House of Commons

Monday 28th March 2011 Commons Chamber

Monday 28 March 2011

The House met at half-past Two o’clock

Prayers

Monday 28th March 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 28th March 2011 Commons Chamber

The Secretary of State was asked—

[Claire Perry (Devizes) (Con)]

1. What assessment he has made of the potential effects on gender equality of the implementation of his proposals for universal credit.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Before I answer this question, I would like to take the opportunity to offer my condolences—and those, I hope, of the House—to my hon. Friend the Member for South East Cornwall (Sheryll Murray), who had tabled a question for today, but whose husband tragically died last week.

As set out in the equality impact assessment published earlier this month, the effect of the universal credit measures and the Welfare Reform Bill on gender equality are approximately equal; and universal credit will see significant improvements in incentives for both men and women to work. We expect the new system will be particularly helpful to lone parents, including those who are looking for work that will fit in with their children’s schooling.

[Claire Perry]

Many working mothers in my constituency are concerned that the universal credit will mean the loss of their working tax credit and access to child care support. Will my right hon. Friend confirm that support for child care costs will be provided through an additional element as part of the universal credit?

[Mr Duncan Smith]

That is absolutely what we plan to do. We will bring forward our proposals shortly. The idea is that the available money will continue to be used for child care support. We recognise how important child care is in helping parents, particularly lone parents, to fit in their obligations to work and to look after their children.

[Kate Green (Stretford and Urmston) (Lab)]

Witnesses to the Welfare Reform Public Bill Committee stated last week that incentives for second earners to move into paid employment would be reduced in many cases under universal credit. Will the Secretary of State tell us what assessment has been made of the impact of the universal credit proposals on second earners and on women’s economic independence?

[Mr Duncan Smith]

Yes. The majority of existing and potential second earners will not, on the basis of the figures I have looked at, be affected by the reforms, because the household already has earnings that take them beyond the reach of the benefit system. Approximately—I stress this is an approximate figure—300,000 second earners may see a deterioration in the incentive to increase their hours, and it is possible that some second earners will choose—or may choose as a result of their home commitments—to reduce or rebalance their working hours or leave. However, universal credit will provide much better incentives for the first earner, giving a greater choice to the household about how it wishes to spread its income.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State told us on Thursday that the Government have not yet decided how to support child care costs in universal credit. Is he yet in a position to assure women with children that in the new system they will be better off in work—after child care costs have been taken into account?

[Mr Duncan Smith]

We are going to bring forward our proposals. It is because we acknowledge the importance of this area that we want to get it right. We are going to consult and we want people to recognise their priorities and have the opportunity to decide with us what they think those are. It is our intention—this can be stated absolutely, because it is the purpose of universal credit—to ensure that people will always be better off in work than out of work.

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

2. What estimate he has made of the number of people in Halifax who will be affected by planned changes to disability living allowance.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

After disability living allowance reform, we will be spending broadly the same in 2015-16 as we spent in 2009-10. At present, some 5,480 people in the Halifax parliamentary constituency are in receipt of DLA. That is after a 30% increase in the number receiving DLA nationwide in the last eight years. We will work with disabled people and the organisations that represent them on the design and delivery of the personal independence payment. Until this work is more advanced, I am unable to predict precisely whether individuals will see a change in their entitlement.

[Mrs Riordan]

I recently visited Mayfield house, a residential home in Halifax, to meet people who need and rely on DLA. The Government say that they are delaying their cuts to this benefit, but I hope they are not giving false hope to many of my constituents. Will they just admit that they have made a mistake and simply keep this benefit?

[Maria Miller]

I thank the hon. Lady for giving me the opportunity to clarify the situation yet again, even though the Prime Minister did so last week in Prime Minister’s questions. The Government are not removing DLA mobility from care home residents from 2012. We made it clear that we have listened to concerns across the House and from disabled people. We will consider care home residents at the same time as all other recipients—both current and future claimants—as we develop the personal independence payment. What we have uncovered is an unacceptable way in which mobility is often dealt with in care homes, and we will look at that further.

[Iain Stewart (Milton Keynes South) (Con)]

3. When he plans to respond to the review of employment support services for disabled people conducted by Liz Sayce.

[Jane Ellison (Battersea) (Con)]

10. When he plans to respond to the review of employment support services for disabled people conducted by Liz Sayce. [Official Report, 1 April 2011, Vol. 526, c. 10MC.]

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Liz Sayce is due to submit her independent review of specialist disability employment services by the summer of 2012. We look forward to her recommendations and will respond in due course.

[Iain Stewart]

I very much welcome this review, but will my hon. Friend assure me that it will also specifically consider the potential power of new media and new technologies to unlock additional training and employment opportunities for disabled people?

[Maria Miller]

As I travel around and speak to disabled people in various types of employment, I hear from them directly how important new media are in helping people in that sector both to obtain jobs and to remain in employment. I am sure that new media opportunities will remain at the heart of the Government’s drive to get more people into work.

[Jane Ellison]

How is the Work Choice programme helping people with disabilities, especially those who need more specialist support?

[Maria Miller]

As my hon. Friend will know, Work Choice was launched in October last year, and concentrates on both pre-employment and on-the-job support. We will support about 13,000 people a year through Work Choice—people who experience the most difficulties in obtaining employment—and I am sure that it will prove to be an important part of the Government’s programme.

[Ann Coffey (Stockport) (Lab)]

Over the coming months, more than 11,000 people in Stockport will be required to attend a local centre run by Atos Healthcare for reassessment of their incapacity benefit. Disability Stockport is worried about the fact that the centre in Deanery Way does not provide easy access for disabled people on foot, and cars cannot park nearby. Atos has not consulted local disability groups about the choice of site. Will the Minister ask Atos to consult them, in order to ensure that the centre is fully accessible for disabled people before the assessment process begins?

[Maria Miller]

It is vital for such assessment centres to be fully accessible. I should be delighted to take up the point and report back to the hon. Lady.

[Fiona Mactaggart (Slough) (Lab)]

I am still confused after the Minister’s reply to an earlier question, in which she said that the proposal to cut mobility allowance for people in residential care homes had been withdrawn. Can she tell us why the proposal is still in the Health and Social Care Bill, and specify the nature of the continuing review of the proposal to which she and other Ministers have referred?

[Maria Miller]

The provision in the Bill is intended to ensure that there are no overlapping payments for anyone who is receiving other forms of Government money. That is very straightforward. As I told the hon. Member for Halifax (Mrs Riordan), the purpose of the review is to ensure that the most vulnerable members of our community are given the support that they need, and that the current confusion ends.

[Mr Adrian Sanders (Torbay) (LD)]

4. Whether he plans to review the timetable for the raising of the state pension age for women born between December 1953 and October 1954.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We recognise the importance of giving people notice so that they can prepare, which is why the timetable for the state pension age changes will not begin to affect people who are due to retire until after 2016. However, life expectancy has increased dramatically. We believe that the timetable in the Pensions Bill provides the best balance between the impact on individuals and fairness to the taxpayer, who will fund the cost of that increased longevity.

[Mr Sanders]

I think that we all accept what the Minister has said, but it remains the case that a very small group of women who just happen to have been born at a particular time are affected. It cannot be beyond the scope of Government to do something for that group, who at present are being more disadvantaged than anyone else simply because of the time at which they were born.

[Steve Webb]

My hon. Friend has raised an important point, but of course as soon as we do something for that particular cohort, another of people born a month earlier or later will say “That’s not fair”, and before we know it we will have delayed the change until 2020 at a cost of £10 billion. Although my hon. Friend asked his question in a characteristically beguiling way, I must tell him that there is no simple way of dealing with that one group.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

The Minister will be aware that it is increasingly difficult for women over the age of 50 to obtain employment. Given the later pension age that the Government are introducing and the changes in employment and support allowance, women who find it impossible to obtain jobs may find themselves with no financial support at all.

[Steve Webb]

The hon. Lady has raised an important point about the financial support available to the group concerned. In fact, about 70% of them are in paid employment, and that section of the labour market is doing better than other sections. We reckon that three in five of these women have built up occupational pension rights on which they will be able to draw before they reach the age of 66, and both ESA and JSA will be available in certain circumstances. A combination of sources of income will be available to them.

[Harriett Baldwin (West Worcestershire) (Con)]

In his statement last Wednesday, my right hon. Friend the Chancellor said that he was hoping for

“a new, more automatic mechanism for future increases in the state pension age based on regular, independent reviews of longevity.”—[Official Report, 23 March 2011; Vol. 525, c. 961.]

With longevity increasing by about a year every year, that brought to my mind the vision of a cohort of people who might never actually reach pension age. Will the Pensions Minister comment?

[Steve Webb]

Tempted though I am, we do not propose to abolish retirement. What my right hon. Friend the Chancellor said was that we need to take account in a more automatic way. I do not recognise the improvement of one year per year, although it is rising very rapidly. The key is that we need to do things with proper notice and make sure people have successful longer working lives and therefore build up bigger pensions when they come to draw them.

[Rachel Reeves (Leeds West) (Lab)]

I could not agree more with the points made by the hon. Member for Torbay (Mr Sanders), because the Government’s proposals mean 500,000 women will have to wait for more than a year longer before they receive their state pension, while 33,000 women will have to wait for exactly two years longer. With 10,000 signatures now on a petition calling for a rethink, and full-page letters in today’s Times and Telegraph asking the Government to think again, will the Minister now accept that the strength of opposition both in this House and outside is too great for the Government not to think again?

[Steve Webb]

I am surprised the shadow pensions Minister chose not to raise the issue of the state pension reform announced by the Chancellor in the Budget statement, which will be of particular benefit to this group of women. Many of the women who are aged about 57 spent considerable amounts of time out of work bringing up children, and we will reform the state pension system so that they get a proper pension for the first time.

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

5. What recent progress has been made on implementing the recommendations of the Harrington review of work capability assessment.

[Sheila Gilmore (Edinburgh East) (Lab)]

19. What recent progress has been made on implementing the recommendations of the Harrington review of work capability assessment.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We are committed to taking forward Professor Harrington’s recommendations so that we can make the system we inherited from the previous Government fairer and more effective. Many of the changes he proposed are already in place, and we will implement the remainder by the summer, to coincide with the first work capability assessments of incapacity benefit claimants taking part in the full nationwide reassessment.

[Annette Brooke]

I thank the Minister for his answer. What guidance and training will be given to decision makers and Atos Healthcare professionals on implementing the new work capability assessment effectively and fairly, and in particular what training will be given for assessing people with fluctuating conditions such as multiple sclerosis and ME?

[Chris Grayling]

Staff decision makers in Jobcentre Plus and Atos assessors are currently going through a renewed training programme to take into account the changes proposed by Professor Harrington. We have also now moved ahead with, and pretty much put in place, the recommendation to have champions in the network who specialise in dealing with some of the more challenging conditions which will undoubtedly be a factor in the assessments, and on which expertise may not previously have existed to a sufficient degree.

[Sheila Gilmore]

One of the findings of the Harrington report was that the Jobcentre Plus decision makers were not, in fact, making decisions; rather, they were simply rubber-stamping the Atos assessments. What steps have been taken to ensure that that is no longer the case, and will the Minister publish some figures on this so that we can have some reassurance that that has actually changed?

[Chris Grayling]

The hon. Lady makes an important point. That was clearly one of the flaws in the system we inherited. We have retrained decision makers, instructing them to take into account a broader range of evidence than simply the assessment so that claimants now have the opportunity to submit proper evidence from their own medical practitioners, and we have made it absolutely clear to decision makers that they are in charge. We have also introduced a process of reconsideration within Jobcentre Plus to reinforce that process.

[Jenny Willott (Cardiff Central) (LD)]

The Harrington review contained some very welcome and important recommendations that the Government are implementing, including on increasing the discretion of Jobcentre Plus staff. In contrast, the Department recently introduced regulations making the descriptors for work capability assessments more prescriptive. As Professor Harrington will now be reviewing the descriptors as well, can the Minister assure the House that the Government will take into account Professor Harrington’s recommendations in that area, and look in general at the descriptors being applied to work capability assessments?

[Chris Grayling]

I can absolutely give that assurance. We want to get this right, and we have introduced these changes because we think they improve the process. For example, we expect more mental health patients to end up in the support group as a result of the changes we have introduced. I have made it very clear to everyone involved that if there are further ways of improving the process, as a result either of recommendations from Professor Harrington or of the experience of the national roll-out, we will move quickly to make the necessary changes.

[Dame Anne Begg (Aberdeen South) (Lab)]

I want to be clear on what the Minister is saying will be in place by June in respect of Professor Harrington’s recommendations, and whether that will include the new descriptors—I understand that they will be another year away. I ask about this because my constituents have already been through the system as they are the first to be migrated from incapacity benefit to employment and support allowance. It is important to ensure that they have been assessed properly, because they will also be the first cohort whose contributory ESA will be removed from them after they have been on it for a year—there is an unfairness in that process too.

[Chris Grayling]

We will take all necessary steps to ensure that the decision-making process is correct. Professor Harrington did not recommend changes to the descriptors ahead of the national roll-out; he recommended that they should be part of the second year review process. I invited him to accelerate that work, and if and when he makes further recommendations, either before or as part of the second year review, we will move quickly to implement them.

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

6. What steps he is taking to reduce the level of benefit fraud.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We are taking all necessary measures to try to clamp down on benefit fraud—we are using the latest technology—and we regard this as a key area for progress. The introduction of the universal credit, which will provide better flows of information around the Department, will make it easier to reduce fraud.

[Andrew Bridgen]

Can my right hon. Friend confirm that his Department is not only sharing data with other Departments but using the services of credit rating agencies to detect fraudulent claims? Such claims not only unfairly burden the taxpayer but unfairly tarnish those in genuine need of help.

[Chris Grayling]

I can absolutely give my hon. Friend that assurance. The Welfare Reform Bill improves the flow of information and data sharing within the public sector. I can also confirm that we are now working closely with credit reference agencies—he will understand if I do not give too many details, as I do not want to give the fraudsters advance notice of what is coming.

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

The Minister will be aware that companies such as Atos Healthcare, which is French-based, are paid about £100 million per annum by taxpayers, yet in Scotland alone 40% of those deemed “fit to work” won their appeal. Does he think that that is a good use of money? Would it not be better used tracking down those who are avoiding paying tax in this country?

[Chris Grayling]

The hon. Gentleman is absolutely right to highlight the flaws in the system we inherited from his party when it was in government. We have taken steps to improve the process. The Harrington review was designed to ensure that we have a better and more just process, with fewer appeals being made. I agree with the hon. Gentleman about wanting to see the number of appeals reduced significantly, but it is the right of the individual claimant to appeal if they so choose.

[Damian Hinds (East Hampshire) (Con)]

7. What assessment he has made of the potential effects on incentives to work of implementation of the provisions of the Welfare Reform Bill.

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

8. What assessment he has made of the potential effects on incentives to work of implementation of the provisions of the Welfare Reform Bill.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The Welfare Reform Bill introduces a fundamental reform of the benefit system and should ensure that work always pays. The universal credit will improve earnings incentives for some 700,000 people and could reduce the number of workless households by about 300,000.

[Damian Hinds]

Casual work and temporary work are important routes into employment, but many people are put off them, not only by benefit loss but by the complexities they will face. How will my right hon. Friend’s welfare reform programme help to address that disincentive?

[Mr Duncan Smith]

One of the complexities that most people face is the fact that two Departments administer what are, in essence, benefits: the working tax credit and the Department’s own benefits system. One of the problems that occurs is that people in difficulty often find it difficult and stressful to figure out who they are supposed to notify of the changes taking place in their lives, their working hours and so on, and they have to go to two Departments to deal with two sets of figures. That will all be sorted out as we bring those together under one benefit. First, these people will not have to notify so many people, and secondly, universal credit will pick up a great deal of that through the real-time system.

[Nick de Bois]

Does the Secretary of State agree that in addition to the incentives in the Welfare Reform Bill, community initiatives such as the Enfield jobs club, which we launched this morning, play a vital role in securing employment, as does the support of a national charity such as GB Job Clubs?

[Mr Duncan Smith]

May I take this opportunity to congratulate my hon. Friend on his job club, whose launch I attended? This is a good example of an area where Members of Parliament can help enormously, because by working with their local jobcentres to set up these job clubs, which we now discover work incredibly well with those who are out of work, people can be given real enthusiasm and hope for the future.

[Nic Dakin (Scunthorpe) (Lab)]

Can the Secretary of State give a clear commitment that nobody will be worse off in work when child care and other costs, such as the cost of school meals, are taken into account?

[Mr Duncan Smith]

With respect, I think the hon. Gentleman will have to wait until I bring the proposals forward. As I said earlier, there is no point in introducing the universal credit unless we stick with our principle that work should always pay better than being out of work.

[Ms Karen Buck (Westminster North) (Lab)]

Work incentives are only effective where there is work. As we now know, unemployment is projected to be at or above 2 million for the life of this Parliament. Will the Secretary of State update us on whether the Treasury has provided him with additional funding to expand the Work programme so that it can take up the additional demand from the workless?

[Mr Duncan Smith]

The Work programme is well set to cope with all the ups and downs that might take place over the next few years. The reality is that the Opposition go on about there being no jobs, but even now, advertised through the jobcentres, nearly a million new jobs have been placed in the past three months—that is 10,000 a day and about half the total number of new jobs created in the outside world. I say to the hon. Lady, with respect, that we are making these reforms and changing this complex system because more than half those jobs are likely to go to those from overseas, which does not help at all unless we reform the system to ensure that British people get a shot at the jobs, too.

[Mr David Burrowes (Enfield, Southgate) (Con)]

9. What support his Department provides for mothers who wish to stay at home to care for their children.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

All parents have a responsibility to support their families, but we will make it as easy as possible for families to adapt their own working arrangements. The structure of disregards and tapers in the universal credit will make it easier for parents to move into financially rewarding work that they can balance with their child care needs. When the child is very young—pre-school age—one of the parents can always choose to stay at home or to work and, where parents are meeting their responsibilities by working to support themselves and their children, they will have the freedom to decide whether one of them should stay at home.

[Mr Burrowes]

Does the move towards a single-tier retirement pension that recognises the contribution of stay-at-home mothers signal the value the Government place on the choice of women to give up careers and care for their children?

[Maria Miller]

As my hon. Friend will know, at the moment parents caring for their children can claim credits for the basic pension, but the credit for the second pension is more limited and has only come in since 2002. Our proposals to put in place a single-tier pension would have the advantage of making one year of caring worth the same as a year of working.

[Kerry McCarthy (Bristol East) (Lab)]

Obviously, the Minister will be aware that it is not just women who bring up children, and it is often not just the parents, either. I have been speaking recently to groups such as Kinship Carers about the situation that arises when grandparents or older siblings are left with the responsibility of bringing up a child, often having to give up work as a result. What support is available for people in such a situation?

[Maria Miller]

Obviously, we support the very idea of kinship care. It is an important way in which children can remain in family care when their own parents are unable to look after them. I believe that in April we will bring in some support to help them with their pensions, too.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

12. What recent progress his Department has made in reducing pensioner poverty.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

17. What recent progress his Department has made in reducing pensioner poverty.

[Stuart Andrew (Pudsey) (Con)]

18. What recent progress his Department has made in reducing pensioner poverty.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We have restored the earnings link for the state pension and given a triple guarantee that the pension will rise by the highest of earnings, prices or 2.5%. We will pay the winter fuel payment in 2011-12 exactly as budgeted for by the previous Government. We have made permanent the increase in the cold weather payment from £8.50 to £25 a week.

[Mr Evennett]

I welcome the approach the Government are taking on this very important matter. What estimate has the Minister made, however, of the impact of the single-tier pension proposals on future levels of pensioner poverty?

[Steve Webb]

We will shortly publish a Green Paper with a range of options for state pension reform. As my hon. Friend says, one of those is a single flat-rate pension. One of its great advantages is that whereas many pensioners do not claim their means-tested benefits and therefore live in poverty, everyone claims their pension.

[Jesse Norman]

Like many Members, I welcome the single-tier pension. Will the Minister help us consider whether there could be an interesting interaction between that and a lifetime savings account, whereby people can take money in and out of an ISA-style savings account?

[Steve Webb]

Although policy on the tax treatment of savings is a matter for our friends in the Treasury, it is absolutely the case that the single tier provides a firm foundation for saving. Whereas under the current system, every pound one saves results in the clawback of means-tested benefits, a decent single pension will get one clear of means-testing to a far greater extent.

[Stuart Andrew]

Will my hon. Friend confirm that thanks to the re-linking of the basic state pension with earnings, the typical person retiring this year can look forward to receiving an extra £15,000?

[Steve Webb]

My hon. Friend is absolutely right. Although earnings are temporarily depressed, this is a policy for the long term, as many pensioners will draw a state pension for 20 or 25 years. He is absolutely right to say that the typical person retiring this year will have an enhanced state pension of about £15,000 through the restoration of the earnings link.

[Kelvin Hopkins (Luton North) (Lab)]

Even with the Government’s reforms, the restoration of the link and so on, the basic state pension will still be below the official poverty level, and way below comparable basic state pensions on the continent. What are the Government going to do to address the problem?

[Steve Webb]

We have a twin-track strategy that does right by today’s pensioners and that puts in place reform for tomorrow’s. For today’s pensioners, as well as restoring the earnings link we are looking at measures to make sure that people claim the means-tested benefits to which they are entitled, but we will also be consulting on a much firmer foundation of state pension for the future so that we guarantee that more people do not have to retire into poverty, as too many people have had to in the past.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

On Radio Sheffield last week, the Deputy Prime Minister did not seem aware of the Government’s decision on the winter fuel allowance which means that pensioners will receive up to £100 less this year. Were the Minister and his team aware of the changes, and can he confirm that winter fuel allowance payments to pensioners will be up to £100 lower this year?

[Steve Webb]

My right hon. Friend the Deputy Prime Minister pointed out that the budget for winter fuel payments is exactly as budgeted for by the previous Government. The winter fuel payment increases that were, mysteriously, for two years before the election and one year after—I cannot think why—were always temporary. However, what we have not done is cut the cold weather payment, which the hon. Lady’s party had planned to do.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

What made the Government think they could get away with reducing the winter fuel payment by £100 by smuggling it through and not mentioning it in the Budget statement? If they think that they have got away with it and that pensioners have not noticed, they should have been in my constituency at the weekend.

[Steve Webb]

Well, the right hon. Gentleman must not have been paying attention last year when the Chancellor announced in his comprehensive spending review that the winter fuel payment would be exactly as budgeted for by the previous Labour Government. Perhaps he was not listening.

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

13. What assessment he has made of the potential effects on pensioners of the uprating of pensions using the consumer prices index.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The net effect of the triple guarantee for the basic state pension—the figure we gave a moment ago—and CPI for the additional pension is estimated to be a lifetime gain of around £10,000 for the average person reaching retirement in 2011. The impact on private sector occupational pension schemes will vary from scheme to scheme.

[Paul Uppal]

Can my hon. Friend confirm that the triple guarantee will ensure that pensioners will receive a decent offering from the state in their retirement?

[Steve Webb]

My hon. Friend correctly points out that for the past 30 years the value of the state pension has been falling and falling relative to the living standards of the working population. We are proud to have put a halt to that.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Will pensioners be worse off or better off should income tax and national insurance be combined?

[Steve Webb]

Obviously, this idea is at a very preparatory stage, but my right hon. Friend the Chancellor has made it clear that pensioners will not simply face an increase in overall tax as would be the case if the two tax rates were simply added together. The idea is in its very early stages, a lot of preparatory and consultative work is going on, and I am sure that the Chancellor is entirely mindful of the points that the hon. Lady raises.

[Jo Swinson (East Dunbartonshire) (LD)]

15. What assessment he has made of the potential effects on women of his proposals on pensions.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

My hon. Friend will be aware that the Chancellor announced in the Budget that the Government will shortly consult on various options, including one for a simpler state pension. In looking at these options one of our key priorities will be to consider how we deliver improved outcomes for women. Under proposals for a single-tier pension we would expect many women to benefit and we will publish more details of our proposals shortly.

[Jo Swinson]

I thank the Minister for that reply, and I warmly welcome the single-tier pension, which bears a striking similarity to the citizen’s pension on which he and I have campaigned. May I bring him back to the answer he gave to my hon. Friend the Member for Torbay (Mr Sanders) about the injustice faced by women born in 1953 and 1954, which he said there was no simple way of dealing with? The Minister is widely respected for his great expertise on the intricacies of the pension system, so even if there is not a simple way of dealing with the problem, may I urge him to look hard to find a complicated way of tackling it?

[Steve Webb]

I am very grateful to my hon. Friend. The issue, unfortunately, having dealt with the one-month cohort about whom I understand there is particular feeling, is that it is not only that group who face an increase of more than a year. When one looks at the neighbouring months, an obvious way of dealing with the problem is by delaying until 2020, but if we did that, we would soon rack up a £10 billion bill. That is the sort of difficult trade-off we have had to face.

[Guto Bebb (Aberconwy) (Con)]

16. What progress his Department has made on delivering new enterprise allowance support in Merseyside.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am pleased to inform my hon. Friend that the new enterprise allowance was launched in Merseyside on 31 January. We have a partner in place to deliver the mentoring support, which is being done through the local chambers of commerce, and we have appointed a provider for the NEA loans service. The early signs are promising: we have had nearly 400 referrals from Jobcentre Plus to the mentoring service, more than half of whom are now working with a business mentor, and some of the propositions for new businesses are close to fruition.

[Guto Bebb]

Certainly, in the 1980s and 1990s the enterprise allowance was a great success in north Wales and I look forward to a roll-out to our part of the world. If the enterprise allowance is rolled out throughout the rest of the United Kingdom, what proposals does his Department have to ensure that the universal credit will work in tandem with the enterprise allowance scheme in order to ensure that work pays, even for the self-employed?

[Chris Grayling]

It is important to say that we recognise the need to ensure that the universal credit works with self-employment. In the detailed design of the universal credit, we will ensure that it aligns with initiatives such as the new enterprise allowance, but more broadly we will make sure that self-employed people can also benefit from the support that the credit offers. They are a crucial part of our economic future.

[Graham Evans (Weaver Vale) (Con)]

How will my hon. Friend ensure that we harness the skills and expertise of business to help unemployed people get their own businesses up and running?

[Mr Speaker]

With reference to Merseyside.

[Chris Grayling]

In the context of Merseyside, we have been very pleased by the co-operation and support that we have had from the chambers of commerce. They are actively recruiting more mentors among the local business community. The lessons we have derived from Merseyside will enable organisations in other parts of the country and Jobcentre Plus to follow best practice in getting the scheme up and running nationwide in the course of the year.

[Sajid Javid (Bromsgrove) (Con)]

20. What estimate he has made of the likely effects on welfare expenditure of implementation of the provisions of the Welfare Reform Bill.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

In real terms working age welfare spending climbed by 54% over the past decade from £48 billion in 1999-2000 to £74.7 billion in 2009-10. The explanatory notes to the Welfare Reform Bill report that there will be savings of some £960 million in 2012-13,rising to around £3.9 billion in 2014-15. We have also set aside £2 billion to cover the costs of implementing the universal credit.

[Sajid Javid]

This Government inherited a record Budget deficit, which rightly requires the re-examination of every Department’s spending. Instead of getting constructive suggestions from the Opposition, we too often get opportunism, including a demeaning comparison this weekend between protesters, civil rights marchers, people who fought for women’s rights and anti-apartheid campaigners. Does my right hon. Friend believe that the best way to bring down our welfare bill sustainably is to get people back into work by giving them the right work incentives?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The key is to get people back into work, to reform the system so that it is simpler and to ensure that work always pays. As we approach April, when the Darling plan was meant to start, I have yet to hear one single figure for anything that the Opposition say they would have reduced, had they introduced it. Instead, apparently, the Leader of the Opposition now lines himself up with Pankhurst, Mandela and Martin Luther King. Miliband does not quite work, does it?

[Hywel Williams (Arfon) (PC)]

What account does the Secretary of State take of arguments by disability campaigners such as my constituent, Mr Rhydian James, who points out that much of the increased cost of the system is due to demographic matters and to reduced under-claiming?

[Mr Duncan Smith]

The hon. Gentleman will therefore be pleased with the design of the universal credit, because the one thing that it will tackle hugely, which is why there is an extra cost to it, is under-claiming, which will stop. Those who are eligible and who should have their money will be able to get it. Better still, that will improve the level of those coming out of poverty, as opposed to what happened under the previous Government.

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

The Secretary of State may recall a row that broke out when a family on benefits was moved into a house in Acton worth well over £1 million, which people on average salaries would only dream of. Does he agree with those constituents who tell me that these reforms are fair not only to those in work, but to the taxpayer? Why has it taken so long for common sense to prevail?

[Mr Duncan Smith]

Most people who work hard and who are on marginal incomes will consider it reasonable that the benefits system does not pay more than average earnings, which turn out to be about £36,000 gross. Most people who are in work would consider that to be a reasonable level of income. Those who complain about that complain about something that they should have resolved anyway.

[Margaret Curran (Glasgow East) (Lab)]

Of course, the Secretary of State will have received many representations from carers’ organisations about the Welfare Reform Bill and its likely impact. In reply to a written question I tabled last week, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), who has responsibility for disabled people, stated that she did not yet know what impact the new personal independence payment will have on carers, yet the Bill is now in Committee and PIP will be decided in just a matter of weeks. Will the Secretary of State confirm that PIP will remain a passported benefit from carers’ allowance, how many carers will be affected by the change and how many carers will lose as a result of the changes being introduced by the Government?

[Mr Duncan Smith]

I can say to the hon. Lady, much as my hon. Friend the Under-Secretary has before, that we are reviewing all of this. The purpose is to ensure that those who are involved in caring will get greater and better support and that they will be better cared for themselves. The reality is that we chose for that reason not to take carer’s allowance into the universal credit, which the hon. Lady has not touched on, because that would have meant that some people might have lost out.

[Mr Peter Bone (Wellingborough) (Con)]

21. What plans he has for the future of disability living allowance; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Disability living allowance will be replaced by the personal independence payment, which is a new, more transparent and sustainable benefit underpinned by an objective assessment of the barriers disabled people face in living full and independent lives. From 2013-14, working-age individuals in receipt of DLA will be reassessed against the new eligibility criteria for PIP.

[Mr Bone]

It is so nice to have a Minister give such a full answer. In my constituency, people are worried that DLA is going to go and not be replaced by anything. I wonder where such false information is coming from. Does she have any idea?

[Maria Miller]

I thank my hon. Friend for his question and share his concern about the lack of understanding that people sometimes have about what we are trying to do. I can reassure him that the Government’s reforms are all about putting integrity back into the support available for disabled people, moving away from a discredited system of DLA in which, in terms of the higher rate for the DLA mobility component, more money goes to people who are drug and alcohol addicts than to people who are blind.

[Mr Wayne David (Caerphilly) (Lab)]

What can the Minister say to my constituent, Jordan Owen, who is deaf and blind, currently attending school and in receipt of the mobility component of DLA, but who may well lose it when he leaves school and moves into residential care?

[Maria Miller]

The hon. Gentleman will of course have heard the earlier exchanges in which I said that the Government are not removing the mobility component of DLA from care home residents from 2012. We will ensure that the needs of individuals in care homes are assessed in the same way as those of everyone else in receipt of DLA as part of the PIP reforms.

[Duncan Hames (Chippenham) (LD)]

What measures are the Government taking to ensure that assessments for PIP, the successor to DLA, are not as disastrous as those introduced under the previous Government for their work capability assessment?

[Maria Miller]

I can absolutely give an undertaking to my hon. Friend that we are learning a great deal from the development of the work capability assessment, although I would stress to him that it is a very different sort of assessment that looks at the barriers people face in living independent lives, rather than the barriers they face in getting into work.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Last Thursday night I met representatives of Lanarkshire Ace, a group in my constituency that looks after adults with learning difficulties. They are terrified about the prospect of going through a reassessment for DLA. Will the Minister confirm that people with life-long conditions, such as adults with learning difficulties, will be exempt from a reassessment in future?

[Maria Miller]

I am sure that the hon. Gentleman will take this opportunity to ensure that his constituents are not terrified about the future of DLA, and indeed the personal independence payment, because we are making sure that it will be a fair and transparent assessment. We will not be, as a rule, saying that individuals would be exempt from assessment, because we want to make sure that they are getting the right support, and we can do that only by looking at their needs.

[Nicky Morgan (Loughborough) (Con)]

22. What steps he is taking to improve the ICT systems operated by the Child Support Agency and its successor.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

The CSA currently uses two IT systems. It was the intention of the previous Government to transfer all 1993 cases to the 2003 scheme, but this proved impossible because of deficiencies with the IT they commissioned. This situation is unacceptable, which is why the Government have decided to bring in a new single system to replace the current ones. We plan to introduce this from 2012.

[Nicky Morgan]

I have previously written to the Secretary of State about my constituent, Mr Jonathon Little, who had arrears added to his current child support bill that were impossible for him to pay. The CSA told Mr Little that the payment period would be extended to 2014, but he then received a letter stating that the payments on account would be reviewed every six months. When I queried this, the CSA told me, “That’s just a computer-generated letter; we’ve had problems with those.” Will the Minister assure me that he will look into the matter as part of the wider improvements being made to the IT system operated by the Child Maintenance and Enforcement Commission?

[Maria Miller]

I thank my hon. Friend for that example. She has just underlined the need for change, because the current system is not working as it should for all constituents. Indeed, there are now 100,000 cases that cannot even be dealt with on the current IT system—costing the taxpayer a great deal of money and, as she points out, the patience of a great many of our constituents.

[Laura Sandys (South Thanet) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

This Government inherited a youth unemployment crisis, and to tackle the problem the Chancellor’s Budget announced 100,000 new work experience places and funding for an additional 40,000 apprenticeships, on top of the 75,000 places that we announced last year. That is a far better way of helping young people into sustainable jobs and long-term careers than some of the rather expensive and ineffective programmes that we inherited.

[Laura Sandys]

I would like to associate myself and my local fishermen with the condolences that the Secretary of State paid to our hon. Friend the Member for South East Cornwall (Sheryll Murray).

I, like many other hon. Friends, am taking on an apprentice, and I wondered what the Department was doing to support apprenticeships and work placements, which are so crucial to giving young people that first step in the workplace.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We are doing two things. First, we are supporting the programmes in a practical sense. We already have apprentices working in the Department, but we as a Department will take a lead in providing work experience places—including something like 4,000 throughout the Department per year. We will also actively go out and encourage organisations to come forward and take part in the work experience programme. I hope every company in the country—private, public and voluntary sector organisations—will give young people the chance to take those first steps in the workplace.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

May I start by associating Opposition Members with the condolences expressed to the hon. Member for South East Cornwall (Sheryll Murray)? The circumstances that the Secretary of State outlined were extremely tragic.

May I return the Secretary of State to our debate this afternoon and ask about what the Prime Minister said to the House last week? He said that he had no plans to proceed with the removal of the mobility component of disability living allowance, and the Under-Secretary of State for Work and Pensions, his hon. Friend the Member for Basingstoke (Maria Miller) appeared to confirm that this afternoon. Yet, two hours after the Prime Minister sat down, his right hon. Friend the Chancellor said that he was ploughing ahead with making the savings. Whose side is the Secretary of State on? The Prime Minister’s or the Chancellor’s?

[Mr Duncan Smith]

I am on the side of both of them, to be quite frank. I make it my business to be so—although it is not always necessarily reported accordingly.

The situation, as I, the Prime Minister and even the Chancellor have outlined, is very simple. We have a requirement to look at the whole disability living allowance spectrum, of which the mobility and mobility in care homes components are part. As I said the last time I was asked about the issue, we are absolutely setting out to make sure that the current overlaps and deficiencies in an incredibly messy and complex system, whereby local authorities, care homes and the Department all tread on each other’s toes, are sorted out and do not exist, so that the mobility component that is required for people in care homes will exist after we have completed that work.

[Mr Byrne]

I am grateful for that answer, which is familiar to many in the House. If the proposal were to be dropped, however, the Red Book would show that from 2013 the savings would be returned. In fact, it shows no such thing. Indeed, page 44 of the Budget states that up to £500 million more will be removed from the residential care component than originally planned; and, in a parliamentary answer to me, the Secretary of State says that 100,000 fewer people will be in receipt of DLA by the end of the Parliament. Can he see now why people with disabilities are so worried about his plans?

[Mr Duncan Smith]

The letter I sent to the right hon. Gentleman and, I think, to others is quite clear. The point I am making, and I make again, is that the purpose of what we are doing—what the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) is engaged in—is to review a complex system, which does not work very well. Many people who need disability living allowance often do not get it; people, when they go back to work, are confused about whether they will still receive it; and people often feel that they should not take work because they think that the allowance is work-related, which we know it is not. So, that complex system, which the previous Government left to us, has to be reviewed. Many have welcomed the review, and at the end of it we will make decisions that benefit those who need DLA.

[Mark Menzies (Fylde) (Con)]

T3. I should like to ask the Secretary of State what advantage he sees in placing young people on to apprenticeship schemes as opposed to a six-month placement on the Work programme.

[Chris Grayling]

Essentially, the Work programme’s role is to help those who are longer-term unemployed and are struggling to get into the workplace. Our work experience proposals and apprenticeship plans are very much geared towards those who are newer in the labour market and looking for opportunities in the early few weeks of job search. Of course, the really stark comparison is between what we are proposing and the vastly expensive future jobs fund run by the previous Government, which has proved to be three or four times more expensive than even their relatively unsuccessful new deals. In my view, our programmes will make a difference in a way that theirs did not.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

T2. Many of my constituents are facing lengthy delays in benefit appeals coming to tribunal. This causes real worry, but also financial hardship. What action are the Government taking to address this, given that demands on the Tribunals Service are increasing?

[Chris Grayling]

I am acutely aware of the issue to which the hon. Lady refers. We have been in detailed discussions with the Tribunals Service about this, and it is moving ahead with an increase in capacity that will help to ease the situation. We have also, for the national roll-out of the incapacity benefit reassessment, introduced a reconsideration stage at Jobcentre Plus level to try to reduce the number of appeals and to make sure that we get as many decisions as possible absolutely right.

[Neil Carmichael (Stroud) (Con)]

T4. In my constituency, a large number of individuals come to my surgeries worried about being passed from pillar to post in the complicated welfare system that we have. Can the Minister give me some reassurance that the reforms are going to make it much simpler, especially in connection with people wanting to establish businesses?

[Mr Duncan Smith]

I can give that assurance to my hon. Friend. We have inherited a system that has huge in-built disincentives and perverse incentives for people to do the wrong thing. The idea of this reform—the universal credit, alongside the Work programme—is that people have a clear understanding of what they will earn when they go to work. They will not need to have the brains of a professor in mathematics to figure it out; they will find it out themselves, and that will incentivise them to stay in work and not be put off by having to report to 50 different people.

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

T5. In his earlier response, the Minister implied that levels of winter fuel payment under Labour were based on the electoral timetable. In fact, the UK has the highest level of excess winter deaths, according to National Energy Action. Can he explain why pensioners in my constituency will be receiving less this winter than last?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

For the first seven or eight years in which the winter fuel payment existed, it was set at exactly £200. For three years only, it was temporarily increased, and the budgeted amount was set to reduce this coming winter. Last year—the hon. Lady may not be aware of this—we ensured that poor pensioners got an £80 electricity rebate. This winter, subject to regulations going through the House, we plan that over 1 million poor pensioners will be entitled to a £120 electricity rebate—real help for people who need it.

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

T6. Next week, pensions get linked to earnings for the first time since Mrs Thatcher abolished the link in the 1980s. I do not think that pensioners have yet got all the good news messages that they should be getting from this Government. Can Ministers assure us, and pensioners, about what those messages are? Can they then make sure that every pensioner and pensioners’ organisation understands the range of good things from which they have already benefited thanks to Ministers in this Government?

[Steve Webb]

My right hon. Friend is absolutely right. I spend a good deal of my time going out around the country talking to pensioners’ groups. I shall be talking to one such group in Birmingham on Wednesday, and I will tell them that restoring the earnings link for the first time in 30 years will provide a firm foundation and dignity for pensioners. That is long overdue.

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

T8. Under new welfare rules, jobseekers will be required to undertake mandatory work activity placements such as stacking shelves for 30 hours a week for at least four weeks, and if they do not comply, their jobseeker’s allowance could be withheld. Can the Secretary of State tell me what safeguards are going to be put in place to prevent exploitation and whether sanctions will be placed on Work programme providers if it is found to be occurring?

[Chris Grayling]

The whole point about the mandatory work activity programme is that we listened to the advice of our front-line advisers on what they felt could make the biggest difference to the people they are working with. That is what this programme is designed to achieve in giving people an opportunity to step up their work search by getting involved in more full-time activity to get themselves focused on the challenge ahead. There will clearly be safeguards. Ultimately, the most important safeguard lies in the discretion of our front-line staff. There is no obligation for any staff member to sanction an individual if they judge a sanction to be inappropriate. They know and understand when a sanction is necessary, and when it is not, and that is guidance that we will continue to give to them.

[Karl MᶜCartney (Lincoln) (Con)]

T7. My right hon. Friend is no doubt aware that my constituents in Lincoln help to fund welfare spending in this country. Welfare spending has increased from £132 billion 10 years ago to £192 billion at present—an estimated real-terms increase of 45%. Will he assure me that even in these difficult economic times, this Government, unlike the last Labour Administration, will do all they can to help people in Lincoln who are genuinely able to move from welfare into work?

[Mr Duncan Smith]

I can give my hon. Friend that reassurance. He should be reassured by the fact that this Government are doing more to reform the archaic benefits system, which is full of all the traps to which he referred. That will benefit those who are in work. One big reason why they have to pay more tax is that the last Government left us with a nightmare system that prefers to keep people out of work than in work.

[Alison McGovern (Wirral South) (Lab)]

Having work experience and money reserved for apprenticeships will not automatically equal a reduction in unemployment among young people. When will the Minister report to the House on the unemployment that is faced by young people, and what will he do if the numbers do not fall?

[Chris Grayling]

The hon. Lady needs to understand that this problem has been building steadily for the past decade. It happened in good years under the previous Government. We are dealing with the appalling inheritance of 600,000 young people who left school, college or university and have never worked. We think that our programmes will start to make a difference, that they will be better value for taxpayers’ money, and that they will be more effective than the previous Government’s programmes. Above all, we think that apprenticeships give the foundation for a lifetime of skills and employment. That is why they were such a centrepiece of the Budget.

[Mr Steve Brine (Winchester) (Con)]

T9. Severe autism sufferer, Alastair Bolan, and his family came to my surgery in Winchester on Friday afternoon. Like many families living with the condition, they are anxious about the move to personal independence payments. They made the case to me passionately that a one-to-one interview for Alastair would be an absolute disaster, as it would be for many like him who have been granted permanent disability living allowance with good reason. I know that the Minister is good at reaching out to organisations, so will she reassure me that she will continue to engage with the all-party group and autism charities to minimise the uncertainty that some people feel?

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I can reassure my hon. Friend that both I and officials have met representatives from the National Autistic Society, which has put forward helpful thoughts on the new assessment. It has asked for the people who carry out the assessments to be trained in autism, for individuals to be able to bring somebody to a face-to-face assessment, and for them to be able to use the best supporting evidence. We agree 100% with its proposals.

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

By insisting that widows’ pensions should be treated as unearned income under the universal credit, widows will lose a large slice of their pension. How can the Secretary of State justify that?

[Mr Duncan Smith]

The hon. Lady knows that we are looking at all these matters. I am happy to discuss that matter with her if she wants to talk to me.

[Stuart Andrew (Pudsey) (Con)]

T10. I have been approached by a number of constituents who are private landlords, who are concerned that they have not received payments that have been made to their tenants. What measures are the Government considering to alleviate that problem?

[Steve Webb]

We recognise that payments do not always get through to landlords. There is a provision that allows direct payment when there are eight weeks of arrears, and we have added a provision under our new rules so that direct payment can be made to a landlord when it will secure or maintain a tenancy.

[Dame Anne Begg (Aberdeen South) (Lab)]

I was contacted last week by a constituent who is in her 50s, has advanced multiple sclerosis and lives in a residential home. Her elderly mother has moved into a nursing home on the other side of Aberdeen. The taxi that allows my constituent to visit her mother costs £50 there and back—exactly the amount she gets from the mobility component of disability living allowance. Will the Minister guarantee that my constituent will continue to have access to those funds after the changes to DLA, and that she will not have to go through a reassessment to make sure that she really deserves it?

[Maria Miller]

As we have said before from the Dispatch Box, the intention of our measures to reform the personal independence payment is not to remove the ability of people such as her constituent to get out and about. We will now include the needs of people in care homes in the overall PIP reassessment.

[Robert Halfon (Harlow) (Con)]

A number of my constituents are facing redundancy. What extra help can the Government give those people, particularly those who have worked in their companies for a very long time?

[Chris Grayling]

I express my sympathy to those of my hon. Friend’s constituents in that position. Unemployment is a very difficult thing for anybody to experience. We have put together a number of different proposals. Most immediately, there is support through the Jobcentre Plus rapid reaction service in the immediate aftermath of redundancy. Schemes such as the new enterprise allowance, as it is rolled out across the country, will give people the opportunity to move into self-employment, and we will examine all other sensible ways of ensuring that we mitigate the impact of unemployment on people at what remain difficult times in the labour market.

Petition

Monday 28th March 2011 Commons Chamber

Mr Iain Wright (Hartlepool) (Lab)

- Hansard - - Excerpts

I rise to present a petition on behalf of my constituents who are concerned about the loss of bus services, particularly evening bus services and those on socially vital routes.

The petition states:

The Petition of residents of the borough of Hartlepool,

Declares that the petitioners are concerned that residents in areas of the borough such as The Headland and Burbank, as well as villagers in Dalton Piercy, Elwick and Greatham, have been left isolated and without transport following the decision of Hartlepool Borough council to cut public subsidy to private bus companies.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to work with the Secretary of State for Communities and Local Government, residents of the borough, Hartlepool Borough Council and bus operators immediately to reinstate the services and then to secure a financial settlement and a regulatory framework which provides a comprehensive, reliable and cheap system of bus transport in Hartlepool, designed to address the social and economic needs of passengers in both the urban and rural areas of the borough, rather than the narrow interests of private bus companies.

And the Petitioners remain, etc.

[P000909]

Disturbances (London)

Monday 28th March 2011 Commons Chamber

15:30

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

(Urgent Question): To ask the Home Secretary to report on the violent disturbances over the weekend.

[The Secretary of State for the Home Department (Mrs Theresa May)]

On Saturday, 4,500 police officers worked to keep order during the TUC march of up to 500,000 people. During the afternoon and evening, gangs of thugs carried out acts of violence against the police, private property and public monuments. I want to place on record my gratitude to the officers who put themselves in harm’s way during Saturday’s operations. I want also to praise the Met’s senior officers—Assistant Commissioner Lynne Owens and Commander Simon Bray—for their leadership, and I want utterly to condemn in the strongest possible terms the mindless behaviour of the thugs responsible for the violence.

I can confirm to the House that 56 police officers were seen by force medical examiners and that 12 of them required hospital treatment, while 53 members of the public were also hurt. I can also confirm that officers arrested more than 200 people on Saturday, and that 149 of them have already been charged. I expect that number to increase as the police go through video evidence, as they did after the student protests last year. The message to those who carry out violence is clear—they will be caught, and they will be punished.

Throughout Saturday and Sunday, Ministers were kept informed of events. The Home Office was in regular contact with the Metropolitan police and City Hall. The Minister for Policing and Criminal Justice has spoken to Kit Malthouse, the deputy Mayor, and I have spoken to Lynne Owens to thank her for the police operation, which was, on the whole, a success. The police might not have managed to prevent every act of violence, but they were successful in preventing wider criminality and are now actively engaged in investigating the perpetrators so that they can be brought to justice.

In my statement to the House following the student demonstrations in December, I said that the police would learn the lessons of that experience. Since then, the Metropolitan police have been learning the lessons necessary, and the tactics deployed on Saturday reflected that learning, but there is more that can be done. Just as the police review their operational tactics, so we in the Home Office will review the powers available to them. I have asked the police whether they feel they need further powers to prevent violence before it occurs. I am willing to consider powers that would ban known hooligans from attending rallies and marches, and I will look into the powers that the police already have to force the removal of face coverings and balaclavas. If the police need more help to do their work, I will not hesitate in granting it to them.

That is the right way of doing things. The police are operationally independent, the Mayor holds them to account for their performance and the Home Secretary’s role is to ensure that they operate within the right legal framework and have the right powers to do their job. I know the whole House will want to join me in sending this message: we will always back the police when they do their important work, and we will back them as they do everything they can to bring these mindless thugs to justice.

[Yvette Cooper]

I thank the Home Secretary for her answer to my urgent question, after she withdrew her planned statement earlier today.

Hundreds of thousands of people demonstrated peacefully on Saturday in support of their families, services, jobs and communities, but a few hundred mindless idiots and thugs launched violent attacks against property, businesses and police officers, and 31 police officers were injured. In a democracy, that kind of violence is no form of political protest. It is violent assault and criminal damage, it is thuggish behaviour of the worst kind and it must face the full force of the law. I welcome the speed with which the police have acted to charge 149 people with offences already. They will have the Opposition’s support in taking a strong line.

The police have made it very clear that those violent incidents were separate from the legitimate, peaceful march, and the Home Secretary has rightly done the same today, but I have three things to ask her. First, she rightly praised the police—like her, I have thanked Lynne Owens and Acting Commissioner Tim Godwin for the work of the Metropolitan police and other police forces, to which I pay tribute—but in addition to the 4,500 officers on the streets hundreds more officers and support staff worked on the operation behind the scenes. Will she join me in paying tribute to all of them, and assure the House that the police will have the resources that they need on the front line and behind the scenes to deal with future events?

Secondly, I welcome the Home Secretary’s consideration of further action. Will she consider co-ordinated action to deal with the so-called anarchist groups? It is vital that we do not let a violent minority undermine the power of peaceful political protest in a democracy. Such incidents have been increasing every time there is a crowd event, and, frankly, people are fed up with it. Co-ordinated, determined action was successful some years ago in tackling the football hooliganism that used to hijack crowds and frustrate ordinary fans. May I offer her the Opposition’s support? We will work with her and the police on a parallel or similar co-ordinated approach to wider action to deal with problems at crowd events.

Thirdly, we have a tradition in the House of standing together against extremism to protect public safety, property and the public right of peaceful protest. The Home Secretary will know that the Mayor of London today claimed that the Leader of the Opposition and the shadow Chancellor will feel quietly satisfied—[Interruption.] I want to quote the Mayor of London accurately because this is important. The Mayor said that the Leader of the Opposition and the shadow Chancellor will

“feel quietly satisfied by the disorder”

and that:

“They will be content to see the police being unfairly attacked on all sides”.

Will she condemn those disgraceful and outrageous remarks? The Mayor is the man whom she wants to put in charge of the governance of the Metropolitan police. Does she agree that it is the worst kind of politics to slur those who supported hundreds of thousands of peaceful marchers?

Will the Home Secretary answer those three questions on the police, a future strategy and the London Mayor? Let us be united in this House on rooting out hooliganism and supporting peaceful protest.

[Mrs May]

I thank the right hon. Lady for the tone in which she conducted most of her comments. Unfortunately, towards the end, she chose to move into a rather more political tone.

May I make two factual corrections to the right hon. Lady’s remarks? First, she claims that I withdrew a statement to the House, but I never asked to make one. Secondly, she said that I intended to put the Mayor of London in charge of the Metropolitan police, but, of course, he is in charge of them.

I, too, put on record the House’s support for and thanks to all those involved with the Metropolitan police who were not in police uniform or not warranted officers who took part in the policing operation on Saturday, both in relation to the march and the mindless acts of violence that took place.

The right hon. Lady mentioned the possibility of co-ordinated action. She will have noted that I said in my response that I was prepared to look at the possibility of some sort of pre-emptive banning orders for hooligans, which we have in place for football hooligans. It is now worth our looking at such experience, and I welcome the support she was willing to give on behalf of the Opposition. Everybody in the House wants to ensure that the police have the right powers and tools available to do the job of keeping our streets safe. The great majority of the march went ahead peacefully, but, sadly and unfortunately, it was damaged by the mindless violence of the thugs. The description given by Liberty is a very good one:

“The demonstration appeared to have been infiltrated by violent elements who periodically separated from the main route in order to attack high profile commercial properties and the police before melting into the demonstration once more…This minority presented significant challenges for the police and trade union stewards alike and at times jeopardised both the safety and ability to protest of those with peaceful intent.”

[Several hon. Members]

rose—

[Mr Speaker]

Order. We have statements by the Prime Minister and the Secretary of State for Education and a heavily subscribed Budget debate to follow, so there is pressure on time. Short questions and short answers are essential.

[Mr David Davis (Haltemprice and Howden) (Con)]

It is incumbent on those of us willing to criticise the police when they make mistakes, as they did during the G20 protest, to step in and correct the record when inaccurate and unjust criticisms are made, as happened over the weekend. The simple fact is that few police forces in the world could have delivered the peaceful outcome for the vast majority of 200,000, 300,000, 400,000 or 500,000 demonstrators during a march in which none was harmed or hurt, and in which all were able to exercise their democratic right properly. Similarly, the police were able to use intelligence to make the arrests to which the Home Secretary referred. However, I hope she will not pay any attention to the sort of thing said in The Times this morning by a retired police officer, when he called on her to use “dawn raids” and “snatch squads”. That is the sort of thing we might expect in Tripoli, not London.

[Mrs May]

It is important that the police have the powers they need to deal with such violent incidents. Of course, however, a balance always needs to be struck to ensure that the powers that the police use do not inadvertently damage the civil liberties that we hold so dear in this country. It is right that the police have operational independence—that is crucial—but we need to set the right legal framework for them. My right hon. Friend is right. I thought that the way in which the police dealt with the demonstrations and the march on Saturday was a fine example of, and a tribute to, the British model of policing. We do indeed have the finest police force in the world.

[Keith Vaz (Leicester East) (Lab)]

The Home Secretary is right to praise the police and condemn those responsible for this wanton violence, but a pattern is now emerging of peaceful demonstration followed by violent demonstration. Tomorrow, Assistant Commissioner Lynne Owens will appear before the Home Affairs Select Committee to update us on what happened last Saturday. We need a big and open conversation with the police and to give them whatever they need to police the second part as effectively as they police the first; otherwise this tale of two protests will continue whenever there is a demonstration in London.

[Mrs May]

I agree with the right hon. Gentleman. When I spoke yesterday to Assistant Commissioner Owens, I specifically asked her whether the police would need further powers, so that we can discuss what is necessary to enable them to do the job we all want them to do.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend agree that in rightly condemning the extreme behaviour of a few hundred people we are in danger of losing sight of the essential foolishness of the perfectly legitimate, but nevertheless misguided, demonstration, in which many prominent people in the Opposition took part? Does she agree that at a time when we have a deficit comparable to that of Portugal and Greece, it is ludicrous for the Leader of the Opposition to couch his words in those of Abraham Lincoln?

[Mrs May]

I think that many people in the House would share my hon. Friend’s views about the tone of the language used by the Leader of the Opposition. I wonder how many of those who demonstrated against the cuts know that the Leader of the Opposition, who addressed the demonstration, would, if in government, be cutting £4 out of every £5 that this Government are cutting.

[Mr David Hanson (Delyn) (Lab)]

The Home Secretary will be aware that it is an offence to encourage or assist crime. Will she please examine and have a conversation with the police to ensure that people who use social network sites such as Twitter and Facebook to encourage or assist crime are prosecuted?

[Mrs May]

The right hon. Gentleman makes an interesting point. After such events, it is important that we take the appropriate time to consider all the issues that have arisen and give proper consideration to whether we need to give the police any further powers to enable them to do the job we want them to do in this new environment.

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

Will the Home Secretary commend the overwhelming majority of peaceful protesters and the police for their measured response, urge the police to maintain their close-proximity approach to policing and reject calls for a policing approach that is based on distance and relies on water cannon and cordoning off large sections of a city?

[Mrs May]

As I said in response to the question from my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), the way in which the main march was policed was a good example of, and a tribute to, the British model of policing. It was important that the police were able to do that in co-ordination with the organisers of the march, who had been in discussions with them about it in advance of the event.

[Mr David Anderson (Blaydon) (Lab)]

Will the Home Secretary enter into discussions with her colleagues about the way the events on Saturday were reported? Any impressionable young person watching the news on Saturday evening or through the night, or reading the newspapers yesterday, would believe that the only way to make their voice heard is by being involved in such actions, which none of us in this House condones. We need more balance from the British media so that that message can get through.

[Mrs May]

Yes, of course the media have a responsibility in how they report such incidents. I find it deeply distressing that too many people are willing to stand up and condemn the police, when they should be condemning those who perpetrated the acts of violence.

[Mr Marcus Jones (Nuneaton) (Con)]

Will the Home Secretary investigate the possibility of introducing a system akin to football banning orders to keep the minority of anarchist thugs off our streets when such demonstrations take place?

[Mrs May]

I thank my hon. Friend for that question; I am indeed prepared to do that. Over a period of years we saw a sensible response to football hooligans, which included banning orders. That is why I have asked the police whether we need more powers, and I am willing to look at that example.

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

Has the Home Secretary had time to reflect on the policing Minister’s response to a patsy question on the BBC, where the sense was that the Leader of the Opposition was responsible for the anarchist attacks? If she honestly believes that the Leader of the Opposition is responsible for them, then we had better bring back the planes from Libya and have a no-fly zone over the Labour party headquarters in London.

[Mrs May]

I would simply say to the hon. Gentleman that that was not what the policing Minister said. It is extremely disappointing that, at a time when the House should be uniting in its support of the police and its condemnation of violence, the hon. Gentleman chose to address his question in that way.

[Justin Tomlinson (North Swindon) (Con)]

What action will my right hon. Friend take to recover the costs of the damage from the extremists who have been arrested?

[Mrs May]

My hon. Friend makes an interesting point. If he looks at the Riot Act of 1886, he will see that it presents us with an interesting suggestion in dealing with those costs, and I am currently looking into its operation.

[Ian Murray (Edinburgh South) (Lab)]

This weekend saw 400,000 people marching in London, while Sunday saw 35,000 of the tartan army march into the Emirates stadium. Will the Home Secretary congratulate those involved on the good nature of those mass events, and put on record her disgust at the violent minority who insist on ruining them?

[Mrs May]

I am happy to join the hon. Gentleman in saying that, across this House, we want people to be able to demonstrate and make their point peacefully. It is those who chose to use violence to disrupt demonstrations or perpetrate acts of criminality as part of such demonstrations whom we condemn across, I believe, the whole of this House.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

UK Uncut claims that what it characterises as a “fun and friendly” and “creative occupation” of premises on Oxford street on Saturday has been misrepresented. What advice does my right hon. Friend have for those who claim that they have been misrepresented?

[Mrs May]

I say to them that they certainly have not been misrepresented. We need to make it absolutely clear that the police are right in what they were doing to try to prevent violence on our streets. The people who should be condemned are those who were engaged in that occupation, and in perpetrating those acts and the mindless thuggery that took place. They will be brought to justice.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Will the Home Secretary take this opportunity to say unequivocally that the remarks of the Mayor of London were unacceptable?

[Mrs May]

The Mayor of London is open to make the remarks that he chooses to make about the policing and the demonstrations. He is responsible for the Metropolitan police as the elected representative. We are all united in believing that it is absolutely right that the role of the police should be praised across this House, because they did a very good job in managing the situation on Saturday.

[Iain Stewart (Milton Keynes South) (Con)]

Has my right hon. Friend had a chance to quantify the cost to the public purse of the damage done at the weekend and of prosecuting the perpetrators? That money could otherwise have been spent on the public services that they claim to protect.

[Mrs May]

My hon. Friend is absolutely right. Of course there will be a significant cost as a result of the violence at the weekend and, sadly, that is money that could otherwise have been spent in rather better ways.

[Fiona Mactaggart (Slough) (Lab)]

Does the Home Secretary agree that one of the reasons the policing of this demonstration was more effective than that of some previous events was that the police clearly differentiated the peaceful majority who were demonstrating from the violent, thuggish minority? Is it not therefore depressing that the Mayor of London, who is responsible for the police, actively sought to conflate the two? Will the Home Secretary take this opportunity to repudiate his remarks?

[Mrs May]

Of course it was important that the police learned from recent experience of policing demonstrations, and that, as a result, they chose to operate slightly differently and to use slightly different tactics. I quoted Liberty earlier, which made it clear that some of the violent demonstrators were moving in and out of the peaceful demonstration and—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

And the Mayor?

[Mrs May]

I would say to those who want to comment on the remarks made by individuals about the demonstration that the reason Opposition Front Benchers are choosing to say so much about the Mayor is perhaps because they do not want to talk much about the comments made by the Leader of the Opposition at the demonstration.

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

The Home Secretary will be aware that, back in 2002, I was partly responsible for bringing 407,000 people to the capital and back again without so much as cracking a window pane. Will she assure the House that future protests will not be made more awkward or more expensive as a result of her proposals?

[Mrs May]

The only march I have been on was that Countryside Alliance march. It was notable that it was entirely peaceful and that virtually no litter was left afterwards. Everyone cleared up and made their point in entirely the proper way.

[Jack Dromey (Birmingham, Erdington) (Lab)]

On a day when the House should be standing united in opposition to boys in black masks who disgrace the traditions of democracy in our country, will the Home Secretary dissociate herself from the Mayor when he said:

“Balls and Miliband…will be content to see the police being unfairly attacked on all sides”?

[Mrs May]

The House is indeed united in saying that we should praise the work of the police and condemn the acts of violence by the perpetrators of criminal acts on Saturday.

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

Can my right hon. Friend confirm whether the people who were charged today will be remanded in custody, so that we can be certain that they will not be planning future demonstrations?

[Mrs May]

I am not able to give my hon. Friend confirmation one way or another in relation to all 149 individuals—[Interruption.] The shadow Leader of the House is saying, “Can’t she just do it? Can’t she just say it?” Actually, it is not the Home Secretary’s decision whether to remand people in custody. This is the Opposition’s problem with these matters; they do not recognise the difference between political responsibility, operational responsibility and judicial responsibility.

Libya/European Council

Monday 28th March 2011 Commons Chamber

15:53

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on Libya and report back from last week’s European Council. On Libya, I want to update the House on military action, on the steps that we are taking to strengthen and deepen the alliance, on our efforts to ensure that humanitarian aid gets through and on plans for the future, including the conference that we are holding tomorrow.

First, on military action, I believe that it is quite clear that allied operations have had a significant and beneficial effect. We have stopped the assault on Benghazi and helped to create conditions in which a number of towns have been liberated from Gaddafi’s onslaught. In towns such as Ajdabiya, Ras Lanuf and Bin Jawad, people are now free to return to their homes. The no-fly zone is now fully operational and effective. When it has been challenged, Gaddafi’s planes have been shot down. He can no longer terrorise the Libyan people from the air.

UK pilots have now made more than 120 sorties and flown for more than 250 hours. Over the weekend, RAF Tornados continued to conduct armed reconnaissance sorties, hitting a total of 22 tanks, armoured vehicles and artillery pieces around Ajdabiya and Misrata. This involved some extremely skilful and courageous work by British pilots seeking out and destroying tanks while doing everything possible to avoid civilian casualties. I am sure that everyone here will want to send their best thoughts and wishes to our brave pilots and all those in our armed services for the work they do.

I can also tell the House that during the early hours of this morning our Tornado pilots flew deep into the desert to strike against major ammunition bunkers at Sabha, which we believe were being used to resupply Gaddafi’s forces, including those terrorising people in Misrata. Initial reports suggest that the bunkers have been destroyed.

There remain, of course, real issues of concern. The situation of civilians in Misrata and Zintan is extremely grave, and the situation for civilians in other towns under the regime’s control is also deeply concerning, with widespread reports of human rights abuses. But we have moved quickly and decisively over the last week and we will stick to our task, as set out in the UN resolution and take all necessary measures to protect civilian life.

Secondly, on the strengthening and deepening of the alliance, I told the House last week that we believed NATO should take on the command and control of Libyan operations. This has now been agreed. NATO is already co-ordinating the arms embargo, the maritime operation and the no-fly zone. Now it will take on command and control of all military operations, including those to protect the civilian population. Canadian Lieutenant-General Charles Bouchard has been appointed as the NATO commander of the joint taskforce for the operation.

I have also made clear the crucial importance of the further active involvement of Arab nations. On Friday, the United Arab Emirates confirmed it would provide 12 fast jets, six F-16s and six Mirages, while on Saturday jets from the Qatari royal air force flew over Libyan airspace to patrol the no-fly zone for the first time. We look forward to welcoming the representatives of five Arab states, the Arab League and the African Union at our conference tomorrow.

Thirdly, it is critically important that humanitarian aid gets through to those who need it. It is absolutely clear that when the Gaddafi regime occupies a town such as Ajdabiya, the people suffer terribly. When the regime leaves a town, the way is open for proper humanitarian access. The important thing now is to make sure that it happens.

Our strategy is to help fund the humanitarian organisations that have been able to get in, to help the UN play its co-ordinating role and to provide assistance at Libya’s borders. We have funded the International Committee of the Red Cross, which is now present in Misrata, to provide support for up to 100,000 people for basic necessities and to treat 3,000 walking wounded. We flew 12,000 migrant workers trapped on the Tunisian border back to their countries and their families and we delivered 2,000 large tents and 38,000 blankets to the border. We will continue to give intense focus to humanitarian access in the coming days.

Fourthly, on plans for the future, in order to make the pressure on the Gaddafi regime as effective as possible, it is vital that we have the maximum political and diplomatic unity around the world. At the European Council, Europe came together over Libya. The Council conclusions endorsed UN Security Council resolution 1973, set out Europe’s

“determination to contribute to its implementation”

and recognised the lives saved by our action so far. This is an important step forward and it shows that Europe is now fully on board with this mission.

Today, alongside the British and French aircraft, there are Danish, Dutch and Spanish aircraft taking part in the action over Libya, flying from Italian bases, working with warships from the UK, France, Italy, Belgium, Netherlands and Poland. Romania will also provide a frigate and the Turks are planning to make naval assets available, too. Tomorrow, Britain will host a broad international conference in London to review progress and plan for the future. This will include representatives from more than 40 countries, including all the military contributors to the operation, and the United Nations Secretary-General will also be there.

I can tell the House this afternoon that France and the UK will issue a joint statement to the conference participants, setting out what is at stake as we gather to support a new beginning for Libya. A copy of the statement is in the Library.

Libya’s new beginning requires three things: first, to reaffirm our commitment to UN Security Council resolution 1973 and the broad alliance determined to implement it; secondly, to ensure the delivery of humanitarian aid, including to the newly liberated towns; and, thirdly, to help plan for the future of Libya after the conflict is over. It is for the people of Libya to choose how they are governed and who governs them, but they have a far better chance of doing that as we stand today than they did 10 days ago. Had we not acted, their future would already have been decided for them.

Let me now turn to the economic issues discussed at the Council. Britain had two goals at the summit: first, to support the euro area’s efforts to bring stability to the eurozone while fully protecting Britain’s sovereignty, and, secondly, following our Budget for growth last week, to win support for a similarly ambitious pro-growth, pro-market agenda for Europe as a whole. Let me take those two goals in turn.

I have always said that a successful eurozone is in Britain’s national interest. Given that 40% of our trade is with eurozone countries, we want the eurozone to deal with its problems and challenges, and we should therefore welcome the steps to which eurozone countries are committing themselves to taking with the euro plus pact. However, I have also said that Britain is not in the euro and will not be joining the euro, so it is right that we should not be involved in the euro area’s internal arrangements. That is why we are not intending to join the “pact” that euro area countries have agreed. It is also why I believe that we should not have any liability for bailing out the eurozone, but given the current emergency arrangements, established under article 122, we do have such a liability.

That decision was taken by the previous Government, and it is a decision to which my right hon. Friend the Chancellor specifically objected when it was taken by his predecessor after the election but before this Government took office. Frustratingly, we are stuck with it for the duration of the emergency mechanism, but that is why I ensured last December that the eurozone treaty change would carve Britain out of the eurozone bailout arrangements when the new permanent arrangements were introduced in 2013, and specifically secured agreement that, from that point onwards, article 122 would not be used for this purpose. That ends our current potential liability, and makes it clear that from 2013 Britain will not be dragged into bailing out the eurozone.

My second goal was growth. There was clear agreement at the Council about the link between action on deficits and action for growth. As the conclusions clearly state, fiscal consolidation

“should be frontloaded in Member States facing very large structural deficits or very high or rapidly increasing levels of public debt.”

We agree. It is worth noting that the UK still has one of the highest budget deficits in the EU—higher than those of Greece, Spain and Portugal—but because of the actions we have taken our interest rates are closer to those of Germany. It is also worth noting that the EU forecast is for the UK to grow in 2011 faster than France, Spain, Italy, the eurozone average and the EU average.

Just as we have a Budget for growth in the British economy, we need a plan for growth in the European economy. In advance of the Council, I organised a letter, which was signed by nine countries, making the case for specific actions to support growth: completing the single market and extending it to services, boosting trade, opening up and connecting European and global markets, reducing regulation, supporting innovation, and unleashing enterprise. That has had a real impact, not least because the argument is now being made not just by Britain but by Sweden, Denmark, the Netherlands, Finland, Poland, Latvia, Lithuania, and Estonia. As a result, the European Council endorsed much of our approach. We agreed that we should focus on concluding the Doha round and other free trade agreements in 2011. We also agreed that

“the overall regulatory burden should be reduced”,

and that micro-enterprises should be exempted from certain future regulations. That moratorium, which mirrors the moratorium on regulation for small businesses in last week’s Budget, is a positive endorsement of the approach we are taking in Britain.

Finally, the Council discussed how Europe could help Japan to recover from the devastation caused by the earthquake and the tsunami. I spoke to the Japanese Prime Minister on Friday. As the House knows, we have provided search and rescue teams, and stand ready to help in other ways. I know that everyone in the House will applaud the resilience and courage of the Japanese people during these tragic times. Looking to the future, we should show solidarity with the Japanese, and help both our economies by pushing forward with a free trade deal between Japan and the EU. At Britain’s instigation, the Council conclusions explicitly refer to the

“potential launch of negotiations for a free trade agreement .”

At this Council, Europe was faced with a choice: to rise to the challenges facing our continent, or to take the path of least resistance. On Libya, Europe chose to come together around the stand taken by Britain, France and the United States to respond to the call of the Arab League and save people on our continent’s doorstep from slaughter. On the economy, Europe chose a new direction, based on the principles set out by Britain and other member states, for stronger growth and prosperity.

For too long Europe has focused on issues of process and structure. Last week, Britain helped Europe to focus on policies and people: on creating prosperity for its citizens, and confronting a humanitarian crisis on its southern border.

I commend the statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement.

I want to concentrate my questions on Libya, but let me first deal with the issues of economic policy and Japan. On economic policy, I welcome the Europe 2020 conclusions, the proposals on economic governance and the commitment—which I do not think the Prime Minister mentioned—to explore an international financial transactions tax. On the international financial transactions tax, may I ask the Prime Minister for clarity on the UK’s position and urge him to take forward discussions actively both with the United States and at the G20? On the 2020 strategy, we saw some welcome progress, as the Prime Minister said. The European Council also talked about the priority of “reducing unemployment”, which the Prime Minister did not mention in his report to the House. I wonder whether he shared recent UK experience with his colleagues and told them that the forecasts for UK unemployment have been revised up for each and every one of the next five years by up to 200,000—something the Chancellor failed to mention in his Budget speech. May I also ask whether the Prime Minister told the Council that he had recently unveiled a Budget for growth that downgraded growth this year, next year and the year after? Did he warn Council colleagues about the dangers of going too far and too fast?

On Japan, I share the sentiments the Prime Minister expressed about all possible help for reconstruction being given to the Government and people of Japan. The immediate priority for the UK Government will rightly be the situation of our citizens, but, looking to the future, will the Prime Minister update the House on the timetable for the report he has commissioned by Mike Weightman on any lessons that might need to be learned for British nuclear plants? It is important that this report is completed quickly, because we do not want to delay without reason the important progress we need to make on new nuclear power in our country.

Turning to Libya, may I start by welcoming the strong and unanimous position adopted by the European Council? I welcome the fact that the military operation to enforce the no-fly zone and protect civilians is showing signs of success. Now that the rebels are advancing, will the Prime Minister assure us that efforts are being made to remind them of their own humanitarian obligations to respect human rights and protect civilians at all times? Lord Ashdown raised a number of concerns this morning, and, for the record, may I ask the Prime Minister to repeat his reassurance of last week that the UN resolution is aimed at the protection of the Libyan people, not choosing the Libyan Government?

On the question of command and control arrangements for the military operation, I welcome the decision to move to the NATO command structure. Will the Prime Minister say a bit more about the governance arrangements that will now be in place for that, and in particular what the relationship will be between the North Atlantic Council and the narrower group, which I believe the French are convening, of those directly involved in military action? Given the importance of maintaining Arab support, I welcome the meeting being hosted tomorrow by the Foreign Secretary with a broad alliance of countries. What continuing role will this wider group play, and how often will it meet?

May I also emphasise to the Prime Minister another point: the importance of post-conflict planning? Whatever the eventual outcome in Libya, the peace is set to be as challenging as the conflict. Will he clarify where he believes responsibility for post-conflict planning lies? In particular, which institution, UN or otherwise, is in his view best placed to oversee this work, and does he see the case for a particular individual being asked to lead the international community’s efforts?

I think we both agree that the international community should continue with a strategy that includes non-military means. I therefore welcome the intention of the European Council to strengthen sanctions against the Gaddafi regime. The Council’s conclusions say that EU member states will be proposing the adoption of further sanctions measures at the UN Security Council. Will the Prime Minister say more about the scope and timing of those proposals? Finally on Libya, given that we have a long recess coming up, may I urge the Prime Minister to keep open the possibility of the House being recalled, should events require it?

Turning to events in the wider region, may I also welcome the words in the European Council conclusions about Syria, Yemen and Bahrain? It remains essential that we avoid the reality, or the impression, of double standards. May I therefore ask the Prime Minister what specific actions the Government are taking to attempt to prevent further repression in these countries?

Finally, may I once again pay tribute to the efforts of our armed forces? They are doing extraordinary work, protecting the people of Libya and enforcing the will of the United Nations. We owe them huge gratitude.

[The Prime Minister]

I will take the right hon. Gentleman’s comments in reverse order. First, I thank him for what he says about our armed forces. He is right to say that they have, as ever, performed with great courage, professionalism and dedication; they are extraordinarily capable and brave people and this country is lucky to have them. He asked about other countries and whether we are sending a clear message. I believe our message should be clear: the way to meet the aspirations of people in north Africa and in the Arab world is with reform and dialogue, not with repression. We have made that clear throughout and it is important.

The right hon. Gentleman asked that we keep the House up to date and I certainly intend to do that. I can let him know, because I have checked this, that in my first 10 months as Prime Minister I have made 15 statements in this House. I am told that that is more than John Major, Tony Blair, Gordon Brown or indeed Margaret Thatcher made, so I think I am doing my bit to keep the House informed.

[Edward Miliband]

Well done.

[The Prime Minister]

Thank you very much. I will certainly look at what arrangements need to be put in place for information to be regularly published and discussed in this House, because I am keen that that should happen.

The right hon. Gentleman asked about post-conflict planning and which body is in the lead. As I said in my statement, we want to make sure that the UN feels firmly in the driving seat; Baroness Amos does an excellent job and the UN should be gripping this emerging picture and working with those agencies that have managed to get through to places such as Misrata and Ajdabiya, and elsewhere. He asked about the wider group that will meet as well as NATO members. We are going to be forming a sort of contact group of friends of Libya for the future, but all the operations are now going to be run with command and control and co-ordination provided through the NATO machinery.

The right hon. Gentleman asked whether the emphasis is still on protecting people, not regime change. That is right—the UN Security Council resolution is all about putting in place the no-fly zone; protecting civilians, using all necessary measures; and, of course, humanitarian aid. He asked for assurances that we will make it clear to the rebels how they should behave in terms of civilian life. We are now in proper contact with the rebels; a Foreign Office official is having discussions with them. That is vital as we need to get to know and work with them, and make these points to them.

The right hon. Gentleman rightly refers to the fact that there was a discussion on nuclear energy at the European Council. We agreed to stress test all EU nuclear facilities, making sure that that is done by the appropriate bodies, carried out by independent regulators, properly peer-reviewed and tested. Europe must learn all the lessons from the Fukushima nuclear plant. I cannot give a timetable for the report we will be carrying out through the chief nuclear inspector, Dr Mike Weightman, but it will be done as fast as possible.

I now turn to Europe and the financial transactions tax, which was mentioned in the Council’s conclusions. We are very happy to look at this, but we believe it has to be done on a global basis. There is a great danger of a group of countries deciding to do this and just seeing financial transactions go completely out of their area, so it must be done on a global basis.

Finally, on Europe, the right hon. Gentleman made some points about unemployment. We did discuss unemployment. In Britain, as he knows, we have seen the claimant count come down and we have seen 300,000 more people in work. I would just make a point about the message coming clearly from Europe. Commission President Barroso has said:

“Without fiscal consolidation, there is no confidence, without confidence there are no investments, without investments there is no growth.”

That is a lesson the Labour party could well learn.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I just remind the House that, in keeping with the convention, Members who entered the Chamber after the Prime Minister started his statement should not expect to be called.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

On the economic aspect of the Prime Minister’s statement, does he agree that the recent election in Germany shows that the German people have lost patience with the European Union, as have the British electorate?

[The Prime Minister]

I am not an expert in the politics of Baden Württemberg, but I suspect that this is partly about the euro and the effects of the euro. I think that there are also strong feelings about nuclear power in Germany. The point I would make is that whatever our views about the euro—I think that my hon. Friend and I agree that we should stay out of it—it is in Britain’s interests that the eurozone sorts itself out, because that is the destination for a lot of our exports. So we should support these countries in what they want to do to deal with their problems and challenges.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

Does the Prime Minister accept that when he referred to the discussions that took place last May on the eurozone fund he gave a somewhat incomplete account of my conversation with the now Chancellor? We did indeed agree that we should do everything we could to keep Britain out of the main part of the rescue fund, but in relation to the smaller element to which the Prime Minister refers, what we discussed was not voting against, but abstention, recognising that Britain could have been outvoted—that is exactly the same thing that the Chancellor of the Exchequer referred to when dealing with Ireland. So when the Prime Minister next refers to this issue, perhaps he would give the whole account, not a partial account, of what happened.

[The Prime Minister]

Fortunately, I have had a full discussion with the Chancellor about that issue and he was absolutely clear that it was something to which Britain should not agree; nor should we. The problem is that we are stuck with this mechanism, which I have managed to get rid of once the new mechanism is introduced. That is the sort of action, frankly, that we have needed in Europe these past few years.

[Sir Menzies Campbell (North East Fife) (LD)]

When considering any of the variety of proposals that may be on the table at tomorrow’s meeting, will the Prime Minister do all in his power to prevent the endorsement of any proposals that would enable Colonel Gaddafi to regenerate the apparatus of terror and oppression that has sustained him for too long?

[The Prime Minister]

I thank the right hon. and learned Gentleman for that question. This is a very important point. All sorts of people will quite rightly want to ensure that there will be a proper political process at some stage so that Libya can transition to democracy. It is important, however, that while such clear and flagrant breaches of the UN Security Council resolution are going on, we should do everything we can to protect people and, as a result, the Gaddafi regime will effectively be driven back.

[David Miliband (South Shields) (Lab)]

May I strongly associate myself with the Prime Minister’s words about the successes of the past week in justifying the UN Security Council resolution on Libya? The rebels’ progress more than reflects the widespread view across the House about the importance of the resolution. However, the Prime Minister did not say much about the European Union’s relations with the rest of the Arab world in future. One reason to support the resolution was the danger for the rest of the Arab world of Gaddafi’s potential slaughter. Will the Prime Minister say something about the potential for conditionality in EU engagement with the countries of the middle east and north Africa on trade, development and other matters as we go forward in support of democratic governance in north Africa?

[The Prime Minister]

The right hon. Gentleman makes an important point, which is that Europe’s engagement with north Africa and the middle east has not always been very successful in the past, particularly on the grounds that he describes. There has not been enough conditionality on the progress those countries need to make towards more open societies and the building blocks of democracy, getting rid of emergency laws and the rest of it. The European Council conclusions, like those from our emergency summit, talk about putting in place a new partnership and making a new offer to these countries with deeper economic integration, broader market access and greater co-operation and, in return for that, we should ask for more conditionality in the progress that they make. Money is not the problem; there has been plenty of money put into these areas by Europe. We need more of a focus on what we believe we should be getting out of it.

[Richard Ottaway (Croydon South) (Con)]

Will the Prime Minister use tomorrow’s summit to clarify the rules of engagement? He will be aware of the criticism of the attacks on the arms dumps as they have been considered to involve a fairly broad interpretation of the UN resolution. Does he agree that it is critical that the future of Libya is not cluttered up with acrimony among the political consensus that he has successfully built up?

[The Prime Minister]

My hon. Friend makes a good point, but I would disagree with anyone who says that destroying a Gaddafi arms dump is not in the terms of the resolution, and for the following reason. We can see very clearly what Gaddafi’s regime is doing in Misrata, in Zintan and in other places. He is using munitions to kill people—to murder his own citizens—so depriving him of weapons is not only in the letter of the resolution but in its spirit, too.

[Chris Bryant (Rhondda) (Lab)]

Further to the question asked by the former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), I am sure that there will have been an official note of the conversations between the former Chancellor and the present Chancellor. Will the Prime Minister publish that note so that we can decide for ourselves whether he or the former Chancellor is providing the more accurate report?

[The Prime Minister]

I will certainly look at the suggestion because I am absolutely clear about what the conversation was and that the current Chancellor did not support the action being taken by the previous Chancellor.

[Mr Mark Field (Cities of London and Westminster) (Con)]

The Prime Minister rightly points out that the Budget last week went into some detail about the support that we were going to give to small and start-up businesses. Will he go into a little more detail about the work he did this weekend in the European Council on micro-businesses, which will clearly be important organisms for growth in employment in the years ahead, both in Europe and throughout the world?

[The Prime Minister]

My hon. Friend makes an important point. Businesses that are either starting up now or are yet to start up will provide a lot of the growth in jobs, investment and opportunity here and elsewhere in Europe. What was encouraging about this European Council was that the Commission itself, in response to the letter that we had produced with other countries, brought up its own proposals, one of which was a moratorium on certain regulations for all new businesses for a specific period. That does not go quite as far as what we have done in the UK, but to hear the Commission talk about deregulation, cutting the burden of regulation and taking regulations off new small businesses was, I thought, very good progress.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I welcome the references in today’s statement to the access to humanitarian help. Now that the rebels are advancing well, is it not time for coalition countries, particularly this country, to give us some idea when the Government will consider that the job is done? Also, will the Prime Minister please confirm that all possible diplomatic avenues are still open?

[The Prime Minister]

First, in terms of diplomatic avenues, it is welcome that there is now British diplomatic representation talking with the opposition in Benghazi—I think that is hugely welcome. In terms of when the job will be done, I think the answer is when the UN Security Council resolution has been secured. Let me take the right hon. Gentleman back to what the President of the United States said:

“Qaddafi must stop his troops from advancing on Benghazi, pull them back from Ajdabiya, Misrata and Zawiya, and establish water, electricity and gas supplies to all areas. Humanitarian assistance must be allowed to reach the people of Libya. Let me be clear, these terms are not negotiable”.

Of course, Gaddafi has been driven back from Benghazi and out of Ajdabiya, but he is still terrorising and killing people in Misrata and terrorising other towns, he has not allowed humanitarian access and he is in flagrant breach of the Security Council resolution. I think now is the time to press ahead—helping those civilians, making sure those lives are saved and giving the Libyan people the chance of a different future.

[Mr Douglas Carswell (Clacton) (Con)]

The Prime Minister has suggested that we are liable for the bail-out mechanism entirely thanks to the former Chancellor. In that case, will he be happy for the current Chancellor to respond to my freedom of information request and publish the advice that he received on this matter on assuming office to demonstrate that we are not liable for the bail-out billions because of any failure to grasp the small print in those first few halcyon days in office?

[The Prime Minister]

I can go into even more detail if my hon. Friend wants: article 122 was turned into qualified majority voting via the Nice treaty. My right hon. and learned Friend, Michael Howard, who is now in another place, said, as a Back Bencher, “You are making a terrible mistake here: this could be used for future bail-outs,” and the then Europe Minister, the right hon. Member for Neath (Mr Hain), said in reply:

“The use of QMV…does not undermine the no-bail-out rule set out in article 103.”—[Official Report, 4 July 2001; Vol. 371, c. 359.]

What is worrying is that the Nice treaty made the situation worse and the previous Government were warned about it but they did not pay any attention.

[Mr David Winnick (Walsall North) (Lab)]

Is it the policy of the British Government to try to bring about a genuine ceasefire in Libya as apparently urged by Turkey? Is there not a danger that the manner in which allied operations are taking place means that we are getting near to regime change, which is certainly outside the United Nations Security Council resolution?

[The Prime Minister]

Of course, everyone would welcome a genuine ceasefire, but let us be frank—two ceasefires have been announced by Colonel Gaddafi, both of which were broken instantly by him, so I think we should have a heavy degree of scepticism about what this man says. I would not be at all surprised if, in advance of the conference tomorrow, he announced some all-encompassing ceasefire tonight, but we have to judge him by his actions and not his words. That is absolutely vital. I defend what the coalition is doing in terms of some quite robust ground attacks to protect civilian life. Frankly, if those things had not taken place—if we had not destroyed tanks and armoured personnel carriers—we would still see people under the lash of the Gaddafi regime in Ajdabiya and in many other towns along the Libyan coast. What we have done has really helped to implement part of the resolution, but there is still more implementation to be done.

[Mr James Arbuthnot (North East Hampshire) (Con)]

Does my right hon. Friend agree that Turkey is a key ally of the United Kingdom and a central part of NATO decision making? Is there a role for Turkey to play in the mediation process that will need to happen over the next few weeks and months?

[The Prime Minister]

My right hon. Friend makes a good point. Not only is Turkey coming to the conference tomorrow, but the Turkish Prime Minister, Prime Minister Erdogan, is coming here on Thursday for talks at No. 10. I have also visited Turkey to see him. It was one of the first visits that I made as Prime Minister. The Turks are incredibly important members of NATO, and I believe that they should also be members of the European Union. They should be intricately involved with the operations that are being undertaken in Libya. They may well also have role as a trusted interlocutor, but right now, what they want to do is get their ships involved and get humanitarian assistance involved as well. That is hugely welcome.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the grip that the Prime Minister has on the situation, after a slightly unhappy start. When I close my eyes, I hear his predecessor but one, 10 years ago, talking about Kosovo and Sierra Leone in similar terms. On Europe, I welcome his metamorphosis into a pragmatic, fairly friendly European. Will he confirm that we will, if called upon, help our oldest ally, Portugal? When Mrs Thatcher brought the rebate back in 1984, agreed to a tripling of the EU budget, and when Labour Eurosceptics questioned her, she said, “We must help our old friend, Portugal.” Is the Prime Minister still a Thatcherite?

[The Prime Minister]

I am a great admirer and supporter of what Margaret Thatcher did for our country, and I am a great admirer of Portugal. When I talked to the Portuguese in advance of the UN Security Council resolution, they were strong supporters of that resolution and said that one of their reasons was that they wanted to be with their oldest ally. So they see the relationship in that way. On financial issues, we should not speculate about any other country’s financial situation or finances. As to what the right hon. Gentleman says about Europe, I have always believed that we should get stuck in in Europe to fight for the British interest, and that is what I do.

[Mr Roger Gale (North Thanet) (Con)]

My right hon. Friend has rightly highlighted the plight of civilians in Misrata. That concern is shared by the Libyan British Relations Council. Will my right hon. Friend ask his right hon. Friends the Foreign Secretary and the Defence Secretary to look at ways of getting humanitarian aid into Misrata by sea?

[The Prime Minister]

We are doing just that. There are a number of humanitarian agencies that are trying to get aid into the ports along the Libyan coast. As I said in my statement, we should be trying to give financial assistance to those that are successful, while helping to get the UN to co-ordinate. Obviously, Misrata is a very difficult picture. Fighting has been going on as I have been standing here. It is difficult to get access, but we should do everything we can to help it.

[Mr Dennis Skinner (Bolsover) (Lab)]

What steps is the Prime Minister taking, along with others, to avoid an inter-tribal civil war in Libya?

[The Prime Minister]

We believe that the Libyan people should be able to choose their own future. I do not believe that the only alternative to Colonel Gaddafi is some sort of tribal internecine warfare. Many people coming forward in Libya want to see a proper transition. Of course we need to know more about the interim transitional national council, but it is at least a good sign that its members want to be interim, transitional and national, rather than sectarian or tribal. We should be a little more optimistic than the hon. Gentleman sounds in his question.

[Nicholas Soames (Mid Sussex) (Con)]

May I congratulate the Prime Minister on the initiative of the letter that he signed with nine other countries in the European Union, in particular about the importance of pushing forward with a programme of deregulation in the EU? Does the Prime Minister agree that it is essential that someone takes ownership of this programme, and will he do it?

[The Prime Minister]

I certainly will attempt to do that, but as my hon. Friend knows, one of the issues is that the only organisation that has the right of initiative in the European Union is the Commission, so the key is to work with the Commission and to persuade the Commission that what is needed right now in Europe is deregulation, market reforms and completing the single market. I think President Barroso sees the world like that. There is no fiscal stimulus left to European countries; they have all run out of money. There is not much monetary stimulus left, with interest rates as low as they are. What we need is the stimulus that comes from making it easier to do business, and I think President Barroso gets that.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister referred to the need for maximum political and diplomatic unity. In that context, will he clarify the position as regards attendance at the conference tomorrow? Will all the members of the UN Security Council be there? What is the position of the British Government with regard to the remarks being made from Russia?

[The Prime Minister]

More than 40 Foreign Ministers will be attending tomorrow’s meeting, and it is a meeting of Foreign Ministers, rather than Government Heads and Prime Ministers. In terms of who is coming, it is those countries that are active in the coalition, so there will be strong European representation, but we have also secured, as I said in my statement, strong Arab representation. Countries such as Iraq, Morocco, the United Arab Emirates and Qatar will be there and the Arab League will be represented. I have also heard that the African Union Secretary-General will be there, which is hugely to be welcomed. Not every permanent member of the Security Council will be represented, but crucially Ban Ki-moon will be there, so I think that it is a good opportunity to bring the alliance together to show its strength and depth and to work out the next moves forward, both militarily and politically and diplomatically. It is about showing that the world is still united around UN Security Council resolution 1973 and that there is a group of countries that are determined to implement it in the interests of the world.

[Martin Horwood (Cheltenham) (LD)]

I strongly welcome the London summit, particularly the inclusion of Turkey, which is very important, but on the day that the Ashdown report has emphasised the importance of anticipation in humanitarian response, can I ask that, even though the outcome is still very uncertain, both the summit and the European Union discuss not only the current situation in Libya, but the future humanitarian response, reconstruction and recovery scenarios?

[The Prime Minister]

I thank the hon. Gentleman for his question, and indeed Lord Ashdown for his very good and timely report. One of the things that we have been looking at for some time is how to get reconstruction and humanitarian aid into countries faster, which is why we have been looking at trying to have a combined military and development approach in some circumstances. In terms of who does the co-ordination, it seems to me that we should be trying to persuade the UN to take a leading role in co-ordinating, but there are some agencies, such as the International Red Cross and Médecins Sans Frontières, that are already getting into the ports, and we should be helping those that have got there.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I noted what the Prime Minister said about completing the single market and including services. For the benefit of the House, will he clarify whether it is his understanding that, following his NHS legislation, NHS services would become subject to single market competition rules in Europe?

[The Prime Minister]

I think that the hon. Lady will find that it was in 2004 that the previous Government extended EU competition legislation to cover all aspects in the UK, and that has now been progressively extended to health as well. That is my understanding, but if I have got it wrong in any way, I will certainly write to her.

[Margot James (Stourbridge) (Con)]

I applaud the Prime Minister’s progress on deregulation within the EU, but may I draw his attention to the European Chemicals Agency’s rewriting of the guidelines on the registration, evaluation and authorisation of chemicals, which will add considerable cost to chemical intermediates manufacturers in my constituency? I urge him to support the efforts of the Department for Business, Innovation and Skills in pushing back on those costly proposals.

[The Prime Minister]

I will certainly look into the case my hon. Friend mentions. I have received similar representations from companies in my constituency that are concerned, because they had just about worked out how to comply with one set of rules before seeing another set coming down the track, so I will make sure that BIS is doing as she says.

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

Will the Prime Minister confirm whether those armed forces personnel who are either carrying out or supporting operations will now be exempted from redundancy notices?

[The Prime Minister]

What we said very clearly with regard to Afghanistan is that anyone who is about to go on operations, is on operations or has recently returned from operations would not be subject to compulsory redundancy, and I believe that that should apply in all circumstances where people are effectively involved in conflict for their country.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

My right hon. Friend has rightly been commended for the way he has averted a humanitarian catastrophe, but will he say a little more about what will mark the end of this conflict? Ideally we would like to see Gaddafi step down, but is it possible that he could comply with the terms of the no-fly zone and the UN Security Council resolution while remaining in office and keeping the country divided, rather like a new Cyprus?

[The Prime Minister]

My hon. Friend asks the extremely difficult and very good question, because it is unclear what will happen next. People did not predict the rush to Benghazi, and nor did they predict the rush back from Benghazi. They did not predict that the rebels would be so effective at knocking the Gaddafi regime out of all those coastal towns, including the key oil installations, so it is difficult to have an absolutely clear picture of what will happen next. I think that what we should hold true to is the very strong UN Security Council resolution that is about a no-fly zone, about protecting civilians and about getting humanitarian aid in. To comply with that, Gaddafi must comply with all the things in the resolution and with what the President of the United States set out in his statement. I see no sign of that happening and, as that is not happening, we are right to go on enforcing the resolution.

[Jason McCartney (Colne Valley) (Con)]

I have a dream: I have a dream that one day our country will not be liable for bailing out the eurozone. Will the Prime Minister confirm whether we have contingency funds set aside for any bail-out that goes ahead?

[The Prime Minister]

I share my hon. Friend’s dream, but I have not had to stand on his shoulders, nor he on mine, to realise it; we both have our feet firmly planted on the ground. On that ground, we will be out of all the bail-out arrangements by 2013. That was negotiated by us in Europe, and that is a worthwhile thing that we have achieved, but we are stuck with article 122 in the meantime.

[Mark Reckless (Rochester and Strood) (Con)]

It is good that we will not be liable for bail-outs after 2013, but will the Prime Minister build on his diplomatic successes by using the fact that we have a veto over the permanent arrangements as a lever to extract us earlier—and before we are on the hook for Portugal and Spain?

[The Prime Minister]

Let me just say again that I do not think we should speculate on other countries’ financial situations; we certainly would not like it if they speculated on ours. The point is that, in return for agreeing to the treaty change that was put forward, we had an opportunity to win some benefits for the UK. We got ourselves out of all future bail-out mechanisms, and we got an assurance that article 122 would not be used again once those operations were in place. I think that that was the right approach for the UK. It was doable, it was negotiable and it was tough work, but we got it, and to say that there was some other option on the table is, if I may say so, not realistic.

[Conor Burns (Bournemouth West) (Con)]

Having prevented Gaddafi from doing to his citizens in Benghazi with guns what he did to our citizens in Northern Ireland with cash, has the Prime Minister had time to reflect on the fact that, in publishing the legal advice, in being clear and honest about the objective and in going to the United Nations, he has done a great deal to restore the faith in his office that was so profoundly damaged after Iraq?

[The Prime Minister]

I am grateful for what my hon. Friend says. It is right to have debates in the House and to do so on the basis of a proper Cabinet decision. Let me just say that we have published not the legal advice, but a note based on the legal advice, and we will stick to the convention that the Government are entitled to receive legal advice confidentially, and then to act in the terms of that legal advice. When we are being asked all sorts of questions about what is legal and illegal under a UN Security Council resolution, I think that that is the right approach.

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

Does my right hon. Friend agree that the biggest economic boost to Europe would be a successful conclusion of the Doha trade round? Was he not entirely right to keep the Council focused on that matter, and will he update us on progress?

[The Prime Minister]

The issue is about trade both internally within Europe and externally between Europe and other countries. On the first one, it is about completing the single market, and the point to remember is that the single market does not apply to four-fifths of our economy if it does not apply to services properly. On Doha, it is still extremely hard going, but if the Chinese and the Americans can agree to enlarge what is on offer, there is still a prospect of making progress this year. We really need those two countries, however, to focus on the fact that there is a benefit to both of them if they show the political bravery to re-open things and try to make the deal larger.

[Mr John Leech (Manchester, Withington) (LD)]

Will the Prime Minister assure the House that every effort is being made to protect the safety of UK citizens, including a number of Mancunian Libyans, still trapped in Libya?

[The Prime Minister]

I certainly give that assurance. We are still updating daily the number of British citizens in Libya and the numbers who want to leave. There has obviously been an increase, because so many journalists have gone to the country, but we do what we can with partners to try to get those people out who want to get out. Given that the Turks are now helping us with our diplomatic representation in Tripoli, there are avenues to do that, but if the hon. Gentleman has specific cases in mind, I refer him to the Foreign Secretary and his team, whom I know will do everything that they can to help.

[John Howell (Henley) (Con)]

May I return my right hon. Friend to the communiqué on fiscal consolidation? I wonder whether he would say what message it now gives to those who still oppose tackling deficits on an urgent basis.

[The Prime Minister]

I think the simplest way of putting it is this: if we cut the deficit in half in four years, as Labour proposed, that would mean that in four years’ time our deficit would be about the same size as Portugal’s today. That really brings it home to us that the problem in Britain is that much deeper because the deficit we inherited was that much bigger. That means, as the European Commission and the European Union said:

“Consolidation should be frontloaded in Member States facing very large structural deficits”.

I think they mean us.

[Mr William Cash (Stone) (Con)]

The Prime Minister knows that in the past he has promised the repatriation of laws relating to small businesses and employment and social legislation. He also knows that the Deputy Prime Minister has ruled it out. In the context of these promises from the European Council, which may turn out to be a triumph of hope over experience, as far as we can tell from the past, and with the Commission merely offering a report, would my right hon. Friend be good enough to reaffirm his policy of repatriation so that we can re-grow the British economy and pass the legislation overriding European business laws where necessary for our own national interest and growth?

[The Prime Minister]

The point I would make to my hon. Friend is that we had to come together in a coalition Government with a coalition agreement. If we are absolutely honest with ourselves, Europe is not an area where the Liberal Democrats and the Conservatives always agree, if I can put it that way. However, in the coalition agreement we came to a good agreement that we would not pass further powers from Westminster to Brussels, and that we would introduce the referendum lock so that any further transfer would be subject to referendum; and we also have the agreement that Britain is not intending to join the euro. In spite of the fact that we do not always agree on these European issues—and we are grown-up enough to make that point—I think it is a very strong coalition agreement, and one that all colleagues can support.

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

When my right hon. Friend spoke to the Japanese Prime Minister on Friday, did he receive assurances from him that everything was being done to reopen Japanese factories that provide much-needed components to the British car industry?

[The Prime Minister]

I recognise the point that my hon. Friend makes, given his interest in the magnificent Honda plant in Swindon, which I had the great good fortune to visit. Indeed, although I am not allowed to drive it any more, I am the proud owner of a Honda made in Swindon. I know of the problem. I did not discuss it with the Japanese Prime Minister because we were talking about the absolutely urgent requirements for help for the Japanese now, but it will be key for the Japanese economy, and indeed for ours, to make sure that those trade links are opened up again as soon as possible.

[Charlie Elphicke (Dover) (Con)]

Rather than bail-outs, will the Prime Minister consider putting it to the European Council that there is a better alternative, which is to get spending under control and get a really great Finance Minister like we have here?

[The Prime Minister]

My hon. Friend is right. Everyone in Europe has the same challenge: how do we get on top of fiscal deficits and what are the decisions that we need to make in terms of spending reductions and other measures? Everyone in Europe is engaged in this, apart from the Labour party.

[Duncan Hames (Chippenham) (LD)]

It is not just tanks and planes that Gaddafi uses against his own people but the poisonous propaganda on Libyan state TV carried on NileSat, which threatens to undermine hopes for future peace in that country. What can be done to ensure that all Libyans, especially those in Tripoli, can access independent media on which to base their understanding of current events?

[The Prime Minister]

The hon. Gentleman makes a vitally important point. We want to do everything we can to try to make sure that people can access independent media, which have had a huge impact on these events. But also, frankly, we should take a tougher approach to Libyan state television, which, as far as I can see, is actually working on behalf of the regime that is terrorising and brutalising its own civilians. The hon. Gentleman makes a very good point that we should pursue urgently.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

My right hon. Friend is aware of the relatively peaceful progress being made in the Kingdom of Morocco, in sharp contrast to the situation in much of the rest of region. Will he ensure that we give every encouragement to Morocco following the very positive speech by King Mohammed VI which outlined constitutional and judicial reform in his country?

[The Prime Minister]

My hon. Friend makes a good point. The last European Council—there have been quite a lot of them—which was specifically about north Africa, the middle east and the events in Libya, mentioned the excellent speech by the king of Morocco specifically. At a time when many countries in the area are trying to reform, we should encourage those who are engaging in dialogue and reform, and not treat all these countries in the same way.

[Chris Heaton-Harris (Daventry) (Con)]

The euro-plus pact, which was endorsed by the European Council and which I am pleased the UK has not joined, referred to a recently proposed directive on corporation tax, which would apply to the UK if it was adopted. Would the Prime Minister be prepared to veto that directive if it interfered with our tax sovereignty?

[The Prime Minister]

It is important that we maintain our tax sovereignty. That is one reason why I think it is right to stay out of the euro-plus pact. One of the terms of the euro-plus pact is to look at developing a common corporate tax base. If eurozone countries want to equalise their tax rates, that is a matter for them, but it is a folly in which I do not think we should engage.

[Bob Blackman (Harrow East) (Con)]

I congratulate the Prime Minister on extricating us from the eurozone bail-out mechanism by 2013. Given that Portugal, Spain and Greece are in financial trouble, most people will be concerned about what contingent liabilities we will be exposed to between now and then. What has my right hon. Friend done to assess those potential liabilities?

[The Prime Minister]

We have assessed the liabilities. Debates have been held in this House and there is a great deal of information that I can make available to my hon. Friend. The matter is complicated because as well as the article 122 mechanism, which contains a limited amount of headroom, some of which has already been used up in the case of Ireland, another facility has been put in place that does not include the UK, which has considerably more headroom. Above and beyond that, we will have the future mechanism post-2013. If he likes, I can give him the full details on what all those things are and on the relatively limited liability that the UK has under article 122. As I have said, it is a liability that we wish we did not have.

[Mr Peter Bone (Wellingborough) (Con)]

Over the weekend, my wife was saying what a wonderful job the Prime Minister was doing over the EU bail-outs, and that he was turning into a Mrs Thatcher. She wondered if he could use his immense charm and ability to persuade the euro countries not to ask us to participate in any bail-out? Will the Prime Minister satisfy Mrs Bone?

[The Prime Minister]

I am fast coming to the view that Mrs Bone is quite literally insatiable. I will—[Laughter.] I will certainly do my best, but there are some things of which it is quite difficult to persuade one’s European colleagues. I take to heart the compliments that Mrs Bone paid in the early part of my hon. Friend’s question.

[Mr Speaker]

I feel rather left out not to have met Mrs Bone.

[Stephen Gilbert (St Austell and Newquay) (LD)]

Will the Prime Minister confirm that France and the other allied countries will take part in military action only through the NATO command structure, and will not prosecute separate campaigns outside that structure?

[The Prime Minister]

That is the arrangement that has been put in place. Obviously, it is both NATO’s command and control structure and its machinery that everyone has agreed to use. The point that the French have made—I think that this is important—is that we should ensure that the world knows that this is not just a NATO operation, but that Arab countries are involved and that there is a broader coalition and alliance. Given that we have the NATO machinery, it makes sense to use it. I think that one should make those practical arguments, rather than getting too caught up in the theology.

[Neil Carmichael (Stroud) (Con)]

I welcome the Prime Minister’s emphasis on deregulation and on strengthening the Single European Act. Does he agree that we should apply that logic to the whole of Europe to ensure that our businesses can operate untrammelled across Europe and that investment is able to flourish?

[The Prime Minister]

I do agree. As I said, completing the single market can sound rather technical and dull, but when one considers how much our economies are dominated by services—80% on average—and the fact that there are still so many abuses of the single market by services in so many countries, it is clear that there is a real opportunity to enlarge the whole EU economy if we take these steps.

[Mr Speaker]

I must thank the Prime Minister and colleagues for their succinctness. Everybody got in, and we did not even take up the hour that I had it in mind to allocate.

Post-16 Education Funding

Monday 28th March 2011 Commons Chamber

16:49

[The Secretary of State for Education (Michael Gove)]

With permission, Mr Speaker, I should like to a make a statement on education after the age of 16.

Today’s statement builds on the work of my colleagues such as the right hon. Member for Yeovil (Mr Laws), the original architect of the pupil premium; the Minister of State, the hon. Member for Brent Central (Sarah Teather), who has secured additional funding for reform of early years and special needs provision; my right hon. Friend the Deputy Prime Minister, who has been leading the coalition’s radical programme of work on social mobility; and my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), whose work as advocate for access to education has been driven by the ethical imperative of making opportunity more equal.

All of us know that an increasingly competitive world economic environment means that our children need to be better educated than ever. Sadly, however, we have been falling behind other nations in our educational performance. The OECD has reported that despite sharply rising school spending over the past 10 years, England has slipped down the international rankings from fourth to 16th for science, from seventh to 25th for literacy and from eighth to 28th for mathematics. Last month, in a new report, the OECD revealed that we have one of the most unequal education systems in the developed world. We have a system of education spending that is fundamentally inefficient, and we have an insufficient supply of high-quality vocational education.

The OECD’s challenge is underlined by the conclusions of Professor Alison Wolf’s report on vocational education. Professor Wolf has revealed that nearly half of school leavers never secure five decent GCSEs including English and maths, and that many of the qualifications that they currently secure are not respected by employers and colleges. The case for reform that she makes is unanswerable. We cannot carry on with a vocational education system that is broken, and we are determined to ensure that we have a technical education system that is among the world’s best.

Action has already been taken by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning. The number of new apprentices taken on in the last quarter was 54,000, 8% up on last year, and I expect that number to rise further in the months ahead. More young people are being trained for work, and the number of young people between the ages of 16 and 18 not in education, employment or training actually fell by 15,000 in the last quarter of last year. However, we know that more needs to be done. In particular, action needs to be taken to reduce bureaucracy. That is why my hon. Friend will be working with me in the months ahead to make it easier for small and medium-sized enterprises to hire apprentices, so that we can ensure that the next generation enjoys opportunities that were denied the last.

Critically, we know that the biggest determinant of whether students can stay on is their attainment at the age of 16, and specifically whether they secure good GCSEs in subjects that universities and employers value. So to raise attainment, especially among poorer students, we have radically extended our academies programme, introduced a new, more aspirational measure of performance, the English baccalaureate, and are investing an additional £2.5 billion in the pupil premium for students who are in school to the age of 16. Today I can confirm that, building on the pupil premium, we will introduce additional funding for the education of students over the age of 16 who stay on at school and college.

We are already increasing funding for post-16 education next year to more than £7.5 billion, which is equivalent to more than 1.5 million places in schools, colleges and training. Within that £7.5 billion, £770 million is being spent on supporting the education of disadvantaged 16 to 18-year-olds. That is £150 million more than would previously have been available to schools and colleges specifically for the education of the most disadvantaged 16 to 19-year-olds. Nearly 550,000 young people will benefit from that student premium.

As we plan for more students to stay on, so we must reform how we fund the institutions that educate young people over the age of 16. I will therefore consult on a fairer funding formula for all schools and colleges in the sector. Already, thanks to the measures taken by the coalition Government, there will be more places in schools and colleges for students, particularly those who want a high-quality technical and vocational education. Because of the steps that we have taken to reduce waste and remove inefficiencies, my right hon. Friend the Chancellor of the Exchequer released in the Budget another £125 million to build new schools and colleges in England. We will double the number of university technical colleges planned from 12 to 24, and we will work with leading figures in industry and commerce to create a new generation of 16-to-19 technical academies that will support the growth industries of the future.

All schools should have the ability to benefit from a closer engagement with business, so I have today asked Bob Wigley, the chair of the Education and Employers Taskforce, to bring forward proposals that will allow every school to develop a link with local businesses through engagement with volunteer governors.

However, we must also ensure that no young person is prevented from staying in education or training for financial reasons. The education maintenance allowance was used by the previous Government to provide an incentive for young people to stay on, and it led to a small increase in overall participation, but as a report commissioned by the previous Government pointed out, there are real questions as to whether it is socially just to pay 45% of students a cash incentive to stay in learning when we could concentrate our resources on removing the barriers to learning faced by the poorest.

The social justice case for reform has already been made—by the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), when he was Education Secretary in the previous Labour Government. He said in 2007 that the EMA was an incentive that

“we will not be using”

in future. Instead, he argued, a Labour Government would need to “divert that” EMA “money into other areas”.

“What we will need to do”,

he argued on behalf of the Blair Government, is

“offer…assistance to youngsters…from poorer backgrounds”,

which is precisely what I propose to do.

Today, I can announce the shape of the new, more targeted, student support scheme that we pledged to introduce last autumn. We have consulted extensively to ensure that we support those most in need, and I am particularly grateful to my right hon. Friend the Member for Bermondsey and Old Southwark for the work that he has done to help to secure a progressive solution.

The Government have already ensured that every household in which the family are not on the higher rate of tax, and where children stay on in school after the age of 16, will receive increased child benefit, and today I propose to increase the amount of support that we give to the most vulnerable. Twelve thousand students, those in care, care leavers and those receiving income support, including the severely disabled, should in future all receive an annual bursary of £1,200 if they stay on in education—more every year than they ever received under EMA.

I also propose that those most in need who are currently in receipt of EMA be protected. All young people who began courses in 2009-10 and who were told that they should receive EMA will still receive their weekly payments. Young people who started courses in the 2010-11 academic year and received the maximum weekly payment of £30 should now receive weekly payments of at least £20 until the end of the next academic year.

In addition, those students will be eligible for support from an entirely new post-16 bursary scheme. Our scheme will help to ensure that the costs of travel, food and equipment for poorer students are properly met, so that no one is prevented from participating through poverty. One hundred and eighty million pounds will be available for that bursary fund, which is enough to ensure that every child eligible for free school meals who chooses to stay on could be paid £800 per year—more than many receive under the current EMA arrangements.

Schools and colleges will have the freedom to decide on the allocation of the bursary. They are best placed to know the specific needs of their students, and we will give professionals full flexibility over allocating support. We will now consult on the implementation of the new scheme, so that allocations can be made for the new arrangements to come into effect from this September.

In these extremely difficult economic times, the coalition Government are prioritising the reform and investment we need across the education system. We are providing more investment in the early years to tackle entrenched poverty; tougher action to turn around underperforming schools; more investment in improving the quality of teaching, especially for the most disadvantaged; higher standards for all children at every stage, to get more going on to college and into fulfilling jobs; more academies to extend opportunity across the country; sharper accountability for how every penny is spent and how every pupil is taught; and more autonomy for all professionals, so that we can compete with the best.

We must ensure that we at last have a world-class education system in the decade ahead, and I commend this statement to the House.

[Andy Burnham (Leigh) (Lab)]

On Saturday, thousands of young people came out on to the streets to speak out against the unfair decisions of this Secretary of State. On the “Today” programme, he was dismissive of their actions:

“Evan Davis: Will the march, however big it is, change your mind about any aspect of this cuts agenda? Michael Gove: No.”

Given that so many people no longer have any faith in a word he says, perhaps it is entirely to be expected that he is here, just 48 hours later, announcing a humiliating climbdown. I do not think that we can dignify today’s announcement with the word U-turn. He has taken a successful policy that improved participation, attendance and achievement in post-16 education, and turned it into a total shambles.

I will remind the House of the background. Before the election, both the Secretary of State and the Prime Minister made personal promises to young people that the EMA would stay. Even after the election, the schools Minister, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), pledged to keep it. Then, out of nowhere, the Secretary of State cut it by 90%, and today, under pressure, he tries to put a positive gloss on a 60% cut. Whatever he says, that is what it is—a successful scheme praised by the Institute for Fiscal Studies and leading economists cut by two thirds. Young people have seen through this and will not be taken in by this Secretary of State.

The truth is that with his confused decision making, the Secretary of State has already thrown into chaos thousands of young lives. Even today, many will be none the wiser about their futures. I will take three issues. First, on the money, I have a simple question: where is it coming from? How much is coming from elsewhere in the education budget? Will this announcement not cause chaos elsewhere? Is it true that he is cutting the careers service even further to pay for it—a service already in meltdown thanks to the complete failure of Ministers to manage the transition to a new service? If new money is being provided by the Treasury, how much and why was it not announced in last week’s Budget?

Secondly, on the numbers who will benefit, the Secretary of State claims that the poorest 12,000 students will receive more than under the current scheme. What he did not say is that it amounts to 77p a week more. What has he got to say to the other 588,000 young people who stand to lose over £1,000 a year and to whom he gave a personal promise that they would keep this support? On the Opposition day debate, he stood at that Dispatch Box and promised that his new scheme would help with travel costs and equipment, and provide help for young parents, carers, those leaving care and young people with learning disabilities. Can he today assure the House that all of those promises are met by this announcement? What about the estimated 300,000 first-year students in the middle of a two-year course? He knows that a legal opinion obtained by the Labour party showed that these students had a strong case against the Secretary of State. Is it not the case that today’s partial climbdown was only prompted by the threat of legal action and the panic realisation that he was at risk of yet another reverse in the courts?

Thirdly, on how this scheme will work, we welcome the Secretary of State’s climbdown on keeping a national automatic payment system for about 2% of current recipients. Is it not the case, however, that under his proposed scheme more than half a million young people will no longer have any guarantee of the level of support they can expect? Does not that lack of clarity in this new scheme run the same risk of thousands of young people walking away from education altogether? The fact is that his proposals fail to build on the strengths of the current system. Is it not the case that college principals and senior staff will be spending a huge amount of their time administering this fund and will be placed in the invidious position of having to make impossible decisions between equally deserving claims for support? Will there be any national criteria for eligibility and, if not, are we looking at an unfair postcode lottery?

Will the new scheme replicate the weekly conditional payments that have helped to boost attainment and stay-on rates? Five months ago the Secretary of State made a decision that dropped a bombshell on young people in this country, and we are told today that there will now be a further period of consultation—more consultation! Young people are facing a difficult enough future, but still they do not know what financial support they will get. We are five months away from the start of the academic year, yet people working in education do not have the precise details.

This is yet another shambles from a Secretary of State who lurches from one disaster to another: Building Schools for the Future, school sport partnerships, Bookstart and now EMA. The pattern is always the same—a snap decision, no consultation, no evidence to support it and then a grass-roots backlash as his policy unravels before our eyes. It is becoming ever clearer that this is a Secretary of State out of his depth—who has not worked out the difference between being a journalist and being a Minister, and whose shortcomings have been cruelly exposed in office. His transformation is indeed a remarkable one—from the Tory golden boy to the coalition Mr Bean.

But the danger with this Secretary of State is that his incompetence is having a direct effect on the hopes and dreams of thousands of young people. Even after today’s announcement, with universities lining up to charge the full £9,000 in fees and youth unemployment at record levels, thousands of young people will still have to downgrade their ambitions, leave their studies and give up hope of a university education. Is that not a damning indictment of any Secretary of State for Education?

[Michael Gove]

I am very grateful to the right hon. Gentleman for those questions. I am grateful for his reference to people being out of their depth—I will of course acknowledge his expertise in this area. I am also grateful to him on behalf of my right hon. Friend the Secretary of State for Business, Innovation and Skills for once more recycling the Mr Bean joke—the copyright on that joke will ensure that the right hon. Gentleman enjoys a successful and happy retirement in years ahead.

The first question that the right hon. Gentleman asked was: where is the money coming from? The answer is that the money for all public spending comes from the taxpayer. It was on his watch that the taxpayer got a spectacularly bad deal from a Government who spent every penny and left this coalition Government with a difficult economic inheritance. He asked whether the money would be allocated by discretionary means. I pointed out in my statement that it absolutely will. He argued that college principals would face an invidious decision, but he must know that it was the Association of Colleges that argued that the new fund should be put in place on discretionary principles. Perhaps he should consult college principals before claiming to speak on their behalf.

The right hon. Gentleman accused the coalition at one point of engaging in no consultation, and of having too much at another. There was no consistency at all in the questions that he asked. There has been a certain consistency in his position in one area, however, and that is his consistent refusal to state what his alternative would be. The truth is that Labour does not have a policy on this issue or any other education issue. We know what the right hon. Member for Kingston upon Hull West and Hessle thought: he said that we should divert money from the EMA to the poorest. We know what the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) thought: that we should divert money from child benefit to pay for EMA. However, we do not know what the right hon. Member for Leigh (Andy Burnham) thinks, beyond believing that students should have money to go out for drinks with friends.

We do not know how the right hon. Gentleman would pay for his alternative to our proposal, because he has opposed every saving that we have made. We do not know what he thinks people should be studying when they are not going out, because he has opposed every reform to raise standards. He has no policies on education other than blanket opposition. No wonder he did not join the march for an alternative on Saturday—he does not have one.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I welcome the statement and the funding—which is greater than was originally expected—going into the new bursary scheme. I also welcome the focus on the poorest, to whom it is appropriate to ensure that that funding goes. Can the Secretary of State tell the House on what basis the money will be allocated? Will it be based on free school meals? Indeed, is that part of the consultation? Can he also confirm again that colleges will have total freedom in how they spend the money, so that they can provide directly for transport, for instance?

[Michael Gove]

The Chairman of the Select Committee on Education asks two intimately related and very good questions. On the first, I can confirm that we intend as closely as possible to mirror funding for the replacement scheme and existing funding, which was given to colleges on the basis of EMA entitlement. However, as he rightly points out, in the consultation, which will relate to the implementation of the scheme, we will take on board the points made by college principals and others, in order to ensure the fairest possible distribution of funding. Unlike with the EMA, college principals will have explicit flexibility under our scheme to be able to provide for transport, among other needs.

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

Any change from the Secretary of State’s former proposals is welcome, and we are certainly in favour of those in the greatest need getting the greatest amount of help. I recently visited Kirklees college in Huddersfield and found that what was being taken away from most of the young people there was the ability to get to college. The EMA was being spent on transport and food, and I hope that the right hon. Gentleman will join me in dispelling the myth that people were using it as spending money for drinking and parties.

[Michael Gove]

We want to ensure that those who need help to pursue their learning have that help, and that is why the money will be in the hands of principals. That arrangement will be more flexible, and the money will be targeted precisely on the need for food, transport and equipment. By ensuring that fewer people receive it, we can also ensure that those in need receive more.

[Andrew Stephenson (Pendle) (Con)]

I welcome the £194 million of transitional support for those who are currently on EMA. I also welcome the fact that the more targeted support will be delivered through schools and colleges. When I was last speaking to a group of students at Nelson and Colne college, many of them said that it was far better to have discretionary support provided by the college for transport and for course-related costs, rather than a cash payment. Does the Secretary of State agree with them?

[Michael Gove]

I am grateful to my hon. Friend for his question. I know that Nelson and Colne college has particular issues relating to transport. The new, flexible fund will enable us to ensure that those learners, particularly those most in need and who need the most help with transport, will receive timely support that will enable them to carry on learning at that highly successful institution.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

It is not much of a claim for the Secretary of State to say that the scheme he is now offering is more generous than abolition. He has caused huge confusion in the minds of young people in my constituency. In his statement, he said: “Our scheme will help to ensure that the costs of travel, food and equipment for poorer students are properly met, so that no one is prevented from participating through poverty.” How is he defining “poverty” in those specific circumstances?

[Michael Gove]

As I explained in my statement, enough money is available in the fund to ensure that every student who is eligible for free school meals could receive £800, which is more than they would receive at the moment. Of course there is a lively debate about how we should define “poverty”, but the decision by both parties on the Government Benches to target help on those eligible for free school meals seems to be a very good metric, as a starting point.

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

I thank the Secretary of State not only for his statement and for the additional financial support, but for a new scheme that seems to be a strong, grown-up successor to the education maintenance allowance. Does he agree that the evidence is clear that the wider the participation in further education is, the wider the participation in higher education will be? The new scheme will mean that no youngster from a poor family should be precluded from going to college for want of reasonable travel costs, all of which can be met under the scheme.

[Michael Gove]

Absolutely. I want to take this opportunity to underline my gratitude to my right hon. Friend for the painstaking way in which he has consulted students across the country, and for the thoughtful way in which he has put forward his proposals to ensure that our aim for a discretionary fund targeted on the very poorest can be implemented effectively. He is absolutely right to say that if we encourage more students to take part in further education, we will be able to achieve our joint aim of ensuring that more students, particularly from the poorest backgrounds, go on to college and university.

[Ann Coffey (Stockport) (Lab)]

I am very pleased that students who are in receipt of EMA will continue to get some financial support for the continuation of their course, but will the Secretary of State tell me what plans he has to monitor the new scheme to ensure that young people from lower-income families are not discouraged from entering further education?

[Michael Gove]

The hon. Lady makes a very constructive point. We are going to consult on implementation. In the process of designing the new scheme, we have worked with the Association of Colleges, the Sutton Trust and others. I will be looking for evidence on the ground to ensure that all barriers are removed, and I would be very happy to work with the hon. Lady in the future. If she encounters any specific cases of students being unable to access the support that they need, we will ensure that they receive it.

[Jason McCartney (Colne Valley) (Con)]

I welcome the Education Secretary’s statement, particularly in relation to the more targeted support for those in real need. Josh and Georgia from Huddersfield New college in Salendine Nook came to see me on Friday in my constituency office. They were concerned about travel costs, including their train and bus fares, in our rural constituency in west Yorkshire. I see that the new arrangements will come into effect in September. How soon will colleges and sixth forms have the details of how the new arrangements will help with travel costs?

[Michael Gove]

I know my hon. Friend used to be a lecturer at Leeds Metropolitan university, and he has been committed throughout his career to ensuring that students from poorer backgrounds enjoy appropriate access. I hope the arrangements announced today will give his constituents the flexibility they need to meet the specific travel costs that his rural part of Yorkshire compels students to meet.

[Dan Jarvis (Barnsley Central) (Lab)]

Given that more than 3,500 young people in Barnsley currently claim EMA, can the Secretary of State guarantee that the number of 16 to 18-year-olds participating in education will not fall?

[Michael Gove]

It is our intention to make sure that the number participating continues to increase. As I pointed out in my statement, the number of 16 to 18-year-olds not currently in education, employment or training fell in the last quarter. I hope that the number of apprenticeship starts to be revealed later this week will show that that strong trend is continuing encouragingly.

[Conor Burns (Bournemouth West) (Con)]

What message does the Secretary of State have to colleges such as the Bournemouth and Poole college in my constituency, which were so profoundly let down by the decision under the last Government to withdraw the funding for their capital project through the Learning and Skills Council? That means that young people aspiring to go to that college will now be taught in temporary classrooms. Is there anything the Secretary of State can say to reassure them about their future?

[Michael Gove]

I am grateful to my hon. Friend for reminding us that it was under the last Government that the Learning and Skills Council’s capital scheme collapsed, causing no end of heartache to many principals and students who had hoped that they would be able to enjoy handsome new facilities. The Chancellor has released through the Budget £125 million of additional capital spending for England. That money is intended to ensure that we have a new generation of university technical colleges, but some of it will go to support 16-to-19 institutions as well.

[Nic Dakin (Scunthorpe) (Lab)]

The majority of post-16 students attend colleges and are not currently eligible for free school meals. Will the Secretary of State confirm that, in line with his statement, they will be eligible for free school meals in future and will be paid the additional £800 a year that he has just announced?

[Michael Gove]

That is fair point. The hon. Gentleman was previously the principal of a very successful further education college. As he will know, many FE colleges simply do not have the facilities to be able to provide free school meals; they do not have the cafeterias or kitchens in place. What we need to do is ensure that students who are attending FE colleges have the money they need so that if they are travelling particular distances and are learning at different times, they receive the support they need—whether it be for subsistence, transport or equipment. We both know that the way in which students learn after the age of 16 is varied and does not follow the same pattern as the normal school day. That is why the provision has to be flexible in order to ensure that the very poorest receive the support they need.

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

While I welcome the Secretary of State’s announcement on targeted assistance, may I remind him that he has seen for himself the inadequate conditions in which high school pupils in Alnwick are taught. When is he going to make an announcement about the capital scheme so that a bid can be put in to help provide a new school?

[Michael Gove]

My right hon. Friend makes a fair point and we shall make an announcement shortly. I am sorry that we have not yet been able to provide additional support for the Duchess’s high school in Alnwick. As he knows, that school was not supported under the old Building Schools for the Future scheme, but we hope that the new method of allocating capital for schools, which we will announce, will allow those whose buildings were neglected by the last Government to receive support.

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

Last year, 7,700 of the poorest students in Liverpool were able to continue their studies because they received education maintenance allowance. How many of those students will receive equivalent support under the Secretary of State’s proposal to help only the very poor?

[Michael Gove]

Without knowing the precise details of the composition of that larger number, I cannot say definitively. What I can say is that it will be constituencies such as the hon. Lady’s that are likely to benefit most, while constituencies such as my own are likely to benefit least. One problem with the EMA scheme was that 45% of students received money, which meant that we were not supporting constituencies like the hon. Lady’s, which deserve the most generous support that the coalition Government can give.

[Robert Halfon (Harlow) (Con)]

Young people in Harlow and elsewhere will welcome the investment in university technical schools. Will my right hon. Friend come to visit Harlow college, which is preparing a bid for such a school and would greatly welcome a visit from him. On EMA, I ask my right hon. Friend to consider giving bursaries to students who improve their academic performance, rather than basing them only on attendance?

[Michael Gove]

I should be delighted to visit Harlow at some point to see what we can do to advance the very exciting plans for a university technical college. I am also happy to confirm that the flexibility of the new scheme will enable college principals to tailor it to the specific needs of students. It is true that the old EMA provided an incentive for attendance, but this scheme could help college principals to give more support to the very poorest students who put in the most impressive performances and whose learning needs to be supported most strongly.

[Jeremy Corbyn (Islington North) (Lab)]

Can the Secretary of State explain how the money enabling the college principals to give discretionary awards will be drawn down? Will there not be a perverse incentive for colleges not to take on pupils from poorer backgrounds because they are more likely to demand more money? Would it not be better for us to have a national scheme based on rights, with national application and national distribution? Such a scheme was pretty successful under EMA, resulting in more young people staying on at college and going to university.

[Michael Gove]

The hon. Gentleman and I disagree on many matters of principle, but he is absolutely right to say that we must support the very poorest. That has been a consistent theme of his political career. The new scheme will allow the very poorest to receive more than they did under the previous scheme, and will enable college principals to target their resources on those who are most in need. I believe that those college principals, rather than the hon. Gentleman or me, are best placed to identify the needs of students.

[Andrew Percy (Brigg and Goole) (Con)]

I look forward to welcoming the Secretary of State to my constituency in the near future. As he knows, I support many of the educational changes he has introduced, but he will also know of the concern that I expressed about the EMA change. I welcome what he has now announced, and I certainly want nothing to do with the pooh-poohing of EMA. However, will he assure me that, although giving more discretion to education professionals is important, safeguards will be introduced to ensure that colleges which compete for students in areas such as mine will not be able to use the fund as a bribe to encourage students to attend those colleges rather than others?

[Michael Gove]

I look forward to visiting both Lincolnshire and the east riding of Yorkshire on Friday. I recognise the concerns that my hon. Friend has raised, but I want to ensure that we trust professionals. When it comes to the admissions of pupils aged both 11 and 16, we need to ensure that schools are incentivised to attract the very poorest students, and that nothing can work against that.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

May I first say how much City and Islington College—where 3,000 children currently receive EMA—is looking forward to the Secretary of State’s visit on 12 May? As we prepare for that visit, will he help us by clarifying something? At present, what I would term the poorest—those whose parents are on benefits and who have been given free school dinners—receive £1,170. Under the right hon. Gentleman’s current plans, only children who are in care, are care leavers or receive income support themselves will receive the maximum amount. EMA for children who were being given free school dinners and whose parents are on income support will be cut by a third. Is that right?

[Michael Gove]

No, it is not right. It is the case that we will be paying more to those who are most in need—£1,200 for 12,000 students—and it is also the case that a discretionary fund will be available to ensure that college principals can decide that students with specific needs will receive exactly what they deserve.

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

Can my right hon. Friend confirm that the last Government commissioned research which had already concluded that we would need to move to a more targeted system for those in the most need?

[Michael Gove]

I am grateful to my hon. Friend for making that point. The former Secretary of State for Children, Schools and Families commissioned work from the National Foundation for Educational Research, which demonstrated that we needed to target resources more effectively on the very poorest.

[Paul Blomfield (Sheffield Central) (Lab)]

It is clear from the Secretary of State’s announcement that thousands of young people will lose out on funding as a result of the significant level of cuts. He has transferred the responsibility for bearing the bad news for those thousands to school and college heads. That is a massive task for them to undertake. How does he expect them to resource the task within individual schools?

[Michael Gove]

I am grateful to the hon. Gentleman for making his point, and I know that he has been committed to supporting better educational outcomes in Sheffield. When we consulted on this scheme, college principals themselves said they would prefer it to be discretionary, and my understanding is that both the Association of Colleges and the Association of School and College Leaders say they would prefer to be able to allocate funds in that way.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

I welcome the announcement that children in care and care leavers who stay on in education will receive an annual bursary of £1,200. In order to ensure that they have the best possible educational experience, will my right hon. Friend consider widening the scope of the Frank Buttle Trust quality mark, under which care leavers and children in care who move on to further or higher education have the assurance that their educational establishment will meet all their needs, including their educational needs?

[Michael Gove]

My hon. Friend makes an important point, and I will ensure that the Under-Secretary of State for Education, my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), who has particular responsibility for children in care, and my hon. Friend the Minister for Further Education, Skills and Lifelong Learning take that work forward. Today’s announcement of additional support for children in care and for care leavers follows on from last week’s announcement that such children will also receive support through a new individual savings account scheme, to ensure that they can build up a capital pot to help to support them in subsequent education or work.

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

As the Secretary of State will know, the introduction of the education maintenance allowance led to a big increase in stayers-on aged over 16 in Tower Hamlets. Has his Department assessed the impact of his proposals on boroughs such as Tower Hamlets, and if so, will he publish the results and compare them with what happens after his proposals have been implemented in September?

[Michael Gove]

As we outlined at the time of the last spending review, we sought to construct a replacement scheme that would, within the resources available, be more progressive, and we believe that constituencies such as the hon. Gentleman’s will benefit more than some constituencies represented by Conservative Members. We will keep the scheme under review, however. A quality impact assessment has been prepared, and I will be happy to talk to the hon. Gentleman if there are specific problems in supporting the many students in his cosmopolitan constituency who want to stay on.

[Mr Marcus Jones (Nuneaton) (Con)]

I warmly welcome my right hon. Friend’s statement. I also welcome the consultation, but ask him to ensure that the details of the student bursary fund, including the allocations to further education colleges, are confirmed as quickly as possible, in order to give certainty to those students requiring assistance who are looking to enter further education this year.

[Michael Gove]

My hon. Friend makes a good point. As ever, I wanted to balance the requirement to consult widely—and I am grateful to my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) for talking to so many students about what exactly was required—with the need to move on so as to provide certainty to institutions. We undertook a process of consultation beforehand and brought forward these proposals in line with principles we outlined at the time of the comprehensive spending review. We will now consult in the next eight weeks in order to make sure the proposals can be implemented fairly.

[Liz Kendall (Leicester West) (Lab)]

Some 2,200 young people at Leicester college get the maximum EMA, precisely because they are from some of the poorest and neediest families in my constituency. There is obviously going to be a great deal of uncertainty about the future, so can the Secretary of State tell the House when colleges will receive the money for the new scheme and, crucially, when students and their families will learn about the criteria, because that is very important to them in deciding whether or not to stay on?

[Michael Gove]

The first point to make is about the hon. Lady’s constituents who are already at college: if they received notice of their EMA support in the academic year 2009-10, they will receive the full amount; if they received notice in 2010-11, those who currently receive £30 will receive at least £20, and discretionary support will be available. We propose that the amount the college receives should be broadly in line with the amount it received beforehand, reflecting the level of need in the hon. Lady’s constituency, but we will be consulting on the implementation over the next eight weeks, so that the amount can be in place for distribution from September.

[Dan Rogerson (North Cornwall) (LD)]

I welcome the Secretary of State’s announcement and measures such as the money over and above what was originally talked about and, in particular, the transitional money. I also congratulate my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) on the work he has done in his report to Government. However, I seek the Secretary of State’s assurance that he will continue to look at transport issues and ensure that sufficient money is provided in both urban and rural areas, so that transport provision is in place for people to access.

[Michael Gove]

My hon. Friend makes a good point. Some local authorities—I have mentioned before in the House Liberal Democrat Hull and Conservative Oxfordshire—do a very good job in providing transport for students staying on after the age of 16, but all local authorities need the support that this new scheme is intended to provide. I am also aware that, obviously, after the age of 16 students tend to travel further to their place of learning, particularly in rural constituencies such as the one my hon. Friend represents, and we will be working with the Association of Colleges and others to make sure they are supported.

[Lisa Nandy (Wigan) (Lab)]

The vast majority of EMA recipients are in households whose annual income is less than £21,000—no Member of this House is on anything like the same. If the Secretary of State can find money to fund his pet initiative on free schools, why can he not find money to show those young people that they are worthy of our support?

[Michael Gove]

I am grateful to the hon. Lady, who worked very hard before she came into this House to shine a light on the difficult circumstances faced by children growing up in poverty. That is why we are spending £2.5 billion more over the lifetime of this Parliament on the education of the very poorest five to 16-year-olds. Of course the amount of money available for this support fund will mean that some students who currently receive cash will no longer do so, but it will also mean that more money is being spent on the education of the very poorest 16, 17 and 18-year-olds, as well as there being more money for their support. I believe that the progressive approach we are taking to education funding will mean that those she has spent her political career fighting for will benefit more from this Government than from the previous one.

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

Vocational learning will be crucial for us in rebalancing the economy. Can my right hon. Friend confirm that the all-age careers service will radically change the quality of advice on vocational learning?

[Michael Gove]

I can confirm that because, thanks to the brilliant work carried out by the Business Secretary and the Minister for Further Education, Skills and Lifelong Learning, we have an exciting new approach to providing support and advice for those in careers. In addition, thanks to the changes that we have made to accountability measures, through such things as the English baccalaureate and the Wolf review, we will ensure that students who in the past were not able to progress on to college and on to worthwhile jobs at last have the chance to succeed.

[Ian Mearns (Gateshead) (Lab)]

Under the current system, EMA payments are related to attendance and the completion of coursework, which in itself helps to raise attainment. What steps is the Secretary of State taking in the new scheme to include that provision? How will he ensure that enough money goes to colleges in the poorest areas under the new funding mechanism?

[Michael Gove]

The hon. Gentleman makes two very good points. He mentioned, as I did, that one of the benefits that EMA brought was a linkage between attendance and the completion of coursework, and, thence, attainment. There will be flexibility for college principals to design their own schemes in order to reward not only attendance and the completion of coursework, but exceptional achievement, if they believe it is right to do so. The way in which we are weighting the allocation of funds to colleges is intended to ensure that the very poorest receive the most. The process of consultation over the next eight weeks, in which I hope the hon. Gentleman will participate, is intended to ensure that we accurately and fairly reflect the needs of the most disadvantaged.

[Jane Ellison (Battersea) (Con)]

I recently had the pleasure of visiting South Thames college, in my constituency, with the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). The comments we heard from young people that day bear little resemblance to the broad-brush rhetoric we have heard from those on the Opposition Front Bench today. What those young people did say was that they are keen to know what their options are at a much younger age. I very much hope that Ministers will give considerable thought to putting together a comprehensive package of intelligible information, to be made available to young people earlier than it is now, setting out the growing options post-16.

[Michael Gove]

My hon. Friend makes two very important points. The truth is that among the generation in receipt of EMA there is not majority support for the continuation of the old scheme; they recognise that a more targeted scheme would be right. [Hon. Members: “What?”] I am terribly sorry, but Opposition Front Benchers should pay attention to what people think rather than what they imagine people think. Had they done so, it might have helped them to stay in power.

On my hon. Friend’s other point, we do need to ensure that people receive appropriate advice. As Professor Alison Wolf pointed out in her groundbreaking report, hundreds of thousands of young people received the wrong advice under the previous Government, which is why they are not in the fulfilling jobs that they needed to be in.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The principal of my local college, Tower Hamlets college, recently told me that in the light of the reduction in the overall EMA funding he would have to choose one out of four students from poorer backgrounds who could qualify. In the light of today’s announcement, will the Secretary of State confirm that the other three out of the four students who used to get EMA will now qualify? The people of Tower Hamlets live in an area with some of the highest child poverty in the country and, as he can imagine, this support is desperately needed—it is £1 million that the college needs. Will he please confirm that that is now available?

[Michael Gove]

I am grateful to the hon. Lady, who has argued politely and persistently behind the scenes for the interests of her constituents. Like the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), she represents a constituency where need is greater. That is why Tower Hamlets continues to be among the best-funded local authorities for students between the ages of five and 16, why Tower Hamlets will benefit disproportionately from the pupil premium, and why I wanted to ensure that the replacement scheme supports the students she is anxious to help. I will work with her to ensure that those most in need get such help.

[Mr John Leech (Manchester, Withington) (LD)]

Up till now, the reform of EMA has been a complete PR disaster. How will the Secretary of State ensure that the improvements announced today will be outlined to young people to ensure that they will not be put off continuing in education post-16?

[Michael Gove]

I will rely on the effective and persuasive advocacy of my hon. Friend the Minister for Further Education, Skills and Lifelong Learning.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The Secretary of State said a moment ago that EMA did not enjoy the support of the majority of the young people who received it. What was the source for that claim?

[Michael Gove]

An opinion poll.

[Mr Stewart Jackson (Peterborough) (Con)]

I welcome the statement and so will students at Peterborough regional college. I would resist the churlish response from those on the Opposition Front Bench, marked out by intellectual incoherence and opportunism. Is my right hon. Friend as surprised as I am that nowhere in the comments made by the right hon. Member for Leigh (Andy Burnham) was there an apology for their record? Social mobility ossified in 13 years of Labour Government to the extent that more—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May we have a question that falls within the responsibility of the Secretary of State and this statement?

[Mr Stewart Jackson]

More people went to Oxford university in those 13 years from one noted public school than from the entire care system. Is that not a legacy of shame?

[Michael Gove]

My hon. Friend makes an excellent point succinctly and well.

[Pat Glass (North West Durham) (Lab)]

We have already heard that students on EMA attended at a higher level than their peers and made disproportionate progress. Given that the Secretary of State has said many times that he wants to narrow the gap for those children, what measures will he put in place to monitor whether the children from the poorest families continue to have higher attendance and disproportionate progress, or will that be left to individual colleges? My question is about the specific monitoring proposals.

[Michael Gove]

The hon. Lady makes a very good point. One thing that I am unhappy with is the system of accountability for post-16 education that we inherited. I believe we need a sharper system of accountability post-16 and, in particular, that system needs to focus on outcomes for the very poorest. One problem we inherited from the previous Government was that we did not have the information necessary to see how institutions were performing. It is only now that we know, for example, that only 16% of students, in the last year for which we have figures, managed to secure five good GCSEs including English, maths, science, a modern foreign language and a humanities subject. The fact is that those students eligible for free school meals did not succeed at anything like the same level as their wealthier contemporaries.

[Justin Tomlinson (North Swindon) (Con)]

I welcome plans further to expand apprenticeships for post-16s. Does my right hon. Friend agree that small businesses could be encouraged and informed of these schemes by including promotional material in the annual business rates mailing?

[Michael Gove]

My hon. Friend makes a very good point. I understand from my hon. Friend the Minister for Further Education, Skills and Lifelong Learning that we are doing just that with the National Apprenticeship Service.

[Kate Green (Stretford and Urmston) (Lab)]

Has the Secretary of State made any assessment of the possible impact on the viability of colleges and college courses of student numbers falling significantly when EMA’s replacement is no longer available to many thousands of young people who otherwise might have been eligible?

[Michael Gove]

The hon. Lady has been a passionate campaigner against child poverty, but on this occasion I fear that her powers of logic are not doing her justice. The truth is that we know from all the research that was undertaken that of those eligible for EMA—45% of the total cohort—only 10% said that they would not have participated without that sum, which works out at about 4.5% overall. We will ensure that many more students than 4.5% of the total receive the support they need so that no student should be prevented from participating as a result of these changes. In fact, more of the very poorest students should be supported to participate. If there are any problems in the hon. Lady’s constituency in the operation of the scheme, I would be very happy to work with her to ensure that every student who needs support receives it.

[Chris Heaton-Harris (Daventry) (Con)]

Daventry has both a need and a desire for a university technical college and has had a bid before the Secretary of State for a number of weeks now that is well supported by the university of Northampton and schools and businesses in the town. Can he give us the timetable for announcements going forward?

[Michael Gove]

I enjoyed a visit to Daventry to meet my hon. Friend a few weeks ago and I hope to go again in due course to work with him to bring forward plans for a new university technical college. Although I admire his ardour, I urge him to be a wee bit patient just at the moment because we are developing plans to move from 12 to 24, and in the next few months we should be able to bring them forward.

[Richard Fuller (Bedford) (Con)]

Many young people will share my right hon. Friend’s disappointment that his opposite number, the right hon. Member for Leigh (Andy Burnham), who was part of a Government who maxed out the country’s credit card and racked up levels of debt that people will have to repay for their entire careers, has had absolutely nothing constructive to say today. Will my right hon. Friend note that in the review of EMA, one comment was that a large proportion of Bangladeshi and Pakistani students relied on it? Will his review look into that to see what can be done to ensure that their participation in higher education can continue?

[Michael Gove]

I am very grateful to my hon. Friend, who is particularly concerned to ensure that students from ethnic minority backgrounds enjoy better opportunities. One thing that we will do is liaise with college principals to ensure that currently under-represented groups, particularly Bangladeshi and Pakistani students and especially Bangladeshi and Pakistani female students, are encouraged to participate in future.

[Richard Graham (Gloucester) (Con)]

Today’s announcement will benefit the most disadvantaged youngsters in my constituency, as elsewhere, but in these very difficult times for Government spending, does my right hon. Friend agree that it is important that the fund should be spent on transport and food rather than on “time out with friends”. Will he consider allowing colleges to distribute the money through vouchers for transport and food rather than in cash?

[Michael Gove]

My hon. Friend makes a very good point. He reminds the House of the right hon. Member for Leigh’s somewhat curious suggestion that we should maintain EMA to ensure that people can receive money to socialise. In fact, what we will be doing is making sure that transport, food and equipment are provided and my hon. Friend makes a good point that in some rural areas colleges or groups of colleges might wish to work together to ensure that transport needs are met.

[Stephen Gilbert (St Austell and Newquay) (LD)]

As someone who benefited from free school meals, I welcome the focus that my right hon. Friend places on encouraging pupils from poorer backgrounds to stay in education. Does he recognise, however, that free school meals are not always taken up in rural areas and will he therefore ensure that it is eligibility, rather than take-up, that counts for access to the bursary?

[Michael Gove]

That is a really good point and I want to deal with this issue. It is not only in rural areas that take-up of free school meals is lower than eligibility: that is also the case among some black and minority ethnic groups. We want to ensure that such eligibility is increasingly used as a means of targeting disadvantage and we think that the introduction of the pupil premium, which I know my hon. Friend helped to design in opposition, will ensure that more students take up their entitlements.

[Bob Blackman (Harrow East) (Con)]

Young people in my constituency have told me that only EMA enabled them to stay on in further education, but others have told me that they used the money at Tesco to buy alcohol. Clearly, we have to ensure that money is targeted at the right people, but what controls will be imposed to ensure that the transitional funding is not abused?

[Michael Gove]

We will do everything in our power, but colleges and college principals who understand the ecology of the local labour market and the needs of local students are often in a better position to tailor support than any Minister or bureaucrat sitting in Whitehall would be when developing that scheme in the abstract.

[Mr David Ward (Bradford East) (LD)]

I strongly welcome the statement but I wish there had been a tiny glimmer of acknowledgement from the Opposition of the ground that has been shifted here. They all say that the person who never thought twice never thought once, and I want to thank the Secretary of State for thinking twice on this. Does he agree that this is not a U-turn because a U-turn takes you back to where you were before and we are not where we were before? Nobody who opposed the removal of EMA in our debate on this issue was of the opinion that it did not need to be reviewed, so I welcome the review. Will the Secretary of State give us an undertaking that there will be a review of the new proposals to make sure that we get to where we want to be—supporting children from deprived backgrounds to enable them to do what they want to do with their lives after 16?

[Michael Gove]

I always take seriously what my hon. Friend says because before he came to the House he worked very hard as a councillor in Bradford to ensure that the education of the poorest children was enhanced. I am grateful to him for his support. The point that he makes—that we need to make sure that the new regime is kept under review to ensure that it helps the very poorest—is right. I look forward to working for him. The tough questions that he asks and the constructive support that he offers are a model to the rest of the House.

[Madam Deputy Speaker (Dawn Primarolo)]

Thank you, Secretary of State and thank you all for the brisk answers and mostly brisk questions, which helped us get through a considerable number of Members’ questions.

Points of Order

Monday 28th March 2011 Commons Chamber

17:45

[Kevin Brennan (Cardiff West) (Lab)]

On a point of order, Madam Deputy Speaker. The Secretary of State cited an opinion poll in support of an assertion that he made in the course of his statement. I know that he always says he wants to back up his assertions with evidence, so I wonder whether it is within your powers to require him to place a copy of that opinion poll in the Library of the House so that we might all consult the evidence that he cited in the statement?

[Madam Deputy Speaker (Dawn Primarolo)]

The hon. Gentleman knows, I think, that it is not within my power to undertake such things, but I think the Secretary of State wishes to raise a point further to that point of order.

[The Secretary of State for Education (Michael Gove)]

Further to that point of order, Madam Deputy Speaker. Thank you, first, for the gracious way in which you acknowledged that my memory, although it may be capacious, cannot remember everything. But on this occasion, I do remember. The opinion poll concerned was a YouGov opinion poll conducted between the 19 and 20 January, which showed that 44% of people aged 18 to 24 were opposed to the abolition of the education maintenance allowance, and 45% of people in that age group supported the abolition of EMA, which meant that there was a one-point lead for the Government position. Coincidentally, that is the lead that the Conservatives enjoy over Labour in the latest post-Budget opinion poll published in my favourite newspaper, The Guardian.

[Madam Deputy Speaker]

I am grateful, Secretary of State, but we are talking about only the one opinion poll.

[Kerry McCarthy (Bristol East) (Lab)]

On a point of order, Madam Deputy Speaker. The Government are required by law to publish their child poverty strategy by the end of March. After the issue was raised in business questions on Thursday, I gather that there was a flurry of activity by civil servants phoning round various child poverty charities, telling them that it would be published on 5 April, the day the House goes into recess. Do we have any power to compel one of the relevant Ministers to come to the House to explain to us why the Government are not complying with the law and publishing the strategy by the end of March?

[Madam Deputy Speaker]

As the hon. Lady will appreciate, that is not strictly a point of order for the Chair, but I am sure those on the Treasury Benches heard her comments and will take seriously their obligations to make sure that the report is published.

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

On a point of order, Madam Deputy Speaker. On 21 March 14 employees at the Liverpool passport office were dismissed from their permanent posts without notice because of a mistake that the Passport Service had made in their recruitment more than two years ago. Does the Home Secretary have plans to make a statement to the House, both about what happened in the Liverpool passport office and about its implications for passport offices throughout the country?

[Madam Deputy Speaker]

I have no knowledge of any notification of a statement. I understand that as the passport office is in her constituency, she is very concerned about the issue. May I suggest that she discusses with the Table Office how she might pursue the points that she wishes to have raised on the Floor of the House?

[Chris Heaton-Harris (Daventry) (Con)]

On a point of order, Madam Deputy Speaker. Can you help a number of Labour MPs who signed early-day motion 1146 last year, congratulating UK Uncut? I believe they might want to withdraw their names now and need a bit of advice on how to do that.

[Madam Deputy Speaker]

Nice try, Mr Heaton-Harris. I do not think we will take that any further forward. I am sure that all Members of the House will consider their position when signing early-day motions.

Protection of Bowling Greens (Development Control)

Monday 28th March 2011 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

17:49

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

I beg to move,

That leave be given to bring in a Bill to require local planning authorities to ensure that certain criteria are met before planning permission involving the redevelopment of bowling greens can be granted; to introduce a community right to buy for bowling greens in certain circumstances; and for connected purposes.

I am delighted to present this Bill to protect our threatened bowling greens. The House does not talk enough about bowling greens. We wax on about a milliard other sports, but bowling—a sport enjoyed by upwards of 400,000 people—has to my knowledge been debated only once before in the history of Parliament. We have Helen Jackson, the former Member for Sheffield, Hillsborough, to thank for that debate, and I am pleased that her successor is one of the Bill’s sponsors.

That lack of forensic debate has perhaps helped to perpetuate the common misconception that bowling is a sport exclusively for older people. Nothing could be further from the truth: there are thousands of young people in the junior and senior leagues up and down the country. Indeed, that is where I started out as a 10-year-old, tentatively gripping my first wood on my local bowling green in Sheffield. It is truly a sport for all ages and abilities, as my record of a solitary doubles trophy in all my years of youthful endeavour can perhaps attest.

However, let us be clear that bowling is what gets many older people out of the house and into the fresh air. It is the sport that keeps them fit and active long into retirement. There is the chance to listen to the gentle knock of wood on wood and there is the sense of anticipation: will my opponent go thumb or finger, and will he have the audacity to call for measures? Above all, there are the enduring social networks that make our greens not only a valuable part of our nation’s heritage but an enduring part of community life for so many, be they publicly owned or among the many that remain attached to pub and clubs across the land.

None of us is getting any younger. In fact, the nation is ageing at a formidable rate. The changing demographics should lead to a blossoming of the sport beyond the 400,000 who currently play, but not if the current threat to our dear bowling greens is allowed to pass unchecked. Let me spell out the likely impact of closures. Bowls England estimates that every time a club closes, 40% of its members on average give up the sport for good. In my constituency of Barrow and Furness, there is a sad litany of greens that have closed over recent decades. The Washington and Victoria Park hotels in Barrow have been shut down, despite local outcry. On Walney island we have lost the greens at the Vickerstown Institute and the George pub, both of which were sold for housing development.

I am sorry to inform the House, particularly Government Members, that bowlers at Dalton’s Conservative club turned up for practice one September morning the year before last to find that the electricity and water had been turned off in the club house and that the gates to the bowling green had had their locks changed. Those dastardly tactics were designed forcibly to put the green out of use and so soften it up for redevelopment. Even that skulduggery failed to save the Conservative club, because the entire premises, including the bowling green, are now up for auction. That is a fate that has befallen too many of our pubs and clubs. Faced with severe financial pressure, they opt for a short-term fix that ends up making the problem worse, depriving them at a stroke of loyal and thirsty customers, souring community relations and leaving bowlers without a home turf.

Colleagues across the House have made it clear that the loss of bowling greens is a matter of concern up and down the country. I am grateful for the cross-party support I have received for the Bill, including from the hon. Member for Leeds North West (Greg Mulholland), who chairs the all-party save the pub group, which has rightly recognised that the fate of public houses and their bowling greens are often intertwined—one cannot be sacrificed in the hope of saving the other.

It is no surprise that the draconian cuts being made to local authorities are placing publicly owned greens under threat. That threat extends even to the most famous bowling green of all, Plymouth Hoe, which symbolises the legend surrounding Sir Francis Drake and the armada. There are similar situations in Manchester, Sutton and Birmingham, Edgbaston, and my hon. Friend the Member for Sefton Central (Bill Esterson) has brought to my attention the plight of the threatened club at Duke Street park in Formby.

The British Crown Green Bowling Association points out that bowlers often want simply to be able to stand on their own two feet. They want to know that if the club is handed over to them, they can run and maintain it at their own expense simply if they are helped out with the rent. That is a solution that is being pursued in Barnsley and looked at in many other areas. However, each closure is making it ever clearer that the current planning regulations are simply inadequate for protecting even clubs that are in active and frequent use. The Bill seeks straightforward safeguards to protect our bowlers.

On the face of it, the current planning regulations ought to be pretty strong. They state that a bowling green cannot be built over unless an assessment has shown that it is surplus to requirement, but owners and developers are finding ways around this and clubs are being closed against the express wishes of the sportsmen and women who use them.

The Bill would insist that if a club is registered on a green and matches are being played on it, it cannot be deemed to be surplus to requirement unless there is a specific vote by the bowlers affected. Planning authorities would also be required to take into account the kind of sharp practices that we saw at the Dalton Conservative club. The Bill would also introduce a community right to buy for any bowling green where disposal is agreed. Where a local club is prepared to commit to keeping the green in use, it would be given the opportunity to purchase it on the basis of its market value as a sporting facility, which is often much more affordable than developers are prepared to pay. We should support bowlers who are willing to form co-operatives to preserve their prized assets. This is a field in which Supporters Direct has blazed a trail for other sports. We should set in lights the shining example of the co-op bowling club in Barrow, which has flourished since it took that route to protect its green.

Bowling has long been a sport that has enriched the communities we represent. It is said that in England one is never more than a few miles away from the cry of “jack high”. That is one of the many things that has made this country so great. We should endeavour to ensure that that remains the case for centuries to come.

Question put and agreed to.

Ordered,

That John Woodcock, Mr Graham Allen, Luciana Berger, Bill Esterson, Robert Flello, Cathy Jamieson, Helen Jones, Mark Menzies, Greg Mulholland, Angela Smith, Ms Gisela Stuart and Mr Iain Wright present the Bill.

John Woodcock accordingly presented the Bill.

Bill read the First Time; to be read a Second time on Friday 1 July, and to be printed (Bill 173).

Ways and Means

Monday 28th March 2011 Commons Chamber

Budget Resolutions and Economic Situation

Monday 28th March 2011 Commons Chamber

Amendment of the Law

Monday 28th March 2011 Commons Chamber

Debate resumed (Order, 24 March).

Question again proposed,

(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.

(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation,

(b) for refunding an amount of tax,

(c) for any relief, other than a relief that—

(i) so far as it is applicable to goods, applies to goods of every description, and

(ii) so far as it is applicable to services, applies to services of every description.

16:38

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

It is a great pleasure to resume the debate on the Budget.

Since 1997, year on year, families have waited for that dreaded envelope: the council tax bill. Every year under Labour, it grew, eventually doubling in size, but this year something is different. As the bill hits the doormat, families and pensioners throughout England will find that it has not gone through the roof. It will save families up to £72 on a band D home, because the coalition Government are on the side of ordinary working people. I commend those councils—every single one of them—that have taken up the Government’s offer to give their residents a much-needed break, but I am very disappointed that the Opposition have opposed the measure.

In the Commons, the shadow Local Government Minister, the hon. Member for Derby North (Chris Williamson), called the measure a “gimmick”. His Lords counterpart last week also opposed it, alleging that the

“freeze builds up financial trouble for the future.”

Surely that cannot be the Labour party’s position, because it is not what Labour councils are saying on the ground.

I have a selection of quotations, and I will read out just three that will help. Sandwell’s local authority states:

“The council is very aware of the difficult times local people face, and we don’t want to add to their misery”.

On the freeze, it states:

“It would be barmy not to do so.”

Manchester city council, a local authority that we have heard a lot of recently, states:

“We recognise it has been a very difficult year for some people, and as the UK comes out of recession it is critical we offer all the support we can to Manchester residents… it is great news…that this year we will freeze council tax”.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

Will the right hon. Gentleman give way?

[Mr Pickles]

In a moment. Let us have the full panoply before we hear from the right hon. Gentleman.

[Bob Russell (Colchester) (LD)]

He’s one of the guilty men.

[Mr Pickles]

Yes.

Bolsover council states that

“we have taken this step to freeze our share of the Council Tax because we do not feel it is fair that these are passed onto you”.

I do not recall the right hon. Gentleman freezing the council tax during his time in government, but let us hear from him.

[Mr Raynsford]

I am sure the right hon. Gentleman will recall, because he has followed local government matters, that the London borough of Greenwich, the authority in the area I am proud to represent, has frozen its council tax for six of the past 10 years—under a Labour Government for five of those six years. Has he forgotten that? Is he not aware of what councils were doing long before he took up his current position?

[Mr Pickles]

I suppose if a council sits on £130 million of reserves, that is an easy thing to do, but let him recall Hammersmith and Fulham, which, after years of considerable increases, managed not only to freeze the council tax but to cut it in each successive year.

I regret that the Labour party says one thing in the Chamber and another thing to the voters. I am proud to say that we are able to set aside—

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

In a moment.

I am proud to say that we are able to set aside £3 billion to support councils with a freeze on spending, and that is despite the mess that the Labour Government made of our nation’s finances. It sounds as though some on the Opposition Benches would like to wash away the past few years and drown out their bitter legacy: record national debt; unsustainable public spending; and a crushing burden on ordinary families.

The Opposition do not like to admit that their Labour Government planned spending cuts of £44 billion by 2015. Labour’s cuts were to be front-loaded cuts, with £14 billion of cuts falling this April, and Labour’s spending plans would have made bigger cuts to housing, regeneration and local government.

On Saturday, the Leader of the Opposition should have told the crowds the extent of Labour’s cuts. That would have been much more convincing, as hon. Friends have said, than comparing himself to Martin Luther King or, more bizarrely, to Emily Pankhurst.

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

Will my right hon. Friend give way?

[Mr Pickles]

In a moment. I am sure that my hon. Friend would like to hear this point.

Perhaps that omission prompted the right hon. and learned Member for Camberwell and Peckham (Ms Harman) to say today on “The Daily Politics” that a Labour Government would have employed fewer people in the public sector. I have obtained a transcript of the interview, and the interviewer said:

“Some of the people on that march, some of those people listening to Ed Miliband, would have lost their jobs under a Labour Government. Yes or no?”

The right hon. and learned Lady was wise enough not to give a yes or no answer, and said:

“Well, I think that basically we would see, err yes, fewer people employed in the public sector.”

[Hon. Members: “Ah!”] Yes. I think “err yes” neatly covers the point.

[Nadhim Zahawi]

Does my right hon. Friend not think it bizarre that the Leader of the Opposition chose to compare his party’s struggle to that of apartheid?

[Mr Pickles]

Well, I suppose there comes an occasion, you turn up, there’s a lot of people there—and you just start to talk. These things happen, and we should be in a forgiving mood. I mean, anybody can compare themselves to Martin Luther King.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Who would you compare yourself to?

[Mr Pickles]

Certainly not to Martin Luther King.

Let us be clear: Communities and Local Government was the unprotected Department under Labour’s plans. Unprotected Departments would have received a larger average real-terms cut over four years under Labour than they are under the coalition’s deficit reduction plans over the spending period.

Thanks to the £18 billion of savings from our welfare reform programme and the £3 billion of savings from lower debt interest, the coalition is cutting £2 billion less from departmental budgets than the Labour party would have. Labour would have cut local government more, and, without the support for a council tax freeze, the end result would have been soaring council tax.

[Sheila Gilmore]

Will the right hon. Gentleman give way?

[Mr Pickles]

I am so sorry. I promised to give way to the hon. Lady.

[Sheila Gilmore]

Will the Secretary of State consider monitoring what happens to charges where local authorities have imposed the council tax freeze? We have had a council tax freeze in Scotland for four years now, and a 90-year-old constituent of mine has just received a charge for garden aid. It was nil under a Labour council, it became £75 and it is now £200, so she is not that impressed by the council tax freeze.

[Mr Pickles]

We will certainly look at that, but may I remind the hon. Lady that Labour councils are of the view that it would be “barmy” not to have the freeze, and that the freeze itself is “great news”? She should really get with the programme.

[Mr John Redwood (Wokingham) (Con)]

That is great news on the council tax—fantastic. Will my right hon. Friend confirm that, every year of this Parliament, total spending goes up in cash terms, so, if the public sector can control costs and inflation, the situation need not be nearly as bad as the Opposition say?

[Mr Pickles]

My right hon. Friend, as always in these matters, is absolutely correct. There is sometimes a fallacy, which the Opposition assume, that a pound cut in grant means a pound cut in services, but there are clearly better ways of doing such things.

Last June’s emergency Budget started a rescue mission. It preserved the UK’s triple A rating and helped to keep interest rates stable. This Budget shows that we are moving from rescue to far-reaching reform. It is a Budget for a strong and stable economy, marking our progress towards eliminating the structural deficit. It is a Budget for growth, rebalancing the economy away from over-reliance on the public sector towards long-term, sustainable growth based on export and investments. This is a Budget for fairness, lightening the burden on some 23 million taxpayers by lifting the personal income tax allowance.

In the past, there may have been an impression that the people in Whitehall who were responsible for the economy sat in the Treasury or in the Department for Business. Today, every part of Government has a role to play in helping to keep business thriving. I am proud of my Department’s reputation as one of the most deregulating Departments in Whitehall. The Communities Department is central to economic activity, and were it not for the cost of sign writers and stationery, I would rename it the Department for Communities, Growth and Local Government. Over the course of the past 10 months, we have cut the red tape on councils; called time on the Audit Commission’s clipboard inspectors; unravelled Labour’s home information packs; scuppered Labour’s ports tax; scrapped the Whitehall density targets for housing, which encouraged garden grabbing and a glut of flats; and binned the planning rules that encouraged councils to hike up parking charges in town centres. Today, we are going further still to create the conditions for growth.

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

The Secretary of State talked about rebalancing the economy. One of the most shocking statistics that the Chancellor quoted in his address was that in the west midlands, during a time of growth, we saw a 3% decline in private sector jobs growth. In areas such as the black country, it is absolutely essential that we deregulate and find as many opportunities as possible to drive entrepreneurship, small business and economic growth.

[Mr Pickles]

My hon. Friend makes a very reasonable point. Part of the problem is that we are now having to rebalance the economy.

Last week’s Budget was driven by an absolute certainty held by Conservative Members—that Governments can print money but only businesses can make money. We do not succeed as an economy by giving bean counters the whip hand over wealth creators. Governments need to listen to entrepreneurs about how to unlock growth.

I do not want to be terribly unpleasant about the regional development agencies, but perhaps I should on just this one occasion. They were fantastic at passing public grants from one part of the public sector to another, but very poor at creating private sector jobs and sustainable growth. After a decade of regional development agencies—my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) gave figures for the midlands—the public sector still accounts for more than a quarter of jobs in the north-east, compared with less than a fifth in the south-east of England, and the number of private sector jobs grew half as fast in the north-east as the national average between 2003 and 2008.

[Claire Perry (Devizes) (Con)]

The Secretary of State said that we should have fewer bean counters and more wealth creators. Would not a few bean counters not have come amiss under the previous Government, who spent £135,000 on luxury Parisian sofas for the Department, partly under the stewardship of the right hon. Member for Don Valley (Caroline Flint)?

[Mr Pickles]

It is indeed true that we are a well-upholstered Department.

[Charlie Elphicke (Dover) (Con)]

Is not the key difference that instead of quangos such as the RDAs running amok across the country doing nothing, we will see enterprise zones and pro-business, pro-growth planning policies that will get the country going again properly?

[Mr Pickles]

My hon. Friend is absolutely correct—so much so that I am delighted to tell him that I will refer to that in a few moments.

The regional bureaucratic approach is not only costly but does not do the job it is supposed to do. Instead, we want to see business men and business women playing a leading role in the debate about their local economy, helping all parts of the country to live up to their full economic potential.

More than 90% of people in England now live in areas with local enterprise partnerships. These partnerships are a new approach to economic development, putting local councils, local communities and local business in the driving seat. The partnerships established so far have already set out plans that are high on ambition and low on bureaucracy—plans to attract investment, boost tourism and strengthen transport links. Local enterprise partnerships are going for growth, not handing out grants. The 21 new enterprise zones are an opportunity for leading partnerships to take their work to a new level. In exchange, we will let them keep all business rate growth in their zones for at least 25 years.

Businesses in the enterprise zones will benefit from a discount of up to 100% on rates and access to superfast broadband. We will work closely with local partners to make sure that the zones do not simply displace jobs and business. For example, the Boots campus in Nottingham will be a centre for science and medical research and innovation, the Manchester airport zone will be ideally placed to make the most of the local science and engineering expertise and international transport links, and Liverpool Waters will keep up the momentum of economic growth in that resurgent English city.

It is not just enterprise zones that are being helped: the Budget extends the doubling of small business rate relief for a second year. This will help small firms and small shops across the country, given that business rates are the third biggest outgoing for firms after staff and rents.

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

Can the Secretary of State say whether Coventry is going to be part of these enterprise zones, and if not, can he give me the reason why?

[Mr Pickles]

It is very important to understand that the enterprise zones will be allotted on the basis of innovation and ideas, not on the basis of Buggins’ turn. Having seen some of the industry leaders in the Coventry area, I am confident that their innovation and skills will make them a high priority in obtaining these zones; after all, Coventry and Warwickshire is one of the leading local enterprise partnerships in the country.

[David Wright (Telford) (Lab)]

The right hon. Gentleman will know that several new towns still have areas of land that are, in essence, controlled by Government. Would he be willing to put some of those land holdings into the pot if local enterprise partnerships come up with schemes to promote growth in their areas?

[Mr Pickles]

It is certainly our intention to release an awful lot of Government land.

[Kerry McCarthy (Bristol East) (Lab)]

The right hon. Gentleman mentioned three cities having local enterprise zones, but he did not mention Bristol, although that was one of the 12 listed in the Budget. It is somewhat surprising that the Secretary of State for Business, Innovation and Skills was in Bristol on Friday but did not, as far as I am aware, tell us where the local enterprise zone is going to be. Can the right hon. Gentleman enlighten me?

[Mr Pickles]

This is a very clear example of the difference between how we do business and how the Opposition did business. We are not going to tell the people of Bristol where the enterprise zones will go—they are going to tell us.

[Helen Goodman (Bishop Auckland) (Lab)]

There is confusion in the north-east because what the Chancellor said in his speech about enterprise zones—that there will be one in Tyneside—was not the same as what the Budget documents said: namely, there will be one in the north-east. There is an enterprise zone on Teesside, but the geography of the other one in the north-east is not clear. Does the Secretary of State have any insight on that?

[Mr Pickles]

There is one in Teesside and an additional one within the northern area. In truth, it is up to the local enterprise partnerships to put the thing together. [Interruption.] The hon. Lady wants to control everything from here, but I have to say that she was not very successful in doing so. What is wrong with an approach in which rather than us down here in Whitehall telling the people of the north-east what to do, the people of the north-east tell us how they will do things?

We are taking measures to help get the house building industry firing on all cylinders. Every new home supports four jobs in house building and two more in related industries. The availability of new homes helps people move around the country for work. Getting the housing industry moving again is key to restoring growth. Under the new Government, house building starts are up 23% and construction orders for new private housing are up 50% compared with Labour’s last year. But we need to go much further. There are about 200,000 granted planning permissions out there in the country, but the homes are not being built.

The answer is not targets; it is addressing the root causes. First, there is a tight mortgage market, so we will introduce a new form of support that will help first-time buyers get a foot on the ladder: a 20% equity loan, co-funded by Government and developers. That will put ownership within the grasp of 10,000 first-time buyers. We will reform the stamp duty land tax rules on bulk purchases of new homes to boost equity investment. We will help to reduce the sector’s reliance on mortgage funding.

Secondly, there is the problem that elements of the planning system are holding up the building of new homes. Let us go back to the 200,000 granted planning permissions. It is fair for councils to agree a contribution to the area where developers are planning to build to ensure that the development is sustainable, perhaps by providing a new park or playground, or by paying for road widening. However, what looked like a reasonable request three or four years ago may no longer look quite so reasonable if it stops necessary development happening altogether. If those commitments make it simply too expensive to build, we need to be realistic. Councils should not compromise on the essentials to make a development acceptable to the local area, but unrealistic agreements negotiated in the boom times should be reviewed to help new developments move forward quickly.

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

I am grateful that the Secretary of State mentioned Liverpool, but what is happening with Liverpool Waters is nothing to do with his Government. I read a statement that said, “Pickles was always happy and obedient, and would often roll over and have his tummy tickled.” Although the statement was about the dog called Pickles who found the World cup in 1966, does it not describe exactly what he did when negotiating his Department’s budget?

[Mr Pickles]

I suspect that when the hon. Gentleman was putting that question together in front of his shaving mirror, it seemed more of a tummy tickler than it actually was.

[Chris Bryant (Rhondda) (Lab)]

One of the big issues in many former mining constituencies is that a large proportion of people live in their own homes, but there is no work in the area any more. People do not want to make the decision to move to a place where there is work, but where they cannot afford the price of homes. How does the Secretary of State propose to get round that vicious circle, in which many people in my constituency and in the constituencies of many Opposition Members are stuck?

[Mr Pickles]

The hon. Gentleman will know that we have just put £30 million into the former coal homes area.

[Chris Bryant]

The former coal homes?

[Mr Pickles]

Into the former colliery areas. That £30 million is more than the hon. Gentleman’s party had put in. We will certainly do our best to ensure that there is sustainable development in that area.

[Dame Anne Begg (Aberdeen South) (Lab)]

Has the Secretary of State had discussions with the Department for Work and Pensions on the reforms to housing benefit, under which it will become impossible for someone who is under-occupying their house to get full housing benefit for that house? He talks about building new homes, but what proportion of them will be one-bedroom homes, because a large number of people who will be looking for property under the new housing benefit rules will be looking for such homes?

[Mr Pickles]

The hon. Lady will be aware that we have abolished the density targets, which led to a glut of flats. We will ensure that the market decides a reasonable mix. That seems to be a more sensible and reasonable way of going about the process.

For too long, the planning system has been a source of friction between councils, communities and businesses.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

In a moment. The purpose of the planning system is to ensure that the country benefits from the right kind of development—not to frustrate and delay, and generate endless paperwork. The Budget therefore confirms fundamental changes. By the end of the year, we aim to condense the morass of unwieldy national planning policies into one concise, easy-to-use document.

At the heart of our approach to planning is a presumption in favour of sustainable development. We need a system that consistently and predictably says yes to the right kinds of development. We will consult on plans to streamline the information required to support planning applications. We will introduce a planning guarantee so that no planning application will spend more than 12 months with decision makers, when a timely appeal is made. We will consult on proposals to bring empty commercial buildings back into use as residential properties. Let us cut the red tape and make it easier to turn run-down old eyesores into much-needed new housing. At the same time, we will maintain protection for the environment, including by safeguarding the green belt, which was under threat from Labour’s regional plans.

[Dr Whitehead]

rose—

[Bob Russell]

Will my right hon. Friend give way?

[Mr Pickles]

I will give way to my hon. Friend, and then to the hon. Gentleman.

[Bob Russell]

Will my right hon. Friend confirm that the third and sixth paragraphs of chapter 4 of the coalition’s programme for Government on communities and local government will form part of the planning legislation? I believe that they will, but I would like that to be put on the record.

[Mr Pickles]

The coalition agreement is not quite holy writ, but it is pretty close to it, so of course those paragraphs will be included.

I apologise to the hon. Member for Southampton, Test (Dr Whitehead) for not giving way earlier.

[Dr Whitehead]

Does the Secretary of State consider that his abandonment of the code for sustainable development and the target for zero-carbon home building by 2016 will aid sustainable development, build more houses or merely build less worse houses?

[Mr Pickles]

The hon. Gentleman is entirely wrong. We have included zero-carbon homes, and that will take effect from 2016. [Interruption.] We most certainly have done that.

[Mr Clive Betts (Sheffield South East) (Lab)]

I ask the Secretary of State to look at paragraph 2.12 of “The Plan for Growth”, which states that where an authority does not have a development plan or where such a plan is not up to date, there will be a presumption that an application “will be accepted”. That sentence does not mention sustainability, but just that such applications will be accepted. Does that mean that where there is an up-to-date plan, a developer will have less chance of getting an application through than in an authority without a current local development framework that is still operating on a unitary development plan? In other words, will there be a two-tier and differential planning system in this country, which we have never had before?

[Mr Pickles]

The local plan will have to reflect the presumption as well. It will be reflected in the national planning framework, which in turn will be reflected in the local plan. If a plan is ambiguous or out of date, that presumption will take effect, but there might be an existing plan that conforms to the presumption in favour of sustainable development. Members will now understand why planning is such fun.

Our planning reforms, like the new roles for local councils and entrepreneurs, are there to drive growth, just like the council tax freeze for hard-working families. They show that localism and economic growth go hand in hand. Those who think that the key to getting Britain growing again is for Whitehall to seize control should learn the lesson of history, which is that it repeats itself because no one was listening the first time round.

Let us compare two years, 1924 and 2009. There are many parallels. In 1924, Lenin is dead and Stalin is planning to take absolute power; John Logie Baird is demonstrating a prototype of his latest invention, the televisor; in New York, theatre audiences are getting their first sight of a dance called the Charlton—[Hon. Members: “Charleston!”] Charleston. I do beg your pardon. Also, house building in the UK reaches an all-time low.

[Chris Bryant]

Will the Secretary of State give way?

[Mr Pickles]

No.

In 2009, pleasingly, Lenin is still dead and the Soviet Union is no more; multi-channel TV is available in most homes; and “Strictly Come Dancing” becomes almost compulsory viewing. What is Labour’s contribution to this wave of nostalgia for the roaring twenties? A dance revival such as bringing back the Black Bottom? Introducing a flapper to speak from the Dispatch Box? No, a record fall in the number of new builds. The Labour party rails against the system and the machine, ups its target and achieves absolutely nothing. That is what central control brought us—growth constraint, innovations stifled and an economy needlessly held back. This is a positive Budget, a Budget for stability, balanced growth and above all fairness, and I commend it to the House.

18:32

[Caroline Flint (Don Valley) (Lab)]

I begin by saying that the violence of a handful of anarchists and attention seekers at the weekend was an absolute disgrace, and I hope that prosecutions will follow. However, I have to add that none of their yobbish and illegal behaviour could detract from the biggest demonstration of British feeling for eight years. People wanted to tell the Government that their cuts are going too far and too fast, and that their lack of plans for jobs and growth just make the pain worse.

[Bob Russell]

Will the right hon. Lady give way?

[Caroline Flint]

I will shortly, but I want to make a little progress.

What the Secretary of State’s rhetoric today has revealed is that the Government have no plans for jobs or growth and no plans for the future. If he wants to talk about the economy that they inherited, let me tell him a thing or two about the legacy that we left. They inherited an economy in which growth had returned, inflation was low, unemployment was falling and borrowing was lower than forecast. I am proud to say that Labour increased funding for local authorities, built or refurbished 4,000 schools and 100 new hospitals and left the nation’s public housing stock in better shape than it had been in during our lifetime. If the Secretary of State got out of his office a little more often, he would see that Britain’s major towns and cities had been substantially regenerated.

Even when the worst recession in our lifetime was visited upon our country, bringing half the banks in the UK and Europe to their knees, we still had fewer repossessions, fewer business collapses and a lower rise in unemployment than during the Tory recession of the 1990s. Today we have an economy that is not growing at all and in which inflation is up to 4.4%, unemployment is at a 17-year high and borrowing will be higher this year, next year and in every year for the next five.

[Bob Russell]

I am glad that my intervention was delayed, because I had not recognised the utopia that the right hon. Lady has just described. Does she accept that the last Government had any responsibility for the financial situation that the UK is now in?

[Caroline Flint]

We were part of a global crisis that affected countries around Europe and the world, but it is interesting that before the international crisis hit, we had the second lowest debt of any G7 country. We had brought overall public sector net borrowing down, and the now Prime Minister and Chancellor committed themselves to Labour’s spending plans. In 13 years, we created 1.1 million enterprises, and in the past two years, which included our last year in government, the World Bank ranked the UK fourth in the world and first among European countries for the ease of doing business.

[Chris Bryant]

I am particularly glad that my right hon. Friend has reminded that lot over there on the Tory Benches that they fully supported Labour’s spending plans up until the end of 2008 and promised to spend the additional benefits of growth on the economy, which they never seem to remember. That lot on the Liberal Democrat Benches, when they were sitting over here on the Opposition Benches, urged even greater levels of spending, so we are not going to take any hypocrisy from them.

In addition, will my right hon. Friend remind that lot over there of one further piece of history? In 1924, George Lansbury—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. You have to be much shorter, Mr Bryant.

[Caroline Flint]

If my hon. Friend was going to point out that when we go into recession we have to ensure that we do not go into a depression, that is exactly what the Labour Government did. Things may look rosy from the leather seats of the Secretary of State’s new Government Jag, but for ordinary people, the Government’s plans are hurting but they are not working.

[Mr Pickles]

Mine is a second-hand ex-Labour Jag.

If the Labour Government were doing such a good job, why did the right hon. Lady resign?

[Caroline Flint]

For goodness’ sake. I have always put on record my pride in what the Labour Government did to ensure that this country recovered from 18 years of Tory rule. Whatever my disagreements with them, I will never take that away from any of our leaders of the past 13 years.

This Budget has offered more of the same. The Government claimed that it was a Budget for growth, but we got nothing of the sort. Only a few weeks ago, the Chancellor told us that it would be an “unashamedly pro-growth Budget”, as though economic growth was something that he would normally be embarrassed about. What the Government should really be embarrassed about is that as a direct result of their policies, the Office for Budget Responsibility has downgraded its growth forecast not once but twice. Now we know that growth was down last year and will be down this year and next year. The only things that are growing at the moment are the prices in the shops and the number of people out of work.

[Nadhim Zahawi]

Let’s try again. Does the right hon. Lady think that, in the court of public opinion, people blame Labour for the economic mess that we are in?

[Caroline Flint]

I think we are doing quite well in by-elections, but I do not take the public for granted, and I know that they believe the deficit should be tackled. That is quite right, and I absolutely agree. However, as every day goes past and people see the choices that the Government are making, they say that they are going too far and too fast. That was expressed on Saturday, and it will be expressed on 5 May.

[Claire Perry]

Does the right hon. Lady share the opinion of her esteemed colleague, the very sensible right hon. Member for Salford and Eccles (Hazel Blears), who recently said that Labour could be much more

“explicit about where we had plans to cut…The public…are worried that we haven’t been as clear as we ought to be.”

[Caroline Flint]

I will come later to the position that Labour put before the electorate at the general election, which we stand by today.

[Nadhim Zahawi]

rose—

[Caroline Flint]

I have already given way to the hon. Gentleman, so I am going to make some progress.

I turn to some of the measures announced in the Government’s plan for growth. I think we would all agree that the planning system shapes the places where people live and gives character to our communities. It helps us to protect our natural and historic environment, and it should ensure that everyone has access to green space and unspoiled countryside. It is crucial for growth, because it supports economic development, helps to create jobs and contributes to our prosperity as a nation. I have never shied away from the fact that we as a country need to build more homes, and that our planning system has to support that. When the Government were elected, they promised bold, radical reform of the planning system that would speed it up, reduce bureaucracy and support growth. Let us look at what has happened.

Following the Government’s chaotic and botched reforms to the planning system, there has been a dramatic fall in the number of planning permissions for new homes, which are now at a near-record low. The figure for the third quarter of 2010 was the second lowest seen in the past 19 quarters, and in the last quarter of 2010, new planning permissions were down 22% on the previous year. It is no good the Government blaming the previous one, because things have got worse and not better since they came to power. The biggest drop of all came just after the last general election. In the first quarter of 2010, before the election, more than 40,000 planning permissions were granted to developers for new homes, but by the third quarter, after the election, that had fallen to just 30,000.

The Chancellor sought to address that last week, but I am afraid that in doing so, he sounded the death knell of localism. I offer my condolences to the Communities and Local Government Secretary for the demise of localism, because after months of the Government pledging power to the people—neighbourhood plans, communities in the driving seat and so on—the Chancellor blew localism out of the water in a single sentence. He said that

“from today, we will expect all bodies involved in planning…to prioritise growth and jobs, and we will introduce a new presumption in favour of sustainable development, so that the default answer to development is yes.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

I cannot recall cheers from Government Members when that was said. While the Secretary of State trumpets devolving power to local people and promises to give them a real say in the development of their area, the Chancellor wants to make it easier for developers to bypass the planning system altogether. They cannot both be right, which reinforces the confusion that has paralysed the planning system in the past 10 months.

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

Did the right hon. Lady support regional spatial strategies, which imposed on my constituents a brand-new town on green belt that was not supported by any democratically elected person? Does she prefer that to the Government policy that she describes?

[Caroline Flint]

I am afraid that if the Chancellor gets his way, nobody will be consulted.

No community can thrive if the system is biased against change. Every community must look to create new homes, workplaces and jobs. A planning system that is devoid of obligations to provide for the future and that just protects the present is destined to fail, but a fair and open planning system that involves local people, and that leads to better decision making and greater consensus on development, is important. Although the Government promise to give local people more of a say, their policies do exactly the opposite. Ten months in, their record on planning is one of incompetence and broken promises. Government Members who represent our green and pleasant land must be in mourning, for although existing controls on green belt will be retained, the Chancellor made it very clear that the Government

“will remove the nationally imposed targets on the use of previously developed land.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

Forgive me for putting that in plain English. More developers will be given a yes, but as there will be no obligation to develop brownfield sites, by definition, more greenfields will be developed. I do not hear any cheers from Government Members for that one.

We can add to the chaos in the planning system the fact that plans for more than 200,000 new homes have been dropped. Under Labour, more than 2 million more homes were built in England, including 500,000 affordable homes; 1.5 million social homes were brought up to a decent standard; 700,000 new kitchens, 525,000 new bathrooms and more than 1 million new central heating systems were installed; 1 million more families were able to buy their own homes; help was provided to more than 130,000 first-time buyers through shared-ownership schemes or equity loans; and even in the teeth of the recession, the previous Government were building 55,000 new affordable homes, which is more than this Government will build in any of the next four years.

[Charlie Elphicke]

On a non-partisan basis, I caution the right hon. Lady against many of those numbers, because many of them apply to flats, which are quick and easy to build, but which left us with a shortage of family housing.

[Caroline Flint]

They still had people living in them. The hon. Gentleman should come to the constituencies of Labour Members to see the investment in social homes, and the partnerships that were developed with the private sector to ensure that we had social homes alongside private developments. The previous Government were putting an end to the division whereby social homes were in one part of the community and private homes were built in another. That is the Labour way, and I am very proud of it.

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

The story the right hon. Lady tells is not one that I recognise in my constituency, which had the worst quality council housing in the whole country. Seventy per cent. of our housing was not up to the decent homes standard, and it has taken a Conservative-led coalition Government to deliver the £21 million to bring them up to standard over the next four years.

[Caroline Flint]

People throughout the country benefited from the decent homes programme and other housing initiatives that helped them to get on to the property ladder and to ensure that they had choices. In the first six months of 2010, before the election, the number of new homes built went up by more than 20%, but in the last six months of 2010, after the election, the number of new homes started fell by nearly 20%. If the Secretary of State wants that debate, I am always happy to have it with him—or with any of his colleagues.

The country wants to know what the Secretary of State and his Government will do to help to build the homes for which communities up and down the country are crying out. Whatever he pretends, the reality is that the Budget brings very little good news. It promises help for first-time buyers. The Opposition welcome the Government’s U-turn—their decision to bring back Labour’s homebuy scheme, which they insist on calling “Firstbuy”—but less than a year ago, the Minister for Housing and Local Government described that policy as an “expensive flop”. That was not what thousands of first-time buyers thought about it or what the housing industry made of it. The Home Builders Federation said that it

“was judged a major success by the industry”.

Only a matter of months later, with his customary humility, the Minister has been forced to admit that he called it wrong. We have wasted 10 months in which we could have ensured that people had a better opportunity to own their own homes. He has done too little, too late, and the measure does not go far enough, because while more than 3 million hopeful first-time buyers try to get a foot on the property ladder, the measure helps only 10,000 of them.

No one is convinced that the new homes bonus is the panacea to the housing crisis that the Government believe it to be, least of all the 21 Tory council leaders from the south-east who wrote to them earlier this year warning that they were not convinced that the plan provides enough of an incentive to communities for them to welcome development. The Budget was crying out for measures to support housing, but they did not happen. All it comes up with is the idea of allowing commercial properties to be turned into homes without requiring planning permission. When the Government get around to establishing exactly which sort of commercial properties will be allowed to turn into residential properties and under what conditions, we will look at their proposals carefully, but if the Secretary of State really believes that the answer to the country’s housing crisis is turning some empty offices into luxury penthouses, or asking people to live in disused out-of-town business parks or derelict industrial estates, he had better think again.

The biggest disappointment is the failure to address the deeper problems of housing supply and the lack of available mortgages. In their submission on the Budget, the Home Builders Federation is absolutely clear that mortgage availability

“is the biggest immediate constraint on demand and house building.”

Figures from the Council of Mortgage Lenders published as recently as 18 March show that mortgage lending has stalled. It says that lending is

“weaker than a year ago”

and that the housing market is “stuck in a rut”, but on that, the Budget is silent.

Before we move on from housing, let us remind ourselves of another matter on which the Government have not lived up to their promises. Just a few weeks ago, the Minister for Housing and Local Government told the Zero Carbon Hub annual conference:

“The commitment to Zero Carbon remains in place—there’s no ambiguity about that”,

but when reading the small print of the Budget, we discover that that is just another broken promise, because from 2016, new homes will no longer have to source all their energy from carbon-neutral sources, which goes back on a commitment that the Conservatives made in opposition and repeated in government. Those standards were about not only protecting our environment, but driving innovation and creating new jobs in the green economy. The Government’s failure on that undermines not only their green credentials, but the ability of our economy to compete for new jobs, new investment and new industries.

Let me deal with the underlying economic nonsense at the heart of Government policy. They hope that the UK economy will be saved by an export-led recovery, which I call Osborne’s see-saw, because the Chancellor views the public and private sectors as opposite ends of a see-saw. He thinks that the harder, deeper and faster he cuts the public sector, the sooner the private sector grows to fill the space and suck up the unemployment. One does not have to be an economist to know that there is no reason why cutting home helps, police officers and council cleaners will lead to the UK selling more electrical equipment, cars or IT services abroad. However, I do know that if we cut public investment in roads, regeneration and house building, and shred the school building programme, the private sector takes a huge hit. The construction industry nose-dives and hundreds of thousands of skilled workers and those who manufacture and supply to them lose their jobs.

[George Freeman (Mid Norfolk) (Con)]

Has the right hon. Lady noticed the International Monetary Fund’s recent figures showing that Britain is running interest rates 3% lower than those in countries with similar deficits to us? Is that not a fundamental result of our programme for the deficit?

[Caroline Flint]

I notice that the economies of the USA, France and Germany grew in the last quarter of 2010, but that of Britain shrank by 0.6%, and that the German and US economies are forecast to grow more strongly.

This is the first ever Budget for growth to downgrade its own growth forecast, yet the Government’s answer is not to continue Labour’s plan to manage the deficit reduction, but to go faster and further and hammer public spending harder. Then they blame everyone but themselves when growth forecasts fall and when Government borrowing rises. Hundreds of thousands of people tried to tell the Government on Saturday that it is hurting but not working, and they are just not listening. For this Government, giving a tax cut to the banks was more important than supporting the construction industry, keeping people in work or building new homes.

The Budget shows above all else how out of touch the Government are. With more people out of work, inflation rising and people facing the biggest squeeze on their living standards in a generation, we hear the Secretary of State make much of this year’s council tax freeze, which every Labour council has implemented, despite receiving much steeper cuts than Tory and Liberal Democrat councils in far wealthier parts of the country. However, with the Deputy Prime Minister busily coming up with a thousand and one new taxes and the Business Secretary desperately trying to resurrect the idea of his mansions tax, it remains to be seen whether the Secretary of State will be able to say the same next year.

A council tax freeze helps only so much. It is a £72 saving versus a VAT increase that will cost a family £450 extra this year, and it is coming at a time when families are losing tax credits and facing a freeze in their child benefit, when pensioners are seeing winter fuel payments cut, and when the Government’s cuts are undermining our recovery and costing people their livelihoods. They give with one hand but take with many more from the communities that we represent.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

The right hon. Lady will be aware that the Darling plan commits her party to £14 billion of cuts, beginning in a few weeks, which is only £2 billion less than the Government are committed to. Will she tell us where those cuts would fall under her party’s Government?

[Caroline Flint]

It is amazing how Conservative MPs are picky about which part of our budget they want to suggest would go different ways. On the one hand, the hon. Gentleman claims that the difference between our budget and theirs is £2 billion, and on the other hand, the Chancellor boasted in the previous Budget that there was a £40 billion difference between our plan to halve the deficit over four years and his plan to eliminate it entirely. They cannot have it both ways. We need a Budget for growth, and a few facts tell us all we need to know.

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

Government Members have mentioned export-led recovery. Only last week, in the Budget debate, the right hon. Member for Wokingham (Mr Redwood) warned the Front-Bench team that such an export-led recovery will peter out very soon and for the next two years, as credit contracts in China, India and Brazil, among other countries. However, does my right hon. Friend agree that at the heart of the Budget and the growth strategy lies the privatisation of the Royal Mail, the privatisation of the NHS and the attempted privatisation of the forests?

[Caroline Flint]

They have already U-turned on the forests; let us see how much they respond to the elections in a month when the people of this country will make it loud and clear what they think of the past 10 months. The sad thing is that we have had to wait 10 months for a so-called plan for growth. In those 10 months, we have seen unemployment and borrowing rise and growth fall. That does not bode well for anybody in the country, be they those with families, those in the public or private sectors, those with a business trying to grow or those trying to start up a business.

[Nic Dakin (Scunthorpe) (Lab)]

Does my right hon. Friend not agree that what we need in order to promote growth is demand in the economy? However, with public spending being cut and people losing their jobs, which will cut private spending, where will the demand come from to fuel private sector growth?

[Caroline Flint]

My hon. Friend makes a very good point. I could not make it better myself.

The fact is that this is not a Budget for growth. We have the highest unemployment rate in nearly two decades, with nearly 1 million young people out of work and inflation spiralling out of control. Even Moody’s credit rating agency, which all of us have heard so much about from Government Members, are warning that our triple A credit rating could be at risk. What is the price of this failure? It will be another £43.4 billion in borrowing. Yet all the Government can come up with is more of the same: the same old excuses; the same failed policies; and the same old stories from the same old Tories.

No number of excuses can hide the fact that the Government have cut too far and too fast, hitting jobs and growth, and putting our recovery at risk. However, there is an alternative. We could get our country’s finances back on track by halving the deficit in four years; we could give families and businesses real help by scrapping the VAT increase on fuel; we could repeat last year’s tax on bankers’ bonuses, and invest the money in building 25,000 new homes and getting 90,000 young people into work; and we could boost the regional growth fund by £200 million.

With the Government’s first major elections just weeks away, this Budget sets out a very clear choice: between Labour, which will do everything it can to protect jobs and the services people rely on, and this Tory-led Government imposing cuts with barely disguised relish; between Labour, which knows that there are difficult decisions to be made, but will make them in a way that is fair and open, and the broken promises and underhand tactics of the Tories and the Liberal Democrats; between Labour, which will support people into work and get our economy back on track, and a Government who are taking a reckless gamble with the economy that is hurting but not working. In one month’s time, people up and down the country will have their chance to send the Government a very clear message—and their voices will be heard.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I remind Members that speeches are limited to six minutes, although I might look to reduce that to four. A huge number of Members wish to speak, and there is a lot of pressure today and tomorrow, so we might have to reduce the limit to four minutes.

18:56

[Nicholas Soames (Mid Sussex) (Con)]

I draw the House’s attention to my entry in the register.

I warmly welcome the Budget and my right hon. Friend the Chancellor’s broad judgment of the economy. I particularly commend him for sticking to the plans he had outlined earlier, so that—painful though it may be, and mindful, as we must be, of the difficulties—we can deal properly and speedily with the appalling state of the economy bequeathed to the Government by their thoroughly irresponsible predecessors. Measures are now firmly in place to repair the economy, to ameliorate the gross waste of public money, to pay down the deficit and to put in place the architecture for a growing and expanding enterprise economy, with all the opportunities for jobs, increased competitiveness, substantial improvement in the effectiveness of essential and greatly valued public services and support for wealth creation.

Clearly major challenges and difficulties lie ahead, but the Chancellor has set out a clear vision for growth, with the aim of creating in the United Kingdom the world-class businesses of the future, of all sizes and in all activities, and consolidating a way ahead for all our industries and commerce. I was taken today with a letter in the press from some of Britain’s most successful business men that said that the steps taken

“will be a massive boost for start-ups, and will help entrepreneurs to secure finance to get their ideas off the ground.”

That is just so. It is exactly what is required.

Of course, I welcome the announcement on apprenticeships, but as I have made consistently clear to Ministers on many occasions, all the good will in the world cannot replace the over-bureaucratic burden currently in place that often makes it difficult to take on apprentices. If these targets are to be achieved, the process must be made a great deal easier. These are matters with which the Department concerned must deal with great vigour. The opportunities to expand the skills of our young work force are real and vital, and I hear from businesses on all sides their desire to get on with this matter in a speedier manner. To this end, I strongly urge my right hon. Friend to pay careful attention to the views of Professor Alison Wolf, who has developed some very good ideas on these matters, and the excellent work done by my right hon. Friend Lord Baker of Dorking.

I welcome the steps taken on deregulation, and I was pleased to see that the Government’s earlier work has been built on in the Budget in a number of areas. However, those steps are nowhere near good enough yet, and progress across Whitehall is extremely patchy. For my part, I believe that greater authority and impetus should be given to the war on unnecessary, debilitating and grinding red tape, which holds back so many of our businesses and infuriates so many of our best people, who have great ambitions that they cannot fulfil because of the burden that the state places on enterprise.

[Helen Goodman]

Will the hon. Gentleman give way?

[Nicholas Soames]

No, I am very sorry; I am afraid that I cannot.

I call on the Chancellor and the Prime Minister to bring back Lord Young, who understands such matters well, knows the grislier ways of Whitehall and is ideally qualified to lead a tough, cross-departmental effort to enforce the measures needed to reduce onerous administrative burdens, particularly on our small and medium-sized businesses. I know that many Ministers are aware of the importance of doing that, but from the Back Benches making progress often feels like wading through very deep mud. The sometimes apparent weakness of the civil service, judicial activism, thickets of regulation, and an infantilised and often financially illiterate press can all make it impossible to progress. The Government need to make a big effort to move on the issue.

On taxation I need say only this. A more competitive, simpler and more stable tax system will be better for everyone, rich and poor alike. Such a system would also go a long way towards restoring our badly lost international competitiveness, to which the last Government did such terrible damage.

Finally, let me briefly say a word about banks and the language of relentless negativity that is doing great harm to the City of London, which is one of the greatest assets that this country has. That language—particularly of the Opposition, but also of much of the press—is self-defeating, illiterate and often infantile. It needs to stop, and the debate needs to grow up. Many new jobs in banks headquartered in London are now being located overseas. That is very bad news. The Chancellor has averted a fiscal calamity. I am optimistic about the future of this country, but we face a long, hard slog.

19:02

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Let me start by saying that I did not recognise the Secretary of State’s position. In my county of Northumberland, we have just cut £44 million, with more to be cut next year and hundreds of people sacked throughout the United Kingdom, and we have cut services—or, if we have not cut them, we have charged people for them. Unfortunately, he never mentioned that, so I thought that I would put that one to right.

Let me talk about the enterprise zones. We have seen them in the north-east, where we had them last time, under Thatcher—they were called “Thatcher zones”. Although they were partially successful, they were not all successful. I would say that, at a good guess, most of them stood empty. They were not filled by anyone—in fact, anyone who went around the north Tyneside and Newcastle area today would find that a lot of the buildings are still empty.

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

Is my hon. Friend aware that during the period of the last enterprise zone in Newcastle, there was a jobs increase of only 0.7%, whereas in eight years of the last Labour Government, there was an increase of 18%?

[Mr Campbell]

Of course that is right, and that is part of my point. I would like the zones to be targeted in unemployment blackspots, which we have in the north-east. Unfortunately for Blyth Valley and Wansbeck—my hon. Friend the Member for Wansbeck (Ian Lavery) is not here—those zones did not come into our areas. If they are going to be in Tyneside, we have to get the people from our area into Tyneside, but the only transport we have is buses and people’s private cars—we have a rail link, but we do not have a train on it. If we target those blackspots, the enterprise zones might see some success.

Let me turn quickly to what I have heard since this Government came to power about how the last Government are to blame for the mess we are in. We hear all the time—we have heard it this evening—about the bankers’ mess, and that is indeed what I would call it: the bankers’ mess. The one thing that we never hear from the Government Benches is any criticism of the banks and the crisis that the bankers put us in. This country was going on wheels until 2008, when the bankers created the crisis. Government Members are not blaming the last Labour Government for the crisis in America, the crisis in Greece, the crisis in Spain, the crisis in Portugal or the crisis in Ireland. They are not blaming the Labour Government for all that—or would they in fact want to blame them for it?

I will tell the House why Government Members are not blaming the bankers: because since the Prime Minister was selected as a candidate for the leadership of the Tory party, the City has put £42 million into the Tory coffers to fight elections. That is why we do not hear anything from the Government side about the banks. That is why the banks and the bonuses are allowed to flourish, because the Tories are in the pay of the bankers. Make no mistake about it: that is a fact. The fact is that the Conservatives are in their pockets, and the banks are in their pockets.

[Andrew Bridgen]

rose—

[Andrea Leadsom (South Northamptonshire) (Con)]

rose—

[Mr Campbell]

No, I am not going to give way; I do not have time.

What happens when the Conservatives are in the pockets of the banks? Where does the bill for the bankers’ crisis fall? Yes, you’ve got it: it falls on the working people of this country. We are seeing that now, with sackings all over the place and wages cut.

[Andrea Leadsom]

I thank the hon. Gentleman for giving way. Does he recognise the fact that 1 million people in this country are employed by those banks in one way or another, in financial services, accounting for 3.5% of employed people in total? Is he blaming all those individuals?

[Mr Campbell]

I am blaming the bankers for the way they invested their money in the crisis that they caused. They caused it—they knew what they were doing, and they will all say that. They all came to the Treasury Committee and apologised, if the hon. Lady remembers.

As I was saying, the bill for all this falls squarely on the working people of this country, with the sackings that we have seen and the wage cuts. Wages are 2.2% below the average. That is what they are: they are not above. In fact, we had to take a pay cut ourselves last week. We all did it, and most of them on the Government Benches are in the pay of somebody—some board or some consultancy—so they will be all right when they get a pay increase from them.

What else is being cut? Pensions are being cut. Look at the furore. I am sure that hon. Members have had letters from servicemen, policemen, teachers and local government workers about their pensions. The Government are murdering their pensions, and what are they doing about it? Absolutely nothing. The Government are going to sink them with their pensions—[Interruption.] Never mind looking at my lot: your lot are in power. They are in charge, and they have to deliver the pensions that those people are entitled to have.

We can go even further, because we can look at those who are in their pockets—the pockets of Government Members—who also evade tax. There is £16 billion out there in evaded tax, with people running off to the Cayman islands, or some island where they can put their money under a sack and hide it. That is what is happening today. What are the Government doing about it? Absolutely nothing. They will tax the people of this country, but they will not tax those who run away to another country to put their money in a sack. That is what they will do, and they always have.

Then there is the argument that there was no money. That’s funny—we had £7 billion to give to Ireland when Ireland went under. Why, we saw the Chancellor jumping up at that Dispatch Box and saying, “Not a problem, Ireland. We’ve got plenty of money—there’s £7 billion,” yet we kept being told that there was no money. Now what have we got? We have got this Libya crisis. Not a problem for Britain. Tomahawk missile? Not a problem, even when one Tomahawk missile costs £900,000, and we are firing them left, right and centre. That is another expense for the British people. Ministers are not saying anything about that at the Dispatch Box, but I am waiting for it, and it may come.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. If people are going to intervene regularly, I am going to have to drop them down the list, because we are really struggling to fit everyone in.

19:09

[Mr David Ruffley (Bury St Edmunds) (Con)]

The business of the Government is not the government of business. The growth that this country needs, which will provide jobs and higher living standards for all our citizens, is generated by businesses, not by the Government. This Budget takes a modest step towards setting enterprise free in this country. I welcome these measures, but I also wish to sound a note of caution.

I want to talk first about the fiscal squeeze and the way in which inflation is squeezing Britain’s businesses. The Chancellor of the Exchequer is rightly lionised for being the deficit reducer of the western world. Contrary to what the Opposition might think, we do have the biggest peacetime borrowing requirement in the history of this country, and national debt was doubled under the Labour Government. It is also the case that £120 million a day is being spent on debt interest, which is more than we are spending on schools, the armed forces, criminal justice and police. Those are the facts.

The Chancellor’s rules are clearly correct, and he is setting about implementing them with real purpose and due ruthlessness to eliminate the structural deficit in five years, and thereafter to ensure that debt as a share of national income falls. The Chancellor’s excellent fiscal policy is in safe hands but, sadly, monetary policy is not. The good work done by the Budget will be threatened by monetary policy. We all know that the Bank of England has let inflation out of the box. It has lost control of inflation. Consumer prices index inflation is now 4.4%, and retail prices index inflation, which many people feel is a truer measure of the cost of living, is now 5.5%. Too many letters have been sent to the Chancellor by the Governor of the Bank of England explaining why, yet again, he and the Monetary Policy Committee have missed the inflation target.

Our higher-than-expected inflation has had the following consequences. Our debt interest payments are £4.6 billion higher than forecast in November for the simple reason that inflation has fed through to gilts, one third of which are index linked. We have also seen increases in the spending totals for social security and public sector pensions. This has led to an overshoot in the public sector borrowing figure, not for this year but for next year, of £4 billion. For 2012, there will be an overshoot of between £10 billion and £12 billion on the borrowing numbers that we forecast last autumn.

Higher inflation has another pernicious consequence. It will make cuts in public spending deeper, assuming that the Chancellor sticks to his cash totals, which I have every confidence he will. The Office for Budget Responsibility has forecast that average earnings will not grow faster than inflation until 2013, but the real worry in the OBR report is that inflation will not be tamed, and that the Bank of England does not tighten monetary policy in such a way as to get inflation under control. The report sets out a very gloomy scenario. It is that, in 2012-13, inflation could be stubbornly trading at around 4%. In those circumstances, real earnings would need to tick up. They will tick up, and there will be upward pressure at that stage for the Bank to jack up interest rates. According to the OBR’s gloomy scenario, it could be as bad as having a 6% base rate by 2013. That would result in the mother of all squeezes—much worse than the one we are already contemplating. That is why I suggest that, when we look at the macro-economy, we pay more attention to what the Monetary Policy Committee is doing. It is the duty of this House to scrutinise exactly how the committee is ensuring that monetary policy works together with, and supports, fiscal policy. At the moment, it is not doing so.

Because of the pressure on living standards, I am particularly pleased that the Chancellor has decided to lighten the burden on ordinary hard-working families. Taking 1p a litre off fuel duty, abolishing the escalator and introducing a fair fuel stabiliser are at least a nod towards helping household finances and giving some stability to the cost of fuel for each household. By 2012-13, the allowances for income tax will rise so that the average cash gain will be in the region of £326 a year for every working household. Those measures will take 106,000 people out of tax in the east of England, and they will benefit more than 2 million in the region. There is also the council tax freeze, which will be worth about £72 for a band D property.

We seem to have made a sensible start on unleashing the forces of enterprise in this country, but it is my contention that we need to keep a watch on inflation. We need more deregulation, and quickly, and we will also need deeper tax cuts when the economy can afford them.

19:15

[David Wright (Telford) (Lab)]

Last week’s Budget was delivered by a Chancellor who was quite frankly in denial about the impact of his Budget last year. He used to accuse the former Chancellor of the Exchequer and Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), of being in a bunker, but the current Chancellor has not only gone into the bunker but has had it sound-proofed and cut off the phone lines. He is not listening to what is going on in the economy at all.

In my speech in last year’s Budget debate, I cited the example of Japan and the problems that the Japanese economy has had over the past 10 to 15 years. Of course our hearts go out to the people of Japan after what has happened to them over the past few weeks, but it is interesting to see how their economy has behaved over the past 10 to 15 years. We have seen a series of growth figures that just bump along the bottom. There has been no significant stimulus in the economy there, and this country is in real danger of following Japan’s example.

It is clear that the Chancellor has not taken into account the impact of last year’s Budget on confidence in the economy, on the housing market and on the jobs situation in constituencies such as mine. He has gone on to build on the problems that he has already created in the UK economy.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Will the hon. Gentleman give way?

[David Wright]

I will not.

In the Budget, we have seen that growth estimates have gone down for last year, this year and next year. Borrowing is up by £43.4 billion, and debt interest will be £17.6 billion higher. According to the Chancellor’s forecast, unemployment will go up by up to 200,000 every single year until 2015. That is a significant price for people to have to pay for what I believe are the sado-monetarist views of this Chancellor.

We have seen a massive squeeze on living standards right across the board. The hon. Member for Bury St Edmunds (Mr Ruffley) rightly spoke of the impact of inflation on the economy. People see it every time they go to their local supermarket as the costs of the core products that they buy rise significantly. There is an impact on the cost of food, as well as significant rises in the cost of fuel. It is interesting that the Chancellor’s much-heralded policy for cutting fuel costs was destroyed within two days of the Budget, when I saw a gentleman arguing with the staff in my local Sainsbury’s filling station. He said, “Hasn’t the price of petrol gone down?” and they said, “Yes, it went down on Budget day, but we put it back up again the day after.” That policy was blown out of the water as soon as it was announced, and, anyway, the Chancellor had already put a 3p a litre rise in the price of petrol into the system through the VAT increase.

It was interesting to listen to the Chancellor’s speech. It contained a complicated segment at the beginning on tax thresholds, which he went through very quickly. That was because it contained all the clawbacks relating to the changes in tax thresholds, following the debate on the consumer prices index and the retail prices index and the announcements of all the cash that he was giving out—actually, he did not give out that much cash; he gave out a bit. All the cash that went out had already been clawed back in the measures announced at the start of his speech. The impact of his decisions in last year’s Budget was that the average family with a child would be paying about £450 a year more in VAT anyway, so he had already wiped out any goodies to be given away in this year’s Budget by the approach he took last year.

There has been much debate about youth unemployment. The corporation tax cut from the Chancellor is one way of proceeding for a Budget strategy, but I believe he could have done something far more radical: instead of giving away that corporation tax cut, he could have spent the cash on a massive programme of employment, training and support for young people in the economy. He could have made that choice and, as I say, invested the money in training and skills for young people.

The Red Book is useful for looking at the Government’s overall strategy. The table on page 12 is headed “International consensus on fiscal consolidation”. It shows that we are up there as consolidators-in-chief with France, Turkey, Canada and Spain. There is, however, a significant outlier on this table—it is the United States. The table suggests that the US is going to move its fiscal consolidation position significantly next year, but I have my doubts. Let me explain what I think is going on.

I believe that the US is looking more carefully at where its economy is and is planning significant investment to lift its people out of recession. Obama’s programme on public spending and expenditure right across the board shows that he is not pursuing a strategy of significant fiscal consolidation, and I doubt whether he will next year either. He is trying to ensure that his economy recovers throughout this period of downturn and that it does not go into significant levels of depression.

Finally, the enterprise zones are positive, but infrastructure investment has to be put in place alongside them; otherwise, they will not work and local economies will be blighted. This is a Chancellor who has got it generally wrong in the Budget. He needs to change his strategy and adopt a plan B very—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

19:22

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

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

I start by welcoming the increase in income tax thresholds. It is important that 1.1 million people, including a number of part-time workers, are being taken out of tax altogether. That will make a great deal of difference to them. In addition, up to 25 million people are likely to receive a rebate, which will, of course, be some help in these difficult circumstances. I would also like to welcome the many measures to help small and medium-sized enterprises, through incentives to invest and innovate, reduction in taxation and, most importantly, cuts in regulations that have been such a burden on our small and medium-sized firms.

We are where we are, and there is no doubt that it is growth in the private sector that is going to take us out of this situation. We are already seeing growth in manufacturing and growth in exports. That has to be where the growth comes from, rather than in the public sector. In his Budget speech, the Chancellor identified our current planning system as a chronic obstacle to economic growth in Britain. I would like to make a few comments on some of the proposals for planning.

First, on making it easier to convert commercial premises to residential ones, I am pleased this is going out to consultation as I can see some instances where it would be beneficial and others where it would be detrimental. The overriding question for me is how this fits in with localism, local decision making and indeed the proposed neighbourhood plans.

Developing an office block left empty for many years owing to a lack of demand for such facilities because of new ways of working sounds like a good idea, but let us suppose that that office block overlooks Poole harbour. It could be right for a second home, so what conditions could be placed on it to make sure local that housing needs were met and that there was an affordable component? My own district shopping centre has suffered from estate agent creep, takeaway café creep and, of course, charity shops, so I hope its viability will be secured through a neighbourhood plan, but will this proposal present another threat? I welcome residential accommodation above shops, but there is often a conflict with noise and other side-effects from the retail use, which would need to be considered.

Although more flexibility about the level of control over change of use is generally to be welcomed, I am wary about any top-down national measures that would impede local people from shaping their local or town centres. Councils and local residents need to decide when and where the relaxing of rules would be advantageous. The new presumption is in favour of sustainable development so that the default answer is yes. Again, my worry is how this will fit with localism and the proposed neighbourhood plans. What is sustainable development? Presumably, it will be defined in the national policy framework. Housing amidst shops is sustainable in one sense, but not in others—the viability of a local shopping centre, for example.

Having fought long and hard against centralised targets, the south-west regional spatial strategy and the last Government’s plans that would have destroyed valuable green belt within my constituency and that were not supported by any locally elected person, I welcome the commitment to protect the green belt. Naturally, I welcome the removal of nationally imposed targets, but with this presumption, can valuable green spaces, which are not green belt, be protected within a neighbourhood plan? It is particularly important in an urban setting to protect those green lungs and to be mindful of densities. High density works in some settings, but not in others. Will this new presumption be a trump card over local plans?

The infrastructure must be there. We need the right balance with housing. My local council seems to be pursuing its core strategy and trying to put the plan in place, but is still working to the housing targets set by the last Government.

I shall comment briefly on something that affects housing in my constituency. I represent an area with a great deal of valuable heath land, of which I am very proud. Natural England, however, has a policy that no development can take place within 400 metres of the valuable heath land. That is right for a large development, but when it comes down to infilling in an already built-up area, sometimes with dual carriageway between the housing and the heath land, I feel that it is too restrictive and should be looked at again. I do not want to jeopardise our valuable heath land, but I am sure that this policy, as it stands at the moment, is too restrictive.

It is important to achieve growth. There has to be some scope for speeding up the planning process, for empowering our councils to prioritise employment and housing opportunities and for giving them the tools to do so. That seems to me to make sense because we should have local decision making—on how we work, how we live and how we play.

19:27

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

It is well documented that the west midlands has been one of the worst hit regions during the recession. That is one reason why I raised the issue of enterprise zones in an earlier intervention. Those zones would certainly affect Coventry in a major way.

There is widespread concern in the west midlands about these cuts, but it is important to remember how this started. Some of us were here when the economic crisis blew up. It blew up in America. I realise that Government Members are probably in denial about this, but the fact remains that it started with Lehman Brothers in America. As Members who have followed these events will recall, there are still some charges against them. A Senate investigation took place into why Lehman Brothers collapsed. Some believe that the American Treasury could have done a lot more to help Lehman Brothers out. Be that as it may, it did not happen. We should all remember how this started.

People might have short memories, but the situation became so bad that even a Republican President and tax cutter like George W. Bush ended up pumping billions of dollars into the economy in the last month of his presidency. He realised the seriousness of the situation. It is not true to suggest for a moment that the Labour Government created this problem. It was an international problem, and that has been demonstrated.

It is equally important to say that we were never in the same position as Greece or Portugal—or Ireland, for that matter. We kept our triple A credit rating, although people tend to forget that. If we cast our minds back, we will remember that we had to restructure the banks. Anyone who watched the collapse of Northern Rock night after night on the television would know that there could have been a major run on the banks. The previous Government acted decisively and quickly. The last Prime Minister flew out to America in an attempt to secure international agreement on how to control the banks. The widespread absence of such agreement was one of the major problems. The Prime Minister tried to secure it in Europe as well. To say that we created the present problem is to deny the truth, in my view at least.

As I have said, we had at least 14 years in which to repay our debt—unlike Greece, and unlike other European countries such as Ireland. If we can underwrite Ireland’s debt, or help Ireland and promise to help one or two other countries, that suggests to me that our country has not been as badly off financially or economically as the Government parties have tried to make out. There certainly were economic problems, as I have demonstrated, but not to the extent that the Government’s solution suggests. We said that we would probably halve the deficit over about four years, but the present Government want to eradicate it, and I cannot think of any United Kingdom Government in recent history who have eradicated a deficit. Governments have tried, but they have not been able to do it.

We should bear in mind that when Labour came to power in 1997, 50p in every pound of taxpayers’ money was used to pay off debt. People also tend to forget that, after consultation with industry and the trade unions, we introduced the car scrappage scheme, which brought the motor car industry out of the doldrums. That was a long, hard-fought battle. We would certainly have reduced the deficit over those four years.

Coventry has benefited from significant redevelopment and regeneration, and the public sector has been crucial to that process. What concerns us now is the possibility that the Government’s cuts in the public sector will cause it to return to the days of the late 1970s and 1980s. Members may recall that, during the 1970s and the 1980s in particular, the motor car industry in Coventry and manufacturing in the west midlands were almost annihilated. The Government talk of balancing the economy. The last Conservative Government were balancing the economy at the time, but they were balancing it in favour of the service sector. The present Government criticise the excessive emphasis placed on that sector, but the Conservatives started it.

Rising unemployment is also a growing worry. The latest figures from the House of Commons Library reveal that there are nearly 10,000 unemployed jobseekers in Coventry, and the position is likely to worsen in future years. Coventry is famous for car manufacture, but public sector workers are driving much of the local economy under the present Government.

As some Members will recall, one of the Government’s first actions, last June or thereabouts, was to abolish the British Educational Communications and Technology Agency and the Qualifications and Curriculum Development Agency. They also abolished Advantage West Midlands, which was one of the most successful regional development agencies in the country and had created hundreds of thousands of jobs throughout the midlands. It created Ansty technological park, of which the Government are now very proud. What a strange coincidence. When we created a business park at the university of Warwick at the same time, we were told that we had no business to be in the area, but later the Government tried to take the credit.

I will end my speech now, because I know that others wish to speak. There is a time limit anyway.

19:33

[Stephen Mosley (City of Chester) (Con)]

Last year’s emergency Budget and the comprehensive spending review laid the foundations for rescuing our economy and restoring our public finances to balance. Now reform is needed to steer our country to prosperity, and at the heart of the reforms that are necessary is the knowledge that less interference and regulation from central Government is the natural precursor of growth and efficiency. It is essential that we make it as easy as possible for our firms to succeed, expand, and employ more people, and it is imperative that we send a clear message that this coalition Government are on the side of innovators and entrepreneurs.

I am fortunate to represent Chester, which is a successful, popular and thriving constituency. However, like most places, we could do better. I am in the enviable position of watching companies queue up to move in and invest, but our problem is that we have nowhere for them to move into. For years after the millennium, we had a planning moratorium that was designed to discourage investment in Chester and Cheshire and direct it towards Merseyside or Greater Manchester instead. I have no problem with encouraging investment in our metropolitan city centres—indeed, I welcome it—but that must be done by making them more attractive to investors, rather than simply stopping investment in other areas and hoping it will spontaneously start up elsewhere. The two-pronged approach announced by the Chancellor on Wednesday will help to solve both problems.

First, enterprise zones will create areas that are more attractive to investors, developers and those who wish to start up companies. I am delighted to note that Liverpool Waters has been selected on Merseyside. That will create jobs and investment, which will help people in the whole sub-region, including my own city of Chester. Unlike many Members over the past few days, I am not going to call for an enterprise zone in my own constituency, but I wholeheartedly support Cheshire West and Chester council’s proposal for one in neighbouring Ellesmere Port. A manufacturing-based enterprise zone there would complement the existing manufacturing industry—including Vauxhall and Shell—and because workers no longer live next door to the factories in which they work, it would create jobs for people in Chester as well.

Secondly, Chester will benefit from the relaxation of planning regulations. Planning is rightly considered to be a sensitive issue in Chester. Ours is a small historic city with a heritage and archaeology that make new development in the city centre very difficult. We are also tightly surrounded by green belt. All Members will be aware of the difficulties caused by proposed green belt development. However, that does not mean that we should have a planning system that places even more hurdles in the way of investors, developers and wealth creators. Reforms involving streamlining, fast-tracking, removing bureaucracy and time-limiting are long overdue, and they will have one simple consequence: they will facilitate growth.

I also welcome the Chancellor’s announcement that the Government will consult on the potential benefits of merging income tax and national insurance. It does not make sense that people’s earnings are subject to two separate taxes that are deducted directly from income. Let us not sit here and pretend that there is one pot of money that goes towards paying the state pension or unemployment benefits, and a completely different pot for general Government expenditure. Income tax and national insurance are contributors to the same kitty. Of course we must take great care to ensure that there is no unfair impact on those of state pension age whose earnings are not currently subject to national insurance deductions, but if the system can be simplified, it should be simplified.

Those of us who have run businesses are all too aware of the burden that the current system places on business owners, especially owners of small businesses that do not have the advantage of large payroll departments. It was obvious from the cheers on the Government side of the House on Wednesday that many of my colleagues had had such experiences, but as we cheered, the blank looks on the Opposition Benches told a different story. It dawned on me that many Opposition Members had very little idea of the difficulties involved in running a small business. They seemed unaware of the impact of this unnecessary complication on businesses up and down the country.

We should be doing all that we can to reduce the burden of bureaucracy on businesses and to help them to invest their time, energy and money in growth, ingenuity and development. That is what this proposal will help to deliver. If we want to stimulate our economy and help business and private enterprise to grow, we need to cut costs, cut regulations and cut bureaucracy.

Last week the Chancellor said:

“We want the words:

‘made in Britain, created in Britain, designed in Britain, invented in Britain’ to drive our nation forward.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

Only a simplification of regulations will allow such an overhaul of our economy, and I believe the measures outlined in the Budget are the first steps towards achieving that goal.

While the cuts in public services have been directly caused by the disastrous economic legacy of the last Government, these cuts in bureaucracy, waste and red tape are entirely our own, and will provide the foundations needed to help our economy to grow for decades to come.

19:39

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

It is a pleasure to follow the hon. Member for City of Chester (Stephen Mosley).

I want to start by welcoming three aspects of the Budget. The first of them is the confirmation on page 54 of the Red Book of the announcement made the day before the Budget that the Government intend to fund a new system of savings accounts for children in care. The previous system was lost when the child trust fund was abolished last year. I have been campaigning with Barnardo’s and Action for Children for a new system to improve the prospects of those leaving care, and I am grateful to the Financial Secretary, who is in his place, for the constructive approach he has taken and welcome the Government’s announcement.

Secondly, I welcome the decisions to put on hold this year’s increase in air passenger duty and not to move to a per plane tax. High levels of APD are having an impact on regional airports such as Manchester airport in my constituency, including by putting off airlines from making connecting flights to regional airports. A per plane tax would be even worse, of course. I therefore welcome the consultation the Government have begun, and I encourage Treasury Ministers to look very closely at the regional variations proposal made by regional airports.

Thirdly, I welcome the announcement that Manchester’s airport city is to be one of the new enterprise zones. Politicians, and certainly Opposition Members, hold various and different opinions about enterprise zones, but I welcome the prospect of the rate reliefs that will be available and the superfast broadband. More particularly, having zone status will give airport city the energy to turn the ambitious plans that have been drawn up into reality. Airport city could certainly produce jobs—perhaps as many as 15,000 in total—when all the plans are worked out.

There are two issues on which I seek reassurance, however, and if there is not time to address them in the winding-up speech I would appreciate a letter following the debate. First, it is essential that the zone is shaped and led by its key local partners: Manchester airport, the city council and the University Hospital of South Manchester. Manchester’s international airport will clearly be an attraction for international investors, and the hospital also has an ambitious plan, known as medi-park, which would attract global players in the life sciences industry. These organisations must be allowed to define the zone for themselves, and to get on and make progress. We must hold the Secretary of State to his statement earlier that this will be bottom-up, not top-down. We need a reassurance that that will indeed be the case in practice.

Turning to the second reassurance I seek, airport city is one of the bids being considered for regional growth funding, and it is crucial that funding is made available and that we begin to put the infrastructure in place that will make the zone possible. A particular feature of the Manchester bid is the idea that public money should not simply be spent but be recycled and reinvested as the market develops and progress is made. I hope that that aspect of the Manchester bid model will find favour with Ministers.

The ultimate question about airport city is whether it will benefit the people in my constituency and the surrounding communities who still face severe hardship and disadvantage, and whether they will get the support, training and opportunities they will need to be able to connect to the jobs that will be created. I give an assurance that we at local level will do everything we can to make this a reality, but, frankly, there is little in the Budget that offers us encouragement. The growth estimates are down and the estimates for unemployment and social security spending are up, yet the message from the Chancellor is, “No change. Carry on as normal. Carry on with the cuts.” We have no prospect of new investment in social housing, and even with almost 1 million young people now out of work and on the dole he is not prepared to invest in a proper, quality jobs programme for young people such as the future jobs fund, of which I am very proud, and under which 8,000 young people in Greater Manchester found work in the last year alone, including hundreds from my constituency.

Let me give one example. It concerns the STARS—student tourist ambassador recruit—project run by Manchester airport. Out of 40 young people, 32 now have permanent employment as a result of their going through the future jobs fund, but we have no prospect of that now. All we have is the pale imitation that is on offer: the work experience scheme that will last a maximum of two months. Most worryingly of all, even now, on the eve of a catastrophic loss of jobs and public services, the Chancellor is not prepared to revisit the public spending decisions.

In the days that follow any Budget, we are treated to a mass of statistics, trends and distributional detail, but in the few seconds remaining to me I want to take Members on a journey to a small street in Benchill at the heart of my constituency, so that they can learn what the Budget and this Government’s policies mean for communities such as those I represent. Benchill is a community that knows real poverty through experience, but through previous investment in schools, community infrastructure and housing the trend has been reversed. I recently met the mother of a 14-year-old boy who was destined to be on a programme that would have given him work experience leading to an apprenticeship, but that has now gone because of the cuts. I also met a man who has worked for 25 years in the youth service in Manchester, and who was given his redundancy notice last Friday, and a young woman who works at the local Sure Start centre, and whose job goes in September.

That is the reality of what is happening. The Conservatives think that when the economic prospects improve, all communities will benefit, but that is not true. Particular communities need particular help, and I urge a rethink on the Budget in that respect.

19:45

[Andrea Leadsom (South Northamptonshire) (Con)]

The measures our coalition Government have taken in the Budget make something of a silk purse out of the sow’s ear left by the previous Government, and I was very reassured by the letter published in today’s The Daily Telegraph today from venture capitalists about the fact that these measures will be very attractive to business start-ups. Some 99.9% of enterprises in this country are small and medium sized, 60% of private sector employment comes from that sector, and there are 500,000 new start-ups each year. In my constituency, there are many small businesses, some focused on motor sport or high technology, and they are exactly the sorts of businesses this coalition Government are determined to support. I welcome the many measures we took in the Budget to try to encourage the development of such new businesses.

I recently had a meeting with my Northamptonshire business club, at which business people told me that the single biggest problem they face is funding. Bank finance is still not being made available to them at prices they can afford. The figures show that between 2009 and 2010 small businesses with a debit account turnover of less than £1 million per year suffered a 19% drop in total lending made available by banks. The problem is not just the lack of availability of funding, however; it is also the terms, such as the time scales, which have been much shorter—sometimes just a year—and very difficult to achieve for small businesses. The arrangement fees have been much higher too, and the margins have increased by an average of 60 basis points. Funding for small and medium-sized enterprises has therefore been extremely difficult, and remains so in spite of the excellent Project Merlin agreement this Government put together, which I thoroughly welcome.

I want to make the following suggestion to Ministers. United Kingdom Financial Investments Ltd, which holds the taxpayers’ investment in the banks, should look at the shares we own and consider whether it might restructure some of the shareholdings in Northern Rock, Bradford & Bingley, RBS and Lloyds HBOS with a view to creating new banks out of the bank shares. In other words, it should consider restructuring some of those shareholdings to create, at a stroke, new competition in the high street and particularly in the SME lending area. While we remain significant shareholders in those banks, I believe there is a huge opportunity to improve funding availability and banking competition.

The Treasury Committee recently took evidence that showed that up to 90% of SME finance comes from just five banks in the UK. It is absolutely true that conservative lending is the way forward, and banks will not be able to afford to make loans at such cheap rates as in the past, but there is plenty of evidence to suggest that these enormously concentrated market shares are creating enormous pressure for SMEs. Indeed, Mervyn King told the Treasury Committee that

“we should try to encourage new entrants into the banking system because they will not have the same problems of legacy balance sheet difficulties.”

He also said:

“We have to make sure there are other sources to which those SMEs can turn for finance.”

This Government have been incredibly generous and creative in their support for SMEs, and I urge Ministers to consider this idea, because it is only through revitalising our private enterprise in an SME-led recovery that we will put our economy back on track.

19:50

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased to have the opportunity to contribute to this year’s Budget debates. Last Wednesday, the Chancellor of the Exchequer had a choice to make. He could have corrected the judgment he made last summer in the light of December’s stall in growth and the huge instability in the oil market, but he made a different choice: he chose to continue with his £81 billion of public spending cuts. Notwithstanding the remarks made by the hon. Member for South Northamptonshire (Andrea Leadsom), I fear that the Government’s supply side measures will not produce a revolution in entrepreneurialism. The evidence for that is the Chancellor’s own growth forecasts. The forecasts for the early years have been reduced by far more than those for the later years have been increased, and that is because everything is dwarfed by the massive fiscal retrenchment. The cuts are deeply unfair and they are a strategic blunder.

I wish to focus for a moment on the cuts to the poorest families: the cuts to the social fund. At the beginning of March, the Department for Work and Pensions announced an immediate end to crisis loans for cookers and beds. Why? Before the election, the hon. Member for Thornbury and Yate (Steve Webb), who is now a Minister of State at the Department for Work and Pensions, said:

“People who apply for crisis loans are desperate and have nowhere else to turn…The Government has got to practice what it preaches to the banks and make more cash available through these loans to help families through hard times.”

Now he prioritises sticking to the Budget and says:

“We need to ensure that crisis loan support is correctly targeted at those who need it most”.

Does he honestly believe that bedding is not essential? Does he think that mothers of disabled and incontinent children do not need beds and bedding? Can Government Members imagine how a mattress smells after six months’ use by an incontinent child?

[Claire Perry]

Yes.

[Helen Goodman]

The hon. Lady says yes, so she obviously thinks it is satisfactory for poor children to live in that way—a way that I am sure she would never allow her own children to live.

Do Government Members think that children in poor families should have only cold food—even in winter? Would they like to say to their small child on a cold afternoon in November, “Oh you can’t have baked beans on toast. You’ve got to have a cheese sandwich”? No wonder DWP Ministers are not having an outing on the Treasury Bench during these Budget debates. Clearly they do not want to face the criticism they know they would get from Labour Members.

In answer to questions, the DWP has told me that last year crisis loans for cookers and bedding totalled some £27 million. Where are people supposed to turn instead? Are they supposed to turn to the voluntary sector? I recently met families in my constituency, all with disabled children, who had benefited from that excellent voluntary sector organisation the Family Fund. Last year, the Family Fund helped 55,000 families with items such as cookers and bedding and its total budget was £35 million. Are the Government going to increase the grant to the Family Fund by £27 million to make up for the cuts to the crisis loans? Last year, the Family Fund included a picture of the right hon. Member for Witney (Mr Cameron) in its annual report—I wonder whether it will do that next year too. I am sorry that the hon. Member for Colchester (Bob Russell) is the only Liberal Democrat Member here to be reminded that the Minister responsible for this is the hon. Member for Thornbury and Yate.

The problem that this country faces is not that it is bankrupt; the problem this country faces is that it has a Government who are morally bankrupt. This is hurting, but is it working? Taking the four years from 2010 to 2014 together, the independent Office for Budget Responsibility forecasts that growth will be down, unemployment will be up, the social security budget will be up and net public sector borrowing will be up by a massive £40 billion. Already this looks like a catastrophic error of judgment and a strategic blunder. There is an alternative: a sensible path to fiscal consolidation as set out by my right hon. Friend the Member for Edinburgh South West (Mr Darling), which was about bringing down the debt, promoting growth and keeping people in work. There is an alternative, and on Saturday 300,000 people came to London to demonstrate in favour of it.

19:55

[Graham Evans (Weaver Vale) (Con)]

Before I dive into my speech, I just want to provide clarity on a matter that has caused considerable trouble for Labour Members. In last Thursday’s Budget debate, the shadow Chancellor rightly referred to Members getting confused between debt and the deficit, but one of the worst offenders is the hon. Member for Streatham (Mr Umunna). Given his extremely confident exterior, his no doubt lengthy experience of working in the City and his position on the Treasury Committee, one would not expect him to be so easily confused about basic economic terms, but he has talked about “paying down the deficit”. For his benefit, let me explain: you can pay off or pay down debt, but you cannot pay down a deficit. The deficit is the gap between income and expenditure, and therefore the level of borrowing required. This is not just pedantic semantics, because it really matters when the Labour party confuses debt and the deficit. It makes a policy of halving the deficit over the course of this Parliament appear reasonable, but it is in fact a policy that involves continuing with massive levels of borrowing well beyond 2015, and saddling our children and grandchildren with even more debt. That is why a structural deficit is something that we need to eliminate and why two political parties have come together to achieve this goal by the end of this Parliament. I am very pleased that this Budget keeps us on track to do this.

Having got that off my chest, may I say that I am delighted to speak in this Budget debate and I am delighted at the announcements made last week by my right hon. Friend the Member for Tatton (Mr Osborne)? My constituency stretches from the border with Tatton in mid-Cheshire all the way to Runcorn and Merseyside. As I have mentioned before, I am the only Government Member with a constituency on the Mersey estuary, so I am very pleased to welcome this Budget, which does more for Merseyside than any of Labour’s 13 Budgets between 1997 and 2010. The plans for enterprise zones in both Merseyside and Greater Manchester are great news for my constituents, who commute to both cities in large numbers. Along with the reduction in corporation tax and increased relief for small businesses, the zones will bring investment, help boost growth and create jobs.

I am also thrilled about the decision to invest £100 million in science capital development, with a substantial share going to the Daresbury science and innovation campus, in my constituency. That investment provides a sharp contrast with the Labour years, when funding was taken away from Daresbury and the north, to be put into alternative centres in the south-east. Many Members may be growing tired of my constant references to this world-class facility, but I will continue to support it in any way I can, and I welcome the creation of thousands of high-tech local jobs.

The timing of that investment also happens to be rather helpful for me. Just two days before the Budget, Rob Polhill, the Labour leader of Halton borough council attacked me in the local paper, asking:

“What new money has he actually won for Halton since he became the MP?”

Councillor Polhill has been very quiet since the Budget. But to be fair to him, he is not the only Labour politician struggling to respond to the Budget. The Leader of the Opposition’s Budget response last week was the most astonishing performance I have ever seen in this Chamber. He talked for 15 minutes but said nothing. Labour lack any credibility on the economy. Despite their leader ordering Front Benchers not to make any unfunded spending commitments in February, they went on to make £12 billion of spending commitments in just four weeks. The Labour Party has not changed: it is still suffering from spending diarrhoea—or, to use the correct medical Latin, “Balls-itis”.

I could list every welcome measure in the Budget, but I would run out of time. So let me focus on three areas that will help to reduce the burden on families. The 1p cut in fuel duty and the scrapping of Labour’s fuel escalator is very welcome. Many constituents have got in touch to express their concerns about rising prices, and I know that the cost of running a car falls particularly heavily on those with children. I have three young children and “Mum’s Taxis” takes them to football, cricket, rugby, jujitsu and parties. When we bought our Vauxhall Zafira five years ago, it cost £30 to fill the tank and it is now nearly £60. I congratulate the Government on the action they have taken; if Labour were still in power, people would be paying 6p a litre more in fuel duty. Labour is the party that punishes the motorist at every opportunity.

I welcome the help for home owners and the help on to the property ladder for first-time buyers. The Firstbuy programme of equity loans is an excellent initiative. When I knock on doors in my constituency, I regularly hear people’s worries that their children or grandchildren will never get to own their own home and will have no choice but to move away from Cheshire, so I am proud to support a Government who are taking practical steps to encourage more house building and to help people on to the property ladder. Finally, I congratulate the Government on raising the personal tax free allowance again. That is a big help for many people and has now taken more than a million of the lowest earners out of paying income tax altogether.

I shall finish by giving my full support to this excellent Budget, which boosts growth, helps families and is exceptionally good news for my constituency.

20:01

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It probably comes as no surprise that I was deeply disappointed by the announcements in last week’s Budget. The Chancellor was strong on rhetoric but short on action that will deliver a sustainable economy, quality jobs, and a fairer society. Despite the Budget’s being hailed as a Budget for growth, the OBR growth forecasts were revised down for last year, this year and next year and although the OBR has revised medium-term growth prospects slightly upwards, it is entirely unclear why less growth now should somehow automatically lead to higher growth later.

The OBR concluded that the effects of the Budget’s so-called growth measures—the cut in corporation tax, the relaxation of planning laws and the creation of 1980s-style enterprise zones—would be minimal and unlikely to raise the trend growth rate of the UK economy. We already know from evaluations of similar and comparable enterprise zones, not just in this country but in Europe, that there has been a zero net increase in growth. There tends to be a relocation effect, but that is about it. I am glad that many of our colleagues have had positive experiences, but the overall evaluation shows quite the opposite.

Once again, the Government are ignoring evidence and pushing ahead with ideologically driven policy. Not only is the Chancellor ignoring evidence, but he is failing to listen to the British people. The Chancellor made little reference to public spending plans—his Budget stuck rigidly to the public spending plans set out in last October’s spending review. It was as though he thought if he did not mention the cuts, nobody would notice them. Well, the people have noticed and in addition to sending clear messages to the Government in the recent by-elections, mine included, on Saturday more than 250,000 people also voiced their objections to these disastrous cuts to vital services—the police, social care, education, and our NHS.

Despite what the Government say, such cuts are affecting our NHS. One of my constituents, Peter Thornborrow, was diagnosed with cataracts last year. He is a 50-year-old precision engineer and he has had his cataracts operation refused. Cuts are going on and are affecting his ability to work. That is obviously not what we need. My surgeries are full of the tragic consequences of the Government’s policies as services are cut or rationed.

In addition to the human tragedy resulting from the disastrous cuts to public spending, the spending plans will also continue to crimp UK economic performance. The irony is that the deficit will increase as a result of what the Government are doing, but they say the cuts are needed to reduce the deficit. The Government are now expected to increase the amount of borrowing—the amount of debt—by an additional £45 billion over the coming years. Last week, as we have already heard, the credit ratings agency, Moody’s, warned that slower growth combined with

“weaker-than-expected fiscal consolidation”

could put the UK’s triple A credit rating at risk. In other words, the Chancellor might be stumbling into exactly the situation he says he is trying to avoid.

Alongside the downgrading of growth and the cuts in services and jobs, prices have and will continue to rise faster than expected and wages slower, dampening the recovery even further and adding to the deficit, not to mention the spectre appearing to home owners of an increase in their mortgage interest rates. The rise in inflation to 4.4% announced last week—that is the consumer prices index, which is much higher than the EU average of 2.8%—and the revised upward projections, coupled with average earnings going down, mean that the squeeze in living standards is set to intensify this year and next.

Most alarmingly, forecasts for unemployment have been revised up and it is now expected to reach more than 8% this year. In my constituency, we have seen unemployment nearly double over the past few years, with one in five young people affected. That is simply unacceptable—we cannot have another generation of young people consigned to the scrap heap as we saw in the 1980s and 1990s. I was a community worker in the 1980s and I can remember how the young people I worked with felt abandoned and written off. The Chancellor is proposing more work experience opportunities for our young people, but will that help young people like those with whom I used to work? I remember one young woman whom I took to job interviews for work experience and she rocked backwards and forwards in her first interview. It was tragic and it took five interviews before an employer was willing to take her on and months of hand-holding before she increased her confidence and self-esteem so that she could go on to secure permanent employment.

On the surface, the proposals to increase work placements and apprenticeships seem positive but those must be high-quality programmes that cater for young people’s range of needs, including the needs of people like the young woman I have spoken about. However, the most important way to reduce unemployment, including youth unemployment, is to get the economy going again.

The Chancellor has claimed that the Budget is fair. I do not know what definition or test of fairness he is using, but the Institute for Fiscal Studies analysis shows it is not fair. I think that most people will consider that the Budget means, for example, that disproportionately more young women and young people will lose their jobs and that pensioners will be affected.

20:07

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

Let me start by saying how welcome the Chancellor’s measures to remove red tape are. By freeing up small businesses and start-ups from the burden of excessive regulation, we will encourage a new generation of entrepreneurs and create for them the conditions in which they can thrive and kick-start our economy again. So often, it is young, creative and dynamic people who are penalised for their endeavours by becoming entangled in too much red tape. I am really pleased that the Government are taking steps to put their trust in these people and I am sure that we will soon reap the rewards.

It must be said too—I know many of my hon. Friends agree—that this is hardly the easiest time to produce a Budget to cheer us all up. With the problems in the middle east, tragic events in Japan and worrying developments again in Portugal, producing such a balanced, fiscally neutral Budget, which none the less contains a number of positive moves, is a feat in itself.

Lest we forget—as I note many on the Opposition Benches are still wont to do—we are still in the big old mess inherited from the previous Labour Government. It was a faintly depressing experience to listen to the Leader of the Opposition as he moaned on in response to the Budget statement, constantly barracking us for taking difficult decisions and suggesting that we enjoy imposing hardship on communities across the country. That is just childish politics that does nothing to further the public debate.

It is quite scandalous that Opposition Members now absent themselves from any responsibility for the spectacular mess the Government have inherited. They desperately avoid the fact that we faced the same banking crisis as every other country, but, separately, we were left with the largest deficit in the G7. It is because of the Labour party that Britain is spending £120 million a day just on servicing the interest on Labour’s debt.

The Chancellor has shown that we remain firmly committed to turning the country around. His decision to double the first cut in corporation tax is a huge step forward and comes on top of measures to help smaller businesses, such as extending the business rate relief for another year. Those proposals, plus the 50,000 extra apprenticeships that will bring the total funded by Government to 250,000 over the next four years, demonstrate a Budget with a vision for growth. The 1p cut in petrol duty, on top of the cancellation of Labour’s extra 5p tax on fuel that was in the pipeline, is also a welcome relief for hard-strapped motorists and businesses. The reduced freight costs should also help to bear down on inflation, but shame on those petrol stations that are not passing on the cuts.

The introduction of the new enterprise zones only further confirms the Government’s intention to make it as easy as possible to start up and grow new businesses, but I must throw my hat into the ring and stand up for my patch on this issue. London is to have one enterprise zone in the royal docks area and the Mayor has announced that he is going for another two—one in Croydon and one in Tottenham. My question, as the Member of Parliament for Ealing Central and Acton, is, what about west London? With the focus on the Olympics in east London, other parts of London have missed out on regeneration programmes and I hope that City Hall will soon start to look west once again.

Moving to a smaller, but significant, aspect of the Budget, I welcome the removal of the requirement on charities to document gift aid for donations of £10 or less. That will be of considerable assistance to churches, along with all charities, around the country. Those beautiful buildings are maintained without support from the Government or the Church Commissioners, often by small bands of dedicated people within their parishes. The move could mean, even for smaller churches, a positive gain to cash flow of £1,000 or more. In many cases, it will make all the difference between keeping them open or having to shut them. This measure is clearly a big shot in the arm for the big society. Allied with the Chancellor’s promise to cut the inheritance tax rate by 10% for those who leave 10% of their estates to charity, which could benefit charities by as much as £300 million, it firmly underlines the Government’s commitment to supporting volunteering, philanthropy and social action.

In conclusion, I support the Budget proposals at a time when the whole country is still struggling to emerge from Labour’s recession. The measures are not individually huge, but put together they provide good reasons to be a little more cheerful during these difficult days. After all, the Government have also taken decisive action to lift more than 1 million people out of paying tax altogether and have restored some sanity to prices at the petrol pumps up and down the country—and let us not forget their initiative to freeze council tax across the country. The measures in the Chancellor’s Budget point the way towards a far stronger economy—a rebalanced economy with a successful private sector powering ahead. We should not forget that without a thriving private sector, we can never afford efficient and sustainable public services.

20:12

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Across Britain, our low-carbon firms, our green groups and millions of concerned citizens had high hopes for this Budget. They have heard the Prime Minister say that this will be the greenest Government ever—an ambition that was restated in the Chancellor’s Budget statement—so they might therefore have expected this to be a Budget for green growth and green jobs and a boost for green firms, but those hopes have been cruelly dashed by Ministers as it was not a Budget for green growth, green jobs or green firms. There have been so many promises, but so little action.

I want to address three important areas, the first of which is the reduction of household emissions. Ministers have announced the green deal for householders and tenants to make their homes energy efficient, but a closer look at the scheme shows that it is at serious risk of being bungled and botched. A battalion of accredited energy assessors and installers will be needed, but where will they come from and what are the incentives for home owners and tenants? How will consumers be protected from cowboys and what happens if the cost of energy efficiency measures is not met by the savings? Who will pick up the bill? The Government claim that up to 14 million households will benefit by 2020, so every one of the people living in those homes has the right to demand answers.

What about the Government’s ambition to make all new homes zero-carbon? In an article in The Guardian on 6 December 2010, the Minister for Housing, whom I am sorry to see has left his place, wrote,

“very soon I’ll be setting out our progress towards achieving a zero carbon approach”.

At the zero carbon hub annual conference on 1 February—just under two months ago—the Minister for Housing said:

“The commitment to Zero Carbon remains in place—there’s no ambiguity about that”.

There is no ambiguity because buried on page 117 of the Government document, “The Plan for Growth”, contrary to what we have heard from the Secretary of State for Energy and Climate Change, who should perhaps look more closely at those elements of the Budget that affect his Department, Ministers have killed that commitment stone dead. The WWF described the announcement as

“years of work and ambition swept away.”

The second area that I want to discuss is the green investment bank, which Department of Energy and Climate Change Ministers have heralded in every speech and utterance. The Energy Secretary has staked his political reputation on it and green businesses up and down the country are crying out for it, so where is it? That the green investment bank will not be able to borrow its own capital until 2015—four long years away—and only then if the Government’s debt target is met, makes me wonder when a bank is not a bank and when it is merely a fund run by officials. Surely, a bank has staff, a board and a headquarters building. I have been asking Ministers about the set-up of this so-called bank for a while, but we are still waiting for the answers.

The fund that has been announced will total £3 billion, but Ernst and Young calculates that Britain needs £450 billion between now and 2025 for low-carbon investment. Ministers claim that up to £1 billion will come from selling Britain’s third share in URENCO, the uranium enrichment company. Perhaps Ministers can tell us what the URENCO share price is today compared with a year or two ago? If it can be done in 2015, why can it not be done this year? Do Ministers really believe that we can take our time? I keep hearing time and again from green companies that the window of opportunity is closing and that green business needs stability, but all they get from the Budget is uncertainty.

Thirdly, what does the Budget do to boost green research and development? No one should seriously doubt that without research and development into low and no-carbon technologies there will be no green revolution in Britain and Britain’s good green ideas will be developed abroad. Research into biofuels such as algae biofuels, which can be developed on arid land and could considerably reduce aviation emissions, has been cut, not boosted, by the Government. They have cut funding to the Carbon Trust and support for geothermal, tidal and other renewables has also been slashed. They have taken an axe to the very research and development that would yield the new green products and jobs for the future—how unlike other countries, which have increased their support for those infant technologies.

Britain can be proud of its environmental and renewables firms, including companies such as Eco Environments on Merseyside. We can also be proud of our leadership in low-carbon firms such as our video games development industry, which is the third largest in the world. In 2010, UK sales of video games totalled £1.53 billion. Those are the kinds of low-carbon sectors that deserve our support, but this Budget is unambitious: it does not deliver for low-carbon enterprise, it does not deliver green jobs and it does not deliver growth. Judged by deeds, not words, this Government fail every test. Ministers talk green, but is not the simple truth that this Budget sets Britain’s environmental progress back years?

20:18

[Guto Bebb (Aberconwy) (Con)]

It is a privilege to speak in this Budget debate. First, I should like to touch on some of the comments that have been made so far, especially the opening comments of the Secretary of State for Communities and Local Government, who stated categorically that English council tax payers were enjoying a council tax freeze. Unfortunately, that is not the position in Wales where the Labour-Plaid Cymru Assembly Government have decided not to ask the local authorities in Wales to play a part in the sacrifices being asked of the population of Wales, and as a result people in constituencies such as mine are facing council tax increases this year.

It has been said that the council tax saving is nothing compared with the cost to individuals of the increase in VAT. I was in a public meeting in Penrhyn bay in my constituency on Friday night where a large proportion of the population are pensioners. Often, pensioners’ biggest expenditure will be on food, heating and council tax, and there has been no effect on their food budget from the VAT rise because food is zero-rated. In the same way, there has been no increase in the cost of heating, because VAT on household fuel is remaining at 5%. But, under a council that is operated in Wales by the Labour party, we have had an increase in council tax, and it is fair to make that point.

We hear a lot from the Assembly Government about the fact that Wales is treated very badly by the coalition Government in Westminster. That is not the case. In a fiscally neutral Budget, the consequentials through the Barnett formula for the Welsh Assembly was £65 million. Over the weekend I took part in a number of television and radio programmes. Not once did I hear a single member of the Labour party or Plaid Cymru say a word of thanks for the fact that Wales is benefiting to the tune of £65 million as a result of the changes announced in the Budget.

The main feature of the Budget is that it is a Budget for growth. The proof of the pudding is in the attitude of small businesses to the Budget. I was delighted—elated even—on Friday morning to go into my office and receive an e-mail from a business in my constituency in the town of Llanrwst. That business man had been communicating with me regularly since Christmas, asking, “When will this Government show their commitment to small businesses?” He wrote to me on Friday morning, stating that he now felt confident that the Government would stick to their promises to support enterprise. As a result of the Budget, he had undertaken to invest £160,000 in his business and to give his staff a pay increase for the first time in three years, because he felt confident enough to make such a decision.

In a constituency such as mine, where 70% of employment is in the public sector—a statistic that would have embarrassed the East German Government in 1989—and there remains such dependence on the public sector, it is imperative that we get the private sector moving. In a Welsh context, the private sector means small businesses. I welcome the fact that we are reducing the corporation tax rate in the Budget. I also welcome the fact that the small companies corporation tax is going down from 21% to 20%, but in my constituency the vast majority of small businesses are owned and operated by sole traders and in partnerships. The fact that we are increasing the personal allowances makes a real difference to such businesses. It means that they can retain and reinvest more of their profits.

I am delighted with the announcements made in the Budget, but we can go further. By that I mean that we need to look at the burden of regulation on small businesses. For example, the Food Standards Agency is looking to increase dramatically the costs on small abattoirs throughout the United Kingdom in relation to food hygiene rules. It is moving towards full cost recovery from abattoirs. That sounds technical, but in a Welsh context that means an increase in cost to small abattoirs in the region of £4.3 million at a time when they are struggling to survive. These regulations cost money for small businesses. Although the fact that we are getting to grips with regulation is welcome, we must go further and faster. I see no reason why profitable businesses in my constituency should be under threat as a result of regulations and the cost of regulation.

We want small businesses to grow in constituencies such as mine. By “small” I mean micro-businesses. One of the issues that we still need to deal with is VAT. I notice from the Red Book that we are increasing the threshold for registration from £70,000 to £73,000, and again, I am delighted that that change is happening, but we need to get to grips with the fact that VAT can be such a throttle on the growth of small businesses. Small start-up businesses reach a turnover threshold of about £68,000 or £70,000, and then those business people have to ask themselves, “Do I grow and, as a result, probably see my profits reduced, or do I decide to stay put?”

When one goes into Llandudno in my constituency and sees cafés and bed-and-breakfast businesses closed for winter, that is not because those people are lazy. They work extremely hard, but because of the VAT threshold, they make a conscious decision to close their businesses over winter, not to grow their businesses. Surely any tax threshold which has that impact on entrepreneurship and on the need to grow must be changed.

20:24

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

I am pleased to be called to speak in the debate on the Budget resolutions. In January, the Chancellor was fiercely critical of what he called the forces of stagnation holding back economic recovery. With last week’s Budget, which fails the test of growth, strips demand from our economy, and hardwires unfairness and higher living costs into our society, he has joined those forces. Rather than being a Budget for growth, it is a Budget that now depends on growth.

If the OBR’s growth forecast proves overly optimistic, and the resulting lower tax receipts further impede the Government’s ability to encourage growth, what will drive the economy? Before the Budget statement, the OBR was expecting total receipts to exceed non-investment spending by 0.3% of national income by 2015-16. It now expects instead a deficit of 0.2% of national income by then. On Thursday afternoon, the Institute for Fiscal Studies at its post-Budget seminar gave its verdict on the Chancellor’s failure—his spending cuts will now be even more dramatic than planned in last June’s emergency Budget because of surging inflation, cutting 1% deeper over the next four years.

The Chancellor says that only his programme of fiscal consolidation and no other can save the economy from collapse. He talks of the need for confidence in the markets. Emulating Lady Thatcher and Lord Lawson, he tells us that there can be no alternative. But on Thursday morning, the ratings agency Moody’s said that a combination of slower growth and lower than forecast tax receipts could endanger the UK’s triple A credit rating.

This Budget sees growth downgraded for last year, for this year, and for next year, with the price of the Chancellor’s failure on growth being £43.4 billion in extra borrowing, higher debt interest payments to the tune of £17.6 billion between 2010 and 2016, and higher benefit costs of £12.6 billion by the end of this Parliament. The Chancellor’s headline measures, such as the 1p cut in fuel duty, were described by the OBR last week as having at best a minimal effect on the stagnant level of growth that his policies are set to deliver.

Given the appalling UK trade deficit recorded in the last quarter, it becomes even clearer what an error the Chancellor committed in slashing investment and capital allowances inherited from the previous Government. Although the Budget contains some small-scale measures such as on the research and development tax credit for small and medium-sized business, and on the enterprise investment scheme, they are no substitute for a comprehensive strategy on supply-side reform.

Many credible voices, both national and international, have warned the Government that taking £81 billion out of public spending, as they propose, is cutting too far and too fast. Higher unemployment, a slump in consumer confidence and lower growth are the likely results. As Paul Krugman, the Nobel prize-winning economist said in The New York Times last week, after the Budget the downgrading of the economic forecast plus the upgrading of the deficit forecast is evidence that

“slashing spending in the face of high unemployment is a mistake”.

Whereas we should have had a Budget for jobs to reverse soaring youth unemployment now approaching 1 million, we instead had a Budget which directly increases unemployment in each of the next two years by 130,000, and will increase the International Labour Organisation measure of unemployment by 0.5%. The IFS, in its green budget last month, found that Labour’s plan to halve the deficit by 2015 would have restored the public finances to sustainable levels. There is an alternative to the Chancellor’s raid on the winter fuel payments of pensioners from next winter, when the bonuses of the bankers who exacerbated the economic crisis have been left so feebly undertaxed.

Most feeble of all was how the self-proclaimed greenest Government ever completely failed to fulfil the green economy’s potential to generate growth. As the UN environment programme’s report “Towards a Green Economy” concluded recently, green investment

“will result in the long run in faster economic growth.”

On the green investment bank, there will be no independent borrowing powers until 2015 at the earliest, and again that is dependent on growth not being further downgraded and the national debt falling. There are no green ISAs or green bonds underpinned by the Government to promote small investor participation in the renewables sector.

The Chancellor said that his Budget would put fuel in the tank of the economy, but instead he has put the engine into reverse. He has fired up the Quattro and is taking Britain back all the way to the 1980s. There is inadequate help for the construction sector and no plan for jobs for young people. Our country deserves better than this reckless, deflationary gamble, which is hurting but not working. This is the no-growth Budget from the out-of-touch Chancellor.

20:29

[Bob Russell (Colchester) (LD)]

Until the Labour party acknowledges the problems it left the country and its financial mismanagement, it will never be taken seriously by the British people. The stark reality is that the previous Government took Britain to the brink of bankruptcy—just one more move and we would have been in the same boat as Ireland, Greece and Portugal.

Not everything in the Budget meets with my approval. There are things in it that I wish were not, and things not in it that I wish were. However, it is a Budget of hope, and it is pragmatic after Labour’s years of hopelessness. Among the good things is the fact that I am blessed in Colchester with the most incompetent Conservative party in the east of England, which is matched in incompetence only by the local Labour party. Although I welcome the Budget, it will come as no surprise to Members on the Government Benches to hear that, having spent 40 years opposing the Conservatives, I have not changed my spots. The Budget is more Aldi than Waitrose.

Some Members have referred to their constituencies, and I believe that on occasions such as these we need to remind people that national Budgets have local consequences. They affect local pride and civic leadership. In that respect, I want to state with great honour that last Wednesday Colchester borough council voted to apply for city status, a civic honour granted by Her Majesty the Queen under the royal prerogative. The qualifying guidelines for making such an application state:

“Any local authority… which considers that its area deserves to be granted the rare honour of city status on this very special occasion is welcome to enter the competition… The places to be honoured for the Diamond Jubilee should be vibrant, welcoming communities with interesting histories and distinct identities.”

On that basis, Colchester ticks every box. It is Britain’s oldest recorded town and the first capital of Roman Britain. It is the home of the university of Essex, the most international university in the country, and of which Mr Speaker is a graduate. As a super garrison town, it is also the home of 16 Air Assault Brigade, which is currently serving in Afghanistan. An additional reason why I hope Colchester will become the UK’s newest city is the fact that this is being driven from the ground upwards by an organisation called Destination Colchester, which is bringing together organisations, local businesses and the people of the town. This is the big society in operation.

Among the aspects of the Budget that I am unhappy about are those relating to planning. I urge the Government to look again at the VAT on old buildings, because although converting old buildings to housing is welcome, the 20% VAT levy is a penalty. I hope that they will look at that again. Colleagues will recall that I intervened on the Secretary of State for Communities and Local Government earlier to mention chapter 4 of the coalition programme for government, which relates to communities and local government. The third point states:

“In the longer term, we will radically reform the planning system to give neighbourhoods far more ability to determine the shape of the places in which their inhabitants live, based on the principles set out in the Conservative Party publication Open Source Planning.”

The sixth point states:

“We will… create a new designation—similar to SSSIs—to protect green areas of particular importance to local communities.”

I am delighted that the Secretary of State has agreed to visit Colchester to see the fields of west Mile End, which developers want to put under a housing estate of 2,200 dwellings, against all the wishes of the local community.

I will conclude on beer duty, which was an opportunity lost by our Government. I hope that they will look again at the issue, because our towns and cities are troubled by binge drinkers, and one way to address that would be to put up the beer levy by 10p a pint or thereabouts in the supermarkets and the mega-pubs and to reduce it by 10p a pint in our community pubs, traditional pubs and village pubs. In that way, our local communities—the localism aspect of the licensing industry—would receive the boost. At the moment, the supermarkets and the mega-pubs are able to outdo the local, community pubs, and we all know that the consequence is drunkenness in town centres, so I urge the Government to look again to see whether we can have a lower beer levy for our community pubs.

20:35

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This Budget trumpets much about growth, and indeed accompanying it we have a whole White Paper, “The Plan for Growth”, which claims to set the seal on those aims so loudly trumpeted. In truth, however, the Budget contains very little that, in the real world, stimulates economic activity or, in a time of deficits or depression, shows any sign of moving the economy forward so that the Government can tackle the deficit other than by just cutting everything they can lay their hands on.

That is a conundrum. Unless all those measures are a cynical put-on, the Government obviously believe that they are setting out a path for growth. They have, as a default position on the economy, chosen a particular path that they believe will, if followed, lead to growth. In technical terms, that assumption is called the Ricardian equivalence: the assumption that Government borrowing is essentially deferred taxation; and that, even in a depressed economy, it is important to send out a signal that the Government will not borrow, so that people discount what they had set aside to cope with what they saw as deferred taxation and, instead, invest and spend, thereby miraculously bringing about growth, deficit reduction and so on. In reality—and in previous depressions—the opposite is usually the public’s reaction, but we will pass that by.

Then, the public, once they are cured of the unhealthy habit of holding money back to deal with perceived deferred taxation, must also have regulations and other matters stripped away if they are to invest and spend. Hence it is necessary to pull apart regulations, collapse planning impediments and so on.

This Budget sets out that false premise admirably, although some of the zeal with which it is being pursued is, to say the least, a little alarming, especially as I imagine the Government still believe that growth should be low-carbon growth in order for them to be, as the Prime Minister has stated “the greenest Government ever”.

The removal of most housing targets and the new announcement of the removal of any prescribed level of house building on brownfield sites, which I am sure is bad news for the hon. Member for Colchester (Bob Russell) and the fields near his constituency, both follow from the philosophy of pulling down regulation so that the private sector can supposedly rush in to invest where the public sector has withdrawn. That must come as a shock, however, to anyone who believed for example that being the greenest Government ever implied some view about the merits of arbitrarily concreting over at a random cost to the environment and to carbon emissions targets.

Two other planning and investment decisions in the Budget must come as a similar shock. The green investment bank has been downgraded to a “fund” for the foreseeable future, so even the merits of the private sector investing in the bank have been eschewed in favour of its functioning as a bank only, as the Budget papers state,

“once the target for debt to be falling as a percentage of GDP has been met.”

In other words, “After all these good people have rushed in and invested to replace the loss of public sector funds, then we might consider some public sector-based funding, even if it is with private money, at a point when the prime need will have passed anyway.”

Not the most significant measure, but perhaps the most shocking—indeed, the measure in the smallest print—is the decision to remove the target to require homes to be built on a zero-carbon basis by 2016, as the Government say:

“To ensure that it remains viable to build new houses”.

Not green, not worried about quality or longevity—anything goes so long as the theory of Ricardian equivalence is upheld. The Government are also apparently holding discussions with industry to see how the principle of the green deal can be extended to new homes. The code for sustainable buildings has been taken out and shot, and B&Q is now going to come in and put the roof on our houses once they are built. Even if that supposition were to be taken just a little seriously, then the signal that has already been loudly given out that spending is to be cut savagely and that the fear of deferred taxation is no more should have started to bear fruit. However, it has not, and that, among other things, is why the Government have had to downgrade their growth forecast so significantly. Consumer and business confidence has collapsed and stays at a very low point. Unemployment is rising, house prices are uncertain or falling, and we had negative growth in the fourth quarter of last year.

Let me give a palimpsest. In my constituency, virtually all the day centre schemes for the elderly are to close in mid-April because the money has been cut. According to Ricardian equivalence, that is a signal to get these old people on their feet and investing in their own facilities—perhaps a private entrepreneur could come in and invest in a gap in the market—but of course that is not going to happen. Jobs are being lost, old people are staying indoors instead of going out and about, and ill-health among elderly people is likely to increase. In short, it hurts but it certainly will not work. No amount of flannel to disguise what an empty set of propositions this Budget, this plan for growth and this massacre of planning and sensible regulation consists of will pass muster. It really is time for plan B, or at least to start reading rather more sensible economists.

20:41

[Harriett Baldwin (West Worcestershire) (Con)]

I rise to speak in support of my right hon. Friend the Chancellor’s historic and pivotal Budget. Today we have heard Conservative Members give examples of what a difficult hand the Chancellor has been dealt in producing a Budget. We have heard about the £120 million a day—£840 million a week—that the Government have to pay in interest. We have heard that interest has, in effect, become one of the biggest Government Departments. That is why it is so important to point out the difference between the deficit and the overall debt. In setting out the path that he did, my right hon. Friend still has to live with the fact that debt will be rising in every year of this Parliament until the last one. That means that the debt interest bill is still growing, despite the tighter economic conditions that he has imposed.

I think I am probably somewhat different from other Members of this House in that I did not aspire to come here when I was a student. Indeed, I managed to survive the first 40 years of my life without it ever crossing my mind that I should stand for Parliament. Shortly after Tony Blair’s second election victory in 2001, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) gave another historic Budget in which he departed from Conservative spending plans for the first time. At the same time, that Government were beginning to evaluate whether the conditions might be right to enter the euro. Those two horrors were the impetus for me to seek election to this place. I vowed, as a mother, that I wanted to ensure that my children did not grow up in a country that was facing bankruptcy, and yet I failed to get here soon enough to stop the rot. I am therefore very grateful to the Chancellor for having finally set out a path that will enable my children—and one day, I hope, grandchildren—to enjoy opportunities of the kind that I enjoyed when I left university.

Enough of me; I think I should talk about the Budget. I welcome the Budget’s focus on growth and the private sector. When the right hon. Member for Morley and Outwood (Ed Balls) was an adviser to the previous Prime Minister, he set out something called a neo-endogenous growth strategy. Again, I realised quite early on that the problem with such a strategy is that before long the marginal impact of increased Government spending decreases, and one runs out of money. We therefore need to focus on private sector growth, which is why this Budget is so pivotal. A lower tax rate for businesses will bring in higher tax returns.

[Mel Stride (Central Devon) (Con)]

My hon. Friend makes a powerful point about the importance of lowering taxation on businesses to provide growth. Does she agree that the Chancellor was immediately vindicated the next morning, when Sir Martin Sorrell was on the “Today” programme explaining that WPP, the world’s largest advertising agency, would consider relocating to the UK as a direct result of the Budget?

[Harriett Baldwin]

Those sentiments were echoed by businesses in my constituency, where entrepreneurs welcomed and cheered the measures set out in the Budget. I also received a communication from a non-dom in west Worcestershire—I did not think we had one, but we do. He is so pleased with the clarity of the Budget that he is going to bring lots of money in on a remittance basis to invest in businesses in the UK.

I have a couple of questions for those on the Front Bench. I do not think that we can enjoy sustained economic growth until we resolve the problems with our banks. I agree with the hon. Member for Telford (David Wright), who said that Japan suffered from slow growth for many decades because it did not do anything about its banking sector. The sooner we get rid of the state’s ownership of so much of the banking sector, the better it will be for the health of the economy.

Given that the Financial Secretary is on the Front Bench, I will take this opportunity to read a passage from the Budget speech:

“from April, we are going to impose a moratorium exempting all businesses employing fewer than 10 people, and all genuine start-ups, from new domestic regulation for the next three years.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

I ask the Financial Secretary to raise this point with the Financial Services Authority, which we know is the regulator of many small, independent financial advisers. I suggest that he take this opportunity to suggest that small IFAs employing fewer than 10 people might be exempt from the increased regulation in the retail distribution review.

In conclusion, I believe that this Budget will be seen as historically pivotal, because it will create real jobs, real growth and real prosperity. Such real prosperity can come only from investment in business and from exports. There will be exogenous growth—the exogenous growth of the private sector. I look forward to supporting the Budget in the Lobby tomorrow.

20:47

[Mr Clive Betts (Sheffield South East) (Lab)]

This could be a Budget for growth—reduced growth. A few weeks ago, the Chancellor blamed the snow. Now we have the old chestnut, “When in doubt, blame the planners.” There is the idea that everything that is wrong with this country is down to our planning system. I accept that some proposals in “The Plan for Growth” may be helpful. Speeding up the consideration of planning applications is generally beneficial. However, I have four areas of doubt in which I want to urge caution.

First, developers want certainty. Consistently tinkering with the planning system leads to uncertainty and is likely to discourage development. Secondly, good developers want good quality development. If they are concerned that on the site next door to them, tin sheds could go up unrestricted, they will be less likely to put their money into good quality development. The Royal Town Planning Institute has cautioned against a return to tin-shack Britain. Thirdly, not only might more houses be built on greenfield sites; if restrictions are not properly applied to applications, out-of-town superstores might rear their heads again, which would go against the policy of the previous Conservative Government of a “town and district centre first” policy for retail development. Finally, we have had enterprise zones before, and last time each job cost an average of £26,000 of public money. There is concern, which the Secretary of State for Communities and Local Government referred to, about jobs simply being transferred to enterprise zones from other areas. He said that that would be controlled, but it is difficult to see how. It is even more difficult to see how we can control the problem of development that would have been undertaken elsewhere going to an enterprise zone instead, at a cost to public funds.

There is a real housing problem in this country. We can welcome the Firstbuy housing programme that the Government have introduced, although it looks very much like HomeBuy Direct, which they have just abolished, by another name. The real concern is the chronic shortage of housing in this country. We hear that from people in our surgeries such as young couples who cannot buy their first home, people who need social housing and are on the waiting list and people in overcrowded accommodation.

What the Government have done in the Budget has to be considered alongside a 50% cut in money for new social homes in the next four years, and alongside the catastrophic fall in the number of planning applications for new homes that are being approved. There is concern that as individuals’ economic circumstances improve in three or four years, as they probably will, when they feel more confident about buying a new home and mortgage availability improves, the houses will not be there to buy because they will have been stopped in the planning system.

We can argue about the abolition of the regional spatial strategies, but it leaves a vacuum behind and there is no evidence at all that the new homes bonus will generate housing development. If it does not, we could be left with a spike in house prices in four or five years’ time, which again will price young people out of buying their first home and force more people back on to the social housing waiting list. That is a real concern, and I do not think the Government are beginning to address it.

When people in my constituency look at the Budget, they will be concerned that it does nothing to address the fact that their real wages are falling or that their benefits and pensions are not going up as fast as inflation. They will also be concerned that the Government have done nothing in the Budget to cushion people from the attack on front-line services caused by the cuts to local government spending.

Local government is taking a much bigger hit than Government Departments, and cities in the north, such as Sheffield, are being hit harder than places in the south, such as Dorset. The front-loading of the cuts is having a real impact. The Secretary of State for Communities and Local Government has said before, “It’s all right, because cities like Sheffield are managing better”. That is not true, despite the fact that the Deputy Prime Minister has said that it is all okay because Sheffield city council is cutting only 200 jobs. Its own website shows that 731 jobs are to go. As it has a high level of outsourcing, many hundred more jobs in the private, third and voluntary sectors will also be cut.

Voluntary sector organisations such as the south-east Sheffield citizens advice bureau are facing 15% cuts to their budgets this year, nearly twice the level of the cut in the council’s funding. That is completely contrary to what the coalition Government said should happen. There are unspecified cuts in the council’s budget, such as £1.3 million for library services. The council is not saying which libraries will close, which books will not be bought or which libraries will have their hours reduced. It is achieving its proposals only by reducing balances to what the chief executive has said is a low level at a time of considerable risk.

Sheffield council is facing up to exactly the same problems as other northern cities are facing. Unfortunately, it is choosing to delay its cuts until after the local elections, when either that deferral of the cuts will help win the election, as it hopes, or more likely the problem will be passed on to a new, Labour council. It is hiding the reality of the cuts from the people of Sheffield. In reality, Sheffield council is facing the same funding reductions as councils in similar cities, and will therefore face the same cuts to front-line services and the same loss of jobs, not merely in the public sector but in the private and voluntary sectors. The Budget will do absolutely nothing to address the situation.

20:53

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

As a nation, we borrow almost £150 billion a year. That is £12.5 billion a month, £410 million a day or an incredible £4,745 every second. By the time I sit down, we will have borrowed another £1.7 million. That is the economic reality that we face, and the reason why balancing the books and business growth are so vital to our country. As an entrepreneur and business man I feel that I have some knowledge of what will damage and what will encourage growth in business, and I am delighted to say that the plans set out in the Budget are most certainly of the latter variety.

I ask Members to imagine, if they will, that we are a group of men and women who are considering setting up or expanding a business. Times are tough, but there are now a number of incentives that can help us make up our mind. One of our earliest decisions is where to site our business. In the early stages, we want to make our capital and that of our investors go as far as possible, so we settle on an enterprise zone, where we get up to a 100% discount on business rates, new, superfast broadband and, as a manufacturing firm, access to enhanced capital allowances, giving us relief on investment in plant and machinery.

At the beginning, like many businesses, our budgets are tight and banks are unwilling to lend, so we look to angel investors for support. The enterprise investment scheme offers tax relief to those investors, and thanks to the Budget the income tax relief on an investment has been increased from 20% to 30%, and the amount that an individual can invest in our business has been increased by 400%. Those changes will make investing in our business, which is an obviously excellent proposition, even more attractive.

[Heather Wheeler (South Derbyshire) (Con)]

Does my hon. Friend agree that businesses in my constituency will grow because of the reductions in corporation tax in the Budget?

[Nadhim Zahawi]

My hon. Friend is absolutely right, and I shall come to the effect of corporation tax in a moment.

As a result of the measures in the Budget that I described, our business has raised early stage finance and begun an expansion programme. As a small company, our R and D tax credit will increase from 175% to 200% this April, and to 225% this time next year. That will allow us to invest in products for the future, helping us to carve out a real niche in the market and to sell our products to the rest of the world. That is crucial. In the real world, that helped me and my business, as we evolved YouGov and invested in its future.

Often the smallest things such as changes in regulation, red tape, and complicated tax and health and safety rules greatly affect businesses.

[Charlie Elphicke]

Does my hon. Friend also welcome the Budget because it represents a vast crackdown on regulation? That will help businesses in Dover and Deal as much as those in his constituency?

[Nadhim Zahawi]

My hon. Friend is absolutely right. That is exactly what the Budget would do for our imaginary business. Three hundred and fifty million pounds’ worth of regulation will be scrapped, the dual discrimination rules in the Equality Act 2010 will be ended, Lord Young’s recommendations on health and safety will be enacted, and new business regulations for the smallest business will be stopped. That is a great starter for 10 from the Chancellor.

As my hon. Friend the Member for South Derbyshire (Heather Wheeler) rightly pointed out, our corporation tax has been reduced by 2% this year, and by 2014 we will be paying the lowest corporation tax in the G7—16% lower than in the US. Many say that that is just a tax cut to line the pockets of business owners, but I disagree. Business owners know that every extra £1 paid in corporation tax is £1 less to reinvest in their business to support growth and job creation, which the Labour party seems never to have understood.

Lowering corporation tax is vital in attracting new, overseas business to the UK. Corporation taxes are not the sole attractor, but they and tax certainty are important in attracting overseas investment. The fact that chief executive officers, such as that of WPP, have announced that their companies are coming back to the UK is testament to that, and today’s letter in The Daily Telegraph from the leading private equity houses reiterates the point.

Let us go back to our little business, which is growing, employing more people, and making more and selling more to the world. However, the cost of fuel is hurting us, and we watch our costs and those of our suppliers increase with transport costs. Luckily, the Government are listening. They feel our pain, and decide to deal with the high petrol price. Under the previous Government, our fuel duty would have shot up by 6p in three days’ time. After all, by the end of their 13 years in power, 75% of the cost of fuel was taxation.

For the employees of our company, the 45p per mile allowance is another huge milestone. The allowance has been 40p for so long that most young people in work cannot remember it ever increasing. That amount was out of step with economic reality. This increase not only makes sense, but is vital for those in business who use their own vehicles, and is particularly helpful to the self-employed. It also, by the way, helps voluntary organisations such as Voluntary Action Stratford-on-Avon, whose volunteer drivers provide such an excellent service.

I return to our little business. What happens if we are successful, and if through our hard work and entrepreneurship it grows, and another business wants to buy us, or we want to float our company? Thanks to the Budget, our capital gains tax relief for entrepreneurs has been doubled to £10 million, increasing the reward for our hard work and investment, and encouraging more individuals to invest in their own business. As you can see, Mr Deputy Speaker, our hypothetical company, like millions of real-world start-ups, will have been aided by the announcements in this Budget. It is a Budget for growth, and through it many start-ups and small firms will get a fighting chance to be a great success. I commend the Budget.

21:00

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

I want to declare an interest. From 2004 to 2010, I worked for a regulator—the bogeyman of Conservative Members. I worked for Ofcom. Working in that area, I was very aware of the dangers and limitations of regulation. However, I am also influenced by my time spent in the private sector in countries that have little or no regulation. It would make for an interesting reality show-type experiment to take Conservative Members who decry all regulation and place them in an entirely unregulated environment to see how they would fare without established property law, civil protection, guaranteed quality standards, working rights, planning control or health and safety.

But enough fantasy. I want to focus on why we need better regulation and the role of regulation in growth. All Governments promise to reduce regulation. I am quite sure that every Byzantine emperor came to power on a platform of less regulation. When Labour was elected in 1997, one of the first things we did was set up the Better Regulation Task Force, and later the Regulatory Enforcement and Sanctions Act 2008 put in place a requirement to remove unnecessary regulation. However, regulation often has unforeseen consequences or is interpreted in bureaucratic and inflexible ways. The solution is not to call for a war on all regulation, but to examine existing regulation imaginatively and to ensure that more public servants have experience of business.

Having worked for a UK regulator with European regulators, I know that we often translate into English law and then interpret European directives in ways that are much less flexible and more burdensome than those in other countries. I welcome evidence-based proposals, therefore, to reduce and/or improve regulation. The improvements to clinical trial regulations proposed in the Budget should lead to better regulation, which is good for business and innovation. However, the sleight of hand by which the Government have delayed green building regulations will actually add to the uncertainty in the building industry and reduce our energy efficiency.

We should not forget that the financial crisis would have been even worse had Labour heeded Tory calls for more deregulation of the City. As the shadow Chancellor has said, we should have been tougher with the City, but the Conservative party was certainly not calling for more regulation in that case. Since coming to power, the Department for Business, Innovation and Skills—the self-styled department for growth—has introduce 26 new regulations in six months, of which several will impose a burden and substantial costs on businesses.

The Government’s repeated calls for reduced regulation are yet another example of their rhetoric exceeding their reach. We know that the Government are recklessly cutting too far and too fast, but they are also entirely failing in leadership. Labour believed that the Government had a duty not to pick technology winners, but to deliver the coherent business, academic and political environment in which the best can win.

Recently I visited a small but growing, innovative high-tech manufacturing company, Kromek, which is developing colour X-rays for security applications. It is based in NETPark—the North East Technology Park—in County Durham, a business park supported by the RDA and the local authority. However, the company is finding it hard to get the talent that it needs, because of the Tory Government’s visa policies—an example of new regulation preventing growth. As the north-east chamber of commerce recently said:

“Since the Government came to power, business have seen the reversal of plans to recycle Carbon Reduction Commitment revenues; the Feed-In Tariff capped; and a delay to the expected start date of the Renewable Heat Incentive. These changes are delaying investment in low carbon technology.”

That regulatory uncertainty means jobs being lost in new industries, including in the north-east. As NESTA—the National Endowment for Science, Technology and the Arts—said when discussing regulation:

“Removing barriers to innovation is important, but on its own it is not enough. Innovation happens in an ecosystem and Government has a role to play in constructing that environment.”

To conclude, rebalancing and growing our economy requires vision, leadership, regulatory imagination, coherent policies and targeted investment. This Government are offering up a few regulatory sacrificial lambs to distract from the vacuum at the heart of their strategy for growth.

21:04

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I am grateful to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who was trying to make some positive comments about regulation, as was the hon. Member for Sheffield South East (Mr Betts), who spoke previously. Unfortunately, however, what we have heard from the majority of Opposition Members is this line about how we are cutting too far, too fast. It would really help their presentation to the country, including my electorate—or at least their presentation to us—if they said which cuts they would be prepared to tolerate, because to my electors their position just sounds bogus and false. The Opposition have lost the argument about how we got into this problem, but it would be really useful in the argument about how far we cut to know their position. I can say from my attendance in the Chamber that they have opposed every one of the Government’s proposed cuts. We would therefore love to hear one or two suggestions from the Opposition about where they would be by now.

Like most Members, I suppose, I spent the weekend trying to find out what constituents really feel about this Budget, on the political proviso that we should be careful on the first day, and then see how it sinks in on the following days. We are now five days in, and if I can sum up the general view by quoting one of my electors, he said of the Chancellor—in true Lancashire fashion, of course—that he did not think that the lad had done too badly, given the poor hand that he had been dealt. I have found that to be pretty much the general impression.

As for growth, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) is absolutely right. Indeed, the north and western Lancashire chamber of commerce has said:

“Overall there is a lot in this Budget for Business,”

and specifically mentioned the corporation tax reduction and cuts in fuel duty. From the workings-out that I have seen, the Federation of Small Businesses gives the Chancellor eight and a half out of 10, welcoming the measures on fuel duty, the fair fuel stabiliser, apprenticeships, deregulation, enterprise zones and small business rate relief, and the doubling of entrepreneurs’ relief and the increase in the R and D tax credit for SMEs.

In the few minutes remaining, I want to pick up on something that my hon. Friend the Economic Secretary said last week when she talked about regional imbalances. Anyone who goes to the Fleetwood end of my constituency and asks people there what their view is of economic policy over the last 13 years, would simply be told that Fleetwood had been forgotten—a port now without a ferry service; a train line without a train on it. Yet behind all that—to return to the point made by the hon. Member for Newcastle upon Tyne Central—all that small businesses talk about are the regulations that prevent them from taking on more people. I have food processors in my constituency that export all over the world, but they are trapped by regulation. They want to take on more apprentices, and they hope that something will come from the measures in the Budget.

The interesting thing about Labour policy on the regional imbalance over the last 18 years is this. The Office for National Statistics uses a measurement called gross value added, which measures the contribution to the economy of each individual producer, industry and sector. It showed that there was decline in the north every year for the past 13 years as growth in London and the south-east increased. Lancashire’s rate of decline was twice that of the whole of the north over the past 13 years. The figures are consistent for every single year.

What has gone wrong? My right hon. Friend the Secretary of State for Communities and Local Government has suggested that the regional development agencies were not working, and I support that view. I sat on the board of the London Development Agency for four years. I have to be careful what I say, because I see my hon. Friend the Member for Ealing Central and Acton (Angie Bray) in the Chamber, and she was instrumental in getting me on to that board as the lone Conservative. But why did London need such an agency in the first place? It had all the bureaucracy and office-led systems of any other development agency. It also claimed that every person employed across the whole of London was employed as a result of its actions. I could never quite make that connection, because I thought that perhaps the City of London Corporation and the development in the docklands might also have had something to do with people coming to London.

There is a general view in my part of the world that people in London think that the north-west begins and ends with Greater Manchester and Merseyside. I am therefore not surprised that each of those areas is to have one of the new enterprise zones, but I hope that Ministers are listening and will perhaps decide that there will be room for one of the 21 zones announced in the Budget in part of Lancashire.

During my four years on the board of the London Development Agency, I learned that, while it is possible to spend money on all kinds training schemes, as the Opposition have proposed, infrastructure is the key. This Government have made a commitment to major transport improvements. I also hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) will look into the proposal in the Liberal manifesto for regional stock exchanges. Given the problems with banks and investment, they might encourage greater investment by local people in local businesses. The Chancellor should look into that. A great practical step forward would be the announcement of a Lancashire-wide stock exchange based in Lancaster.

21:12

[Nic Dakin (Scunthorpe) (Lab)]

It is always a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), and I will try to respond to his challenges.

The Budget statement treads water while this reckless Government cut too fast and too deep. While the Deputy Prime Minister confides that there will be nothing for him to disagree with the Prime Minister about in future television debates, the nation suffers. Indeed, the nation is bracing itself for worse to come. I was proud to join more than 250,000 honest Britons on the march for the alternative on Saturday. That was the big society in action, rising up to say no thank you to the Government, and I am happy to spell out what the alternative is. Strangely, it is the very alternative that the British people voted for last May. Let us be clear: no individual party won the 2010 election. The British people essentially said, “A plague on all your houses.” One thing is certain, however: they roundly rejected the Conservative argument that there was a need to clear the deficit in double-quick time over four years. That argument was well put by the Tory party and the Tory media, but the British people gave it a resounding no. Instead, more people voted for candidates who argued that the deficit needed to be reduced more carefully and more slowly.

As someone who has run an organisation employing more than 250 people, I well know the difference between making cuts of, say, 8% and 16%. Chief constables said that they could manage a cut of up to 12%, but that anything greater would harm front-line services. The front-loading of cuts in public expenditure will also make the situation far worse. There are many of us in the Chamber who have run real organisations in the real world, and we know that savings can be more intelligently and better made when they are properly planned and actioned over time. There is a massive difference between the quantum of the service reductions being recklessly driven forward by this Government and the approach that Labour has argued for.

Alongside cuts in spending and tax increases, there is a need for growth to address the deficit. The Government’s plan for growth is this vacuous document, and in its four-point plan, it is silent on how to stimulate the biggest driver for growth—demand. That is not surprising as the actions of this Government have been to machete demand. With consumer confidence in free-fall, unemployment rising exponentially and inflation fuelled by a VAT hike, living standards are being eroded and the economy is contracting. All this is before the cuts in public expenditure hit next month and we see record job losses in the public sector and the lowering of demand for goods and services in the private sector. It is not, I am afraid, a pretty picture.

[Charlie Elphicke]

I have been listening carefully to the hon. Gentleman’s argument. I am unable yet, however, to understand or hear what alternative he suggests. Will he tell us what his alternative is?

[Nic Dakin]

The alternative is to go much more slowly and much more carefully so that things can be managed out there in the real world. [Interruption.] I am sorry that Conservative Members just do not understand the difference between double and half. They simply do not understand it, but perhaps that will get through to them over time.

[Nadhim Zahawi]

rose—

[Nic Dakin]

I turn to deal with aspects of regulation and economic reform.

[Several hon. Members]

rose—

[Nic Dakin]

I am not giving way, as other Members want to speak.

Let me welcome the decision to defer the fuel duty rise in line with what Labour called for. It is disappointing, however, that the rise in VAT on fuel means that even allowing for a 1p reduction, people still have to pay 2p more a litre.

There is potential merit in the incentives for further charitable giving, but these are limited in their scope. I hope that the Government will examine carefully the proposals brought forward, with strong cross-party support, in my recent ten-minute rule Bill. It is designed to ensure that charities taking over the delivery of services from the NHS—for hospice care, for example—are treated in the same way as the NHS in respect of the application of VAT to non-business supplies.

The Budget’s proposals to increase support for technical innovation and research and development are movements in the right direction, as are the faltering steps forward for the green investment bank. However, I am disappointed not to see greater emphasis placed on ensuring that future investment in energy infrastructure will be carried out and supplied by UK-based companies. Such an approach would support the sort of renaissance that is needed in steel-based manufacturing supply chains.

I am further concerned about the introduction of the carbon floor pricing. It is not only steel manufacturers such as Tata in my Scunthorpe county constituency that are sceptical, but organisations like Greenpeace, which said:

“The carbon floor price will put up bills, deliver a windfall profit for existing nuclear power stations and yet it won’t drive investment into clean energy and improved efficiency. It’s not so much a green tax as a stealth tax and it’s exactly the kind of measure that gives green levies a bad name.”

The proposals on planning law are confusing when set alongside the direction outlined in the Localism Bill. At first glance, these are Janus-like policies, pointing in two directions. As the hon. Member for Mid Dorset and North Poole (Annette Brooke) pointed out, they present mixed messages to an already confused world.

Finally, there is nothing in this Budget to support getting young people into work and much to create greater worklessness. The investment in apprenticeships is to be welcomed, but the key issue around apprentices is not student demand—there is plenty of student demand out there—but employer supply. As the Federation of Small Businesses says, small businesses

“are willing to take on apprenticeships given the right incentives.”

This remains sadly unclear. There was also disappointment that the Government had chosen not to extend the graduate internship scheme.

To conclude, this is a Budget that disappoints rather than inspires. It leaves the UK economy charging pell-mell in the wrong direction. It is a helter-skelter ride of falling demand, rising joblessness and falling living standards. I hope the Government will listen to the people, take stock and pause—before it is too late.

21:19

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

I thank all Members for the speeches that they have made this evening. We have heard a bit of knockabout and a few partisan comments, and of course that is all good fun in the Chamber, but I want to shed some light on the issue. I want to draw attention to the writings of one Hamish McRae, the economics correspondent of The Independent—a newspaper which, if truth be told, has not always expressed a favourable opinion of Conservative Members.

From about 2005 onwards, Hamish McRae’s weekly columns highlighted the fact that the then Chancellor was quoting his famous golden economic rules less frequently, until he eventually stopped referring to them, in much the same way as he stopped using the word “prudence”. In later years, Mr McRae pointed out that the Chancellor had continued to borrow money even when tax receipts were fairly plentiful. Despite Tony Blair’s best efforts to stress economic credibility and use the term “prudence” from the beginning of the last decade, the Labour Government abandoned Conservative spending plans and resorted to type, which meant spending money. Labour Members cannot help it: in the end, they always think that they can cure society’s ills and promote social mobility by throwing money at a problem.

The present Government have produced a pro-growth and pro-aspiration Budget. First and most important, it outlines a strategy for growth, a strategy for reducing the national debt, and a strategy for continuing to restore confidence in our once broken economy. We must never shy away from supporting businesses by offering competitive levels of taxation, and we in the House of Commons must send out the message that the country is once again open for business.

Over the last decade, many high-profile companies have left the UK to escape our complicated tax system and our higher than average rate of corporation tax. Given the increased mobility of capital and people, Britain must be an attractive place in which to work and live. We must be a beacon for investment from around the world and the jobs that it will bring. With this Budget, we can once again start to attract the kind of investment that the country needs. Britain must be able to compete to attract the brightest and the best, and enterprise zones, lower corporation tax and other measures outlined in the Budget will achieve that.

I am proud to be able to speak about what I feel is the most important part of the Budget, the part that deals with enterprise zones. I know that the black country has already been allocated an enterprise zone, and I am delighted that the Chancellor has made that decision. I have in mind Wolverhampton and my constituency of Wolverhampton South West when I say that I hope and believe that the reintroduction of enterprise zones will offer the black country an opportunity to rebalance the regional economy and provide the building blocks for future prosperity in areas that have missed out on capital spending projects over the last decade. I grew up in the shadow of Merry Hill. I remember the original site, and I saw with my own eyes the power of ambition and aspiration being tangibly enhanced as the buildings rose up in a sea of regeneration.

The recovery must be led by the private sector, and the Budget outlines how we will be able to achieve that. The growth of small businesses employing a handful of people will be central to our future economic prosperity. They are the engines of our economy, employing 60% of the private sector work force and contributing half the United Kingdom’s annual turnover. Lower taxation, planning simplification and less bureaucracy will provide an ideal cocktail of measures to kick-start local economies and encourage the growth of that vital sector.

Let me end by briefly discussing another of Labour’s legacies. Labour created an environment in which young people feel unable or unwilling to take the first steps in creating their own businesses. On Friday I visited a number of sixth-form politics and economics students. When they were asked whether they wanted to set up their own businesses, none of them said that they did. I was struck by their reaction, which suggested that future generations would not be inspired to go out into the world of business. Indeed, that supports the finding of commissioned research that 50% of young people do not feel that they are encouraged at school to be entrepreneurial. Changing that culture is vital to our economic future. Children in our education system need to be challenged and encouraged to take employment into their own hands. We need to invest in and develop talented young people, supporting them in the first steps on the difficult journey towards creating their own businesses and ultimately becoming successful.

Perhaps more pernicious is the Opposition’s determination to play politics and present the most draconian picture of the responsibility measures taken by the Government. Indeed, the Leader of the Opposition compared the demonstration on Saturday to the struggle for civil rights and the suffragettes. In 2009-2010 Government spending was £669 billion; by 2014-15 it will be £647 billion, a few percentage points leaner. Even more tellingly, in 1999-2000 it was £343 billion, and had it followed inflation, it would have been £438 billion by 2009-2010. In fact, expenditure increased by over 50% in real terms during the current decade. Labour just cannot help itself: it will always be in its DNA to spend other people’s money. Thank goodness we on this side of the House are implementing measures to return the country to good economic governance and responsible spending.

21:25

[Kerry McCarthy (Bristol East) (Lab)]

The Government have had to face up to two challenges in this Budget. The first was to do with growth, on which the news presented to the Chancellor as he drew up his Budget was not good. The UK economy shrank by 0.6% in the last quarter and the Office for Budget Responsibility was forced to revise downwards its growth forecast for the next two years. Unemployment is more than 2.5 million, a 17-year high, and is rising rapidly, and again the OBR has had to raise its forecast. The Chancellor must know in his heart of hearts that it is simply not possible to reduce the deficit while the economy is shrinking, tax revenues are falling and the number of unemployed people is rising.

[Angie Bray]

Will the hon. Lady give way?

[Kerry McCarthy]

I am afraid I do not have time, as I want others to be able to speak.

Instead of listening to the mounting evidence that the plan is not working and preparing a fiscal plan B, the Chancellor is not for turning. He has stuck to his plan of cutting too far and too fast, and instead of a plan for growth that would create jobs, he has gone back to the failed Thatcherite ideology of the ’80s—that by simply removing regulations and lowering taxes, the private sector will rush in and save the day.

I welcome the announcement of a local enterprise zone for Bristol, of course—this Government have so little to offer us that we have to grab what we are given—but how long will it be before we see the benefits of such a move, and how will we ensure that this does not simply displace investment from other areas that need it just as much? The Work Foundation says that up to four fifths of the jobs created by enterprise zones in the 1980s were merely shifted from other areas. It also says the cost of creating such jobs was in today’s money £26,000 per person. We should compare that with the £6,500 cost per job created under the future jobs fund, which, as I recall, not very long ago the Conservatives were decrying as a waste of public money.

With the regional development agency axed, where is the strategic overview for the wider city region of Bristol to come from? Where are the sources of match funding? Where is the focus on, or funding for, our infrastructure needs? On infrastructure, may I once again make a plea for an integrated transport authority for the Bristol area, as that is badly needed? On housing, I agree with the National Housing Federation, whose representative said:

“Removing regional spatial strategies, without putting anything in their place, was a short-term mistake”.

The NHF has estimated that local authorities have already scrapped plans for more than 200,000 homes as a result of that, and that there may be no new social homes built until 2015. In Bristol alone, 9,600 planned homes were scrapped by the city council. Shelter says that only 39% of housing need is met in Bristol. Last year, about 10,500 people were on the waiting list for social housing, and with transfers included, the number was as high as 15,000, but only a few thousand people a year are being rehoused. There is a clear need for a strategic level of planning to ensure that local need is met.

The Government now promise a presumption in favour of sustainable development in the planning system, but neither that nor the promised national planning framework were set down in the Localism Bill, and that presumption would appear to be at odds with the Localism Bill itself, which gives nimby power to small sections of a community to block developments in a local area. It is therefore unclear whether or not local people have been given more say over planning decisions in their area.

I welcome the Budget’s proposal to speed up major planning decisions. Developers in Bristol have in the past complained to me that it takes a long time—years sometimes—to get approval for their big projects and that it is simply not financially viable to hang on in there and wait. I accept that the planning authorities do need a rocket put under them, but that must not lead to decisions being railroaded through without local people being given a proper say.

The second challenge the Chancellor faced in his Budget was to deliver help for ordinary people, and again he comprehensively failed. The economic crisis began in the financial sector, but ordinary working families are paying the highest price for it. The cost of living is now rising by over 5% per year on the retail price index measure. That is in no small part due to the Government’s decision to raise VAT. Meanwhile, average wages grow at just 2.3%.

At the same time, cuts to services are also affecting the quality of life of ordinary people. Councils are grappling with cuts to their formula grant of 28% over four years. The Communities Secretary said that councils should be able to find efficiency savings rather than make front-line cuts, and the Deputy Prime Minister said that

“they shouldn’t immediately start issuing redundancy notices for savings that they can phase in over four years”,

but the Local Government Association believes councils will make 140,000 redundancies next year across the UK, and the Liberal Democrat-controlled Bristol city council is making 340 people redundant next year alone, and it is reported that 600 jobs are now under review. The Communities Secretary told councillors last year:

“You are now in charge of something like £38 billion every year, no strings attached.”

He also said that they were back

“in charge of the decisions which matter”,

but in fact the only decision that councillors are now empowered to make is the decision to slash services on which local people rely.

The Chancellor could have chosen to implement a real strategy for growth by keeping people in work, building homes and infrastructure, and investing in businesses and industry. Instead he is cutting too far, too fast, and his Government have removed the strategic mechanisms for delivering the investment we think is needed. Even staying within his fiscal plans he could have chosen to put a greater share of the tax burden on the banks by reintroducing the bankers bonus tax. That money could have been used to create jobs and homes, as we suggested. He could have chosen to smooth the cuts to local authority budgets and protect the most vulnerable groups from sudden front-line reductions, rather than front-loading the cuts. The Chancellor is not listening. I predict that in time he will wish that he had.

21:31

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

I welcome this Budget as the first step in a much overdue reform of our economy and our tax system. It is not a sustainable position to expect the private sector, at 50% of the economy, to support itself and the other 50%, which is the public sector. The rebalancing of our economy is not a nice optional extra or a Government whim: it is absolutely essential to our country’s current and future economic survival in an increasingly competitive world. It will be by promoting enterprise that we grow our way out of the disastrous position left behind by the last Labour Government and their debt-fuelled economic model, which has been proven to be totally unsustainable. They borrowed even in the boom years of 1997 to 2004, when the national debt rose by an eye-watering £74.9 billion.

I welcome the announcement of the extra 1% cut in corporation tax to 26% this year, making it the lowest corporation tax rate in the G7, which is accompanied by commitments to reduce corporation tax further in future years. That positive move will let international businesses know that Britain is truly open for business. In addition, there are many signposts that if someone is prepared to take risks to generate wealth and pay taxes, the rewards will be worth while. The doubling of the size of the entrepreneur’s relief, for instance, ensures that if someone creates wealth and employment, they will not be overly punished by the taxman when they exit their business.

Other measures taken in this Budget are a welcome start on the road to regulatory reform and will be of encouragement to employers in my constituency and across the country, especially those with fewer than 10 employees—90% of the businesses in this country fall into that category. The announcements on incentives for charitable giving and the rise in personal allowances should be welcomed and supported by Members on both sides of the House.

I also welcome the announcement that the 50p tax rate is to be reviewed by Her Majesty’s Revenue and Customs, and the revenue raised from the new rate calculated. I have written at length about the damage the measure has done to our economy. Hon. Members will recall that when Nigel Lawson cut the top rate of tax from 60p to 40p in 1988, the tax take rose and the top earners actually paid a larger share of it. When the Treasury recently decided to set the rate of capital gains tax at 28%, it stated that studies it had conducted concluded that this was the rate that maximised the tax take. If that is correct and the optimum rate for unearned income is about 28%, it is very unlikely that the optimum top rate of income tax should be nearly double that level. I look forward to the report in due course.

On a personal basis, on behalf of North West Leicestershire, I very much welcome the news that the per plane tax plan is to be dropped. East Midlands airport is in my constituency and the jobs dependent on both the airport and air distribution are a significant part of my district’s economy and employment base. There is nothing more international than air transport and if we had acted alone with the per plane tax, those jobs would have been threatened. Cuts in fuel duty are also particularly welcome for North West Leicestershire, as one in three of our private sector jobs are either in distribution or distribution-related.

I believe the Budget will act as a signpost that the Government will take action to reform our taxation system and our economy. Labour left our economy in a totally unsustainable state—imbalanced in so many ways, whether that meant the proportion of the economy made up by the public sector, our decline in manufacturing or our reliance, or over-reliance, on financial services and housing bubbles. There is no doubt that Labour’s economic model was and still is unsustainable. The attitude of the Opposition to the record deficit they bequeathed the coalition Government is both startling and opportunistic. In opposing all the coalition Government’s saving reductions but still claiming to be in favour of deficit reduction, they are failing to act in their duty of being a credible Opposition on this topic.

This is a good Budget for growth, a good Budget for jobs and a good Budget for North West Leicestershire, and I support it enthusiastically.

21:35

[Sheila Gilmore (Edinburgh East) (Lab)]

A very interesting thing happened in my city in 2009. For the first time since the 1960s, the number of affordable rented homes built exceeded the number of private homes—55% of all new build was affordable rented homes, subsidised by public spending. That subsidy helped the private builders who otherwise would have had to shut up shop for a while—as many have had to do—and meant that some at least could stay in work, and that gave work to the skilled work force who would otherwise be sitting at home watching daytime television because there was no work. When those people are at work they are contributing to our economy and paying taxes—[Interruption.] I do not know why that is so funny for people who want to reduce the deficit, because if people are paying taxes in, that is far better than their simply taking benefits out.

That was a good thing. It showed the weakness of the private sector, however, that it was affordable rented homes that had to be built in the numbers to keep some people in work. I look out from my constituency office at a regeneration scheme that has stalled because the private sector is not leaping in to build new homes and to bring offices or any other kind of business into the area. I look out on land. There is no shortage of land, but there is a shortage of investment to make all this development happen. We ought to invest in housing and build a real shared equity scheme, rather than providing a meagre amount of money that will be available for only one year, as we learn if we read the detail. The scheme is not sustainable: for one year there will be £250 million.

Shared equity has certainly helped to keep the house market going in my city—it is very important—but it needs subsidy. What is wrong is the constant juxtaposition of the private and public sector as though they are at war. In fact, the two are constantly interrelated.

[George Freeman]

Will the hon. Lady give way?

[Sheila Gilmore]

No, I will not.

The private and public sectors are constantly interrelated, because public sector stimulus has kept the economy going since the recession began.

History has been rewritten, and I find it deeply perplexing and upsetting that the Liberals have been prepared to be complicit in that. I am not surprised that the hon. Member for Colchester (Bob Russell) took us along the byways of Colchester becoming a city, because it was a diversionary tactic. He did not want to talk about his party’s real economic policy. It reminded me of when I was working from home—suddenly, cleaning the kitchen became quite attractive because I could not settle down to do the work that required a bit more effort. That is what is happening with a party that went into the election telling people that it would be downright dangerous to cut public spending too quickly. That is not just some sort of Labour notion, as the Conservatives seem to think. It was the policy of two of the parties that went into the election and that, together, won a majority of public support. It is not true that the public supported the financial disaster that the Conservatives are now wishing on us.

I said in a previous finance debate that the proof would be in the outcomes and that if the Conservative party was right and economic growth was driven by their policies, I would concede that, but so far we are seeing nothing of the sort. Our position would not be too far, too fast—

[Mr Speaker]

Order.

21:40

[Chris Leslie (Nottingham East) (Lab/Co-op)]

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) was making her point so well, and I commend her analysis of this Budget, as well as those of my hon. Friend the Member for Coventry South (Mr Cunningham), my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) and my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger), for Newcastle upon Tyne Central (Chi Onwurah) and for Telford (David Wright), among others. They all made the point that it is a no-growth Budget that is hurting many people and that certainly will not help our economy in the years ahead.

We do not have to look far to see the cracks emerging. Setting aside the scepticism that some might have had about the Office for Budget Responsibility, a cursory flick through its detailed analysis shows that the Budget has had a dilatory effect on our economy. The first line of chapter 3 on page 31 of its report cites a squeeze on household disposable incomes in the coming months weakening consumer spending growth. The OBR states on the same page that

“we have revised down our central forecast for economic growth in 2011 from 2.1 per cent to 1.7 per cent.”,

as my hon. Friend the Member for Southampton, Test (Dr Whitehead) has pointed out. Page 53 of the report says that real household incomes will “fall further in 2011”, and page 54 states:

“We have revised down our forecast for consumption growth…from 1.3 per cent to 0.6 per cent”.

Page 62 tells us that the medium-term forecast for exports needs to be revised downwards and page 72 states:

“We expect unemployment to rise over the next few quarters,”

with unemployment 80,000 higher in 2012. On page 75, the OBR downgrades forecasts for average earnings and output growth and on page 76 it tells us that aggregate wages and salaries will be

“around 1 per cent lower by 2015-16 than expected”—

and on and on it goes.

Economic growth matters, but that simple fact is lost on the Chancellor. I asked the Library about the cost to the Exchequer of that infamous quarter 4 reduction in economic growth in the last few months of 2010 when the economy shrank by 0.6%. It estimated that that reduction has caused a £3 billion reduction in Treasury revenues—£3 billion that might have been anticipated in revenue if performance in quarter 4 had been anything like that in quarter 3. That significant sum would have been enough to offset the need for the freeze in child benefit or the cuts in capital allowances for business investment that the Chancellor announced.

There is a symmetrical irony in that the OBR says, on page 125 of the report, that an

“increase in the claimant count”

will lead to “higher benefit payments” in 2012-13. As my hon. Friends the Members for Bishop Auckland (Helen Goodman) and for Glasgow North East (Mr Bain) have pointed out, the OBR has forecast an increase in social security costs of

“approximately £3 billion per year from 2012-13 onwards”.

When economic growth is driven down and unemployment is increased, those costs and the deficit are both going to be increased, as the eminent economist Paul Krugman has pointed out this week. This obsession with deficit reduction to the exclusion of all else—this fetishism—is a very narrow view of the world and ignores the impact that the Government’s belligerent strategy is having on the real economy.

The other document that was published with the Budget, “The Plan for Growth”, has also failed to convince anyone that the Government understand the importance of the real economy. The OBR’s reaction to the policy measures, when it had totted up all the Chancellor’s announcements, was that

“we do not believe there is strong enough evidence to raise our trend growth assumption”.

That is its response to the measures in the growth plan. As my hon. Friend the Member for Scunthorpe (Nic Dakin) so eloquently put it, the Government have taken a machete to growth—that is exactly what has happened. Their growth plan is riddled with confusion, fudge and contradictions.

Enterprise zones sound interesting at face value, but when they were tried in the 1980s they took jobs from surrounding areas. My hon. Friends the Members for Blyth Valley (Mr Campbell) and for Oldham East and Saddleworth (Debbie Abrahams) tried to be as optimistic as they could when looking at those enterprise zones, but we have seen that the Government give with one hand and take away so much more with the other. Any improvements to capital allowances on the margins are taken away by a factor of 10, with the cuts in capital allowances of £5 billion announced for the next five years.

There are in the growth plan allusions to weakening employee rights, as though that is the avenue we have to go down to boost growth. There is an allusion to clarity on the national minimum wage. We will have to see where that goes. There is opposition to improvements in maternity and paternity rights—typical Tory fare. There are some interesting vignettes on legal reforms that the Government want to make. For example, injured parties will have to deduct their legal costs from their compensation, instead of those costs falling on the negligent party. The Government want fewer food safety inspections at takeaways, as some hon. Members mentioned this evening.

There are references to abolishing money-laundering regulations and reducing corporate accounting, but hold the front page! Many people may not have got as far as page 121, where the Government say—this is absolutely serious—that they will review the Outer Space Act 1986. Presumably they will give us a clue what planet they are living on. One assumes it is planet Redwood, but who knows?

As we can see from the discussion that we have had today, the cuts have been significant and they are having an effect on the real economy. We can see that the unprecedented reductions in local government expenditure will harm local economies. My hon. Friend the Member for Sheffield South East (Mr Betts) mentioned that 737 jobs are being lost in Sheffield alone. The Government are facing both ways when it comes to local government reform. The set of proposals in the Localism Bill is hardly deregulatory, with 142 order-making powers. The Government are facing both ways on business rates. They promise local freedoms to councillors, but when businesses object, they say, “We will have national certainty when it comes to business rates.”

There is a looming crisis in residential housing and property finance. On planning policy, as my hon. Friend the Member for Sheffield South East said, so much for localism, when the Government’s clear expectation is

“that the default answer to development is ‘yes’”.

We will see how far localism goes in each of the constituencies of those on the Government Benches.

My hon. Friend the Member for Bristol East (Kerry McCarthy) pointed out that although the planning process needs to be speeded up, the supposed guarantee of a 12-month closure, including the appeal, is incongruent with the 35% cut in the planning inspectorate’s budget—35%. We will see whether the Government can live up to that guarantee. They are abolishing the Infrastructure Planning Commission, but they will have to recreate a major infrastructure planning unit within the planning inspectorate. They say they will get rid of top-down guidance, but the growth plan refers to five new national guidelines.

It must be recognised that there are significant problems with the Budget, one of which is the risk of a lost generation of young people. Youth unemployment is up 30,000 in the first quarter of this year to just under 1 million claimants between the ages of 16 and 24, the highest since comparable records began in 1992. We know that in the 1980s—the Secretary of State for Communities and Local Government has joined us as a shibboleth for that era—the Government neglected the risk of unemployment. We know the story.

Now, again, a younger generation is forgotten by the Government. Young people are losing their education maintenance allowances, their tuition fees are being trebled to £9,000 per year if they go to university, and opportunities to get into work or on to the career ladder will be rare. There is insufficient emphasis in the Budget on work experience and apprenticeships. The Government should have repeated the bank bonus levy that we implemented last year to raise resources to target job creation, but no; instead, they have scrapped the guarantee of apprenticeship places for 16 to 18-year-olds—a massive backward step.

What hope do young people have of getting on the housing ladder with the rather puny Firstbuy scheme, which Shelter says will help less than 1% of first-time buyers? As my hon. Friend the Member for Sheffield South East mentioned, there is a 50% cut in the new social homes construction budget. On top of that there are cuts to housing benefit. Even on pensions, young people are penalised should they dare to want to save for the long term. The Government assume that they can get away with pulling the rug from under young people, perhaps because they do not vote, but the mood is changing across the country. There is a profound sense of unfairness in cutting young people adrift. It is foolish economics to consign a generation to poorer prospects and less prosperity than their parents enjoyed. The Budget’s adverse impact on young people will penalise and alienate those in their teens and 20s. It is a catastrophe in the making, and the Chancellor will rue the day he neglected the younger generation.

21:49

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

We knew that the Labour party was in denial about the deficit and the difficult decisions that the country has had to take as a consequence of its legacy, but every one of the 16 speeches we heard from Opposition Members today reiterated that same denial. They claim that 250,000 people were out at the weekend to find an alternative, but there is clearly no alternative from those on the Opposition Benches. In speech after speech, Labour Members denied the reality of the economic situation they left the country. They have forgotten that when they were in Government the manufacturing sector halved in size while financial engineering replaced real engineering, and that our share of world trade fell as we failed to take advantage of growth in the global economy. The gap between the north and the south grew on their watch, and under their stewardship red tape, whether regulation or the length of the tax code, ballooned, acting as a dead weight on business. Their legacy to this country is an economy that needs reform if we are to have stable and sustainable growth, if every part of this nation is to prosper and if we are to compete with the best in the world. That is the agenda of reform that we set out in the Budget last week.

We want the UK to become the best place in Europe to start, finance and grow a business, but in the past decade alone countries such as Germany, Denmark and Finland have overtaken us in international rankings for competitiveness. In our plan for growth we have therefore taken action to abolish £350 million-worth of specific regulations, to implement in full Lord Young’s recommendations on health and safety laws and to impose a moratorium, exempting businesses employing fewer than 10 people and all genuine start-ups from new domestic regulations for the next 10 years. These measures were welcomed by my hon. Friends the Members for Aberconwy (Guto Bebb), for Mid Dorset and North Poole (Annette Brooke) and for City of Chester (Stephen Mosley). No longer will British business be tied down by wasteful red tape.

We are going to tackle what every Government have identified as a chronic obstacle to economic growth in Britain but have never done anything about: the planning system. Councils are spending 13% more in real terms on planning permissions than they did five years ago, despite the fact that applications have fallen by a third. Yes, communities should have a greater say in planning, but as a result of the Budget we will expect all bodies involved in planning to put jobs and growth first, and we will introduce a new presumption in favour of sustainable development so that the default answer to development is yes.

We will protect the greenbelt, but we will also remove the nationally imposed targets on the use of previously developed land. We will streamline the planning process. I welcome the support from the hon. Member for Bristol East (Kerry McCarthy), who wants to stop applications being bogged down for years, which I think will free up the economy. I am pleased that there is at least one measure in the Budget that Labour Front Benchers will support. No longer will cumbersome planning rules and bad regulation stand in the way of job creation up and down this country.

There has been a lot of talk about enterprise zones. The hon. Member for Nottingham East (Chris Leslie) was dismissive of them, so I think that he should speak to his friends the hon. Members for Blyth Valley (Mr Campbell), for Telford (David Wright) and for Coventry South (Mr Cunningham), who all want to see enterprise zones in their constituencies because they want to see the benefit that will flow as a result. We have already announced four new enterprise zones: Mersey Waters in Liverpool; the Royal docks in Newham; Manchester city airport, which was welcomed by the right hon. Member for Wythenshawe and Sale East (Paul Goggins); and the Boots campus in Nottingham. There are 17 more to follow. The only Member who did not call for an enterprise zone in his constituency was my hon. Friend the Member for Colchester (Bob Russell), who went one further and called for Colchester to become a city. I do not know whether city status will offer the same benefit as enterprise zones, but I wish him well in that bid.

There was some discussion among Opposition Members about the problems of youth unemployment. We know that under the previous Government youth unemployment increased. Let me remind the House what the Chancellor announced in the Budget last week: 80,000 additional work experience placements and a doubling of the number of university technology colleges from 12 to 24. He announced 50,000 additional apprenticeships, taking the number introduced by this Government to 250,000 in total, compared with the plans left us by the previous Government.

We also need to make sure that we have a competitive tax system. Britain used to have the third lowest corporate tax rate in Europe; now we have the sixth highest. At the same time, our tax code has become so complex that it has overtaken India’s to become the longest in the world. As my hon. Friends the Members for Mid Sussex (Nicholas Soames) and for Wolverhampton South West (Paul Uppal) said, we have to address that issue.

Our taxes should be efficient and support growth, be fair and predictable, simple to understand and easy to comply with. That is why from April the corporation tax rate will be reduced not just by 1 percentage point as we announced last June, but by 2 percentage points, and by 1 percentage point for each of the next three years, taking our rate down to 23%—16 percentage points lower than in America, 11 lower than in France and 7 lower than in Germany, giving us the lowest corporation tax rate in the G7.

A competitive tax system is not just about lower rates, however; it is also about the way in which we make tax policy and cut the cost of compliance. That is why last July we set up the Office of Tax Simplification to give advice on how to reduce the complexity of the tax system; and that is why we are going to reduce no fewer than 43 complex reliefs, from Black Beer to Angostura Bitters and late-night taxis to luncheon vouchers. We are ridding the tax system of unnecessary legislation and taking out 100 pages from our tax code, which is a good step towards creating a simpler tax system and reducing the cost of compliance for small businesses.

We need to go further, however. For decades, we have operated separate systems for income tax and for national insurance, with two completely different systems of administration and two different periods and bases of charge. That imposes unnecessary costs on our country’s employers, and that is why this Government will consult on merging the operation of national insurance and income tax to create a simpler, more competitive and more stable tax system that is an asset to our economy.

Several hon. Friends talked about the importance of small businesses having access to finance, and we should not ignore the problems that businesses face in that regard. Small businesses in particular have been innocent victims of the credit crunch. They have seen the flow of affordable credit dry up, their overdrafts squeezed and lending conditions deteriorate. That is why we have agreed with the nation’s banks a 15% increase in the availability of credit to small businesses.

But that is not the end of the story. As my hon. Friends the Members for Stratford-on-Avon (Nadhim Zahawi) and for South Northamptonshire (Andrea Leadsom) said, we need tax incentives to encourage entrepreneurial activity, and that is why it was good to see Sir Ronald Cohen and a number of venture capitalists and business angels praise the measures we announced in the Budget last week to double the size of entrepreneurs relief to £10 million and to increase income tax relief to 30%. That is how we will provide finance to the nation’s small businesses in order to help them to grow and create the jobs that we will need in the future; and that will help Britain to become the best place in Europe to start, grow and finance a business.

The issue is not just about financing start-ups and smaller businesses. We are pleased that the banks have agreed to increase the size of business growth funds to £2.5 billion, and to provide more equity investments for small and medium-sized businesses that want to grow and become the best in the world.

This Government are looking to right the wrongs of the past. We are going to reverse the trend of the past decade, a decade that saw manufacturing shrink, businesses tied down by red tape imposed by the previous Labour Government, the south grow faster than the north and growth balanced precariously on a mountain of debt. We will not repeat the mistakes of the previous Labour Government. We want to see growth built on firm foundations, with reforms that make our country more competitive and more business-friendly, with an economy exploiting new opportunities in the manufacturing, life sciences, digital and creative industries.

That is why the Budget has been greeted with acclaim throughout the country by business organisations that recognise the measures we have taken. That is why the strategy that my right hon. Friend the Chancellor set out, of tackling the deficit, has been supported by the OECD, the International Monetary Fund, the European Union, the CBI, the Institute of Directors, the Bank of England and 35 business leaders who wrote in support of our plans at the time of the spending review last year. Who can the Opposition claim in support of their plans? The Guardian. Is it not typical that, when this country needs far-reaching economic reform, the only answer that the Labour party has is a policy, which it knows is illegal, to cut the VAT rate on petrol?

We have set out measures to ensure that we tackle the mistakes of the past, that build a more dynamic, prosperous and sustainable economy that this country—

22:00

The debate stood adjourned (Standing Order No. 9(3)).

Ordered, That the debate be resumed tomorrow.

Business without Debate

Monday 28th March 2011 Commons Chamber

Private Members’ Bills

Motion made,

That, notwithstanding the provisions of Standing Order No. 14(4), Private Members’ Bills shall have precedence over Government business on 9 September 2011, 21 October 2011, 25 November 2011 and 20 January 2012.—(Mr Alistair Carmichael.)

[Mr Speaker]

As there is an amendment not supported by the Member in charge, I will follow the practice of my predecessors and treat it as an objection to the motion. Objection taken.

Human Rights (Joint Committee)

Ordered,

That Mrs Eleanor Laing be discharged from the Joint Committee on Human Rights and Rehman Chishti be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Bus Services (Hartlepool)

Monday 28th March 2011 Commons Chamber

22:00

[Mr Iain Wright (Hartlepool) (Lab)]

I rise to present a petition on behalf of my constituents who are concerned about the loss of bus services, particularly evening bus services and those on socially vital routes.

The petition states:

The Petition of residents of the borough of Hartlepool,

Declares that the petitioners are concerned that residents in areas of the borough such as The Headland and Burbank, as well as villagers in Dalton Piercy, Elwick and Greatham, have been left isolated and without transport following the decision of Hartlepool Borough council to cut public subsidy to private bus companies.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to work with the Secretary of State for Communities and Local Government, residents of the borough, Hartlepool Borough Council and bus operators immediately to reinstate the services and then to secure a financial settlement and a regulatory framework which provides a comprehensive, reliable and cheap system of bus transport in Hartlepool, designed to address the social and economic needs of passengers in both the urban and rural areas of the borough, rather than the narrow interests of private bus companies.

And the Petitioners remain, etc.

[P000909]

Sustainable Communities Act

Monday 28th March 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Alistair Carmichael.)

22:02

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

I should like to thank hon. Members remaining in the House for their interest in the Sustainable Communities Act 2007. I will begin by explaining why the Act is so important. A successful first round of proposals has been made under the Act, but delays with implementing the 2010 amendment to it are creating unacceptable delays for future proposals, and I want to focus on that as well.

The Act is important essentially because, in so many ways, our communities are unsustainable. In the past decade, Britain has lost a quarter of all its post offices, a quarter of all its independent newsagents and a fifth of all its bank branches. In my constituency, thankfully, there is still a thriving local economy with local traders and businesses fighting off incursions on to the high street by the big chain stores and supermarkets, but we are unusual in being successful thus far, and there are certainly many battles still ahead. In particular, we need more powers to restrict the number of large chain stores that pose a threat to the unique character of our city of Brighton—for example, powers to stop the expansion of supermarkets given that we already have about 56 major ones.

Our city is home to about 10,000 small and medium-sized enterprises, which form the backbone of our economy as well as being a major element in Brighton’s attractiveness to holidaymakers in terms of the services that they provide, such as bars and clubs, and the retail experience that they create. In fact, the city remains home to the largest concentration of independent traders on the south coast. Of course, we also have the well-established reputation of Brighton’s leisure and tourism industry, which attracts more than 8 million visitors a year and has remained a large source of employment in Brighton and Hove despite the recession.

As I said, however, we are bucking the trend, and the relentless march of the high street clones is taking its toll, as are the prevalence of out-of-town shopping centres, the push to run public services such as our post offices for private profit, and the legacy of gaping social inequality. Increasingly, there are signs of disengagement from the political system. Evidence such as the POWER inquiry shows that people want to be engaged and to get involved, but that they do not bother because they perceive that they cannot really change anything.

The Sustainable Communities Act 2007 aims to reverse those interconnected problems. It recognises that community decline is an ongoing national problem. Evidence such as the New Economics Foundation’s “Ghost Town Britain” research demonstrates that and shows that it will get worse if nothing is done. The best efforts of local citizens and communities are not enough to reverse this overwhelming national trend. The Prime Minister has placed enormous faith in what he calls the big society, but without adequate resources it is unreasonable to expect that people will have the capacity, skills, time and wherewithal either to plug the gap left by cuts to public services or to provide the intensive input required to facilitate genuine community development. Of course, we all know of inspiring individuals who make a difference in their neighbourhoods and of projects that turn lives around, but that is not the same as the kind of infrastructure that allows for long-term, community-controlled sustainable engagement in the transformation of our society.

Government should help and Government can help, but communities are the experts on local problems and the solutions to them. The actions that Government take to help them should therefore be decided by communities, not by those in Westminster and Whitehall. A mechanism is needed whereby local people can drive Government action to reverse community decline and create local sustainability. The 2007 Act creates precisely that mechanism and enshrines it in statute. Putting local people in the driving seat is a crucial aspect of the Act. For the first time, it sets up in law a bottom-up process. Communities and councils are invited to make proposals for Government action to reverse community decline and promote local sustainability. Central Government then have a duty not only to consult, but to co-operate and reach agreement with an independent selector body on which of the proposals will be implemented.

The Act became law in 2007 as a result of a long and widespread grass-roots mobilisation campaign organised by Local Works, a coalition of more than 120 national organisations. The campaign inspired tens of thousands of citizens to urge their MPs to back the Sustainable Communities Bill. It struck a chord with communities who were fed up with seeing the decline of the places where they lived and worked, but who felt powerless to do anything about it.

I spoke at a large public meeting in Brighton in 2004, when the Bill had only just entered Parliament. Local Works organised more than 100 such constituency public meetings across the country. The turnout stunned MPs. The meetings drew average crowds of 250 people, with some attracting as many as 300 or 500 members of the public. In 2006, another huge meeting was held in Brighton, to which more than 250 people came to urge the city’s three MPs of the time formally to back the Bill in Parliament. A year later, when the Bill was in its final parliamentary stages, London’s Green MEP, Jean Lambert, spoke before 1,000 people at a public meeting that the campaign had organised in Westminster. I give these examples because they give a clear sense of the level of public support for this campaign and this Act.

The Green party was the first political party to back the Bill formally, and the campaign continued to call for cross-party support. That was eventually achieved and the Act became law in 2007 with the support of all parties across the House. In early 2010, Local Works successfully campaigned for the Sustainable Communities Act 2007 (Amendment) Act 2010. The 2010 Act ensured that the process would be ongoing, and allowed parish and town councils to submit proposals to central Government directly.

It is important to look back to see what has happened since. Have the opportunities promised by this groundbreaking legislation been realised? Back in October 2008, the Government of the day launched the first invitation for proposals under the 2007 Act. Local Works held many more public meetings across the country, where communities lobbied their councillors to resolve to use the Act. A hundred local authorities responded. Together with their communities, they drew up 300 proposals for Government action and submitted them to the Local Government Association, in the role of selector, by 31 July 2009.

The proposals were wide ranging and included measures to protect local post offices, shops and trade, and pubs; measures to increase the production and sale of local food; measures to promote local renewable energy, microgeneration and energy efficiency; measures to protect local public services; and measures to increase democratic participation.

The people of Brighton and Hove successfully urged the council to opt into the Act, and then many got involved in coming up with the proposals that would help the area become a more sustainable place. Of those proposals, eight were shortlisted by the LGA. Examples include allowing food grown in allotments to be sold locally, introducing feed-in tariffs for local renewable energy and empowering councils to have more flexible business rates to encourage local trade and jobs.

The LGA’s selector panel shortlisted 199 proposals in total and submitted them to the Government in January 2010. On 15 December 2010, the Government announced that they had reached agreement with the LGA’s selector panel on all the shortlisted proposals, and they published the results. Some proposals were to be implemented and some were rejected, with reasons given, while others were compromised on or deemed unnecessary because powers already existed.

I am pleased that as a result of that process, the Government will make it easier to introduce renewable energy schemes by bringing in permitted development rights for small-scale renewable and microgenerational energy. They have also agreed to legislate to establish a community right of purchase, which will allow communities to bid to take over local assets. A moratorium on the sale of listed assets will give community groups time to prepare a bid. The planning rules are due to be amended to exclude gardens from the classification of “previously developed land”, and the Government have backed community calls for a ban on the sale of alcohol below cost price, preventing supermarkets from selling alcohol below a certain price floor.

Those are positive outcomes, with local communities having a direct say in shaping their futures. But what happens next? The Government have set up a barrier-busting website as the portal for submitting future proposals under the Act. They have also invited community groups and councils to submit proposals directly through the website. Local Works has welcomed that, and I do too. However, the 2010 Act requires that the Government introduce regulations that will govern the process of making proposals and deciding on them in future. The consultation that they must run before finalising those regulations has not yet been published.

Following repeated requests for information, officials at the Department for Communities and Local Government initially advised that the consultation would be published in the summer of last year. Since then the date has been continually revised, first to the end of 2010, then to the end of January 2011 and then to before the mid-term recess in February, and now we are not being given any time frame at all. Parliamentary questions tabled by the hon. Member for Gower (Martin Caton) and me asking when it would be published both met with similar responses, stating that it would be soon and that a statement would be made “shortly”.

Community groups and organisations, councillors and officers who want to get involved in the Act are now all asking what on earth is going on. To them, this looks like deliberate stalling by the Government. I have to say, I am minded to agree. The fact that the early-day motion on the subject currently has the second highest number of signatures, with 236 hon. Members supporting it, suggests that people in the House are also very concerned about the future of the Act. That is true not just of people here in the House but many people outside, too. I shall give just a sample of what is being said.

Ruth Bond, chair of the women’s institute, has stated:

“The Women’s Institute is looking forward to encouraging our members and others in our communities to be involved in the Sustainable Communities Act and to use it to help and protect the vibrancy of our villages and towns. However, the delay in the consultation on the future regulations for the Act is holding us all back. This delay has been ongoing since early January this year and still we have no date for when the consultation will be published. We therefore hope the government will make an announcement urgently.”

John Walker, the national chairman of the Federation of Small Businesses, has made a similar point, stating:

“We are looking forward to seeing the consultation on the new Sustainable Communities Act regulations. The long delay in seeing this consultation has been frustrating as it is holding back our members and branches on the ground from engaging in the Act to help keep trade local and promote and protect local businesses and jobs in their communities.”

I have a whole stack of further quotations from many organisations, including the Campaign for Real Ale, Age UK, Sustrans, the Public and Commercial Services Union, the Woodland Trust and others. All of them make the very same point—that extensive delay to the consultation is extremely frustrating and, worse, risks local people becoming disillusioned with the whole process.

The Sustainable Communities Act has enormous potential, and its emphasis on community control and empowerment should surely be in keeping with the Government’s professed support for localism. I therefore hope very much that the Minister can tell my constituents, me and the many others who are still waiting to hear about why progress has stalled, what his plans are to get it back on track and when we can look forward to action. I hope he will also take this opportunity to reiterate his full support for the Act and its processes.

22:14

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

I warmly congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this debate. I am happy to give her my full commitment to the Sustainable Communities Act 2007, which is one of the most important Acts that this House has passed. The fact that it was passed with cross-party support underlines its continuing significance to how we govern ourselves in future.

For my money, the Act is one of the most important Acts of the past decade, because it contains, as the hon. Lady knows, two important principles: first, that communities should have the right to know what is done by public bodies in their area on their behalf; and secondly, that communities, armed with that information, have the right to suggest alternative, better ways that might enable them to thrive, as she described. The Act is a seminal piece of legislation, and I congratulate our predecessors who campaigned long and hard for it, and the coalition led by Local Works, which did so much in the community.

The hon. Lady describes her long association with the campaign. When I was selected as a parliamentary candidate in 2004 and first went canvassing on the doorstep, almost the first question I was asked—from Mr Philip Clarkson Webb, a constituent whom I have come to know—was whether, if elected, I would support the Sustainable Communities Bill. I told him that I did not know but that I would find out, and it is a thrill to speak at the Dispatch Box now in support of the Act.

I hope to reassure the hon. Lady on some of her points. The Act is seminal in other ways, because of its impact on other legislation. Its principles of dialogue, collaboration, and genuine, bottom-up democracy are a recurring theme in the coalition agreement, and unite both parties to the coalition. Those principles wholly permeate, and to a significant degree have inspired, the Localism Bill, to which she drew attention, which completed its Committee stage earlier this month.

The principles of dialogue, collaboration and bottom-up democracy also underpin our consultation on the new regulations to govern the Act’s implementation. I can tell the hon. Lady that we will launch that consultation tomorrow. I also welcome the opportunity of informing her and the House of how we intend to proceed. First, we are keeping the essential character of the previous approach, but trying to make it more streamlined and effective, and easier for communities to take up. The Act is about inspiring ideas from local communities and engaging with them in open, honest dialogue; it is not just for councils. It is not about councils saying to their communities, “We want to do this, do you agree?” but rather about councils asking their communities, “How would you like us to improve our area?”

As the hon. Lady said, the Communities and Local Government Secretary invited councils to begin that process on 15 December 2010, which was the second invitation under the Act. The first invitation was made back in 2008, which generated a range of ideas from around the country on how best to put power where it belongs, and how to put control into the hands of local people.

Many of those ideas—getting rid of the regional spatial strategies and giving local councils much more discretion on spending public money—were reflected in the actions that the Government took in our first months in office. The hon. Lady mentioned three examples from Brighton, which as one would expect contributed some of the more lively, ambitious and creative proposals. There was a recommendation to introduce feed-in tariffs, for which she and many constituents in Brighton have campaigned for many years, and now we have them, and it is possible to introduce business rate discounts under the Localism Bill. We looked very carefully at the possibility of allotments selling surplus food, and we have clarified—I hope to her constituents’ satisfaction—that those powers exist. If she finds any frustrations in exercising them, she has only to come to me, and we will make sure that anyone who doubts them is told what the reality is. I want the second invitation under the Act to be even more successful in provoking local debate, energy and imagination. It is a good opportunity to reinvigorate local democratic discussion between councils, community representatives and individual members of communities, and to bring forward great ideas and translate them into practice wherever possible.

I have always been clear that the best ideas are not to be found cooked up by Ministers and officials in Whitehall. They come from people in communities who have practical ambitions to make their communities better than they could otherwise be. One of the great things about the Act is that it sets a challenge for government to open itself up to ideas from communities in a way that in the past it has been too reluctant to do, and in that sense to turn government upside down, so that it can truthfully serve the interests of the people and follow their initiative, rather than governing them in the traditional way. The Act introduced the important concept that local and central Government should try to reach an agreement on what local people want. We are keeping this fundamental principle. We made it the centrepiece of the December invitation, and we will make it the centrepiece of the regulations when they are published in draft tomorrow.

The core principles behind the Act and our intentions remain the same. However, the difference I have set out is the first of several differences between the first invitation and the second, all of which are designed to improve the process. I have been grateful for the helpful suggestion that the Local Works coalition has made in helping us to frame these changes. There was some frustration, as reflected by the hon. Lady, about the fact that some of the processes were rather slow, bureaucratic and cumbersome. In the second invitation, we are seeking to be much more open, responsive and bureaucracy free. More action and less paper is what people want from us.

We want the second invitation to put people firmly in the driving seat. As the hon. Lady knows, under the first invitation, we saw only a fraction of the ideas that people put forward—those put forward by the selector for the Government to try to implement. This time, we have made a commitment to consider everything. We guarantee that we will try to help with any genuine problem raised. We do not want to filter out good ideas just for the sake of having a smaller number. Anyone can now e-mail one of the barrier-busters we have established in my Department with an example of how red tape or some other regulation or practice is preventing people from improving their area, and we will do our level best to resolve it.

Under the first invitation, people submitted their idea, but then, as the hon. Lady pointed out, had to wait a year or more for a decision to be taken, with no way of keeping track of progress. If people were concerned because they did not know where their idea was, they wondered whether it had been forgotten about altogether. This time, anyone who submits a request through the barrier-busting site will have a tracking number, like with an internet order, so that the person can tell where it is in the system, and they will have a dedicated person to call to check on progress.

The first invitation was time limited and burdensome on councils, but this time there is no deadline. Councils can ask for people’s ideas at any time and in any way they want. We will not presume to know better than them how they should talk to their local communities and whom to involve. The first invitation also set out a rather restrictive role for the selector—the body tasked to keep the Government honest in their handling of the Act. The selector was asked to reduce the number of suggestions and to prepare a pared down list. This time, however, we will give the selector as well as the people proposing the ideas more freedom than ever before. They will be able to choose which ideas to champion and will get involved only when they feel the need to. People will have the right directly to address the Government. They will also have help from an advisory panel to assist them. I am pleased to announce that it is our intention that Local Works and the National Association of Local Councils, both of which have been vital, will join the Local Government Association in providing a really top-notch advisory panel to the selector.

Because there might be times when, despite our best efforts, it will not be possible to reach agreement between Whitehall and councils on the way ahead, councils that go the extra mile—those that want to champion people’s ideas under the 2007 Act, but are told that we cannot remove the barrier stopping them—will get an extra route of appeal. We will reform the role of the selector, so that it can resubmit that request for help and require us to discuss that request with it before we come to a decision.

Finally, let me mention another difference that I regard as an improvement, and which I hope the hon. Lady will too. The first invitation, before the amendment, excluded parish councils. We are very keen indeed for parish and town councils, which represent their communities so successfully, to submit suggestions and proposals under the 2007 Act. That is one of the reasons why we are keen for the National Association of Local Councils to be included in the work of the selector. We will ensure that the duty to “try to reach agreement” with the selector will apply to requests from parish councils, not just higher or upper-tier authorities, as they are referred to.

All in all, the changes are designed to make the process easier, more open, less bureaucratic and more effective at making change happen—and, I hope, more inviting for people in communities up and down the country. With the barrier-busting services, the support and advice to which Ministers have access will now be increasingly available to people in communities. If we regard people in communities as having good ideas, it is incumbent on us to give them help and support in turning those ideas into reality, just as Ministers count on officials to help them turn their ideas into legislation. It has been my ambition in proposing these changes to turbo-charge the 2007 Act.

My final point is that, through the consultation, the Government are listening for further suggestions and changes that might be made, which we know are most likely to come from people in communities. The consultation on the regulations is a genuine consultation. If there are things that we have missed out or if suggestions are made during the consultation, we will do our level best to take them into account. The operation of the 2007 Act should go along with the spirit of the Act, and should be driven by communities.

I hope that those points will have brought the hon. Lady up to date on our intentions for the 2007 Act. I hope that she will welcome the fact that the publication that she was hoping for will happen tomorrow, in a written statement to the House. I would welcome the chance in future to discuss with her and hon. Members from up and down the country how we can put real power into the hands of local communities, and in so doing make our country and those communities better.

Question put and agreed to.

22:27

House adjourned.

Ministerial Correction

Monday 28th March 2011 Ministerial Corrections

Monday 28 March 2011

Business, Innovation and Skills

Monday 28th March 2011 Ministerial Corrections

Pfizer

[Andrew Miller]

To ask the Secretary of State for Business, Innovation and Skills what meetings he has had with representatives of Pfizer (a) before and (b) after its decision to close its research and development site in Kent.

[Official Report, 4 February 2011, Vol. 522, c. 976W.]

Letter of correction from Mr David Willetts:

An error has been identified in the written answer given to the hon. Member for Ellesmere Port and Neston (Andrew Miller) on 4 February 2011.

The full answer given was as follows:

[Mr Willetts]

The Prime Minister met Jeff Kindler, CEO of Pfizer Inc, on October 21 and they spoke on the telephone in December 2010. I met Ian Read, Jeff Kindler's successor, on 24 January 2011 at 10 Downing street and officials have since held several discussions with the senior management of Pfizer UK.

The correct answer should have been:

[Mr Willetts]

The Prime Minister met Jeff Kindler, CEO of Pfizer Inc, on 21 July and they spoke on the telephone in November 2010. I met Ian Read, Jeff Kindler's successor, on 24 January 2011 at 10 Downing street and officials have since held several discussions with the senior management of Pfizer UK.

Written Ministerial Statements

Monday 28th March 2011 Written Statements

Monday 28 March 2011

Members' and Peers' Correspondence

Monday 28th March 2011 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I am today publishing a report on Departments’ and agencies’ performance on handling Members’ and peers’ correspondence during the calendar year 2010. Details are set out in the attached table. Correspondence statistics for 2009 can be found on 16 March 2010, Official Report, 47-50WS.

Departmental figures are based on substantive replies unless otherwise indicated.

The footnotes to the table provide general background information on how the figures have been compiled.

Extraordinary Energy Council

Monday 28th March 2011 Written Statements

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I was unable to attend the Council because of Cabinet business in London. Andy Lebrecht, Deputy Permanent Representative to the EU, represented the UK at the Council.

The extraordinary Energy Council began with a report by the Energy Commissioner of the impact of events in north Africa and Japan on the EU’s energy market. Although there had been no significant impact on supplies as a result of events in Tunisia, Egypt and Libya, there had been an impact on prices. The EU had 120 days of oil supply. Saudi Arabia and Russia had undertaken to cover any shortfalls in gas and oil supplies. There was general agreement that oil and gas markets were functioning well and that it was important to take a calm approach to reassure the market. The Council concluded that although there was no immediate problem with energy supply, the EU should take measures to increase its ability to deal with problems in the future, in line with the priorities agreed at the European Energy Council on 4 February.

The Commissioner then reported on the situation in Japan; and on the role of nuclear in the energy mix of the EU. He noted the right of member states to decide upon their own energy mix and that nuclear would continue to play a large role in the EU for the foreseeable future. He proposed that member states should work together to develop and approve an EU safety check for nuclear power plants. The UK agreed on the importance of a measured response based on the evidence and on lessons learned from the events in Japan. Most member states supported this position.

The Council concluded that the EU response to the situation in Japan should involve comprehensive risk and safety assessments (“stress tests”) of nuclear power plants in Europe with full involvement of member states in determining how this should be done. EU neighbouring countries should also be involved in the assessment, as well as international bodies such as the G20 and the International Atomic Energy Agency. The EU should maintain high standards of nuclear safety, with a continual process of improvement. The Council agreed that communication with the public on these issues should be open and transparent.

Animal Health and Veterinary Laboratories Agency

Monday 28th March 2011 Written Statements

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

Today I am publishing the framework document for the new Animal Health and Veterinary Laboratories Agency (AHVLA) being created on 1 April by the merger of two existing Executive agencies, Animal Health and the Veterinary Laboratories Agency (AHVLA) which I announced on 29 June 2010.

The new agency will be an Executive agency of the Department for Environment, Food and Rural Affairs with the same remit as its predecessor bodies. In addition to its UK role and commercial activities it will help deliver the animal health and welfare strategy (GB) through regulatory and advisory activities and the provision of excellent science.

Copies of the framework have been made available in the Libraries of both Houses and it will also be placed on the Animal Health and Veterinary Laboratories Agency’s website.

Greater London Authority Transport Grant (2011-12)

Monday 28th March 2011 Written Statements

[The Secretary of State for Transport (Mr Philip Hammond)]

Following consultation with the Mayor of London, I have today determined the Greater London Authority Transport Grant for 2011-12 at £2,804 million.

This grant is provided by the Government to Transport for London to deliver transport services and investment in the capital, including London Underground.

In line with my 20 October 2010 letter to the Mayor “Spending Review 2010: TfL funding agreement”, £861 million of this grant is designated an investment grant to support delivery of the schemes and milestones, notably upgrade of the tube, set out in annex B of my 20 October letter, and the remaining £1,943 million is a general grant for the purposes of TfL.

Housing Benefit Shared Accommodation Rate

Monday 28th March 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

My hon. Friend, the Under-Secretary of State, responsible for welfare reform, Lord Freud of Eastry, has made the following statement.

The Government announced in last October’s comprehensive spending review that it would extend the housing benefit shared accommodation rate to people under the age of 35 from 2012. This rate currently applies to people under the age of 25 and reflects the costs of renting non-self-contained accommodation in the private sector where the tenant has exclusive use of a bedroom but shares other facilities such as a bathroom.

We intend to bring forward these changes by three months so that they start to take effect from January 2012.

The local housing allowance reforms, to be introduced from this April, cap the level of payments to a maximum of a four bedroom rate and reduce local housing allowance rates so that they are based on the 30th percentile of rents rather than the median. They also introduce overall caps on the rate of local housing allowance for one, two, three and four-bedroom accommodation. Existing customers will be given up to nine months transitional protection from these reforms starting from the anniversary date of their claim.



By introducing the shared accommodation rate changes slightly earlier, this will bring the timing of the shared accommodation rate change more closely into line with the local housing allowance reforms for existing customers. It will ensure that single people aged 25 to 34 reaching the end of their transitional protection period will experience at that point a single reduction in their housing benefit, rather than two separate reductions.



That is why we have decided to bring forward the shared accommodation rate changes. We will publicise these proposed changes through appropriate channels to make sure that those affected are aware of them in advance.

Equality 2025 (New Chair)

Monday 28th March 2011 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Equality 2025 is a non-departmental public body of publicly appointed disabled people, which was established in December 2006.

The group offers strategic, confidential advice to Government on issues that affect disabled people. This advice can include participation in the very early stages of policy development, or in-depth examination of existing policy. The group works with Ministers and senior officials across Government.

Rowen Jade chaired Equality 2025 from 1 December 2008 to 2 September 2010, when she sadly passed away. This recruitment exercise took place to find a candidate to continue Rowen’s good work.

The recruitment exercise was carried out in accordance with the Commissioner for Public Appointments’ code of practice. The quality of applicants for the post was exceptionally high. I am pleased to announce the successful candidate and new chair of Equality 2025 from l April 2011 is Dr Rachel Perkins.

Rachel Perkins has been a member of Equality 2025 since 1 April 2010. I am confident she will lead the group forward during an interesting and challenging time.

House of Lords

Monday 28th March 2011 Lords Chamber

Monday, 28 March 2011.

14:30

Prayers—read by the Lord Bishop of Ripon and Leeds.

Homelessness

Monday 28th March 2011 Lords Chamber

Question

14:36

Asked by

[Lord Sheldon]

To ask Her Majesty’s Government what is their estimate of the number of people sleeping rough in London; and what proposals they have to reduce the number.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

The latest statistics show 415 rough sleepers in London on any one night: 23 per cent of the national total. The Government are committed to tackling rough sleeping and preventing homelessness. We have maintained the level of the homelessness grant, with £400 million for local authorities and the voluntary sector over the next four years. A cross-departmental ministerial working group has been set up to address the complex causes of homelessness and to improve support for homeless people.

[Lord Sheldon]

I thank the noble Baroness for that reply because there is some improvement there, which I look forward to seeing. Sleeping rough can be a dangerous experience. One estimate is that rough sleepers have an average life expectancy of 42 years, and that people who sleep rough are 35 times more likely to commit suicide than the general population. It is difficult to get an accurate figure, because to protect themselves men and particularly women sleep in places where they might not easily be found. Is the noble Baroness aware that one estimate is that 3,600 people sleep rough in London at some point and that the London mayor was actually committed to ending rough sleeping by next year? What proposals are there for that claim to be put into practice?

[Baroness Hanham]

My Lords, I am aware of the seriousness of homelessness and of rough sleeping. That is why we are trying very hard to end the situation. As I mentioned in my opening remarks, a ministerial group is looking across the spectrum of Whitehall to see what needs to be done about homelessness to stop it completely. It hopes to report quite soon. I am sure the noble Lord knows that the mayor is also taking forward an initiative to try to ensure that people are not sleeping on the street for more than one night. The whole issue of criminal activity and attacks on people rough sleeping will come into the care that they will be given when they are being looked after.

[Lord Best]

My Lords, did the Minister see the report last week from Homeless Link, which suggested that one in six places in hostels for homeless people will have to go because of the cuts to the Supporting People grants? Will she join the Housing Minister Grant Shapps and campaigners in this field in urging local authorities, even in these difficult times, not to cut the Supporting People grants, which both cure and prevent homelessness?

[Baroness Hanham]

My Lords, local authorities have no excuse for cutting the Supporting People grants, which have by and large been preserved in cash terms—the reduction is less than 1 per cent. Although that is part of the unring-fenced grant, we still expect to see that amount of money put towards supporting people. Reductions in the number of bed spaces available cannot be attributed to that because the money is there to ensure that there is sufficient accommodation for people who are rough sleeping and are being taken into hostels.

[Baroness Doocey]

My Lords, I declare an interest as chair of the London Assembly. Is the money also going to provide any specialist help to the estimated one in three rough sleepers who are suffering from mental health problems?

[Baroness Hanham]

My Lords, the question of why people rough sleep certainly includes mental health problems. The mayor’s initiative to take people in immediately—along with the other hostels—ensures that they get access to both healthcare and support for moving on into housing.

[Baroness Dean of Thornton-le-Fylde]

Is there strong MoD representation on the interdepartmental committee? It is a known fact that ex-service personnel in particular have issues of homelessness and represent quite a considerable number of those sleeping rough.

[Baroness Hanham]

The answer to that is yes. The Ministry of Defence is represented on the cross-ministerial group. It is well understood that a number of the people who are on the streets are prisoners who have been let out without care. I know that attention is also being given to ensure that better care is given to prisoners before they leave prison, because it is clearly one aspect that is giving difficulty.

[The Lord Bishop of Ripon and Leeds]

My Lords, can local authorities really stop organisations distributing food to those in need on the streets? Will the Government ensure that charitable work that has been conducted by organisations such as St George’s Crypt in Leeds for generations is not destroyed or damaged by anti-humanitarian by-laws?

[Baroness Hanham]

My Lords, I think that the question refers rather opaquely to the proposal by Westminster to provide a by-law. That is a very specific initiative that Westminster is looking at, and it will involve a very small area. The Government have no intention of stopping soup runs elsewhere in the country. They are a very valuable assistance to people who are rough sleeping, although one has to be careful that they do not provide a magnet for those who are not rough sleeping but are just coming for cheap soup.

[Baroness Howe of Idlicote]

My Lords, could the Minister tell the House just how many young people and children are involved in sleeping out at this time? What special arrangements will be made to deal with them, not least in the light of all the trafficking that has been going on recently?

[Baroness Hanham]

My Lords, I do not know the specific number of children who are sleeping rough, but I hope that the answer is nil because it would be a very serious matter if there were more than a few. If I can find out the answer, I will of course let the noble Baroness know. I am very well aware of her interest and that of the House as a whole in the problem of the trafficking of children and women. I know that it will be very high on the police radar to ensure that any child found in the street is immediately taken in.

[Baroness Armstrong of Hill Top]

My Lords—

[Baroness Trumpington]

My Lords—

[Noble Lords]

Trumpington!

[Baroness Trumpington]

My Lords, would any of the excellent remarks that the Minister has made apply to those sleeping rough in Parliament Square?

[Baroness Hanham]

My Lords, I believe that the rough sleeping initiative will apply across London and the country.

Prisons: OPCAT

Monday 28th March 2011 Lords Chamber

Question

14:44

Asked by

[Lord Ramsbotham]

To ask Her Majesty’s Government what action they propose to take in response to the recommendation on gaps in the national preventive mechanism made in the first annual report of the United Kingdom’s Preventive Mechanism under the Optional Protocol to the Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, the Government welcome this report and are studying its recommendations carefully. MoJ officials are in discussion with Her Majesty’s Chief Inspector of Prisons, Her Majesty’s Courts Service and the Provost Marshal—Army—to look at any ways of closing gaps that have been identified.

[Lord Ramsbotham]

My Lords, I thank the Minister for that reply. I am very glad to see that there is a report because while this protocol was signed in December 2003, it was not until March 2009 that the national preventive mechanism was set up. It has an extremely important role, not just in prisons but with immigration detainees. The coalition, as noble Lords will know, has 18 members, but what is worrying them all is that in addition to the gaps that have been identified, about which the Minister spoke, there is a problem of resources. They have to resource those extra inspections from their own budgets. Can the Minister assure the House that cuts will not affect the operation of this protocol?

[Lord McNally]

My Lords, the Government are committed to the operation of this protocol. All the bodies covering it have had to take their share of cuts, but they should keep in mind the overall commitment to honour the protocol when they apply those cuts.

[Lord Corbett of Castle Vale]

My Lords, the Minister will be aware that the report also reflects concerns about the length of time that some detainees are kept in immigration removal centres. What is being done to keep their number to the absolute minimum for the shortest possible time?

[Lord McNally]

My Lords, there is concern, and the UK Border Agency regularly reviews all cases where people are detained under immigration powers. It will consider for release all those who have been assessed as presenting a low risk of harm to the public and/or who are unlikely to abscond. However, there will always be some detainees who need to be detained.

[Lord Dholakia]

My Lords, one area of concern is the fate of deportees when they are returned to their homeland. How often are the in-country reports updated to ensure that the political situation is taken into account? Secondly, what mechanism exists to ensure that they suffer no harm when they are returned?

[Lord McNally]

My Lords, that goes slightly wider than this Question. Rather than trying to busk it, I will make sure that I get the correct information and write to my colleague.

[Baroness Stern]

My Lords, is the Minister aware that one of the bodies in this mechanism is the Care Quality Commission and that last year it inspected 1,700 wards in hospitals where people are detained under the Mental Health Act? It was very concerned about children and adolescents being held in mixed wards because that threatened their privacy, their dignity and their safety. Do the Government have any plans to respond to that concern as a matter of urgency?

[Lord McNally]

Yes, my Lords. This is being kept under particular review since how young people with mental health conditions are being kept is of concern. As far as possible, the issues identified will be addressed.

[Lord Hunt of Kings Heath]

My Lords, perhaps we might return to the issue of resources. The noble Lord referred to the UKBA but would he acknowledge that, in the past few weeks, Ministers have referred to an increasing number of responsibilities being given to the UKBA at the same time as 5,000 staff are being taken off its head count? What we have not had is an explanation of how the UKBA is meant to manage these new responsibilities.

[Lord McNally]

Cuts are being made right across government. I will not go through the mantra of why that is so, as those on the noble Lord’s side know it only too well. However, all departments in which the cuts are being made are looking at how to maintain delivery under a much more difficult regime. That is one of the facts of life that we face as a country.

[Baroness Farrington of Ribbleton]

My Lords, would the Minister care to answer the second part of my noble friend’s question? How can the Government justify putting more responsibility on the UKBA when the Minister acknowledges that it is making reductions in effect by putting more responsibility on those staff? Surely a responsible Government would take account of this and not give extra workloads to those whose numbers are being severely reduced.

[Lord McNally]

The noble Baroness obviously sees herself as the minder of the Front Bench as she often pops up with questions that suggest, usually quite unjustifiably, that I have not answered the question. If she wants it more bluntly, we inherited an economic disaster. Every government department has had to take its hit, including mine; yet there are people within the public service grappling with those realities—in a way, may I say, that the last Government avoided. Those people will continue to do so, and I have every confidence that the UKBA will do that too.

[Lord Low of Dalston]

My Lords, getting back to the report to which the noble Lord, Lord Ramsbotham, referred in his original Question, the report raised significant concern about detainees with mental health problems, who often do not receive the support and treatment they need when in prison and are often held for long periods in segregation units. Even when they are held in more appropriate settings, they still experience difficulties in accessing mental health services. Can the Minister tell the House what efforts are being made to ensure that all detainees are able to access the services that they require regardless of where they are detained?

[Lord McNally]

My Lords, mental illness is being addressed by the Government in a new cross-government mental health strategy that was launched in February. On the segregation units, for prisoners for whom segregation is considered to be the only option an initial segregation health screening must be carried out within two hours of the prisoner segregation. In addition, for prisoners in an open mental health situation a mental health assessment must be undertaken within 24 hours. We are taking mental health in the prison population extremely seriously and we will be bringing forward positive proposals to divert those who need mental healthcare away from prison and into the appropriate conditions.

Railways: Cardiff Valley Lines

Monday 28th March 2011 Lords Chamber

Question

14:52

Asked by

[Lord Touhig]

To ask Her Majesty’s Government whether they will include the Ebbw Valley line in the development of the business case for the electrification of the Cardiff valley lines.

[Earl Attlee]

My Lords, the Department for Transport has committed to work with the Welsh Assembly Government to develop a business case for the electrification of the key valley commuter lines north of Cardiff via Pontypridd, Caerphilly, Treherbert, Aberdare, Merthyr Tydfil, Coryton and Rhymney, as well as the lines to Penarth and Barry Island to the west. There is no current proposal for electrification of the line from Newport to Ebbw Vale.

[Lord Touhig]

My Lords, I thank the Minister for his Answer but I am disappointed by it. By the way, the line at present does not go to Newport—it is Cardiff to Ebbw Vale. It opened on 8 February 2008 and in the first year carried 573,000 passengers, breaking all expectations. At weekends it has to double its capacity to carry passengers. It is the only one of the valley lines not to be included in this proposed business plan. Would he be prepared to facilitate a meeting with myself, himself, his Secretary of State and perhaps a couple of Members of the other place so we can put our case directly to Ministers?

[Earl Attlee]

My Lords, I am aware of the success of the lines. The noble Lord asked about a meeting. Yes, I will facilitate that. I think noble Lords need to understand that electrification can have a good business case when the existing rolling stock needs replacing and the frequency of vehicle movements is relatively high. That does not yet exist on the Ebbw Vale line.

[Baroness Randerson]

My Lords, the announcement of the proposed electrification of the valley lines was strongly welcomed in Wales but there was some disappointment that the electrification of the First Great Western line did not go beyond Cardiff. I was very pleased to hear that the Government are keeping that under review. Can the Minister give us some detail of how that review will take place?

[Earl Attlee]

My Lords, Governments keep everything under review. It is important to understand that the rolling stock that will be used on the Great Western line is the bi-mode IEP train. The savings in time from Cardiff to Swansea will be minimal because the maximum speed on that line is severely restricted. Therefore, there would be no benefit from electrification in the short term.

[Lord Berkeley]

My Lords, given the success of the service on the Ebbw Vale to Cardiff line, why are there no passenger trains from Ebbw Vale to Newport, for which there must be a big demand? I believe that freight has been running on the line for many years. I declare an interest as chairman of the Rail Freight Group.

[Earl Attlee]

My Lords, the noble Lord makes an important point. As I understand it, although there is a freight line to Newport, the signalling is not up to the required standards for passenger trains. Under the new signalling project, modern signalling has been provided for but not fitted. Specifying train services is a matter for the Welsh Assembly Government, so if they want to specify that there will be passenger train services from Ebbw Vale to Newport, they can do so.

[Lord Brookman]

I declare an interest as someone who was born in Ebbw Vale, an event that was followed by the Second World War. I recall the final march about the closure at Ebbw Vale—the noble Baroness, Lady Kinnock of Holyhead, and her dear husband were there and her remarks stay with me. Does the Minister agree that commuting from Ebbw Vale to Cardiff and subsequently, I hope, to Newport is of paramount importance for the people who live in that area, especially the young people, to get jobs?

[Earl Attlee]

My Lords, the noble Lord is absolutely right. Most of the valley lines are going to be electrified for precisely the reason that he describes.

[Lord Roberts of Conwy]

Will my noble friend bear in mind the increased attractiveness of the valleys in terms of enterprise zones and the promotion of work opportunities if the valley lines are electrified?

[Earl Attlee]

My Lords, yes.

[Baroness Morgan of Ely]

My Lords, will the Minister explain this business about being “under review”, what the timetable of the review of the electrification of the line from Cardiff to Swansea would be and why he has not done a complete business case on electrifying that line?

[Earl Attlee]

My Lords, there are numerous possible electrification schemes and we have to go for those that offer the best business case. At the moment, there is not a good business case for electrifying the line all the way to Swansea; there are much more attractive schemes elsewhere. We cannot do everything all at once.

[Lord Davies of Oldham]

My Lords, no one is asking the Minister to do everything all at once. He will recognise that it will be a considerable time before any of this electrification programme takes place, so will he take seriously the possibility that the Ebbw Vale line may well develop in such a way as to merit inclusion in the projected electrification of the valley lines? There is no doubt about the economic necessity of improved transport links between the valley towns and Cardiff.

[Earl Attlee]

My Lords, I agree with much of what the noble Lord says, but it is important to understand that when there are relatively few diesel trains running, the savings that you can obtain by electrification are relatively small. At some point, the demand on the Ebbw Vale line may be sufficient to justify electrification.

Energy: Shale Gas

Monday 28th March 2011 Lords Chamber

Question

14:59

Asked by

[Lord Trefgarne]

To ask Her Majesty’s Government what are the likely implications of the discovery of shale gas on United Kingdom energy policy.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, exploration for shale gas has only recently commenced in the UK and no commercial production has yet been proven. In a recent study for DECC, the British Geological Survey estimated that there could be worthwhile shale gas resources in the UK. However, on current knowledge, it is not possible to estimate the recoverable reserves and therefore it is too early to assess how shale gas in the UK might impact our energy policy.

[Lord Trefgarne]

My Lords, I thank my noble friend for that reply. However, are the discoveries so far not sufficiently encouraging to provide at least the potential for future energy policy? Will he take that potential into account in making his future plans?

[Lord Marland]

That is a very topical question. We hope that fracking—I use the word, which you might think has come from “Call My Bluff”, advisedly—is about to start in Blackpool. We should have the results of that this week. It is being observed. Once we have the results, we will have further study and a greater awareness of what is potentially there.

[Lord Teverson]

My Lords, is the Minister satisfied that fracking is environmentally safe? It has been suggested in parts of the United States that it can cause water pollution. Is my noble friend happy that that is not the case, certainly for the immediate Blackpool operation?

[Lord Marland]

I have just been asked by those on my own Benches what fracking is, so I will further the “Call My Bluff” scheme, if I may. It is hydraulic fracturing—sending in water and chemicals to discover whether there is shale gas there. My noble friend’s question refers to whether the water comes out polluted. It is therefore very important that the Environment Agency is on hand to establish whether it does.

[Lord Reay]

Is the Minister satisfied that the announcement in the Budget of a floor price for carbon, to be introduced from 2013, will not discourage investment in this extremely promising source of abundant and cheap energy?

[Lord Marland]

My Lords, it is abundant and cheap in America, where a great amount of it has been found—three times the supply, in fact. However, we have different problems here in the UK. We have a high population density and are unsure of the reserves. There are all the planning issues that go with high population density. Therefore, it will not necessarily at this point mean a huge surge in the gas supply in this country. However, the point that my noble friend makes about taxation and the carbon floor price will be taken into account with this technology.

[Lord Jenkin of Roding]

My Lords, the noble Lord, Lord Teverson, rightly mentioned water pollution. Is one of the problems of exploiting shale gas in a country such as ours not that it requires huge quantities of water? When we are likely to face water shortages in the near future, would that not seem to be rather an unwise thing to do? Is it not clear that the biggest consequence of shale gas will be the exploitation of the enormous American supplies, which are already having an impact on the global gas price?

[Lord Marland]

My noble friend makes a point about the competition that American shale gas has brought to the gas supply. That is very valuable to us now that we are net importers of gas. We hope that it will compress the price of gas. As to water, it has been pointed out that we are an island and there is a lot of water around us. I do not think we will end up with a huge water shortage, provided that we use the right water.

[Lord Naseby]

Can my noble friend indicate what other parts of the United Kingdom are undertaking exploratory work in shale gas?

[Lord Marland]

My Lords, they are largely in the area around Blackpool. I understand that there will be some investigation in Southport and on that coastline. I am not a geologist but it presumably links in some form to Morecambe Bay. That is largely the area that is being investigated.

[Baroness Smith of Basildon]

I know the Minister is aware that there are concerns, as we have already heard, that there might be risks associated with obtaining shale gas. Why then have the Government not waited for the Select Committee in the other place to report fully on the inquiry that it is undertaking at present, or for the report from the US Environmental Protection Agency on the risk to humans and the environment? That information would have been very helpful to the Government before proceeding. To reassure people who have those concerns, what evidence does the Minister have that it is safe to proceed?

[Lord Marland]

We have evidence in the United States, as has been referenced. This has been going on for some time, so it is a proven technology. As I mentioned, the Environment Agency is on site to ensure that the process is taking place properly, so I am very comfortable with that. This is not a new technology. We have been using the fracking process in gas development for a very long time, so we have the safeguards in place.

[Lord Oxburgh]

Does the Minister agree that some of the difficulties with shale gas exploitation in North America and elsewhere have arisen because of an unsatisfactory regulatory regime or through regimes being put into place too late? Is he satisfied that the existing regulatory regime that would cover shale gas exploitation in this country is adequate and derives full benefit from the experience of shale gas exploitation elsewhere?

[Lord Marland]

The noble Lord is a great expert in this field. However, we have been exploring gas in this country for many years and have a very long knowledge of it. We have extremely sound regulation, but that does not mean that we are complacent about it. We have a very sound industry structure that has stood the test of time, and a great deal of knowledge.

Access to Justice Act 1999 (Destination of Appeals) (Family Proceedings) Order 2011

Monday 28th March 2011 Lords Chamber

Family Procedure (Modification of Enactments) Order 2011

Data Protection (Subject Access Modification) (Social Work) (Amendment) Order 2011

Motions to Approve

15:05

Moved By

[Lord McNally]

That the draft orders laid before the House on 3 and 28 February be approved.

Relevant documents: 16th and 17th Reports from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 23 March.

Motions agreed.

Offshore Chemicals (Amendment) Regulations 2011

Monday 28th March 2011 Lords Chamber

Offshore Petroleum Activities (Oil Pollution Prevention and Control) (Amendment) Regulations 2011

Renewables Obligation (Amendment) Order 2011

Motions to Approve

15:06

Moved By

[Lord Marland]

That the draft regulations and order laid before the House on 10 January and 9 February be approved.

Relevant documents: 12th and 16th Reports from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 23 March.

Motions agreed.

Tax Credits Up-rating Regulations 2011

Monday 28th March 2011 Lords Chamber

Guardian’s Allowance Up-rating Order 2011

Guardian’s Allowance Up-rating (Northern Ireland) Order 2011

Motions to Approve

15:06

Moved By

[Lord Sassoon]

That the draft regulations and orders laid before the House on 15 February and 9 March be approved.

Relevant documents: 17th and 18th Reports from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 23 March.

Motions agreed.

Road Vehicles (Powers to Stop) Regulations 2011

Monday 28th March 2011 Lords Chamber

Motion to Approve

15:06

Moved By

[Lord Shutt of Greetland]

That the draft regulations laid before the House on 1 February be approved.

Relevant document: 15th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 16 March.

Motion agreed.

Public Bodies Bill [HL]

Monday 28th March 2011 Lords Chamber

Report (2nd Day)

15:07

Schedule 1 : Power to abolish: bodies and offices

Amendment 20A

Moved by

[Lord Warner]

20A: Schedule 1, page 16, line 23, leave out “Youth Justice Board for England and Wales.”

[Lord Warner]

My Lords, I rise to move the amendment in my name and those of the noble Lords, Lord Ramsbotham and Lord Elton. The right reverend Prelate the Bishop of Ripon and Leeds intended to add his name to the amendment but just missed the deadline for the Marshalled List. I am sure that the House will want to hear his views on this matter at a later stage.

Across the Benches Members of this House are saying that the Government are wrong to seek the abolition of the Youth Justice Board. The same position appertained in Committee, with no speaker supporting the Government and five former Ministers, including three from the coalition Benches, saying that the Government were wrong about this. I will not repeat all the arguments made in Committee other than to remind the House that a series of independent reviews have said that the Youth Justice Board has done a good job, with the PAC recently saying that there was no foundation to the Government’s case for abolition.

The nub of the Government’s argument is that the YJB has done its job and youth justice can be left to local youth offending teams and Ministry of Justice civil servants and Ministers. The five former Ministers made it clear in Committee that leaving this specialist programme delivery work to generalist civil servants who move from job to job carries no credibility in terms of good government. Depending on locally financed YOTs, unaided at this time of severe financial retrenchment, is a recipe for youth justice sinking once again to the bottom of the pile, in terms of priorities, which is why the Youth Justice Board was set up in the first place.

Since the Committee stage, four of us—the noble and learned Baroness, Lady Butler-Sloss, the noble Baroness, Lady Linklater, the noble Lord, Lord Elton, and myself—had a meeting with the Minister and his colleague, Mr Crispin Blunt, who is responsible for youth justice matters. It would be a masterpiece of understatement to say that this was not a meeting of minds, despite the best endeavours of the noble Lord, Lord McNally, who, throughout this sorry saga, has tried to retain a balanced and helpful stance. Particularly worrying has been the absence of any sensible ministerial response to the incisive questioning of the noble Lord, Lord Elton, on why ministerial powers under the Crime and Disorder Act 1998 for holding the YJB to account are insufficient for discharging ministerial responsibilities to Parliament and the public.

In Committee, I teased the noble Lord, Lord McNally, about falling into bad company. I have to say that the more I learn of the Government’s thinking on this issue, the more it seems not unlike the stories of Richmal Crompton in Just William and the Black Hand Gang. It is at about that level of intellectual competence. In Committee, several Members set out the YJB’s success in reducing reoffending and the entry of juveniles into the criminal justice system. Since then, new figures on reoffending have been placed in the public arena. They show a further reduction in the number of juvenile reoffenders by 0.4 per cent in one year between 2008 and 2009—a number that continued in that downward trajectory throughout 2009.

Alongside these achievements, the YJB has significantly cut the number of young people going into custody. The board’s abolition puts all this at risk. Given my considerable experience in this area, I say that the abolition of the YJB is likely to mean an increase in the number of young people being placed in custody unnecessarily—at great cost to the taxpayer and likely damage to young people.

The Government have totally failed to make the case for the abolition of the YJB and we should ask them to think again by passing the amendment. That is my overwhelming preference, and it is in the best interests of vulnerable young people and of the public purse. However, if it turns out that we are unable to achieve this, the second amendment in the group, Amendment 21B, becomes important, because it prevents the YJB’s functions disappearing into the maw of the Ministry of Justice and, probably in reality, into the maw of NOMS, without any clear focus on youth justice issues. Having a separate agency with two independent non-executives is better than any ministerial warm words, particularly when one realises that the Ministry of Justice has accepted this model for prisons and the Courts Service. We should retain the Youth Justice Board and its name should be removed from Schedule 1. I beg to move.

[The Lord Speaker (Baroness Hayman)]

I have to inform the House that if the amendment is agreed, I cannot call Amendment 21B, by reason of pre-emption.

[Lord Ramsbotham]

My Lords, I rise to speak to the amendment and to echo what the noble Lord, Lord Warner, said about Amendment 21B. I am conscious that one cannot repeat arguments made in Committee. I, too, remember the remarkable unanimity around the Committee.

I am grateful, as before, to the noble Lord, Lord McNally, for the efforts he made to continue the discussion. I am only sorry that I could not attend that meeting, but from what I have heard about it, and from a letter that the Minister wrote to the noble Lord, Lord Elton, which I hope he will forgive me for quoting, I believe that what is at the heart of the Government’s proposal is a fallacy that for years has influenced the consistent failure of the criminal justice system—namely, that policy and operations are one and the same thing, rather than one being the practical deployment of the other. This was brought home to me when a senior official told me that she wished that I would stop talking about strategy. “We don’t need strategy; all we need is strategic direction,” she said. I asked what that meant. “Top down, of course,” she said. That is nonsense. Having something said from the top down does not make it either strategy or strategic direction.

15:15

I do not dispute that the youth justice system, like any other system, requires cross-departmental working based on one strategy and binding on all concerned. I do not dispute that the Minister for Prisons and Probation, Crispin Blunt, the Permanent Secretary, Sir Suma Chakrabarti, or the director-general of the justice policy group, Helen Edwards, are committed to leading and maintaining a dedicated focus on youth justice within the Ministry of Justice, and to ensuring that the necessary skills and expertise are retained. However, these are inward and invisible signs relating to the production of policy that they are responsible for overseeing. What is also needed, as in all effective systems, are outward and visible signs of the delivery of policy in the form of operations that must also be overseen.

This confusion between policy and operations is reflected in Crispin Blunt's letter to the noble Lord, Lord Elton, in which he argues that,

“it is not efficient or sensible to have this unique oversight of part of the offender/potential offender journey through the justice system … A unique body for one part of the journey does not help overall policy formulation … Bodies for every group deserving of special oversight (women, foreign nationals, BME, addicted, mentally ill, learning disabilities, young adults etc) would not improve but complicate matters. My time and that of senior officials would be spent even more managing these relationships, not trying to make a coherent system work for all”.

Very few people undertake a journey through the justice system. The majority undertake a journey through only one part, which is why separate programmes need to be made for these parts within the whole. Tell the chief executive of a business that it is not efficient or sensible to have separate departments for finance and sales. Tell the chief executive of a hospital that there is no need for special oversight of surgery, paediatrics, mental health or pharmacy because that complicates matters. Tell the headmaster of a school that you do not need separate maths, science or language departments because it takes too much time to manage the relationship between them. Tell the Chief of the General Staff that you do not need directors of armour, artillery, engineers, communications or medical services because their expertise does not help overall policy formulation. Come on.

This discloses a complete lack of understanding of how systems work in the real world. Systems work where every element within them is co-ordinated into a coherent whole, based on a binding strategy—and where each, as well as the whole, is separately led. Ministers and senior officials who suggest that they might have to spend time managing relationships between different parts are disclosing that their system is incoherent. If there was a proper chain of responsibility and accountability, they should only have to deal with someone who was responsible and accountable to them for making the system work. That person will require machinery to enable him or her to do that, but its working will be nothing to do with Ministers or senior officials. If it is, they are guilty of the prime sin of senior managers, which is micromanagement. They are responsible for ensuring that the whole is directed: in other words, for ensuring that everyone knows what is to be done. They are not responsible for the minute details of process—in other words, the minutiae of how—which regrettably has become the practice in the recent past because so few Ministers and senior officials, well versed in how, seem to know how to do the what.

The Youth Justice Board may not be the complete answer to the operational part of the youth justice system, as has been freely acknowledged. Looked at holistically, it includes prevention as well as cure and after-care, and much of its responsibility rests with local government. If it is to be made to work effectively, bearing in mind how many different departments and organisations are involved, it must have an overarching strategy and a coherent structure in which someone is responsible for oversight of policy and someone for oversight of operations, as every other working organisation has.

It may be that after the consultation on the Green Paper Breaking the Cycle, the Ministry of Justice will decide to manage the youth justice system differently. But, until that discussion has been held, and until the operation structure to sit alongside the announced policy structure is confirmed, it makes little or no sense to do away with the body that not only should play a key role in those discussions but which has been responsible for introducing the acknowledged success stories, such as the youth offending teams, the reduction in numbers in custody, the reduction in the reconviction rate and providing direction to the previously undirected children’s custody provision. However committed, no Whitehall Minister or official could have achieved that.

These are testing times for the criminal justice system with cuts coming on top of already inadequate provision. I know that the Public Bodies Bill results from the Government’s obsession with the alleged plethora of public bodies that seem to be obfuscating responsibility and accountability. However, here it is a Whitehall ministry and not a public body that is guilty of obfuscation. Obviously the Government cannot do away with the ministry but they can do away with the proposal—as they have done, thankfully, for the Security Industry Authority and Schedule 7. I believe that when they think through how the minutiae of a coherent youth justice system is made from so many different elements, they will be thankful that they retained a Youth Justice Board that is responsible and accountable for making it work. I therefore very much support the amendment.

[Lord St John of Fawsley]

With the leave of the House, I hope that I may ask this question. Does the Minister have any idea why we are not having a Statement on the events of Friday, which has prevented many of us expressing our wholehearted support for the bravery and wisdom of the police and the staff of this House in handling that situation?

[The Earl of Listowel]

I echo the many tributes paid in Committee to the Minister and his colleague, Crispin Blunt, for the Government’s overall policy in this area. I strongly support and welcome the amendments from my noble friend Lord Ramsbotham and the noble Lord, Lord Warner. I fear that in this area I am forced to disagree with the Government’s direction of travel.

On the matter raised by my noble friend about strategic leadership in this area, the children involved have very complex needs. As vice-chair of the All-Party Parliamentary Group on Children and Young People in Care, I am well aware that a quarter of these children will have come out of local authority care. Indeed, 50 per cent of the girls have been in local authority care. With the reduction in numbers of children coming into custody, we are left with a hard core of young people with even more complex and challenging needs. I should also say that I am a patron of Voice, an advocacy charity for young people, which goes into secure training centres and young offender institutions.

I was glad to hear of the discussions that have taken place since the Committee stage. The Government will be bearing in mind the contributions of the noble Lord, Lord Newton of Braintree, and the noble Viscount, Lord Eccles. We heard in Committee that more than 1,000 fewer young people have been taken into custody in the past three years. To keep a young person in a young offender institution costs £120,000 a year; to keep a young person in a secure training centre costs £160,000 a year; and to keep a young person in a local authority secure children’s home costs more than £200,000. Therefore, many hundreds of thousands of pounds are saved by the successful regime of the Youth Justice Board in reducing the numbers of children in custody.

That money is being reinvested in making the secure estate more effective at rehabilitating young offenders. I recently visited the Wetherby young offender institution and was particularly interested to see its Keppel unit, which is for the most vulnerable young people. I see the right reverend Prelate nodding to indicate his knowledge of the unit. There, for instance, the boys have showers in their own rooms. Normally there are collective showers, but that easily gives rise to bullying and intimidating behaviour. The boys are extremely proud to have a shower of their own; they arrange their shampoos of various kinds. They also have a very good relationship with the prison officers because the ratio of prison officers—so often criticised by my noble friend when he was chief inspector in previous reports on prisons for young people, with a large number of young people for a few prison officers—has been turned around at Keppel. That is so important to the rehabilitation of those young people.

I fear that I am speaking for too long, but the issue has been raised of the need for strategic leadership in this area. Secretaries of State and Ministers have too much to do to give full attention to that needy group of young people and to make the difference in their lives. The chairman of the Youth Justice Board can do just that and has been doing so. She invited the children's directors and chief executives of the local authorities in the north-east of England, in Manchester, Stockport, Rochdale and Wigan, to visit the young offender institutions to see for themselves what happens there. I spoke to one of the deputy chief executives following his visit. He could now see clearly his responsibility as the leader of a local authority to help resettle those young people, because the holy grail of success in this area is what happens when young people leave custody. They need to be found appropriate accommodation. Following the Youth Justice Board chairman’s work, there is now a consortium in the north-east; those local authorities are working together. They have hired the charity Catch 22 to supervise proper accommodation for those young people.

I strongly support the amendments and hope that the Minister will consider accepting them today.

[Lord Woolf]

My Lords, I hope that your Lordships will forgive me, because I have not spoken to the amendment at earlier stages; it was not possible for me to do so.

I echo what has already been said about the care which the Government have taken to reconsider other parts of the Bill and to take into account comments made by those who have had certain experience in the area. I am sad indeed—because I thought that the result might be otherwise—that, so far, the Government have not felt able to change their approach towards the Youth Justice Board.

I speak from personal experience in various capacities, which perhaps I should declare. One is from my concern with criminal justice as, first, a barrister and then a judge. The second is because I have recently become chairman of the Prison Reform Trust. The third, and most important in this context, is because I was involved in—indeed, I led—the Strangeways investigation and report. I have over many years been so disappointed that initiatives which have proved themselves to be successful have not been able to grow and develop to fulfil their full possibilities. My experience goes back to the time before the Youth Justice Board’s creation and before its leadership by the noble Lord, Lord Warner.

I can only say to the House, as sincerely and as emphatically as I can, that this initiative has been wholly salutary. It managed to change the whole approach to a part of the criminal justice system—and, if I may say so, perhaps one of the most difficult and important parts of the criminal justice system—in a way which gave new hope to all those who were concerned for this area of our justice system. The best test of the innovation is to ask, “Did it work?”. I would not say that it was always perfect—no change would be—but the balance sheet would show a huge improvement as a result of the Youth Justice Board.

I would urge as strongly as I can that the House consider the importance of this matter, as I am sure that the Government intend to do. However, it would be sacrilege if, whatever the motives put forward, we took out of the criminal justice system something that works, and introduced something that has not worked and has not been tried. I therefore hope that before such a result is brought about, there will be at least the pause for which the noble Lord, Lord Ramsbotham, has asked, to see how matters are dealt with in the Green Paper. I have to say that it really would be sacrilege to rush in and do something which is untried when the experience indicates that we cannot afford to do without the positive influence of the Youth Justice Board.

15:30

[Baroness Linklater of Butterstone]

My Lords, it gives me enormous pleasure to follow my hero, the noble and learned Lord, Lord Woolf, who never speaks anything but words of the deepest wisdom.

Since we last debated the future of the Youth Justice Board, the folly of the Government’s plan to dismantle it seems ever more misjudged, unnecessary and worrying. It is misjudged because the work of the YJB is highly specialist, dealing as it does with the most damaged, difficult and needy children in our community, who must be managed by people with specific experience and expertise, as they have. Children are not—as I said in Committee—small adults and should definitely not be managed by civil servants from NOMS in the MoJ who just do not have the expertise and whose work is with adults, not children.

It is unnecessary because, as we heard so eloquently in Committee from the noble Lord, Lord Elton, the ministerial powers of oversight, responsibility and accountability, which has been an area of central concern to the Minister, Crispin Blunt, are already in place in statute, giving him the power to make changes, decisions and appointments and other wide-ranging powers of overall control.

It is worrying because the desire to abolish the YJB betrays a determined failure by the Government to appreciate just how important, effective and significant this work is with children and young people who offend or are at risk of offending. This work by the YJB over the past few years has resulted, as we have heard, and as the most recent figures show, in a further drop in reoffending by young people. It is an extraordinary achievement.

This failure is exacerbated by a wish to make a decision which is driven by administrative concerns, convenience and cost-cutting—the input side of the balance sheet—rather than recognising and valuing the outcomes now being seen by the YJB, whose work has truly taken off in the past few years and is now achieving real results in terms of properly embedding and co-ordinating the youth offending teams, reducing reoffending and offending through prevention and diversion schemes, joint publications of inquiries, the oversight of the setting of maintenance of standards of professional practice, and much more.

This Bill has rightly concerned itself with rationalising those public bodies which have developed over the years with bureaucracies growing, mopping up precious government resources and duplicating effort which could be absorbed in existing government departments. The tests against which an organisation is validated therefore are that it performs a specific, necessary public service, independently establishes facts and is politically impartial. The YJB's success against these tests is beyond doubt, just as its value is clear to the many bodies with which it works, several of which were quoted in Committee. I will add the words of the Children's Commissioner, who represents the voice of children in this country. She says:

“It is imperative that responsibility for the custodial component of the youth justice system is held by an agency that understands and appreciates the distinct and special needs of children and young people, particularly those who are vulnerable”.

It is because these tests are clearly being met and because of its track record of success and the considerable savings that are being made to the Exchequer through the success of diversion and prevention work, as well as because of the judgment of specialists in the field, that I believe that the YJB clearly should not be abolished.

Furthermore, the YJB itself is quite prepared to look at how to accommodate itself to the administrative thrust of government thinking. It is quite able to see a modus vivendi within the MoJ as an executive agency, with its specialist focus maintained, its separate identity from NOMS and its ability to work at arm’s length from government, just as NOMS and other organisations already do. It is a mystery to me why this option has been resisted so far by the ministry and why it appears that my dear noble friend the Minister and, particularly, his colleagues in the Commons are hell-bent on reinventing the wheel in the name of some perceived convenience. The idea that the work of the YJB could be taken over wholesale by Ministers and senior officials is totally unrealistic, particularly when it has taken the YJB years to reach its current levels of expertise. We have already heard from the noble Earl, Lord Listowel, about the marvellous Keppel unit at Wetherby YOI. It demonstrates the extent to which specialisms within the specialist provision of the children's estate are so necessary. It is probably saving lives in the process. I just hope and pray that we are not being served notice that other groups in the criminal justice system not currently at issue but seriously important, including women and the mentally ill, can expect no future special attention, and that the reports of the noble Baroness, Lady Corston, on women and of the noble Lord, Lord Bradley, on mental health, whose recommendations have had wide support, are now to be shelved.

We should acknowledge around this House and in the country at large our overriding duty of care for the youngest in our society who need us most and should remember our responsibilities to our most vulnerable children by ensuring that their needs can continue to be met by the very organisation which has the knowledge and skills. To do otherwise would be a serious dereliction of our collective duty. I wholeheartedly support the amendment.

[Lord Beecham]

My Lords, I start by tendering an apology to the Youth Justice Board and to your Lordships' House for a figure I gave in an earlier debate concerning the number of deaths of young offenders in custody. Those figures had improved substantially in recent years, but I was not aware of that fact. That improvement was in good part, of course, due to the efforts of the Youth Justice Board.

One might have thought that a Bill that deals with part of the justice system would rest upon a sound evidential base. Where is evidence to support the proposal contained in this Bill for the abolition of the Youth Justice Board? Such evidence as there is appears to point entirely the other way. As my noble friend Lord Warner and others have said, the reduction of about one-third in the number of young offenders in custody, in those who reoffend and in those who do not come before the courts at all because of policies of prevention and diversion, is testament to the successful approach of the board. That has been supported by a number of reports. The noble Earl, Lord Listowel, referred to the work of the Youth Justice Board in conjunction with local authority services, which was acknowledged as far back as 2004 when the Audit Commission reported.

Of course, the Audit Commission is also under sentence at the moment, although we have yet to see legislation about that. Even at that stage, the Audit Commission reported:

“The new structures work well. The YJB sets a clear national framework … and takes a lead role in monitoring progress”.

It also emphasised the role of the young offender teams. It stated that they,

“are critically placed between criminal justice, health and local government services to co-ordinate and deliver services to young offenders and the courts”.

A report commissioned by the previous Government concluded:

“Overall, the YJB earns its place as a crucial part of a system which aims to tackle one of the most serious social policy issues in this country”.

Most recently, there have been reports from the National Audit Office and, as my noble friend Lord Warner, mentioned, the Public Accounts Committee in terms of the recent statistics on the reduction of offending by young people. In a report published only three months ago, the National Audit Office declared:

“The Board … has been an effective leader of efforts to create and maintain a national youth justice system with a risk based approach, and in recent years key youth crime indicators have been falling substantially”.

The Public Accounts Committee report, which was published only six weeks ago, concluded:

“The youth justice system has been successful in reducing the number of criminal offences … an achievement in which the Youth Justice Board has played a central role”.

It continued:

“The planned abolition of the Youth Justice Board has arisen from a policy decision and not as a result of any assessment of the Board’s performance”.

The board has brought together a whole range of organisations and institutions working in youth justice. It has developed a substantial programme of secure estate commissioning. Indeed, it has been so successful that it decommissioned 900 places recently. Value for money is certainly very much part of its agenda. A range of other initiatives has been taken. Those initiatives range from the piloting of YOTs, as we have heard, to the delivery of the persistent young offenders’ pledge to halve the time from arrest to sentence, working with the parents of young offenders and much else besides.

Against that background, it is disconcerting that the Government still are unclear about how the functions of the board will be discharged in the future. In particular, there is widespread concern in your Lordships’ House and beyond about the potential transfer to the National Offender Management Service, which deals with adult offenders. NOMS, to put it mildly, has a chequered record. I would invite the Minister in his reply to assure the House that, if the amendment fails—I certainly hope that it will not—it would not be the Government’s intention to transfer the Youth Justice Board’s functions to the National Offender Management Service.

As my noble friend Lord Warner indicated, should the amendment fail, as a backstop, an agency would be a better solution. But given the pressures on the department, its ministerial members and the officials working within it, it is inconceivable that the Young Justice Board’s functions would be adequately discharged if they are simply transferred into the department. The independence, to a degree, that even an agency status would confer and, in particular, the separation of youth justice from adult justice and NOMS must be a precondition of any organisation of our services for young offenders.

15:45

[The Lord Bishop of Ripon and Leeds]

My Lords, I, too, support Amendment 20A. It is the experience of a number of Members of this Bench that the Youth Justice Board has been among the most effective of the executive agencies since 1997. I also thank the noble Lord, Lord Warner, for his persistence in helping us to explore the qualities of the board and the opportunities that it has taken to encourage work with both young offenders and those in danger of becoming young offenders. From the perspective of this Bench, that experience has been held together by the right reverend Prelate the Bishop of Liverpool, who is very sorry that he is unable to be with us today to continue the debate.

Many of us have experience of YOIs and the work being done in them, overseen and encouraged by the Youth Justice Board. The board is ideally placed to help young people through programmes such as the Youth Inclusion Programme and the use of youth offending teams. It has been at the forefront of encouraging the restorative justice procedures about which we have spoken often in this House and which deliver high levels of victim satisfaction as well as positively influencing offending behaviour.

The oversight and commissioning of custody places for young people are highly specialised activities. I do not know whether other Members of your Lordships' House have visited Wetherby Young Offender Institution, but it was good hear the noble Earl and the noble Baroness speak of developments there because it is on my patch and I know it quite well. One gains a real sense that it is exploring ways forward for the young people in its care—I would say the same of the other YOI, that at Deerbolt near Barnard Castle. The young people there need the specialist attention which the Youth Justice Board can and does provide. I, too, do not argue that the Youth Justice Board is perfect and I have on occasions argued with it, but I know that it offers specific attention to those young men who often have both disrupted and disruptive lives.

Surely the YJB is among those public bodies which continue to make a real difference to the health of our nation. If the Minister, to whom I, too, am grateful for his own part in wrestling with this issue, is not moved by that fact, will he not accept that, in purely financial terms, this body is saving millions of pounds in terms of the number of young people who are being kept out of our young offender institutions as well as of those within them who are being helped and encouraged towards a future life out of the criminal system?

[Lord Newton of Braintree]

My Lords, I am feeling rather good because, in the course of the past 20 minutes or so, I have given way, modestly, to every other section in the House, including the Bench immediately in front of me. So I think that I deserve some credit, and I am looking for it particularly from the right reverend Prelate.

I have only a modest speech to make, which is why I refrained earlier. I want just to make it clear to my noble friend on the Front Bench that those of us who expressed some concern at the previous stage have not melted into night but retain some concern. In my experience, which is not inconsiderable, even civil servants have a completely different mindset if they are serving a dedicated outfit, whatever is said about its independence, outside the department than if they are simply part of the department’s mainstream. It is an underestimated argument in some of these debates.

Lastly, I ask again a question that I asked on the previous occasion, and I shall try to do so even more crisply—it is the question that the noble Lord, Lord Warner, and others have adumbrated: if youth justice was, by common consent, a mess before and has been made better by the Youth Justice Board, what is the case for believing that it will stay better if it goes back pretty much to where it came from in the first place?

[Lord Elton]

My Lords, I have moved behind my noble friend not to threaten him but because my voice is very uncertain and I think that otherwise he will not hear what I have to say. I start with an observation on the contribution of the noble Baroness, Lady Linklater. She rightly said that we owe it to the young people who commit grievous crimes to do the best for them and to give them proper, constructive lives. However, I would say that we also owe that to the communities that they wreck and threaten and the families that they disrupt, and to a large extent that is the rest of us. Therefore, this is a popular, not a specialist, subject.

My second prefatory remark is that I was glad to notice that the other amendment in the group, Amendment 21B, has not really been dealt with because, to my mind, it is no substitute. If your Lordships, in the regrettable event of this amendment not being conceded or carried, were to accept that amendment, it would be wise but they would be gaining one slice, or at most two, out of a yard loaf. I shall keep it as short as that.

What have been, and are being, advanced as the reasons for getting rid of the YJB? The first one that we had right at the beginning was that Ministers should be directly responsible for what happens to young people in custody. To encapsulate what I have said before, Section 41 and Schedule 2 of the Crime and Disorder Act 1998 specifically say that the Minister is to decide who the members of the YJB are, who is to be the chairman, and who is to be sacked—and he can sack them with or without reasons, according to what is appropriate. That legislation says exactly what the YJB will do under 12 headings and in great detail, which one might think would tie the Minister’s arm behind his back. However, we then find that he can alter, add to, remove or change all the members at will with a statutory instrument. The Minister says what the members do, whom they do it to, how they do it, what they get for doing it and what they can spend on doing it, and, with those powers and those in local government legislation, he is capable of transferring those functions away from himself or, under the schedule, sharing them.

The second argument was that Ministers should be responsible publicly for what they do. The Minister is responsible for everything that I have set out, and also, under paragraph 8 of Schedule 2 of the Crime and Disorder Act, he has to lay before Parliament the YJB’s annual report so that Parliament is aware, in detail, of what he has been doing and can ask him to defend it—or praise him, if that be the case, although I notice that it is rare that when Parliament wants to praise the Minister it has a debate on an unnecessary measure.

According to the letter quoted by the noble Lord, Lord Ramsbotham, the board members have full responsibility for the purchase of secure accommodation for children. I should tell your Lordships that I had that responsibility when I was a Minister in the Department of Health and Social Security. I shall detain noble Lords no longer other than to say that I heartily wish that I had had the YJB. It would have been a godsend to have had the Youth Justice Board with its insight and understanding of what was going on.

The next thing we were told was that the YJB is ineffective. A great deal has been said already about the change in offending rates and volumes and reoffending rates and volumes. All those are remarkably good figures, as your Lordships can remind themselves when they read Hansard, but in all respects they compare favourably with what is going on in the adult system, which is what this was drawn from in the bad days gone by.

It is argued that this is a single issue body. The noble Lord, Lord Ramsbotham, has shown what single issue bodies are and they are not this: they are on the list that he gave about foreigners, the illiterate, sick, mentally ill and so forth. All those are single issues and affect single people, but being a teenager under the age of adulthood as recognised in statute is common to them all. This is a general issue of supreme importance.

I happen to have been a teacher. I taught in schools and colleges and noble Lords should not doubt that the behavioural and emotional responses of young people and adults are different. They have to be managed with tricks out of different boxes. We are talking about a specialism of enormous value to this country, which has produced enormous benefits already, which continue.

I have been told—and I dare say that other noble Lords have been told by the Minister—that the YJB’s job has been done and it should hang up his boots, thank you very much. To say that when the offending rates and numbers in custody are all still coming down is a matter of profound pessimism. Surely we must want this to go on. It has been said that the bureaucratic approach of the Youth Justice Board has always been an impediment although it was admitted that that had reduced in recent months. But it has been reducing over the past two years, so that is also an incomplete argument.

We have been told that this is part of the great national programme of localism. In fact, that has not been mentioned yet but I anticipate, with many apologies, what my noble friend on the Front Bench is likely to say to us. The Government are already committed to localism and to the youth offending teams. The youth offending teams are what determine the level to which functions can be delegated. The Government already acknowledge the need for what they call light-touch performance monitoring of them. Anyway, Her Majesty's Government propose to take all the powers back into themselves. What on earth is localist about that?

It is argued that the expertise of the Youth Justice Board will be preserved in the department when it gets there. I do not doubt my noble friend’s word or that of his right honourable colleagues, but they cannot foresee or commit themselves to who will replace those people when they retire, are promoted or simply, sadly, die. If they are part of the Civil Service, they will be replaced by people recruited from the Civil Service, which does not mean that they will necessarily have any of this expertise at all.

My last point in this overlong speech is about cost. I remind your Lordships that in the adult system in the past 10 years the population in prisons has increased by 32 per cent at a cost of £36,000 per head per year at current prices. Over the same period, the number of juveniles in custody has reduced by 27 per cent—almost as much. They are more expensive. My figures are slightly different to those given by the noble Earl, Lord Listowel, because his have yet to be reviewed by the National Audit Office. Screening out all that, I reckon that it represents a saving in one year of £58,174 million. If that rather notional figure does not satisfy your Lordships, the decommissioning of 900 places, to which the noble Lord, Lord Beecham, referred, has saved £38 million net. I should add that administrative costs were reduced by 10 per cent as well.

When a car is running sweetly and the engine is doing what it should, you do not go to the garage and ask them to lift up the bonnet and take a piece out of the engine. This is not a bolt-on extra. This is something that has grown up with and caused the youth justice system to develop as it has, under the care of Ministers—which I greatly acknowledge. In supporting this amendment, which I do with fervour, I am trying to save my noble friends from making a catastrophic mistake.

16:00

[Baroness Armstrong of Hill Top]

I intervene briefly to give a practical example of the value and the practical work of the Youth Justice Board. I do not see how it could be fulfilled by the department.

When I was a Member in another place, a prison in my constituency subsequently became one of the first secure training centres for young people. It was commissioned by the Major Government and my Government, I am sorry to say, decided to go ahead with the contracts that had been agreed. When the contracts were first put into place, there was an American contractor, and the thing was a disaster. I had a phone call from the local police chief, who said, “You’ve got to come—we have to work out what we are going to do. My people are being called in every day and the kids are ending up in the cells because the secure training centre simply cannot handle them”.

One of the real problems—I do not know whose idea it was—was to have children aged from 12 to 15 there. Quite honestly, they could not handle prison. One thing that you have to do when you go into prison is to recognise that the better you behave the sooner you will get out. They simply were not able to make decisions like that; they were ripping up their rooms and all the area outside. The Youth Justice Board had to come in, of course. I talked to Ministers and the Youth Justice Board sent someone for nearly a year, virtually full time, to help the organisation to sort out what it was doing and to enable it to build up a group of people who could provide education. The whole idea had been that inmates would receive more intensive education while they were there—and it just was not happening.

I heard some very salutary stories and had salutary experiences in that period. The Hassockfield STC is now run by a different organisation. No one would say that it was trouble-free—I am sure that the Minister has heard of Hassockfield—but it is doing much better than it was. Part of that is because the Youth Justice Board got hold of it and persuaded Ministers that you could not put children as young as that into a prison environment. It was intended as a prison environment, because somebody thought that it would be a good shock for them at that age. It did not work, and all sorts of things went on that should not have gone on. It is still being used but it is being used for an older age group. I still have concerns, but I know that the regime is now much more aware of what it needs to do to work effectively with young people. That would not have happened without the Youth Justice Board encouraging very clearly another organisation to take over. I do not believe that civil servants in the Ministry of Justice would be able to do that; they would not have the expertise or training, and they would not have the professionalism of the woman from the Youth Justice Board who went in and worked at Hassockfield virtually full time for a year.

I hope that the Minister understands that this is not a party-political thing and should not be. It is about how we get the most effective way of working with young people, even the most troubled, who end up at the moment at something like a secure training centre. I hope that the Minister will find a way of thinking again.

[Lord Maclennan of Rogart]

My Lords, like the noble and learned Lord, who is a former Lord Chief Justice, I did not speak in Committee and I hope that my intervention at this stage will be forgiven. However, this has been an astonishingly informed debate and all those who participated have demonstrated immediate experience of the working of the youth justice system and the Youth Justice Board in particular. I rise as someone who has not had that direct experience in England, although I have observed at reasonably close quarters the working of the children’s panel system in Scotland. I commend that to my noble friends as a system that works remarkably well in dealing with the care of troubled children and the prevention of crime.

However, an outside voice can sometimes be helpful in these debates, particularly as, if neither of these amendments is carried, the matter will go to another place where there will unquestionably be knowledge about the youth offending system but not the same direct, immediate experience. I served for 17 years on the Public Accounts Committee and the argumentation that that body has produced, as recently as six weeks ago, appears to be profoundly important in the context in which this measure is being introduced. Inevitably, because the board is one of a number of bodies being wound up, this is seen in the context of economy and value for money. Many of those who have already spoken in this debate have questioned whether value for money will in fact be achieved by drawing these decisions into the department itself.

I do not believe that the implication that Ministers will give it closer insight is sustainable. Ministers are enormously busy and rely heavily on having their attention drawn to weaknesses in a system or in its administration. If the emphasis is to be all on localism—and the place for localism is certainly not being contested by me—it seems highly improbable that there will not necessarily be that experienced oversight of the workings of the youth offending teams, which have had some years to test themselves. It is quite possible that those who have the job of overseeing these matters within the department will feel a need to defend the stance taken rather than a need to spot uncertainties, inefficiencies and unsuitable behaviour.

I recognise that the Public Accounts Committee has not infrequently had the experience of dealing with bodies of this kind within the Civil Service. Ultimately, however, it tends to admit that the accounting officer is responsible for answering the questions. In turn, that might lead to a statement that the real responsibility lies with the policy-maker: that is to say, the Minister. The actuality is very different. The case made by the noble Lord, Lord Ramsbotham, for separating out these functions and having clear responsibility for administration separated from the Minister responsible is unanswerable.

It seems to me that there will be much greater transparency if the Youth Justice Board is preserved. Good and bad examples will surface and lessons can be learnt from both. If this is all done within the department, I fear that the issues will become muddied and unclear. The progress that has been made in bringing about a reduction in recidivism and offending among the young and the economic advantages for the community that have stemmed from fewer numbers in custody, not to speak of citizens’ general concern to live peacefully in the community with young troubled people, has definitely been assisted by this relatively new innovation.

I hope the Government will give this real further consideration. We have had lengthy debates on this already and I do not believe that there has been sufficient opportunity for extensive consultation with all those involved. I know that the Youth Justice Board has taken a very positive role in dialogue with the Government, but this is something that extends right across the country. People from all ranks of society are affected by it, and consequently it is not something that should be rushed. It is not broken, so we should not seek to repair it.

[Viscount Eccles]

My Lords, I spoke in Committee and I have not had the benefit of any discussions between Committee and Report. Like everyone else, I await with great interest the reply from my Front Bench. However, I am reminded that there are two amendments in this group and I think it has been notable that only the noble Lords, Lord Warner and Lord Ramsbotham, have actually referred to Amendment 21B in any depth or detail. The noble Lord, Lord Elton, did not put his name to Amendment 21B, so I assume he does not support it.

I suppose the question that we are facing is how much independence should be provided to those who think through and monitor youth justice. There is a very widespread feeling in the House, which I share, that a fairly high degree of independence is desirable. In the discussion, it seems to me that the Youth Justice Board is the good boy and NOMS is the bad boy. That does not seem to be an inevitable outcome of running the Prison Service, but is what has come across. What has also come across to me as I have listened to the debate is that the Youth Justice Board is not quite the clear distinction between policy and operations which the noble Lord, Lord Ramsbotham, put across to us. Many other people have been involved in improvements, which have been referred to, alongside the efforts of the Youth Justice Board.

This is an enabling Bill; nothing happens as a result of this Bill becoming an Act until a Minister lays an order in front of Parliament. Parliament, at that time, as we shall see later in the Bill, can reject that order. Some people feel that the secondary legislation procedures are such that it is not likely that Parliament will reject an order, but I do not agree. The power is there, so when an order is laid we should not give up the idea that we vote it down. As this is an enabling Bill, nothing happens until an order is laid. The question then becomes: do we believe, as in tennis, in sudden death? Amendment 20A is a form of sudden death, Amendment 21B is a form of giving a degree of independence to an executive agency, and neither of these sections in the Bill, if that is what they become, commits Ministers to lay an order at all. There is therefore still a great deal of time before the Government come to an irrevocable decision. I very much hope that my noble friend on the Front Bench will deal with that matter in some detail.

16:15

[Baroness Scotland of Asthal]

My Lords, I suppose that I, too, should declare an interest as someone who has practised in the field of family law dealing with children for the past 34 years and who has had the privilege of being one of Her Majesty’s deputy High Court judges of the Family Division.

On the last occasion that we met to discuss this issue, the noble Lord, Lord McNally, told me that I had been shooting at an open goal. Well, the goal has not got any narrower. However, if I may respectfully say so, I think that the nature of this debate has been slightly different from that of the debate that we had last time. There is now a degree of sadness and almost disbelief that there has been no material change in the approach taken by the Government. At the end of Committee, the noble Lord, Lord McNally, said, in essence, “Give me time. Don’t shoot me today. Postpone the execution until Report. Give me time to think again and to persuade my Government”. The noble Lord, Lord Warner, with the generosity of spirit for which he is renowned, did so; as noble Lords will remember, he said that recidivism could be addressed and that there was still time for repentance. However, there always comes a time when repentance appears not to have transpired and the judge has to make a decision.

The House has now spoken twice. It is important that in this debate there was not one dissenting voice urging on the Minister the wisdom of going forward with the current plan. If I may respectfully say so, I think that it was poignant to hear the noble and learned Lord, Lord Woolf, say that this was—he used a strong word—“sacrilege”. Why is that? Those who spoke on the last occasion and who have spoken today struggled and suffered in order, together with the young people, to try to create a system that is able to deliver change in a material way. The system that we had before the Youth Justice Board was agreed by all not to have worked. It was expensive and dysfunctional and it produced poor outcomes. For all its flaws, the Youth Justice Board has created something of real merit and worth.

When we talk about costs, we need to think about the real cost of the demolition of the Youth Justice Board. It does not come in money; it comes in the pain, injury and suffering that will flow not to us but to the young people who have been so advantaged by the board’s work. As the noble Lord, Lord Elton, said so eloquently, it comes in the pain that will be inflicted on us all if vulnerable young people and their dysfunction are not dealt with robustly, carefully and successfully.

This House has a choice. There is a moment when we get to say to the Government and to the other place, “This far and no further”. I repeat what many have said. This is not an issue over which the House has divided on political lines. Every person who has spoken has done so with the same voice, because this House cares passionately about young people and about reducing the pain that is caused to them. We should look at the YJB’s work not just in terms of the reduction of recidivism among young people. We just need to glance at the fact that there has already been an encouraging sign that the reduction in juvenile crime is effecting a reduction in the reoffending figures that we now see for young people between 18 and 20 and between 20 and 24. The noble Lord knows well that 13 to 24 is the most active age group for criminal behaviour. Therefore, reducing the number of those who enter the criminal justice system, and then reducing reoffending, is very significant.

There is evidence that accountability from a ministerial point of view is delivered very successfully by the method that we currently have. On the previous occasion, the noble Viscount, Lord Eccles, and the noble Lord, Lord Newton, made that point so powerfully; it is not about removing ministerial accountability because that ministerial accountability currently exists. We need strong, national, co-ordinated accountability through a dedicated body, and that dedicated body is the Youth Justice Board. We know how difficult it is to create a piece of machinery that works. The Youth Justice Board works. It works in its current form. The opinion of the House is clearly that it should remain in its current form. An executive agency would be the least bad option if it has to go, but it is certainly not the preferred option.

I gain comfort from what the noble Viscount, Lord Eccles, has said. We need to understand him as saying: “If we lose today, we will come back and defeat you—we hope—on another day, but through a statutory instrument”. I would not like to put the House through that pain. I invite the House to vote on this issue, if my noble friend presses his amendment, and say decisively that it does not agree with the removal of the YJB. If the Government need real encouragement to think again, we should ask them to do so by voting in favour of the amendment, as we on these Benches will do in, I hope, great numbers.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, I thought of leaving a long pause to wait for one of my supporters to stand up and make his or her speech. At the end of my remarks I will not appeal to the noble Lord, Lord Warner, not to test the opinion of the House. I did that in Committee because I thought that it would be useful to allow my colleagues to read his speech before coming to a conclusion. Rather than just reading the speech, perhaps seeing the result of the vote—whichever way it goes—will also be an opportunity for them to do so.

At the start of the remarks of the noble and learned Baroness, Lady Scotland, she echoed the noble and learned Lord, Lord Woolf. Using the word that they both used, the House is being asked to vote on sacrilege. Essentially, that is the case for the prosecution: we are about to destroy something of real merit. That is certainly not the intention of the Government. We do not intend to dismantle the youth justice system. We want to build on what has been achieved over the past 10 years. I agree that this debate has been dominated by well informed, experienced speakers who care passionately about youth justice. My experience in my department is of finding similar qualities in the people dealing with this. It is not a matter of uncaring bureaucrats and caring Peers; those qualities exist across the board.

The noble Lord, Lord Warner, suggested that what has happened sounds like an episode of “Just William”. Unlike Violet Elizabeth Bott, I promise that I will not “scweam and scweam and scweam” if things go wrong. As with earlier debates, I will report back the result of this one to colleagues. However, I will not hold noble Lords in suspense: my brief does not allow me to make any concessions today.

The noble Lord, Lord Ramsbotham, slightly overeggs the pudding in that the separation between strategic and operational matters is not as clear as he made out. I think that the noble Viscount, Lord Eccles, made that point. There is real benefit in the department and the Minister providing strategic leadership while retaining the real success of the MoJ—the holistic, local response to youth offending. In referring to the situation in young offender institutions and advocacy, the noble Earl, Lord Listowel, may have been trying to return to a matter raised in Committee. We recognise that advocacy and social work provision in youth offender institutions is important. There are legal responsibilities on local authorities and prison governors to safeguard and promote the welfare of young people in custody but we realise that responsibility for funding these services is complex. We have been working on a solution and I expect that I and my colleague, Mr Crispin Blunt, will receive official advice on funding soon. I will write to the noble Lord later this week or next week, putting forward solutions on that point, which he raised in Committee.

I echo the noble Earl’s tribute to Frances Done and her chief executive. They have behaved exemplarily throughout in steering the organisation through a period of uncertainty while maintaining the high quality of service which we expect. It is interesting that the noble Earl mentioned the need for local authority initiative. The thrust of the policy the department is putting forward in these new arrangements is that we keep the best of the localism of the youth justice system but encourage local authority initiative and co-operation even further.

I suggest to the noble and learned Lord, Lord Woolf, that undoubtedly the YJB has had an impact but that the holistic approach of the youth offending teams may best explain the success gained during the past 10 years, which has been mentioned on a number of occasions. I emphasise again that we are not going to abandon the lessons learnt in the past 10 years but will build on them. It is worth pointing out that youth policy is not the only policy that the MoJ looks after. I think that the noble Baroness, Lady Linklater, and the noble Lord, Lord Beecham, mentioned this. One might equally ask whether one needs a similar arm’s-length body for women, the mentally ill or an educational training body. I see lots of nods across the House. Perhaps that is where we have an ideological difference—“When in doubt set up an arm’s-length body, or, if not, a tsar”; that was very much part of another age. It is worth pointing out that Ministers and departments can be responsible for distinctive policies that they can pursue successfully, without necessarily setting up an external body to help them to do that.

16:30

On the point made by the noble Lord, Lord Beecham, I can give him an answer. I think I have said previously that all Ministers are birds of passage. The noble Lord, Lord Elton, also mentioned that. However, it is certainly not the intention within our new structure that the YJB be absorbed into or placed under NOMS.

I pay tribute to the contribution of all faith groups, and of the leadership of the Church of England and the right reverend Prelate the Bishop of Liverpool, to counsel and service in our prison and youth systems. However, I ask the right reverend Prelate the Bishop of Ripon and Leeds to look at our Green Paper on the rehabilitation revolution, because that fits in a lot with what we are trying to do in our approach across the board to the treatment of offenders and to reoffending.

The noble Lord, Lord Newton, said that he had not melted into the night. Knowing him so well, I honestly never thought that he would do that. Again, I emphasise that I do not believe that separation is strength in the way that some noble Lords advocated; nor is this going back to where we were 10 years ago. The attack on the policy has relied very much on a concept of going back to where we were. That is certainly not the intention.

The noble Lord, Lord Elton, rightly reminded us that we are talking about not only the kind of concern for young offenders to which the noble Baroness, Lady Linklater, and the noble Earl, Lord Listowel, referred, but our responsibility to the victims of youth crime to make sure that we are getting this right. The noble Lord, Lord Elton, with great precision, seems to have set out ministerial powers that are clearly considerable but fall short of being able to abolish the body.

We have never claimed that the YJB was ineffective, but we claim that removing a layer from the system is not vandalism. I was interested in the intervention of the noble Baroness, Lady Armstrong, and the example she gave of advice and intervention. Again, I doubt that that kind of expertise or professionalism would be absent under the proposals we put forward. However, I welcome her view that this is issue is not party-political. One has to look only at the list of noble Lords who have spoken to know the breadth of cross-party views on it.

The noble Lord, Lord Maclennan, referred us to the Scottish panel system. I recently visited Edinburgh and talked with the Scottish Minister of Justice about that country’s approach to youth justice, which has aspects of some value that we could study. I also heed his warning that it would be wrong for the department to become defensive rather than proactive about its responsibilities. I do not believe that this will be so under the system that we are putting forward. There is an important function for the YJB in commissioning the secure estate. However, it is important that this responsibility should be taken within the department, with the Minister taking direct responsibility for it.

The noble Viscount, Lord Eccles, said that this was not the end of the story. Certainly, whichever way the vote goes later this afternoon, the statutory instrument will still be debated. However, it would be unfair to those who work in youth justice to suggest that, if the Government were to carry the day today, there would be another opportunity to change policy at the statutory instrument stage—although technically that is true.

As I hinted, I cannot concede on the abolition of the Youth Justice Board. Nor am I able to accept that the establishment of an executive agency would be appropriate or proportionate. As I said in Committee, there were good reasons to establish the YJB at arm’s length from the Government. This enabled it to lead the national rollout of youth offending teams and to establish a dedicated, secure estate for young people. However, a decade on, that work is done and we can handle within the MoJ the residual responsibilities of the board, while leaving alone the thrust of youth justice at the operating level of the YOTs, where it has been extremely successful.

It is not true that we have not consulted. We have had 13 youth justice seminars across England and Wales as part of our Breaking the Cycle Green Paper. Early responses to that paper indicate that what is wanted is strategic leadership, cross-government working, a dedicated focus on youth justice and fewer central burdens on the YOTs. These responses are all in accordance with our proposals to bring the functions of the YJB into the Ministry of Justice.

I am not sure that either eloquence or a peroration will work on this issue. I hope that I have met the points that were made and explained how people can come honestly to a different view. It is not—I hope that here the case for the prosecution has been dismissed—a callous act of vandalism by the Government. There is an honest difference of opinion in the House about how to build on the success of the past 10 years of the YJB. However, honest differences can exist in a framework of mutual respect, and I hope that that will remain. I certainly respect and appreciate the many contributions that have been made to this debate today.

[Lord Warner]

My Lords, I am grateful to everybody who has spoken in this debate. There have been many powerful speeches this afternoon, particularly from the right reverend Prelate the Bishop of Ripon and Leeds, and the noble and learned Lord, Lord Woolf. My experience of the utterances of the senior judiciary, whether serving or retired, is that they do not use words like sacrilegious and sacrilege lightly, so the Government would do well to reflect on what the noble and learned Lord said.

The Minister says that he wants to build on the work of the Youth Justice Board. If I thought that he was going to do a loft conversion I would not be too bothered about this, and I certainly would not have moved this amendment. However, he has sounded consistently like a man on the phone to the JCBs, and it is that which has caused great concern, however much tribute he gave to the work of the YJB in the past.

I do not think that we have learnt much more about the case that the Government can marshal on this decision to abolish the YJB. The Minister has been honest and straightforward about it but I emphasise that he and the Government will find that, if they abolish the board, the cost of custody and the cost to the system will rise substantially. I do not think that anyone who has spoken in favour of the amendment wants the Government to be under any misapprehension —that will happen if they get rid of the board and take the functions inside the ministry. It will not only cost the taxpayer more but will do a lot of damage to a generation of young people who get into the criminal justice system and who are both troublesome and very troubled. I have heard the arguments and I wish to test the opinion of the House.

16:41

Division 1

Ayes: 225

---

Labour: 152
Crossbench: 50
Liberal Democrat: 6
Conservative: 5
Independent: 2
Bishops: 1
Plaid Cymru: 1

Noes: 162

---

Conservative: 103
Liberal Democrat: 48
Ulster Unionist Party: 3
Crossbench: 3
Independent: 2

16:55

Amendment 21 not moved.

Amendment 21A withdrawn.

Amendment 21B not moved.

Amendment 21C

Moved by

[Baroness Whitaker]

21C: Schedule 1, page 16, line 36, at end insert—
“(4) Notwithstanding the future of the Library Advisory Council for England, in exercising his responsibility under the Public Libraries and Museums Act 1964, the Secretary of State shall ensure that he has sufficient independent advice for him to enable local authorities to manage their public library duties effectively.”

[Baroness Whitaker]

My Lords, in speaking to Amendment 21C, I take it as given that the immense value of libraries to our culture, economy and well-being is understood. It was agreed by all sides in Committee, not least by the Minister. The problem is that local authorities often cannot manage the cuts without unnecessarily damaging their libraries. They might think that libraries are a soft option to cut or might not see them as very important, or those who benefit might not be well enough organised to mount enough of a protest, although there have been some stupendous outcries, and rightly so.

This amendment would put beyond doubt that the Secretary of State in exercising his duty,

“to superintend, and promote the improvement of, the public library service”,

under the Public Libraries and Museums Act 1964 will have the independent and expert resource to help local authorities manage these difficult decisions in the interests of better libraries. Of course departmental officials will be competent and conscientious, and I pay tribute to those with whom I have been discussing this amendment, but with the best will in the world, they are not necessarily going to include among their number the most up-to-date and expert librarians, nor are they independent.

Our public libraries matter enormously. We must ensure that the Secretary of State gets the best advice in keeping them the remarkable asset they are. I beg to move.

[Viscount Falkland]

My Lords, I do not think there is any point in rehearsing what I said when the noble Baroness moved her amendment in Committee. I think all noble Lords understand the value of public libraries to all those in the community who have been fortunate enough to be introduced to books. The trouble addressed in the amendment tabled by the noble Baroness is that you can have libraries, such as the one I visited this morning in the borough of Merton, which, to use common parlance, tick all the boxes. Not only was the library very full and animated, light and airy, well equipped and with a highly articulate staff, it was full of volunteers from the community. I do not think we need lessons from anybody about what constitutes a big society. We already have one. Anybody who goes into a well run public library will see that it already exists.

The problem addressed by the noble Baroness—I hope that the Minister will be able to give me some encouragement on this—is that you have good libraries, not-so-good libraries and some that are, frankly, very run down. The interesting thing I learnt this morning when I went into this very well run library and spoke to three highly articulate people who worked for it was that nobody seemed to have heard of the body being abolished. That drove me to ask the noble Baroness what she intended to do with her amendment. I hope the Minister will agree that what good libraries are doing needs to be promulgated widely so that libraries that are not doing well know the standards they can and should reach, and have some idea of how they can do so and can bring in volunteers to give their services to the community. I hope that in her reply the Minister will be able to give satisfaction to the noble Baroness, Lady Whitaker, and other noble Lords who are interested.

17:00

[Lord Newton of Braintree]

My Lords, I shall speak briefly. I think that in the amendment in the name of the noble Baroness, Lady Whitaker, lurks a wider point that has affected the House’s attitude to large parts of this Bill. It is acknowledged—it was certainly implied in the speech made by the noble Viscount—that there remains a need for spreading good practice and for an advisory role of some kind in order to preserve and enhance library services around the country. I do not know whether the Government accept that but I do know that, for a variety of things, we have been told that these bodies do things which need doing but that they will be done in a different way. It is just that we do not yet know how they will be done. I have sought to address that more general point in one or two of my later amendments.

While, on the whole, I hope that the noble Baroness will not press her amendment—I have been bad enough today already—I hope that she will get a constructive response. Around the country—my observation is only in eastern England—wildly variant policies towards libraries are being pursued by different local authorities. I am not sure that I really believe in a complete postcode lottery for libraries any more than I do for anything else.

[Baroness Bakewell]

My Lords, I have not spoken on the subject of libraries previously and I support the noble Baroness in her amendment. My point follows on from what the noble Lord has just said and it is about local authorities rather than libraries. Local authorities have a spread of responsibilities which, particularly now, are accentuated by the burden of cuts that they have to impose. There is an opportunity for them to see libraries as an easy touch. There is a myth abroad that libraries are the territory of the well heeled middle class who regularly read books but who, in their own lives, buy the books that they want and then patronise the users of libraries by pretending that they are concerned. That is by no means the case.

The evidence of the use of libraries across the country is extremely varied from one library to another and from one part of the country to another. It is also varied in the use that is currently being made of libraries by the public. Libraries have long ceased to be only rows of books for the middle classes. They are used by mothers with buggies full of children and large areas are set aside to serve such people. They are used for story telling by informed librarians and teachers who spread the idea of reading stories among young people, thus giving them an appetite for creativity and reading for the rest of their lives. They are used by people who want to read newspapers but cannot afford to buy them. They are used by the old to find company and some interest in life. They are used by the local community to consult documents issued by agencies, government bodies and local authorities.

The spectrum of people who use libraries needs to be understood by local authorities. Who will make that available to them? We need an advisory council which can come across with the information that will help them make the right decision. The body to which this amendment refers does that.

[Baroness Jones of Whitchurch]

My Lords, I thank my noble friend Lady Whitaker for pursuing this issue today and for allowing noble Lords from all sides of the House to emphasise the vital role that libraries continue to play in their community. Once again, the debate has highlighted the major disquiet that many people feel that their cherished local libraries will not survive the squeeze of local government cuts. This is at the heart of the problem because there is a sense that no one in government is championing their cause. You could say that libraries are an orphan service looking for shelter at a time of economic uncertainty and so far have not found it. On the one hand, policy for libraries still lies with DCMS—I am sure that the Minister will once again speak warmly of the important service that libraries provide—while, on the other, the money to fund the library service lies with DCLG, whose overriding obsession seems to be to cut budgets at any cost.

The Government are already taking steps to abolish the only other national library advisory body, the Museums, Libraries & Archives Council. Now, the only national body able to speak up for the service is to be subsumed into the Arts Council, with a real fear that it will disappear for good.

I do not feel in a position to judge the success of the Advisory Council on Libraries, but I agree with my noble friend Lady Bakewell that libraries around the country are already going through a revolution, opening up their venues to new forms of learning and studying, providing essential access to information and making the links between books, music, theatre and the wider arts. Staff are doing a magnificent job in redefining the service for the 21st century so that libraries remain relevant and loved by their local community.

How can we be reassured that the Arts Council will retain the professional knowledge to give the advice that libraries will need if they are to flourish? How can we be sure that the Arts Council will champion the service when it has so many other priorities? Is this amendment not just a small gesture to reassure libraries at least that the department is serious about protecting their interests at a time of such uncertainty in the rest of the sector?

[Baroness Rawlings]

My Lords, I am grateful to all noble Lords who have spoken. I thank the noble Baroness, Lady Whitaker, for tabling the amendment and for giving the Government the opportunity to make it absolutely clear that we are committed to the effective management of library services. Consequently, we totally support the underlying spirit of what is a probing amendment. I thank the noble Baroness also for her openness to constructive dialogue on this issue. It has led to a position where the department is under no illusions about the importance of this issue in your Lordships’ House and where the Government can provide clear reassurances about how advice is provided to local authorities.

It is worth me making clear from the outset that we believe that existing legislation provides sufficient protection for library services. The Public Libraries and Museums Act 1964 requires the Secretary of State to superintend, and to promote the improvement of, the library service provided by local authorities in England and to make certain that local authorities fulfil their duties as defined by the Act. The noble Baroness, Lady Bakewell, made a good point about local authorities. That is why we are pressing for improvement.

Ministers are committed to fulfilling their statutory duties. The Secretary of State is providing important practical help and advice for libraries and contributing to the improvement and development of the sector through the Future Libraries Programme. The programme was announced in July and is led by the Museums, Libraries & Archives Council and the Local Government Association. They support more than 30 local authorities participating in the programme to explore options that will help them to deliver more efficiently the front-line services that communities want and need. In line with the decentralisation agenda, the programme encourages local authorities to find their own solutions to the challenges that they face.

The noble Baroness, Lady Jones, felt that there was no support for libraries. I say to her with due respect that she is mistaken, as the goal of the Future Libraries Programme is to share insights from the 10 pilot projects. This will allow local authorities to identify ways in which effective and efficient services can be maintained by taking a longer-term and more strategic approach to the way that libraries are improved. In addition to the Future Libraries Programme, the Museums, Libraries and Archives Council promotes best practice and provides support and guidance to local authorities. Arts Council England will assume responsibility for improving and developing library services following the abolition of the Museums, Libraries and Archives Council. We will work with Arts Council England and Local Government Improvement and Development to continue to make the best-quality advice available and accessible to support local authorities. We will be discussing a new programme of projects to drive the improvement of library services.

This Government are acutely aware of the statutory obligations needed to improve library services and to make certain that local authorities have the advice and support that they need to deliver an effective service. The noble Viscount, Lord Falkland, is right: there are good ones and bad ones, and I reiterate the need to make the improvements. This obligation and this Government’s commitment already exist without the addition of a further statutory duty such as that proposed in the noble Baroness’s amendment, and therefore I hope that she will feel able to withdraw it.

[Baroness Whitaker]

My Lords, I thank all noble Lords who have spoken. They have all added appreciably to the debate. I also thank the Minister for her broadly supportive response. I would rather that there were more in the Bill but I accept that much is going on, and the combination of the MLA and the Local Government Association sounds a very powerful one. The Minister gave very interesting information about the 10 pilot projects. I hope that she will communicate the results to the House, as that would help to reassure us. I beg leave to withdraw the amendment.

Amendment 21C withdrawn.

Clause 2 : Power to merge

Amendment 22

Moved by

[Lord Taylor of Holbeach]

22: Clause 2, page 1, line 15, leave out “Subject to section 16,”

[Lord Taylor of Holbeach]

My Lords, I beg to move.

[Lord Whitty]

Are we on Amendment 25?

[The Deputy Speaker (Baroness Harris of Richmond)]

Amendment 22.

[Lord Whitty]

I beg your Lordships’ pardon.

Amendment 22 agreed.

Amendments 23 and 24 not moved.

17:15

Schedule 2 : Power to merge: bodies and offices

Amendment 25

Moved by

[Lord Taylor of Holbeach]

25: Schedule 2, page 17, line 14, at end insert—
“Group 5Competition Commission.
Office of Fair Trading (“OFT”).”

[Lord Taylor of Holbeach]

My Lords, now we are on Amendment 25 and I am sure that the noble Lord, Lord Whitty, will be pleased that we have an opportunity to debate it. I am much relieved, as my notes for Amendment 22 had long since disappeared.

Government Amendment 25 would add the Office of Fair Trading and the Competition Commission to Schedule 2 to the Bill, which, as noble Lords will remember, deals with mergers. The purpose of the amendment is to provide a vehicle through which to take forward a merger of these bodies, and it responds to a commitment made in our debate in Committee.

I should remind noble Lords that the Government are also minded to transfer most of the consumer enforcement functions and resources of the Office of Fair Trading to trading standards, and advice, information and education functions and resources to Citizens Advice. For that reason, the OFT will need to remain in Schedule 5 in order to facilitate the transfer of most of these functions prior to the expected order to merge. A number of points relating to the consumer landscape were raised by noble Lords in Committee and I am happy to answer questions that may occur in today’s debate.

In Committee, the noble Lord, Lord Dubs, asked for more detail about the Government’s proposed consultation. I can inform him that the Government published their proposals for consultation to merge the competition functions of the Office of Fair Trading and the Competition Commission and on other changes to the competition regime on 16 March. I do not know whether noble Lords have been able to obtain a copy, but it is a substantial document of 172 pages, covering the breadth of that particular aspect of government. The consultation will run for three months. The Government hope for as wide an engagement as possible, including holding seminars and specific meetings focused on specific issues. The Government intend to issue in May a further consultation document covering a model for the consumer landscape.

Growth matters now more than ever. Businesses—particularly SMEs—and consumers have been hit hard by the economic crisis. Reform is now important to create the right environment for business to create and enter new markets—reducing barriers to entry and encouraging rivalry between firms to promote lower prices and better quality products and services. There is longer-term potential for growth through benefits reaped from innovation that stems from greater competition in the market place.

Competition is the cornerstone of growth, innovation and consumer choice. The UK competition regime is regarded as one of the best in the world. But it can and should be even better. That means that we also need to have a strong regime to promote effective competition in markets. The Government believe that creating one, powerful Competition and Markets Authority would ensure a more dynamic and flexible use of competition tools and resource and a single advocate for competition in the UK and internationally and would end duplication for business.

The proposals in the consultation document include: creating a single, powerful advocate for competition to ensure a dynamic and flexible use of tools to promote strong and fair competition; increasing business confidence through faster decision-making, ending duplication and giving more predictability of competition processes and decisions; reducing barriers to entry by making it easier for the competition authority to tackle anti-competitive mergers and reforming anti-trust provisions to increase deterrence of anti-competitive and abusive behaviour; delivering faster results for consumers by shortening end-to-end studies and investigations into markets where lack of competition is giving consumers a raw deal; reducing the SME burden by introducing an exemption for small mergers from the merger control regime; and giving small business a voice in an extended super-complaints process to spotlight market features that harm small companies.

Those proposals are an excellent opportunity to strengthen and streamline the competition regime to deliver better outcomes for consumers and increase business confidence. The Government want to strengthen and improve the UK’s competition regime in order to promote growth, innovation and competition. The proposed merger of the OFT and the CC is about creating one, single competition authority that is dynamic and efficient and retains the best aspects of those bodies. The proposed transfer of the OFT’s consumer functions to organisations better placed to ensure enforcement against rogue traders and businesses and give consumers the advice that they need is important to ensure action can be taken at a local level. The Government are consulting on all these proposals. I beg to move.

[Lord Borrie]

It would be churlish of me not to welcome the 172-page document that has been issued. I have been one of those who has suggested that one common feature of the Public Bodies Bill is that whole lists of organisations covering every conceivable subject were inserted into schedules, in nearly all cases without any explanation as to why or how their functions would be replaced or where we were to go from here. It was a rushed job. Among the bodies listed when Schedule 7 existed—and I am glad that the Government have got rid of it—were the Office of Fair Trading and the Competition Commission.

The Minister said several months ago when we first touched on this, at Second Reading and in Committee, that the intention was to merge those two bodies. Then it became clear that they were not being abolished but somehow brought together. I say “somehow” because it is only now, or 10 days ago, that we have had the 172 pages of explanation. Delighted though I am to see that document, it still raises the issue of how the Government still want by this amendment to insert the Competition Commission and the Office of Fair Trading into the schedule when they have not yet had the outcome of the consultation. In other words, the Government still want to determine the future and merger of these two bodies before they have received the answers to the question that the consultation paper very fairly raises of what the advantages or disadvantages would be of a merger.

It is not appropriate in this debate to raise large numbers of issues about that very lengthy document, and I hope there will be other occasions on which to do so. However, in relation to the Office of Fair Trading, which is to become part of the Competition and Markets Authority, a number of provisions in the first eight or 10 sections of the Enterprise Act 2002 list a whole lot of functions for the Office of Fair Trading—to promote consumer interest, to educate and inform consumers and to have various other functions. The Minister might say that some of those functions will go to Citizens Advice and some will go to trading standards offices. That might be so. However, as a debate on this Bill and the loss of the National Consumer Council indicated, the Minister explained that Citizens Advice would be adequately resourced to be able to substitute for what the NCC now does. The suggestion in the consultation paper to which the Minister now refers indicates that the consumer functions of the OFT are to disappear, as are the consumer functions of the National Consumer Council. Am I right in thinking that that is the result of bringing together the competition functions of the OFT and the Competition Commission?

Furthermore, how are the new bodies to function? I am interested to find that the consultation document seems to further the idea that has been working well for 40 or 60 years of a two-stage investigation. The main first investigation, the prosecutorial investigation, was done by the first government department, and then the OFT when it came into existence. The second stage investigation was of a more quasi-judicial type, with experts from different parts of business and the professions brought together in panels to determine individual cases. That range of expertise to be drawn upon by the Competition Commission has generally been thought of, internationally, as a very helpful procedure. As far as I read it—I hope that this is broadly correct—it is intended that the panel system should continue but it is suggested that more people should be full-time rather than part-time. I have generally thought that the very part-time nature of the Competition Commission’s panel members is their plus point, because on every day of the week except for one, or perhaps two, they are in their own business, profession or work and bring that in to inform their work as members of the Competition Commission when investigating cases.

I then noticed that it is intended that the actual employees—the economists, lawyers and civil servants within the Competition Commission—are to operate as teams not just at one stage or at the second stage but right the way through. That might be because there is a conflict in the mind of the Government. It might be to do with wanting to save money, which you do if only one team operates on the same case throughout instead of moving from one to another. Yet it also makes it more difficult, surely, for the second stage to be truly independent of the investigation. To make a rather crude analogy, you have the work of the court getting mixed up with the work of the investigators and the police.

I have those various doubts and questions, but then I, like everyone else who has it, has only just received the consultation paper. I think the noble Lord said that we have two or three months to go through it and give our answers but why, here and now in March when the consultation paper has only just gone out, are we as the House of Lords being asked to determine in this Bill that there shall be a merger of these two bodies?

[Baroness Kingsmill]

My Lords, I support much of what my noble friend Lord Borrie has just said. I have always been in favour of a merger of these two bodies and am pleased to see that the Government are thinking of bringing that about. I have received the consultation paper and I have not yet come to terms with all the points therein. This is a merger that, on the face of it, has a lot to commend it—as I said, I have always supported it—but I feel that the devil is in the detail and that there is much detail to be determined.

From what I have seen in the consultation paper, the one aspect that I regret is the separation of consumer protection from competition issues. When I was at the Competition Commission, our primary and overriding rule was the public interest. We felt constantly that we were protecting the interests of consumers. It is regrettable to separate out those consumer interests and consumer protection from the competition regime. While it is very good that it is proposed that the panel system should be retained, the balance between that panel of, if you like, independents and the professionals who are fully employed must be carefully regulated. I also agree that the part-time nature of the role is one thing that enables its independence and expertise to be maintained.

We also ought to be looking at the separation of the two roles or stages within the competition regime. The first stage is a sort of triage: how serious, how big and how important is this, and what are the main issues? It is important to have that first stage, and it is fundamental to the fairness of the whole procedure that, once that triage stage has happened, it should move on to another panel that looks at it afresh, having had the triage diagnosis to enable it to do so. From my point of view as an ex-regulator and as one who is now on the boards of many companies that have undergone and are undergoing competition investigations, business needs certainty and speedy results. We must ensure that the merged body produces both. If it does, as a result of the consultation document that emerges, that could be a very good thing.

I continue to have a number of questions about this and I think it is a shame that this merger should be regarded and looked at in the context of the Public Bodies Bill. It deserves a piece of legislation of its own and should not just be shovelled in with the consultation document, with such a short time to consider it. Having said that, it is, on the face of it, an appropriate merger.

17:30

[Lord Dubs]

My Lords, the Minister promised us a consultation document when we debated this in Committee, and we have to welcome the consultation document even if we cannot resist saying, “Decide first and consult afterwards”. I suppose if the Minister says that the consultation will be on the detail, that is fair enough.

Since we last debated this issue, I have had a chance to talk to people who know a bit about Citizens Advice and trading standards, and there is a lot of concern as to whether trading standards will be able to manage it, partly because of the cuts in resources to local government and partly because of the question of how trading standards people somewhere in a town such as Carlisle manage to deal with a complaint against British Airways or some other large organisation. Are they well enough geared to take on some of the big boys when they are a small trading standards body in a moderately sized town in the north of England? The balance is not the same as it would be between the Competition Commission and British Airways or between the OFT and British Airways.

However, I am most concerned about the central issue. Of course I welcome the merger of the OFT and part of the Competition Commission, although I am worried about the other parts. I wonder how the process will work. Certainly there will be a detailed input into the consultation process from people who know a lot about it, but what chance will Parliament have to look at the results of the consultation? What chance will we have to influence the new body through legislation? I agree entirely with my noble friend Lady Kingsmill when she said it ought to have legislation of its own. After all, these bodies were set up through primary legislation. The issues are large enough and important enough to merit a proper debate, with the chance for us to amend the legislation and use the experience that we have, together with the result of the consultation, to see how we can make it better. As I understand it—I hope I am wrong—the Government will simply consult, although they might publish the results of the consultation, and then the legislation will happen through an order that will be unamendable. I fear that Parliament will not be able to play its part and we shall lose some of the benefits of the process that primary legislation gives us.

[Lord Whitty]

My Lords, my apologies for my premature intervention earlier. I will not repeat everything that my colleagues have said, but we have a potential dilemma here. People are in broad terms in favour of a merger, subject to certain caveats, but the consultation paper indicates that the total approach to competition policy and consumer policy in which this new merged body would operate has yet to be determined. Many of the options in the paper—changes in the mergers procedures and in the relationship between the new Competition and Markets Authority and the sector economic regulators—would indeed, as my noble friend Lord Dubs implies, normally require primary legislation. Changes in the ability of people to raise super-complaints probably do not require primary legislation but the implication of giving that right to SMEs is that some of this is about monopsony and oligopsony as well as monopoly and oligopoly. That certainly requires some explanation and some primary legislative change.

The reality is that the arrival of this document a few days ago indicates that the Government’s strategy of introducing a new competition institution by the merger of these two bodies can be properly assessed by Parliament only if you have the totality of the change to the competition regime as a whole. It ought to have been a principle of this Bill that bodies whose basis will require primary legislation should not therefore be dealt with solely on the basis of secondary legislation provided for by this Bill. We saw a smaller example of this the other night when the Government withdrew in effect the proposals for the Security Industry Authority, which will require primary legislation to change to where the Government wish to go.

There is a bit of a constitutional issue here that the Government should be aware of. In general, it is a good idea and I do not propose to oppose it, but the Government are in a bit of a dilemma here and in reality we will have to have a competition Act before we can deliver the new body that the Government are envisaging.

[Lord Mackay of Clashfern]

My Lords, it is important that this is just a preliminary stage to enable this consultation to happen and, if the results of the consultation are sufficiently clear, to go forward with an order that is, as I understand it, amendable—my noble friend will correct me if I am wrong but I think I am right. If one had to do a lot of these exercises through full primary legislation, not only in competition but in all the other areas that this Bill covers, one would have no time in Parliament to do anything else. A review of this kind requires some mechanism of this sort, and we have endeavoured to make the mechanism as close and as secure as we can. It would be a pity to lose this opportunity to do what might be possible in this way, and, so far as I am concerned, putting this into the Bill at this stage is a step in the right direction.

[Lord Taylor of Holbeach]

My Lords, I thank all noble Lords who have spoken because I think this has been very useful debate. I emphasise the point made by my noble and learned friend that by inserting these bodies into Schedule 2 we are not predetermining their merger; we are facilitating their merger after a consultative process. Indeed, although statutory instruments are not normally amended in this House, an enhanced procedure in this Bill will enable a full consultative process to take place on the statutory instruments that might be brought before Parliament.

More to the point, the whole process has been evidenced in the foreword, and if noble Lords have got no further than page 1 they will see the foreword by my right honourable friend the Secretary of State Vince Cable in which he talks about the wish to be transparent and open about this process. Indeed, it is in the Government’s interest because the contributions made by noble Lords today have been remarkably powerful and useful. I hope all noble Lords who have spoken will feel free to involve themselves in the whole consultative process, because every single one of them will bring their experience to this regime.

I welcome the comments made by the noble Baroness, Lady Kingsmill, about the strategic objective—trying to get a unified Competition and Markets Authority in place with a primary purpose to be decisive, well informed and speedy. Business demands that of us. We live in a highly competitive world, but we can help ourselves and our fellow industrialists and businessmen by the way in which we construct markets and make sure that they operate in the country’s economic interest and in the consumer’s interest. Although the consumer interest part is being transferred—it will be much more heavily based in trading standards and Citizens Advice—the regime will be co-operative; trading standards officers will still feed in abuses of the market that have become apparent during their investigations.

The noble Lord, Lord Dubs, wondered whether small trading standards departments would be able to take on large organisations. With the backing of competition law, it does not matter how small the authority might be; the power of the law in this regard means that no business, however large, can afford to ignore it. Any systemic abuse through the structure of trading conditions is just the sort of thing that the new authority will take up and investigate at speed.

I am pleased that the idea of the panels is being welcomed. It is part of the detail in the consultation. In many ways, it would be wrong to use this speech to try to predetermine the outcome of that consultation, but there are in the consultative documents steers and guides, at least, to the sort of outcome for which the Government wish. I am moving my amendment today with the idea of facilitating that outcome. Parliament’s role will be to scrutinise both the consultation and anything that is produced under the Bill.

Amendment 25 agreed.

Amendment 26

Moved by

[Lord Newton of Braintree]

26: Schedule 2, page 17, line 14, at end insert—
“Group 5Administrative Justice and Tribunals Council.
Civil Justice Council.”

[Lord Newton of Braintree]

My Lords, until about an hour ago I had intended and expected to wind up this speech by claiming a concession from the Government as a reward for good behaviour. Unfortunately, we have just had the debate and vote on the YJB, so my chances of any kind of reward for good behaviour have gone up in smoke. Nevertheless, I hope for a reasonable and positive response from my noble friend.

It is clear to me that the House is fed up to the back teeth with this Bill and would like to see the back of it. Everybody wants to make progress and I will try to fit my speech to that. It is four months since we last debated the Administrative Justice and Tribunals Council and probably five months since we started to talk about this wretched Bill, so I understand the desire to get on.

Four months ago, we debated the inclusion of the Administrative Justice and Tribunals Council in Schedule 1. An amendment in the name of the noble Lord, Lord Borrie, to take it out of the schedule was defeated. I know that I cannot reopen that debate and I am not seeking to; rather, I am looking through these amendments, which I hope people will have realised are designed to add the justice councils to Schedule 2 and other schedules, to give the Government other options. I hope that the Government will feel that that is a reasonable add-on. It does not detract from the fact that the AJTC remains in Schedule 1, so that, if the Government want to bring forward an order to abolish it, they are quite at liberty to do so—my amendments would not prevent it.

I hope that my mentioning the Civil Justice Council, which was originally included in Schedule 7, has not upset the judges, but I am slightly disturbed by the fact that all the judges on the Cross Benches appear to have fled since the earlier debate. I emphasise that my intention is in no way to threaten the Civil Justice Council but to see whether we can make a more rational disposition of advice on justice matters across the board.

17:45

In passing, I observe that my confidence in Ministers has been encouraged by some of the things that have happened since the earlier stage, when I was, frankly, most irritated by the clearly spurious and flimsy arguments that they were using or causing to be used. At least they are now admitting that, in effect, the primary motivation is to save money. The Secretary of State says in a letter, after various preliminaries, that any change of the kind that I am proposing in the Bill—and, as far as I can see, any other change—is,

“undesirable as it would mean that we would not make the savings from the AJTC’s abolition that we are planning for”.

At least that is straightforward. I can understand it and even relate to it. I was for most of 10 years a Social Security Minister, including three years as Secretary of State. I know what it is like to have the Treasury breathing down your neck, demanding whatever it is that it demands; you know that you are going to have to do some unpleasant things. I recognise that, but what I cannot quite stomach is the notion that, as a country, we are now so impoverished that we cannot spend a little money in this field related to justice between the citizen and the state. Are we really now that poor?

I also cannot accept the argument that everything that the council does could be done—this echoes earlier debates—just as well by the Ministry of Justice. I asked previously what would happen when people made representations about, for example, the effect on tribunals of proposals for legal aid made by the same Secretary of State. How would any part of the ministry take an objective view on that? That would all be part of department policy and the ministry would just have to straddle both horses. I do not accept that the ministry will be able to do some of the things done by the council or, indeed, by the former Council on Tribunals—I see my predecessor on that body, the noble and learned Lord, Lord Archer of Sandwell, in his place.

For me, the main point is that, although the Ministry of Justice now takes what are labelled as administrative justice decisions, the responsibilities for those run right across government. For example, the AJTC is taking a big interest in getting things right first time—improving initial decision-making—which we would all like to see. That is something for every department in Whitehall. The MoJ does not have responsibility for ombudsmen, although, according to its latest pronouncements, it has ambitions to learn a bit more about the subject. The Cabinet Office has that responsibility, although it has not been every effective in that respect, as different government departments have had all sorts of different policies, to the extent that there have been competing ombudsmen in the same field. Even now, the DCLG has proposals in the Localism Bill about ombudsmen that have enflamed more or less the entire ombudsman world. Where does that leave the Ministry of Justice? Will it attack the DCLG? Has it had any influence on those proposals? I doubt it. I simply do not believe that the MoJ can do what it says on the tin.

That links with my second point. Why preserve the Civil Justice Council, which I am in favour of, and the Family Justice Council, which I am also in favour of, but abandon the one council which is concerned with justice between the citizen and the state and which has a 50-year-plus track record of bringing about improvements in that area? Let us be clear: we are not talking here about great judicial reviews or developers seeking to get their plans past a planning refusal. We are talking about hundreds of thousands of social security claimants, people claiming disability benefits, people who are under compulsory orders going to mental health tribunals and a whole range of others. I have the figures here—I was going to cite them but I will not—and the figures, particularly for those who are on social security and disability benefits, are rising all the time, partly because of the economic problems that we have. Why is this the Cinderella? Given that we are talking about the interests of many of the least articulate and most vulnerable people in our society, this is totally in conflict with coalition rhetoric.

[Lord Archer of Sandwell]

Since the noble Lord was kind enough to tempt me to my feet, would he agree that many local tribunals and public bodies lead lonely lives, and that the great contribution of a central body is that it can collect and disseminate experience and best practice? If that were missing, everyone’s performance would suffer.

[Lord Newton of Braintree]

I agree. It tempts me to extend my remarks a fraction further to a point I had omitted. The Ministry of Justice knows nothing—and, frankly, as far as I can judge, cares less—about large amounts of administrative justice that relates to local authorities, including, in education, school admissions and exclusion appeals. Many people may regard this as trivial but it also includes the whole area of decriminalised car parking. These are things that affect citizens. They have nothing to do with the Ministry of Justice but they amount to important areas of administrative justice.

I made the point in my earlier speech—I will not repeat it in extenso—that the terms of reference of the Civil Justice Council are, in effect, identical to those of Administrative Justice and Tribunals Council. I will make a few further points before I conclude. Notwithstanding the disappearance of the CJC from Schedule 7 to the Bill, the Government have already cut its secretariat and merged it with that of the Family Justice Council. In respect of the various procedure rule committees, including tribunals, all of which were in Schedule 7, the Government have already put all the secretariats into the same team. They argue that this makes better use of resources. It probably does. However, my amendments simply go with that flow. They create the possibility of what I regard as rational alternatives to abolition, but they do not prevent the Government going for abolition if that is what they continue to want to do. Even if I cannot claim a reward for good behaviour, I can claim a response to rationality, reasonableness and a powerful argument.

[Lord Mackay of Clashfern]

My noble friend bemoaned the fact that the judges had all fled, but the noble Lord, Lord Elystan-Morgan, is still there.

[Lord Newton of Braintree]

I apologise to both my noble and learned friend and the noble Lord, Lord Elystan-Morgan. I had in mind those who contributed to an earlier debate. If they all now chip in to support me, I shall give them brownie points as well. My noble and learned friend Lord Mackay might help, too. I beg to move.

[Lord Howe of Aberavon]

I do not rise for brownie points, which I probably deserve in no circumstances whatever. I am rather alarmed that my contribution to this discussion, in support of what my noble friend said, is founded on my experience almost exactly half a century ago. I make no apology for that. It takes me back to the second half of the 1960s, when the electors of Bebington decided to give me four years leave from the other place, during which time I concentrated on my practice at the Bar. Two of the most important matters with which I was involved concerned the very issues that my noble friend has just talked about—issues affecting real people in the face of difficult circumstances.

For nine months I represented the colliery managers in the Aberfan tribunal inquiry, conducted by Lord Edmund-Davies and his expert wingmen. He did not consider the matter alone but with expertise to help him. Every one of those people whose actions were being criticised, or whose grievances were being represented, were represented by counsel before that administrative tribunal.

Not long after that, I was invited by Kenneth Robinson, who was then Minister for Health in the department presided over by Richard Crossman, to conduct an inquiry into alleged misconduct and mishaps at the Ely Hospital in Cardiff. That gave me some insight into the way in which administration in search of justice can get up to some very curious things. I had three advisers—one consultant psychiatrist, one hospital board member and one senior nurse. We set out by saying, “Please may we announce our existence to the public so that we can call for evidence?”. “No, no”, came the answer to that. However, we decided that we would not start our work without it, and were able to make that announcement and continue with our inquiry. We were not given any counsel to the tribunal, as such. There was no official solicitor to help us in an investigation, so I had to perform the task of being both chairman of the inquiry and interrogator and, therefore, quasi-prosecutor. It was not exactly comfortable.

At the end of our inquiry, which did not take very long, we produced a report and submitted it to the Welsh health authority for publication, as we thought. However, we were told that it would certainly not be published and we were asked whether we could make a rather different version of the report that we had first filed, confining it to facts and not judgments. Happily, I had a Cambridge acquaintance who was special adviser to Richard Crossman. Many in this House may remember him—Brian Abel-Smith. I was able to convey that strange news to where it mattered and we were then able to produce an alternative version to the one that we were compelled to produce in the first instance. Richard Crossman did not hesitate to publish the full version of that report. Anthony Howard, whose recent death we all mourned, in writing about Richard Crossman said that that publication was,

“perhaps the bravest action of his political career”.

Certainly, I like to think that it was something that made a major contribution to the consequences of our inquiry, about which I make no boasts or gestures whatever. We were doing a job and were allowed to do it, but we had to wrestle at various stages to get the framework right.

Since then, I have been involved in different ways in other comparable inquiries and have witnessed others. One in which I was involved most tenaciously for some time was that presided over by the noble and learned Lord, Lord Scott—Lord Justice Scott as he was then. Two other inquiries followed soon after that one. One was presided over by Lord Justice Phillips, now the noble and learned Lord, Lord Phillips, and the other by the noble and learned Lord, Lord Hutton. In those tribunals there were no wingmen, as I have put it, sitting on either side of the noble and learned Lords; they had to conduct the tribunals on their own. In the tribunal of the noble and learned Lord, Lord Scott, no representation was allowed on behalf of any of those people giving evidence to or being judged by the tribunal. That was notwithstanding my submissions as former Foreign Secretary on behalf of the many diplomats whose conduct was being scrutinised, or the interventions of the noble Baroness, Lady Symons, who was then in charge of the First Division Association.

As I say, I believe that Lord Justice Hutton had no legal representation, and certainly no wingmen, to help him. On the other hand, the noble and learned Lord, Lord Phillips, had the full range of expertise alongside him and full representation by lawyers throughout the case. I give those examples without wishing to criticise the principal actors in them as they illustrate the diversity of the different judgments that have to be made when deciding what kind of tribunal to set up, how to formulate it, what tasks to give it and so on. For that reason I was conscious throughout those proceedings of the opinions being offered—sometimes not soon enough—by the Administrative Justice and Tribunals Council. I subsequently wrote a piece in the Political Quarterly, from which I wish to quote. It states:

“A number of studies have now been done (or recommendations been made in individual reports) about the factors that have to be taken into account by the appointing minister (or other authority), as well as by the leader of an inquiry. And all these data have now been re-summarised and drawn together in one place within government. That will help, of course. But I am convinced that one thing more remains to be done. We need to ensure the continuous availability of a small corpus of people with experience of this work (not just in one department), who can be thoroughly consulted by those involved in shaping any fresh inquiry. For the necessary decisions often have to be taken under pressure and at speed. In such circumstances, paper-borne wisdom is no substitute for experience … It is this practically tested know-how which has to be accessible whenever it is needed”.

It is against that background that I intervene in the debate on this amendment because it seems to me that the council presided over for many years by my noble friend Lord Newton is an organisation which certainly deserves to survive in one form or another. It may be possible to change it or to shuffle it into different places but it has met a very important need and has accumulated wisdom over the years from diverse sources. The Government should proceed with the utmost caution in handling the future of this organisation. They should in particular pay attention to the submissions made by my noble friend Lord Newton of Braintree.

18:00

[Lord Borrie]

I congratulate the noble Lord, Lord Newton of Braintree, on devising a way of trying to ensure some sort of future for the Administrative Justice and Tribunals Council after my failure in Committee to secure a vote against abolition. I failed by nine votes despite the support of several Law Lords present on that occasion and of the noble and learned Lord, Lord Howe of Aberavon. I remember that on one occasion when we debated this matter the noble and learned Lord, Lord Woolf, stressed the very point just made by the noble and learned Lord, Lord Howe of Aberavon, on the significance of the work done by the Administrative Justice and Tribunals Council for ordinary people in this country. Often that work is much more important for ordinary people than that done by the courts of our land. The noble and learned Lord, Lord Woolf, emphasised the tribunals to which the noble Lord, Lord Newton, has referred and added in employment tribunals. You could hardly have a more significant set of judicial bodies than employment tribunals when dealing with the troubles of ordinary people such as unfair dismissal cases.

The Government narrowly won the vote on this issue in Committee but in seeking to defend the Ministry of Justice from the queries that some of us had raised the only answer they could provide was that the relevant tasks could be carried out by the Ministry of Justice. Of course, the Ministry of Justice has a great deal to contribute on policy and other areas of administrative justice but it cannot replicate the advice and role of independent people from outside the department who have a range of experience. That experience can be tapped individually by the department; indeed, I think that the ministerial representative said that. However, if this council disappears, you will not get a group coming together and discussing among themselves the important issues of administrative justice. They will merely be seen individually by an appropriate department civil servant and we may or may not hear the results of that discussion. Therefore, I again congratulate the noble Lord on bringing forward the amendment and hope that he will press it to a vote.

[Baroness Scotland of Asthal]

My Lords, since the noble and learned Lord, Lord Mackay, does not seem to be tempted by his noble friend’s invitation I rise to respond on behalf of Her Majesty’s loyal Opposition. Not surprisingly, we wholeheartedly support the amendment moved by the noble Lord, Lord Newton. I take this opportunity to commend the noble and learned Lord, Lord Howe, for his powerful intervention and for the work that he did in relation to the Ely inquiry. The House will know that that was seminal to the material changes regarding mental health which came after it.

I invite the noble Lord, Lord McNally, to consider carefully whether he cannot accept the amendments spoken to so ably by the noble Lord, Lord Newton. As we heard from the noble Viscount, Lord Eccles, in regard to the previous substantive debate that we had on the Youth Justice Board, this is enabling legislation. Notwithstanding the fact that the Administrative Justice and Tribunals Council can be abolished, there is nothing to stop Her Majesty’s Government thinking again. They are not bound to abolish it. If they want to abolish it, they should think carefully about how it can still be merged, used or modified in regard to other bodies. I invite the noble Lord to think again about this matter. If Parliament decides that there is to be no independent voice, it is very difficult to see how some of the challenges that have been so forcefully laid out by the noble Lord, Lord Newton, will be responded to.

The noble Lord, Lord McNally, will know the position in relation to legal aid which was touched on by the noble Lord, Lord Newton. As the Administrative Justice and Tribunals Council has recently said in its response to the Ministry of Justice consultation document Proposals for the Reform of Legal Aid, some material difficulties arise in this regard. Your Lordships will know that in its response the council opposed the proposed cuts to legal aid for administrative justice. It gave the example that welfare benefits legal aid costss £28.3 million in 2009-10, representing less than 0.18 per cent of the £16 billion value of benefits that are unclaimed every year. The success rate of legally aided clients in these areas is more than 90 per cent. The council believes that the Government bear responsibility for causing many of the appeals in the administrative justice system through poor decision-making, poor communication, delay and overly complex or incomprehensible rules. Not only will the legal aid cuts affect individual claimants, they will contribute to increasing work and delays in courts and tribunals that are already under pressure. How will such a challenge to the department that is also responsible for legal aid be made, made independently, and by whom? The value of an independent critical eye will remain present. Therefore, merging, modifying or otherwise dealing with this issue remains of critical importance.

I understand what has been said previously about the utility of the council’s work no longer being identified, but we have not had an answer to the question posed in Committee by the noble Lord, Lord Newton, and again now, regarding how the department responsible for all these administrative issues will deal with issues such as these. The difficulty will remain. The challenges are likely to be much more honed, because the issues that administrative justice touches upon in its remit, in terms of everyday lives, become increasingly broad. I invite the Minister to consider very seriously indeed merging the council with another body, modifying the constitution arrangements under Schedule 3, or modifying the funding or transferring the functions—but not to expunge them in their entirety.

The noble Lord will know that acceding to these amendments would not oblige the Government to do all or any of those things. They would be given the power and opportunity to do so if they, in their inimitable wisdom, decided, on mature reflection, that the same was necessary.

[Lord Mackay of Clashfern]

My Lords, in view of what has been said, perhaps I may take this opportunity to indicate that this amendment is eminently supportable and that I hope the Minister will respond positively to it. I felt that I did not want to make two speeches; I thought that I had made one already. Anyway, that is my position.

[Lord McNally]

My Lords, that convinces me only that the noble and learned Lord, Lord Mackay, can resist anything except temptation.

The noble Baroness gave some reasons why the Government should give themselves time to think on these matters. She pointed out that this is only enabling legislation, but, as I said in the previous debate, it is better that we have some clarity in what we wish to do. We are aware that the proposed changes to legal aid will put pressure on parts of this sector of justice, and that is why a concerted effort has to be made to drive up the quality of original decision-making. It is the departments and public bodies that make the original decisions that have the primary responsibility to ensure the quality of decision-making. However, this work with the decision-makers will continue, so as to improve getting it right first time. To drive up standards, we will seek to spread lessons learnt among relevant decision-making bodies.

The noble Lord, Lord Borrie, gave the game away when he said that the amendment and the consequential amendments were a perfectly legitimate and ingenious way of asking the House to reconsider a decision it had already made in Committee. However, the department has never hidden the fact that one of the reasons for the decision was saving money. However, as in the recent debates, almost throughout the Bill, opponents to what the Government propose seem to put enormous emphasis on the benefits that arm’s-length bodies can deliver and give no credit at all to the fact that one of the beauties of our system was that one check and balance on the delivery of policy was the direct line of responsibility running from Ministers in their departments through to the Floors of both Houses. We do not accept the idea that all these things have to be done by arm’s-length bodies, nor do I accept that the Ministry of Justice knows nothing and cares less about the wider issues of administrative justice. It is unfair to keep on throwing these attacks on civil servants who, in my experience, show an extraordinary commitment in their areas of expertise and are extremely willing to speak truth to power.

18:15

I appreciate that the noble Lord, Lord Newton, is passionate about retaining independent oversight of the administrative justice system and that this has motivated this group of amendments. I recently met the noble Lord, Lord Newton, and the noble and learned Lord, Lord Howe, and faithfully took back their messages to the Secretary of State for Justice. Although I acknowledge their experience and knowledge in this area, and I am also grateful for their recognition that the Government have to make tough decisions, their argument did not carry weight with the Secretary of State. I even gave the Secretary of State the advice of the noble and learned Lord that you abolish in haste and repent at leisure—advice that came from his experience with the Metrication Board in the early 1980s.

It is probably no surprise that I have to tell noble Lords that the amendments do not fit with the Government’s decision to abolish the AJTC. I should, however, reiterate that our policy is the right one. The AJTC is relatively expensive for the job it does; the context in which it operates has changed enormously since the council and its predecessor, the Council on Tribunals, were founded; and this in turn makes the exercise of its functions outside central government unnecessary and, in fact, a duplication of efforts and resources.

In the case of the Civil Justice Council, I have to say that it is a little odd in the context of this particular Bill that a non-government amendment is tabled to put a body back into the Bill, rather than to take it out. Although I understand why the noble Lord, Lord Newton, has done this, I do not agree that the Civil Justice Council should be in the Bill simply to preserve the functions of a body proposed for abolition. The Civil Justice Council was deemed to perform a function that should remain unchanged; the AJTC was not.

I should like to respond first to Amendment 26. It would enable a merger of the Administrative Justice and Tribunals Council and the Civil Justice Council, and replace them with a new body, or abolish one body, with the remaining one taking some or all of the other’s functions. This amendment would not allow the Government to abolish the AJTC and to keep the Civil Justice Council as it is—which is our intention. A merger is not desirable. Putting civil justice and administrative justice together provides too wide a range for one body to cover, and the focus of each is different. Tribunals are distinctive in character from the courts, and we are keen to preserve that difference. There are not sufficient overlaps between the two areas to make the whole manageable.

There are further difficulties—in particular, the difference in jurisdiction. The Civil Justice Council covers England and Wales, but the AJTC’s remit extends to Scotland. There are also differences between the ways in which the two bodies are set up. Appointed members of the AJTC are remunerated, whereas Civil Justice Council members are not. In addition, even if the policy was sound, the secretariat that supports the Civil Justice Council would not be in a position to take on additional work without an increase in resources. In addition, even if the increase were relatively modest, the resource could not be funded without jeopardising other areas of the ministry’s work.

I turn now to the rationale for abolishing the AJTC. When we considered the reforms to arm’s-length bodies we looked at all relevant factors including value for money. The AJTC costs about £1.3 million a year. This may not seem a large sum in the context of the ministry's overall budget, but the Civil Justice Council’s budget is £312,000—for a body whose work directly supports the practical operation of the courts. I accept that the Civil Justice Council’s functions are similar to those of the AJTC. When we looked at functions, we looked not only at statutory functions but at how the bodies worked in practice. Much of the Civil Justice Council’s work, such as the production of advice on the technical aspects of civil costs and policy, and pre-action protocols, directly supports the courts. As noted, the cost of the Civil Justice Council is extremely modest. It has unpaid members and little in the way of secretarial support compared with the AJTC. Taking this into account, as well as the technical emphasis of its work, we concluded that the Civil Justice Council should remain.

The Government’s policy takes account also of the changes that have taken place since the AJTC was set up. The most significant is the establishment of the Unified Tribunals Service. We consider the AJTC to be no longer vital because the unified service provides a coherent system of tribunal’s administration and judiciary for the tribunals within it. For this reason, we do not need the AJTC’s tribunal’s oversight function. We should keep in mind that the AJTC is an advisory body; it is not an executive body, a regulator, a judicial body or a tribunal.

Our policy is to reduce duplication of effort and resource, and I do not share the view of the noble Lord, Lord Newton, that we would be taking a retrograde step if we were to abolish the AJTC. I have faith that the Ministry of Justice can work effectively with other government departments, and with other administrations and bodies outside the remit of the Tribunals Service, to ensure oversight and to develop a coherent policy on administrative justice. I appreciate the concerns of the noble Lord about the responsibility for administrative justice policy being spread across several government departments. However, the Ministry of Justice is committed to enhancing its role in wider administrative justice issues and will work closely with the AJTC while it still exists, and with other government departments that have an interest in this area such as the Cabinet Office, which leads on ombudsman policy.

The Government resist Amendment 26, which would merge the two bodies. Amendments 30, 32, 37, 45 and 47 would allow orders to be brought forward to modify the constitutions, funding or functions of the AJTC and the Civil Justice Council. The Government oppose these amendments for the same reason. There is not sufficient reason for us to depart from our original view, endorsed by the House in Committee, that the AJTC should be abolished. It should also not be merged with a body that we wish to retain in its current form. I hope that, in the light of these explanations, the noble Lord will withdraw his amendment.

[Lord Newton of Braintree]

My Lords, a number of points have been made. If I attempted to answer them all, I would rerun both the speech I made a while back and the one I made four months ago. Perhaps I may emphasise three points. First, I am not arguing that we should go on with a body costing the sums that the Minister referred to and should instruct it exactly as we do at present.

Secondly, if my remarks were taken as in any way being rude to civil servants; that was not my intention. I have a high regard for them and have worked with many of them. However, they do not want to touch some quite important tribunals in the local authority field with a barge pole—and nor do they know much about them. These are important parts of the system of administrative justice, as are the ombudsmen.

Thirdly, I turn to the geographical points that were made. The AJTC covers not the whole of the United Kingdom but the whole of Great Britain. It has a separate Scottish committee. Since 2007, it has had a separate Welsh committee, voted for by the House. I cannot be certain what will emerge, but there is a strong possibility that Wales and Scotland will decide to maintain their committees while England gets rid of anything similar that it has. That would not make sense.

I find myself in a position that I neither expected nor wanted. There has been a slight flavour in one or two conversations that I have had that those of us who are pushing these issues are simply trying to defend the work that we did over—in my case—10 years. Obviously, that is in my mind. However, if I test the opinion of the House, it will not be for reasons of amour propre but because it would be wrong to do what is proposed. We need to do more to protect the standards of administrative justice and, in particular, the interests of those relatively less well off and vulnerable people who are to a large extent the subjects and users of the system.

I am a bit disappointed that nobody from the Cross Benches joined in, but I am profoundly grateful to the noble and learned Lord, Lord Howe of Aberavon, for his consistent support; to the noble Lord, Lord Borrie, for his support once again; and ultimately to my noble and learned friend Lord Mackay, who at least made a friendly comment, although I am not sure where it will take him—I am very friendly towards him too, I might say.

My last comment is about the Minister’s suggestion that the noble Lord, Lord Borrie, gave the game away by referring to the process that will be required to pass an order under Schedule 1, or indeed any other schedule. Much of the first part of the debate on the Bill was taken up with my noble friend Lord Taylor of Holbeach introducing safeguard after safeguard on consultation, the parliamentary process and amendability in certain respects to reassure people that this would not just be a stroke of the ministerial pen. If a game has been given away, frankly, it was by my noble friend Lord McNally, who said, “We don’t want to prolong all this uncertainty, do we? We can’t really have all this upset again by debating an order and possibly not passing it”.

It does not stand up with what the Government have said and what is now enshrined in the clauses of the Bill—with all the consultation and the rest of it. I am not sure that my noble friends will thank me and I do not particularly want to do it, but I shall not feel happy with myself unless I test the opinion of the House.

18:29

Division 2

Ayes: 198

---

Labour: 158
Crossbench: 24
Democratic Unionist Party: 3
Conservative: 3
Independent: 2
Plaid Cymru: 1

Noes: 191

---

Conservative: 115
Liberal Democrat: 58
Crossbench: 10
Ulster Unionist Party: 3
Bishops: 1

18:41

Amendment 27 had been retabled as Amendment 34A.

Clause 3: Power to modify constitutional arrangements

Amendment 28

Moved by

[Lord Taylor of Holbeach]

28: Clause 3, page 2, line 11, leave out “Subject to section 16,”

Amendment 28 agreed.

Amendment 29 not moved.

Amendment 29A

Moved by

[Lord Wigley]

29A: Clause 3, page 2, line 37, at end insert—
“( ) To the extent that this section may be applicable to Sianel Pedwar Cymru (“S4C”), only subsection (2)(a) to (c) and (g) and subsection (3)(a), (b) and (d) shall apply.”

[Lord Wigley]

My Lords, I declare my interest in matters relating to S4C, as I did in Committee. I beg to move Amendment 29A in my name and to speak to the other amendments: in particular, Amendment 34B in the name of the noble Lord, Lord Roberts of Conwy, and Amendment 40 in the name of the noble Lord, Lord Roberts of Llandudno.

I shall not speak at length, as I spelt out the general arguments in relation to S4C in Committee. Our concerns expressed at that time remain. They were particularly eloquently expressed during Committee by the noble and learned Lords, Lord Morris of Aberavon and Lord Howe of Aberavon, the noble Lords, Lord Elystan-Morgan, Lord Richard and Lord Rowlands, and, at that time, by the noble Lord, Lord Roberts of Llandudno, himself. I look forward to hearing his comments tonight. The Government have tabled no amendments to assuage the feelings we expressed.

In many ways, the amendments are being taken tonight in the wrong order. Amendment 40 would remove S4C from Schedule 4 and, essentially, from the Bill. That is what most of us from Wales want. Amendment 34B would bring S4C into Schedule 3 —something which many of us regard with trepidation, because that gives the Minister the power to apply the provisions of Clause 3 to S4C; and the powers are extremely wide ranging. It would allow the Minister to modify the constitutional arrangements of S4C in how employees exercise its functions, the power to employ staff, how it runs its committees and how it is accountable to the Minister. All those seem little short of giving the Minister powers by order to micromanage S4C.

Amendment 29A is moved not only to get my retaliation in first but to cope with the unfortunate eventuality that the amendment of the noble Lord, Lord Roberts of Conwy, should be carried and that S4C becomes part of Schedule 3. Amendment 29A restricts the power given to the Minister to subsection (2)(a) to (c) and (g) and subsection (3)(a), (b) and (d). That would still allow the Minister to be involved with the appointment of the chairman—as he apparently is very much at the moment. It would allow changes to the body and to the offices. It would still allow the powers with regard to reports and accounts, which are perfectly normal requirements in the circumstances, but it cuts out the temptation to micromanage S4C.

I shall be very interested to hear the justification of the noble Lord, Lord Roberts of Conwy, for inserting S4C into Schedule 3. Clearly, the Government did not think that those powers were necessary—otherwise they would have put them in the Bill or tabled a government amendment at this stage—or are the Government leaving their dirty work to a trusted pair of hands, who has bailed them out on so many occasions in Wales over the years? As I said, I would rather that Amendment 34B were not moved at all, or, if it is, that it is defeated. Equally, I urge that Amendment 40, to which I have added my name, should be carried. If it is rejected by the Government, it should be taken to a vote.

18:45

All the amendments deal with one simple matter. S4C should never have been in the Bill. The independence of S4C will be critically undermined, as it will be beholden to the BBC Trust for the bulk of its funding, which the Government, without prior consultation, have moved to the licence fee. He who pays the piper calls the tune. S4C will be at the mercy of the BBC Trust for its resources. Its independence will be further eroded by the Minister's indication that BBC staff will sit on S4C’s management board—not just on the authority but on the management board. As such, the BBC will have a preferential position compared to the independent programme producers with whom it competes for S4C’s commissions.

The Minister has kindly suggested that S4C can keep its logo. Well, thank you very much indeed, if that is all that independence means. I emphasise that S4C’s independence is not philosophical or ephemeral; it is a hugely practical issue. S4C competes against BBC Wales for television rights for sporting and other events. How is it to do so if BBC staff are locked into its management? If it is not meant to compete, how can it be said to be independent in programme content?

I want S4C to be taken lock, stock and barrel out of the Bill. I urge noble Lords to support Amendment 40, to oppose Amendment 34B and to support Amendment 29A if Amendment 34B carries. If Amendment 29A carries, I humbly ask that the noble Lord, Lord Roberts of Conwy, not move his amendment, as the will of the House will clearly be on our side, not his. I beg to move.

[Lord Roberts of Conwy]

I speak to Amendment 34B. In the course of Committee debate on S4C, I suggested that the reorganisation of the S4C authority’s governance might make it advisable to include S4C in Schedule 3, as a body whose constitutional arrangements might be modified by order.

I thought that there was tentative empathy with that view in government, and that that was why S4C was originally included in the now defunct Schedule 7, allowing for transfer to another schedule. I cannot see how the Government can fully implement the commitments given by Ministers to Parliament and others without modifying the structure of S4C. That is why I tabled Amendment 34B to include S4C in Schedule 3.

My noble friend Lord Crickhowell has added his name to the amendment. Unfortunately, he cannot be here this evening because he is taking his wife to hospital outside London, but he has left me with a note of apology to your Lordships. As he played a central role in the creation of S4C and, as a director of HTV, later worked to ensure its success, the House will understand his disappointment at his inability to be here. He has encouraged the Government to accept the amendment. He feels very strongly that the financial assurances given by the Government—given practical effect by the company's inclusion in Schedule 4 —combined, if my amendment is passed, with the ability to create an appropriate and effective management structure put in place after wide consultation inside and outside Parliament, is the best way to guarantee a strong future for Welsh language television.

He also thinks that to remove S4C from the Bill, with all the uncertainties that would be created by the need for primary legislation to replace the existing statute, would be a profound mistake.

I should perhaps add that S4C’s current structure and composition are governed by Chapter VI and Schedule 6 to the Broadcasting Act 1990, as amended, and—particularly as to funding—by the Broadcasting Act 1996, which contains the requirement that the Secretary of State increase its funding annually by reference to the retail prices index. Most of us on all sides of the House at least understand the Government's view that that requirement cannot be met in our current, straitened financial circumstances—which is a euphemistic way of referring to the horrendous deficit that we inherited. It is simply no longer sustainable, and RPI appears to have been abandoned across the governmental board in favour of the consumer prices index.

The Secretary of State, very cleverly, has at least agreed alternative funding arrangements for S4C, predominantly from his department for the first two years—2011-12 and 2012-13—and then from the licence moneys collected by the BBC Trust in the following two years. These new funding arrangements will be subject to an order under Schedule 4, where S4C also appears, and subject to public consultation and the special affirmative procedure as prescribed in Clauses 10 and 11, which are absolutely essential reading and make considerable changes in order-making as most of us have known it.

The new funding arrangements require the inclusion of S4C in Schedule 4, whereas an amendment in this group proposes the withdrawal of S4C from that schedule. If that amendment succeeds, as the noble Lord, Lord Wigley, suggested it should, the future funding of S4C will be left in limbo, on the edge of a black hole. However, my guess is that when the Bill finally becomes law, S4C will still be in that schedule. There is no satisfactory alternative to the funding arrangements proposed by the Government. We have not heard a single suggestion for alternative arrangements.

This would leave the Government with a number of organisational commitments to fulfil, and I am not at all certain that all those can be met by reliance on and within the terms of the existing broadcasting legislation from 1990 onwards. That is one of the main reasons why I should like to see S4C included in Schedule 3 —to help the Government meet their commitments. The nature of the commitment was spelt out by the DCMS in an exchange of letters between the Secretary of State, the chairman of the BBC Trust and the chairman of S4C towards the end of last year. I detailed these commitments in Committee. They are also contained in a concise form in a DCMS briefing document of 16 December which refers to,

“a strong and independent Welsh language TV service”,

with all that that entails by way of editorial and commissioning independence, accountability, distinctive brands and so on. It is not at all clear to me how all that can be achieved without an order under Schedule 3.

Another reason for S4C's inclusion in Schedule 3 is that the authority and the management board have not distinguished themselves in recent years. There has been a damaging divisiveness between them, which most of us who are of Wales know about. Possibly this is a result of the fact that S4C is a curious animal—not a quango but a corporate body, regulator and programme provider at the same time, as Sir Jon Shortridge, former Permanent Secretary at the Wales Office and the National Assembly, says in his report on the governance of S4C. The authority and the management also pursued what is to me still a puzzling policy of separateness from 2006 onwards, and possibly that might be due to the fact that they were trying to follow the BBC charter of that year, which separated the trust from the executive board of the BBC.

The accountability function of the BBC Trust for the licence fee moneys it collects and will spend in part sustaining S4C as well as the World Service is a new ingredient in the melting pot. How I wish that that money could be diverted through DCMS, but I sense that that cannot or will not be done at this stage. Also new is the relationship between S4C broadcasting and devolved areas of government, especially relating to the Welsh language, culture and education. Clause 10, which refers to Welsh Ministers and their functions in these associated areas, is highly relevant in this context. The Welsh Ministers must be consulted when an order is proposed. All these matters, I maintain, should be reflected somehow in the constitution of S4C, which they are not at present. So S4C requires inclusion in Schedule 3.

A fresh constitutional order under Schedule 3 sorting out the membership of the authority and its composition, its duties and responsibilities and, possibly, the shape of the management board—although I respect what the noble Lord, Lord Wigley, says about the detail; we do not want too much detail, although certainly the management board should be somewhere included—would be a very helpful and salutary measure. The consultation and consequential procedure required under Clauses 10 and 11 would also enlighten the Welsh public—who have been much misled in this matter—over the couple of years ahead, as well as government, and enable all interested parties to have their say. It might add a new dimension, indeed, to devolution.

With a revitalised constitution, S4C would once again achieve the excellence it formerly enjoyed and provide a service which met the needs of Welsh-speaking viewers and the many, of all ages, keenly aspiring to learn the language of heaven. This is a challenge to the Secretary of State to rise to the occasion, as I am sure he will over the months ahead. For the moment, I hope that my noble friend on the Front Bench will spell out the Government's intentions once more and inspire trust in the Government and her department to provide a sound basis and proper framework for the future of S4C.

Perhaps I may say a brief word on later amendments, especially Amendment 40. Let me make it clear that I am trying to save S4C, as I did before its birth—as did the late Gwynfor Evans, who threatened to fast to death on this account. We were on the same side, which may come as a surprise to many young people today. Some extremists now say that the Government are intent on killing off S4C. There is not a shred of evidence to support that. S4C has never appeared in Schedule 1 alongside the bodies that may be abolished.

All that we are concerned about really is S4C’s funding, which can be rearranged under Schedule 4. If S4C is withdrawn from that schedule, where does that leave its future funding? I would not like to rely on Clause 80 of the 1996 Act and its annual RPI increase. It has not been operated for the coming year, and it is not expected to work for the following year either. The withdrawal of S4C from Schedule 4 deprives the Government of the right to submit a draft funding order for consultation with interested parties, including S4C, Welsh Ministers and both Houses of Parliament, and then, if there is no bar to progress, to proceed to a final order that regularises the position and assures S4C of its funding for four years, subject to parliamentary approval. If this does not happen, what happens to S4C? It will be left in limbo, at the mercy of events and subject to all the financial pressures of exigencies that might arise. That would be a killer punch for a television channel. I beg those inclined to listen to the populist, demagogic cries from outside and who wish to see S4C withdrawn from Schedule 4 to think again. If there was another, alternative, practicable and sure way forward, all well and good, but there is none. None is on offer. I am trying to save the baby that is S4C. Let us not throw it from a safe cradle to an uncertain fate on a cold floor.

19:00

[Lord Morris of Aberavon]

In the interests of brevity, I shall make just two points. There must be a meaningful and transparent financial arrangement between the BBC and S4C if S4C is not eventually to be swallowed up by the much larger BBC. Think of the tale of Jonah and the Whale. Mark Thompson says that he is the custodian of the licence fee. He does not own the licence fee. It is the licence fee payers’ money. If it has to be funnelled through the BBC, if there is no top-slicing—and I suspect the Minister would lose that battle—I shall make one practical suggestion; we are all familiar with legislation stating that money cannot be spent without the consent of the Treasury. Let us borrow from that and say that any money that goes via the BBC to S4C must go with the consent and approval of the Secretary of State. I suspect that that will get over most of the accounting problem, and it will underline the Secretary of State’s responsibility to ensure independence and financial independence for S4C.

My second point is about the appointment of the chair, which was referred to in the Minister’s letter and which I raised at the meeting with him. I think he has fully taken the point on board. Both sides of the House will have some experience of appointments in Wales. I am proud of the appointments that I made when I was Secretary of State from Lady White to the Land Authority to Lord Gibson-Watt to the Forestry Commission. They were personal appointments. The Minister and his good intentions will be judged by the kind of person who is appointed to the chair of S4C. He or she must be a figure who is respected throughout Wales, with a proven track record in administration and who can stand up for S4C and Wales and not become a sort of BBC toy-boy or toy-girl. At every appointment, there will be a parade of those who have served and graced our quangos in Wales. I can assure the Minister that they are the same lot every time they come. They go round and round. I suggest that the Secretary of State is bold and considers someone with at least some experience outside Wales and a deep knowledge of Welsh and Welsh affairs. Our nation, knowing that person’s track record, would have some confidence in his or her stewardship. The Minister might well have to reach out to find some such person. I know such a person is there. Please do not give us the old retreads from the old quangos who have not done particularly well in Wales.

[Lord Roberts of Llandudno]

I shall speak to Amendment 40, which stands in my name. In so doing I remind folk, possibly those who do not have much experience of Wales, of how essential S4C is for Welsh-speaking people. If it were withdrawn it would be as though the BBC were withdrawn from the English-speaking people. Some 600,000 people speak Welsh, and the popular Welsh serial “Pobol y Cwm” attracts 500,000 viewers every week. It is no small fry; it is an important part of the life of so many people.

I shall not take very long, but I shall ask the Minister for assurances on a number of issues. The first is that funding will be guaranteed and ring-fenced for the entire period until 2016. That assurance would set my mind at rest. The BBC charter—at Article 47, I think—limits the way in which it can rechannel the fees, which may only go to some organisation within the remit of the BBC. It is not possible to do any top-slicing with the present charter. In December 2016, we shall have a new charter, so we will have an opportunity, if needed, to revise the BBC charter as far as Wales is concerned.

The second assurance I ask for is that the board of S4C will have a notable majority of people from within Wales and that in no way will the BBC try to have the majority of people on that board. I regret that the executive of the BBC will have any outside input at all, but if Parliament decrees that that is necessary, I ask for an assurance that there will be a majority of people of Wales who understand Wales.

The third assurance I request is that S4C will have total editorial and programming independence with 100 per cent Welsh input. If I can get that, it will be very helpful.

The fourth assurance is that any new governance structure for S4C will be enshrined in a dedicated agreement, a formal declaration, laid in Parliament. It will then become the law of the land. The relationship between S4C and the BBC will be seen as a partnership, and not that S4C is a subsidiary of the BBC. The current level of independent production companies will be retained. I have spoken to some in the past few days, and they are afraid that their input will be less and that they might, as one in Caernarfon already has, not be able to meet the challenges of the present time. We should also look again at the Welsh Assembly’s role and responsibility in relation to S4C, especially after the referendum in Wales four weeks ago, following which the Assembly now has full control over topics and issues in 20 devolved areas. Possibly within a few years when the financial situation is better, S4C could become a matter that is devolved to the Welsh Assembly.

Finally, if we are not in Schedule 3, how will that affect our ability to change and to have our own governance? I should be very grateful for assurance from the Minister on that.

For me, the essentials are: secure funding over a long time; editorial independence; looking to a new charter, under which funding can be altered; and a total commitment to the Welsh language. I look forward very much to hearing what the Minister has to say on those matters.

[Lord Elystan-Morgan]

My Lords, the noble Lord, Lord Roberts of Conwy, has, in a most endearing way, explained to the House how by the purest coincidence it so happened that many months into this Bill he had an idea in relation to Clause 3, which had not commended itself in any way to Her Majesty’s Government, but which somehow or another now has been thoroughly and enthusiastically espoused by them. I will say no more about that matter.

However, I think that the submission is one which the House would accept. Clause 3(2) has nine paragraphs attached to it. The totality of the provisions would give a Minister massive, almost dictatorial, powers in relation to the reconstitution of any one of the bodies included in the Bill. If a Minister wishes to do so—I am sure that the noble Lord, Lord Taylor of Holbeach, would not wish to do so—he could exercise utterly emasculated consequences upon S4C. However, if he does not wish to do so, is there any reason why the very limited powers—indeed, in one or two cases they are almost cosmetic powers—referred to in the amendment of my noble friend Lord Wigley should not be accepted? It seems to me that there is an irrefutable logic in relation to that.

I shall speak briefly about the other matters. We have rehearsed these arguments time and again but I have the impression that it is very much the exercise of the rocking horse. There is a great deal of movement but not much forward progress. I speak now as a Welsh-speaking Welshman and as one who can well represent the views of the ordinary persons in Wales who regard the Welsh language as their own language, even though four-fifths of them do not speak it. The problem is that there is a huge chasmic gap between what Her Majesty’s Government say and desire—I accept the total genuineness of the noble Lord, Lord Taylor, and his team in this matter—and what is legally possible.

Three areas of independence are crucial: financial independence, corporate independence and editorial independence. In a letter dated 25 March, which was sent to many of us, there is a guarantee with regard to editorial distinctiveness. It seems to me that there is a world of difference between distinctiveness and independence, a matter into which the noble Lord might wish to look. To me, distinctiveness is much narrower than independence.

As regards financial independence, it would be marvellous if there could be a direct transfer of a part of the fee. The Government would get a quid pro quo—or, one might say, an £80 million quid pro quo. There is a huge restraint on them in the way in which that fee can be spent. If that fee passes through the conduit of the BBC, of course the BBC becomes the accounting agent. But there is a way out. The noble Lord, Lord Roberts of Conwy, said that there was not. In June 2006, an agreement between the BBC and the Secretary of State was published and it has formal status. Following that, a few months later, in October 2006, the charter of the BBC was completed. It seemed therefore that there was every intention that the preceding agreement of June 2006 should in some way operate upon the charter. That agreement of June 2006 makes it clear that the Minister, in relation to the licence fee, is entitled to withhold such sum or sums as he sees fit. In other words, they would never go to the BBC at all. I should be most grateful if full thought could be given to that.

The noble and learned Lord, Lord Morris of Aberavon, raised the corporate independence of S4C in this structure. If you have an informal relationship, all is well. There is already an informal relationship. The BBC is responsible for producing 10 hours per week of programmes in the Welsh language, which is no problem at all. But once a structure is set up, one corporation has to dominate over the other corporate bodies. There cannot be a situation whereby they are at arm’s length and equal. That point has already been made by my noble friend Lord Wigley.

That is the situation. Well meaning guarantees are being given by the Government, but they are in no way bankable because of the technical, legal difficulties. The problem can be overcome only by tackling those difficulties in a specific way so that the undertaking given is realistic and bankable.

19:15

[Baroness Morgan of Ely]

My Lords, I am extremely sorry that, despite the impassioned pleas by this House on the issue of withdrawing any reference to S4C from the Public Bodies Bill, the Government have ignored any suggestions to this end and are continuing their unrelenting pursuit of weakening this important channel in Wales. Let us remind ourselves that S4C was born after years of bitter struggle. One cannot deny that the channel is being weakened. It certainly had a massive impact on the language community and on life in Wales, not least the dramatic contribution of slowing the decrease in the number of people speaking Welsh to the point where for the first time in history we can see an increase.

We have moved from a position where S4C was established through statute with guaranteed long-term funding to a position where, under Schedule 4, it may see its funding cut so dramatically as to make it nigh on impossible to run the channel or, under Schedule 3, be modified at the drop of a hat without reference to anyone. One of my greatest concerns about the way in which the Government are handling this matter is the obvious ignorance of what they are dealing with.

The Secretary of State has suggested that the skills and expertise of the BBC will help to protect S4C’s independence. He talks as if there is no current relationship with the BBC and suggests that it might be helpful to have the BBC on board as it is able to reach wide audiences and deal with niche programming. Anyone in Wales who has the faintest idea of how the channel works knows that some of the most popular programming on the channel is and has been delivered by the BBC since its inception. We all know this. Why do the Government not know it? We are confident that the skills and experience of the BBC could continue to make a valuable contribution to the channel but there is a massive difference between this and editorial independence, which is essential in order to retain pluralism in the media in Wales and which is already extremely restricted.

At the very least, we need an idea of what the future governance structure will look like. What will the relationship be between the BBC trustees and the S4C board? Who will have the final word? Will there be permanent representatives of the BBC on the S4C board? Will S4C be granted total editorial control? Will the BBC have a veto on the board or will it be a minority voice? Will there be a reference to S4C in the new BBC charter? Are we supposed just to trust the Government that they will do this? What will they say? Where are the assurances? As the accounting body, the BBC would be responsible for funding. It simply would not be able just to hand over the cash and hope for the best. What does independence mean in these circumstances?

This morning, on the school run—I am sure that not many noble Lords are doing that these days—I ran into a cameraman who works on S4C programming now and again. He told me that a camera costs £60,000 and that he would not be investing now because he does not know what the future looks like. This kind of insecurity is already hitting investment and is having a damning effect on the media industry in Wales. The amendment suggested by the noble Lords, Lord Roberts and Lord Crickhowell, would leave S4C in an even more vulnerable situation than under the Government’s initial suggestion, which dealt only with the financial situation. Including a reference to S4C in Schedule 3 would allow any future Government to modify profound constitutional arrangements without any accountability in future and at the stroke of a pen. I urge the Government to think again.

[Lord Crickhowell]

I hope that the House will forgive me for not having been present for the debate. I understand that my noble friend Lord Roberts of Conwy has explained that I had to take my wife to hospital as she is going to have a hip operation very early tomorrow morning.

Most noble Lords who know me will realise how anxious I have been to take part in this debate. I do not think that anyone can question my credentials as far as S4C is concerned. I was one of its creators. I wrote the Conservative election manifesto for Wales before the 1979 general election in which we committed ourselves to a form of Welsh language broadcasting. I engaged in the battles that followed and persuaded my right honourable friend Willie Whitelaw as he then was, later Lord Whitelaw, to change the way forward and to make sure that we sent out the Welsh language on a single channel. At the same time, I engaged with my noble friend Lord Roberts of Conwy on a major exercise to safeguard, strengthen and encourage the Welsh language in Wales. My actions were then followed up by my successor Secretaries of State, working with my noble friend, so I think that it is right to say that no political party has done more for the Welsh language than the Conservative Party. Therefore, when assurances about the future of the language are given by Ministers on behalf the Conservative Party they should be treated with respect.

After I had left the Welsh Office, I was for many years a director of HTV, eventually its chairman. During the early days, we helped to sell S4C’s advertising and provided a considerable quantity of its programming; we worked closely with it. We also had something else to do during the later time that I was a director of HTV. We had moved from the years in which people said that television companies had a licence to print money to the years when, week by week and month by month, advertising revenue was collapsing. We had to live in era where we had to adjust our organisation and programming to a rapidly changing world.

The Government have not only given long-term assurances that they are determined to secure the future of S4C but have set out a financial programme and budget for the next four years which I believe give S4C, with its reserves and with the management capability that I hope will be assisted in a number of ways in the future, a sound foundation on which to move forward during the next three or four years.

If we take S4C out of the Bill, we are left with the legislation as it is in a situation where it is quite clear that reductions in expenditure will have to be made. The existing Bill does not give S4C any safeguard. I imagine that there would have to be a new clause in a Finance Bill, but I cannot believe that it is beyond the capability of the Government to ensure that savings are made, as they are being made in every other public body—and, indeed, most private ones.

So I was not so concerned about the inclusion in the Bill of S4C in relation to financial arrangements, but, until very recently, I was concerned about the organisational and structural issues that have been raised with great eloquence by many noble Lords, including my noble friend Lord Roberts of Conwy. They have asked very reasonable questions about who will ultimately be responsible, who the accounting officers will be, and so on. Anyone who remembers my involvement in the tragic drama of the Cardiff Bay Opera House will understand why I perhaps more than anyone understand all too clearly the difficulty when you have one body providing finance and the other being responsible for managing a project. What happened then was that the Cardiff Bay Development Corporation, which was providing the finance, decided that it could second-guess the judgment of the trustees who had been set up with the job of organising and managing the project, and disaster followed.

I see the potential for that kind of disaster if we get wrong the structural organisation of S4C. That is why I very much welcomed the suggestion of my noble friend Lord Taylor of Holbeach, which led to my noble friend Lord Roberts of Conwy, supported by me, putting down an amendment to include S4C in Schedule 3. That will enable us, over the next three or four years, during the period when finance has been provided, to have the widespread consultation that people have very reasonably demanded both inside and outside Parliament. Under the revised structure of the Bill, the matter would then have to be approved by both Houses of Parliament. We would have the opportunity—towards the end of that four-year period, we would be into the next revision of the BBC charter—to work out a solution without rush and without taking S4C out into a black hole by removing it from the Bill, which would be a disastrous way forward. The proposal would provide a combination of finance and structural change and the ability to consult, which should and can enable us to provide a sound future for S4C.

Sometimes people seem to imply that the structure that we now have is somehow sacred, despite the fact that some of the recent management failures by S4C might suggest that changes in structure would be a very good idea. But there is nothing sacred in the present structure. It is not the structure that was put in place in 1982. At that time, the finance was provided largely from the independent television companies. I think that it was my right honourable friend, as he then was, David Mellor, who introduced the changes that led to the present structure. I do not believe that the structure is what matters; what matters is the future of strong Welsh language television broadcasting. No one is more concerned to see that that continues than me. It is because I believe that we now have a way forward that can guarantee a strong future for Welsh language television broadcasting that I will vote against any amendment that takes S4C out of the Bill and will support the amendment moved by my noble friend Lord Roberts of Conwy.

19:28

[Lord Grade of Yarmouth]

My Lords, I declare a past history of relationships with S4C through my involvement at Channel 4 and later at the BBC. While I cannot speak with the passion of a Welsh language speaker, of a Welsh inhabitant or of somebody of Welsh birth, I have always supported S4C whenever I have had the opportunity and have been involved. I am sure that the archives—because that, sadly, is where my support now sits—will demonstrate that I have always supported the ambitions of S4C and its contribution to the culture and life of these islands.

That said, I regret that I cannot support the amendment. I am listening to this debate as a broadcaster who has in various guises seen various free-to-air public service broadcasting bodies be picked up by the roots more often that the petunias in my garden, be pruned, re-examined, replanted and repotted, with attempts to kill them off and so on. I have been listening to the fear and worry in noble Lords’ minds. However, from where I sit and from my experience, I can say that S4C occupies the most privileged position in British broadcasting that is possible to imagine, and the idea of introducing a greater level of accountability and transparency seems perfectly reasonable. Obviously, the devil lies in the detail and change creates uncertainties. However, I am sure that the uncertainties will be ironed out.

I am in some confusion surrounding the independence of S4C. I have heard a number of noble Lords express concerns about its future independence, but then I hear that the solution is to give the money to the Treasury to dole out or to give it to the DCMS—the Government of the day—to look after. I cannot imagine anything more likely to undermine the independence of a broadcaster than being in the hands of the Treasury and the DCMS. I am trying not to sound in any way antagonistic towards S4C, which I believe in passionately. I wish there were a Yiddish channel for the language that is dying out in my culture, but there is not. S4C is a very, very important part of Welsh sovereignty and identity and so on. It deserves to be protected and it deserves public money, but the price you pay today for that privileged position is greater accountability and transparency.

I am sure that the Government are hugely sensitive to the issues that surround broadcasting. I would be very comfortable if my future depended on the BBC Trust. It understands the independence of broadcasting and it exists to create an independent BBC. I can think of no greater guarantor of the independence of S4C than the BBC Trust. Therefore, with great regret, I cannot support the amendment and I commend the words of my noble friend Lord Crickhowell.

[Baroness Gale]

My Lords, I agree that this has been another great and passionate debate. There have been contributions from many noble Lords who are steeped in the language and culture of Wales and have great knowledge of S4C’s history and of how it is run. I am sure that the Minister will have taken note of what has been said.

First, I thank the Minister for arranging a meeting with the Secretary of State, the right honourable Jeremy Hunt. It gave interested Peers the opportunity to discuss their concerns about the Government’s proposals for S4C. I believe that all the Ministers and the Secretary of State were made aware of the very strong feelings that Welsh Peers have regarding this matter.

I am sure that over the past few days many noble Lords have, like me, received numerous e-mails from a range of people and organisations in Wales expressing their fears and concerns about the future of S4C. The people who wrote to me were not extremists; they were from organisations such as the National Eisteddfod of Wales, Merched y Wawr, Urdd Gobaith Cymru and a number of churches. I also received letters from a number of individuals, and everyone was very concerned about the Bill as it stands. It seems that very few people in Wales agree with the Government’s proposals regarding the future of S4C, although they all recognise that there are problems which need to be addressed, as some noble Lords have mentioned. Of course, funding issues, too, have to be looked at.

In Committee, we mentioned that the four leaders in the Welsh Assembly made very sensible suggestions in their letter to the Prime Minister, calling for an independent inquiry commissioned by the Welsh Assembly and the Westminster Government. However, that suggestion seems to have been ignored—if there was a response, we are not sure what it was. The Minister, the noble Baroness, Lady Rawlings, said in Committee that it had not been practical to have in-depth discussions with all interested parties ahead of the announcement, and that the timetable reflected the Government’s desire to put the UK finances in order. Later, she said:

“We have had lengthy dialogues with Cardiff to secure the future of S4C within the BBC partnership with DCMS funding”.—[Official Report, 9/3/11; col. 1640.]

Can she say something about those discussions in Cardiff, as we are not sure how they went? Who took part, what was the outcome, and are the discussions continuing? I feel that if more discussions had taken place earlier, the general feeling that the Government have not been listening could have been dealt with.

In a letter to the noble Lord, Lord Wigley, Jeremy Hunt said that the Government are committed to the future of Welsh language programming and to S4C as a strong and sustainable Welsh TV service with editorial independence. He said that a change to the funding model did not represent any threat to S4C as an independent service. I hope that the Minister can give positive answers today in order to alleviate the concerns expressed by noble Lords. I emphasise that all the organisations and individuals in Wales who have written to a number of us are concerned. They believe that S4C should be taken out of the Bill. They have great knowledge of what is going on in Wales and of how S4C operates, and they all want to see it taken out of the Bill. As I said, these people are not extremists.

Everyone who has spoken today has said that they support S4C and wish to see it continue. The one desire is to maintain a strong Welsh language television channel in Wales for the benefit of all who live in Wales and who value the language and culture. The people of Wales need some reassurance that that will happen. The amendments in this group would go some way towards achieving that, especially if S4C were to be removed from Schedule 4.

I hope that the Minister can give some assurance on the independence of, and funding for, S4C. I repeat that we would like to see S4C removed from Schedule 4. We look forward to the Minister’s response, bearing in mind what has been said today and that the people of Wales will be listening to what she says. We support the amendment of the noble Lord, Lord Wigley.

[Baroness Rawlings]

My Lords, we have had another full and passionate debate today, and it is clear that this is an incredibly important issue. Once again, noble Lords on all sides of the House have demonstrated the depth of feeling and commitment that exist on this issue, and I know that the Government share that. I make it clear at the start that Her Majesty’s coalition Government remain fully committed to Welsh language television broadcasting, as I said in Committee and in response to earlier questions. We recognise the immense value that it has to the culture, economy and people of Wales and the role that it plays in preserving and promoting the Welsh language. I would like your Lordships to be under no illusions about the Government’s primary objective for S4C, which is to protect Welsh language television for the long term. I repeat that: it is to protect Welsh language television for the long term. I am afraid that we beg to differ with the views of the noble Baroness, Lady Morgan, which I hope to explain further in my response.

Since our last debate, in Committee on 9 March, I, along with the Secretary of State for Culture, Media and Sport, my noble friend Lord Taylor and the Minister for Wales, have met several noble Lords to discuss S4C and to listen to your Lordships’ concerns as promised. We had a very helpful discussion and I am grateful to all noble Lords who attended for their insightful and constructive approach. Their views have been invaluable and I appreciate the frankness and sincerity of their contributions to the debate. It was clear that, while our views differed on some methods of reform, we fundamentally shared the view that S4C must be protected as an independent channel, secured for the long term.

I will take some time today to try to give specific assurances wherever I can to all of the concerns that have been raised. I make no apologies for speaking at length on this issue, for it is one that the Government feel strongly about and one that merits the invaluable attention of your Lordships’ House. In doing so, I will speak to Amendment 29A in the name of the noble Lord, Lord Wigley; Amendment 34B in the name of my noble friend Lord Roberts of Conwy; Amendment 40 in the name of my noble friend Lord Roberts of Llandudno; and Amendment 41 in the name of the noble Lord, Lord Elystan-Morgan. I also clearly state from the outset that the Government intend to support Amendment 34B to add S4C to Schedule 3.

I will first talk about the funding of S4C, which so many noble Lords asked about. There has been almost universal acceptance that S4C, like any organisation in receipt of public money, must operate within the economic context in which we find ourselves. Cuts to the funding of S4C are inevitable and the existing, index-linked funding arrangement is simply untenable. The cut to S4C is exactly in line with the cut to the Department for Culture, Media and Sport. Quite simply, that represents the fairest solution. As well as the funding that S4C will receive from the Government and the BBC over the next four years, it will also receive around £20 million per year worth of programming from the BBC, which your Lordships will agree is not an insignificant sum.

A number of noble Lords asked for the funding for S4C to be secured for a longer period. I assure the noble and learned Lord, Lord Morris, that the Government have secured ring-fenced funding for S4C for the entire comprehensive spending review period up to March 2015. The noble and learned Lord asked for ring-fencing up to 2016, but we support it up to 2015, give or take a few months. That should be welcomed in the current fiscal climate and goes beyond the security given to many other bodies. Beyond the spending review period, the Government are committed to making certain that the new partnership arrangement will guarantee a level of funding that is sufficient to allow S4C to deliver its public service remit, as enshrined in legislation.

I reiterate the Government’s commitment to have a full review of the scale, scope and funding of S4C before the end of the spending review period, once the new partnership has had time to bed in, as my noble friend Lord Grade said. The long-term performance of the channel should be determined by its success rather than by how much money it receives. That success will be defined following the review which will be shaped by the people of Wales.

19:45

During our debate on 9 March, noble Lords suggested that initial decisions on S4C were taken without meaningful discussions with those in Wales who have a legitimate interest. We acknowledge that the Government moved fast on the decisions during the comprehensive spending review and were unable to consult with everyone. My noble friend Lord Roberts of Conwy stressed that Clause 10 now makes it a statutory requirement to consult before orders are brought forward, and that requirement specifies the need to consult Welsh Ministers on matters that relate to Wales. I assure your Lordships’ House and my noble friend Lord Roberts that there will be a full public consultation on the governance arrangements of S4C and that the views of the Welsh Assembly Government and other interested parties will be part of this process, as requested by my noble friend Lord Roberts of Llandudno in Committee.

This is also what lies behind our support of Amendment 34B in the name of my noble friend Lord Roberts of Conwy to add S4C to Schedule 3. When the Bill was introduced, it was not clear that the powers in Clause 3 would be needed to facilitate the new partnership with the BBC. However, it is now clear that, to make this partnership work in practice, there will need to be some modest changes to the constitutional arrangements of S4C. I am pleased that my noble friend Lord Crickhowell is with us after all this evening, especially as he is so knowledgeable about and experienced with S4C. I am sure that we all wish Lady Crickhowell a swift recovery.

By using the powers in the Public Bodies Bill, we are guaranteeing that our proposals must be subject to consultation and we are making certain that any changes will be subject to the scrutiny process associated with orders under this Bill. This process, as noble Lords will be aware, stipulates that any order must be accompanied by an explanatory document setting out the findings of a consultation process, along with giving Parliament the option of an enhanced affirmative procedure, which builds in time for a Select Committee to consider the detail of the order. That represents a very real check on the Government’s power, and it provides a safeguard that, in practice, prevents the Government from delivering policy that runs contrary to the views of Parliament.

In that respect, adding S4C to Schedule 3 makes the Government’s intentions clear, guarantees that consultation will be carried out and secures the requisite scrutiny of the detail when the order is laid before Parliament, as desired by my noble friend Lord Roberts. The Government would also welcome continuing to work constructively with noble Lords as the partnership develops and as the Bill passes to the other place. This is a significant and sincere offer as I genuinely believe that the expertise in your Lordships’ House will be positive for the future of S4C. My noble friend Lord Grade made all that very clear in his eloquent speech and I thank him for his support.

To answer the noble Baroness, Lady Gale, if S4C is not contained in Schedule 3, we may not be able to affect the whole of an agreement reached on a partnership between S4C and the BBC. Conversely, if S4C is in Schedule 3, the partnership can take place as agreed and documented as clearly as possible.

The Government cannot, however, accept Amendment 29A from the noble Lord, Lord Wigley, on the extent to which Clause 3 applies to S4C. I can understand the motivation behind the noble Lord’s amendment and, in principle, the Government agree with the proposition that not all powers in Clause 3 should be used in relation to S4C. However, in practice, Amendment 29A could actually compromise the reform of S4C, the need for which has been stated a number of times during this debate. It is important that the new chairman of S4C is given full opportunity to assess the detail of what is being proposed and full opportunity to make a contribution to the discussions. I agree totally with the suggestion of the noble and learned Lord, Lord Morris, regarding the importance of choosing the new chairman. I know that the Secretary of State is taking this personally very seriously. It will therefore be some time yet before the discussions are concluded and we can say with certainty exactly how Clause 3 would be used.

As regards the logo, I assure the noble Lord, Lord Wigley, and your Lordships' House that we have no intention of changing the name of S4C and we can say with some certainty that the whole of Clause 3(3) will not be used in relation to S4C. Conversely, the power in Clause 3(2)(f) to amend S4C’s governing procedures and arrangements, excluded under Amendment 29A, are likely to be required to implement changes following the conclusion of discussions between S4C and the BBC.

Many noble Lords have asked whether the funding from the licence fee can be given straight to S4C without any accountability to the BBC. What we are trying to achieve is a partnership with the BBC, and such a move would undermine this. The Government are clear that the BBC Trust is the right organisation to make certain that licence fee funding achieves value for money. It is therefore right that the money, ring-fenced as it is, goes to S4C via the BBC. The proposals set out in the licence fee settlement letter make it clear that there must be a genuine partnership with S4C and the BBC, mutually agreed by both the BBC and S4C. This is a critical point. The letter also makes it clear that, within this partnership, S4C must remain an independent service with independent commissioning and scheduling, and with a distinct editorial voice. This cuts to the heart of the issue. The partnership with the BBC should not be misconstrued as a merger or a takeover. No—it is a partnership that will protect the very things that noble Lords on all sides of the House are seeking to protect by having this thoughtful and passionate debate.

I assure noble Lords that the editorial independence of S4C from government, the Welsh Assembly and the BBC is assured. I should also add that the BBC’s current obligation to provide programming to S4C will remain, as will S4C’s existing relationship with the independent production sector.

Amendment 40 would remove S4C from Schedule 4, which would prevent us keeping S4C safe. Breaking the link to RPI is important from a financial perspective, but creating a partnership with the BBC, and in turn securing S4C’s funding via the licence fee goes, hand in hand with this, and we need to do it all to secure a strong future for Welsh language programming. If the Government were not able to use the Public Bodies Bill to change S4C’s funding arrangements, S4C would not be able to rely on the security of licence-fee funding. As many noble Lords, including my noble friend Lord Crickhowell, said, S4C will benefit from this security, particularly as the Government are determined to break the link with RPI.

Amendment 41, tabled by the noble Lord, Lord Elystan-Morgan, would require any changes to S4C made under Clause 4 to be preceded by an amendment to the BBC charter. The Government agree with the motivation behind this amendment—that there should be absolute clarity about the governance structure for S4C within the new partnership. The only difference between us is the mechanism by which we secure this clarity. It is more appropriate to codify the terms of the partnership in a dedicated agreement between the Secretary of State and the BBC, a document laid in Parliament, which enshrines the governance structures agreed with S4C and will set out exactly how S4C will remain an independent service. It would be inappropriate to amend the high-level BBC charter outside of its 10-year review cycle.

Several noble Lords, including the noble Baroness, Lady Morgan, have raised the issue of governance under the partnership, and I can confirm that the BBC will not have a majority on either the S4C board or the S4C executive. Furthermore, the BBC representatives need not necessarily be BBC Trust members but could be individuals nominated by the BBC Trust. I cannot guarantee, as some noble Lords have asked, that there will be no BBC appointees under this new partnership. But let us not forget that these terms will have been agreed during negotiations between S4C and the BBC. It will be S4C itself which will have negotiated the terms of this partnership. It was suggested that the payment of money by the BBC to another body would make that body a subsidiary of the BBC. This is absolutely not the case. Neither is there any intention of removing S4C as a statutory body, nor merging it with the BBC. S4C’s current public service remit, as enshrined in legislation, will remain and the Secretary of State will continue to exercise powers of appointment over the chairman and the S4C authority. The relationship will be on the basis of a partnership and not of a BBC subsidiary.

Finally, I suggest again that protecting S4C as an independent service, with independent commissioning and scheduling, and with a distinct editorial voice is absolutely at the heart of this coalition Government. It is a challenging market and savings must be made, but we must be under no illusions. This Government will do whatever it takes to protect S4C for the long term. These changes have been proposed for the benefit of Welsh language television and saving S4C. This is the goal that we all share and so I would therefore ask the noble Lord to withdraw his amendment.

[Lord Wigley]

My Lords, the House has listened with considerable interest to the more substantial reply that we have had tonight, compared with the one we had in Committee. None the less, a number of issues remain unclear and some quite unsatisfactory. We still have not had the bankable commitments that my colleagues and I have sought on the ongoing financial independence. We all appreciate that RPI could not continue and in Committee we invited the Government to bring forward some alternative formulae—perhaps 2 per cent of the BBC licence fee—so that there was a sort of ongoing commitment, even though at a different level from that which obtains today. If there was a need for ongoing commitment when the previous legislation was passed, by what virtue is that ongoing commitment not needed in the present circumstances? People could argue that it is needed even more now.

If I understand correctly, we heard that money will be ring-fenced up to 2015-16 but that is a commitment in name which is not in any Bill. There is no mechanism for the safeguards and no assurances on where they will be enshrined. I do not know whether the Government will bring something forward for Third Reading on that; time will tell. Neither have we had any clarity on why the Government are so anxious to secure the provisions of Amendment 34B. It is a pig in a poke. Certainly, there may be things that need to be done but no limit is being given by the Government and no self-denying ordinance as to how far they will take it. The assurances we are given are that there will be consultation. I noted with much interest that consultation is to be based on Clause 10(1)(e), which says:

“the Welsh Ministers, if the proposal relates to any matter, so far as applying in or as regards Wales, in relation to which the Welsh Ministers exercise functions”.

Perhaps we should be reassured that Welsh Ministers will therefore be exercising functions with regard to S4C. That is the only interpretation we can have from what the Minister said, but perhaps she was inadvertently misleading the House where that was concerned.

[Noble Lords]

Oh!

[Lord Wigley]

No, if the Minister wants to intervene to correct me, I will by all means give way. But if she does not—no—I repeat that the provisions of Clause 10(1)(e) are in regard to those matters,

“to which the Welsh Ministers exercise functions”.

At present, they do not exercise functions with regard to S4C. If the consultation is based on that, presumably they will in future. That would be an interesting development.

I am afraid that the Minister has not answered what I regard as a critical point. It is the involvement of BBC nominees and people on the executive function of S4C, taking decisions in circumstances where S4C is adjudicating between various bidders for commissions —independent producers outside on one hand, and the BBC on the other, in competition with each other. If the BBC is to be involved in that mechanism, how on earth can that possibly be fair? Independence means independence, not having people sitting at the table where those decisions are being taken.

I am not sure what position the noble Lord, Lord Roberts of Llandudno, will take on Amendment 40. However, if there is no greater clarification on how those mechanisms are to be assured, I hope that if he does not move it tonight, he will certainly do so at Third Reading. As for my amendment, we have not had the assurances that we need with regard to it and I beg the House to support me in the Division Lobbies.

20:03

Division 3

Ayes: 162

---

Labour: 137
Crossbench: 13
Democratic Unionist Party: 3
Independent: 3
Plaid Cymru: 1

Noes: 197

---

Conservative: 124
Liberal Democrat: 53
Crossbench: 12
Ulster Unionist Party: 4

20:15

Schedule 3 : Power to modify constitutional arrangements: bodies and offices

Amendment 30

Moved by

[Lord Newton of Braintree]

30: Schedule 3, page 17, line 16, at end insert—
“Administrative Justice and Tribunals Council.”

Amendment 30 agreed.

Consideration on Report adjourned until not before 9.15 pm.

London Local Authorities and Transport for London (No. 2) Bill [HL]

Monday 28th March 2011 Lords Chamber

Third Reading

20:15

Amendment 1

Moved by

[Lord Jenkin of Roding]

1: The Preamble, page 1, leave out lines 8 to 10

[Lord Jenkin of Roding]

My Lords, I beg to move Amendment 1 standing in my name and with it I hope we can discuss Amendment 2 and Amendment 3.

I ought to begin by declaring my interest. I am a joint president of London Councils along with my noble friend Lady Hamwee and the noble Lord, Lord Graham of Edmonton. London Councils is the representative body for the London borough councils, one of which, Westminster City Council, formally promotes this Private Bill jointly with Transport for London.

I am glad that at long last I can move the Third Reading of this Bill. It has been a very long wait. The Second Reading was on 20 February 2008. It is more than two years since the Select Committee completed its consideration of the Bill in March 2009. Before I can move to the contents of the Bill I ought just to explain why there has been this almost unparalleled delay with this Private Bill.

The Select Committee sat between 9 and 11 March and heard the petitions and representatives of the pedicab trade—I will deal with that later—and also the London Cycling Campaign. The committee decided that amendments should be made to the Bill and produced its special report which was published on 23 April 2009. At this point I express my warm thanks to the members of the committee, chaired by the noble Lord, Lord Faulkner of Worcester, whom I am glad to see in his place, and whose members included the late Lord Dahrendorf—that, too, gives one an indication of the passage of time. I thank them most warmly for their work.

After the committee reported, a new threat emerged to the Bill. A group of bodies representing the sporting interests voiced concerned about what are now Clauses 16 and 17. These would enable London authorities to recover the costs of cleaning streets and imposing traffic regulation measures at sporting and other events. The promoters became convinced that the sports bodies had very strong support among your Lordships and recognised that there was potentially a serious threat not just to Clauses 16 and 17 but to the whole Bill. Not surprisingly, therefore, they embarked on a process of negotiation with the sports bodies.

That process proved to be very long indeed. Without going into detail, I think that it is enough to say that agreement in principle was eventually reached about a year ago, last spring. However, soon after that the election was upon us, so the Bill had to wait until it could be revived in the new Session. Then, although the promoters believed that they had reached agreement with the sports bodies, a new point of dispute arose and conclusion of that was not finally agreed until the beginning of this year.

The Bill deals with seven distinct subjects. Because the Second Reading of the Bill was entirely formal and there was no debate on the Floor of the House, I think it right to take a few minutes of your Lordships’ time to describe briefly the main points in the Bill. As originally drafted, Clauses 4 and 5 would have enabled London authorities to attach street lamps and signs to buildings without requiring the consent of the owner or occupier of the building. The provisions were intended to bring the rest of London in line with the City of London Corporation, which already enjoys these powers. The intention is to avoid cluttering up the streets with more and more street furniture. However, in response to points made by the then Minister, Rosie Winterton MP, in her report to Parliament on human rights, the promoters put forward amendments to the Bill. Subsections (3) to (7) of Clause 4 now require the authorities to serve notice on the owner of the building in question and to take any representations into account. Subsection (12) requires the authorities to come forward with a statutory code of practice about the exercise of the powers. The provisions relating to compensation have also been amended in favour of the property owner.

If there are any lingering concerns about the precise terms of the code, I suggest that they may properly be dealt with in another place. That leads me to make the point that, although the Bill has taken over three years in this House, it still has to go through the other place. The promoters have taken leading counsel’s opinion on the compatibility of Part 2 with the European Convention on Human Rights, and she is satisfied that it is now compliant.

Clauses 6 and 7 deal with damage to the highways. I mention them briefly because they have been uncontroversial. They will enable the London authorities to recover the costs of repairs to the carriageway where damage is caused by construction traffic. They will also enable them to require a deposit in advance of the construction works commencing.

The main purpose of Part 3 is to decriminalise offences relating to builders’ skips. One might express some surprise that builders’ skips have to be dealt with on the Floor of the House, but the sort of offences that I am talking about are putting them out without a licence or not properly lighting or protecting them. Clause 9 enables a highway authority to require information about who the owner of the skip is in order to determine on whom penalty charge notices should be served. Clause 10 provides that the owner of the builders’ skip will be liable to pay any such charge arising from a contravention. Representations may of course be made against the imposition and appeals may be made to an adjudicator, very much as with the existing parking regime.

Part 3 also alters the powers of the highway authority to place conditions on giving permission for placing a skip on the highway and will enable the authority to insist that the skip has, as an integral part, lights or a guard or system of guarding. That would enable the highway authority to fix an immobilisation device to a skip in cases where it has also served a penalty charge notice.

I understand that there may be some concerns about Clause 9(5), which provides for a defence of knowingly giving false information about the identity of the owner of a skip. There has to be some way of enforcing Clause 9, which enables the authorities to obtain from the skip company the name and address of the person on whom they can serve a penalty charge notice. If not, the authorities will end up in a position where the whole of Part 3 will be unenforceable. It would soon become clear if a skip company had given false details knowingly, but I would hope that the threat of appearing in court would deter them from doing that.

I turn now to Clauses 16 and 17, which deal with the recovery of exceptional traffic management and waste clearance costs. These are the clauses that provoke the objections of the sports bodies to the Bill. Your Lordships will see that amendments have been tabled to remove both clauses from the Bill. The quid pro quo—not a surrender to the sports authorities—for that is that a memorandum of understanding has been signed with the Premier League and the Football League. I will explain that in a moment. The clauses as they stand would allow councils and Transport for London, as traffic authorities, to reclaim expenditure incurred in implementing traffic management measures, and allow the borough councils to recover expenditure incurred in complying with their duty to keep land and highways clear of litter, where the expenditure is reasonably incurred as the result of a sporting or other event.

The Department for Culture, Media and Sport expressed some objection at an early stage to what are now Clauses 16 and 17. Its objection was relayed to the Select Committee. Although there were no petitions against the provisions from the sporting parties, after the Select Committee had reported, significant opposition was expressed by them, including the Premier League and the Football League. Therefore, there were negotiations, which resulted in the memorandum of understanding being signed between the promoters and the Premier League and the Football League. The effect of that will be that London clubs that have a certain minimum average attendance will be required to enter into negotiations with the authorities, with the aim of reaching an agreement whereby the costs of the authorities would be recoverable as though Clauses 16 and 17 had been enacted. There are specified target dates for the completion of the agreements. No doubt, if agreements are not reached the promoters will have to consider coming back to this in future legislation to protect their interests.

Clause 18 deals with interference with barriers. It makes it an offence to open, close or otherwise interfere with a barrier erected to prevent the passage of vehicles, or any class of vehicle, into, out of or along a highway without lawful excuse. There has been no objection to that. Indeed, it is a very sensible measure.

Turning now to pedicabs, I cannot say the same for Clause 19. Those of your Lordships who have been in the West End recently will be familiar with what a pedicab is. The Bill, in Clause 19(8), defines them as cycles,

“constructed or adapted … to seat one or more passengers; and … for the purpose of being made available with a driver in the course of a business for the purpose of carrying passengers”.

That is a pedicab. The clause is solely about traffic management. It is not about the safety of the pedicabs themselves or the fitness or suitability of the riders. The clause would enable councils and Transport for London to identify the owner of a pedicab and to serve a penalty charge notice on the owner when a parking or moving traffic offence is committed. The clause goes on to say that it would operate only when either the councils or Transport for London have arrangements in place for a voluntary registration scheme for pedicab owners, or if a separate statutory licensing scheme had been enacted. Because such a scheme would undoubtedly require the pedicabs to display some sort of plate that could be used to identify the owner, that would inevitably follow. However, the clause does not, of itself, set up a statutory licensing or registration scheme.

There was an attempt some years ago, under the previous Bill, to set up such a scheme, but it was rejected by the Select Committee in another place on that occasion. A company that rejoices in the name of Bugbugs petitioned against the clause and appeared before the Select Committee. It owns pedicabs, which are hired out to riders for use in the West End. The Lords Select Committee did not accept the company’s arguments and the promoters are expecting opposition to the provisions in another place, not just from the pedicab operators but from the taxi trade.

Part 5 enables London local authorities to provide and operate charging apparatus for electrically powered motor vehicles on highways and to permit third parties to do this. It sets out the procedures for this provision as well as creating an offence of the unlawful use of charging points. The number of electric vehicles has increased rapidly since the Bill was introduced. It is well known that the Government are very much in favour of encouraging their use and, indeed, the Mayor of London has made it a priority. There has been no opposition except from the Society of London Theatre, which was understandably concerned about points being placed directly outside theatres.

In conclusion, I hope that what I have said will persuade your Lordships to give this Bill a Third Reading and agree to the amendments that I propose. I beg to move.

20:30

[Lord St John of Fawsley]

It is a great relief to support my noble friend on this issue, having voted for justice for young criminals, not without some experience of that matter. Since the Leader of the Opposition has made a habit of talking about himself, I will talk a little about myself, but not too much. The first social duty that I undertook was that of a prison visitor when I was my noble friend’s age—18. I have been Minister for Higher Education and I was concerned about the welfare of young criminals. I was equally concerned about protecting the innocent victims of crime. That is why I was moved to pay a tribute to the police this afternoon. I will not go into all that again; I made my point and I am extremely glad that I did. However, it is wonderful that my noble friend shows such persistence. That is what you need in politics; you have to keep going and keep at it. I hope that my noble friend Lord Steel will take the same line with his Bill. He should get on with it, not give it up. In the end, if you persist you will get somewhere but if you give things up you will not. My noble friend deserves every support and congratulation on the way in which he has persevered with this Bill, as does the noble Lord opposite who played such a distinguished part in the committee.

I have an interest to declare as when I left government because of the unemployment figures my noble friend was instrumental in my securing my next appointment. I had the honour to be appointed chairman of the Royal Fine Art Commission, a post which I held for 15 years until the whole of the commission was abolished by fax. Not even the Vatican in its worst days would behave in such a way. When the Orthodox Church got rid of the Orthodox Archbishop of London, it did so by fax. However, it provided a charge: namely, that he coveted thrones.

[The Chairman of Committees (Lord Brabazon of Tara)]

My Lords, I wonder, as the person responsible for the conduct of Private Bills in this House, whether I may bring the House to order. We are dealing with three amendments moved or spoken to by the noble Lord, Lord Jenkin, at Third Reading. We are not dealing with the Second Reading of the Bill or with other issues, such as those that my noble friend Lord St John has just raised. We are considering three amendments that deal with the recovery of street cleansing expenditure—nothing else.

[Lord St John of Fawsley]

My noble friend the Chairman of Committees is quite right. I was following the bad example of the Leader of the Opposition. One should never talk about oneself. It is a subject that is of interest only to oneself and no one else. I merely wanted to congratulate my noble friend on his persistence in proceeding with the Bill. Here, I make just one point; it is very important that Select Committee reports are speedily implemented. I heard the Select Committee being attacked because of its report. I answered on the millions of pounds spent by the noble Lord, Lord Rodgers of Quarry Bank, on the urban nonsense of turning us all into Dutch flat dwellers in five words that are all that needs to be said on that issue—and I shall then sit down. Those words are: “English people love their gardens”. That is it.

[Lord Faulkner of Worcester]

My Lords, perhaps I may take the House back to the amendment moved ably by the noble Lord, Lord Jenkin of Roding. I thank him for his kind words about my chairmanship of the Select Committee and other noble Lords who took part in those deliberations.

The issue we are discussing in Amendment 1 is whether it is correct to remove Clauses 16 and 17 —formerly Clauses 26 and 27—that deal with the recovery of costs arising from the holding of major sporting events. The Select Committee took a great deal of time to consider this issue. We received a report from the Department for Culture, Media and Sport, but, as the noble Lord, Lord Jenkin, said, there was no petition or evidence of any sort from the sporting bodies indicating that they were unhappy with what was proposed.

We took evidence from the Assistant Director for Public Protection and Safety of the London Borough of Hammersmith and Fulham. He stated:

“The large scale of events of the nature that we talked about cause littering over a widespread area, much of it in our residential streets, not just on the frontage of where the individual streets are. It requires additional street cleansing resources, much greater, over and above what we would normally put on the streets to deliver the cleansing that is required by our residents in the community to return the streets to a satisfactory standard after an event has taken place. The resources and costs specifically relate to the number of events, the scale of the event and the scheduling of when these events take place”.

We cross-examined Mr Austin and the witness from the DCMS. We heard from no witness or petitioner from sporting bodies. We had no knowledge that they were unhappy with what was being proposed. The committee, after considering the evidence very carefully, came to the conclusion that the promoters had made their case. In fact, they presented an exemplary case on the Bill as a whole; but, on this particular issue that required us to go against the advice of the DCMS, we concluded that it would be appropriate, in certain circumstances, for local authorities to recover from those organising large sporting and entertainment events additional costs for exceptional traffic management and waste clearance.

I am concerned to hear that the negotiations effectively took place after we had taken the evidence and considered the issue in detail in the committee. I put it to the House that the time for those deliberations was before the Select Committee considered these matters and that, if it was necessary for petitioners to come forward with objections, that was when those objections should be taken. It is not satisfactory, as a rule of procedure, for negotiations to take place subsequently, and for such pressure to be put on the promoters of the Bill that, in order to get it through, they must take out something which at the time was very important to them.

I do not wish to see the Bill delayed any further, but I am concerned at the way in which these amendments have been brought forward, and by the fact that it has been done not on the basis of our being able to cross-examine the people who do not like what is being proposed, but on the basis of a back-stairs deal.

[Baroness Kramer]

My Lords, I will speak very briefly. I congratulate the noble Lord, Lord Jenkin of Roding, on bringing forward a Bill that has taken so long to get to this stage. As a newcomer to the House, I find it astonishing that the time of this House has to be spent on issues such as the lighting and guarding of builders’ skips. If ever there was an illustration of the need for the Localism Bill, and a more general grant of powers to assemblies and local authorities, this Bill is it.

I will set that aside and make a couple of comments on the provisions. My hope is that as the Bill proceeds to the other House, there will be an element of balance in the way that it is reviewed. For example, returning to the contentious issue of skips, I, like many others, have been in a situation as a resident where I have become frustrated with people who have clearly abused their right to have a skip in the street. On the other hand, I have also done repairs and changes to my home and know that the cost of a skip is an important part of the building budget—so no one would wish that to increase unnecessarily. I hope that that constant balance will remain in the thinking of the House.

I welcome the move to a memorandum of understanding between sports clubs and local authorities. This is a sensible way to proceed on these issues, which are better negotiated between the parties than set out in statute and regulation. It will be less costly and more flexible, with more capacity to adapt to the needs of situations, if we move to a negotiated arrangement rather than always looking for a regulation to sort out the mechanisms. I wish that we could see some of that around pedicabs. Some people regard them as pests and some as positive attractions in the West End of London. I do not understand how one can enforce parking rules against them if the requirement for licensing is not statutory but merely voluntary—presumably that is something that the other House must cope with.

I, too, as I read through the legislation, congratulate everyone on persisting with this through a change of government. I was in the other place when this started. It has taken nearly three years, which is extraordinary. I suggest that local councils and assemblies ought to have the qualifications to deal with these issues, and that this illustrates a matter that we can now pass to those authorities in future legislation.

20:45

[Lord Rosser]

My Lords, I congratulate the noble Lord, Lord Jenkin of Roding, on the fortitude and tenacity he has shown on the Bill. I shall make only one or two points. As the noble Lord said, the Bill had its far-from-lengthy Second Reading—I think that it amounted to five lines in Hansard—more than three years ago, following which it was committed to a Select Committee. The committee reported in April 2009 and approved the Bill with a small number of amendments. It now stands as it was following the committee’s consideration. As my noble friend Lord Faulkner of Worcester said, there were no petitions against the clauses that the noble Lord, Lord Jenkin of Roding, now seeks to remove. There was opposition to those clauses from the Department for Culture, Media and Sport. The question is: what has been going on behind the scenes over the past 23 months?

The noble Lord, Lord Jenkin of Roding, threw a little light on the issue, but we should be told more. Apparently, representations were made against these clauses by organisations and businesses in the sport and entertainment industries—organisations and businesses that did not petition the Select Committee which would then almost certainly have called them to give evidence in public so that everyone could have heard their arguments. These organisations and businesses have instead been lobbying in private. We have not been told that the Department for Culture, Media and Sport has single-handedly got the Bill changed in the face of the wishes of the promoters and the report of the Select Committee.

The Select Committee heard evidence from the London Borough of Hammersmith and Fulham which said that the additional cost of clearing up outside the ground after a Chelsea football match was an average of £1,000 a game. It gave evidence of the amount that Chelsea paid in business rates and contrasted it with organisations that paid much more but which did not generate the same traffic management and waste clearance costs. Chelsea is a club with a certain amount of money. At the end of January it spent more than £70 million on two new players. At a cost of £1,000 on average a game for the additional cost of clearing up outside the ground, £70 million would pay for that to be done for around the next 2,000 years.

At a time when local government is having to tighten its belt, services are being cut and closed down and staff are receiving redundancy notices, why is it still felt appropriate, as the deletion of these clauses suggests, for local government and the council tax payer—of which I am one—to have to continue to pay the additional clearing up costs in the streets around a sporting and entertainment event that is put on for commercial gain? Surely organisations and businesses pay business rates just as individual householders pay council tax for the removal of waste from their own premises, not for the removal of waste that they have caused to be generated in the public streets outside as a result of the promotion of an event for that organisation’s commercial gain. Clearly that was the view of the promoters of the Bill and of the Select Committee. So what has happened to cause the promoters to change their mind under pressure over these clauses being in the Bill, as revealed by the amendments proposed by the noble Lord, Lord Jenkin of Roding, at this late stage? Who has been making representations in private that they were not prepared to make publicly in front of the Select Committee? I hope that either the Minister or the noble Lord, Lord Jenkin of Roding, will enlighten your Lordships’ House on that point.

We have no intention of seeking to stop the Bill. There is much that is non-controversial within it, which clearly the local authorities concerned wish to see implemented. However, a little more information about the lobbying that has—or has not—been going on in private over the past two years to achieve a change in a Bill with which the promoters and the Select Committee were happy, and against which there had been no petitions is surely not too much to ask from either the Minister when he responds, or perhaps more appropriately, from the noble Lord, Lord Jenkin of Roding, when he replies.

The noble Lord, Lord Jenkin of Roding, referred to understandings or to a memorandum of understanding. I hope he will say just how strong and meaningful are the understandings that have apparently been reached and in what circumstances local authorities’ costs will be reimbursed, at what level and by whom. Are they written understandings? Are they legally binding? I hope the noble Lord will provide the answers because there must be some concern, subject to the noble Lord’s response, that they will prove worthless and meaningless in the light of the removal of these clauses from the Bill.

[Earl Attlee]

My Lords, it is more than two years since Parliament last considered this private Bill, so it is the first time that it has been considered by the coalition Government. I am grateful to my noble friend Lord Jenkin of Roding for his explanation of the Bill. I should point out to the House that my noble friend is leading on the Bill—not me. The noble Lords, Lord Rosser and Lord Faulkner of Worcester, have made some points about procedure. I want to make it clear that it is not a matter for me but a matter for the Procedure Committee of your Lordships’ House, as I am sure all noble Lords would agree. However, this is not the first time that the London local authorities and Transport for London have promoted a private Bill together. The Bill would confer a variety of powers on its promoters to improve streetscape and the local public realm. My noble friend has explained how that will work with the Bill so well that it is unnecessary for me to repeat his work there.

The Bill's provisions would also enable the promoters to enforce sanctions against anybody giving traffic unauthorised access to gated roads and enforce moving traffic and parking contraventions against pedicab owners and operators where the owner or operator has entered into a voluntary registration scheme. Again, my noble friend has given a comprehensive explanation. The Bill would also put in place a comprehensive system to allow the installation and use of charging points for electric vehicles on the highway in locations across the capital.

I acknowledge the amendments that my noble friend Lord Jenkin has proposed and explained so well. Although I very much doubt that we will be voting on the Bill this evening, I should like on behalf of the Government to comment on a few points of note for the record. The Bill creates various new civil and criminal offences in relation to improper conduct when depositing a builder's skip on the highway; the unlawful opening of a gated road to unauthorised traffic; the improper use of a charging point for electric vehicles; and moving traffic and parking contraventions by pedicabs.

The Government are committed not to create new offences unless it is truly necessary to do so. My noble friend Lady Kramer made some pertinent points about that. As such, I should state now that before the Bill reaches its Committee stage in the other place, the promoters will need to have submitted to the Ministry of Justice their assessment of the impact of creating these offences. This will allow the Government to come to an informed view on whether their creation is appropriate. Other clauses have the potential to impose burdens on business, particularly the construction industry. I am referring to the clauses relating to the placement of skips on the highway and to recovering the cost of remedial work on the highway from a developer after a development has taken place.

The Government's position on increasing the burden on business is very clear and we will be considering whether, in our view, the Bill would create an unacceptable burden on business in order to make our views known before the Bill reaches Committee stage in the other place. The Government have already notified the promoters of some clauses which we feel could be improved or altered by some minor amendments, particularly with regard to the affixing of street furniture to buildings, where we would like the owner of the building which is to have street furniture affixed served a notice stating the exact date on which the work will begin and the terms of usage of electric vehicle charging points installed and operated using the powers conferred by the Bill.

We will be seeking to reach agreement on amendments with the promoters before Committee stage in the other place as it is then that the Bill can next be substantially amended. Aside from the specific points I have raised this evening, the Government are content that the Bill passes to the other place, where it can be further scrutinised to ensure that the points I have raised—most notably in relation to the creation of new offences and the imposition of new burdens on business—can be addressed to the Government’s full satisfaction. I conclude by thanking my noble friend for putting forward the Bill.

[Lord Jenkin of Roding]

My Lords, I am extremely grateful to all noble Lords who have taken part in this debate, and for the important comments that have been made. I was amused by my noble friend Lord St John of Fawsley, who congratulated me on my persistence. I have to say that that is wholly undeserved. I did not move Second Reading. The people who can be congratulated are the promoters, the London boroughs and Transport for London. I shall take his kind words about that and simply comment that at a very early stage in my career, someone said to me, exactly as my noble friend has said, “Patrick, if you want to achieve anything, keep pegging away”. In my life I have tried to follow that nostrum. However, I am grateful to my noble friend.

I turn to my noble friend Lady Kramer. I have a lot of sympathy with her on her suggestion that much of this ought not to come to the Floor of the House in a Private Bill in this form. All I can say to her, in some comfort, is that before 1992 a great many more Private Bills came on to the Floor of the House. However, in that year the Transport and Works Act was passed and all the railway Bills, all the major road Bills and all the rest of it have now disappeared, and what is left are the occasional local authority measures, such as we have here and we had earlier in the previous Parliament from Manchester and others; and, of course, occasionally the universities need to have legislation to amend their statutes. However, I am sure that my noble friend on the Front Bench will have heard her plea for something on more general powers.

I have to say in relation to London—and I have lived in London almost the whole of my working life—that it has conditions and circumstances that are very different from any other city in the country, and I am not surprised that both the City of London and the London local authorities have felt the need from time to time to introduce legislation to deal with the problems which they face. My noble friend also welcomed the negotiated agreement—I will come to the remarks of the noble Lords, Lord Faulkner and Lord Rosser, in a moment. All I can say at this stage is that I was grateful for my noble friend Lady Kramer’s support on that.

As for the deal done with the Football League and the Premier League, I understand the indignation that noble Lords may have felt that this was done outwith the consideration of the Select Committee. As the noble Lord, Lord Faulkner, said, the Select Committee examined the authorities from Hammersmith and Fulham. It heard the evidence and felt that the promoters had made a good case for their clauses, and here we are with an agreement having been reached outside the committee. Whether or not it was a smoke-filled room, I do not know; but, nevertheless, it was reached without the full scrutiny that it would have had if it had gone before the Select Committee. I have some sympathy with that point. I asked a number of questions myself about whether there was any reason why the sporting authorities were not aware of what was in the Bill. It is their job to make sure that they do. They are very wealthy organisations; they spend billions of pounds, as one noble Lord said, on buying footballers and so on. I do not see why they could not have done this before, but the fact remains that they did not. They did not put up a petition. The committee therefore could not hear the petition and reach a conclusion on it.

So what have we got? As I explained in my opening speech, after very prolonged discussions a memorandum of understanding has been reached. In each case the club that falls within the definition, which has a reasonably substantial attendance at its events, has to enter into agreement with the local authority to cover the costs that would have been covered by these two clauses. If someone says to me, “An agreement to agree is not worth the paper that it is written on”, I would have to say that I was brought up in my legal studies entirely to accept that. However, there rests behind this the fact—and the sporting authorities are in no doubt about this at all—that if they do not reach agreements of the sort envisaged in this memorandum of understanding within a clear time limit which is spelt out here, then future legislation will be brought forward to reinstate these clauses.

[Lord Faulkner of Worcester]

Does the noble Lord agree that it would have been courteous to this House if the detail of that memorandum of understanding had been made available to your Lordships before we had this debate today? Can he at least give an assurance that it will be published and will be considered in proper detail when the Bill reaches another place so that it can at last be given proper scrutiny?

14:29

[Lord Jenkin of Roding]

I have much sympathy with that. I do not think an agreement of this kind could be disclosed to Parliament without the agreement of both parties. I will draw the attention of the promoters to what the noble Lord has said and see whether they can secure the agreement of the sporting bodies that this should be made public before the Bill goes to a Select Committee in another place.

[Lord Rosser]

Can the noble Lord tell the House how long ago this memorandum of understanding was signed?

[Lord Jenkin of Roding]

It was reached in the early part of this year. The original agreement had been left before the election. As often happens when negotiations are dragged out over a long period, new objections were made, and it was not until the beginning of this year that finally there was an agreement. Part of the agreement was that the clauses be removed and replaced by that memorandum of understanding. Nobody is in any doubt that if the sporting clubs do not negotiate agreements with the local authorities in good faith, the promoters will bring back the clauses in some form. Having heard the noble Lord, Lord Faulkner, they should be in no doubt that a Committee would take a fairly clear view on the merits of those clauses.

The noble Lord, Lord Rosser, is entitled to his complaints. This has been a very long drawn out matter. One can argue about whether the promoters ought to have given in to the clubs. They clearly thought that the whole Bill might eventually fall on this basis, not just what were then Clauses 26 and 27. They will read in Hansard the criticisms that have been made, and I hope that the lesson will be learnt and this will not happen in this form again. I feel particularly sorry for the Select Committee which spent a good deal of time on this Bill only to find that its decisions had been subverted by this memorandum of understanding. I think I have gone on long enough, unless there are any points that I have missed out.

Amendment 1 agreed.

Clause 16 : Recovery of exceptional traffic management and waste clearance costs

Amendment 2

Moved by

[Lord Jenkin of Roding]

2: Clause 16, Leave out Clause 16

Amendment 2 agreed.

Clause 17 : Recovery of costs: appeals

Amendment 3

Moved by

[Lord Jenkin of Roding]

3: Clause 17, Leave out Clause 17

Amendment 3 agreed.

Bill passed and sent to the Commons.

21:03

Sitting suspended.

Public Bodies Bill [HL]

Monday 28th March 2011 Lords Chamber

Report (2nd Day) (Continued)

21:15

Amendment 31

Moved by

[Lord Judd]

31: Schedule 3, page 17, line 18, leave out “Broads Authority.”

[Lord Judd]

My Lords, in the absence of the noble Lord, Lord Greaves, I rise to move Amendment 31 and to speak to Amendment 34. In doing that, I should also like to say a few words about the government amendments. When I arrived at the House today, there was a message from the noble Lord, Lord Greaves, asking me to move the amendment and saying that he was “confined to barracks”. I thought, “My goodness, the Whips are getting tough on the other side”. But, in fact, I am sorry to say that the noble Lord is unwell again. I am sure that it would be the wish of the whole House, because of the noble Lord’s commitment on these matters, to send him greetings and God speed for a rapid recovery.

After the profound issues of law and legal institutions that we have been having today, this issue might seem a bit ephemeral. However, I do not believe that it is ephemeral because it is central to the quality of our society and those things that make Britain a place worth living in. Before I speak to Amendments 31 and 34, I should like to put on record how much many of us appreciate the moves made by the Government in their amendments to remove some of the anxieties which were surrounding the future of the parks. No one could be in any doubt that we have Ministers, whatever our profound differences on all sorts of things, who are committed to the national parks. Indeed, I was very impressed when I took the chair at a meeting on Thursday to hear the Parliamentary Under-Secretary of State speak so positively about the parks. From that standpoint, I should like to express real gratitude that the Government have moved. In a sense, that makes my remarks on Amendments 31 and 34 sad in that I wish they were not necessary.

The amendments would remove national park authorities and the Broads Authority from Schedule 3, the schedule relating to constitutional arrangements. As has been the case on a number of other parts of this Bill, it is not clear why the wide scope of Clause 3 is necessary in the light of powers that are already available to Ministers and the absence, as I understand it, of radical proposals in the local responses to the Defra review of governance of national park authorities and the Broads Authority.

It has been suggested that the list of constitutional arrangements in Clause 3 could be tightened in relation to its application to national park authorities and the Broads Authority. However, the Government have indicated that they are not ready to do that because of the way in which the clause is set up. Clause 3(1) gives Ministers the powers to change constitutional arrangements and subsection (2) says that that includes X, Y and Z and so on. But it is not a definition of the power itself. So the Government could still make a constitutional change even if it was not listed in the examples.

It might be helpful if I put three specific questions, which I hope are constructive, to the Minister. First, why is it considered necessary to include national park authorities and the Broads Authority in Schedule 3 at all, given the powers that Ministers already have in relation to amending the membership of these bodies—for example, those introduced by the Natural Environment and Rural Communities Act 2006? Secondly, will the Minister indicate which proposals emanating from the Defra review of governance of national parks are likely to require legislative changes, particularly any proposals which relate to the composition of membership of authorities and which would anyway be covered by Section 61 of the NERC Act? Thirdly, can Ministers provide a definitive list of the constitutional arrangements of national park authorities and the Broads Authority that they consider will be covered by Clause 3? Which of these do they consider will need amending in the light of the Defra governance review, which, it seems, will not be published until May because of the local elections?

If greater flexibility is still deemed necessary by the Government, surely it would be better for the Bill to contain a dedicated clause relating to national park authorities and the Broads Authority which amended the relevant sections of the National Parks and Access to the Countryside Act 1949 and the Norfolk and Suffolk Broads Act 1988? It could specify what constitutional arrangements Ministers would have the power to amend by order. As it is, I hope that Ministers, with whom we have worked so well on this Bill, will agree that Clause 3 as it stands is unacceptably open-ended. I believe that it is time to reflect. I hope that the Government, as they have so readily done on some other issues, will move to meet these points. I beg to move.

[Baroness Miller of Chilthorne Domer]

I support the noble Lord, Lord Judd, in the questions that he put. I remember, when the NERC Act was going through, the lengthy debates that we had on how many representatives of the national interest should sit on national park authorities, what role councillors from the principal local authorities should have if, for example, they lived outside the park and so on. Many of the issues are worthy of deep consideration and consultation. It seems unfortunate—I know that it is just how the timing has worked out—that we will have to agree or disagree with the drafting here, before the consultation is completed. Up until now, the governance of national parks has evolved in a way that has carried support. My fear is that if it changes and becomes the subject of ministerial decree that consensus will be lost. I am very concerned, and I am very glad that the noble Lord, Lord Judd, put his questions.

[Lord Marlesford]

I support totally what was said by the noble Lord, Lord Judd, and by my noble friend. There are very few things which I mind so much about as the national parks; I have been very much involved in them for a long time. The national parks, along with the planning legislation of the same period of 1948-49 were one of the two great achievements of the Attlee Government—the other being the creation of the National Health Service. Let us remember that we created our national parks only some 50 years after the Americans created theirs in, I think, 1898.

I am afraid that it would be absolutely unacceptable for the Executive, whichever Government were in power, to make crucial changes to the organisation and administration of the national parks without specific parliamentary approval in each case. Of course, one is not saying that there should not be any changes at any stage, but I am afraid that my suspicion of Executives is such that I would never agree to something as crucial as changing the national parks without specific parliamentary approval.

It is quite interesting that the national parks and the Broads Authority are mentioned separately, and I am sure that all noble Lords know why that is. The national parks were formed under the 1949 Act and, as the noble Lord, Lord Judd, has pointed out, the Broads Authority was formed in 1988. I was very much involved in that because I was on the Countryside Commission at the time. The only reason that the Broads Authority was not a national park at the time was, first, because the original definition of “national park” was a wild area, which the broads clearly were not, and, secondly, because initially there was a lot of suspicion and opposition in the broads that commercial interests concerned with boating, although perfectly legitimate, might be interfered with by its becoming a national park. Therefore, frankly, it was something of a concession to say that the broads were not a national park and that they had their own separate Act of Parliament.

I am not saying that I would necessarily die in a ditch for that to continue. The crucial thing is that the national parks, including the broads and the parks created since the 1949 Act, should continue to have the complete protection at the pinnacle of our hierarchy of designation of countryside areas. Of course, they are obviously followed by heritage coasts and areas of outstanding natural beauty and so on, but they are so precious to this country that we need a lot of reassurance regarding exactly what powers the Government are seeking and reassurance that those powers will not be exercised without reference to Parliament in each case.

[Lord Cameron of Dillington]

I very much support the amendment. The noble Lord, Lord Judd, referred to the quality of our national parks. We all consider them to be an essential characteristic of this nation, and the benefits that they bring to our urban and rural societies are huge. To my mind, their quality depends very much on the maintenance of the very delicate balance between local and national interests, which have been thrashed out over the years since 1949. Here, the Government are giving themselves—and, more importantly, their successors—powers to modify the constitution of national parks authorities without having to revert to Parliament. As the noble Lord, Lord Judd, said, those are open-ended, and that must be wrong. This Government may not have any malicious intent vis-à-vis the national parks but there is no sunset clause and I look forward to hearing the answers to the questions put by the noble Lord, Lord Judd.

[Lord Maclennan of Rogart]

My Lords, I rise briefly in view of the fact that the principal questions to which I wish to have an answer have been posed by the noble Lord, Lord Judd. My noble friend Lord Greaves, whose recurrent illness is distressing and to whom we all send good wishes, was very anxious to know why the Government were proposing to include the Broads and the national parks authorities in Schedule 3, as the Government already have powers to make modifications. This seems to be an omnibus arrangement and it is not necessary if the Government are in a position to act in any event.

Can it also be indicated what particular powers the Government have in mind to alter under Schedule 3 provisions? It does not seem that there is any need to do so. These bodies are responsive to both national and local interests, opinion and governance, and the balance seems to be set quite well. Therefore, if we could hear a little more, it would be of great assistance.

21:30

[Baroness Quin]

I, too, support my noble friend Lord Judd in his amendment. I was very struck by the support that, even in a very brief debate, he received throughout the Chamber with the comments of the noble Baroness, Lady Miller, the noble Lord, Lord Marlesford, who, we know, is strongly committed to the national parks, and the noble Lords, Lord Cameron and Lord Maclennan. The Government can be in no doubt about the strength of support for the national parks that clearly exists on all sides of the House.

As my noble friend told us previously, he is a vice president of the Campaign for National Parks. I am not involved in quite the same way, but I would like to thank the campaign for the briefing and information that it is always ready to send to Members of your Lordships' House.

I also thank the Government for clearly responding to some of the concerns expressed the last time that we debated this in Committee. In particular, they removed the national parks and Broads authorities from Schedules 5 and 6 to the Bill relating to the power to modify, transfer or delegate functions. Because of that, it is not surprising that the debate has focused on the continuing mention of these authorities in Schedule 3. I agree with the comments and concerns that have been expressed about this.

Obviously, mention was made of the consultation that has taken place and to which the Minister referred when we dealt with this in Committee. In Committee, he said that he and his colleagues were currently considering the responses to that consultation and were committed to announcing the outcome by the end of March. Well, the end of March is this week. Perhaps this evening the Minister might have something to say about the outcome of that consultation. At the time, he was thinking that we would probably get to this part of Report after Easter. None the less, given the interest and concern about this, we would like to know the preliminary findings of the consultation exercise.

In speaking this evening I want to reinforce the questions asked by my noble friend. The key one is why it is still felt necessary to include these organisations in Schedule 3 given the powers that Ministers already have under other legislation. Are there elements of the changes that the Government want to make that cannot be done via the legislation that already exists? We need an answer to that specific point in relation to national parks—it has been pointed out to me that perhaps the Broads legislation is somewhat different in this respect. What is not available to Ministers under the 1996 Act and other legislation mentioned by my noble friend that is already on the statute book?

We would like a list of the constitutional arrangements that the Minister feels are best dealt with in this Bill and cannot be dealt with by some other legislative instrument. Without information of that kind, what is being proposed still seems too wide, too open-ended and too vague. We are not in a clear position to judge what is in the Government's mind.

As we were reminded today, the 11th report of the Delegated Powers and Regulatory Reform Committee stated that despite the welcome changes that the Government have made in the Bill, the committee is still very concerned about the,

“exceptionally wide delegated powers which remain in clauses 1 to 5 and 13”.

Given that concern and the importance to our country of the national parks and the Broads, we should get some answers to the questions that were well raised by my noble friend and others who took part in this evening’s debate.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

My Lords, I will respond to Amendments 31 and 34 in the name of the noble Lord, Lord Greaves. I would like to say to the noble Lord, Lord Judd, that there has been no element of his legs having been broken or anything like that. Sadly, my noble friend Lord Greaves is ill. He is not here, so we wish him well and look forward to seeing him back in due course.

I will also speak to Amendments 46, 53, 57, 58 and 59. Amendments 58 and 59 are in the name of my noble friend Lord Taylor. Amendments 46, 53 and 57 are in the names of my noble friends Lord Greaves and Lord Taylor, which gives some indication of where we are coming from on those issues.

I agree totally and utterly with the noble Baroness, Lady Quin, about the strength of support on her own Benches for the national parks and the Broads authorities. That is true of all Benches throughout this House, and I reiterate it on behalf of the Government.

We had a good debate on this matter in Committee on a similar group of amendments, and on that occasion I explained the Government’s thinking in placing these bodies in Schedules 3, 5 and 6. I shall make things absolutely clear on the scope of Schedule 3 for the noble Lord, Lord Judd, who seemed to imply that the provision could be used in a slightly wider way, with matters from other clauses. We do not think that Schedule 3 could be used to go wider than it is set out, and I hope that I shall be able to cover that matter in due course. We dealt with Amendments 3, 5 and 6, which stemmed from the consultation on the governance arrangements for those bodies, which honoured a commitment in the coalition agreement—our bible—and was run in close co-operation with the national parks and Broads authorities. We asked each authority to make recommendations following consultation on the changes needed for their governance arrangements. We were clear from the start that the objective was to improve the governance arrangements of those bodies and not to remove or replace them. For that reason, they do not appear in other schedules to the Bill—not in Schedules 1 or 2, for example. Our consultation began with these words:

“The Government wishes to retain an independent authority, as currently exists, for each of the National Parks and the Broads. It intends that these authorities should continue to be the local planning authority for their areas”.

The paper then went on to raise a number of questions about what modifications or refinements of the current governance arrangements might be desirable.

In Committee, your Lordships pressed me on the sort of steps we might want to take and on why those could not be achieved without this Bill, perhaps by using powers which already exist in the Environment Act 1995 or the Natural Environment and Rural Communities Act 2006. Of course, at that time it was too early for me to be able to give concrete examples, as we were still at an early stage of evaluating the consultation. I have a slightly embarrassing admission to make, because at that stage I announced that we would have the outcome of our consultation by the end of this month. That has slipped a little, because that takes us into the period of local government elections purdah, and it will not now be until after the elections. At that stage, I still thought that Report stage might be after Easter, but one never knows quite what the Opposition will achieve in delaying government legislation. So there has been a degree of blame on all sides. But we have made significant progress in identifying what might be in our response. As a result, we have come to the conclusion that there is very little likelihood of the powers in Clauses 5 or 6—the powers to transfer functions and authorise delegation—being needed to implement any changes resulting from that consultation. For this reason, I propose to remove the national parks and Broads authorities from the schedules. That is why Schedule 6—because they are the only bodies left in that schedule—will disappear, and Amendments 46, 53, 57 and 58 have that effect. Amendment 59 is a consequential amendment that removes the reference to Clause 6 from Clause 7. Although it is clear that Clauses 5 and 6 are not required to implement necessary changes, the same is not true for Schedule 3, which deals with constitutional arrangements, so I cannot agree to the amendment moved by the noble Lord, Lord Judd.

It would not be appropriate for me to pre-empt or predict the announcement that we shall make after the May elections. However, purely by way of illustration, the House will see a number of the suggestions which national parks authorities have already made. The proposals are—dare I say it?—largely in the public domain, having featured in various board papers produced by the authorities, and elsewhere. They include, for example, the power to remove the requirement for the Secretary of State formally to appoint the members whom parish councils choose and the power to allow non-councillors to be eligible for the parish seats, or to limit the maximum time that all members may serve on a national parks authority. Any of those points, if accepted, could be delivered through Clause 3.

I appreciate that noble Lords might feel that there are other ways of dealing with these things but we think it would actually be easier and better, under the powers in the Bill, to deal with those matters in that way. I therefore hope that your Lordships will agree that it is premature to consider removing Schedule 3 at this stage and that it should continue to stand as part of the Bill. There is no sinister motive behind that; all we are proposing is a power to amend constitutions and all the usual checks and balances are available in the Bill. We want to look at what comes out of that consultation. I have given some hint of that in what has appeared in the public domain but the noble Lord, Lord Judd, will probably know even more—the noble Lord smiles—about what might come from it. I hope that he will accept that this should continue to be part of the Bill.

As I said, we are perfectly happy to remove the national parks and Broads authorities from Schedules 5 and 6, which is why we have tabled our amendments. However, it is quite right that they should remain part of Schedule 3 on the power to modify constitutions. With those assurances, I hope that the noble Lord, Lord Judd, will feel able to withdraw his amendment.

[Lord Judd]

My Lords, first, I thank the noble Lord for his response and for its friendly tones, which I appreciate and which have characterised the Government’s approach to discussions on the future of the national parks. I want everybody to recognise that we know that and appreciate it greatly. We are all getting titbits of indications about what might be in the review and what its outcome might be. The noble Lord has given us a few sweeteners and I have certainly heard some reports and seen some assessments of what that exercise might have indicated, but in the assessments I have seen there is no indication whatever of any great demand for radical change—none at all. There are some very constructive observations but there seems to be no argument coming out for a radical change of arrangements.

I am sure that the Minister, who is a reasonable man, will agree that it is not really satisfactory to be considering giving those undefined and extensive powers to which the noble Lord, Lord Marlesford, referred so well before we have seen the outcome of the consultation. If that consultation was necessary, surely we should see its outcome before we decide whether we want to give Ministers certain powers to meet that situation. This is untidy and the noble Lord in his heart of hearts probably would agree with me that constitutionally it is not really acceptable. There are also—and my noble friend Lady Quin made the point very well—all sorts of provisions under existing legislation. It just is not clear what is going to be better about putting these new, very extensive, open, ill-defined powers into this Bill.

21:45

I want to thank all those who have participated in the debate. Absolutely everyone, without exception, has spoken with the authority of engagement and of years of experience in these matters. I take particular encouragement from the fact that the noble Lord, Lord Marlesford, spoke; he and I came into the House together 20 years ago. We have watched each other and been friends across the divide and on probably far more issues than not, I am sorry to say, we do not see eye to eye. However, on this issue—the importance of the parks and their qualitative dimension to society and the areas of outstanding natural beauty—we have always seen eye to eye and it was therefore good to hear him. I want to thank everyone, from the Cross Benches, the Liberal Party and my own Front Bench who have contributed.

I am in touch with a very wide cross-section of people who care about these issues deeply. I have the privilege of being president of the Friends of the Lake District which represents CPRE in Cumbria. I have the privilege of being a vice-president of the Campaign for National Parks and although that does not make me a trustee or an executive staff member of either organisation, it keeps me very much in touch with a wide cross-section of the people involved. I know that there will be a lot of good will towards the Government for the steps they have taken on this Bill so far. They will have generated brownie points as indeed will the measures they have taken so far—although there is a lot more still to be covered and a lot more safeguards to be put in—as to what they have done on forests as well. That will accentuate the anxiety about why this particular generalised power is not being compromised at all in the Government’s approach and why they are being so intransigent on the issue. It is a pity and I hope therefore that before Third Reading they will, even at this 11th hour plus, go away and think whether there is some way that they can come back and meet this point and not spoil the good will they have generated by leaving quite acute anxiety out there concerning this part of the Bill. At this stage I beg leave to withdraw the amendment.

Amendment 31 withdrawn.

Amendment 32

Moved by

[Lord Newton of Braintree]

32: Schedule 3, page 17, line 18, at end insert—
“Civil Justice Council.”

Amendment 32 agreed.

Amendments 33 and 34 not moved.

Amendment 34A

Moved by

[Lord Whitty]

34A: Schedule 3, page 17, line 24, leave out “Passengers’ Council (“Passenger Focus”).”

[Lord Whitty]

My Lords, my comment this evening is basically: why is Passenger Focus still here in the Bill? As the noble Earl knows, Passenger Focus had the distinction of appearing in three schedules to start with, plus we had a generalised statement from BIS that it wished to bring all consumer bodies together as one body, probably Citizens Advice. Because the consultation on all that has been postponed, we do not yet know whether the Government are still so minded, although I suspect that the noble Earl’s department has seen off that proposal for the moment, so we are discussing Passenger Focus as a separate entity. In default of having a sensible rationalisation of consumer bodies, it is important that Passenger Focus remains.

When we removed Passenger Focus from Schedule 5, I received some assurances on the subject from the noble Earl, but this amendment relates to constitutional change in the body. As we have just heard from the noble Lord, Lord Henley, a lot of things could be done under the heading of constitutional change, so I would like some assurance from the noble Earl that the worst fears are unfounded. It was said that Passenger Focus would be reduced to its core role. I expressed concern at the time that that might mean that it would no longer be able to criticise the general conduct of the railway or bus companies, or indeed government policy, and would simply be reduced to a complaints organisation. I think that, on that occasion, the noble Earl said that that would not be the case, but the drastic reduction in its resources—by nearly 40 per cent—suggests that it will have to reduce substantially. If, in order to meet that very much reduced budget, it has to drop some functions, we should be told which functions the Government expect those will be.

If the inclusion of Passenger Focus in this schedule is simply aimed at its governance, I would need reassurance that that would not remove the regional base of its governance and its wide remit to go into the affairs and performance of individual train and bus companies. I hope that I can receive those assurances tonight, in which case we can have a very short debate on this item and welcome the fact that Passenger Focus will be affected by this Bill only to a minimum degree. However, I need those assurances. I beg to move.

[Lord Hunt of Kings Heath]

My Lords, perhaps I may briefly support my noble friend in saying that I hope that the noble Earl will be able to give the assurance that he requires. The problem with Schedule 3 is that, on the face of it, it gives considerable power to Ministers to alter the constitutional arrangements of bodies and offices. I take that to mean that, if the Government were unhappy with the performance of the board of such an organisation, they could make drastic changes in its governance arrangements by bringing an order before Parliament. The problem is that that power could also be used to remove members of the board who may be causing some disagreeableness to the Government. That is a matter of concern. Clearly, if these public bodies are not able to exercise their functions in a robust and independent way, they are unlikely to do their job effectively. This relates to all the bodies listed but I think that the question that my noble friend has raised about Passenger Focus is a fair one to put to the noble Earl, Lord Attlee. I hope that, specifically in regard to this body, the noble Earl will say on the record from the Dispatch Box that the changes envisaged to governance et cetera will only be minor.

[Earl Attlee]

My Lords, this amendment would remove Passenger Focus from Schedule 3, preventing our current proposals to change the governance arrangements of the body. The noble Lord, Lord Whitty, asks why the body is still here in the Bill. He also mentioned other bodies, such as Citizens Advice. He will recognise that BIS is developing proposals for reforming the wider consumer landscape, but it is too soon to say how the reform of Passenger Focus will fit with that, as this is too long term.

The noble Lord expanded his point to Citizens Advice and trading standards organisations, if I may put it like that. We would not want to rule that out but the consideration of options is at too early a stage for any commitment to be given. As was made clear in Committee, the appearance of Passenger Focus in the Bill does not reflect the view that passengers’ interests are unimportant. We are very clear that passengers are the only reason that we run a public transport system in the first place. In addition, we fully accept the need for a powerful passenger advocate, which is reinforced by EU provisions that require us to have a properly independent complaints body to which passengers can turn. Passenger Focus has that role. This was reflected in the public bodies review, which concluded that Passenger Focus should be retained but substantially reformed to focus on the core role of protecting passengers, while reducing costs to taxpayers.

The noble Lord, Lord Hunt of Kings Heath, made the important point—if I might paraphrase him—that this is perhaps an opportunity to weaken the body in certain circumstances. The answer to that is simply no. We want to maintain an effective passenger advocate; that is the best way of ensuring that transport operators are held properly to account. The Government also value having a passenger advocate that has the confidence and expertise to be a critical friend to the Government and is prepared, where appropriate, to hold both the Government and transport operators to account. This is an opportunity to ensure that role is performed in a robust and cost-effective way.

A significant amount of work has already taken place to review the details of Passenger Focus’s work for next year within a significantly reduced budget. As part of this process, it is right that we should look at areas such as the size and composition of the Passenger Focus board. The noble Lord, Lord Whitty, asked how we would achieve the reduction in budget. An obvious area for reduction is research. We do not expect research to end altogether, but it is right to be sure that the current range of research is genuinely justifiable. We need to consider whether operators should do more to canvass the views of their customers, rather than expect the Government to pay for research.

As referred to in Committee, Schedule 3 can be used to implement changes to the composition of the Passenger Focus board. Indeed, we understand that Passenger Focus has for some time been considering streamlining the board’s operation. Although the details are still to be finalised, it makes sense that a scaling back of its activities should be accompanied by a smaller board that will also result in savings for the taxpayer. I understand that Passenger Focus is looking at reducing the size and cost of its board through a combination of measures, including not filling vacancies and changing the scale and scope of board meetings. The Government are working constructively with Passenger Focus to help it maintain its important functions within the constraints of a reduced budget.

We are also interested in exploring the continued funding of passenger representation in Scotland and Wales, where rail policy is largely a devolved matter. We are in contact with the devolved Administrations about how this may be taken forward. Some of Passenger Focus’s other specific Scottish and Welsh passenger activity, such as the current passenger link work, is expected to be restructured in a similar way to that in England.

I hope the noble Lord is persuaded that there are good reasons to have the ability to change the governance arrangements for Passenger Focus and that he will therefore feel able to withdraw his amendment on that basis.

[Lord Whitty]

My Lords, I am grateful to the noble Earl, although some of his assurances were not quite as unequivocal as I would have liked. It is also clear that, as a result of the pressure on Passenger Focus’s budget, the restriction of research and its refocusing, it will not be as powerful a body as the noble Earl suggests. Nevertheless, I am glad he said that the Government remain committed to having a passenger advocate and see it as a very important part of how we conduct and enforce our public transport policy. I am therefore prepared at this stage to accept his assurances and I thank him for them. I beg leave to withdraw the amendment.

Amendment 34A withdrawn.

22:00

Amendment 34B

Moved by

[Lord Crickhowell]

34B: Schedule 3, page 17, line 24, at end insert—
“Sianel Pedwar Cymru (“S4C”).”

Amendment 34B agreed.

Clause 4 : Power to modify funding arrangements

Amendment 35

Moved by

[Lord Taylor of Holbeach]

35: Clause 4, page 2, line 39, leave out “Subject to section 16,”

Amendment 35 agreed.

Amendment 36 not moved.

Schedule 4 : Power to modify funding arrangements: bodies and offices

Amendment 37

Moved by

[Lord Newton of Braintree]

37: Schedule 4, page 17, line 27, at end insert—
“Administrative Justice and Tribunals Council.
Civil Justice Council.”

Amendment 37 agreed.

Amendment 38 not moved.

Amendment 39

Moved by

[Lord Whitty]

39: Schedule 4, page 18, line 5, leave out “Office of Communications (“Ofcom”).”

[Lord Whitty]

My Lords, in moving Amendment 39 I wish to speak also to Amendment 54. Essentially, my question to the Minister is the same as it was in the previous debate: namely, why is Ofcom still included? When we started out on this Bill, almost all the economic regulators were in one schedule or another—Ofgem, Ofwat, the Office of Rail Regulation and, I think, the CAA were all in there. However, only Ofcom remains. When my noble friend Lord Hunt pressed the Government on this earlier, there were references to cost saving and other things, but why does Ofcom appear in Schedules 4 and 5? Instead of a rational approach to the role of economic regulators, we have had departmentally based assessments of their roles, most of which have not yet reached a final decision. Ofgem and Ofwat are being reviewed by their departments but we are not looking in general at the role of economic regulators. We know that some changes are coming along the line to the scope of Ofcom because the Postal Services Bill, which is passing through this House, extends Ofcom’s reach by transferring the work of Postcomm into Ofcom. I support that move but a transfer mechanism or a modification does not need to be included in this Bill because a separate piece of primary legislation exists to achieve that.

Expenditure on Ofcom has already been reduced by the department and the reference in the previous stage to a saving of some £400,000 could be achieved administratively. It is also true that advisory committees to Ofcom can be changed without primary or secondary legislation. Indeed, it seems to me that Ofcom, presumably with the connivance of its parent department, has already removed by stealth the Communications Consumer Panel from effective operation without it being entirely clear where those functions for the protection of consumers in the communications business now lie. Therefore, it is unclear why the Government need additional powers to make savings and streamline Ofcom’s operation.

As regards Ofcom’s inclusion in Schedule 5, we know about the transfer into Ofcom of the Postcomm responsibilities but there is a suspicion that there may be some transfer out of it. Ofcom has responsibility for regulating a whole range of communications industries, many of which are deeply sensitive. I referred just now to its sponsor department but it is sometimes unclear to us who is the sponsor department for Ofcom because, on the media side at least, a significant proportion of Ofcom’s activities now appear to be the responsibility of DCMS rather than BIS. I do not regard that as a particularly healthy move. However, either way, it raises a suspicion that some of its media responsibilities, such as media ownership, broadcasting content and the whole structure of regional broadcasting, may be in line for being curtailed or moved back to the department. It would be alarming if a transfer out involved any of those items.

There are also other responsibilities. Just to show that I am not being partisan, I had a substantial and ongoing row with the previous Government about their provisions in the Digital Economy Bill. Those provisions have been handed over to Ofcom to implement, which is finding some difficult in doing that. There may be some irritation in government about that. Therefore, a lot of Ofcom’s responsibilities could be transferred out.

I should like an assurance that Ofcom’s continued inclusion in Schedule 5 in particular does not mean a reduction in its scope, particularly as regards those responsibilities. Ofcom has, in general, been a pretty good economic regulator in the consumer’s interest, as compared with some other bodies. However, it was and is always up against some powerful telecoms, broadcasting and media companies and their lawyers in almost every move that it makes. I therefore hope that the Government are not envisaging that we should reduce Ofcom’s responsibilities and are not using its inclusion in Schedule 5 to facilitate that reduction without primary legislation. I beg to move.

[Lord Fowler]

My Lords, I agree entirely with the noble Lord, Lord Whitty, that Ofcom is an extremely important body, and I hope that the Government accept that because, in the media area, a body such as Ofcom that is independent and seen to be independent and skilful is of the utmost importance. Certainly, as regards Schedule 3, I should like confirmation that it is not necessarily the case that the proposal means there will be a cut in Ofcom’s budget, although the budget can be modified either way.

I say that because it is difficult these days to debate Ofcom without discussing the role of the BBC Trust, which was set up by the previous Labour Government. The previous Secretary of State rightly changed his view, decided that the trust was an unnecessary body and that the logical way to run the BBC would be for there to be one chairman, a board and the executive, rather than the current extraordinary position, which is unique in the western world, whereby there is at one level the executive and then, in a separate building, the trust, headed by the noble Lord, Lord Patten of Barnes—I am glad to say. However, the noble Lord is able to call himself the chairman of the BBC only as an honorary title. That is ridiculous. He should actually be the chairman of the BBC, and there should be one unitary authority. That is the logical way, and that is why 99.5 per cent of organisations in this country run themselves in that way.

The position that I reach from that is that the responsibilities that are now with the BBC Trust could easily be transferred to Ofcom. That is their logical place and everyone has argued for that. If that happened, one would find that the Lords Communications Committee—no longer under my chairmanship—would consider this matter further. If that is the position, there would clearly be adjustments to funding arrangements and the rest, as set out here. That does not necessarily mean that the funding would be reduced, but that the funding for Ofcom would have to increase.

I ask my noble friend Lady Rawlings—who, I am glad to see, is refreshing herself with water for her reply—whether she will confirm that that is the case. It would be a grave mistake for the Government to accept the argument put by people who have very vested interests that Ofcom is of no particular value and should be downgraded. Everything that has happened in the media world over the past six months confirms the view that the importance of Ofcom should be underlined. That is what I should like to hear from my noble friend now that she has refreshed herself.

[Baroness Jones of Whitchurch]

My Lords, I am grateful to my noble friend Lord Whitty for continuing to champion the organisations that stand out as protecting consumer interests, and for the remarkable good sense that he has shown again this evening in defending Ofcom's independence.

During the passage of the Bill there have been several attempts by Ministers to make reassuring noises about the importance of Ofcom and its central role in the future of media regulation. This may well be the case, but I share my noble friend's concern that the thrust of these changes, far from giving Ofcom greater responsibility, will limit its power to intervene in crucial issues such as media ownership and changes to public broadcasting. Power appears now to be increasingly centralised in the hands of the Secretary of State.

As is the case with many other organisations for which changes are sought in the Bill, one is left to wonder about the cost savings that might occur if the Minister's department is serious about taking on those functions. I concur with the questions of the noble Lord, Lord Fowler, about the proposed savings expected from Ofcom in this context. The Government have trumpeted the increased transparency that will occur, but it remains unclear how we will be able to scrutinise the major decisions that will be taken in the department on issues such as media control. When it comes to transparency, give me Ofcom any day.

My noble friend repeatedly emphasised, in previous debates and today, the special status of the economic regulators and the need to protect their independent function. Again, the Government took steps in the past to reassure the House on this matter. However, like other noble Lords today, I am left wondering why they felt that it was necessary to put the remaining changes to Ofcom in the Bill, and whether this still represents a shift in power and authority away from independent economic regulators and back to the centre. If this is the case, it is a backward step both for the consumer and for the wider public, as well as being a cause for celebration for would-be media barons. I remain unconvinced of the need to change Ofcom's role through the formal mechanism of the Bill, and very much look forward to hearing the Minister’s justification of why it is necessary.

[Baroness Rawlings]

My Lords, I thank the noble Lord, Lord Whitty, for tabling these amendments and for giving the Government the opportunity to state clearly to your Lordships' House how they intend to use the powers in Clauses 4 and 5 to reform Ofcom. The noble Lord asked why Ofcom is included in Schedules 4 and 5 to the Bill. This is so that we can bring forward several small changes to some of its duties that will make certain that it will be able to fulfil its statutory duties as efficiently and effectively as possible.

The communications landscape has changed significantly over the past decade, since Ofcom was established by the Office of Communications Act 2002. It is sensible and timely that we now use this opportunity to make some changes. At a time when the public sector must become more efficient, it is right to amend or remove some of Ofcom's duties, which will result in a small reduction in its cost to the public purse. I confirm that Ofcom is comfortable with the proposed changes to its duties. In answer to the concerns raised by the noble Lord, Lord Hunt, in our last debate on these amendments, I can reassure him that the overarching responsibilities of Ofcom will not change, and that its independence will remain a fundamental principle of regulating the communications sector.

I note, too, that the noble Lord is concerned that the Government may look to introducing additional changes in years to come using the Public Bodies Bill. I can reassure him that we have no plans to make any additional changes to Ofcom’s duties other than the nine small changes that we propose to bring forward by order after the Public Bodies Bill receives Royal Assent.

22:15

Once those changes are complete, the Government will use powers set out in Amendment 60 to remove Ofcom from Schedules 4 and 5, thereby repealing the power of Ministers to make changes to Ofcom via secondary legislation. I can tell the noble Lord, Lord Whitty, that that makes certain that Ofcom will not be subject to the powers in the Bill in perpetuity. Like all bodies named in the Bill, Ofcom is included for a specific purpose. Once that purpose has been met, it will be removed from the relevant schedules.

Amendment 39 would prevent the Government making the proposed change to Ofcom’s financial arrangements. Currently, satellite filings are paid from Ofcom’s grant in aid to manage the radio spectrum in the UK. Allowing this change would bring the UK into line with many other countries which charge for this work and save taxpayers in the region of £400,000 per annum. That is not a huge sum, but it is a saving that can and will be delivered. I can answer my noble friend Lord Fowler, after my water refreshment, that Ofcom’s inclusion in Schedule 4 is for this purpose and not about funding levels.

Amendment 54 would prevent changes being made to Ofcom’s governance arrangements which are part of our commitment to deregulation. Our proposed changes will cut duplication, reduce the need to undertake unnecessary reviews, and allow Ofcom to make cost savings. They include the removal of the requirement for Ofcom to undertake reviews of media ownership and public service broadcasting arrangements every three and five years respectively. Instead they will be done at the request of the Secretary of State. That is more efficient and will ensure that the review process is dictated by a need, not an inflexible statutory timetable.

Another proposed change will remove Ofcom’s duty to promote development opportunities for training and equality of opportunity. That should not be mistaken for the Government turning their back on the issue of diversity. It would simply bring Ofcom into line with regulators of other industries who do not generally have such requirements. This decision was made on the basis that the media sector is fortunate to have Skillset already to promote training issues. The removal of this duty on Ofcom will allow Skillset to continue to develop its work in this field. In light of those details and the assurances about the limits of the Government’s plan for the reform of Ofcom, I hope that the noble Lord will feel able to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the Minister for those assurances as they have taken us a little further than previously. I also thank the noble Lord, Lord Fowler, and my noble friend Lady Jones for their contributions.

I understand from the Minister that there are nine changes. I may not approve of all of them but she is probably right to say that they are relatively small changes. One which she cited was about having no regular reviews unless the Secretary of State says so. I would probably not approve on the specifics, but nevertheless I accept that they are relatively minor changes in the overall picture. The power that will come in with Amendment 60 will mean that Ofcom will be removed from the schedules, so it is an early sunset clause. In the light of that, and as we have received greater assurances than previously, I shall not press my amendment tonight.

Although the noble Lord, Lord Fowler, made some good points to start with—and I do not entirely disagree with him about the structure of the BBC—including this regulator in the list for some future secondary legislation is the not way to change the governing structure of the BBC. I am very glad that that is not one of the consequences of allowing this to stand. In the light of the noble Baroness’s tight assurances—more than we have had for several other bodies—I beg leave to withdraw the amendment.

Amendment 39 withdrawn.

Amendment 40

Moved by

[Lord Roberts of Llandudno]

40: Schedule 4, page 18, line 6, leave out “Sianel Pedwar Cymru (“S4C”).”

[Lord Roberts of Llandudno]

I thank very much those who have taken part in our debates over a number of days. We have at least impressed on the Chamber the value of the Welsh language and how much it has been a part of our culture and our very personality. I feel that S4C is stronger after our debates.

[Noble Lords]

Hear, hear.

[Lord Roberts of Llandudno]

I am glad that those on the Front Bench agree. I would say that jaw, jaw is better than war, war. The discussions that we have had over many hours have resulted in concessions. I asked for eight assurances. I received seven. With that result from our discussions, I can claim a Liberal Democrat victory in this Bill; and I will.

We still have Third Reading, so if things seem to be getting a little difficult, we can always bring it back then. For today, I beg leave to withdraw my amendment.

Amendment 40 withdrawn.

Amendment 41 not moved.

Clause 5: Power to modify or transfer functions

Amendment 42

Moved by

[Lord Taylor of Holbeach]

42: Clause 5, page 3, line 2, leave out “Subject to section 16,”

Amendment 42 agreed.

Amendment 43 not moved.

Schedule 5: Power to modify or transfer functions: bodies and offices

Amendment 44

Moved by

[Lord McNally]

44: Schedule 5, page 18, line 8, at end insert—
“Advisory Council on Public Records.”

[Lord McNally]

My Lords, the three amendments in this group are in the name of my noble friend Lord Taylor of Holbeach. The reason that I am moving them is twofold. First, I am the Minister responsible for the National Archives; secondly, I am badly in need of a victory today.

The amendments moving the Advisory Council on Public Records, the Public Record Office and the Keeper of the Public Records to Schedule 5 constitute a straightforward and, I hope, uncontroversial legal tidying-up exercise—although I worry that the noble Lord, Lord Warner, is still in his place. They have been agreed with and led by the current chief executive of the National Archives, who is also the Keeper of the Public Records. I reassure noble Lords that no functions currently performed by the National Archives or any of its component parts will be negatively affected. There is no impact on staff and no financial implications.

The rationale for the reforms is to place the National Archives, its chief executive and its advisory bodies on a statutory footing, enabling the Government legally to complete the changes that began with its establishment as an administrative entity in 2003. That involves transferring the statutory duties of some of the National Archives’ component parts using Schedule 5, which grants powers to modify or transfer functions to reflect existing administrative arrangements. For example, the role of the Advisory Council on Public Records is to advise the Lord Chancellor on matters concerning public records and archives. Following the merger of the Public Record Office and the Historical Manuscripts Commission in 2003, their respective Advisory Councils on Public Records and Historical Manuscripts also came together to form the Advisory Council on National Records and Archives.

The separate legal functions of the Advisory Councils on Public Records and Archives have for the past seven years been administered by the Advisory Council on National Records and Archives. The chairman of the Advisory Council on Public Records, the Master of the Rolls, assumed the chairmanship of the new body upon its creation and continues to do so.

The council will therefore be included in Schedule 5 to enable it to be renamed the Advisory Council on National Records and Archives, assuming the functions of the existing, non-statutory, Advisory Council on National Records and Archives and the Advisory Council on Historical Manuscripts. This change will therefore formalise the current arrangements to form a single body, providing greater clarity and efficiency, with one body doing the work of three.

In the case of the Keeper of Public Records, the Lord Chancellor appoints the keeper to take charge, care for and preserve public records under his direction. The chief executive of the National Archives holds the statutory office of keeper, as well as the office of Historical Manuscripts Commissioner. By moving the keeper to Schedule 5 to the Bill, the Government will be able to consolidate these roles—and those of the Queen’s Printer of Acts of Parliament and Controller of Her Majesty’s Stationery Office—into one statutory office, the Keeper of the National Archives. This reform will clarify lines of accountability for the National Archives’ various functions by putting in statute the responsibilities of a new keeper. The changes will not affect the way that functions are carried out, and there are no financial implications. It is important to emphasise again that these reforms have been agreed with, and led by, the current Keeper of Public Records.

The Public Record Office was created by the Public Record Office Act 1838 as the national archive for public records. In 2003, the Public Record Office merged with the Historical Manuscripts Commission to form an administrative entity, the National Archives. In 2006, the Office of Public Sector Information and HM Stationery Office were also merged with the National Archives. All four bodies continue to exercise their legal functions, but within a single administrative body— the National Archives—under a single chief executive. The Public Record Office is therefore a statutory component of the National Archives.

The Government are committed to preserving the legal functions performed by the Public Record Office, and it will therefore be moved to Schedule 5, allowing the National Archives to absorb its functions and those carried out by other, non-statutory component parts of the organisation. Clause 7(3) will permit any necessary changes to the Public Record Office’s constitutional arrangements, in particular its renaming as the National Archives, and the expansion of its funding to cover its new functions. This will put the organisation on a clear legal footing, provide clarity to the public and finalise the merger process begun under the previous Administration.

These amendments will enable the Government to place the National Archives, its chief executive and one of its advisory councils on a much clearer statutory basis, strengthening—not weakening—the ability of these bodies to perform functions which the Government believe to be of immense cultural value. I hope, on that basis, that noble Lords will feel able to support these amendments.

Amendment 44 agreed.

Amendment 45

Moved by

[Lord Hunt of Kings Heath]

45: Schedule 5, page 18, line 8, at end insert—
“Administrative Justice and Tribunals Council.”

Amendment 45 agreed.Amendment 46Moved by Lord Taylor of Holbeach46: Schedule 5, page 18, line 11, leave out “Broads Authority.”

Amendment 46 agreed.

Amendment 47

Moved by

[Lord Hunt of Kings Heath]

47: Schedule 5, page 18, line 11, at end insert—
“Civil Justice Council.”

Amendment 47 agreed.

Amendment 48 not moved.

Amendment 49

Moved by

[Baroness Thornton]

49: Schedule 5, page 18, line 15, leave out “Human Fertilisation and Embryology Authority.”

[Baroness Thornton]

My Lords, we turn to Amendments 49 and 50 and the subject of the HFEA and the HTA somewhat late in the evening again. We have now had time to reflect on what the Minister said on 9 March, to read the letter to my noble friend Lord Warner, which the noble Lord thoughtfully copied to me and others, and to compare the two. In reading the debate on 9 March, I realised it had centred on the issues that arise out of the siting of the HFEA rather than on the proposals for the HTA, so I shall start by raising a few issues that are particularly pertinent to the HTA.

Since the previous debate, the Government have announced that the HTA has been appointed as the competent authority to regulate the quality and safety of organs under the EU organ donation directive. The HTA is now the competent authority for two EU directives. I would be grateful if the Minister will explain where this competence will sit under the various options he outlined in his letter to my noble friend Lord Warner. In addition, the HTA’s responsibilities with respect to EU legislation extend across the UK, but the Care Quality Commission’s remit extends to England only. The Minister can see where I am leading with this question because of the statutory implications that such a move might involve. For example, have the Government consulted the Welsh Administration about this matter or would they divide the legislation or extend the geographical remit of the CQC? Indeed, what if the Welsh said no to such matters regulated by the CQC?

We also need to look at the context in which these changes are being proposed. There are loopholes between coroners legislation, the Human Tissue Act and the Police and Criminal Justice Act which the HTA is addressing at the moment. I think it is right to be concerned with the Government’s continued determination to abandon the idea of establishing a chief coroner’s officer, the abolition of the National Policing Improvement Agency combined with proposals to break up the HTA’s functions. Added to the squeeze on resources in the central government’s resource, one should ask what guarantees will continue to be there and where they will be concerning human tissue not being retained without consent.

When the Minister answered this debate on 9 March, he took the trouble to explain in some detail the Government’s thinking about the future of the HFEA and the HTA and spoke about the possible creation of a new health research agency, which I think largely met with a great deal of approval across the House, and I shall return to that matter in a moment. His letter to my noble friend explores the various options that the Government might take with the powers that the Bill will grant them. I know my noble friend Lord Warner will want to explore the contents of that letter, so I shall limit myself to two issues that are still outstanding and need to be addressed before Parliament grants such powers with regard to these two bodies.

The first is the nature of the pick-and-mix proposals for the future of the HFEA and HTA, which the Minister suggested in his reply to the House on 9 March and in his letter to my noble friend, because I do not think it is acceptable to ask for powers fundamentally to change these organisations and not to know at this stage how those changes might be achieved and what they will do. The Minister spoke about this being a road of travel. Roads of travel are fine when one is developing policy but they are more difficult when one is putting into legislation things which will have a direct effect—in this case, on these two organisations.

Secondly, I return to public confidence, which I raised in Committee. I have read the Minister’s reply on the importance of keeping public confidence in the functions of the HFEA and the HTA. It centres around the fact that he is keen to assure the House that the legislation, and the ethics that underpin that legislation creating the HFEA and HTA would not be fundamentally changed. But I am puzzled: I do not see how, as regards the options outlined by the Minister—the orders that would need to be consulted on—he would intend to stop those ethical issues that lie at the heart of that legislation being discussed at length because of the public confidence that resides in them. When change is being proposed, that reassurance and the assurance that the new arrangements will do their job is obviously very important. Option papers do not usually provide the necessary assurance about people’s jobs or functions and, in this case, about where the ethical issues that underpin that legislation would lie.

I feel that the Government have the opportunity to move forward with the creation of a new science body, and the future of the HFEA and the HTA, with a great deal of agreement across the House and with a great deal of good will to make that happen. I do not think that this Bill is the place to start that, which probably is the heart of the problem.

[Lord Willis of Knaresborough]

Before the noble Baroness leaves the issue of ethics, if the agency model is developed, which would have a separate ethics committee that I think most of us would accept, does she agree that it is not just simply the ethics of research that is important, it is also the ethnical decisions about developing clinical practice? The need for those to be kept together within the new agency is of paramount importance in order that there is public confidence. Without the setting up of the agency, there will be a huge gap that needs to be filled.

[Baroness Thornton]

The noble Lord, Lord Willis, makes the point extremely well and much more eloquently than I was able to. It underlines the point that I have been trying to make. Taking the powers to break up the HFEA and the HTA, as it were, is not the way to start that process. The noble Lord makes exactly the right point. The Minister should recognise that there is a great deal of good will to make this happen across the House but not starting here. I beg to move.

[Baroness Warwick of Undercliffe]

My Lords, I declare my interest as chair of the Human Tissue Authority. I and my authority remain concerned about the impact of the Bill on public and professional confidence in the safe and ethical use of human tissue, as has already been raised by my noble friend. My first question to the Minister is to seek reassurance that the HTA’s functions will not be divided. A division of our functions into three or possibly four different parcels would, in my view, risk undermining the legislation that the HTA was set up to implement, increase the regulatory burden on the sectors we regulate and damage public confidence that has been so hard won.

We must not forget that the HTA was established as a result of scandals at Alder Hey and Bristol Royal Infirmary. Those events caused profound grief among affected families, outrage amongst the public and a crisis of confidence. Those events are still recent. The Human Tissue Act, which set up the HTA and was subject to more than 100 of hours of parliamentary scrutiny, was passed in 2004. The HTA began regulating as recently as 2006. In a relatively short period, it has successfully turned around that crisis of confidence. When people know there is effective regulation, they are more confident in donating their tissue for medical research, their organs for transplant and their bodies for medical education and training. Increased public confidence should mean more donation; more donation should increase professional confidence, thereby creating a virtuous circle beneficial for all. More lives are saved; more people are given back their quality of life; and there is more research and surgical skills training for the benefit of the public.

The Government’s arm’s-length bodies review sets out proposals for transferring the HTA’s functions across three or four different organisations. I fear that separating the HTA’s functions would risk undermining the progress that has been made in building public and professional confidence. Leading thinkers have voiced profound concerns about dismantling the HTA. Senior legal academics have said in the Sunday Times:

“The proposals to abolish the Human Tissue Authority—HTA and the divisions of its functions among larger, non-specialist regulators—risk confusion and error in the implementation of the Human Tissue Act 2004, which in turn will erode public confidence”.

In addition, earlier this month, senior consultant surgeons writing in the Guardian said that moves to break up the HTA would,

“undermine professional and public confidence in the area of medical consent”,

and urged,

“the government to think again and stop trying to operate on things that aren't broken”.

I hope that the Minister will listen to these voices.

The Minister has said that the HTA’s health-related functions should transfer to the Care Quality Commission. I am still not clear about the fate of the HTA’s organ donation and research functions. The ALB review does not suggest a home for its organ donation approvals and suggests that its research functions should transfer to a single research regulator.

With regard to organs, the Human Tissue Act requires board approval of highly sensitive and ethically complex cases of organ donation from living people. If this were to be placed with the CQC, how would the Minister meet the statutory requirement that at least three authority board members who are specifically trained in this area review such cases?

With regard to research, the new regulator for health research will provide a potentially helpful way forward for streamlining medical research in the UK, simplifying life for researchers and increasing the quantity and quality of research. The Minister stated at Second Reading that the purpose of this Bill was to streamline the process of regulation and to reduce costs and bureaucracy. I do not see how the proposal to transfer the HTA's research functions to this new regulator would achieve simplification; nor do I believe the proposals would save money. The sectors that the HTA regulates are interrelated and interdependent, and although it regulates a separate research sector, the licensing framework also allows establishments in the post-mortem, patient treatment and anatomy sectors to store tissue for research as well as for other purposes.

I take the post-mortem sector as an example. The proposal would result in at least one-third of post-mortem establishments needing to be licensed by an additional regulator if they wished to store material for research. A similar proportion of establishments storing tissue for patient treatment would also need to be licensed by an additional regulator. The regulatory burden on an estimated 200 establishments would therefore increase, not decrease. So can the Minister explain what impact this proposal will have on the regulatory burden on these establishments? Can he explain who would be responsible for producing the statutory code of practice on consent and who would be responsible for ensuring consistently high standards if the HTA’s functions were divided?

My noble friend Lady Thornton raised concerns about the ethical dimensions of the work being lost in the rush to amend the mechanical processes. I share these concerns. This is a complex ethical landscape. The HTA has the professional expertise to respond to emerging forms of communication such as Facebook and Twitter. These are now being used as conduits for patients looking for organ donors. We are launching consultation on this very issue in May, and this is a good example of how agile and sensitive the authority can be. Can the Minister assure me that the credibility that lay and professional board members bring to the HTA will not be lost in the Care Quality Commission, when the CQC has only a small number of commissioners? An advisory group has been mentioned. If that model is proposed, can the Minister say what guarantee there will be of its independence?

I apologise for raising so many issues at this late hour but there are many issues still to be resolved. In summing up, I say only that the reason the HTA was established has not gone away and there is still work to be done. My argument is not against the Government’s intention to simplify the regulatory landscape; rather, I want to avoid putting at risk the substantial gains that the HTA has made by splitting its functions across a number of different organisations and losing the overall coherent approach which has been so successful in supporting public and professional confidence and ensuring that tissues and organs are used safely and ethically and with proper consent.

I have one final plea. David Thewlis and Stuart Taylor, both parents affected by the events at Alder Hey, brought it all home to me recently when they said:

“All the effort and soul searching that went into the establishing of the Human Tissue Authority cannot afford to be overthrown by abolishing the HTA and splitting its functions”.

I urge noble Lords to take this on board when deliberating the future of the HTA.

[Lord Willis of Knaresborough]

My Lords, I apologise to the noble Baroness, Lady Thornton, for missing her opening remarks in introducing the amendment.

The fact that so many noble Lords wish to speak to the amendment at this hour indicates that this is an issue of significance to your Lordships’ House. In Committee, my noble and learned friend Lord Mackay ended his remarks by saying that he had helped to give birth to the baby that was the Human Fertilisation and Embryology Authority but that perhaps it was now time to let the child move out, or words to that effect. Before a child moves out into the world, it is important that a responsible parent—and I think that the House should regard itself as a responsible parent—knows that it is safe to do so. However, the reality is that during the passage of the Bill, and in particular during the Committee stage and in the clarification given since then, many questions asked on behalf of the HFEA and the HTA, as the noble Baroness has just indicated, have not been answered. That is regrettable. I think that the House accepts that what the Government are trying to do has a great deal of merit; it is just that it requires organisations to be properly set up before the functions are transferred.

As I have said on two previous occasions, I am not against what the Government are ultimately trying to do. However, before we get rid of two organisations in which the public have great confidence and whose operation is tried and tested, we should be absolutely clear about what will happen to their functions. Although the Minister has made tremendous attempts to satisfy inquiries from noble Lords on all sides of the House, I think that his letter of 22 March to the noble Lord, Lord Warner, raises more issues than it resolves. I am sure that the noble Lord will go through that letter in great detail and therefore I do not intend to do so. However, some of the comments in it indicate that two organisations appear to be in the running to inherit most of the functions of the Human Tissue Authority and the Human Fertilisation and Embryology Authority —the Medical Research Agency and the Care Quality Commission. I was delighted that the Chancellor made it clear in his Statement last week that the Medical Research Agency is going to be set up but, as many noble Lords have said, that announcement was made literally only a week ago. We know nothing about the way in which the organisation will work, other than the report of the Academy of Medical Sciences suggesting that an agency overlooking the whole of medical research would be a good thing.

As for the Care Quality Commission, it is itself an organisation in its infancy and learning how to do its business. Indeed, there are significant complaints about the Care Quality Commission. That is not an overarching criticism. It is inevitable that when a new organisation sets itself up, particularly one that inherited so many problems from its predecessors, there will be difficulties, yet here we are, saying that we will lump another major piece of work with it.

In Committee, the Minister made it clear that the existing personnel would be transferred en bloc into the new organisations, yet in the letter to the noble Lord, Lord Warner, there is no mention of key personnel being transferred into the Care Quality Commission. I understand that staff are seeking posts elsewhere. They will move out of the organisation. If we are not careful, there will be nothing to transfer and we will be looking for new personnel in these key posts. Will the Minister clarify that issue?

The new Medical Research Agency will not be set up until the latter part of this Parliament at the earliest. The Minister floated the idea that some of its functions could be transferred early using the Public Bodies Act—regulation and inspection of clinical services could go to the Care Quality Commission, for example. There is a further suggestion that all but the research functions of both the HTA and the HFEA could be transferred under the Public Bodies Act, as it will then be, with the final process completed following the setting up of the Medical Research Agency. Such hypothetical and confusing scenarios to break up two well-respected and well-worked regulators will do little for public confidence in either of these two areas. It will do little for clinician confidence and will certainly do nothing for research community confidence either. It is important that the agency is set up, properly staffed and has clear terms of reference agreed with both Houses of Parliament before we transfer these key functions to it.

One function that has been set out by the Academy of Medical Sciences, which is a clear pathway, is an ethical structure. We argued when we were looking at the draft Bill and your Lordships in this House argued during the passage of the Human Fertilisation and Embryology Act that we ought to have some form of parliamentary ethics committee. At least the Academy of Medical Sciences has said that there ought to be an overarching ethics committee to look at both areas. But if clinical ethics are not dealt with by that organisation, who will deal with them? Where within the Care Quality Commission are the sort of important ethical considerations that are necessary if we are to transfer all these functions to that body?

I can see the attraction of a method of transfer of functions to avoid primary legislation. I understand why the Minister would want to go down that road, particularly given the enormously strong public scrutiny over legislation concerning the Human Tissue Authority and embryology and stem cells over the past five years, but the idea that if the scrutiny is only in both Houses of Parliament it will be less severe does not hold up. There are 200 new MPs in the other place who were not party to any of this legislation when it went through. It is highly optimistic to believe that there will not be very detailed scrutiny of any new arrangements. I suggest to the Minister in all humility that he accepts the amendment before us tonight or makes some provision to satisfy our concerns. He should seek a comprehensive solution to the problem that the Government have created for themselves. I for one—and, I suspect, many of your Lordships—would agree that there is a way forward from this. The Medical Research Agency is a good idea. There is a possibility of transferring some of the functions to the Care Quality Commission, but it needs to be done en bloc, rather than piecemeal, so that there is a danger of undermining two excellent regulators, which have public confidence, the confidence of most clinicians and the confidence of the research community.

[Baroness Deech]

My Lords, I declare an interest as a former chair of the HFEA. My name is on this amendment, and I support every word of what previous speakers have said. Those who oppose this amendment consist largely of those who are impatient about the shackles that regulation imposes and wish to be free of them. They will not be if this government scheme goes ahead. As researchers and clinicians, they will have to deal with at least two departments or bodies in place of one, which can be guaranteed to be no quicker or cheaper.

Criticisms have been made of the style or overlap of inspections, but that is not the point. Those faults can be remedied. Inspection can be delegated or contracted out. What is at issue is the continued existence and symbolism of one integrated body—the HFEA and the HTA—representing lay and clinical interests, accountable to patients through consultations and to Parliament, speaking with one voice to government and to the world. The HFEA may be alone among the many bodies listed in this Bill that has an international significance and symbolism. Google it, and you will see twice as many thousands of references internationally as in the UK. It has achieved a presence in the world that has helped to give UK science a good reputation and has enabled this country to be the first legally to embrace embryo research for stem cells and as the object of study around the world. Other advanced countries have national ethics committees, such as the United States and France, or HFEA-type regulators, such as Canada, California and parts of Australia. They will be aghast that where the UK led the way it is now abandoning its respected structure.

Now we have to look at the unanswered questions—indeed, there are more unanswered questions at this stage of the Bill relating to these two bodies than there were a few months ago. Noble Lords have referred to them. There is a failure of governance in the plans put forward in the Bill. Plans is too positive a word for an outline of future options which may or may not involve primary legislation and may or may not be predicated on the establishment of an unknown new body—a general medical research regulator—about which we know next to nothing. The notion of an all-purpose regulatory body for medical research is a possibility mentioned in a letter kindly sent by the Minister to those interested in this amendment and available in the Library. However, there is no information in that letter as to when and whether it will be created and how much will be in its scope. There are no powers in this Bill to set it up; it will have to be provided for in separate primary legislation when time allows. But the new body is a linchpin of the planned dismembering of the HFEA and the shifting of embryo research away from it. How much confidence can UK and overseas researchers who may come here have in our system, while years may go by before it is reconsidered? It will be like the familiar experience of being forced into a single lane on the motorway with a coned-off section indicating improvements but with absolutely nobody working inside the coned-off section and no end in sight. If this amendment is not passed, the attractiveness of the UK research environment may plummet immediately. Just as staff may drift away, so will researchers.

As others have said, the future division of functions has not yet been settled, but we know that there is already a risk that the CQC will be overburdened. If there is an overlap between the CQC and the HFEA in licensing, the CQC should be relieved by dropping HFEA-type inspections. In the mean time, the welfare of patients and children will be at risk. It is not clear what functions will go to the CQC and we do not know where the all-important database will go. In a few years’ time, children will be entitled to ask how about their parentage. Who will safeguard the answers? Who will enable researchers to carry out anonymised research from that database? The future governance and organisation of IVF and related matters has been cast into even greater doubt than before in this latest attempt to sort out the detail, which goes to show what a bad idea it was to unpick the HFEA in the first place.

23:00

If the Government will accept this amendment, however, the criteria that should inform the establishment and general shape of regulation will be met. That is: we must keep independence in this sensitive, ethical area. It must be free from government. As a freestanding organisation, the HFEA is much more accountable and transparent than the new proposals for structure would be. It has a global name, which has done this country nothing but good, and provides a one-stop fount for those who wish to know about IVF and research here or who seek guidance as patients. It commands public confidence. There can be no argument about saving costs and preserving efficiency except by leaving it alone.

To fail to accept this amendment means a loss of respect and trust in the UK IVF world, a failure to keep these issues at arm’s length from government, more control over funding when it is taken up by the Government and, possibly, an end to hopes of parity of infertility treatment in the NHS. The Government have not settled these concerns. Other countries have copied us. Why would the proposed submerging improve regulation? Why put integration and efficiency at risk? Why is there a need for a structural change at all? We have not been told, but these questions must be answered before Third Reading or we will have to continue to put them. We need the outcome of the promised consultations.

Finally, in summary, the concern is that the starting point for changing these two bodies, the HFEA and the HTA, has been tackled upside down. If it is considered that there is a need for a different HFEA, the starting point should be to look at what, if anything, is wrong with it and what is the best way to overcome those problems rather than starting with a decision to abolish and split up its functions that has been reached not by an analysis of the HFEA but, quite simply, to meet a political target to reduce arm’s-length bodies. We should not tie ourselves to an outcome before we undertake a review.

I believe that the fear of many professional bodies and patient groups is that by disassembling the HFEA, we could end up with something much worse. It would seem prudent to do the review and the consultations before we determine the outcome. There is no hurry; one can wait until the new, all-purpose medical regulatory authority is established, and then decide what to do. If not, there is great risk so I hope that the Government will accept this amendment and believe that they would be greatly relieved if they did.

[Lord Warner]

My Lords, I support this amendment. I am conscious that I must guard against triumphalism after the Youth Justice Board amendment earlier, but I raise that because there are some similarities, in that the Government could walk into the same situation. With the Youth Justice Board, we had a situation where a body was functioning perfectly well and the Government tried to change it before they knew or could explain what to put in its place to safeguard the development of youth justice and the future delivery of services. The Government are in danger of falling into exactly the same position with the HFEA and the HTA: two bodies functioning perfectly well, which have international reputations and which, certainly in the HTA’s case, are of relatively recent origin in their passage through Parliament. It is far from clear what the Government will do for a new set of arrangements that go wider than those two bodies and embrace a new agency of health research.

I am grateful to the Minister for his letter of 22 March about the Government’s ideas for taking forward the transfer of functions of the HFEA and the HTA using this Bill’s powers. However, I am not at all sure that I am much clearer about how things will work out in practice because the Government seem to be saying in that letter that they have a lot of options for changing things but seem rather uncertain about which option to pursue. On the Minister’s own admission the Government cannot say at this stage what approach they prefer to take on transferring functions. That is a fairly big lacuna in the Government’s thinking. If they cannot say how they want to change these functions with some degree of clarity and when this new agency will be set up, it is asking quite a lot of Parliament to take it on trust that we should plonk a couple of organisations of some standing and good functioning in Schedule 5 of the Bill and hope it will all turn out okay eventually. That seems to be the situation—with the greatest respect to the Minister—that we are placed in at this moment.

Part of the problem, it seems to me, is that the Government are very unclear on when they will actually set up the new research agency. The proposed agency commands a huge amount of support across this House and indeed in the world outside. Many of us have long wanted to see that kind of comprehensive, coherent health research agency in place, but it is not an easy job to do. It will be quite a complicated business setting that up. I do not know, and I am not sure that the Government know, when they will have this body up and working and where they will get the funding from. They will need to carry on running existing agencies at a time of some degree of financial restraint and set up a new body to take over those functions in an orderly way. In my time in the public sector I have rarely seen changes of that kind implemented without some extra costs. I have read the Chancellor’s statement, in which we all live happily ever after on this particular issue. I would really like to know from the Minister whether the Department of Health has actually got the funding. Has it got a game plan for implementing this agency? When will it come on stream? We need to know that to make any sensible judgments about the transferring of functions.

The noble Lord, Lord Willis, has drawn attention to the complications around licensing in relation to clinical research and clinical practice in these areas. These are complex issues. If we do not know in detail when the agency will be operational and what functions it will have transferred to it, it seems a great leap of faith to put these two bodies in Schedule 5 with a strong commitment from the Government that they are going to act on Schedule 5 and make changes in the functioning of these bodies but without knowing precisely what those changes will actually mean.

I found the penultimate paragraph of the Minister’s letter to me of 22 March particularly puzzling. He claims that the mechanism in this Bill reduces the risk of opening up the whole HFEA primary legislation for debate. Like other noble Lords, I view that with deep, deep scepticism. The idea that we can open up a debate about the functions of the HFEA being transferred from it to another body without opening up many of the public concerns around that body and similarly with the HTA seems to me, if I may put it as brutally as this, extremely naive. It is not going to happen. Once you start tinkering with these two bodies of great sensitivity, as I am well aware of from taking the HTA legislation through this House, you are actually opening Pandora’s box. You cannot be sure what the outcome will be in terms of public concerns.

I think that we have to go a long way further down the track in understanding the Government’s thinking and how this will all work with the establishment of the new health research agency. I do not believe that it is either smart politically or sensible managerially to be heading off in this direction without knowing where the finishing post is.

[Lord Harries of Pentregarth]

My Lords, I have three brief questions for the Minister, which concern the HFEA database, research and the role of the Care Quality Commission.

First, under one of the options under consideration, the extensive and complex HFEA database will be managed by the NHS body that is at present charged with collecting and analysing all health data. There seems to be some confusion among your Lordships about the exact name of this body; it seems to be complex and changing, but I think that the Minister knows what I am referring to. As he also knows, the remit of that body covers only England, whereas the HFEA is responsible for collecting and analysing data for the whole of the United Kingdom. Furthermore, that body does not collect data from private clinics, whereas the HFEA is responsible for collecting data about IVF and its associated techniques from both NHS and private clinics, of which there are, of course, a good many. Can the Minister explain how these incompatible remits can be reconciled? One body is concerned only with England, but the HFEA is concerned with the UK as a whole; one body is concerned only with NHS data, but the HFEA is concerned with both private and NHS clinics.

My second question is on research. The Government are, I know, very interested in the recommendations in the Rawlins report and have it in mind to bring forward a Bill with a view to centralising all licensing for medical research in the proposed medical research agency, to which a number of your Lordships have referred. There is no doubt that in principle this is a welcome step in the direction of cutting out duplication and time wasting for medical research. However, the Rawlins report did not specifically recommend that research that is at present licensed by the HFEA should be passed to the proposed body; in fact, it simply left that matter to ministerial decision. If the research function of the HFEA is transferred to the new body, research involving embryos will still, because of the HFE Act, need both separate licensing procedures and separate inspection. The law will demand that. This will involve setting up a panel and inspection teams with the necessary specialised scientific expertise and specialised legal advice. What possible savings or advantage can there be in doing this? It would require the re-creation of a mini HFEA within the new parent body.

My third question is on the role of the Care Quality Commission. By October of this year, the HFEA and the Care Quality Commission will already have co-located and will be sharing back-office staff. They are working on how they can share inspections. They are already in the process of saving the kind of money that the Government have in mind. Does the Minister not agree that legally transferring some of the functions of the HFEA to the Care Quality Commission will add to the cost, entail the long drawn-out process of consultation and legislation that he mentioned in his letter to us and result in the break-up and reformation of a specialist team, with all the consequent disruption as well as the expense?

Everybody knows that the Minister commands huge respect in this House, but the questions that I and others have posed cannot be answered at the moment and it would be in the Government’s best interests simply to accept this amendment.

23:15

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I am grateful to noble Lords for providing us with a further opportunity to debate the future of these two bodies. As is clear, these amendments would have the effect of putting the Human Tissue Authority and the Human Fertilisation and Embryology Authority outside the scope of the Public Bodies Bill. The Government recognise that a number of your Lordships remain unconvinced of the merits of our plans to reform these arm’s-length bodies. The concerns that various speakers have raised are ones that we have debated previously and are therefore familiar. I hope, nevertheless, that I can address them.

To begin, I strongly feel that we cannot continue with the parallel systems of regulation that are currently running. There must be some scope for rationalisation and relieving the overall burden on those regulated. However, in looking to achieve that, I fully recognise the need to retain regulatory rigour and expertise in the fields of embryology and human tissue. I therefore offer further reassurance on those issues that have proved of most concern: the retention of expertise, public consultation and the potential savings offered by our proposals.

First, expertise will not be lost. It is envisaged that the expertise invested in individuals will follow functions —for instance, through staff transfers and establishing expert reference groups. There will be a carefully managed transition between regulators, which will ensure that key skills and knowledge are passed on to receiving organisations.

Secondly, there will be extensive consultation later in the summer on where functions are best transferred and, subsequently, on the orders to effect the transfers. We envisage that our consultation will cover two main areas. It will set out our proposals for the transfer of the regulation of treatment and research, and set out the options and considerations for other functions where there may be several different possible destinations, such as those related to the collection and sharing of information or policy decision-making. Let me be clear that these functions, which are required under the Human Fertilisation and Embryology Act and the Human Tissue Act, will continue. A number of your Lordships have voiced the fear that, for instance, the HFEA’s registers and databases will be dissipated or lost. That will not happen. The consultation document will set out a number of different options for how these functions might be delivered in the future, and we will listen to people’s views about this. I can reassure the House that, in considering how to transfer functions, we will want to maintain the best aspects of the current regulatory system and avoid action that might undermine them.

Thirdly, I turn to financial savings. Together, the budgets for the HFEA and the HTA total £13.6 million. Through the streamlining of regulatory functions, we envisage scope for savings in three areas. The first will be in grant-in-aid for reduced overall running costs. The second will be for the regulated bodies in licence fees. The third will be for those bodies in the preparation and demonstration of compliance with the regulatory system. A leading clinician licensed by the HFEA recently said:

“We pay over £100,000 per annum in fees to the HFEA. Since 80% of our work is NHS funded that means that over £80,000 of the money that the PCT pays for fertility treatments goes straight to the HFEA”.

That is money which in large measure could be saved and used to deliver healthcare to patients. The department will undertake more detailed analysis of current costs and potential savings to inform an impact assessment which will be developed as part of the consultation process, so the whole set of equations will be transparent.

[Lord Harries of Pentregarth]

I thank the Minister for giving way. In relation to that last point, when the impact assessment is made will it be possible not only to assess the impact of what the Government are proposing but that of simply telling the existing bodies that they have to cut costs by a certain amount, so that the one can be weighed against the other?

[Earl Howe]

My Lords, I do not think that I am chancing my arm by saying that that is my understanding of what the impact assessment ought to look like in that a typical impact assessment will have within it several alternatives so that it is possible to compare different options. I would be happy to come back to the noble and right reverend Lord with a definite answer on that but my understanding from previous impact assessments is that that kind of benchmarking ought to be possible.

The noble Baroness, Lady Thornton, has previously raised her concerns about where the ethical framework for any new arrangements will sit. Ethical safeguards, for example concerning the embryos and gametes that can be used in treatment, the need to consider the welfare of the child and the need for consent in respect of human tissue, are clearly enshrined in legislation in accordance with the wishes of Parliament. These safeguards will continue to remain firmly in place and will underpin the regulation of treatment and research as currently, by whoever is responsible for regulating. Where there are specific ethical issues surrounding new treatments, the department will consider how best to commission expert advice on an individual basis, as is currently being done for mitochondrial transfer, for example.

A number of noble Lords have shown interest in and support for the Government’s announcement last week, as part of the growth review, about streamlining research regulation and governance. The Government announced in the Plan for Growth on 23 March that they will create a health research regulatory agency to combine and streamline approvals for health research which are at present scattered across many organisations. As a first step, the Government will establish this year a special health authority with the National Research Ethics Service as its core. When established, the new agency will work closely with the Medicines and Healthcare Products Regulatory Agency to create a unified approval process and promote proportionate standards for compliance and inspection within a consistent national system of research governance.

This will reduce the regulatory burden on firms and improve the timeliness of decisions about clinical trials and hence the cost-effectiveness of their delivery in the UK, and has clear support from the Academy of Medical Sciences review of medical research regulation and governance.

In this context, it is important for me to remind the House of a key point. Here I refer particularly to the question posed by the noble and right reverend Lord, Lord Harries. The AMS report recognised at paragraph 9.5.1 that there are significant benefits in bringing all medical research regulation, including embryo research currently undertaken by the HFEA, within the remit of a single health research regulatory agency. Indeed, remarks made by Sir Michael Rawlins in the Guardian on 11 January firmly backed up that view. We agree with that proposition but again the consultation will invite views on it.

My noble friend Lord Willis expressed his fears about the Government adopting a piecemeal approach to reorganisation, as did some other noble Lords. I accept that our approach to the HFEA and the HTA may indeed seem rather complex. The powers of the Public Bodies Bill will enable us to transfer some of the functions of the HFEA and HTA to other bodies but they do not enable us to do everything that we have set out in the arm’s-length body review. In order to abolish the HFEA and HTA, or to transfer their research-related functions to any new research agency, we will require powers under future primary legislation.

It might help if I provided a rough outline of how and when we could take this forward. We intend publicly to consult on proposals to transfer all the HFEA and HTA functions to other bodies in the late summer of this year. During 2012-13, under the provisions of the Bill, we will prepare draft orders for formal consultation dealing with the transfer of functions, other than research functions. If appropriate, we would then be able to lay the orders before Parliament. This process would enable noble Lords and other interested parties to see, comment on and debate the proposals, as they progress.

Without the inclusion of these bodies in Schedule 5, we would have to provide for the transfer of their functions entirely within future primary legislation. I simply say again, particularly to the noble Lord, Lord Warner, that not including these bodies would significantly increase the risk that the underlying ethical provisions of the Human Fertilisation and Embryology Act and the Human Tissue Act were reopened for debate.

[Lord Willis of Knaresborough]

Would it not be possible to include a new clause in the Health and Social Care Bill to set up the new medical research agency and leave to consultation and secondary legislation the details that would follow? That would at least give certainty to that organisation and, with a new Bill in the second part of the Parliament, put it into the parliamentary timetable much earlier than envisaged.

[Earl Howe]

In theory, my noble friend makes a constructive suggestion. We have considered that option and, I am afraid, rejected it on the grounds that the Health and Social Care Bill is big enough as it is, and contains a substantial programme of modernisation. It would be possible to Christmas-tree that Bill almost ad infinitum, and we have decided that that would not be helpful. With the Health and Social Care Bill, we seek to focus on the modernisation agenda, pure and simple. I am sorry to disappoint my noble friend, who makes a perfectly sound point, but I am afraid that we are not going to do that.

As I made clear earlier, I confirm to my noble friend that the CQC will have staff transferred into it. The intention is that expertise in staff and advice will follow the functions. Unfortunately, we cannot be definite about exactly which functions will be transferred to the CQC or elsewhere until after the summer consultation. If, standing here, I were to say exactly how that would work, I would be pre-empting the results of that consultation. I agree on the desirability of having clarity and certainty, and our aim is that there should be more clarity and certainty for HFEA and HTA staff after the consultation.

The noble Baroness, Lady Warwick, asked a number of detailed questions about the effect of our proposals on bodies regulated by the HTA and the way that its functions are performed. The case that she put eloquently was an argument in favour of keeping the HTA’s functions together. I understand her point of view; however, I reassure her that we will consult on the option of keeping the HTA’s functions together. We will not consult simply on one model, let alone pre-empt the results of the consultation.

[Baroness Deech]

Will that same option in the consultation apply to the HFEA, whereby its functions can be kept together?

23:30

[Earl Howe]

The direction of travel for the HFEA is one that we have mapped out. I am not aware that we are considering consulting on keeping the HFEA together. If I am incorrect about that, I will write to the noble Baroness. I understand why she wishes to press me on the point. However, I have not heard this option put forward, and it was not contained in the arm's-length bodies review.

I can assure the noble Baroness that the consultation will give an opportunity to all those with an interest to express their views on where would be the best place to transfer the functions, and on the merits of keeping functions together where appropriate. I recognise that the expertise of the HTA, and the extent to which this will be carried forward, is a key issue. The consultation that we plan will, as I mentioned, give an opportunity for interested parties to express their views on the point.

The noble Baroness, Lady Thornton, asked who would take over the role of competent authority for the EU tissue and organ directives from the HTA. That role will be considered for transfer to other bodies, as with other functions. It involves regulating according to quality and safety standards. We will consult on the most appropriate body for those functions to be transferred to.

My noble friend Lord Willis made clear his view that we should not split research functions. I can tell him that we envisage that the health research agency will cover what is now covered by the approval of research licences. In the context of human embryo research, the legislative requirements that the research is necessary or desirable, and that the use of embryos is necessary, will remain firmly in place. If that consideration includes an assessment of the research technique proposed, it will remain so in future.

The noble Baroness, Lady Thornton, and the noble and right reverend Lord, Lord Harries, asked how we would deal with the devolved Administrations. The intention of the proposals is to reduce both the cost of regulation and the bureaucracy for regulated establishments. It is important that a workable solution is found for the devolved Administrations, while recognising that the subject matter of the legislation is reserved. The Human Fertilisation and Embryology Act extends to the whole of the UK, and the Human Tissue Act extends to England, Wales and Northern Ireland. We hope to agree a way forward with the devolved Administrations that avoids any unnecessary duplication of effort in order to keep costs and bureaucracy for regulated establishments to a minimum. We have had constructive discussions already at official level, and these will continue. The CQC is at present an England-only body. If reserved functions were transferred to the CQC, we would extend its territorial remit in respect of those functions alone.

I will return to where I began. It is surely right that the Government and Parliament should look for opportunities to streamline regulatory mechanisms, as long as this is done in a way that preserves the legal functions, and the ethical underpinning of those functions that Parliament has put in place. The Bill provides us with the means to do that in respect of the HFEA and the HTA. In view of the Government's broader concessions on the Bill, and our intentions to consult widely on the proposed transfers of functions and to protect existing ethical and legislative safeguards, I hope that noble Lords will not press their amendments.

[Baroness Thornton]

I thank the Minister for another detailed response. I also thank the noble Lord, Lord Willis, the noble Baroness, Lady Deech, the noble and right reverend Lord, Lord Harries, and my noble friends Lady Warwick and Lord Warner. I counted 17 to 20 questions that the Minister was asked. He gave us a great deal of information, some of which was useful and very interesting. However, I do not think that he answered all the questions.

The Minister raised the issue of us not being convinced. We are not being perversely unconvinced. The problem is that there are still too many unknowns about this part of the Bill. Extensive consultation in the summer, to which the noble Earl has referred on many occasions, is after the decision has been taken and after the powers have been taken.

For example, the Minister was pressed on the concern about registers and databases. His answer was that the decision would be part of the consultation, that they would not be dissipated and that there would be options put in the consultation. That is not a satisfactory answer at this point. The same goes for the impact assessment, which will be carried out in the context that the Government will have already taken the powers to do what they want to do.

On the ethical issues that I raised, the Minister suggested that those would go with whoever it seemed appropriate to be the responsible body. Frankly, at this stage of the Bill, an answer that has “whoever” in it is not satisfactory. There is widespread agreement that the medical research agency proposals sound promising, but that simply underlines the point that we should not proceed with including these two bodies in the Bill at this point.

The Minister has said several times that it is a complex process. We agree, and indeed the noble Lord, Lord Willis, made an extremely good suggestion about one way to simplify the process by using forthcoming legislation. Having been the Minister responsible for several Bills that might have been called Christmas-tree Bills, I am not sure that he does not have a very good point.

That begs the question: what is the hurry? If streamlining can be achieved without powers being taken in this Bill, money can be saved—as several noble Lords have said—without taking such powers, and a much larger discussion will be taking place as we move forward. It seems to me that those points remain outstanding.

At this point in our consideration, I do not think that we have reached a satisfactory and conclusive point in our discussions about the HFEA and HTA. I hope that we can resolve and clarify the remaining and outstanding uncertainties on this issue before Third Reading, and I very much welcome the fact that the Minister has said that he will be responding to certain points. I am sure that he is prepared to continue those discussions and I hope that we can resolve them before Third Reading. Otherwise, I fear that we may have to return to this issue. I beg leave to withdraw the amendment.

Amendment 49 withdrawn.

Amendment 50 not moved.

Amendment 51

Moved by

[Lord Taylor of Holbeach]

51: Schedule 5, page 18, line 17, at end insert—
“Keeper of Public Records.”

Amendment 51 agreed.

Amendment 52 not moved.

Amendment 53

Moved by

[Lord Taylor of Holbeach]

53: Schedule 5, page 18, line 18, leave out “National Park authorities in England.”

Amendment 53 agreed.

Amendment 54 not moved.

Amendment 55

Moved by

[Lord Taylor of Holbeach]

55: Schedule 5, page 18, line 20, at end insert—
“Public Records Office.”

Amendment 55 agreed.

Clause 6 : Power to authorise delegation

Amendment 56 not moved.

Amendment 57

Moved by

[Lord Taylor of Holbeach]

57: Clause 6, leave out Clause 6

Amendment 57 agreed.

Schedule 6 : Power to authorise delegation: bodies and offices

Amendment 58

Moved by

[Lord Taylor of Holbeach]

58: Schedule 6, leave out Schedule 6

Amendment 58 agreed.

Clause 7 : Consequential provision etc

Amendment 59

Moved by

[Lord Taylor of Holbeach]

59: Clause 7, page 3, line 43, leave out subsection (4)

Amendment 59 agreed.

Amendment 60

Moved by

[Lord Taylor of Holbeach]

60: Clause 7, page 4, line 4, at end insert—
“( ) An order under sections 1 to 5 may include provision repealing the entry in the Schedule by virtue of which the order was made.”

[Lord Taylor of Holbeach]

My Lords, even at this late hour, it gives me great pleasure to introduce this group of amendments, each of which introduces important changes to the schedules. I hope that they will be welcomed on all sides of the House.

Amendment 60 would create a power for a Minister, when making an order under Clauses 1 to 5, to include a provision to remove the body or office subject to the order from the schedule or schedules in which the body was listed. The amendment ensures that, where a Minister has been able to implement the proposed reforms by virtue of an order under the Bill, that body can be removed from the relevant schedule and therefore be assured of its ongoing status.

Amendment 69C represents a solution—which, I am happy to state, has the support of the noble Lord, Lord Hunt of Kings Heath—to the question of so-called omnibus orders relating to more than one body and whether they should be permissible under the Bill. I made a commitment in Committee to consider the matter further and have done so. During our debates in Committee, I expressed my concern that any restriction on omnibus orders should not prevent Ministers from the sensible and reasonable combination of related changes in a single order. For example, I am sure that the House will understand that there is little to be gained from a separate consideration of 160 orders making identical changes to internal drainage boards.

On that basis, the Government propose instead to amend Clause 11 to require that, should Ministers consider it appropriate to bring forward an omnibus order under Clauses 1 to 5, they must explain in the Explanatory Memorandum their justification for the decision. It will therefore be for Parliament to judge whether the Minister’s decision was appropriate. I consider that to be a sensible and proper solution.

I am delighted to have added my name to Amendment 72, in the name of the noble Lord, Lord Hunt of Kings Heath, the noble Baroness, Lady Royall of Blaisdon, and my noble friend Lord Norton of Louth. That amendment, much like the amendment in Committee which now forms Clause 16, represents the outcome of genuine engagement and compromise on all sides of the House. I pay tribute to noble Lords who have assisted in presenting it to the House this evening. Amendment 72 effectively sunsets the entries in the schedules by ensuring that an entry in the schedule automatically lapses five years after its commencement. The amendment therefore clarifies that the listing of a body in one of the schedules will not involve endless changes to that body's status but will be a vehicle for specific reforms which the Government expect to be carried out in a timely fashion. As I described the Government's thinking in Committee, the amendment will ensure that the powers in the Bill will remain on the statute book. That ensures that, following future reviews of public bodies, the Government will have the option of using primary legislation to repopulate the schedules as a means of making further reforms, subject to Parliament's consent.

For that reason, I am unable to support Amendment 72A in the name of my noble friend Lord Goodhart. That amendment would sunset the entire Bill, as well as the entries in the corresponding schedules, following the dissolution of this Parliament. To do so would be a mistake. It would leave the Government without a mechanism to take forward the outcomes of what I believe all sides of the House hope will be regular, systematic reviews of public bodies. Particularly given the work that this House has undertaken to craft a mechanism in the Bill which can command the confidence of Parliament and the public, it would be a retrograde step to ask future Parliaments to begin that process from scratch.

The Government's amendments in this group and Amendment 72 each significantly improve the mechanisms of the Bill and are the product of a process of engagement and deliberation that characterises this House at its best. It is a pity that we have had to introduce them at this late a stage, in front of a small House, but none the less their significance to the Bill is considerable. I commend them to the House and beg to move.

23:45

[Lord Goodhart]

My Lords, I have again tabled an amendment that I tabled in Committee, and which is now Amendment 72A. As my noble friend Lord Taylor says, the amendment involves a sunset clause. We now have government Amendment 72, which is a sort of sunset clause—it gets the clause going halfway down, towards the shadow, but not quite going the whole way. In view, however, of Amendment 72 and its wide range of supporters, I will support on this occasion Amendment 72 rather than my own amendment. That does not mean that I think that Amendment 72 is better; it is certainly a step forward but I am not convinced that it is in fact better than a simple sunset clause would have been. The effect of Amendment 72 is that after five years the Act will in reality be dead, but somehow it will be brought back to life by new primary legislation. That seems rather a clumsy arrangement, but if others wish to try it, so be it, and, as I said, I will support it.

[Baroness Royall of Blaisdon]

My Lords, I am grateful to the Minister. We certainly support him in his Amendments 60 and 69C and we are especially grateful for the work that the Government have done on omnibus orders. We think that they have arrived at a sensible and proper solution, as the Minister said.

As for the sunset provision, when we first broached this subject in Committee, the Bill was a very bad one. That is why we wanted to sunset the whole Bill. Since then we have genuinely engaged with the Minister and reached a very good compromise. Since Committee the Bill—its content and its architecture—has been radically transformed. Although my noble friend Lord Hunt will seek further change to the Bill's architecture at our next sitting on Report, we are content that the sunsetting of the schedules is adequate. We believe it right and proper that at the beginning of every Parliament there is the potential to have what would in essence be a new Public Bodies Bill. However, we also believe that the architecture is such that it could be maintained while looking again at the schedules. By sunsetting the schedules, the bodies that are currently in the schedule will have the comfort of knowing that if nothing has happened to them within the four or five-year period, they will be free, as it were; and the bodies that are not included will know that they can continue to work efficiently and effectively without a medium-term sword of Damocles hanging over them. We are therefore very grateful to the Minister for the changes to which he has agreed, and we look forward to the adoption of the amendments in question.

[Viscount Eccles]

My Lords, the first three amendments in this group are very welcome. Going right the way back to Second Reading, I remember the suggestion that Schedule 7 be dropped from the Bill being made right at that time. The dropping of Schedule 7 makes the arrangements for sunsetting a great deal easier to agree than they would have been if that schedule had stayed in. These two amendments are rather a subtle way of agreeing to a sunseting procedure, but they are none the less very welcome. I also remember that at Second Reading there was a suggestion that if this was the way that we were going and Schedule 7 were dropped, perhaps we would need Public Bodies Bill (No. 2). I am sure that my noble friends on the Front Bench and, particularly, my noble friend Lord Taylor are very pleased that he has found a way of avoiding Public Bodies Bill (No. 2), and I think we should all be very grateful for that. Finally, we have made a long journey and a lot of progress, which is extremely welcome.

[Lord Taylor of Holbeach]

I thank noble Lords for the general welcome given to these amendments. I thank those on the opposition Benches for their positive engagement on finding these solutions. For that, I am extremely grateful. I thank my noble friend Lord Goodhart for the gracious way in which he bowed to the consensus building on Amendment 72 and my noble friend Lord Eccles for the recognition he gave to the difficulties this Bill faced and for his part in overcoming those difficulties.

Amendment 60 agreed.

Consideration on Report adjourned.

Draft Defamation Bill

Monday 28th March 2011 Lords Chamber

Message from the Commons

A message was brought from the Commons that they concur with the resolution of this House of 23 March relating to a Joint Committee to consider the draft Defamation Bill presented to both Houses on 15 March and that they have made the following orders:

That a Select Committee of six members be appointed to join with the Committee appointed by the Lords to consider the draft Bill.

That the Committee should report on the draft Bill by 19 July 2011.

That the Committee shall have power— (i) to send for persons, papers and records; (ii) to sit notwithstanding any adjournment of the House; (iii) to report from time to time; (iv) to appoint specialist advisers; and (v) to adjourn from place to place within the United Kingdom.

House adjourned at 11.52 pm.