House of Commons
Prayers
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Mr Speaker
I regret to have to report to the House the death of David Cairns, the Member for Inverclyde. David was a most assiduous Member serving as Parliamentary Under-Secretary of State and Minister of State in the last Parliament, and was much respected by the House. David trained and served as a priest before beginning his political career. I am sure that Members in all parts of the House will join me in mourning the loss of a colleague, and extending our sympathy to the hon. Member’s partner Dermot, his father John, his brother Billy and his many friends and family.
Oral Answers to Questions
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Helen Goodman (Bishop Auckland) (Lab)
1. What recent assessment he has made of the effectiveness of the monetary policy framework.
The Chancellor of the Exchequer (Mr George Osborne)
I begin by expressing my own personal sadness and shock at the death of David Cairns, whom I knew pretty well. I went with him on a trip to the United States some years ago and spent some time with him, and I know that he was principled, gentle—in the best sense of the word—and genuinely liked and respected in all parts of the House. His sudden and premature death is a tragedy, and my sympathies—and, I suspect, those of everyone here—go to his partner Dermot and his family.
The Government have set up a new macro-economic framework to restore economic stability. The building blocks of that framework are an independent Monetary Policy Committee that will continue to target inflation, a new Financial Policy Committee to operate macro-prudential tools, so that we can assess overall levels of debt in the economy—something not done in recent years—and, crucially, a credible, coherent and independently monitored fiscal policy that allows interest rates to stay lower for longer while remaining consistent with the inflation target. It is now widely accepted that this framework is far more effective than the one that went before it.
Helen Goodman
May I associate myself with your tribute, Mr Speaker? David Cairns was a highly valued colleague, and I am sure that all our thoughts and prayers are with his partner Dermot and his family.
I am grateful to the Chancellor of the Exchequer for his answer, and I was wondering whether, in his more reflective moments, he would agree that Portugal, Greece and Ireland face a major problem, in that they cannot run an independent monetary policy attuned to their particular needs. That being the case, will he stop making rather childish comparisons between the UK and the eurozone countries?
Mr Osborne
The hon. Lady is right that those countries do not have a flexible exchange rate. That is because they are in the euro, which I campaigned to keep Britain out of. I do not know how she has campaigned in recent years, but the last time I checked I think it was still official Labour party policy to join the euro in principle. Perhaps the shadow Chancellor will clear that up when he gets to his feet. The comparison I make is a good one: a year ago almost to the day, people were looking at the British budget deficit, which was larger than those of Portugal and Ireland, and asking whether Britain could pay its way in the world. Our credit rating had been put on negative watch. Now, however, thanks to the policies of this coalition Government, Britain has economic stability again.
Sir Peter Tapsell (Louth and Horncastle) (Con)
I also wish to pay tribute to the memory of David Cairns. May I ask the Chancellor how the co-ordination is organised to achieve a synthesis between our tight fiscal policy and our lax monetary policy?
Mr Osborne
Obviously, monetary policy is independent—the MPC sets it in the way we all know—so there is no co-ordination in that sense. I do not have a direct influence on monetary policy, but it is clear that by setting a credible fiscal policy, we give the MPC maximum room for manoeuvre and the freedom to keep interest rates lower for longer. The Governor of the Bank of England made that clear when he gave his Mansion House speech last year, and it is an observation also made by many independent observers of the British economy. Interest rates would be higher if we had a less credible fiscal policy.
Ms Angela Eagle (Wallasey) (Lab)
I would like to thank you, Mr Speaker, and the Chancellor for your tributes to David Cairns, our colleague, and to add our tributes from the Opposition side of the House. David was one of those very rare people who caused a change in the law in order for him to be able to take his seat in this place, and when he arrived his presence was not a disappointment to anyone. He was a great colleague and friend, and our hearts go out to his family and friends. We would like to add our deepest condolences at the shocking news of his untimely and very early death today.
Before the last election, both parties now in government pledged no rise in VAT, but with inflation running at double the Bank of England target, people are facing the biggest and longest squeeze in their living standards for 80 years. How does the Chancellor think that increasing VAT by 2.5% has helped them to cope with this issue?
Mr Speaker
Order. Whatever may be said about the question, I am sure that the Chancellor will focus on the monetary policy framework. That is what he can be relied upon to do.
Mr Osborne
Actually, monetary policy is the thing that I am not directly in charge of, but the point I would make is that the VAT rise is part of a credible fiscal policy. The person who was Chancellor of the Exchequer before me has made it pretty clear in interviews since the election that he, too, was considering a VAT rise, and he would probably have gone ahead with one if Labour had been re-elected.
Mr Osborne
The shadow Chancellor shakes his head. I know that in government he tried to do everything to stop a credible fiscal policy being developed, and he is now doing everything in opposition to stop Labour developing a credible economic policy. Long may he continue to do so.
Mr Andrew Tyrie (Chichester) (Con)
The Chancellor will shortly publish draft legislation on financial regulation making the Bank of England the most powerful central bank of its type in the world. The word “Governor” simply does not do justice to the empire over which Mervyn King will shortly preside. What specific proposals does the Chancellor have to ensure full democratic accountability of the reformed Bank to both Parliament and the country?
Mr Osborne
I thank my hon. Friend for advance notice of his important question. Both the Governor of the Bank of England and the Government take the accountability of the Bank very seriously. Clearly the Bank will receive considerable new powers for its prudential regulation of our financial system and in its macro-prudential tools. We are looking at specific ideas for enhancing the Bank’s accountability, including to this House, but it would be appropriate first for me to appear before my hon. Friend’s Committee—I know that he has contacted my office seeking a date—and to await the Treasury Committee’s findings, so that we can listen to what it has to say before coming up with our confirmed proposals.
Tessa Munt (Wells) (LD)
2. What recent assessment he has made of trends in levels of bank lending to small businesses.
The Financial Secretary to the Treasury (Mr Mark Hoban)
Repayment of debt by small businesses is running ahead of lending to the same sector. As a consequence, net lending fell in the first quarter of this year. However, the availability of credit to business in the same period increased.
Tessa Munt
I would like to draw attention to the situation affecting my constituent George Archer, a business man who has had a £5,000 overdraft that was unused for three years, with the exception of four days when he requested a £20,000 extension. The bank—which is one of the big four—offered him £25,000 on rates that he initially refused, before beating it down to acceptable rates. On paper, that bank has increased its lending to a small or medium-sized business by £20,000, but I wonder what the Minister can do to halt this duplicity and ensure that loans are real, active, needed and utilised.
Mr Hoban
I cannot comment on the particular circumstances that my hon. Friend has raised, although I am happy to look at them more carefully. I am sure that she would welcome, as does the whole House, the commitment of banks to increase their capacity to lend to businesses of all sizes.
Chris Leslie (Nottingham East) (Lab/Co-op)
I wonder whether the Minister still thinks that Project Merlin was such a great deal with the big banks. Lending to small businesses continues to fall, while the charges for those loans are rising. The banks’ promise to support the big society bank looks less generous, as we learn that money will be lent only on commercial terms, and now we hear that Santander is pulling out of the business growth fund, which was a key plank of the deal. Is this a failure of Project Merlin or a failure of the Government?
Mr Hoban
It is rather churlish of the hon. Gentleman to be critical of Project Merlin. When his party was in office it was able to secure lending commitments from only two banks. We have achieved a comprehensive package with all banks, including Santander, to increase the amount of money that they will lend to businesses, including small businesses. The business growth fund, which he also raised, is an opportunity for businesses to seek equity finance in a way that is currently not available and that meets the equity gap, which the previous Government did little to resolve.
Esther McVey (Wirral West) (Con)
3. What fiscal measures he is taking to reduce the costs faced by businesses.
The Chancellor of the Exchequer (Mr George Osborne)
As well as dealing with the deficit, this Government are helping business. To support a private sector recovery, we have cut corporation tax by 2% this year, with 3% to come. We have cut small companies’ tax and extended the small business rate holiday for another year. We have stopped Labour’s jobs tax, expanded enterprise and research tax breaks, announced new enterprise zones and, crucially for millions of businesses and families, we have abolished the fuel duty escalator and cut the duty.
Esther McVey
As Merseyside seeks to expand its private sector, it is looking towards its knowledge economy so that it can build on its substantial science base. Predictions show that, by 2022, it could have growth of 15%, which would mean 58,000 jobs. What are the Government doing to incentivise such growth to ensure that those predictions for Wirral and Merseyside become a reality?
Mr Osborne
First, we have increased science funding in the north-west. Although it is not in my hon. Friend’s constituency, there has been additional money for Daresbury, which was announced in the Budget. Also, Mersey Waters in her constituency is going to be an enterprise zone. We have also announced the redevelopment of the Royal Liverpool hospital at a cost of £450 million. So, whether it is medical research, science at Daresbury, the Atlantic Gateway project or the enterprise zones, we are doing all sorts of things to help the Mersey region.
Ed Balls (Morley and Outwood) (Lab/Co-op)
I endorse the sentiments expressed by my hon. Friend the Member for Wallasey (Ms Eagle) and others about the tragic death of our colleague and friend, David Cairns.
I also congratulate the Chancellor on his successful masterminding of the “No to AV” campaign. We all saw how much he enjoyed it over the past week or so, but now that that political campaign is out of the way, perhaps he could drag himself back to his day job for a moment. The flagship measure of his strategy for growth in last year’s Budget was a £1 billion national insurance holiday for new businesses outside London and the south-east. He said that that would benefit 400,000 companies and create 800,000 jobs. Let me ask him a very specific question. Will the Chancellor tell the House how many companies have so far benefited from that scheme, and how many jobs have been created?
Mr Osborne
I thank the right hon. Gentleman for congratulating the “No to AV” campaign, which many of his colleagues supported, even if he did not. I cannot help but notice that he had a big role to play in Labour’s election campaign, during which he said that
“the Scottish elections are a big test”
for Labour. Well, he was certainly right about that.
Let me say something about that national insurance tax break that was announced in the previous Budget. The take-up has been in the low thousands, and that is something that I acknowledged to the Treasury Select Committee. We are seeking to improve the design of the scheme, to ensure that new businesses are more aware of its benefits. As a result of work being done by Her Majesty’s Revenue and Customs, we expect take-up to increase.
Ed Balls
Despite all the bluster, there was not a specific answer to the question in there. We were told by the Business Secretary in February that the Chancellor would announce the details of how he would develop the scheme in the Budget, yet those details still have not arrived. Actually, I have the figures from the Chancellor’s own Department. How many companies have benefited from the scheme? Not 400,000 but just 3,000. How many jobs have been created? Not 800,000 but just 6,000. If that is the flagship measure of his growth strategy, it is no wonder that the economy is flat-lining, that consumer confidence is down and that unemployment is forecast to rise—[Interruption.] Well, if that is not the reason, perhaps the Chancellor will tell us why the economy has been flat-lining in the past six months. Is not the reality that the country is discovering what the Liberal Democrats discovered on Thursday of last week: that this coalition is hurting, but it is not working?
Mr Osborne
The shadow Chancellor is not just out of his depth; he is drowning. The truth is that he has had absolutely no impact in the several months that he has been doing the job. He had one policy, a VAT cut on fuel that the European Union ruled illegal. He had one idea, which was to follow America, but now the Obama Administration have announced a deficit reduction plan as fast and as deep as the UK’s. He had one prediction, which was that there would be a double-dip recession, and that has not happened. We know that he is a man with a past, but we are beginning to discover that he has absolutely no ideas for the future. If we want any proof of that, this is what the CBI said this week when asked what the outcome would be if Britain followed Labour plans:
“The economy would be weaker because of the impact of a loss of confidence”.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
4. What assessment he has made of the effects of the increase in the standard rate of VAT on levels of economic growth in the first quarter of 2011.
The Exchequer Secretary to the Treasury (Mr David Gauke)
At this stage, it is not possible to make a full assessment of the effect of the increase in the standard rate of VAT on levels of economic growth in the first quarter of 2011. The Office for Budget Responsibility forecast released on 23 March projected growth of 1.7% over the course of 2011. That forecast takes full account of the Government’s fiscal policy measures.
Ms Stuart
The Bank of England expects inflation rates to accelerate over the next few months. The markets, however, seem to have taken the view that interest rates will not increase as speedily as was anticipated just a few weeks ago. How does the Exchequer Secretary reconcile the Chancellor’s notion that the economy has grown with the judgment of the markets?
Claire Perry (Devizes) (Con)
May I return to the topic of VAT on fuel? I have just come from a business session in my constituency of Devizes, where I know that despite the decrease, high fuel prices continue to be a real drag on growth for small businesses across the economy. I have a letter from the EU commissioner saying that the recent motion we debated—that a derogation should be made specifically for motoring fuel—is almost certainly illegal and definitely unworkable under EU legislation. May I ask Ministers what proposals we can suggest to help motorists in the real world now that the Labour party’s suggestion has been revealed as yet another—
Tony Baldry (Banbury) (Con)
5. What fiscal measures he is taking to encourage charitable giving.
The Chancellor of the Exchequer (Mr George Osborne)
The Government think that charitable giving needs a great deal more support than it has been getting, so we announced a major package of new tax breaks in the Budget, ranging from the biggest to the smallest donations. This includes the commitment that anyone giving more than 10% of their estate to charity will have their inheritance tax bill cut by 10%. For the first time ever, the first £5,000 of a donation or donations to a charity will automatically attract gift aid. That is automatic tax relief on the collection plate and the collecting tin on the high street. Overall, 100,000 charities could benefit to the tune of £600 million a year. These are the most generous tax changes for a generation.
Tony Baldry
Over the year, some £58 million in loose change is put in collection plates from just Church of England collections, so the small donation gift aid scheme will be very welcome, as it will enable tax to be recovered on that amount. Welcome, too, will be the reduction in inheritance tax for those who give more than 10% of their estate to charity. After all, we can take nothing with us, and it is probably better to leave as much as possible to charity when we go.
Mr Osborne
I thank my hon. Friend for his support. One challenge is to make sure that everyone hears about these schemes over the next couple of years. Because the Budget focused on big issues like fuel duty and the corporation tax cut, the same amount of attention was not given on Budget day to the charitable giving measures. Over the period before they come into effect, I want to make sure that all the charities are aware of the benefits. Every charity will be able to benefit, but small charities will be disproportionately better off.
Kerry McCarthy (Bristol East) (Lab)
Many local charities would disagree with the Chancellor’s statement. Will he explain why he chose in the Budget to focus on tax breaks for the wealthiest owners when many small local charities who will not benefit from such donations are being hit by the triple whammy of a rise in VAT, the end to the gift aid transitional rate and cuts to local government grant funding? What help is he giving to those charities that he expects to form the backbone of his big society?
Mr Osborne
I am not sure who the hon. Lady has been listening to, but this is what the British Red Cross said: “Allowing charities to—”[Interruption.] I am sorry; it seems that we should disregard the views of the British Red Cross. Let me, however, repeat what it said for the benefit of my right hon. and hon. Friends.
“Allowing charities to claim back on up to £5,000 of small donations per year will have a big impact for small charities”.
The Charities Aid Foundation said:
“The Chancellor has today delivered for charities and those who want to support them.”
Instead of carping from the sidelines, why does the hon. Lady not get behind this good scheme and ensure that all charities in all our constituencies make use of it?
Pamela Nash (Airdrie and Shotts) (Lab)
6. What assessment he has made of the effects on families and children of the tax and benefit changes introduced in April 2011.
The Chief Secretary to the Treasury (Danny Alexander)
I echo your tribute to David Cairns, Mr Speaker. I knew him as a very effective Scotland Office Minister, and as a champion of Scottish broadcasting. It is a tragic loss, and he will be very sorely missed by Members in all parts of the House.
Direct tax and benefit changes introduced in April are progressive. On average, households in the bottom 80% of income distribution gain. As a result of the direct tax changes introduced in April, 21 million individuals earning up to about £35,000 per annum will benefit in real terms this year.
Pamela Nash
Let me take a moment to associate myself with the Chief Secretary’s comments on the sad death of David Cairns. David provided me with a lot of support and a lot of laughter during my time here as a parliamentary researcher and, over the last year, as a Member of Parliament.
Families with two or more children will lose up to £1,560 per year as a result of the cuts in the child care element of working tax credit. Does the Chief Secretary accept that that will deter many parents who would otherwise have returned to work from doing so?
Danny Alexander
The vast majority of people on low and middle incomes will benefit from the income tax cuts that will result from the raising of the income tax threshold by £1,000. For families with children, we have increased the child element of child tax credit by £180 above indexation. I agree with the shadow Chancellor, who admitted on the BBC shortly after the Budget that
“only the majority of families”
would benefit from those moves.
Mr Mark Spencer (Sherwood) (Con)
Does the Chief Secretary share my desire to see a welfare system in which hard-working families are better off than those who choose not to work? Does he agree that, as soon as we can afford it, we should enable as many as possible of those hard-working families to benefit from the lifting of the tax threshold?
Danny Alexander
I agree wholeheartedly. That is why we have set ourselves the agenda of both reforming the welfare system and lifting the income tax threshold to £10,000, which will significantly benefit millions of people on low and middle incomes.
Mr David Hanson (Delyn) (Lab)
Value added tax up, losses of about £1,500 for middle-income families, child benefit frozen, child tax credit cut, working families tax credit frozen: can the Chief Secretary tell me why, when such decisions are made, it remains the Government’s priority to cut the 50p tax rate for the highest earners in the community?
Danny Alexander
I am not sure that the right hon. Gentleman opposed any of the items on that list in votes in the House.
As I said earlier, we have cut income tax by increasing the income tax threshold. We have also introduced a triple lock on pensions, increased cold weather payments, and increased the child element of child tax credit. Of course we must look at the way in which the income tax system works, but our priority has been to cut income tax for people on low and middle incomes by increasing the tax threshold. That is the tax priority of this Government.
Harriett Baldwin (West Worcestershire) (Con)
7. What steps he is taking to ensure that the Financial Services Authority exempts from new domestic regulation businesses employing fewer than 10 people and new businesses for the next three years.
The Financial Secretary to the Treasury (Mr Mark Hoban)
Where the Government are granting new powers to the Financial Services Authority through primary and secondary legislation, we will seek to apply the moratorium. The FSA is, however, an independent regulator with powers to make rules under the Financial Services and Markets Act 2000. The Government’s policy on exempting micro-businesses and start-ups from new regulation will therefore not apply automatically to rules made by the FSA.
Harriett Baldwin
In his testimony to the Treasury Committee, the chief executive of the FSA said that up to 10,000 jobs—in many cases, those of small independent financial advisers—could be lost as a result of the retail distribution review. Will the Financial Secretary meet the chief executive of the FSA as a matter of urgency to discuss ways in which the impact could be mitigated?
Mr Hoban
I know that my hon. Friend has campaigned tenaciously for IFAs. I remind her that although the FSA is an independent regulator—this addresses her question directly—it has an obligation to assess the impact of its rules on businesses, including small businesses, and to make its rules proportionate. I should add that it is not planning any initiatives by means of its powers under the Financial Services and Markets Act apart from those that are already under way.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his response. Clearly, if the economy is to be regenerated and rebuilt, it will be small and medium-sized businesses that will achieve that, and one of the things they tell me as their elected representative is that they need rates relief and assistance. What assistance is the Minister considering giving to such businesses?
Mr Hoban
As the hon. Gentleman will be aware, this Government have taken many actions to provide support to small companies. For example, we have cut the small profits rate of corporation tax—which the previous Government sought to increase. We have done a lot to encourage the growth of small businesses, and we will continue to look at what further measures we might take to encourage their future prosperity.
John Stevenson (Carlisle) (Con)
8. What recent estimate he has made of the size of the public sector borrowing requirement.
The Economic Secretary to the Treasury (Justine Greening)
The public sector finances first release published by the Office for National Statistics estimates that the first provisional out-turn for public sector net borrowing in 2010-11 is £141.1 billion, or 9.6% of GDP. That is £15 billion lower than in 2009-10.
John Stevenson
Manufacturing has been undergoing a renaissance under this Government, and clearly has a role to play in helping the economy grow and in reducing the deficit. Does the Minister agree that manufacturing also has a significant role to play in helping to reduce the other deficit: the balance of payments deficit?
Justine Greening
I completely agree with my hon. Friend; he is absolutely right that manufacturing has a vital role to play. In fact, the total trade deficits narrowed in each of the past three months, and that recovery in exports has been driven largely by strong growth in the export of manufactured goods, which accounted for almost 50% of the UK’s total exports. That is not just good news for those businesses; it is good news for jobs, too. It shows that under this Government Britain is not just open for business in the UK; it is open for business abroad, too.
Kelvin Hopkins (Luton North) (Lab)
When the Government’s cuts really start to kick-in, unemployment will rise by hundreds of thousands, if not up to 1 million. That will result in lower tax revenues and higher benefit payments, and the deficit will get worse and public borrowing will increase. Is not the Government’s policy nonsense?
Justine Greening
The hon. Gentleman is giving a critique of his own party’s policy in many respects, because its proposed cuts are nearly as large as ours this year. The difference is that we have set up the Office for Budget Responsibility, and there is clear evidence that we will start to see employment growing year on year and unemployment falling year on year, so by the end of this Parliament we should see a net creation of almost 1 million jobs. Surely, the hon. Gentleman must welcome that? His party leaves unemployment higher when it leaves office.
Mr Marcus Jones (Nuneaton) (Con)
9. What fiscal measures he is taking to support first-time home buyers.
The Financial Secretary to the Treasury (Mr Mark Hoban)
Until and including 24 March 2012, first-time buyers can apply for relief from stamp duty land tax on properties of up to £250,000. The Government are currently reviewing this relief, and will announce the outcome of the review in the autumn. The Government are also investing £250 million in 2011 to assist more than 10,000 first-time buyers to purchase a new-build home of their own through the FirstBuy Direct scheme. That scheme is being co-funded by developers.
Mr Jones
I thank the Minister for his response. First-time buyers are the lifeblood of the residential property market, and while I congratulate the Chancellor and his team on the deposit scheme announced in the Budget to assist first-time buyers to purchase new-build property, will the Treasury team consider apportioning part of that funding to assist first-time buyers who want to purchase second-hand property, in order to give the property market the vital shot in the arm that it needs?
Mr Hoban
My hon. Friend makes an important point, but it is crucial that we target help where it will deliver the greatest economic benefit. By targeting assistance on first-time buyers purchasing new-build property, the FirstBuy scheme helps to unlock stalled developments and stimulate additional house building, with a further 10,000 homes being built for open market sale, supporting 42,000 jobs directly and a further 24,000 jobs indirectly for a year. If we were to pursue the route my hon. Friend suggests, we would potentially lose the benefit of the financing that comes from home builders.
Kate Green (Stretford and Urmston) (Lab)
Is the Minister concerned that the proposed savings cap in the universal credit will make it more difficult for first-time buyers to save for the much higher levels of deposit that lenders increasingly require?
Mr Hoban
Everyone in the House will understand the challenges that face many first-time buyers in trying to save up for a deposit. That is why we announced this scheme at the time of the Budget, which has been widely welcomed. We should also recognise that a number of lenders are now reducing the loan-to-value ratio, to enable more first-time buyers to get on to the housing ladder with a smaller deposit.
Sheryll Murray (South East Cornwall) (Con)
10. What steps he is taking to support investment in the regions.
The Chief Secretary to the Treasury (Danny Alexander)
Returning the UK economy to sustainable economic growth that is more balanced across the regions of this country and across sectors is a key priority. In the recent Budget, this Government took steps to encourage investment and exports as a route to a more balanced economy. In addition, we have introduced 21 new enterprise zones in England and we have allocated £450 million of investment in the first round of the regional growth fund, including to an excellent proposal from the Western Daily Press and the university of Plymouth to support small firms across the south-west.
Sheryll Murray
I thank my right hon. Friend for that reply. Private sector growth is really important in my constituency, but only six of 464 bids to the regional growth fund were from Cornwall. What can the Government do to encourage more bids from Cornwall in the second round?
Danny Alexander
I would urge my hon. Friend and other colleagues from Cornwall to encourage businesses and the local authorities to support bids from private sector businesses. The regional growth fund is there to support private sector-led bids that create growth and jobs and that support economic development across England, and I would urge her to work with chambers of commerce and local enterprise partnerships.
Mr George Mudie (Leeds East) (Lab)
In view of the indifferent growth in the regions, does the Minister regret the Government’s decision to abolish regional development agencies and to give to their authorities no money, no staff and no authority?
Danny Alexander
No, I do not; I think that that was the right decision. The balance of policies that we are putting forward—on enterprise zones, local enterprise partnerships and the regional growth fund—is designed to ensure that ideas that come from the regions have a much greater chance of success. Our decision was the right one, and the hon. Gentleman will have noted that inequality among the regions actually grew during Labour’s 13 years in office.
Nicholas Soames (Mid Sussex) (Con)
11. What steps his Department is taking to promote economic growth.
The Chancellor of the Exchequer (Mr George Osborne)
As my hon. Friend knows, we inherited an economic mess, we have restored economic stability and we are promoting economic growth by cutting business taxes, encouraging investment, expanding exports, improving and investing in skills, and creating jobs. The whole House will be pleased to know that 400,000 private sector jobs have been created since the Government came into office.
Nicholas Soames
I warmly welcome the excellent record of this Government, led by my right hon. Friend the Prime Minister, and the admirable work done by the Chancellor. Does he agree that, in addition to all this work to encourage growth, the deregulation of the economy continues to be extremely important and that it is not proceeding at as fast a pace as it should? Will he do everything he can to encourage his colleagues in the Government to get on with the deregulatory programme?
Mr Osborne
I certainly am doing that. We announced in the Budget the deregulation of £350 million-worth of business regulation, and we also imposed a moratorium for the coming years on regulation on small businesses. On the first anniversary of this Government, it is worth reflecting that 400,000 extra jobs have been created in the private sector, 89,000 fewer people are on the unemployment count, manufacturing output is up by 5%, business investment is up by 11%, exports are up by 12%, our credit rating has come off negative watch, our market interest rates are down and, as I say, economy stability has been restored.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Would the Chancellor like to associate himself with the views of the Secretary of State for Business, Innovation and Skills on the cumulative effect of carbon reduction measures on the competitiveness of energy-intensive industries? There is real concern in the ceramics sector in my constituency that the Government are in danger of exporting jobs and importing carbon, which is in nobody’s interest?
Mr Osborne
The hon. Gentleman raises a very specific issue—the cumulative impact of the environmental policies of both the previous Government and this one on some very energy-intensive industries such as the one that he represents in Stoke—which is worth consideration. We are examining it, and it is a challenge for the whole House to ensure that we get the right balance between absolutely meeting our carbon reduction requirements, to which we have all signed up as Members of this Parliament, and ensuring that we can do so in a way that enables Britain to continue to have a competitive energy-intensive industry.
David Mowat (Warrington South) (Con)
12. What his policy is on the operation of the Barnett formula in relation to relative need.
The Chief Secretary to the Treasury (Danny Alexander)
As the coalition programme for Government states, the Government
“recognise the concerns expressed…on the system of devolution funding.”
The Government’s priority, however, must be to reduce the enormous budget deficit and therefore any change to the system of funding for the devolved Administrations must await the stabilisation of the public finances.
David Mowat
I thank the Chief Secretary for that reply. He will be aware, however, that the Holtham commission, the House of Lords Select Committee and the noble Lord Barnett are all of the view that the Barnett formula is in need of urgent review and should be replaced by a mechanism based on need. I understand that the priority must be to tackle the deficit, but can we not at least start the process in the course of this Parliament of putting in place a fairer allocation mechanism based on need?
Danny Alexander
No, I am afraid I cannot make that commitment. As I said earlier, our priority is to reduce the deficit. We have the Scotland Bill to take forward here, and in relation to Wales we have a process that is following on from the referendum and we have the Holtham commission to look at specific issues. I think that is the right set of priorities for the moment.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
As the Chief Secretary knows, his Government have announced a Calman-like process for Wales following the successful referendum in March for further powers. Will he confirm that reform of the Barnett formula will be a precondition of any wider financial reforms to the way the Welsh Government are funded?
Danny Alexander
I cannot confirm that, no. We have said that we will consider the issues to do with tax powers raised in the second Holtham report as well as other issues that were brought forward at that stage. We made a commitment to the previous Welsh Assembly Government to engage in a conversation about those things. If the new Welsh Assembly Government want to take that forward, we will be open to that, too.
Mr Gary Streeter (South West Devon) (Con)
13. What recent representations he has received from the licensed trade on alcohol duty.
The Economic Secretary to the Treasury (Justine Greening)
I met a number of stakeholders ahead of this year’s Budget, including the all-party group on beer and the British Beer and Pub Association. We carried out a review of alcohol taxation last summer and members of the licensed trade contributed heavily to that.
Mr Streeter
I thank the Minister for her answer. Given the importance of the licensed trade to the economy and our culture, particularly in regions such as the west country, where tourism is high, is it not now time to seek to reduce alcohol duty on served drinks and to increase it on cheap booze sold by supermarkets?
Justine Greening
My hon. Friend is absolutely right to raise that issue. In fact, it is part of the rationale behind tackling problem drinking. One way we have sought to do that is by introducing the limits on the below-cost selling of alcohol in supermarkets. That will be done by a formula of assessing duty plus VAT as the below-cost level. My hon. Friend is also right to point out that we need to do what we can to support pubs, which are the lifeblood of many local communities. They will also benefit from the various packages of measures we have brought forward to support small businesses, including reduced corporation tax, increased national insurance thresholds and, of course, the plan for growth.
Jeremy Lefroy (Stafford) (Con)
14. What recent discussions he has had with his international counterparts on strategies to reduce budget deficits.
The Exchequer Secretary to the Treasury (Mr David Gauke)
At the G20 summit in Seoul in November, advanced countries committed to formulate and implement credible growth-friendly, medium-term fiscal consolidation plans. The Chancellor has been involved in discussions with our international and European counterparts since the Seoul summit, including in the International Monetary and Financial Committee and the International Monetary Fund spring meetings. As was the case with the previous Administration, it is not the Government’s practice to provide details of all such discussions.
Jeremy Lefroy
I thank the Minister for his reply. The OECD’s recent report says that the UK is striking
“the right balance between addressing fiscal sustainability…on the one hand, and preserving short-term growth on the other.”
In his contact with international colleagues, has my hon. Friend found other support for this view or, indeed, any support for the opposing view?
Mr Gauke
It is quite striking that on one side of the argument, saying that we must be serious about getting the deficit down, there is the OECD, the IMF, the European Commission, the CBI, the Governor of the Bank of England and the US Government, whereas on the other side we have the Labour party. We do not find the Labour party’s case terribly persuasive. On the evidence of last week, nor do the British people.
Ian Austin (Dudley North) (Lab)
Does not what happened in Greece show that measures that hamper growth make tackling the deficit all the harder? Is that not why, six months after the geniuses opposite took stewardship of an economy that was beginning to recover strongly, growth had ground to a halt? Is it now why, far from tackling the deficit, which is what all this is supposed to be about, the small print of the Budget shows that the Government will have to borrow £46 billion more?
Mr Gauke
I know that the hon. Gentleman is close to the former Prime Minister, but it really is disappointing that he is such a deficit denier. He even seems to suggest that the Greeks should not be doing anything about their deficit. If we do not have a credible plan, then the economy is at risk. We do have a credible plan.
Stephen Williams (Bristol West) (LD)
First, Mr Speaker, may I associate myself and my Liberal Democrat colleagues with your remarks about David Cairns at the start of Question Time?
On the deficit, the Government’s plans will reduce the fiscal deficit from last year’s figure of 9.6% to 7.9% this year, but that will still be roughly double the eurozone average and higher than the figures for Germany, France, Italy and Spain. Does the Minister agree that if we did not take this action to reduce the deficit, it would undermine international confidence in this country and our ability to borrow the funds that we still need to fund our programmes?
Chris Kelly (Dudley South) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability of the economy, to promote growth and employment, to reform banking and to clear up the mess in the public finances that we inherited so that Britain starts to live within her means.
Chris Kelly
The Chancellor will know that fraud and error have plagued the tax system since it was introduced. What measures is he taking to bear down on this and what financial impacts does he expect those measures to have?
Mr Osborne
I can today report to the House that in the past year Her Majesty’s Revenue and Customs has saved an additional £1 billion by tackling fraud and error in the tax credit system. For many years, the flaws in the shambolic administration of tax credits went completely ignored by the Labour party, causing misery for hundreds of thousands of families and costing the taxpayer billions of pounds, but we are now sorting out this mess.
Mr William Bain (Glasgow North East) (Lab)
T3. Has the Chancellor had an opportunity to note the findings of last week’s report from the National Institute of Economic and Social Research, which show the contraction in public and private demand since emerging from the recession to be higher in this country than in any comparable major economy? Does that not show that the Government are cutting too far and too fast?
Mr Osborne
First, the report recommends higher taxes and higher interest rates—perhaps that has become part of the Labour party’s official policy. I think it is worth looking at what the CBI has said this week. I have already quoted what it said when I was asked what the outcome would have been had Britain followed Labour’s plans—it said there would have been weaker economic growth—but its director general has also said:
“We are rock solid behind the chancellor’s plans to eliminate the structural deficit within a parliament”,
which are an
“essential part of putting the economy back on a stable footing”.
That is the voice of British business’s view of the deficit. [Interruption.] The shadow Chancellor says that is not true. A couple of months ago he was quoting the CBI across the Dispatch Box at me, but now that the CBI says that Labour’s economic policies would lead to weaker economic growth, he is in denial about that too.
John Pugh (Southport) (LD)
T2. What financial stress test will the Treasury impose before allowing the Department of Health to authorise general practitioner or clinical consortia?
The Chief Secretary to the Treasury (Danny Alexander)
I am grateful to my hon. Friend for his question, which raises a very important issue. It is a key part of the Treasury’s engagement with this to make sure that the process for authorising GP consortia ensures that those organisations are fully financially capable, as well as clinically capable, of meeting their objectives before they are authorised on whatever timescale.
Vernon Coaker (Gedling) (Lab)
T7. Does the Chancellor recall his statement to the House in October, when he said:“I completely understand the public’s anger that the banks…should now be contemplating paying high bonuses”?—[Official Report, 20 October 2010; Vol. 516, c. 955.]It is all very well being angry about that, but why do the banks continue to pay high bonuses to their high-ranking directors and why does he not do something about it? Why does he not repeat Labour’s bank bonus tax and reinvest the money in jobs, housing and many other things that the people of this country want?
Mr Osborne
Bank bonuses were higher when the hon. Gentleman was a Minister. There is complete amnesia among the Opposition about their having presided over the collapse of the British banking system and over bonuses that were billions of pounds higher in total than those being paid today, and they have no ideas about how to reform the banking system. The Chancellor who introduced the bank bonus tax to which the hon. Gentleman refers said that it would not work again. We have introduced a permanent bank levy which, I think, the Labour party continues to oppose.
Amber Rudd (Hastings and Rye) (Con)
T4. The economy of Hastings received a tremendous boost today when the Heritage Lottery Fund announced that it would support our bid for £8.7 million for the pier renewal but, sadly, seaside towns in general and we in Hastings suffer from bad transport links, high public sector employment and low wages. Will the Chancellor consider what can be done to support seaside towns under this Government?
Mr Osborne
I join my hon. Friend in celebrating the good news about the successful bid for the renovation of the pier. She is right to point out that there are specific issues associated with seaside towns across the country which are well known to the Members who represent them and well known also to the Government. We intend to come forward with proposals later this year to help those seaside towns.
Ian Mearns (Gateshead) (Lab)
T8. Household debt has been revised upwards by £300 billion, and my constituency, Gateshead, has one of the highest rates of personal insolvency in the country. What is the point of cutting the national debt, only to transfer the burden on to the personal finances of ordinary families? It is blindingly obvious that we are not all in this together—some of us are in this up to our necks.
Mr Osborne
I am afraid the hon. Gentleman misses two important facts. First, the most recent figures—within the past week—for personal insolvencies showed a welcome fall. Secondly, household debt reached a record level under the previous Government. As I said in response to the first question today, we are introducing a Financial Policy Committee to assess overall levels of private debt, including business debt, in the economy so that we do not allow dangerous unsustainable levels to grow. That will now be a judgment for the Financial Policy Committee and it will have the tools to do something about it.
Stephen Mosley (City of Chester) (Con)
T5. Can my right hon. Friend update the House on what discussions he has had about the likelihood of a further bail-out of the Greek economy and whether he has made any assessment of the UK’s likely contribution?
Mr Osborne
The answer is that we have not had discussions about a second Greek bail-out and we have not been asked to make a contribution. The question for Greece is whether it lives up to the commitments that it has entered into. There is currently an International Monetary Fund, European Commission and European Central Bank team in Athens assessing Greece’s progress against the plan that it committed to, and we should await the results of that assessment.
Stephen Timms (East Ham) (Lab)
A year ago the Office for Budget Responsibility was projecting growth in the UK economy of 2.6% this year. Now the forecast is down to 1.7%. What has gone wrong?
Mr Osborne
As I am sure the right hon. Gentleman knows, there are very significant global headwinds of the high oil—[Interruption.] I know that Labour Members live in a complete vacuum but, according to the most recent growth figures for this first quarter, the British economy posted a higher quarterly growth rate than the United States of America. Of course we have the high oil price and the ongoing problem in the eurozone, but what is required above all is a credible deficit reduction plan that keeps Britain out of the financial danger zone.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
T6. Given that Plymouth is a low-skills, low- wage economy with 38% of the work force dependent on the public sector, can my right hon. Friend give me the timetable for the creation of enterprise zones? What role could green deal manufacturing play within that?
Mr Osborne
I know that my hon. Friend is a trenchant supporter of his constituency and a promoter of green industry there. He has raised the issue with me on a number of occasions. I know that Plymouth has put forward a bid for the second round of enterprise zones. An announcement will be made later this summer, in July, and I am afraid he will just have to wait until then, but as I say, he has certainly brought to my attention the potential for the green economy in the city that he represents.
Stewart Hosie (Dundee East) (SNP)
May I offer my condolences to the friends, family and colleagues of David Cairns? He was a man who always argued his corner with intelligence and humour, and carried the rare gift of being liked and respected across the Scottish political divide. We will all miss him.
I am sure the House is pleased that both Santander and RBS have access to European Investment Bank funds to issue discounted loans into the economy—£150 million in the case of Santander, and a third tranche of £300 million in the case of RBS. Can the Chancellor confirm that this is new, additional money, or will it be rolled into the gross lending figures already agreed?
Mr Osborne
Let me write to the hon. Gentleman on the specific issue of the Santander loan and the application to the European funds. I take this opportunity to congratulate the Scottish National party on its victory in the Scottish parliamentary elections and say that we respect their outcome. As he knows, my right hon. Friend the Prime Minister contacted the Scottish First Minister to congratulate him personally. I hope that we can work together in the next few months and years to deliver what we both want to see, which is jobs and prosperity in Scotland.
Joseph Johnson (Orpington) (Con)
T9. US Treasury Secretary, Timothy Geithner, recently praised the Government’s fiscal reduction plans, saying that the Chancellor had locked the coalition Government into a set of reforms that were “very good”. What lessons has he drawn from this powerful endorsement?
Mr Osborne
Of course it is welcome to have the support of the US Treasury Secretary. It is interesting that we have been urged for some months by Labour to follow the US example. The Obama Administration, in the speech the President gave at George Washington university, set out a deficit reduction plan—it is not yet legislated for in Congress—that goes faster and deeper than the one we are promoting here in the UK. I suspect that we will not now hear the argument that we have heard for the past few months from the Labour party.
Alison McGovern (Wirral South) (Lab)
May I associate myself with the remarks about our much-missed colleague David Cairns that you, Mr Speaker, and others have made?
Recent commentators have suggested that it is possible that the Government will not meet their target to balance the cyclically adjusted current budget by 2015-16, by the end of this Parliament. If it becomes clear that Tory cuts are not working to reduce the deficit, at what stage will the Chancellor change course?
Mr Osborne
I have just been told by my hon. Friend the Member for Chelsea and Fulham (Greg Hands) something about the hon. Lady that I did not know: she is the Parliamentary Private Secretary to the previous leader of the Labour party. It is presumably not a job with onerous responsibilities, but it sounds as though he may have written that question for her. The Office for Budget Responsibility is the independent body that assesses our ability to hit the fiscal mandate. The reason we set it up was because under the stewardship of the person to whom she is PPS all credibility for Treasury figures was lost.
Mrs Helen Grant (Maidstone and The Weald) (Con)
Only 14% of small businesses are owned by women. What action will the Chancellor take to improve this figure?
Mr Osborne
It is incredibly important to try to increase the number of women who set up their own businesses. The Government have undertaken a number of specific initiatives, driven from No. 10 Downing street, and I will ensure that my hon. Friend is closely involved in them.
Mr Chuka Umunna (Streatham) (Lab)
Yesterday, in a welcome move, the British banking industry abandoned its legal fight with the Financial Services Authority over the mis-selling of payment protection insurance. Does the Chancellor agree that this scandal, as a result of which millions of people in this country were fleeced by the banking sector on a large scale, was an absolute disgrace and that the banks involved should settle the claims that arise, immediately and without further delay?
The Financial Secretary to the Treasury (Mr Mark Hoban)
The hon. Gentleman is right to highlight the mis-selling of PPI. This happened under the regulatory regime that his colleagues set up when they were in government. One aspect of the reforms that we are introducing by setting up the financial conduct authority is to give the regulator more powers to intervene earlier to prevent that sort of scandal happening again.
Duncan Hames (Chippenham) (LD)
Given the Chancellor’s concern for the use of taxpayers’ money, will he really allow members of GP consortia boards to be paid as much as £30,000 a year for just one day’s work a week?
Danny Alexander
As I said in response to my hon. Friend the Member for Southport (John Pugh), one of the things we need to do as part of the listening exercise is hear the concerns about how consortia will work and ensure that the financial regime that is in place is sustainable and puts the maximum amount of resource to the front line.
Bill Esterson (Sefton Central) (Lab)
The Chancellor did not answer the question from my hon. Friend the Member for Gedling (Vernon Coaker), so I would like to give the right hon. Gentleman another chance. Will he repeat the bank bonus tax that was so successful last year and use that money to build the extra affordable homes, to rent and to buy, which are desperately needed by people in this country and by the construction industry, and which would be good for the economy?
Mr Osborne
As I was explaining to the hon. Member for Gedling (Vernon Coaker), the bank bonus tax was introduced by the previous Chancellor of the Exchequer, and it was his judgment that it would not work for another year because the banks would find a way of avoiding it. That is why we introduced a permanent bank levy not just for one year, but for each and every year. In any one year it raises more than the bank bonus tax net, so that is what we have done. It is pretty striking: Labour Members had 13 years in government to introduce a permanent bank tax; they did not do so, and they cannot carp from the sidelines now.
Charlie Elphicke (Dover) (Con)
If our gold had not been sold off some years ago, how much would it be worth today?
Mr Osborne
The gold was sold, I think on the advice of the current shadow Chancellor, at $3.5 billion—a princely sum, except that it would now be worth $19 billion.
St George's Day (Public Holiday)
Jessica Lee (Erewash) (Con)
I present and support the petition prepared by George’s Tradition, with 3,674 signatures supporting the petition or wording in similar terms.
The petition states:
The Petition of residents of the Erewash constituency and others,
Declares that England is one of very few countries in the world that does not have a public holiday to celebrate its national day; notes that St Patrick’s Day is a bank holiday in Northern Ireland, and that St Andrew’s Day is a voluntary public holiday in Scotland; and further declares that everyone who is part of England should be able to celebrate its traditions, its heritage and the English way of life with a public holiday on St George’s Day.
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals to make St George’s Day a public holiday in England.
And the Petitioners remain, etc.
[P000920]
Off-quota University Places
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr John Denham (Southampton, Itchen) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Innovation and Skills if he will make a statement on the proposals for students to buy off-quota university places.
The Minister for Universities and Science (Mr David Willetts)
Fair access to university is crucial for achieving equality of opportunity, and there is a clear issue of principle here. Access to a university must be based on ability to learn, not on ability to pay. There is absolutely no question of wealthy students being able to buy their way into university.
As the coalition prepares its White Paper on higher education, we are considering possible ways to allow universities to recruit extra students in addition to their student number allocation. Any such arrangement would have to comply with the principle that access to university must be based on ability to learn, not on ability to pay. That is why, in the Secretary of State’s speech to the Higher Education Funding Council on 6 April, he said:
“Another measure for the longer term could be to remove student number controls which inhibit universities’ ability to recruit students who represent no burden to the public purse. For example, I don't believe that universities should be prevented from expanding courses where employers cover students’ costs”.
We are considering two options: first, making it easier for employers to sponsor students at university; and secondly, making it easier for charities to sponsor students at university. Any such scheme would need to comply with the following conditions: the principles of fair access must apply; there would need to be genuine additional places; there would be no reduction in entrance standards; and, of course, rich individuals should not be able to buy their way into university.
Everything this coalition does is guided by our belief in the need to improve social mobility after it stagnated under the Labour party. We will set out our proposals in the White Paper, which will be published shortly.
Mr Denham
In The Guardian and on the “Today” programme, the Minister set out plans to allow students who have access to private funds to buy their way into universities that they cannot get into on merit. Why was the House not told of those plans when we voted on tuition fees? How many hon. Members would have trebled fees if they had known that he planned to allow students to buy entrance to selective universities? Or has the Minister just made up this plan? He has cut 20,000 student places, lost control of fees, £9,000 is the norm not the exception and access agreements have no teeth. There is a black hole in his budget and threats to cut more student places or teaching budgets.
Given that mess, why is it that every time the right hon. Gentleman puts a sticking-plaster on the wounds that he has caused he makes things worse? Yesterday he launched the communications plan for the new fees system. Can he not imagine the dismay that he has caused for thousands of hard-working A-level students today? They now know that hard work, ability and ambition will not be enough.
Students from low-income homes want fairness, not favours. Does the Minister not understand that a few places will not soften the brutal message that, for this Tory Government, access to wealth and privilege will always trump ability and ambition? Poor families have no chance of buying their way in, but is this not also a cruel betrayal of middle England—those hard-working, middle-class, middle-income families who want to do the best for their children and face agonising pressure to take on huge private debts to remortgage their homes to make sure that their children get what the kids of the wealthy take as a right?
Does the Minister accept that although there is nothing wrong with employers getting universities to provide bespoke courses for their employees and nothing wrong with employers paying fees once the university has decided whom to admit, his plans will corrupt university admissions with a two-tier system—one for the best qualified and another for those with access to fatter cheque books? And who will pay? The Minister’s response was remarkable, because it is clear from his interviews today that he wants to allow wealthy families to buy places: he did not deny that in several interviews. Now incompetent Government Ministers are arguing about it in public. Where are these charities that want to pay £70,000 per student? Who are the employers who want to pay for the second best, not the best?
I am glad that the Minister has been forced here today. We will study his plans to see whether he really has climbed down, because if so, it is the most humiliating and fastest U-turn in the history of this discredited Government. This House needs what we needed last December—a proper White Paper to tell us how this whole mess is going to be sorted out.
Mr Willetts
The shadow Secretary of State clearly has not been listening to what I have been saying. He has invented a policy and then denounced it. He has no excuse for that, because in every public statement I have made, I have made it absolutely clear that we are looking at employers and charities. Those are the actual words that I used in The Guardian this morning when I referred to the current rules which, for example, limit the ability of charities or social enterprises to sponsor students.
Let me make the position clear regarding the two proposals that we are considering. First, Members in all parts of the House have endlessly urged us to do more to get employers involved in sponsoring students at university. Only 6,000 students out of well over 1 million in total are currently sponsored by employers outside quota controls. That is why, yes, we are looking at ways in which extra places outside quota controls can be made available for students sponsored by companies, but they must meet the conditions that I clearly set out in my earlier response.
Secondly, we are pursuing another objective that I thought was shared by Members on both sides of the House—encouraging greater endowments for our universities. Many people who are considering charitable support for our universities like to know that real individuals will benefit. At the moment, if they identify and provide for any places for poor students, they come up against a universities quota limiting total numbers. That deters charitable giving. So, again, we are investigating whether charities and social enterprises can support people at universities outside quota controls.
Whatever we do will comply with the fundamental principle that rich individuals should not be able to buy their way into university. Labour Members left the public finances in a mess. They left universities with a £1 billion deficit and in a straitjacket, they restricted places, they fined institutions, and they blocked ambitions. We are determined to reform Labour’s broken system.
Mr Graham Stuart (Beverley and Holderness) (Con)
Will the Minister again reassure the House that there will not be an uneven playing field for those from lower-income families? Will he ensure that we have fair and equitable access to our universities while ensuring that Labour Members do not stand in the way of employers and charities being able to make the maximum number of places available to everyone, regardless of background?
Mr Willetts
I can absolutely give my hon. Friend the assurance that he seeks. The challenge to Labour Members is to join us in explaining to young people in schools and colleges across the country that none of them will have to pay up front to go to university. Under our proposals, the threshold for repayment is increased from the £15,000 we inherited from Labour to £21,000 now.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Will the Minister tell the House what discussions he has had with the Office for Fair Access on this policy?
Mr Willetts
Consultation on our proposals will take place after we publish the White Paper. In a speech that I gave to Universities UK and in the speech that I quoted by my right hon. Friend the Secretary of State to HEFCE, we made it clear publicly that this is the option we are looking at.
Dr Julian Huppert (Cambridge) (LD)
I have the great privilege to represent three great universities: the university of Cambridge, Anglia Ruskin university and the Open university. Will the Minister assure me that nothing he does in this or any other policy will force any of those universities to lower their standards for financial gain?
Mr Willetts
Yes. I have made it clear and am happy to confirm it again for the hon. Gentleman that there should be no reduction in entrance standards for our universities.
Mr David Lammy (Tottenham) (Lab)
Was it wise of the Minister to give the impression on Radio 4 and in The Guardian that our universities are like easyJet in that people can buy their way to the front of the queue? He knows that our lecture halls, universities and university accommodation are only so big. Surely, if extra places are put on, places will be denied to those who want universal access.
Mr Willetts
We inherited from the previous Government, of whom the right hon. Gentleman was the Minister for universities, a system of student number controls so tight that he was fining universities for taking on extra students. There were students who wanted to go to university and universities who wanted to educate them, but he fined the universities for wanting to recruit them. We are trying to break free from the constraints that he placed on opportunity, while making it absolutely clear that people cannot buy a place at university.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I note my right hon. Friend’s comments on off-quota university places, and am reassured by his statement on the issue of standards and entry. However, is it not the case that across the HE sector, discussions about this topic are already taking place?
Mr Willetts
It is the case. I have read with interest the reaction to the speculation today. I was struck by a comment released today by the chief executive of GuildHE:
“Providing off-quota places can be socially progressive.”
He went on to say:
“This could give students of all backgrounds a wider set of choices, including whether or not to take out a long term loan.”
That gentleman is, of course, the former special adviser to the shadow Secretary of State.
Mr Ben Bradshaw (Exeter) (Lab)
Chaos on health policy; Ministers rowing in public about whether to abandon our carbon reductions; and now this, all in the space of 24 hours: is this not the most serially incompetent Government in living memory? When will the Prime Minister get a grip?
Mr Willetts
I do not know what the right hon. Gentleman is getting quite so aerated about. The Government are committed to improving social mobility and to easing the controls under which universities function. We will put forward proposals in the White Paper to achieve precisely those objectives.
Lorely Burt (Solihull) (LD)
We welcome any measure to aid social mobility and increase fair access. I welcome my right hon. Friend’s ideas to increase the number of places by getting charities and businesses to sponsor degrees. Will he confirm that rich students will never be able to buy their way into university under this Government?
Mr Willetts
I am happy to give the hon. Lady the assurance that she seeks. That is not the proposal that we will put forward in the White Paper.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Secretary of State accept that it was he who started this hare running? The minds of those of us who want to be fair to him have not been put at rest by what the Minister has said today. We do not want a twin-track or two-tier system. May I add that, as the Minister knows, many of the leading public schools in this country are charities?
Mr Willetts
The Secretary of State and I have publicly referred to this idea. I referred to it in a public speech to Universities UK and he referred to it in a speech to HEFCE. We both said that we were looking at ideas for off-quota places. We make no secret of the fact that we are investigating those ideas. I have also made it clear in every public remark that we are looking at employers and charities as the people who would sponsor such places.
Mr Rob Wilson (Reading East) (Con)
May I welcome my right hon. Friend’s desire to create more university places? More sponsorship of students by businesses and charities would be very welcome to both students and universities, but does he agree that taking the Government cap off student numbers is the only real way to create a fully functioning market?
Mr Willetts
I share my hon. Friend’s dislike of the system that we have inherited. I deeply dislike a system in which universities are fined for taking on students who meet their entry requirements, but of course there are public expenditure constraints, because each student comes with a cost. That is why I am being perfectly explicit about the fact that we are considering ways in which it would be possible for students to be accepted into university outside the quota, under the conditions that I have clearly set before the House this afternoon. I hope that moves us some way towards his admirable objective.
Sheila Gilmore (Edinburgh East) (Lab)
How will the Minister monitor the bona fides of charities that might be involved in these transactions?
Mr Willetts
I agree that that is very important, and that the principles of fair access must apply. When we produce our White Paper and our proposals are consulted on, that question will of course need to be properly addressed.
Alun Cairns (Vale of Glamorgan) (Con)
Will the Minister confirm that the policy of off-quota places can expand the opportunities of some people from all sorts of backgrounds to go to university, including those who would not normally have the opportunity to go, provided that they have the support of a business or charity?
Mr Willetts
My hon. Friend is absolutely right. We are trying to spread opportunity to go to university, even at a time when money is tight. That is what we are committed to achieving, and it is a great pity that the Labour party has completely failed to suggest anything that would deliver on our belief in improving social mobility.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Given his absence from the House today, can the Minister assure the House that this policy has the full support of his boss, the Secretary of State, and will continue to have it in the future?
Mr Willetts
I am setting out the approach of the coalition Government, and of course we will set out in the White Paper our proposals to deliver on the coalition’s commitment to improving social mobility.
Simon Wright (Norwich South) (LD)
Is the Minister aware of a scheme run by KPMG, which pays the fees for students who go on to work for it? Is he attracted to that model?
Mr Willetts
The KPMG scheme is an excellent example of exactly what we are trying to encourage. The trouble is that at the moment, so far as such estimates can be made, we believe that only approximately 6,000 students out of well over 1 million are benefiting from extra places sponsored by companies such as KPMG. That is far too low, and we are considering ways in which we can encourage more such schemes, because we believe they are a way to spread and improve opportunity in this country.
Clive Efford (Eltham) (Lab)
Affluence is influence, and this is a triumph of affluence over ability. The Government have to recognise that it is social networking that leads to people accessing this type of support to go to university, so it will not be directed at the poorest people from our constituencies. It will be an opportunity for those who do not meet the criteria for entering university to get in by the back door because they have access to private finance.
Mr Willetts
I am afraid the hon. Gentleman is more interested in fighting class war than in considering practical proposals to improve access to university. Not only are the particular conditions that I have set out to the House today intended to ensure that his concerns do not come to pass, but in general, I believe that the expansion of higher education places is of itself a good thing for social mobility and opportunity in this country.
Elizabeth Truss (South West Norfolk) (Con)
Is it not the case that quotas and rationing have served low-income students very badly? In Britain, only 19% of low-income people go to university, which can be compared with more open systems such as those in Australia, which has 30%, and America, which has 50%. Does that not show the poor record of the previous Government?
Mr Willetts
My hon. Friend is absolutely right. There is a problem. We are restricting access to university, and social mobility in our country is far too low. This Government are looking at how we can tackle that problem, but all we get from the Labour party is completely wilful misrepresentation of what we are doing, and no practical proposals whatever.
Paul Blomfield (Sheffield Central) (Lab)
As my hon. Friend the Member for Huddersfield (Mr Sheerman) has pointed out, public schools are charities. Will the Minister unambiguously rule out that his proposals would allow any public school to buy places at any university?
Mr Willetts
It is absolutely not our intention that such purchasing of places at university should happen. That is why the criteria that I have set out are absolutely clear on fair access. People should not be able to buy places at university. We are not proposing what the hon. Gentleman claims.
Mr Sam Gyimah (East Surrey) (Con)
Employers, among others, benefit from well-educated students. Is it not right that if we can find a way for them to share in that burden, we should use it, rather than jumping in and getting over-excited at the mere mention of them?
Mr Willetts
My hon. Friend is absolutely right. Indeed, the previous Government, towards the end of their time in office, produced a report, “Higher Ambitions”, which on page 47 specifically calls for employers to be more engaged. It says that
“businesses have a crucial role in the funding and design of programmes, in the sponsorship of students”.
We are trying to ensure that more employers have the opportunity that was talked about by the previous Government, but which, not for the first time, they failed to deliver.
Gavin Shuker (Luton South) (Lab/Co-op)
The Minister has categorically refused not to rule out private schools buying places for their students. Is this yet another idea dreamt up on the playing fields of Eton?
Nadhim Zahawi (Stratford-on-Avon) (Con)
Access to Russell group universities from the lowest income groups has abysmally flatlined over the past 20 years. Ideas such as allowing companies and charities to create social mobility and greater access should be debated. They should not become the subject of scaremongering and misrepresentation. It is a shame that the Opposition have done that with a cynical letter to The Guardian in support of its scaremongering headline.
Mr Willetts
Not for the first time, my hon. Friend is a voice of sanity in this debate, and I completely agree with his point. Government Members are engaged in improving social mobility and people’s opportunities to go to university, while making absolutely clear the principle that nobody should be able to buy a place at university using their personal wealth. That is the principle we are applying, and I am grateful to my hon. Friend for his support.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
When I read this story in The Guardian, my first inclination was to check the date, but it clearly could not be 1 April, because we have had May’s elections, when Labour took Keele university from the Liberal Democrats because of broken promises on tuition fees. I then thought that the story must be a clever wheeze by plotting Conservative Ministers, who are thinking, “What can we do to make Vince Cable, the Secretary of State, finally jump ship?”
The Minister has clearly not told colleagues and the House in his responses how he would discriminate between different charities: which would qualify, and which would not?
Mr Willetts
I am afraid that I have made absolutely clear the principles that will guide our policy. It is not our intention that schools should be able to buy places at university.
Graham Evans (Weaver Vale) (Con)
I congratulate my right hon. Friend the Minister on the help and support that he has given to mature, part-time students—students who did not do well at school first time around, but who in their 20s and 30s decide to be socially mobile and to get qualifications and further education.
Mr Willetts
My hon. Friend is right. That is one reason why one proposal before the House is to extend loans for fees for the first time to part-time students, many of whom are mature students, which will enable them to take the opportunity of going to university. Our central objective is to give that opportunity to as many people as possible who have the ability and commitment to gain from it. That admirable objective is what drives the coalition.
Barry Gardiner (Brent North) (Lab)
Will the Minister assure the House that there is no truth in the rumour that this policy was announced today to add the final humiliation to the Lib Dems and precipitate a general election?
Mr Willetts
This policy has been referred to in speeches by me and the Secretary of State. [Hon. Members: “When?”] In speeches we gave to Universities UK and the Higher Education Funding Council. The policy will also be set out in the White Paper, after which I look forward to debating it further in the House.
Gavin Barwell (Croydon Central) (Con)
Given the constraints on public spending, allowing businesses and charities to provide additional places at no cost to the public purse is, in principle, a good idea, but can my right hon. Friend tell the House exactly how the Government will ensure that no university in this country will have different entry criteria for quota and off-quota places?
Mr Willetts
My hon. Friend is right to raise that important principle. I hope that I made it clear earlier that there should be no question of sacrificing university entry standards. We are not considering that.
Stewart Hosie (Dundee East) (SNP)
The Minister will want to confirm to the House that university education in Scotland is fully devolved—thank goodness—but will he also confirm that should this extraordinary plan ever see the light of day, it will apply to English universities only, and that there will be no requirement to roll it out in Scotland?
Mr Willetts
The hon. Gentleman says, “thank goodness”, but hon. Members on both sides of the House are still looking forward to hearing the Scottish National party’s long-term plans for the financing of universities in Scotland. We have set out our proposals to ensure that universities in England are well financed and able to offer to our students a high-quality education. I hope that that opportunity is also available to students at Scottish universities.
Helen Jones (Warrington North) (Lab)
If the Minister intends to allow charities to sponsor university places, can he explain to the House what amendments he will introduce to change charity law so that public schools are not counted as charities for that purpose?
Mr Willetts
After the White Paper, we will—with the consent of the House, I hope—introduce legislation that will provide the framework within which all the assurances I have given today can be met.
Kate Green (Stretford and Urmston) (Lab)
How can it be socially progressive to devote time and energy to facilitating access for students from better-off backgrounds at the same time as the Government have axed Aimhigher, which means that projects in my constituency to reach out to poorer students will run out of funding by October this year?
Mr Willetts
It is socially progressive to consider how to provide more opportunities for people to go to university and whether they can be sponsored by their employer or whether that can happen as part of a charity wishing to endow a university. That is socially progressive, which is why these proposals will help to tackle one of the biggest challenges facing Britain today—our very low levels of social mobility.
Simon Danczuk (Rochdale) (Lab)
Twenty-six per cent. of young people in Rochdale get the opportunity to go to university, compared with the national average of 31%. That gap narrowed under the previous Government. Instead of coming up with fanciful policies that will help his wealthy mates’ kids get into university, will the Minister start helping youngsters in places such as Rochdale?
Mr Willetts
It is important to help young people in places such as Rochdale through educational reform and raising school standards. However, in the many debates on higher education that I have attended in the House over the years, hon. Members on both sides have called for greater employer involvement in course sponsorship, and for greater endowments and charitable giving to universities, yet as soon as we introduce practical ideas to achieve these objectives, Opposition Members suddenly no longer support principles that I thought were widely endorsed on both sides of the House.
Chris Bryant (Rhondda) (Lab)
The key point is that people have to get into university first and then get the sponsorship from outside, otherwise the hon. Member for Vale of Glamorgan (Alun Cairns) will be right: this will be a charter for extending access to universities, because more thick rich people will be going to university.
Mr Willetts
That is why we have made it clear that there should be no reduction in entrance standards, and that in no circumstances should rich individuals be able to buy their way into university. I have made that clear to the House all afternoon, and it has been made clear in every statement on this matter from me and the Secretary of State.
Chris Ruane (Vale of Clwyd) (Lab)
I say, Mr Speaker, there might be many on the Tory Benches who think it an absolutely spiffing idea to allow mummy and daddy to purchase privilege through this toff quota. Should this principle be extended, perhaps to allow mummy and daddy to purchase a parliamentary seat, the odd ambassadorship or even, dare I say it, a top judge’s job?
Mr Willetts
If that constitutes the Labour party’s response to our proposals, we can understand why our party is serious about improving conditions in our country and Labour is not.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
What consultation did the Secretary of State have with UCAS before launching the policy, and what was its response? Will he clarify what the range of fees will be for students who try to jump the queue?
Mr Willetts
As I have said, the idea was mentioned in public speeches to Universities UK and the Higher Education Funding Council for England. The proposals will be further set out in the White Paper, after which there will be further consultation.
Bill Esterson (Sefton Central) (Lab)
Wealthy families often set up charitable trusts for themselves. How will the Minister prevent family-run charitable trusts from circumventing his rules and buying places, given that they are governed by exactly the same charity legislation as the other charities to which he has referred?
Mr Willetts
It is very important that endowments for universities absolutely meet the criteria of fair access, and that there should be genuinely additional places and no reduction in entry standards. It is the university that will decide who is admitted, and it is essential that we do not compromise on that principle.
Ian Mearns (Gateshead) (Lab)
I listened carefully to the Minister’s reassurances to the Chairman of the Education Committee. I also listened to his accusations of class war against the Opposition, but I wonder whether there has been any cross-departmental collaboration to ensure that social mobility will come about under his policy. Has he consulted the Secretary of State for Education about his policy, which has seen 500,000 youngsters receiving education maintenance allowance at the higher level to get into further education reduced to 12,000 receiving bursaries under the new scheme?
Mr Willetts
The Secretary of State for Education, just like me, is trying to deliver improved education opportunities after inheriting a total mess in the public finances from Labour, so we have to take tough decisions. We are trying to save money, but at the same time we are delivering reform of schools, improved access to universities, a better way of funding them in future and the freedom for them to escape from student number controls, albeit under carefully controlled conditions and with clear principles. That is the way to improve education standards in our country, even when money is tight.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Will the Minister tease out for us the conversations he has had with his adviser on fair access, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes)? Has not this whole problem arisen because of the ideological experiment that the Minister is conducting with our universities? What is wrong with the state and the private sector working together, rather than this neo-liberal vision that he has for our universities, undermining their integrity and world-class reputation?
Mr Willetts
We absolutely do want the public and private sectors to work together. That is why we do not like the regime that we inherited from the previous Government, which had what are called “closed places”—that is, specially restricted places that are the only off-quota places that employers can sponsor. I very much value the advice of the right hon. Member for Bermondsey and Old Southwark (Simon Hughes)—who, if I might say so, made a powerful intervention in a previous debate in this House on higher education, only last week or the week before, about how our student finance reforms will work, which was exactly the right way forward for student finance in this country. [Interruption.]
Mr Speaker
Order. I want to hear—and I am sure that the House wants to hear—Mr Dave Watts.
Mr Dave Watts (St Helens North) (Lab)
Will the Minister explain what is to stop a rich business man buying his son a place at university?
Mr Willetts
Admission to university is determined by the university. It is the university that has the admission standards, which cannot be compromised, the university that does needs-blind admissions, which cannot be compromised, and the university that is bound by the clear conditions I have set out. Of course there is no suggestion that anyone other than the university looking at who can best benefit from a course should be deciding on admission to university. After our White Paper, when we have a further opportunity to debate our proposals, I very much hope that it will be possible to carry forward these exchanges, to show that we on the Government Benches remain committed to expanding our universities and improving social mobility in our country.
Passenger Name Records
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Immigration (Damian Green)
With permission, Mr Speaker, I would like to make a statement on the draft EU directive on passenger name records—PNRs—and the Government’s decision to opt into it. My appearance today fulfils a commitment that I made to the European Scrutiny Committee.
Global travel brings with it countless benefits—economic, cultural and social—and there is no doubt that our more interconnected world is a better world, but greater freedom of movement also provides opportunities for those who wish to do us harm. We know that terrorists have long had an interest in aviation-related attacks. We know, too, that serious criminals, people traffickers and drug smugglers have exploited easy international forms of travel to carry out their crimes. They often plan and execute their crimes in meticulous detail, using intricate ruses to escape detection and capture. In response, Governments around the world are increasingly exercising greater vigilance to keep their citizens safe. Passenger name records—passenger data collected by air carriers as part of the operation of their business—are a vital and proven tool in the fight against terrorism and other serious crimes.
Passenger name records help our law enforcement agencies to prevent, detect, investigate and prosecute terrorists and other serious criminals. Their power lies in the fact that, by using an automated system and interrogating it intelligently, we are able to sift data quickly and in such a way that they reveal patterns and make links that would otherwise not be readily apparent. For example, the case of David Headley, the terrorist facilitator convicted in the US of involvement in the Mumbai attacks, shows the benefits of PNRs. All that was available to US investigators initially was the first name, “David”, a vague travel window of “the next few weeks” and the partial travel itinerary of a flight from the United States to Germany. The US used these PNR data in association with other known flight information to identify the suspect before he could travel. Headley was later arrested and pleaded guilty to terrorism-related crimes.
PNR data therefore have a proven capability to protect our citizens from harm. Along with advance passenger information—API—PNRs are a crucial element of the UK’s own e-Borders system. Since 2005, e-Borders has led to more than 1,500 people being refused entry and to more than 8,700 arrests, including 57 for murder, 175 for rape or sexual assault, 25 for kidnapping, 441 for fraud, 397 for drugs offences and 920 for violence. That is why we committed to supporting e-Borders in our coalition agreement.
Critical to our decision of opting into the directive was the aim of securing an ability to mandate the collection of PNR data on flights between two EU member states, for the full usefulness of the system to be realised. I am pleased to say that the coalition Government made significant progress on this, ahead of the opt-in deadline, and that the European Council has given a clear political signal that it favours collection of data on intra-EU flights, following a UK amendment to that effect. The Home Secretary pressed the argument for it at the April Justice and Home Affairs Council meeting, which has been reported to the House via letters to the Chairs of both scrutiny Committees. At the Council, 15 member states supported the UK’s position to include intra-EU data collection. So, although we have reservations about some aspects of the directive that will need to be resolved in due course, we can enter into negotiations from a position of strength, knowing that we have the support of a majority of other member states on this key issue for the UK. Indeed, the official outcome of proceedings of the 11 April JHA Council states that
“the preparatory work on the draft PNR Directive will continue...on the basis of the indication by the Council that the Directive should allow individual Member States the option to mandate the collection of PNR data with regard to targeted intra-EU flights”.
The draft directive as it stands is not perfect, but it is right that we work with our European partners to get a directive that best serves Britain’s interests. Initial parliamentary scrutiny of the directive has already taken place, but it will continue as the negotiations progress. Debates have been held in both Houses. The Lords strongly recommended that we opt into the directive and the Commons supported the Government’s negotiating position. We already have domestic legislation to underpin the collection of PNR data, but the directive will provide an unequivocal legal framework at EU level for the collection and sharing of such data. I know, however, that some hon. Members have concerns about the PNR directive, which I want to address directly today.
Let me address the two basic issues of why using PNRs is both necessary and proportionate. I set out earlier how PNR data have been used to target suspected terrorists. The application of this data also has wider benefits in tackling serious organised crime. For example, in 2009, working with our Italian colleagues, we used PNR data to identify Chinese passengers attempting to travel to London from Italy in a human trafficking operation. This led to the conviction in the Italian courts of several traffickers in January 2010. Modern criminality requires modern methods to seek out and shut down criminal activity. We cannot just focus on solving crimes after they have happened; instead, we must use the tools available to prevent them from happening in the first place.
Our commitment to a proportionate approach is made clear by our proposal to collect data only on routes of high risk, whether these are between a third country and a member state or between member states. Our starting position is thus about reducing the amount of data collected rather than imposing blanket coverage on all routes from outside the EU as the directive currently proposes. A further benefit of our approach is that it should help make costs manageable, in terms of both data transmission by carriers, and management and maintenance of the system by the member state. We will want to see stringent data protection requirements, overseen by independent information commissioners, so that people’s rights over their personal data are protected. We will also work to ensure that the directive allows data to be retained only for as long as is necessary and proportionate to the task in hand.
Thirdly, some hon. Members will have concerns about sovereignty. Let me be clear: this directive is not about handing over responsibility to a European institution. Rather, it is about member states collecting and processing PNR data on travel under an agreed legal framework to help protect citizens from harm. The draft proposals are based on each member state collecting and analysing the data, and we will vigorously stand by that way of operating. Indeed, the current directive would not allow for the creation of an EU-wide database. We must recognise that criminals are no respecters of national boundaries—they will exploit any perceived gaps or weaknesses within the EU—so it is our collective responsibility to ensure that we close loopholes, wherever and whenever we can.
Finally, carriers will not be required to collect any more data than they already collect as part of an ordinary business transaction. Transmission costs will be borne by the carrier, and have been estimated by the Commission at less than 8p per passenger per flight—a small price to pay for increased safety and security.
Opting in to this directive is good for our safety, good for our security and good for our citizens. It is necessary and right. Opting in to this directive will make Britain a safer place. I commend this statement to the House.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I thank the Minister for advance sight of his statement. The current UK regime that allows for the collection of PNR data and their use for both immigration control and combating terrorism was brought in by the previous Labour Government through their creation and roll-out of the e-Borders programme. We therefore recognise the vital importance of the role played by PNR data to achieve both those policy objectives.
Given that PNRs are a proven tool for the prevention and detection of serious crime and terrorism, we believe that it is sensible to have a Europe-wide regime to ensure similarity of methodology and approach to PNR rather than have member states going their own way and making individual agreements. We are thus supportive of the UK decision to opt in to the directive.
We note the different approach taken by the Conservatives, now that they sit on the Government Front Bench, to EU co-operation on home affairs and justice matters. That was not something they championed in opposition, but, as we have seen with their change of heart on the extension of the European arrest warrant and their position on PNR data today, that is what happens when rhetoric confronts reality. It is a shame that the Minister took such a long time to sign the directive on human trafficking, where the reality is so shocking.
As the Minister has already told us, the biggest change between the first draft directive and the new draft directive is the inclusion of intra-EU flights within its scope. That is a positive step. As the Minister and I discussed in European Committee B, the inclusion of intra-EU flights is necessary to prevent a security gap from emerging. Will the Minister tell us whether negotiations are continuing with the member states that have not yet expressed support for the proposal—in particular, Germany—and give us his assessment of the effectiveness of the directive without universal support for the inclusion of intra-EU flights?
I note from the new draft directive that the new article 1(a) leaves open the ability of member states to decide which intra-EU routes they wish to include in their PNR data collection coverage, and I note from the Minister’s statement that, in the UK at least, that will focus data collection on routes that are considered to be high risk. However, there is a danger that that will displace the problem rather than deal with it. If potential criminals and terrorists know that certain routes are being targeted, they are likely to move to other routes. Is the Minister confident that we have the necessary flexibility and resources to pre-empt that, and to ensure that we keep pace with what is a constantly changing and developing security picture?
One of the questions I raised with the Minister when this matter was last debated in the House was whether all terrorism offences under the Terrorism Acts 2000 and 2006 would be within the scope of the directive allowing PNR data to be collected and shared. The Minister has written to me. I note that he does not yet know whether all those offences will be covered, and that
“complex legal analysis”
will be required
“during the negotiations to determine the overlap between definitions in the Directive and those in our domestic legislation”.
The UK regime for counter-terrorism reflects the UK’s national experience, and is therefore more extensive in some ways than the regimes of other European Union states. Legislative parity, given the extensive provisions of the Terrorism Acts, will therefore be vital. May I impress on the Minister the importance of keeping that point under review, and will he assure the House that it will be a priority as negotiations continue?
One of the important features of the UK’s internal arrangements is that through the e-Borders programme we can use API and PNR data together, and can use both types of data set for crime fighting and immigration control purposes. I know that the Minister agrees that the full benefits of e-Borders are realised when API and PNR data are collected and used together.
I have asked the Minister before whether he thinks that the current directive is sufficiently clear to enable the UK to continue to use PNR data for immigration control purposes, but I note that the potentially relevant paragraphs of the draft directive remain unchanged. Will the Minister assure the House that signing up to the draft directive will not diminish or weaken the UK’s e-Borders programme in any way, and that he will continue to press for clarity in the directive in order to leave no doubt that member states can collect and use PNR data not just in respect of terrorism and serious crime, but for immigration control? There should be no unintended consequences that would prevent the UK from maintaining effective control of its border.
The draft directive currently states that PNR data will be collected and retained for a period of 30 days, after which it will be anonymised and held for a further five years. The UK Government have been pressing for the data to be held for much longer than that. First, will the Minister tell the House where the negotiations stand in relation to that important part of the proposal? Secondly, will he explain how this conforms with the coalition Government’s emphasis on the removal of data held for the purposes of fighting serious crime? That is what they are doing by weakening the DNA database under the Protection of Freedoms Bill, but they do not seem to be particularly concerned about it in the context of the directive. Does the Minister believe that the Government are adopting a consistent approach, or will they continue to be—as they are at present—all over the place?
Using appropriate information in the fight against serious crime and terrorism is, of course, entirely necessary. We welcome this European initiative, which may make the Government think again about the fight against other serious crime.
Damian Green
I am grateful for the hon. Lady’s support for the Government’s decision, although I am slightly puzzled by her suggestion that there has been some enormous change since my party was in opposition, given that from 2005 onwards the Opposition spokesman on this subject was me. There has been no change at all, either in the person of the spokesman or in the attitude I have taken to PNR and the collection of data. What we are doing is putting into practice what we said in opposition.
The hon. Lady asked a number of specific questions. Negotiations are continuing now that we have decided to opt into the directive. She asked whether the directive will be useful if it ends up not containing the intra-EU provisions that we regard as so important. First, I should emphasise that we have already ensured that a majority of member states are now in favour, so we are extremely hopeful of getting this in place. Secondly, it will be useful, but not as useful as it will be if the intra-EU travel provisions are allowed.
The hon. Lady asked about targeting and whether we can keep pace. It is an important point that some routes are much more high risk than others, so concentrating our resources on them is likely to make us more effective than just having a blanket collection. We and other countries will need to flex to meet the circumstances. The hon. Lady is right that criminals and terrorists will change their patterns of activity. One of the advantages of collecting PNR is that it enables us to see patterns emerging and changing, and to meet that by being fleeter of foot in changing the routes we cover.
The hon. Lady mentioned our exchange in Committee on terrorism offences. She read out part of my letter to her, but neglected to continue. The answer to her question is in the next couple of lines:
“As the negotiations progress…we will need to keep this point under review and, if necessary, seek any changes during the passage of the Directive.”
That is, of course, what we are going to do.
I am happy to be able to assure the hon. Lady that this will not diminish our e-Borders programme. I should point out to her that the most effective immigration part of the e-Borders programme is the API collection, not the PNR collection. I am sorry to be talking in jargon to the House. The API data are essentially the basic information that comes off the passport of any traveller. The collection of that is what will enable us, under e-Borders, to count people out as well as in, and that is what is crucial for immigration.
The hon. Lady talked about the period of time for which data will be held. That will be at the core of the negotiations, and it is extremely important. Under the current British e-Borders system, we hold the data for, essentially, 10 years, and we think that is too long. The Commission is proposing 30 days, and for it then to be anonymised for a few years. The Canadians have a different system again, under which it is held for three and a half years. This issue will be at the heart of the negotiations.
As for the hon. Lady’s idea that there is any inconsistency between our approach on this and our approach on domestic data collection, that is absolutely dead wrong. As I emphasised in my statement, we believe in the necessary and proportionate use of data to combat crime and terrorism, while preserving the civil liberties of the British people. That is what we apply in our domestic field, and that is what we will apply in the international field as well.
Mr Speaker
Order. In wishing the hon. Gentleman a happy birthday, I call Mr William Cash.
Mr Cash
I am extremely grateful to you, Mr Speaker; thank you very much for that.
As the Minister knows, the European Scrutiny Committee is somewhat concerned, to say the least, about the blizzard of opt-ins and the fact that the negotiations on a number of very important matters are still going on. There is therefore some concern about the possibility of our opting in on the hoof, and we will keep these negotiations under close scrutiny, in particular the negotiation on the length of time for the retention of data, but also that on the definition of a serious crime and the question of proportionality in using these data for offences such as racism, xenophobia and sabotage. There is also the whole issue of sensitive personal data in itself. I know the Minister is apprised of these issues, but will he understand that we are extremely concerned and that as there are these important continuing negotiations it is not good enough simply to say, “We will accept it in principle and then discuss it all afterwards”?
Damian Green
First, may I add my good wishes to my hon. Friend on reaching his 39th birthday? I assure him that the Government are keenly aware not only of the key issues he has raised but that he and his Committee will be scrutinising what the Government do. Indeed, as the negotiations are likely to go on for at least a year, if not longer, there will undoubtedly be opportunities for the Committee to return to its perfectly proper scrutiny arrangements during that time.
Keith Vaz (Leicester East) (Lab)
May I also support the Government’s decision to opt in to this directive? The Minister has dealt adequately with the two issues raised by the Home Affairs Committee when it considered the matter—privacy and cost—but will he confirm that the information being collected will not be shared outside the EU? It had been suggested that it might be given to other countries, such as the United States. Secondly, will he also assure us that now that the contracts have been issued under the e-Borders programme, which of course suffered an unfortunate delay under the previous Government, it will be fully operational by 2014, when he may still be the Immigration Minister?
Damian Green
The right hon. Gentleman always paints a happy prospect of life ahead. I am grateful for his support and on the data protection issues I can say that the British information will be dealt with by the British Government, so we will not see the random international sharing of information that he suggests—I agree that that would be bad for data protection issues. On the e-Borders system, we are indeed proceeding with letting the new contracts. We already have more than 90% of routes outside the EU covered by e-Borders and we hope that within the next 12 months that coverage will be more or less complete, so that will proceed quickly. Clearly the biggest single gap in the e-Borders coverage is within the EU, which is what this directive is very precisely going to help us with.
Tom Brake (Carshalton and Wallington) (LD)
The Minister rightly says that the directive will make Britain safer, but will he say a little more about the safeguards? Specifically, will he confirm that the data will not be used for profiling and that the UK’s data protection standards will apply?
Damian Green
I am very happy to give my hon. Friend that specific assurance that the data will not be used for profiling. Indeed, the amount of sensitive personal data that will be put on the system is one of the liveliest matters for negotiation. I entirely share his instincts, which I know to be that although data need to be collected and stored for the protection of our citizens, that must done proportionately. In many ways, the ideal situation is that we collect and store the exact minimum of data that we need to enhance the security of the people and do not drift into the situation that the previous Government fell into. They believed that they made us safer by collecting and storing more and more data and keeping them for longer. That did not make any British citizen safer but it did amount to an assault on our civil liberties.
Kate Hoey (Vauxhall) (Lab)
The Minister has said on a number of occasions that opting into this directive will make Britain safer. I presume that he meant to say the United Kingdom of Great Britain and Northern Ireland, although I frequently hear Ministers refer to “Britain”. He said that this approach would be used “only on routes of high risk, whether these are between a third country and a member state or between member states.” Does he envisage it ever being used for journeys between Belfast and London?
Damian Green
I am perhaps careless in saying “Britain” when I mean the United Kingdom, and I am happy to assure the hon. Lady that I mean the United Kingdom on this occasion. Like her, I regard flights between Belfast and London as being entirely British domestic flights and therefore certainly not included in the terms of an international agreement between EU member states.
Mr Rob Wilson (Reading East) (Con)
I congratulate my hon. Friend on what seems to be a very pragmatic anti-terrorism measure, but will he tell the House how the implementation of this directive fits into the Government’s very positive record of balancing civil liberties, on the one hand, and anti-terrorism work, on the other?
Damian Green
It will fit in during the course of the negotiations, and I hope that my hon. Friend will observe that we want to reach a position in which the amount of information collected, as well as the length of time for which we keep it, are proportionate, and the number of offences for which it is used is both sensible and proportionate. I take the point raised by my hon. Friend the Member for Stone (Mr Cash), which must be considered, too. We will be concentrating hard on those details of the negotiations, always with the view that we want to ensure that this measure is entirely consistent with our stance of enhancing both security and civil liberties.
Emma Reynolds (Wolverhampton North East) (Lab)
I congratulate the Minister and the Government on opting in to this important directive. I also welcome the eventual, although late, decision to opt in to the human trafficking directive at the end of the negotiations. Contrary to the advice that he has received from the hon. Member for Stone (Mr Cash), does the Minister agree that it is important for the UK to opt into such directives at the start of the process, so that we can be at the forefront of negotiating the finer detail of the proposals? We did not have the chance to do that with the European human trafficking directive.
Damian Green
I am grateful to the hon. Lady for her support, but I do not agree that we should take a blanket decision always to opt in at the beginning. With some directives, of which this is one, we are clearly leading a majority of European countries towards a position that would be extremely desirable, and without which the directive would be much less powerful. As for the human trafficking directive that we agreed to opt in to last night, in that case there was more of a threat than a promise during the negotiation procedure, and we needed to know that when we reached the end of the procedure the directive would still be entirely safe for Britain. As the hon. Lady will know, one difficulty is that if we opt in at the beginning there is no chance of opting out at the end if we discover that the negotiations have gone wrong. This is a question of taking every case on its merits, and that is what we seek to do.
Oddly enough, what has happened in the past 24 hours illustrates the virtues of such pragmatism. For the trafficking directive it was sensible to opt in at the end of the process, and for this directive it was sensible to do so at the beginning. With other directives it will be sensible for us not to opt in at all, because they might be harmful. I can assure the hon. Lady that the Government will continue to operate a pragmatic case-by-case approach to such directives.
Mr Peter Bone (Wellingborough) (Con)
My view is completely the reverse of what the hon. Member for Wolverhampton North East (Emma Reynolds) has just said. It was absolutely right to opt in to the human trafficking directive yesterday after it was finalised. I am a bit worried that we are now opting in to a directive that we cannot opt out of before we see the final version, although the Minister already has concerns about it. Why does he think that we should opt in now, rather than waiting until the end, as we did with the human trafficking directive?
Damian Green
Because one of the crucial elements of this directive concerns travel between EU states. That, more than anything else, is what will help make British citizens safer, as 72% of the flights in and out of this country are flights between EU member states. Although the directive would still be useful if it did not cover such flights, it would be significantly less useful. We have devoted our negotiating efforts, successfully so far, towards building a coalition in the EU to promote that policy. So far, that is going well. This is a prime example of where opting in at the beginning and leading the discussions will be to the advantage of this country and its citizens.
Point of Order
Sir Menzies Campbell (North East Fife) (LD)
On a point of order, Mr Speaker, of which I believe that you have been given advance notice. You may be aware that this morning the Select Committee on Standards and Privileges met to consider the confidential report from the Parliamentary Commissioner for Standards following the self-referral to the commissioner of my right hon. Friend the Member for Yeovil (Mr Laws). Shortly after the conclusion of that meeting, Sky News and the Evening Standard were reporting that the commissioner had found my right hon. Friend guilty of breaching expenses rules. What protection is available to hon. and right hon. Members who find themselves in such a position? Such leaking risks undermining the work of the commissioner and of the Committee on which we all rely. What confidence can my right hon. Friend have that he has been, and will continue to be, given a fair hearing and that the principles of natural justice will be upheld?
Mr Speaker
I am grateful to the right hon. and learned Gentleman for his point of order, and to the right hon. Member for Orkney and Shetland (Mr Carmichael), for giving me advance notice of the intention to raise it. Like the right hon. and learned Gentleman and other hon. and right hon. Members, I strongly deprecate any leaks that take place that constitute a discourtesy to this House. However, I have to say to him that at this stage I have no detailed or authoritative knowledge of the matter and that it is not, at this juncture, a matter specifically for me. However, the very real concern that the right hon. and learned Gentleman feels, for his own part and that of others, has been registered, and if there has been any unauthorised disclosure it is, in the first instance, a matter for the Committee concerned to consider. I hope that is a clear and fair response. I am grateful to the right hon. and learned Gentleman.
Lip-reading
Ian Lavery (Wansbeck) (Lab)
I beg to move,
That leave be given to bring in a Bill to require lip-reading to be classified as an essential skill for the purpose of skills funding; to require the Secretary of State to ensure that people who are deaf or hard of hearing have access to lip-reading classes provided by local learning providers at no cost to the learner; and for connected purposes.
There are an estimated 9 million people in the UK who are deaf or hard of hearing—a staggering one in seven of the population—and this issue touches every family in every community in the land. Lip-reading is a vital communication skill. It prevents social isolation, increases confidence and independence and helps people in work and in employment. It is a key part of the rehabilitation process for people with any kind of hearing loss, and it can greatly help people to adapt to using a hearing aid.
There are a number of reasons why someone might be deaf or might lose their hearing, including, but not only, noise, age and genetics. In areas such as my constituency and throughout the north-east, exposure to noise in mining, shipbuilding, engineering and other heavy industry has contributed significantly to the problem. More than 50% of people over 60 have experienced hearing loss, and about one in every 1,000 babies born is moderately to profoundly deaf.
I recently met constituents and volunteers at a Royal National Institute for Deaf People meeting in the town of Morpeth in my constituency. I should like to place on record my support for the excellent work undertaken by the RNID, its staff and its network of hard-working volunteers. At the meeting I had an opportunity to learn about the hearing problems that my constituents have, about how their everyday lives are affected and about the huge difference that lip-reading would make to their quality of life. I want to share some of their thoughts and personal experiences with you, Mr Deputy Speaker, and with the House, because they effectively illustrate the need for, and the benefits of, lip-reading.
One of my constituents, a 69-year-old former miner, was in his 20s when his hearing went rapidly into terminal decline. He came out of a session at the local swimming baths to discover that he was deaf. Although he is articulate, intelligent and motivated, his inability to hear has had a huge impact on his and his family’s lives. He regularly attended lip-reading classes and found them enjoyable and sociable. His confidence improved and he could interpret lip shapes to communicate with others. He was learning to lip-read when the classes were stopped. He was making good progress and the classes were making a real difference to his confidence, so it was a huge disappointment and setback when they were stopped.
In another case, a man who had been in the armed forces and later employed in the building trade lost his hearing on a holiday flight as the aeroplane began to land. He became deaf and his hearing never returned. His hearing loss caused him severe depression and caused problems in his relationships with his wife and family. He eventually lost his job because of his hearing loss, could no longer communicate by telephone, and missed so much conversation that all involved became concerned for his welfare. He became known to the care trust and was assigned a specialist social worker. He attended lip-reading classes, which met his needs. The course was local, always full and with a waiting list, and cost-effective. He found that meeting other people assisted him in his mental health recovery. The lip-reading classes were abruptly stopped, and concern mounted for his welfare.
The man was eventually sent, together with his wife, on a LINK course financed by the NHS after referral by the care trust. LINK is a specialist course for those who have hearing loss, and because it is residential and out of the area—it is usually held in Bournemouth—it is an expensive course, which is financed by the care trust. Had lip-reading classes not been stopped, they would have met his needs and those of his family locally. Lip-reading classes would have stopped the social isolation that he experienced and, in his case, would have negated the need for costly NHS mental health intervention, which required him to travel to Bournemouth.
Another case is that of a chap working in education. He took early retirement after 26 years because of his deafness, which prevented him from being an effective teacher. He was unable to hear young children who were learning to read. Ironically, he became a part-time lecturer at a local university, teaching local history. He said, “I can teach, but I can’t listen!” His family have had deafness problems throughout the generations. He read a novel, “Deaf Sentence” by David Lodge, which showed how lip-reading improves the individual’s quality of life. At the time he was concerned that he had withdrawn from the company of others and had stopped doing things that he enjoyed.
The man searched for a lip-reading class and joined Northumberland RNID as an active volunteer. He was amazed that there were no lip-reading classes available in Northumberland, yet in Durham, the adjoining county, nine classes were held throughout the year. The round trip to the classes in Durham was more than 100 miles so it was not practical to travel. He believes that this life skill should be available to all and free at the point of service. Lip-reading should not be regarded as a recreational pursuit. He says, “To suggest that lip-reading should be linked to adult education or leisure is deeply insulting to those of us with hearing difficulties.”
The final case is that of a constituent who became profoundly deaf as a four-year-old child, following an illness. She struggled in mainstream school and felt excluded and lonely. She later married and raised her twin daughters together with her loving, caring family. Her hearing loss has caused her severe problems throughout her life. Some six years ago, in her mid-50s, she was considered as a candidate for an implant. The operation took place in Middlesbrough and was extremely expensive for the NHS. For the first time in decades she could hear sounds and was able to distinguish between them. It took time for the “Dalek-like stimulus”—her description, not mine—to be assimilated by the brain and for her to make sense of people’s mouth shapes.
Hearing again has made an enormous difference to my constituent and her family. She has had good support from the NHS. However, she feels that although she is fortunate and that the pre and post-operative care were good, there was a vital ingredient missing from her long-term care—lip-reading classes.
Lip-reading is classified in the UK as personal and community development learning within adult safeguarded learning. The Skills Funding Agency policy summaries describe one of the purposes of such learning as enjoyment. The document also highlights the fact that adult safeguarded learning
“is increasingly being referred to as Informal Adult Learning”.
Examples of other skills in the same classification are cake decorating and balloon modelling.
There appears to be a postcode lottery in the UK for lip-reading classes. Surely that cannot be acceptable. The benefits of someone learning to lip-read are well proven. It assists greatly in employment, health and life skills. From my experience it is clear that there is a demand for lip-reading classes, and urgent action must be taken to halt the current decline in the number of classes available.
In all our constituencies and communities there are individuals and families who would benefit hugely from the provision of such a service. It is our responsibility to ensure that those services are available locally and at no cost to the learner. We must remember that one in seven people suffers from hearing loss—9 million people in the UK. Lip-reading classes should be treated very seriously indeed. The simple fact is that we should all band together, and there should be no dissent from the motion so that we can ensure that all people suffering from serious hearing loss at least have the chance to attend lip-reading classes, and a modicum of quality of life as a result.
Question put and agreed to.
Ordered,
That Ian Lavery, Grahame M. Morris, Ian Mearns, Mrs Sharon Hodgson, Catherine McKinnell, Mr David Anderson, Mrs Mary Glindon, Mr Ronnie Campbell, Mr Dennis Skinner and John Cryer present the Bill.
Ian Lavery accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 4 November, and to be printed (Bill 186).
Energy Bill [Lords]
The Secretary of State for Energy and Climate Change (Chris Huhne)
I beg to move, That the Bill be now read a Second time.
Over the past year, energy policy has been in the spotlight. From the gulf of Mexico to Fukushima, no one can doubt the importance of our energy choices. For the first time, scientists have linked greenhouse gas emissions to an increased risk of major floods. Faced with a difficult financial situation, the Government’s objectives are clear: we must secure affordable energy supplies for the future and avoid dangerous climate change. Neither will be easy. The gap between our energy demand and our energy supply is growing and we are increasingly dependent on imported energy. We still rely heavily on unclean and unsustainable fossil fuels. By law, we must cut our emissions by 80% by 2050, and we must get 15% of our energy from renewable sources by 2020 under EU law. Our energy infrastructure is ageing. Our old polluting power stations are shutting down.
Barry Gardiner (Brent North) (Lab)
While the Secretary of State is talking about the targets, will he expand on the dispute that appears to be taking place between Cabinet colleagues on whether the recommendations of the Committee on Climate Change should be met or abandoned?
Chris Huhne
The hon. Gentleman can take it from me, as a former journalist on The Guardian, that he should not always believe everything he reads. The Government will make our announcement on the question of the fourth carbon budget in due course.
Building the next generation of power plants will take time and money. If we are to cut our carbon emissions and keep the lights on, we must act now. The cheapest way of closing the gap between supply and demand is to reduce the amount of energy used.
Mr John Baron (Basildon and Billericay) (Con)
The Government are rightly concerned about fuel poverty and whether customers are paying too much for their energy—a situation not helped by a myriad of tariffs and complex energy bills. As my right hon. Friend’s fellow Ministers know, I have submitted simple proposals to his Department that would oblige energy companies to show customers how much they would save if they were on that company’s cheapest standard tariff, based on the customer’s actual usage, rather than a generic or average usage. Other Ministers have been supportive. Will he be?
Chris Huhne
I am grateful to my hon. Friend, and I know that he has been very active in promoting that cause. I thank him for the way in which he has been championing that change, which will help to increase consumers’ control of their energy bills, and I very much hope that he will continue to do so. I can certainly say—for myself and the whole ministerial team—that we are supportive of his work and the ideas that he has brought forward; we see a lot of merit in them. I would want to consult more before introducing detailed legislation, but we very much welcome the thrust of that work.
Mr John Redwood (Wokingham) (Con)
Given the looming shortage of capacity, how much new capacity is in-build as a result of decisions taken in the last year, and how much does the Minister wish to get in-build as a result of decisions in the forthcoming year?
Chris Huhne
I am grateful to the right hon. Gentleman for his question on that issue. Obviously, there is an absolutely central objective of the electricity market reforms, on which we are consulting, and it is that we bring forward proposals. We are determined that we should have an adequate supply margin through even the toughest of winters. My whole ministerial team is determined to ensure that, and I merely urge him to wait for our White Paper, which will I hope reassure him about the prospect.
Joan Ruddock (Lewisham, Deptford) (Lab)
In the light of what the Secretary of State has just said, what does he make of Centrica’s threat not to reopen its gas field because of the punitive taxation that his colleagues have imposed on it? If he really wants security of supply, surely that is central to its future.
Chris Huhne
Perhaps the right hon. Lady has more information on that than I do. I read the comments very carefully, but I did not read a comment about closing down the Morecambe gas field. That would be a very odd thing for an operator to do, but we will have to wait for the fullness of time to see whether she or I are right.
Chris Huhne
I will give way once more—to the right hon. Gentleman—before making a little more progress.
Mr Andrew Smith
The Secretary of State said a few moments ago that we need to act now to combat climate change. Will he therefore act now to bring in emissions performance standards for power stations by adding an enabling clause to the Bill, so that we make progress in that crucial area as soon as possible, the electricity companies know where we stand, and we do not have to wait months and years for action that, as he says, needs to be taken now?
Chris Huhne
The right hon. Gentleman knows that it is not a question of months or years; the proper place for the House to debate as significant a change as emissions performance standards is as part of the electricity market reforms. We will give a very clear indication, as I said to the right hon. Member for Wokingham (Mr Redwood), of exactly what direction we are taking with our energy policy on the production side. The thrust of this Bill, which we are debating today, is more on the energy saving side, but we will make very clear the detailed proposals on emissions performance standards. We have a clear commitment in the coalition agreement—and, indeed, in our parties’ manifestos.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the right hon. Gentleman give way?
Chris Huhne
I am going to make a bit more progress, if I may, and if the hon. Gentleman will excuse me, because I have taken four interventions without being able to draw breath between any of them.
Building the next generation of power plants will take time and money. If we are to cut our carbon emissions and keep the lights on, we must act, and the cheapest way of closing the gap between supply and demand is, as I said, to reduce energy use.
The Bill contains provisions to boost our energy security, to encourage low-carbon technologies and to improve energy efficiency. It gives energy companies a new obligation to reduce carbon emissions and to support vulnerable consumers, and it delivers a key coalition commitment: the green deal—a self-financing building improvement scheme to bring our properties into the 21st century.
The UK has some of the oldest and least efficient buildings in Europe. Every day, throughout the country, our homes and businesses leak heat and waste energy.
Mr Dave Watts (St Helens North) (Lab)
As up to 24% of heat can go out of the window, will double glazing be included in the green deal?
Chris Huhne
The exact specifications of the measures that can be included in the green deal are properly left to secondary legislation—and for several reasons, because setting it out will require detail and my officials are in the process of talking to industries throughout the country about getting costs down. The scale of the green deal gives us an opportunity for economies of scale that may well bring a whole new series of measures into the possibilities that it offers. I would very much like to see the maximum possible range of measures—including, indeed, double glazing. As the hon. Gentleman rightly says, a quarter of the UK’s energy emissions come from energy used in the home, and billions of pounds spent on domestic heating literally disappear up the chimney. Businesses are wasting money and our outdated building stock is costing us the earth. Not any more: under the green deal—
Mr John Leech (Manchester, Withington) (LD)
Does my right hon. Friend accept that the biggest problem is in the private rented sector, and that one of the best ways to deal with some of the worst properties is to stop landlords being allowed to let F-rated and G-rated properties by 2016?
Chris Huhne
I entirely agree with my hon. Friend, and I will respond to his point later if he will allow me to make a bit of progress.
Under the green deal, energy-saving packages worth thousands of pounds will be installed in millions of homes and businesses right across the country. There has never been anything quite like it. It is the most comprehensive energy-saving plan in the world. Green deal measures will be provided by trusted businesses, installed by accredited professionals, and backed up with a watertight legal framework. Customers will pay nothing up front; businesses will do that for them. Once the property has been refitted, green deal providers will get their money back from the expected savings on energy bills over the lifetime of the measures. This is the big change: payments can be made not just by the existing tenant or owner-occupier but by the new beneficiaries once the original installers have moved out and moved on, so there is a longer repayment period. That makes the whole scheme much more financeable and much more attractive.
Andrew George (St Ives) (LD)
My right hon. Friend refers to the companies that will undertake the assessments and potentially the work itself. Has he had time to reflect on the lessons from the Warm Front scheme, where large companies cleaned up all that work when a lot of it could have been undertaken efficiently by small local companies? Will he ensure that the way in which the legislation is framed does not keep those small local companies out of undertaking this important work?
Chris Huhne
My hon. Friend makes a good point. We are absolutely determined to ensure that this scheme is open to small businesses that are properly accredited and properly qualified as installers. I am sure that all of us, in all parts of the House, want not only the biggest companies but small businesses to benefit from the advantages of the green deal.
Barry Gardiner
The right hon. Gentleman talked about householders moving and the contract then being taken on. However, in the evaluation process that took place at the beginning, the estimated savings were based on usage by the initial occupier. What will happen when the occupier changes and those savings then change as well?
Chris Huhne
As the hon. Gentleman knows, when we are looking at savings or cash flow, money today is worth more than money tomorrow, so from the point of view of the installer, the longer the period, the more the work is worth doing. The key change in the Bill is to introduce the ability to go beyond the existing owner-occupier or tenant in order to spread payments out over a long period.
At the heart of the green deal is a golden rule—that for typical households, expected savings will offset costs. Each month, a green deal home will save energy while providing the same level of comfort. Money from likely energy savings will pay off the costs of the work. This is not a personal loan. Let me repeat: once a property has had the green deal, payment will stay on the energy bill at that address, even if the occupants then move out. When someone moves into a green deal home, they inherit the energy savings that pay for the work. Everyone has a part to play. This is about Government helping businesses and households to come together to deliver energy savings that are important on a national scale.
Through this legislation, we are creating a new market in energy saving. Just as the law establishing joint stock companies unleashed big investment, so this law will set the legal framework for a new green growth industry.
Mr Andrew Tyrie (Chichester) (Con)
The Secretary of State said that he is creating a new market. Considerable consumer protection and competition concerns have been expressed to me about the creation of this market. What advice has he taken on the aspects of the Bill that will set aside the Consumer Credit Act 1974? Is it not the case that many people will feel tied to a particular energy provider? How will he ensure that these measures do not inhibit people from switching between energy providers?
Chris Huhne
We have taken extensive advice on the provisions of the Consumer Credit Act 1974, and the Bill is absolutely in line with the protections.
In the view of this ministerial team, it is essential that the consumer has the highest possible protection, both financially and in terms of the quality of the installation, for the simple reason that the success of the scheme will depend on word of mouth. If people go around saying that they have had a bad experience, either financially or in terms of the installation, the scheme will not be the success that we want it to be. That is why we have been careful not to rush the Bill through. A lot of pressure has been brought to bear on us, because of the state of the economy, to ensure that we get it through as quickly as possible, but we have been determined, particularly drawing on the experience of Australia, to avoid the mistakes of countries that have rushed this matter, and to ensure that we get it right. I assure the hon. Gentleman that we have done that. I will turn to some of the more detailed answers to his question later.
Caroline Lucas
I am grateful for the opportunity to speak. Is it not the case that the golden rule will not help people in fuel poverty much because they are far more likely to feel any green deal benefits through greater thermal comfort rather than through reduced fuel bills? The energy company obligation pot does not have much money in it, although £2 billion is a good start. However, even that is being paid for by a levy on consumers’ bills, and there is research to suggest that that mechanism will push more people into fuel poverty than it pulls out.
Chris Huhne
I do not agree with the hon. Lady’s assessment. It is important to deal with people in fuel poverty. The energy company obligation, as she pointed out, will enable us to fund green deal measures for those in fuel poverty. The ECO will ensure that people, such as the stereotypical little old lady in her extremely draughty home who could suffer from hypothermia, can enjoy more comfort and do not have to generate energy savings to install insulation. The hon. Lady is right that we want such people to have more comfort and to enjoy a higher temperature, because we do not want to see our fellow citizens dying from hypothermia. Providing more comfort is explicitly allowed for in the Bill, and we have just introduced legislative measures for the warm home discount. We want to ensure that there are means through the green deal to tackle the root of the problem of fuel poverty, and to deal with fuel poverty problems for those who have not benefited from that.
Dr Alan Whitehead (Southampton, Test) (Lab)
On the ECO, does the right hon. Gentleman regret agreeing with the Treasury cap on Department of Energy and Climate Change levy-based spending over the current funding cycle, under which any new levy spending—if it is so defined by the Office for National Statistics—would come within the levy cap? Under that scenario, what present levies does he intend to carve out in order to carve in the ECO?
Chris Huhne
The hon. Gentleman should first realise that the ECO is not covered by that as yet, although it may be in the future. Secondly, it is legitimate for the Treasury to have an interest in the taxable capacity of the country as a whole. If we impose an additional obligation on electricity consumers through legislation, we should be absolutely transparent about it, and we have committed to do that through the annual energy statement, for example. It is also absolutely appropriate that the Treasury should have oversight of that, and that there should be ongoing negotiation to ensure that the balance is struck between the progress that we want to see on fuel poverty and hard-to-treat homes, and the charges that are put on the electricity consumer.
Chris Huhne
I will make a little progress, if I may.
Millions of homes, and millions of businesses, could benefit from the green deal in the next decade. We expect that households will be able to install measures worth up to £10,000. That is a massive undertaking, and it can make a real difference. Heating is the second biggest driver of energy demand in Britain, and British Gas pilots show that householders who put in energy efficiency measures can cut their gas consumption, and their bills, by up to 44%. That is a very substantial and significant saving, but so far energy efficiency has passed under the radar. We estimate that between £2 billion and £3 billion of energy is wasted every year because our homes are poorly insulated and inefficiently run. We may as well be standing outside our front doors burning £50 notes. That waste represents £2 billion to £3 billion of gas and oil imports that make us more vulnerable to the vagaries of global oil and gas markets.
Gavin Barwell (Croydon Central) (Con)
What estimate have the Government made of the contribution that the energy efficiency measures in the Bill will make to the UK’s obligations on reducing carbon emissions?
Chris Huhne
One problem that we have in making that assessment is that, as I have said, this is the first scheme of its kind in the world. If an economist is trying to make a projection of what is going to happen in future, they usually examine what has happened in the past, but there is no history for this scheme, so it will be a case of “suck it and see”. However, later in my speech I will give some estimates of what will happen if the scheme progresses as rapidly as I would like it to.
Joan Ruddock
I am exceedingly grateful.
I have to say that much of what the Secretary of State is telling the House is familiar to me, as the person who pioneered and piloted so much of the history of the green scheme that he denies exists. What conversations has he had with the banks? How investment is to be raised is the key element that has not been described to date.
Chris Huhne
I am grateful to the right hon. Lady, and I pay personal tribute to her for her work on the matter. I am not—repeat not—attempting to make any partisan points. This has been a genuinely important piece of work to which Members of all parties have contributed, and I think it will be a game changer.
On the banks, I shall read the right hon. Lady a quotation that I believe sums up better than anything that I could say what is likely to happen with the financing of the scheme. It comes from Conor Hennebry, the director of global capital markets at Deutsche Bank, who says:
“We believe the Green Deal has the potential to improve access to home energy efficiency for families across Britain, and we are delighted to be working with DECC on this exciting initiative.”
He added on another occasion that
“the City is practically champing at the bit to finance the government’s green deal.”
I believe that the finance for the scheme will come through very strongly. The securitisation market is opening up—Eaga, for example, has already gone to the bond market with a securitisation, and many of the utility companies have securitised gas bills. I think that finance will be readily available, which will be an important part of making the green deal work.
Andrea Leadsom (South Northamptonshire) (Con)
I welcome the Bill—it is a superb idea, and I applaud the Government for bringing it forward so quickly. May I press the Secretary of State on consumer protection? As with any new initiative that a tremendous number of people want to take up, some providers will inevitably promise the earth and not deliver. What protection will there be for consumers, particularly those in fuel poverty to whom much is promised but little is delivered, to ensure that they get the insulation and the reduction in their fuel costs that they are expecting?
Chris Huhne
I absolutely sympathise with the hon. Lady’s question—I spent a number of years on the board of the Consumers Association, and I am a firm believer in the need for good consumer protection. There are several layers of protection, and the first line of defence for the consumer is competition. The inability of householders to get an assessment and an alternative quote—such competition keeps suppliers lean and mean—is perhaps what went wrong with the Warm Front scheme.
In addition, we will have all of the usual protections. I mentioned the Consumer Credit Act 2006 in respect of finance, but there is also the accreditation scheme for assessors, so we will know that assessors are properly trained to assess what people need in their homes to meet that golden rule. We will have properly qualified installers, so avoiding the problems that occurred, for example, in Australia, where untrained people crawled through people’s lofts, banging nails into wires and setting fire to homes. The whole Australian energy efficiency industry was given a bad name for many years because of that, but we are avoiding those problems. The hon. Lady will see in Committee that we have delivered a lot on consumer protection.
Mr Michael Meacher (Oldham West and Royton) (Lab)
The Secretary of State has concentrated on the benefits of the Bill, which of course depend on whether there is high take-up, which in turn depends on the interest rates on loans under the green deal. Will he give us some idea of what he intends the interest rate to be? Most expect that it will be of the order of 8% to 10% over a 25-year period, which will rule out very large numbers of people, particularly the poorest.
Chris Huhne
The right hon. Gentleman is right to say that the interest rate is important. However, it is up to competing businesses to arrange that finance. I also very much hope and trust that finance houses will make pools available for the small businesses of which my hon. Friend the Member for St Ives (Andrew George) spoke, so that providers other than the B&Qs and the Scottish and Southerns—the big providers—can get involved. The key point is that the securitisation market is opening up for such businesses, and the finance available is at a reasonable level, which I believe will ensure that we have take-off. However, the right hon. Gentleman is right that that is a market decision.
Mr MacNeil
The Secretary of State mentioned qualified installers, which in theory are all very well. However, one problem, especially in rural and island areas such as mine, is that in practice, local businesses are often unable to tender for the work because of the big contracts that are put together. People in the locality are cut out and left without the work while people come in from outside and take it up.
Chris Huhne
As I have already said, the Government are committed to trying to make the benefits of the green deal available to small businesses, which obviously includes those in remote islands and rural communities. We have consulted widely on that with both of the devolved Administrations, including the Scottish Government. We have a very substantial measure of consensus with the Scottish Government, but if issues need to be addressed in Committee, we will happily address them. I am terribly keen to ensure that the Bill works throughout the UK, because the homes that need insulating exist throughout the UK. Some of the greatest beneficiaries will be communities that are off the mains gas grid. Homes in such communities are often quite hard to treat, and the Bill will be of enormous benefit to them.
Under the green deal, households could save up to £400 a year once the measures have been paid off. That will flow through to spending power, boosting living standards for all, yet many people have never even considered making their homes more efficient—they do not know what better energy efficiency could do for them. New green deal assessments will set out clearly and consistently just how homes and businesses can save energy. The green deal is a new way of doing energy efficiency.
Chris Huhne
Let me make a bit more progress, but I will give way again later.
There will be no more picking off the easy bits, with a little insulation here and a low-energy light bulb there; no more relying on regulation alone to change behaviour; and no more top-down schemes imposed using public money. Instead, we are creating a new dynamic market in energy efficiency, shifting from small-scale improvements to deep retrofits on a national scale. This dynamic market will bring jobs across the length and breadth of the country, and real growth, reaching into the most deprived areas, with no regional bias.
James Morris (Halesowen and Rowley Regis) (Con)
On that point about the added benefit of the scheme to regional economies, can the Secretary of State estimate the number of the quality jobs that will be created in areas such as the west midlands and the black country, a part of which I represent?
Chris Huhne
That will depend on the take-up in different areas, but we estimate that nationally—there is no reason for any geographic or regional disparity; the numbers should be the same across the country—that the number of people employed in insulation alone could soar from 27,000 to 100,000 by 2015. The potential benefits are huge, with opportunities for skilled and unskilled labour alike up and down the supply chain.
The green deal will save energy and help us to hit our carbon emissions targets. It will also give us a chance to get people thinking about how they can reduce their own energy consumption. Millions of homes and businesses could benefit from the green deal, but as with any new product, building consumer trust will be critical to success. We want people to know that the green deal is not just a smart choice, but a safe choice, which is why the Bill also ensures that consumers will be protected. The green deal will be delivered by partnerships across the country.
Jim Shannon
For a minute I thought that as a Democratic Unionist Member I was not going to be allowed to speak in a green debate. When I was a Northern Ireland Assembly Member, I was involved in discussions on these measures, so it is appropriate that I have the opportunity to speak today. At the time, we proposed a clause on guaranteed performance standards that made it clear that if providers did not live up to their promises, they would be accountable for losses and monetary penalties could ensue. Does the Secretary of State intend to enshrine that principle in the Bill, so that what the Assembly proposed will be applicable across the United Kingdom? It would ensure good customer service and enhance security and protection.
Chris Huhne
The short answer is that there is a limit to what we can guarantee—the hon. Gentleman used the word “guarantee”—for reasons that will become obvious: if someone were suddenly to marry a Brazilian and wanted to keep their temperatures 3° or 4° higher in the winter, I could not guarantee that their energy bills would be lower. We have to be cautious, therefore, but if there is no behavioural change, we would expect energy savings.
We will ensure that high-quality, standardised advice is given so that each customer can see clearly where and how the green deal will work for them, and that those installing green deal measures must meet robust standards. We will guard against mis-selling, and ensure that the right information is on hand at the point of sale. Competition will keep suppliers keen: if a customer does not like the quote from one green deal provider, they will be able to get another.
Heather Wheeler (South Derbyshire) (Con)
This is a key test that will give legs to the Bill. Some of my constituents have contacted me about their troubles with Warm Front. There has to be a clean break with the past. This has to be a better way of doing business and giving us all a green deal for the future. I am looking forward to that particular piece of the Bill.
Chris Huhne
The hon. Lady is right. Many of us have been visited in surgery by constituents saying that they were quoted under Warm Front for an improvement, but oddly the entire subsidy was taken up by the provider, rather than going to the constituent. The point of introducing this competitive provision is to ensure that the subsidy goes where it is meant to, instead of disappearing into the pockets of some large business.
The Bill will also introduce a new energy company obligation to replace the carbon emissions reduction target and the community energy savings programme, which have not unlocked carbon savings fast enough. The new obligation will be more ambitious. Energy companies will be expected to pay to support hard-to-treat properties such as those with solid walls, where insulation costs can be higher and the payback period longer than with the typical home. ECO payments from energy companies will be bundled with green deal finance and delivered together to ensure that the green deal is available to all. The scheme will also help the most vulnerable people—those in the coldest homes—to get the heating improvements that they need to keep warm and stay healthy. Cold homes cost lives. By targeting support more closely, we can reach more people more effectively.
Tessa Munt (Wells) (LD)
I wonder whether this Energy Bill might be the right place for the Government to instruct the regulators to say that companies should no longer charge so much for the first units of electricity used—or whatever power it is—but instead swing that round to the point where there is better use of power. That will help the vulnerable and those in fuel poverty, because the whole thing has tipped the wrong way.
Chris Huhne
My hon. Friend makes a good point. There are many difficulties in the energy market of the kind that she describes—for example, with prepayment meters, which often make things more expensive. That is precisely why we introduced the Warm Homes discount, which provides people in vulnerable households with extra support, and why the green deal is so important. We are not just using a sticking plaster—which is what we do when we subsidise people—but dealing with the root cause of the problem. One of the key points is that people in fuel poverty and those at the bottom end of the income distribution have an enormous range of energy use. Their use can vary by a factor of six merely depending on the kind of property they happen to be in. If they are lucky enough to have a social landlord who has recently renovated the property to the decent homes standard, their energy bill can be low; if they are in the private rented sector, it can be six times as high.
Chris Huhne
If I may, I am going to make some progress.
We will focus our resources on where they can do the most good. That means finding practical solutions to identify households that need the most support. We are determined to get to grips with the causes of fuel poverty, not just the symptoms, but the tools at our disposal are not up to the job. That is why I have asked Professor John Hills to conduct an independent review of the fuel poverty target and definition, so that we can understand the problem and what we can do to fix it, and also be held to account as a Government for the progress that we make. The review will produce an interim report in the autumn and a final report early in 2012.
For too long, a sizeable minority of tenants has suffered from higher bills and colder homes. Privately rented houses are more likely to have the lowest energy efficiency rating than those that are owned outright.
Caroline Lucas
I thank the Secretary of State for giving way again. Are not tenants unlikely to challenge their landlords on the introduction of the green deal because of a fear of retaliatory eviction? Would it not be much more effective to introduce minimum energy efficiency standards that landlords have to keep to if they want to put their buildings on the market?
Chris Huhne
The hon. Lady anticipates a point that I will turn to very soon.
Landlords do not want to invest because tenants benefit; tenants do not want to invest because they will move on. By linking the green deal measures to the property, not the tenant, the Bill bridges that divide. With the green deal, everybody wins. Landlords will face no up-front costs; tenants will keep warm for less.
I welcome many of the positive responses that we have had from landlords to the prospect of the green deal. However, some individuals and organisations feel that we are not committed to securing improvements to the least energy-efficient properties in the private rented sector. Many tenants suffer appalling conditions without the power to agree improvements with their landlords. The debate has been lively, and we have listened. That is why I am pleased to announce that we will change the current provisions to make it clear that we will regulate. This is significant step and a marker of our intent. From 2016, any tenant or their representatives asking for their landlord’s consent to make reasonable energy efficiency improvements cannot be refused. From 2018, the rental of the very worst performing properties—those rated F and G—will be banned through a minimum energy efficiency standard. We will of course seek to work with landlords well in advance to support their take-up of the green deal. The precise form of these regulations will be subject to the usual scrutiny processes.
We also remain committed to ensuring that all councils play a role in delivering the green deal. The recent memorandum of understanding between DECC and the Local Government Group recognises the enthusiasm that councils have for delivering the green deal.
Malcolm Wicks (Croydon North) (Lab)
I have a question about the private rented sector, and I ask it in a spirit of non-partisanship because I know that the Secretary of State likes that kind of thing. I welcome what he has said about putting some pressure on landlords but, given that the public sector will in effect be paying the rents of some of these energy-efficient dwellings, through housing benefit and housing allowances, has his Department had talks with the Department for Work and Pensions to see whether the withdrawal of housing benefit could become another weapon in his Department’s armoury?
Chris Huhne
We have discussed this with the DWP, and that would certainly be one route down which we could go. There would be dangers in doing so, however, not least because some of those on housing benefit find it hard to get into privately rented property. The simpler route that I have suggested will have a clear and predictable effect and will touch more than 680,000 homes in the private rented sector that are currently rated F and G. This is a substantial move.
Stephen Gilbert (St Austell and Newquay) (LD)
The Government are clearly announcing significant changes to improve energy efficiency in the private rented sector. Will the Secretary of State expand on what he would consider to be reasonable, in the context of his saying that any reasonable request from a tenant would not be refused? Also, why has 2018 been chosen, rather than 2016 as many outside groups have been calling for?
Chris Huhne
The clear idea here is to give a point at which we know people are going to be able to aim. It is not reasonable to introduce changes very rapidly when, for example, there might not be voids in property renting. We do not want to impose unnecessary costs, and it is therefore appropriate to set a date. Let us remember that the scheme does not begin until October 2012, and we want to set a date by which the private rental sector can deliver.
Andrew George
Before he took those last two interventions, my right hon. Friend had just reached the point about the memorandum of understanding between his Department and the Local Government Group. The Bill does not at present include any powers for local authorities, and some of us are concerned that if it is simply left to the private sector to generate the scheme, it might not be sufficiently targeted at the communities that need it the most. Should we not give a duty, or at least a power, to local authorities in this regard? Does the Local Government Group sign up to that kind of joint arrangement with the Government?
Chris Huhne
My hon. Friend needs to recognise that a substantial number of councils are very enthusiastic about the scheme, because of the benefits that it can bring in regard not only to energy saving but to local jobs. I personally think that we are going to see go-ahead councils trumpeting the work that they do in this area. They already have substantial powers to monitor and to ensure that this will happen.
Alongside the green deal provisions, the Bill also contains measures to enhance energy security. They include legislative changes to reduce the likelihood, duration and extent of gas supply disruption, and to protect consumers from very high wholesale prices. These new powers would sharpen the commercial incentives for energy companies to meet their contractual supply obligation during a gas supply emergency. The Bill also introduces a special administration regime for gas and electricity suppliers, which will help to maintain market stability and protect consumers.
Mr Mike Weir (Angus) (SNP)
The right hon. Gentleman is rapidly going through energy security measures, but clause 100 provides a power to change the boundaries of the continental shelf. According to Library research papers, the aim is to provide flexibility in managing the UK continental shelf resources. Will the Secretary of State give us more information about which parts of the UKCS he envisages changing, what resources are involved and what consultations have taken place with the devolved Administrations?
Chris Huhne
We have indeed had consultations with the devolved Administrations on all aspects of the Bill. One objective of this part of it is to ensure that the smaller and more difficult to get at fields, which have potentially higher costs, are nevertheless attractive and can be handed on to companies who will exploit them to the full. I hope that the hon. Gentleman will see from the Public Bill Committee that that is what we are trying to achieve.
Chris Huhne
I must make progress.
The regime will ensure that if a large supplier becomes insolvent, customers will be supplied with gas and electricity as cost effectively as possible until the company is rescued, sold, or its customers are transferred to other suppliers.
The Bill also includes an updated regime for third-party access to oil and gas infrastructure. Timely access to infrastructure on fair terms will be increasingly critical over the next decade. The discoveries now being made in the North sea are typically smaller than those in the past and need to make use of existing infrastructure where possible. The measures in the Bill will help us to secure the full economic benefits of our North sea oil and gas resources.
The Bill brings energy efficiency to homes and businesses across the country. It boosts the security of our energy supply, protects consumers and supports green technology. In setting up the green deal, it places us at the very forefront of the low-carbon drive—with an innovative, dynamic market delivering energy efficiency at scale, with no extra cost to the public purse.
Chris Huhne
I have come to my peroration and I have given way many times. I would like to continue.
Together with our reform of the electricity market, which will open up our energy portfolio and deliver the next generation of low-carbon electricity, the Bill represents a signal step towards a cleaner, greener future for the UK. In the scale of its ambition, this Bill is a statement of intent. It will help cut our carbon emissions, reduce our dependence on imported energy and protect the most vulnerable in society. This is our flagship policy on energy saving. This legislation provides for it, and this Government will deliver it. I commend the Bill to the House.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I was starting to think that my moment might not come this afternoon. I am delighted that the Secretary of State managed to make it to the House this afternoon to speak to his own legislation. The power of Twitter knows no end!
It is important to outline where the Opposition stand on the vital issues facing the Department of Energy and Climate Change and the Government. We would all agree that there is no greater threat facing the planet than global warming. In the 19 years since the Earth summit in Rio de Janeiro, when climate change was firmly put on the agenda, the issue has moved from the fringes to the centre stage. Even during the 13-year period of the last Labour Government, for whom I had the privilege to serve, the issue became more urgent and pressing. That is why Labour not only introduced tough targets to reduce our emissions of the gases that cause global warming, but enshrined them in law.
This coalition Government cannot be accused of ignoring climate change. The Prime Minister himself put the environment at the top of the Tory agenda when he took his husky ride to the Norwegian glacier. At the time, there were sceptics—including the Secretary of State for Energy and Climate Change—who dismissed that as merely a public relations stunt. We could doubt the Prime Minister’s commitment; after all, he has uttered hardly a word on the matter since. Why else, though, would one install a wind turbine on the roof unless one were committed?
As the Secretary of State has said, the Energy Bill provides a once-in-a-lifetime opportunity to catalyse Britain’s journey from a high-carbon to a low-carbon economy, to change customer behaviour for ever, to lead the world in reducing carbon emissions and to be a bright beacon to our partners in Europe, America and the Commonwealth. So the coalition Government have set out their stall, claiming to be “the greenest Government ever”, and what have they come up with? After months of bravado, bragging and boasts from the Energy Secretary and his ministerial team, we have a Bill that adds new meaning to the word “disappointment”. It is a flaccid lettuce leaf of a Bill, laden with missed opportunities and ducked decisions. If the school playgrounds of Britain have indeed adopted a new phrase, “doing a Clegg”—which, for the benefit of Liberal Democrat Members, means saying one thing and doing another—the lexicon will soon contain another new phrase, “doing a Huhne”. That will mean “talking big”, for 45 minutes in this instance, “but delivering little”.
Andrea Leadsom
I am very disappointed by what the hon. Lady is saying, on behalf of many of my constituents. A couple of months ago I was at a fish-and-chips supper with some retired people, and one elderly lady was literally in tears, saying that given her very limited resources she did not know how she would manage to keep warm in the winter and eat as well. I find it pretty shocking that an initiative that is making a bold effort to remedy that situation should meet with such complete disregard from the Opposition.
Meg Hillier
The hon. Lady may be jumping to conclusions. It is this Government who are removing the Warm Front scheme, and it is this Bill that is failing to deliver for the fuel poor. I shall say more about that shortly.
In his 45-minute peroration, the Secretary of State promised 100,000 jobs. He promised that the poorest would be saved from the cold, and that the market would protect the consumer and many others. However, he did not give us the details of some important matters. We have a Secretary of State who has been rolled over by the Tory Chancellor—and, we have learned in recent hours in days, by his own party colleagues, particularly the Business Secretary—on every important issue in his Department. We have also learned today that the ECO may be within the levy cap, but not yet. We have a Liberal Democrat sheep in a wolfish Government: a Government who want to be green-tinged, but who are under-delivering on their grand promises.
David Mowat (Warrington South) (Con)
When the last Government left office, one half of 1% of the UK’s total energy production was delivered by renewables. Is that under-delivery or not?
Meg Hillier
The Opposition seem to misunderstand—[Hon. Members: “You are the Opposition!”] They are the Opposition to me. They seem to misunderstand the position. There is cross-party agreement on the need for more renewables and a lower-carbon economy, but we believe that the Bill could do more to deliver that. What disappoints us is that a Bill that promised so much is delivering so little. We hope that in Committee we shall see some movement from the Government.
At the heart of the Bill is the green deal, which the Secretary of State spent much of his speech telling us about. The task is obvious. We all agree that Britain needs to insulate its homes and buildings. It needs to improve energy efficiency in millions of households. Given rising energy bills and the need to hit our carbon reduction targets, that work must be done, as Labour’s manifesto made clear at the last general election.
Laura Sandys (South Thanet) (Con)
If the hon. Lady wishes to improve energy security and insulation in homes and to reduce carbon, I do not understand why she does not recognise that the Bill is a game-changer. I recall another game-changing piece of legislation, the Clean Air Act 1956. That was the first in the world; this is the first in the world. That attracted—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think that the hon. Lady has made her point.
Meg Hillier
First does not always mean best. We want the Bill to succeed in its aims, but if the hon. Lady looks at the detail of the Bill and reads the report of proceedings in the other place, she will observe the glaring gaps that I will shortly highlight. As I have said, the task is obvious and the challenge is great.
Neil Carmichael (Stroud) (Con)
For the record, can the shadow Secretary of State tell us whether the level of fuel poverty went up or down under the last Labour Government, for whom she, of course, served?
Meg Hillier
The point is that this Government are removing Warm Front, and there will be nothing for the fuel poor; this Bill will not deliver for them.
The challenge is great. As the Secretary of State said, 27% of all UK emissions come from our homes. All Members are committed to an 80% reduction in emissions by 2050; there is cross-party agreement on that. However, during the Bill’s passage in the other place Ministers were offered opportunity after opportunity to make their proposals clearer, to introduce proper measures of accountability such as an annual report, and to safeguard consumers, but they rejected those offers of help, and we have not heard any further detail throughout the entire 45 minutes of the Secretary of State’s speech today.
Other Members may have longer memories, but I do not believe that this House has ever been asked to vote on the Second Reading of a Bill in which so much of the detail is unclear or not worked out. We are being asked to buy a massive pig in a poke, and that is simply not good enough. At the very least, the Secretary of State should concede the need for evidence sessions for the Bill, so we can shed some light on its murkier aspects, but he has refused to do so. As a result, Members will not have a single opportunity to discuss the Bill outside Committee. Today, the longer the Secretary of State’s answers were, the less we learned. [Interruption.] No, those are my words.
The key question this afternoon is whether the Government’s proposals meet the challenge. Sadly, my confirmed conviction is that they do not.
Christopher Pincher (Tamworth) (Con)
The hon. Lady seems to turn disappointment into an art form. Is she not aware that many people are very disappointed that under the Government with whom she served fuel prices and the number of people in fuel poverty went up, and she did nothing about it?
Meg Hillier
I am sure the Secretary of State would be delighted if he had the power to control fuel prices, but now may not be the time for a lesson on the global oil economy.
Steve McCabe (Birmingham, Selly Oak) (Lab)
What impact does my hon. Friend think a VAT rise has on fuel prices, and what impact does that have on elderly people?
Meg Hillier
I agree with my hon. Friend’s point. This Government cannot lecture us, given the impact of their policies on the budgets of households throughout the country, leaving them nowhere to go when oil prices increase.
In answer to a question from the hon. Member for Harlow (Robert Halfon), the Secretary of State said every home would benefit from the green deal—he clearly has no shortage of ambition in this area—but the Department for Communities and Local Government predicts that there will be more than 27 million households in England by 2033, so how can the green deal possibly hit that target? The Secretary of State talks about companies being keen to get involved, but we know that most have already stepped back, so unsure are they of what the Bill will deliver.
If the Secretary of State is so confident about his proposals, why has he refused to set a target for the number of homes that would benefit? He gave us a waffly answer earlier, but at a public event he said he had wanted to call this Bill the Energy Saving Bill but was told that the parliamentary Clerks would not allow it.
I am sure that all Members are far less concerned about the title of the Bill than about what it achieves, and there are a number of obstacles to achieving the Secretary of State’s aims. First, we have no details about the interest rates at which the green deal cash will be loaned. Evidence suggests that an 8% rate will deter many households. Although there were rumours that incentives would be provided in the Budget, none were announced, yet without any tangible incentives most householders just will not bother. A loan of about £6,000 will barely scratch the surface of paying for what will need to be done to make most homes as green as they will need to be to meet our targets. The Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), has now suggested that loans could be as much as £10,000, which I hope is a sign that the Government finally recognise that there are inadequacies in the Bill, but that higher sum will be more off-putting to the poorest households whose homes are often the most expensive to improve.
On the golden rule, I was interested to hear the Secretary of State’s version of things—perhaps this is a new addition to the Bill—which was that “money today is worth more than money tomorrow”. That shows a level of financial literacy that clearly bodes well for the Bill. We also face the question of whether the banks will be interested, and the only banker that he could cite is a former Tory special adviser—he would be in favour, wouldn’t he? We need the banks to be on board if the Government’s model is to work.
Secondly, this Bill contains no assurances about who will conduct all the assessments and repairs. Who will accredit the legion of assessors—the 100,000 people that the Secretary of State talks about? Where will this army of assessors come from? We all know that the Government are doing their best to create a vast pool of newly unemployed nurses, RAF pilots and other skilled workers who need a new job, but even at the rate that this Government are destroying our services and putting manufacturing firms out of business, there will not be enough skilled people to do the job on the scale required.
The Secretary of State has been asked today, as Ministers in the other place have been, which measures could be put into a home under the green deal. Again, we have heard lots of words—for example, when he talked about double glazing—but he simply does not know the answer, and neither do suppliers, householders and landlords. Hard-to-treat remote and rural homes that are off-grid provide particularly big challenges, but the green deal, as it stands, does not step up to deliver on them. When the Secretary of State talks about success that will be determined by word of mouth, we know he has a great plan that will certainly deliver the results he sets out. [Hon. Members: “Hear, hear.”] Clearly Government Members do not understand irony.
Thirdly, and most shamefully, the Bill—[Interruption.] I think that Government Members ought to listen to the detail. I say that for those who have perhaps not followed it as closely as some of us. Thirdly, and most shamefully, the green deal fails the basic test of fairness, as the poorest households will get the least help. The constituents of mine who, like some of your constituents, Mr Deputy Speaker, and those of other hon. Members, shiver under blankets every winter will not be reassured by the coalition placing the responsibility for tackling fuel poverty with the energy companies. Those households, who have the most to gain from decent insulation and lower bills—I do not doubt that Members across the House are committed to solving this problem—should be the Government’s first priority, but instead they have been left until last.
Finally, I come to an important question on which we have not been given enough detail: what about consumer rights? If the work under the green deal is botched, how can consumers get redress? If the projected savings do not add up to the value of the loan over 20 years, who will pay the shortfall? What guarantees can Ministers offer consumers that they will not be saddled with debts, especially when they buy a house with a green deal loan already in place?
The Secretary of State talks with passion about stopping cowboys getting in on the deal, but his Government have abolished Consumer Focus, the watchdog that has successfully taken up consumer issues with the energy companies. No detail on consumer redress is available to us as we debate this Bill on Second Reading. People are rightly asking these questions and even where Ministers are coming up with answers those answers are not very reassuring. We simply need more detail. We are expecting about 50 pieces of secondary legislation after the House has made its decision on the Bill tonight, on Report and on Third Reading.
Stephen Gilbert
The hon. Lady seems to be “doing a Hillier”, snatching embarrassment from the jaws of defeat. We have heard real detail from the Secretary of State today on minimum energy efficiency standards for the private rented sector. Is it not a bit churlish of her not to welcome the detail that we have heard on the private rented sector, which has been called for by many external organisations?
Meg Hillier
That tells us all we need to know about the relationships in the coalition. If the hon. Gentleman, a Liberal Democrat, believes that what we heard from the Secretary of State today is detail, he perhaps needs to look again at the Bill. The detail is missing. The Secretary of State is keen to talk about the Bill with passion but he is not giving the answers. We are waiting for detail on the 50 pieces of secondary legislation, but we have seen none at all. I lay this marker down for the Secretary of State that in Committee we will seek further detail on many of these important issues and others—
Meg Hillier
The Minister of State says from a sedentary position that that is unusual in Committee—
Meg Hillier
I’m not your love, matey, and I suspect someone else might find that surprising, too.
It is important that we get the detail in Committee and I make that point for a good reason. The Government have form on not giving answers in Committee. The Bill has been in the other place and so we might have expected it to be better. We gave it a fair wind and we would still like to see it succeed, but we need more detail before it can do that.
There is a yawning gap between Ministers’ rhetoric and their actions and it grows day by day. In public, Ministers talk about being the greenest Government ever, so why have they called the Climate Change Act 2008 “red tape” and placed it in a review of what they call “burdens on business”? Ministers might huff and puff and say that the Act is safe in their hands, and I do not doubt the commitment of the DECC team, but why then is it in the red tape review? Perhaps they need to talk to other members of their Government.
Why have Ministers ended the commitment to zero-carbon homes? That fact caused the WWF to resign its place on the working group as the decision was so out of the blue. Why will the green investment bank not be up and running for two more years? Allegedly, the money to fund it is coming from Britain’s stake in a uranium enrichment company, URENCO, which the Financial Times suggests is in doubt.
There is an elephant in the room and we all know what it is. The Energy Secretary has had his eyes on a prize other than reducing carbon emissions. I know that he has had to pull himself away from the detail of the Bill in recent days to attack his coalition partners by article, letter and leak, and it is a shame that he has had to do so because—to give him credit—it might be a better Bill if he had applied himself to it. We also know that the demands of the alternative vote campaign have, for some reason or another, taken up much of his time when he might have been meeting with green groups, consumer groups or businesses that would have told him what a mess the Bill was and how to improve it. There is still no excuse, when he is backed up by the gold-standard civil service of this country, to come to the House with this dog’s breakfast of a Bill. It is weak on specifics, clouded in uncertainty and built on such shaky foundations that few can have confidence in its standing up to scrutiny. We want the Bill to succeed, but we have no detail and no plan from the Government about how it will be implemented.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I agree with my hon. Friend that there is still much to do before the Government can claim to be the greenest ever. There are also significant gaps in the Bill. One example from my constituency concerns a community hydro project in Saddleworth that might not go ahead because of the anomaly in the current legislation, which is not addressed by the Bill, that prevents it from securing the higher feed-in tariff rates. Surely that is something we should be encouraging.
Meg Hillier
That is another example of the Government’s dither and delay in making decisions that can have perverse effects on the ground.
Andrew George
If the hon. Lady does not mind, I will sidestep the disappointingly partisan nature in which she has engaged in the debate. I am genuinely confused. She appears to endorse the principles behind the Bill and, quite understandably, is expressing some anxieties about the details. That is certainly a matter for debate in Committee. Will she urge her colleagues to vote for or against Second Reading?
Meg Hillier
I think the hon. Gentleman wants to know whether he can get home early for tea tonight.
Let me reiterate: we set out that we wanted to give the Bill a fair wind, and I personally made that clear to the Secretary of State. It builds on ideas and work that were carried out by the previous Government and it needs to work to deliver the emissions reductions that we need in this country to meet our targets. It is light on detail, however.
John McDonnell (Hayes and Harlington) (Lab)
I think the tenor of the argument in the House is that the whole House wants to see the Bill succeed, but there is an issue with the delegated legislation and with its range. May I suggest that those on the two Front Benches meet at some stage to discuss how that can be dealt with so that we can have a constructive debate as well as holding the Government to account? We all want the Bill to succeed.
Meg Hillier
I am in discussions with those on the Government Front Bench. When I asked to see draft secondary legislation so that we could be comforted that it would deliver the securities we have been asking for if the Bill was passed, I was told in a letter from the Secretary of State that that would not be possible until the primary legislation had been passed. I live in hope that the Secretary of State—he is a man who believes in this issue; I do not doubt his commitment—and I can continue to have a dialogue.
John McDonnell
Even if the delegated legislation comes after the Bill is passed, may I suggest that there is a discussion about evidence sessions on it and some form of progress report on the Floor of the House so that there can be a wider ranging debate?
Meg Hillier
My hon. Friend makes an excellent suggestion, which I have also made to the Secretary of State. I am sure that with the support of the House the Secretary of State will see the good sense in that suggestion and I hope he will talk to officials about how they can ensure that we facilitate it.
Overall, climate change is too important to leave to the market, and that is one of the problems with the Bill. The market and the market alone will decide. We need a strong Government to lead the fight against global warming and fuel poverty, but I fear that instead we have a Government who are at war with themselves.
Mr Tim Yeo (South Suffolk) (Con)
I begin by drawing attention to my entry in the Register of Members’ Financial Interests.
I would very much like to find something nice to say about the speech that has just been delivered by the hon. Member for Hackney South and Shoreditch (Meg Hillier). I listened carefully for 25 minutes and I could not really say that it made any serious contribution at all to the debate. It was extraordinarily churlish in tone and very ill-judged. If ever there was an issue that cried out for a bipartisan, long-term and constructive approach, it is energy policy and climate change. That was wholly lacking from every sentence of the hon. Lady’s speech.
I warmly welcome the Bill, which is a big—and overdue—step in the right direction. I agree that some details remain to be filled in, but no doubt they will be addressed in Committee. I want to comment briefly on four aspects of energy policy that relate to the Bill. The first, of course, is energy efficiency. The Bill is especially welcome because of its intense focus on energy efficiency, which has always been the Cinderella of energy policy. I have always found that to be extraordinary—it is truly the no regrets policy. Even people who do not accept that climate change is a threat to the conditions of climate stability that have prevailed in the very recent history of our planet, thereby allowing one of the most recently arrived species, human beings, to proliferate in number and enjoy phenomenal and unprecedented success, and who see no advantage, either environmental or economic, in moving to a low-carbon economy can see the merits of greater energy efficiency, which has economic as well as environmental advantages. Those economic advantages accrue to households, rich and poor alike, and to businesses.
The green deal, which is the centrepiece of the Bill, is an excellent concept, even if there remain some areas of its implementation that we would like to know more about. The principle that energy efficiency measures can be financed through savings on fuel bills is a good one that is attractive to consumers. In practice, however, although most of the energy efficiency measures needed have a large and fast enough payback to meet the golden rule to which the Secretary of State referred-that instalment payments for the improvements will not exceed the cost of the savings made-there will be some measures that probably do not come into that category. I hope therefore that the Government will recognise—not necessarily in the context of the Bill, but soon—that some further incentive might be needed to improve all the housing stock in this country. I urge Ministers, as I have before, to explore more fully how discounts on council tax could be used to encourage faster progress to a comprehensive energy efficiency process. Those discounts could even be introduced on a revenue-neutral basis.
Chris Huhne
Powers for councils to do that are already on the statute book. A number of councils have introduced incentives through council tax, which have been very effective. We do not need new powers to do that, and I think that a lot of the most go-ahead councils will do it.
Mr Yeo
I am grateful to the Secretary of State for that point. I hope that means he will encourage the use of those powers in areas in which a significant number of households are not able to use the green deal measures as a sufficient mechanism and incentive to get the improvements that are needed. The same approach could be adopted for business premises by giving discounts on business rates.
Smart meters might also help. Helping consumers to understand the costs of energy and how they can better manage their energy consumption could be very valuable, but I hope that the Government will take a close interest in the roll-out of smart meters. There is a risk that the whole initiative might turn sour if the meters do not get off to a good start, if mistakes are made or if consumers become suspicious that they are going to benefit suppliers more than consumers.
Nicky Morgan (Loughborough) (Con)
Would my hon. Friend agree with a very simple suggestion that was put to me by a constituent about smart meters—that we need the information to be understandable to the average consumer who is not an energy expert? If the meter told the consumer how much energy had been consumed and its cost, that would mean a lot more than complicated numbers and figures that one cannot understand if one is not an expert.
Mr Yeo
The test of smart meters will be how user-friendly they are at giving people information that is relevant to their decisions in a manner that they can easily understand. That includes older people who might not have as much facility for modern information technology communications.
On security, I welcome the duty placed on Ofgem to report on the adequacy of future capacity. Demand for electricity will rise substantially not just because of economic growth but because several of the measures designed to reduce greenhouse gas emissions involve the greater use of electricity—for example, for transport and heat. We shall need a lot more generating capacity and the lead times for new capacity are such that decisions taken in this Parliament are absolutely crucial. A further dash for gas might be the quickest and cheapest way to expand capacity, but it would mean becoming even more dependent on gas imports, threatening a different aspect of security of supply. Even in a world in which gas can be imported from a large number of countries and in which we have the possibility of perhaps abundant supplies of shale gas from Poland and the United States, I do not think that anyone would be comfortable with our relying more on imports.
Furthermore, unabated gas emissions are so much higher than the target for emissions that the Committee on Climate Change quite rightly set for 2030 of 50 grams per kWh that a dash for gas could lead to expensive stranded assets in the 2020s unless we achieve carbon capture and storage, which is by no means a certainty. Yesterday, in its excellent review of renewables the committee reminded us, as it helpfully and regularly does, that nearly all new generating capacity must now be low-carbon. After all, electric cars and electrically heated houses are not going to cut greenhouse gas emissions if the extra electricity is generated by coal. The committee’s review is welcome as a common-sense judgment on renewables. It reaches the unavoidable conclusion that even with an enormous increase in offshore wind and solar power there remains an absolutely essential role for nuclear. We therefore need from the Government today, and regularly in future, an assurance that as soon as any safety issues raised by Professor Weightman have been addressed, every possible assistance will be given to ensure that new nuclear capacity comes on stream as soon as possible.
In the context of how more low-carbon electricity can be produced, a more explicit acknowledgment is needed of the risks of blithely assuming that carbon capture and storage will work viably at scale. With the abundant availability of coal in many countries, lots of coal is going to be burned in the next few decades. It is beyond doubt that the single technological breakthrough that the world most urgently needs is carbon capture and storage. There is huge potential for it, but I have not been encouraged by the fact that when the UK Government offered £1 billion in a competition, there was only one bidder at the end of the process. I therefore urge that more attention be given to issues such as waste-to-energy, which could provide a renewable source as some unrecyclable waste will be always be produced by a growing economy.
Mr Yeo
I am running out of time, I am afraid, and I think I get only two goes at giving way. I am sorry.
It is clear that whatever the precise mix of our portfolio of electricity generation, the cost of secure, low-carbon electricity will be higher in future—possibly much higher—although the Government have rightly pointed out that reliance on fossil fuels might turn out to be even more costly by 2030. Last week, in an evidence session held by my Select Committee on Energy and Climate Change, I asked Ministers what the Treasury’s assumptions about oil prices would mean if they were translated to gas prices, and they were a bit reluctant to explain what they thought gas prices might reach. Clearly, fuel poverty is going to be a key challenge in the next few years and the solution is not to divert investment into cheaper but higher-carbon power stations, but to ensure that household incomes are sufficient to meet unavoidable increases in fuel bills.
Equally important is the need for more low-carbon capacity. Tinkering with UK or European Union targets for the exact proportion of energy to be achieved from renewable sources by this date or that date is of little relevance. The only real question is how Britain, in an increasingly energy-hungry world in which China and the other BRIC countries—Brazil, Russia, India—will be consuming huge amounts of energy, can attract the funds needed to finance massive new capacity in all kinds of low-carbon electricity. The Intergovernmental Panel on Climate Change has reported today that £15 trillion will be needed in the next two decades to develop renewable energy. To attract our share, we must make sure that returns on investment in electricity generation in Britain are high enough and reliable enough. I urge Ministers to recognise that every policy change runs the risk of raising the cost of capital because each switch increases uncertainty in the minds of investors. Individual decisions such as the revision of feed-in tariffs for large-scale solar projects are understandable and perhaps unavoidable, but their impact on investors is harmful and will prove to be expensive in the long term. It is vital that the electricity market reform package promotes stability in the framework of incentives that are designed to promote low-carbon electricity. I urge Ministers to recognise in all policy statements the danger that investment in new capacity in this country is not an entitlement. We live in a genuinely global economy. Investors can easily migrate to places where returns are more secure, where planning delays are shorter and where policy is predictable.
There is a lot more in the Bill, not least the green investment bank. The bank’s contribution to funding some of the investment needed could be considerable if the Treasury allows it. In view of the imminent decision about the fourth carbon budget, I want to close by making a strong plea to the Government to accept the Committee on Climate Change’s recommendations. The Government’s credentials as the greenest Government ever will be enormously strengthened if the carbon budget put forward by the committee last December for the 2023-27 period is accepted. A budget for a period more than a decade away might seem a remote concept, but carbon budgets are much less susceptible to last-minute tinkering than financial ones. Carbon emissions in the middle of the 2020s will be affected by decisions about new electricity generation capacity taken during this Parliament.
Our accepting the committee’s fourth budget will show that Britain wants to lead the way to a low-carbon world. I understand the anxieties about our competitive position, but I believe that those risks are relatively small and are confined to the short and medium term. If the world really means to decarbonise by 2050, and I believe that it does, the countries that lead the way will not only be doing the right thing environmentally, but will reap a huge financial reward.
Let us look east at what China is doing in making huge strides towards a more sustainable, low carbon transport infrastructure and energy system. In the international climate change negotiations in the 2020s it might be China that takes the hawkish stance on greenhouse gas emissions and the measures needed to reduce them, and it will do so from a position of greater strength than many countries in the west. It would be tragic if Britain, one of the first places where the science of climate change was properly understood, were not in the vanguard of the world’s response. I urge the Prime Minister to overrule the reported resistance of the Secretary of State for Business, Innovation and Skills on this point, and I commend the Bill to the House.
Joan Walley (Stoke-on-Trent North) (Lab)
I shall start exactly where the hon. Member for South Suffolk (Mr Yeo), who so ably chairs the Energy and Climate Change Committee, just finished. The whole debate on the Bill is underpinned by the Climate Change Act 2008. Reference was made earlier to new legislation. It was the previous Government who passed that Act.
I agree that the fourth carbon budget is critical. I do not know whether I believe reports in The Guardian, but if the Government are to have any chance of being the greenest Government ever—there is some doubt and dispute about that—the Cabinet must accept in full the recommendation from an independent body that was set up for that purpose. When the statutory instrument comes before the House in June or whenever it comes, that must be agreed, or much of the debate on the Bill today will be irrelevant. So I hope the right Cabinet decision will come out next week or whenever it is made.
It is crucial that the Bill succeeds, but it is very short on detail. Given the comments of my hon. Friend the Member for Hayes and Harlington (John McDonnell), proper parliamentary scrutiny is needed and there can be a role for Select Committees to examine the cross-cutting aspects of the Bill, particularly in relation to the issues that have been mentioned, including the role of the Department for Business, Innovation and Skills. That should be borne in mind when we get to the Committee stage. We have seen what happened to amendments in the other place. They are not before us now for our consideration. A huge amount of work needs to be done very quickly.
My test of the Bill is whether it will reduce fuel poverty around the country in constituencies such as mine, Stoke-on-Trent North. In my constituency, 59% of people in private rented sector housing, 44% of owner-occupiers and 75% of pensioners living in private sector accommodation are in fuel poverty, despite the huge benefit derived from the Warm Front programme. It is crucial that the detailed measures in the Bill deal with that and the implications for public health.
What will the Bill do to deal with the effect of the comprehensive spending review of October 2010? We have already heard about the major reduction in Warm Front funding, and the intention that the programme will be phased out by 2012-13. Will the measures in the Bill offer a fair and proportional replacement strategy? I am conscious that the shift from the Warm Front programme towards the green deal has put many installer jobs at risk as the scheme is wound down. I ask the Secretary of State to give some attention to that. I refer to installers in my constituency and the fact that the Warm Front scheme closed and then started again this year. That has serious repercussions and needs to be addressed.
There are concerns about the green deal. We need greater clarity and certainty about the scale of ambition, the take-up and the long-term nature of the green deal so that businesses can feel confident about investing in the capacity and the infrastructure necessary to deliver it. Reference has been made to the interest rate. That will be a key driver in take-up of the deal. The lower the interest rate, the more attractive it will be. When my own Select Committee went to Germany, we saw how that had been addressed. I am disappointed that so far there does not seem to be a direct link between the green investment bank and the green deal. If interest rates are not at about 2%, difficulties will arise.
Another important topic is energy efficiency measures. I chair the all-party lighting group. We need to consider not only energy efficiency in the traditional sense, but issues such as lighting. Windows are another aspect of industry that has been referred to. A briefing that I received from Wolseley sets out other technologies linked to jobs and to insulation, heating controls, energy pumps and water management. All these contribute to the wider agenda that we need to address. I am not sure whether the detail of the Bill takes account of that.
Citizens Advice has flagged up concerns, particularly in relation to clause 18, which would empower the Secretary of State to modify the energy supply licence to allow an energy company to disconnect a customer for non-payment of green deal payments. Currently, 8.8 million energy consumers in the UK rely on pre-payment meters. Citizens Advice is worried that those consumers have received little consideration in the development of the Bill. It must clarify how green deal payments will be collected from people with pre-payment meters, who are among those at highest risk of fuel poverty. It is not clear how customers’ meter credit will be allocated against green deal payments and arrears, fuel arrears payments and payments for ongoing energy supply. That is another cross-cutting social consideration that the Bill must address.
I shall deal briefly with the private rented sector and chapter 2. It is an important part of the Bill and there have been many interventions referring to it. Research commissioned by the Chartered Institute of Environmental Health, of which I remain an honorary vice-president, shows that the annual cost to the NHS of private rented homes with excess cold is £145,335,000 nationally. In my region, the west midlands, the cost is high, and we need to consider how we are addressing that, linked to the new proposals for public health and those in the Localism Bill. This is a further aspect of the cross-cutting agenda.
I am concerned that making regulation conditional on a review increases the likelihood that landlords will not act voluntarily before 2015. I am not sure that the Government have got that right. Further consideration is urgently needed. The Bill provides for a minimum standard for commercial rented properties. The Government have not explained why that is appropriate for the commercial sector but not for the domestic sector. MPs, including me, have had a briefing from the Green Building Council on the issue, which needs to be addressed before Royal Assent.
The bottom line for me, which has been referred to in interventions, is that the Bill must set a deadline of no later than 2016, after which it will be an offence for a landlord to re-let or market for rent a property where the energy efficiency rating is band F or G. It is vital that we ensure that properties that do not meet energy efficiency standards are not rented out.
On the energy company obligation, the Government should show that they will be able to deal properly with the gap between what the green deal delivers and what is needed. We do not have the detail of the energy company obligation, and clear information is needed. The coalition agreement was clear that there should be no public subsidy for nuclear. One of my concerns relates to clause 102, whereby, if anything unexpected happens, such as an accident at a plant or problems with stored waste, the Government could become liable for the additional costs. The coalition agreement stated that there will be no public subsidy for nuclear, and it is incumbent on the Secretary of State to set out exactly what that means, because my concern is that clause 102 could represent a hidden subsidy. There must be total transparency on that.
On low carbon budgets, no amendment was made in the other place, but that needs to be considered again. There is some support for the memorandum of understanding with local councils, but we are nowhere near getting on the face of the Bill what we need in relation to local carbon budgets. There is wide support from more than 60 organisations for a warm homes amendment, which must be addressed and brought forward in Committee.
I genuinely want to see Parliament play a role in the whole climate change agenda. I desperately want to see action that does what it says for those experiencing fuel poverty. I want the parliamentarians and Select Committees of this House to play a real role in cross-cutting and hope that as the Bill proceeds, despite its many shortcomings, there will be an opportunity to make at least some improvements.
Martin Horwood (Cheltenham) (LD)
I welcome the opening remarks made by my right hon. Friend the Secretary of State, particularly the non-partisan tone in which they were made. I have to say, ever so gently, to the hon. Member for Hackney South and Shoreditch (Meg Hillier) that when I was an Opposition spokesman on energy and climate change I took the time to praise her right hon. Friends the Members for Lewisham, Deptford (Joan Ruddock) and for Doncaster North (Edward Miliband), when I thought that the legislation they were promoting was good, and when they were honestly trying to pursue climate change objectives. I do not think that making relentlessly partisan and negative speeches is terribly constructive. I will just let her reflect on that.
The hon. Member for Brent North (Barry Gardiner) made a much more constructive speech and asked an important question about meeting carbon reduction targets in future, particularly the acceptance of the fourth carbon budget recommended by the Committee on Climate Change—a theme taken up by other hon. Members as well. I am sure that my right hon. Friend the Secretary of State was just displaying his notorious tact and reticence by not stating more fully that he was going to press for the acceptance of that carbon budget. It is absolutely crucial that we accept the carbon budget and make it clear that we are on a clear trajectory to meeting the ambitious climate change targets that all parties agreed to in the Climate Change Act 2008.
I warmly welcome many aspects of the Bill, which will deliver an important part of the Government’s green agenda. The ministerial team is to be congratulated on 95% of it. The green deal is a radical, imaginative and ambitious plan. It could deliver energy efficiency not just haltingly to a few thousand homes, as previous energy efficiency programmes have done, but to millions of homes, and perhaps even tens of millions. That will represent a step change in energy efficiency in this country and make a substantial contribution to reducing the UK’s carbon emissions. The additional measures on smart meters and offshore electricity transmission regimes are also very important and much to be welcomed.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Gentleman and the Secretary of State have talked about step changing and game changing. Does he not agree with a number of Members on both sides of the House, but particularly Opposition Members, that a crucial element about which we are not yet clear is the interest rate that will be payable? We need to know that in order to ensure that the change is as significant as he claims it will be.
Martin Horwood
I am sympathetic to the hon. Gentleman’s point, which is important, but the genius of the green deal is that it will use market mechanisms and a competitive arena in which providers will compete to provide the best deal, which I hope will help drive down the interest rates offered by different financers and providers.
Barry Gardiner
Does the hon. Gentleman accept that the Department of Energy and Climate Change has predicted that the interest rate would be 11%, which has to be factored in, particularly when dealing with the fuel-poor?
Martin Horwood
The hon. Member makes an important point, but we cannot always predict those interest rates, because we do not know what the situation will be. We must look at the situation in the round.
The additional measures in the Bill are very welcome, but there is one that disappoints me in clause 102, which the hon. Member for Stoke-on-Trent North (Joan Walley) has already mentioned. It deals with the vexed question of the decommissioning and clean-up of nuclear power stations. Cleaning up the last generation of nuclear power stations costs the taxpayer £1.5 billion a year, and it would be a great shame if we were to risk repeating any part of that mistake. This reopens an issue that I thought had been settled in the Energy Act 2008. I remember the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) and I, as Opposition spokespeople, trying to outdo each other in finding the loopholes in the funded decommissioning programme arrangements in that Act, and the long-term commitments on funding decommissioning that the nuclear industry might try to wriggle out of in order to shift the risk on to the taxpayer. With all due credit to the ministerial team of the time, that was tricky because the legislation was quite tightly drawn. Section 48 even allowed the Secretary of State to amend funded decommissioning programmes, at either their own or the operator’s suggestion, to take account of unforeseen circumstances.
But lo, we have in the Bill a suggestion that the Secretary of State should promise not to amend those decommissioning arrangements in advance when the decommissioning arrangement is being set up, either “in a particular manner” or “within a particular period”. That seems a rather strange thing, because clearly the subsequent amendment of those arrangements would be a matter of negotiation. The Liberal Democrats have discovered quite a lot about negotiation in the past year, and now think, on balance, that it is not a good idea to give away the negotiating position too early in the process. I think that that applies to Secretaries of State as well.
The explanation for that provision is apparently that it is to reassure investors, but that is a rather strange statement. In a way that is a bit of a give-away by the Government, because to reassure investors they are presumably trying to reduce the risk. There are only two possible explanations for that. Either the Government are actually reducing the risk or they are trying to shift it elsewhere. The nature of unforeseen circumstances, of course, is that they are unforeseen. Although I attribute many gifts to my right hon. Friend the Secretary of State, clairvoyance is not one of them. We cannot know what those unforeseen circumstances will be, any more than the Japanese Government could. Therefore, it is only the transfer of that risk that is likely to take place. It is transferring the risk straightforwardly from the operators to the taxpayer. If that is not against the words of the coalition agreement’s promise not to subsidise nuclear power, it is certainly against its spirit.
If we need an extreme and sobering warning of what might happen in such situations, we need only look at what is happening in Japan right now. The operator of the Fukushima nuclear power station, TEPCO, has now asked formally for Government help to fund the compensation for the 80,000 people who are still evacuated from their homes in the area, which it is estimated will cost around £61 billion in total.
Chris Huhne
My hon. Friend should recognise that the clause intends not only to provide more certainty for investors, but to recognise that there might need to be changes. Those changes would not necessarily be downwards, either; they might well be upwards, in circumstances that would have been set out clearly in an agreement. That applies to costs as well, so, far from saying that the measure would drive a coach and horses through our commitment to no public subsidy, I am saying exactly the opposite: it puts flesh on our commitment to no public subsidy for nuclear.
Martin Horwood
I did not say that the measure would drive a coach and horses through our commitment to no subsidy. I am sure that our commitment to it is absolutely intact, but the clause seems to insert a rather large crack in the edifice. The arrangement that my right hon. Friend mentions—in which the operator and the Secretary of State may agree to the necessity of some amendments, which might be upwards or downwards —is in the existing legislation. The difference between that and the clause under discussion, however, is that in the existing legislation the final decision rests with the Secretary of State, and in the clause before us the Secretary of State gives away that right in advance. That seems to represent poor negotiation.
To return to the situation in Fukushima—
Martin Horwood
I will not—or perhaps I will; I have a few minutes to spare.
Barry Gardiner
I am grateful to the hon. Gentleman. Does he accept that the DECC’s proposals for a “contract for difference” feed-in tariff are precisely the subsidy to the nuclear industry that he counsels his right hon. Friend not to introduce?
Martin Horwood
I am not sure about feed-in tariffs, but if the hon. Gentleman is talking about the floor price for carbon, that certainly risks inadvertently subsidising the new, and indeed existing, nuclear industries. Perhaps a windfall tax on the nuclear industry might help to compensate for that, because the floor price for carbon is an important policy for operators.
To return—for the final time, I hope—to Fukushima and the example in Japan, the compensation bill looks likely to be about £61 billion for the 80,000 people who have been evacuated from their homes, and for the damage to agriculture, businesses and so on in the area. That is a very extreme case, but it is not impossible to imagine much smaller disasters—natural shocks to the system, terrorist attacks or whatever—that might deliver similarly unexpected large bills.
The situation in Japan has resulted in its Government announcing today that they will examine their energy policy from scratch, with a brand new emphasis—surprise, surprise—on renewables and energy efficiency, and almost certainly less emphasis on nuclear. That seems to me a wise decision to take, in the circumstances.
I am pleased that we are emphasising energy efficiency before we are forced to do so, and it is important that the Government promote renewables and energy efficiency as cornerstones of their energy policy, but I would not want energy subsidy for nuclear to creep into that mixture, and it seems to me that clause 102 is unnecessary. As the Secretary of State says, it provides reassurance to investors, but it provides very little reassurance to me or to the taxpayer.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to follow the hon. Member for Cheltenham (Martin Horwood). I have fond memories of debating with him the glorious merits of the south-west regional spatial strategy, and I am sure that you, Madam Deputy Speaker, as a fine Bristol Member of Parliament, have your own thoughts on that, too.
I welcome the notion of the Bill, because it is difficult to oppose in principle a Bill that intends to increase energy efficiency, improve energy security and ensure greater competitiveness for energy companies in the UK, but, as my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) said, this Energy Bill is such a wasted opportunity. It treads water so much that British industry and enterprise, in a field where we could lead the world, will be left behind by other countries, and the poorest and most vulnerable households, which face massive increases in fuel bills over the next few years, will not be helped quickly enough. I want to focus on two broad themes, and in particular on where the Bill does not provide enough detail—a recurring theme of this Second Reading—or enough ambition.
Let me outline the huge potential that we have in Hartlepool, my area, and the wider Teesside and north-east areas to lead the world in modern energy production and distribution. In my part of the world we have always been at the cutting edge of energy infrastructure and technology. The docks and the railways in Hartlepool and elsewhere in the north-east were built in the 1820s and 1830s to transport coal from the south Durham coalfields —I see my hon. Friend the Member for Sedgefield (Phil Wilson) seated on the Front Bench—to London, and the world’s first bulk oil tanker for Standard Oil, the Marex, was built at west Hartlepool docks in 1892.
My area has the potential to lead the world in energy in the 21st century, as it did in the 19th century. Our assets in the region are second to none. The largest heavy industrial area in the country is on Teesside, and we already have a cluster of world-class petrochemical, energy and industrial biotechnology plants. In my constituency I have a nuclear power station with the prospect of a replacement in the next decade, the fourth largest port in the UK, a steel industry specialising in construction and energy infrastructure, and a world-class advanced engineering industry.
The port of Hartlepool is the closest such facility to the Dogger bank, the location in the North sea of the biggest offshore wind project this century, which could provide one quarter of Britain’s energy requirements by the middle of this century. We also have a highly skilled and flexible work force who can innovate and adapt their engineering expertise to design and manufacture new forms of energy production and distribution for the 21st century.
In my constituency PD Ports has introduced the concept of “Chain Reaction”, the Teesside renewable energy supply chain cluster, where firms work together in Hartlepool and in the wider Teesside and north-east areas to provide facilities and skills for other companies that wish to invest in the energy industry.
We have other ambitious companies determined to grow and succeed, such as JDR Cables and Heerema Hartlepool, which are located on land provided by PD Ports and supply the components for offshore wind developments. Tata Tubes in Hartlepool manufactures pipes that sit on the bottom of oceans throughout the globe, allowing oil and gas to be extracted, transported, processed and distributed to the highest possible specification.
Our region has identified a £6 billion pipeline of commercial investment for the next decade with regard to energy policy, but we have to move quickly if we want to lead the world in this field, because other nations are already stealing a march on us. The Pew Environment Group states that the UK is losing the race to be the leading economic powerhouse of the global green economy. Last year we declined from third in the world in terms of investment in green growth to 13th, behind Brazil, Mexico and Singapore.
Frustratingly, Singapore’s energy industry is similar in many respects to Teesside’s: centred on oil refining, with successful spin-offs into chemicals, oilfield equipment manufacturing, shipping and logistics. Singapore is moving much more ambitiously than the United Kingdom, particularly in new growth areas such as solar power, fuel cells, biofuels and energy management, and it aims to increase the value-added from its energy industry from $20 billion to $34 billion in four years and to triple employment in the sector in little over five years.
Closer to home, Rotterdam is pushing itself as the energy port of Europe. The city’s port authority has aspirations to become the CO2-free hub of north-west Europe, and about €6 billion will be invested in the port authority in the next few years to help realise that aspiration, with an emphasis on hydrogen production, supply and distribution.
Given what other countries are doing, the possibility of a missed opportunity is particularly frustrating, because we in this country remain very well placed to lead that global industry. Pew Environment Group estimates that $2.3 trillion could be invested in clean energy infrastructure in the next decade, and, although much of the attention is focused on the east, on China and the Pacific rim, Pew concludes that the UK, the US and India are the three countries with the most to gain from what it terms the
“adoption of aggressive clean energy, when enhanced policies are compared to current policies.”
I do not see the ambitions of my area, Hartlepool and Teesside, matched by the Government’s actions in the Bill. The rhetoric is often positive and encouraging, but the Bill demonstrates that the Government are merely providing warm words. After so much rhetoric about the green investment bank, there is nothing in the Bill to help it to move forward successfully and quickly. Businesses in the field are requesting a clear vision for the road ahead, with certainty and stability to allow for large-scale investment decisions, but that is not happening. Uncertainty about the green investment bank, one-off raids on small and medium oil and gas explorers in the Budget, and further delays to round three of the Crown Estate project to increase offshore energy generation are undermining confidence and stalling investment decisions.
I cannot stress this enough: we would miss the opportunity of our generation if we failed to grasp the huge potential that this country, not least my constituency and region, possesses. I fear that in five, 10 or 15 years’ time we in this House will be reflecting on how we could have been pioneers of a noble and groundbreaking world industry, but are instead rueing the loss of jobs, ambition, wealth, social equality and climate stability.
The second theme that I wish to explore is the pressing need to improve the energy efficiency of much of our housing stock, particularly in the private rented sector. As the Secretary of State articulately explained, there are more energy-inefficient properties in the private rented sector than in other tenures. For instance, privately rented properties are much more likely to have inadequate loft and cavity wall insulation, and less likely to have double glazing or a condensing boiler. The landlord’s energy savings allowance, an incentive introduced by the last Labour Government, had considerable merit, but—I must be honest—a very disappointing take-up. The Secretary of State mentioned that over 40% of tenants in F-rated and G-rated homes in the private rented sector are fuel-poor, and I imagine that there is a big risk that that proportion will get worse as energy prices increase. In this context, the Secretary of State’s announcement about minimum efficiency standards is very welcome, although I do not understand why it was not announced during the Bill’s passage through the other place.
Questions still remain about certain elements of this aspect of the Bill, particularly whether big and numerous Government amendments will be needed to put in place their ambitions in chapter 2. The Bill’s impact assessment acknowledges:
“It is assumed that landlords will not act on primary powers”
provided in the Bill. It concludes that
“no benefits are expected to arise from primary legislation”.
In that case, what is the point of the provision? I understand the need for secondary legislation in this field, but why cannot we act more quickly to ensure that tenants are helped now? The powers in the Bill are very weak, and the prospect of secondary legislation is so far into the future as to be completely meaningless to tenants in my constituency.
What is the point of having a review of energy efficiency in the private rented sector that is not required to report until 1 April 2014? And under the powers in clause 43, regulations relating to energy efficiency for tenants mean that improvements may come into force no earlier than 1 April 2015. We all know that energy efficiency is bad in the private rented sector; even if we did not, the Bill’s impact assessment tells us so. Why can the Government not move faster to do something about it now, instead of making somewhat vague promises about acting in three or four years’ time?
Dr Whitehead
Will my hon. Friend reflect on how landlords are going to be found under the arrangements that have been announced? Will he also reflect on the fact that the Government recently removed the secondary legislation that provided for the creation of a national landlords register for homes in multiple occupation, by which landlords could be found for energy efficiency purposes?
Mr Wright
I remember with great affection going to Southampton to see my hon. Friend’s constituency and talking to people who lived in homes in multiple occupation. I was privileged to be a Minister with responsibility for the private rented sector in the last Labour Government. We put in place the Rugg review, which recommended to us the importance of a landlords register. It is incredibly disappointing that that important database of information will not be put in place, as it could have helped to implement this move much faster.
I welcomed the prospect of an Energy Bill in this parliamentary Session. In such a Bill the Government could have achieved so much to help British industry, particularly in my region, to become world leaders in this growing sector, and they could have been much more resolute in providing help to more vulnerable households, particularly in the private rented sector. The fact that they have not done that is deeply frustrating and disappointing. I fear that this missed opportunity is something that we will regret for decades to come.
Dr Phillip Lee (Bracknell) (Con)
Let me begin by congratulating Members on their contributions, particularly my hon. Friend the Member for South Suffolk (Mr Yeo), who made a very interesting speech, although he had the good fortune to follow the shadow Secretary of State, whose speech was terribly negative. If there is one thing that energy and climate change policy needs, it is some cross-party agreement. Dealing with these challenges does not fit in with five-year parliamentary terms; there needs to be agreement and understanding on policy over decades.
Barry Gardiner
Does the hon. Gentleman believe that his party should reaffirm the statement by the Committee on Climate Change that there should be a 50% reduction in carbon emissions by 2025?
Dr Lee
My view is that these targets are extremely difficult to meet, partly because the energy policy of the previous Administration was woeful; admittedly, it improved when the Leader of the Opposition took over the position that the hon. Member for Hackney South and Shoreditch (Meg Hillier) now shadows. The hon. Gentleman knows that we are in a difficult position as regards hitting these targets, and that difficulty was not aided by the previous Government’s performance.
In the spirit of the Bill, I will try to speak within the generous time limit and save some energy. I am struck by the fact that the time limit is so long, because energy and the need to secure energy supply is one of the most important strategic challenges for our generation. We cannot have more hospitals, schools, aircraft carriers or anything else provided by Government unless we have energy, so the subject matters very much. I want to speak primarily about the green deal, because that is at the heart of the Bill, but will move on to discuss energy generation and my thoughts and views on the technology of the future that, as a country, we should be backing.
The green deal is an ambitious plan, and the first of its kind in the world. I hear that Opposition Members want more detail, and of course it requires additional clarification that will no doubt come in Committee. The reality, however, is that this is the first time that such a scheme has been attempted. I am very proud of that and to support a Government who are introducing it. It will benefit homes and businesses, allowing them to save money. At the moment, saving money matters to individuals, to families, and, very much, to businesses. It is a tough environment out there economically, and if they can save money, all the better.
The green deal involves the introduction of a new financial framework that is subject to market forces. I say to those calling for details about the interest rates that we should wait and see and let the market dictate. We are talking about long-term energy products, particularly in the area of generation, and I would invest in that sector if I were in control of a sizeable pension fund because that would produce a return in the medium to longer term. I do not buy into the idea that interest rates will be driven higher by this scheme. It is “pay as you save”, and it will benefit people who are struggling with their bills. The loan is supposedly £6,500—I hear rumours that it may be slightly increased—and it will be made against the property, not against the individual; that is an important distinction. In the past, when we have tried to go down this policy path, we have worried about the loan going with the individual and the fact that those who are less able to afford it will therefore not take one out. The reality is that it will be attached to the property.
The second aspect is the introduction of the energy company obligation to replace the carbon emissions reduction target. As I understand it, it will target those who could experience fuel poverty and have homes that are difficult to insulate. I think that it was a Scottish Member who referred to the difficulty of insulating some homes. The idea in the Bill is to deal with those problems. In view of the fact that 25% of carbon emissions are thought to come from those very homes, it strikes me as an investment worth making.
There are estimates on the benefits of the green deal. I am always cautious about such estimates because they are always dependent on human behaviour. The Secretary of State referred to the situation of someone having a Brazilian wife, and the reality is that such estimates are not always accurate. However, it is suggested that the benefit to society will be in the realm of £8 billion to £9 billion. Fourteen million insulation measures are required, which could lead to an average saving of £550 per year on domestic bills. That will lead to an increase in manufacturing jobs. In my constituency of Bracknell, small and medium-sized construction firms are crying out for this kind of work. There will be no shortage of companies willing to do it. There will be an increase not only in manufacturing jobs, but in service jobs. If we hit 26 million homes taking up the scheme, the number of jobs in the sector may increase from 27,000 to 250,000. That is pretty good.
I welcome the changes to the Energy Act 2008 to ease the introduction of smart meters. A number of companies in my constituency, not least General Electric, will be pleased to hear about that. If smart meters function properly and are able to connect to the network—I know that there are problems with that—they will play an essential part in reducing energy usage. Ultimately, that is what this legislation is all about. I congratulate Ministers on making energy efficiency the key part of their first Bill, because that is the easiest way to reduce our carbon footprint. On a recent trip to Norway, I was struck that even though it generates huge amounts of energy, the first thing I was told was, “Phillip, the best thing that Britain can do is become more energy efficient.” I know that the same view is held in Sweden.
I am also pleased about the balance of powers between Government and the nuclear industry in regard to decommissioning. I am a strong advocate of nuclear power, and I found it depressing to hear yet another speech on the dangers of nuclear power from the hon. Member for Cheltenham (Martin Horwood). I remind him that, as yet, there has never been a proven death from nuclear power in the west.
Martin Horwood
I have on occasion made speeches about the dangers of nuclear power, but today’s was not one of them. I actually talked about the dangers of subsidising nuclear power through the use of clause 102.
Dr Lee
Forgive me. I thought that the hon. Gentleman said something about compensation to agriculture and people moving house. However, I shall move on.
The final part of my speech will be about energy generation. I commend the previous Government for their commitment to offshore wind, which was a strategically important decision. Given that we have shallow water in the North sea, I think that it was the right decision. I am not so sure about onshore wind, but offshore wind, for sure.
This country needs a sustainable energy policy. It needs sustainable sources of energy that are low carbon and, most importantly, secure. There is an increasing world population, which is going to hit the 7 billion mark earlier than projected. One does not have to be a doctor to know that that means that the 8 billion, 9 billion and 10 billion marks will be hit earlier, because that is what human beings do. That concerns me because it means that future wars on this planet will be fought over not just energy and fuels such as oil and gas, but also over food and water. This country has to get real. It has to realise that energy matters. Energy is associated with prosperity, as everybody knows. We cannot rely on how we have done things in the past, but must look to the future and work out how Britain can become as energy independent as possible.
I will mention two areas. The first is marine technology. The UK is surrounded by energy; water is just the medium that transmits that energy. Tidal power comes from the moon, and we have the Severn bore. Waves, particularly off Scotland, provide remarkable sources of energy. Why are we not concentrating on harnessing that energy? It strikes me as a no-brainer. Why is it that there are more renewables obligation certificates for tidal and wave in Scotland than in England? How is that paid for? I encourage the Minister to look at that, and I know that there is a review of ROCs at the moment. Why is solar so subsidised, and not marine? That was a decision by the previous Administration. Solar is subsidised nine times more than onshore wind. I know we are having some good weather at the moment, but I do not think that that makes sense in this country.
I know that the Government are reviewing low-carbon technologies and that £200 million will be allocated. I hope that they look at marine technology and do their best to support it. I think that it is an opportunity for us to lead the world. If one believes RenewableUK, it is an opportunity for us to generate 20% of our energy. I recognise the capital cost and the potential local environmental impact of the Severn bore project, but that one project could provide 12% to 15% of the UK’s electricity needs. We need to look at that again.
Andrew George
The hon. Gentleman is making a number of interesting points about the renewables sector. He is right that there are five ROCs for marine renewables in Scotland and three south of the border. That does not particularly help. The wave hub off the north coast of my constituency will be the first project of that commercial scale in the world. We clearly need to find a way forward, but how does he propose that we get parity north and south of the border?
Dr Lee
I thank the hon. Gentleman for that intervention, but I do not know the answer to that question. This is just another example of how Scotland is different from England, and I am getting somewhat frustrated by that.
I will quickly move on to new nuclear technologies. First, molten salt reactors eat nuclear waste and have no proliferation concerns. That is a no-brainer, so how come we are not pursuing it? Finally, I will talk about thorium, which is found in the cliffs of Cornwall and may well be in the hon. Gentleman’s constituency. It is also found in Wales. The greatest resource is in Norway, a relatively stable country compared with the countries that we get most of our energy from. Thorium is three times more abundant than uranium and does not produce any dangerous waste. Incidentally, that is why it was not pursued in the ’50s because it does not create the plutonium needed for nuclear weapons. China is now going big time on this, as is India. How come we are not? It strikes me as an obvious thing for us to go for. Doing so may satisfy my Liberal Democrat colleagues because it is safer to produce and does not produce any nuclear waste of note. It has certainly satisfied me because we can source thorium more easily.
In conclusion, at a time when Britain has significant economic challenges, finding ways to save energy is an obvious target. The green deal is fantastic for families, fantastic for individuals, and fantastic for businesses. That is why I am pleased to support the Bill. I hope that the Minister will give some thought to what I have said about energy generation.
Mr Mike Weir (Angus) (SNP)
I must confess that when the Secretary of State was at the Dispatch Box and talked about a golden rule, a slight shiver went up my spine as I remembered the last person who went on about that.
The hon. Member for Bracknell (Dr Lee) asked about the Scottish system of ROCs. It is different from England’s because the Scottish Government have emphasised the importance of renewables and have a target of 100% renewable energy. They have rejected new nuclear power stations, a stance that was endorsed by the people of Scotland only last Thursday.
I generally support the main aims of the Bill, and the Scottish Parliament has approved a legislative consent resolution in respect of some of it. I came to the Chamber intending to support the Government should it be pushed to a vote, but I listened to the Secretary of State and one or two points gave me pause for thought. In particular, when I asked him about clause 100, I found his answer very strange indeed. The explanatory notes state:
“This clause enables designations under section 1(7) of the Continental Shelf Act 1964 to be revoked, amended and re-enacted. This will provide flexibility in making arrangements about maritime boundaries with the United Kingdom’s neighbours by enabling us to swap areas which have already been designated under section 1(7).”
However, the Library research paper specifically states that the clause will
“facilitate the signing of a comprehensive agreement with Ireland about maritime boundaries. The aim is to provide flexibility in managing the UK Continental Shelf resources.”
When I asked for clarity about what was actually intended, he talked about marginal fields in the North sea. As far as I am aware, Ireland does not have a boundary in the North sea. I wonder exactly what is intended by the clause, and I ask the Minister to provide a bit more clarity. As the clause appears in the Energy Bill, I assume that it has something to do with energy resources, whether they be offshore renewables, oil and gas or whatever. We need some clarification of that point.
Barry Gardiner
If the hon. Gentleman will allow me, I will try to help him. When the six counties of Northern Ireland were established and the treaty with Eire was concluded, the land was designated but there was no mention in the treaty of the continental shelf. The Republic of Ireland has therefore always maintained that the six counties’ land is Northern Ireland, but not the area around the coast, as would normally be the case. There has therefore always been a dispute between the Foreign and Commonwealth Office and the Irish Government about exactly what the status of that area is, which is why the clause appears as it does.
Mr Weir
I thank the hon. Gentleman. If that is the case, I understand that there is a rather strange boundary in that area, but the Secretary of State’s mention of oilfields in the North sea set alarm bells ringing about what is intended. That is the point on which I seek clarification.
Mr Binley
I am grateful to my hon. Friend for giving way—he is my hon. Friend, and I am pleased to call him such. Has he read the explanatory notes, which make the point that the areas concerned are more than 200 nautical miles from the Irish baseline, and therefore cannot be included in the Irish exclusive economic zone? I believe we are talking about a matter of tidying up, and I hope that explanation is enough for him to carry on his intention to vote for this worthy Bill.
Mr Weir
I thank my hon. Friend, but again, I would refer to what the Secretary of State said. My hon. Friend may understand what the clause means, but from the answer I received earlier I am not sure the Secretary of State does. I want clarity about what is intended.
On the green deal, we welcome any moves to increase the number of homes with good energy efficiency and make use of domestic microgeneration, but we have some concerns about the Government’s approach. There is talk of amendments on warm homes, and we are generally sympathetic to what they are intended to achieve. However, I wish to mention a point made by the Federation of Master Builders in its briefing on the Bill. It quotes the Minister as saying that the Government’s aim is to have 14 million homes transformed by 2020, and states that that
“would require work to be completed at the rate of 1.5 million homes per annum which equates to almost 30,000 homes per week or put another way 4,274 homes per day!”
There is nothing wrong with such an ambitious target, but to achieve it we need to ensure that there is a veritable army of installers to take on the work.
I fear that, because of the way in which the green deal is being set up, it might be dominated by a few large companies, as my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) said to the Secretary of State. The Minister may remember that I have previously raised with him the concerns of SELECT, which represents the Scottish electrotechnical industry, about the microgeneration certification scheme, which it feels works against small firms in several ways. It drew up an alternative scheme, which should be acceptable under the relevant EU directive and is consistent with the Scottish Government’s building standards system, but DECC would not agree to that system being put in place.
I understand that under the current scheme, it is difficult for firms to become certified. For them to qualify, the equipment that they install must be MCS-certified and installed by an MCS-certified installer. The difficulty for small firms, particularly those in rural and island areas of Scotland, is that many are unable to obtain certification because they cannot provide the required number of installations. Nobody is likely to want such installations unless they are certified. I fear that that problem will be transferred from the MCS to the green deal scheme if it is carried out by larger companies.
Gregory Barker
I am listening carefully to the hon. Gentleman, and I am aware of and responsive to his concerns, but which technology in particular is he talking about? The MCS covers a whole range of technologies, and some providers are perfectly happy with the scheme whereas others have specific problems.
Mr Weir
The Minister says that, but firms involved in a range of technologies have approached me. Scottish Renewables has raised problems with the scheme, and it covers all sorts of microgeneration technologies that will be important in providing renewables in future, particularly in remote rural and island areas. We hope that those technologies will be financed partly under the green deal. Unless the problem of not allowing small firms to install equipment is solved, smaller communities in rural areas may not get the benefits that could come from the green deal. They may not get the jobs that the Secretary of State talked about.
Gregory Barker
The MCS is quite outside the scope of this Second Reading debate, but I take the hon. Gentleman’s point entirely. I have had concerns about it myself, or at least about some parts of it, and I have been considering how we can improve it. If he would care to come to see me, I would be very happy to sit down and talk to him about it to see whether we can address his concerns in more detail.
Mr Weir
I thank the Minister very much for that offer, which takes two pages out of my speech. I will certainly take him up on that. It is an important point: although we support the aims behind the green deal, it must benefit all areas of the country and not just the B&Qs of this world—not that I have anything against B&Q.
I note with interest clauses 80 to 89, relating to offshore petroleum and gas and particularly to the difficulties of a common carrier arrangement. The Select Committee on Energy and Climate Change considered that matter back in 2009, when I was a member. We heard evidence on the issue, and it is fair to say, and hardly surprising, that there was a great deal of difference of opinion on the need for a common carrier arrangement for North sea infrastructure.
With specific reference to the future development of fields west of Shetland, which may or may not proceed given the Government’s tax grab, the Committee noted:
“We understand the Government’s argument for not wanting to interfere in a heavy-handed way in the establishment of a common carrier arrangement for oil and gas west of Shetland. But two things are clear: west of Shetland resources offer enormous potential—possibly a fifth of our remaining oil and gas resources; and putting in place a shared infrastructure to exploit those resources is expensive and complex. The Government should continue its dialogue with industry and agree a timescale for the establishment of such a shared infrastructure and the arrangements governing its use. If progress does not meet that timescale the Government should be prepared to take a more active role, probably through regulation but not precluding assistance with funding.”
The all-party group on the British offshore oil and gas industry recently heard from a representative of small companies working in the North sea, who talked about the difficulties that exist. The problem with the common carrier arrangement is that many of the fields in the North sea are now smaller fields that have been sold off by the majors and redeveloped by smaller companies. However, to bring the oil and gas ashore those companies need access to the infrastructure, which is generally owned by the majors. There are sometimes difficulties in gaining such access.
The group was told that there is a legal process known as a determination, whereby if negotiations on access to infrastructure fail, DECC can be called on to set terms and conditions and a tariff price. A determination has never been effectively used, and although DECC is making efforts to address that shortcoming, a determination is a backstop that comes too late in the process. Oil & Gas UK set up a voluntary agreement, but it says that it is difficult to get much of the information it requires, particularly on tariffs and previous commercial deals. It is therefore difficult for smaller operators to gain access to infrastructure.
The Bill continues the existing arrangements and does not address that difficulty. I recognise the difficulty of Government action, but such action is necessary to ensure that small companies that currently work fields that would otherwise not be worked can access that infrastructure. Currently, the Secretary of State can make a decision, but it is difficult to see how he could do so unilaterally without referral from one or other party.
On an allied matter, RenewableUK notes that the Crown Estate currently gives oil and gas developers leasing priority over offshore wind farm developers if supplies are found, with no compensation payable to the developer. It says that the existence of that measure leads to insecurity and uncertainty in development at a time when offshore wind is rapidly expanding. The Minister needs to consider that matter in more detail, although the obvious solution is to devolve the Crown Estates to Scotland and we will sort out our own solution.
That brings me to my final point, on offshore transmissions, which is allied to my shared infrastructure concerns. Ofgem makes the point in its briefing that
“the Bill contains provisions to facilitate the next stage of the enduring offshore regulatory regime, allowing wind farm generators to build network assets before transferring their ownership to the successful winner of the tender.”
However, how will the energy be brought onshore from those offshore wind farms? There is a lack of joined-up thinking on how offshore energy is fed into the national grid. To illustrate, there are three wind farms off the coast of my constituency. I have asked their developers how they intend to bring the energy to land, and each has its own proposal. We are in danger of running into public opposition to offshore wind farms not because of the wind farms themselves, but because of the on-land infrastructure needed to bring the energy ashore, especially if there are myriad onshore connections within a small distance of one another.
I have urged those developers to speak to one another about linking up offshore so that they can bring one cable on to land, but that does not seem to be happening. The Government need to look at that to ensure that we do not run into the difficulties with offshore wind that we ran into with onshore wind.
If the Minister gives me some assurance on those points, I might remain quite happy to recommend supporting the Bill to my hon. Friends. The Bill has many good measures in it, so the little clause on swapping bits of our continental shelf is odd. That gives us cause for concern, particularly given actions by previous Governments on the continental shelf that mean that I look out from my constituency on to an area of water that is English for fishing purposes.
Madam Deputy Speaker (Dawn Primarolo)
Order. A very large number of Members still wish to speak in this debate, and we will not get everybody in at this rate with a 12-minute limit on speeches, so I am taking the time limit down now, from the next speaker and for the remaining Back-Bench speeches, to 10 minutes. If hon. Members can use less than that, we should comfortably run up to the period for the wind-ups. If not, I shall have to revisit the limit.
Mr Steve Brine (Winchester) (Con)
Thank you very much, Madam Deputy. I shall be speedy.
It is a great pleasure to contribute to this debate and to be part of the Government who have brought this landmark—I do not use that word lightly—Bill before the House. I am sorry to return to this point, but I agree with the shadow Secretary of State on one thing: climate change is too important to be kicked around. That is why her kicking it around was so very disappointing. I support the Bill, and I hope the Opposition come through the Lobby with Government Members this evening. They are very welcome to do so.
I wanted to speak on Second Reading because the Bill has the potential to be truly transformative. Let me make it clear, however, that I am not writing a blank cheque. The Bill is seriously radical and very welcome, but it could be better, and I shall try to explain how.
I was adopted to fight the general election in Winchester back in November 2006—a long time ago. At that time, Al Gore’s Oscar-winning film, “An Inconvenient Truth”, was absolutely everywhere except Winchester. One of the first things I did was to get it shown at the excellent small, independent Screen cinema in Winchester. The response to the film was overwhelming, proving once again to anybody who does not know the great city of Winchester just how important the green agenda, the fight against climate change and the drive for a low-carbon economy are to my constituency and the people whom I now represent. I should declare an interest in that I have long since been signed up to that agenda, but I love the commitment of many of my constituents to handing a cleaner, greener and better environment on to the next generation, and I back it wholeheartedly.
It was therefore hugely to my satisfaction that in opposition my party developed plans for the green deal and many of the measures in the Bill. I remember welcoming to Winchester my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), then the shadow Environment, Food and Rural Affairs Secretary, to help to explain the green deal to the good people of Hampshire—and a good job he did of it too. He described the policy as a game-changer, and he was not wrong. He is not alone in using that expression, as we have heard in the debate.
The Conservative manifesto was succinct on the subject, stating that:
“we will create a ‘Green Deal’, giving every home up to £6,500 worth of energy improvement measures…paid for out of savings made on fuel bills”,
and the coalition agreement reaffirmed the two parties’ shared commitment to the policy. I am pleased that that part of the coalition agreement will not be reopened.
The green deal was a positive policy to sell as a candidate in the general election. It was one of those rare beasts in politics, because everyone who heard about it saw the logic of it, and no doubt thought, “Why didn’t I think of it?” including the Labour party, which might explain its reaction to the Bill.
I outlined the policy at a special hustings meeting purely on the environment—we had only 12 hustings meetings. The meeting was organised by Winchester Action on Climate Change, to which I pay great tribute. As I said at the meeting, what I like about the green deal is that it replaces the stick with the carrot. All too often, changing behaviour to reduce our carbon footprint is about what we must stop doing, and about how awful we are for living our lives, having children and so on—finger-wagging at its worst—but the green deal is different. Yes, it is a game-changer, but I would prefer to describe it as a no-brainer. To my mind, it changes behaviour and reduces carbon footprints the easy way.
Ian Lavery (Wansbeck) (Lab)
Does the hon. Gentleman agree that the introduction of the green deal in its current form will hit the poorest hardest?
Mr Brine
I do not agree, and I will come on to why not.
On the economic case for the green deal, I am clear that the Bill is about growth as much as it is about saving energy and reducing carbon emissions. As we heard from the Secretary of State, the Bill, and the green deal it ushers in, will create in legislation a whole new market, which, as we know, does not happen every day. We heard from him about the tens of thousands of new jobs in the green economy that these measures will create. We should remember that these are new jobs in the private sector, many of which will, we hope, be in small and medium-sized enterprises. I hope therefore that Ministers will keep SMEs at the forefront of their minds at all times as the green deal is developed and rolled out. The industrial opportunities that the green deal presents for some of the big guys, such as John Lewis, B&Q and Asda—I have nothing against them—are great, but I am keen to ensure that the small guys are centre stage and can use the new marketplace as a springboard from which to grow their businesses and employ new people as the green deal comes on line.
In addition to the jobs that I hope will be created as the green deal develops, we will undoubtedly see a fast-growing industry for training. I am fortunate to have one such training company in my constituency—New Career Skills on the Chandler’s Ford industrial estate. The Prime Minister visited NCS while he was Leader of the Opposition and rightly praised its work in training and retraining college graduates and career changers alike in the green profession. The company offers insulation training as well as training in renewables, and is exactly what we need to make the green deal a reality on the ground. I am told that NCS receives thousands of new inquiries every week via its website, but can enrol only a limited number of new students. The Government need to help that business to grow and to up its operation significantly if the green deal is to have the skilled technicians needed to make it work and credible.
NCS told me, as it told the Prime Minister, that many students struggle to raise the funds necessary to take the course and gain the qualifications. As a provider of this key training, it provides finance, but as a small business it is obviously limited in the number of loans it can underwrite on behalf of those students. The Government have urgently to consider the support available, because this sector needs to grow, and if we are to train enough skilled people—legitimate concerns have been expressed in the Chamber about who they are and where they will come from—to ensure that the green deal reaches critical mass and matches Ministers’ obvious ambition, companies such as NCS will be important.
I want to say a word about the third sector and local councils. There is an organisation in my constituency called GreenWin, which sits as part of Winchester city council’s climate change programme, and could be a lean and highly efficient vehicle to drive the green deal in the area I represent. I pay tribute to a constituent of mine, Rob Veck from Colden common, who lives in a house we could call “green deal-plus”—although even that would be an understatement—and who is doing so much to make GreenWin happen. Critical to GreenWin’s success is building a district-wide network of affiliated suppliers and installers. The idea is simple: to build a database with moderated customer feedback that acts as a quality check on the delivery of the green deal. It is 100% community based and is big society-plus with bells on. However, GreenWin has been extremely frustrated by funding issues. I urge Ministers to engage with such groups, which is why I appreciate, and will take up, the Minister’s offer to meet GreenWin through me.
The role of the new green deal assessors is important to the roll-out of the green deal. However, it is not clear to me, and many others, how these GDAs will make a living. Logic suggests that they should be independent—similar to independent financial advisers—but I would appreciate a lead from the Minister, perhaps in Committee, on how they will operate, and on how we can ensure that they will not be cut out of the green deal by the big boys.
I want to touch briefly on the eligibility criteria for green deal homes, and place on record my thanks to Ministers for clarifying, as they did in Department of Energy and Climate Change questions in March, that the green deal will apply to park home residents, if they have an appropriate energy meter and qualify under the normal rules. Park home residents in Winchester and Chandler’s Ford have expressed to me their grave disappointment about how the Warm Front scheme cut them out, and they are very pleased, as is their Member of Parliament, that the green deal will apply to them.
I promised to say where the Bill could be stronger, and I would welcome Ministers’ responses, either today or in Committee, to my suggestions. The Government will be aware that many, including the organisations that make up the Stop Climate Chaos Coalition, do not think that the Energy Bill is strong enough and are calling for an amendment—the so-called warm homes amendment we have heard about today—that would introduce provisions to ensure that the Government’s programme on energy efficiency, including the green deal, fits within an overarching energy-saving strategy sufficient to meet the ambition of the Climate Change Act 2008. To remind the House, that ambition is for an 80% emissions reduction by 2050 and a 42% reduction by 2020. Do the Government have any sympathy with this proposed amendment—on first reading, it seems reasonable—if only in the interests of open government and accountability? If not, why not?
People contacted me while the Bill was making its way through the other place, asking that we strengthen the role that local authorities must play. We have heard much about that today. I know that the Secretary of State and the ministerial team are aware of the local government offer on climate change, which has been signed by local authority leaders of all different political persuasions, and which supports the amendment to make climate change a core responsibility of every local authority through local carbon budgets. I appreciate that Ministers might think that at odds with the localism credentials the coalition Government rightly set out, but given that we must meet the ambitious targets set by the Climate Change Act, is this Bill not an opportunity to bring local councils to the table?
Nicola Blackwood (Oxford West and Abingdon) (Con)
Does my hon. Friend not think that a good place to start would be for the Government to set out exactly how the green deal will help them to achieve their climate change targets?
Mr Brine
I absolutely agree with that point. I can see the logic in setting local carbon budgets, because many council leaders up and down the country of all political persuasions believe in the growth and green agenda as much as hon. Members. However, some do not, and they need to come to the table if we are to meet those ambitious targets.
In closing, I want to place on record my genuine excitement: this could be a transformation Bill; it is true to the Prime Minister’s ambition to make this the greenest Government ever; and it is seriously helpful to the Chancellor of the Exchequer in helping to create the growth that we so desperately need right now.
Mr Michael Meacher (Oldham West and Royton) (Lab)
We have listened to a distinctly Panglossian rosy glow of a statement from the Secretary of State. I think that we can all support the green deal’s ostensible objectives, but there are profound problems with the mechanisms and financing necessary to deliver on the rhetoric. The Bill’s biggest flaw is the failure to address adequately the central issue in energy policy, which is to establish a target for the most efficient way of meeting the nation’s energy requirement over the next 20 years or so, and then to put in place secure and effective mechanisms to ensure that those targets are met. I think that the Bill is the wrong way around: it makes assumptions about the level of energy supply in future decades, and then proposes mechanisms, albeit—as I shall show—rather uncertain and dubious ones, to green that supply.
The Government’s draft overarching national policy statement blandly states, as a sort of unchallengeable datum, that a doubling, or even tripling, of generation will be required by 2050. That clearly puts the cart before the horse, however. If, instead of planning for X terawatts of extra power over the next two to three decades, it was practicable to reduce the figure by, say, 40%—I think that is practicable—it would make much more sense to set that reduced level of energy production as the central target, and then to implement measures to ensure that it is met in as green and cost-effective a way as possible. That is all the more the case given that energy saving is more cost effective, which is a mantra that spokesmen, including the Minister, of all three main parties have repeatedly asserted.
Why, then, are the Government still refusing to undertake a proper cost-benefit assessment of energy demand? Obviously one can see that the big six operators and power generators will be anxious about anything that might impact on their future profits, but I think that the Government, who are far too committed to accommodating the private sector, need to put the national interest first.
Then there is the question of whether the measures in the Bill will deliver what the Government purport to be aiming at. The fundamental issue, on which the whole green deal hinges, is what the interest rates will be. When that was put by me and other hon. Members to the Secretary of State, he gave a studiously vague answer—a discourse, but not an answer. However, without a low interest rate, households will be paying a full, unsubsidised rate for measures such as cavity-wall or loft insulation, which were previously available at no cost or little cost under successive supplier obligations. Without a low interest rate, households will be worse off than they are now. I do not wish to be over-critical, because this should be a reasonably non-partisan debate, but it is irresponsible for Ministers to present such a major Bill to the House and yet remain silent on the intended rate of interest, when the success or otherwise of the entire Bill—certainly the green deal part of it—hinges on that point.
WWF has done a lot of research on the issue and reports that the cost of borrowing for the green deal is likely to be around 8% to 10% over the 25-year debt. Do Ministers agree? If that is the likely interest rate, the effect of the Bill is likely to be fairly minimal without much greater financial support being offered. Market research by the so-called Great British Refurb campaign found last September that even if the interest rate were no more than 6%, only 7% of households—one in 14—would be likely to take up the green deal offer. That is all the more significant when, as we all agree, we recall that the people who need help most in energy saving are those in fuel-poor and vulnerable households, who unfortunately live in the most poorly insulated and energy-wasteful houses.
Given the Government’s savage cuts to the Warm Front programme over the next two years and its discontinuance in 2013, it is perfectly clear that they are not going to lift a finger to help with repayment charges for fuel-poor households, so I ask this question. Realistically, within the parameters of the Bill, is there any reason why energy suppliers should not be required to meet green deal repayments on behalf of fuel-poor households? After all, as we know, such companies regularly report vast profits arising from adventitious rises in fuel prices. However, such a requirement would help them, because they would be able to spread the capital costs over the full length of the green deal finance arrangements and thereby be able to install far more packages in a much shorter time than under the carbon emissions reduction target.
Mark Tami (Alyn and Deeside) (Lab)
Does my right hon. Friend agree that our experience of how the big companies have treated the fuel poor—with pre-payment meters, for example—does not really set a good example or give any hope for how they would look to the future?
Mr Meacher
The point about pre-payment meters is important, because, again, it is the poorest households—the most fuel-poor and vulnerable households—that are so often forced to use pre-payment meters. Their experience under the Bill would be questionable if it were left to private companies to decide how to deal with the issue. Again, that is an area where the Government need to step in and offer support.
A minimum energy efficiency standard is clearly needed in the private rented sector—a point that several hon. Members have made. There is little or no incentive for landlords to do very much to improve their properties, because it is their tenants who pay the fuel bills, not them. What is needed, therefore, is an energy efficiency baseline to prevent properties with an energy performance certificate rating of F or G, or whatever the Government choose, from being re-let or marketed for rent after a reasonable period—say, five years—in which the necessary energy-efficiency measures can be installed.
Lastly—and briefly—it is regrettable that the Home Energy Conservation Act 1995, or HECA, which was a Lib Dem private Member’s Bill, is being repealed rather than extended and toughened, because it delivered more savings in domestic fuel than the entire first phase of the energy efficiency commitment.
Gregory Barker
I will address some of the right hon. Gentleman’s thoughtful comments in my wind-up, but let me put it on record that we are not repealing HECA. Rather, it will form an important part of our strategy to ensure coherent and joined-up implementation of the green deal right across the country at the local authority and community levels.
Mr Meacher
I am very pleased to hear that, and I will take that point away and look at it again. Obviously if the Minister says that, I accept that it is the case, and I am also grateful for it, because HECA is an important Act. It never had great support because it was a private Member’s Bill. Local authorities did not have statutory requirements but had to act voluntarily, so the legislation was not as effective as it could be. However, if the Government are to take it over, supporting and strengthening it, that is excellent.
Gregory Barker
The right hon. Gentleman makes exactly the right point, and although the Secretary of State did not mention it in his opening remarks, that is a new advance—which we are making today, on Second Reading—in strengthening the Bill.
Mr Meacher
I am very pleased to hear that. Clearly there is thinking going on in Government about how the Bill can be improved, which is what we all want. This is a good Bill, but there is a risk that it will not achieve its objectives, so it needs improvements.
Many people have said this, but there are still too many unanswered questions about so many aspects of the Bill, which I do not think is acceptable for a Bill on Second Reading. The Secretary of State was generous in being cross-questioned by Members from all parts of the House, but the increment of information that he was able to provide was not really satisfactory. Given that there is no cap on interest rates, how can the golden rule—that the expected financial savings will be greater than the cost—be guaranteed? Clearly it cannot. What consumer assurances are there that the green deal advisers will not be in cahoots with the green deal installers? Where is the major information campaign? I do not like saying this, but the “Tell Sid” campaign for privatisation in the 1980s was very effective. Where is the information campaign—which only the Government can provide—to support the green deal, rather than leaving it to big business, which will put its own spin on it? In the worst scenario, there is always a risk of repeating the kind of mis-selling scandal that we saw in the City in the 1990s.
I want to be positive about the Bill. Members in all parts of the House acknowledge that this country badly needs a programme for green energy, albeit one that is cost-effective, with implementation measures that will ensure the objective—not hope for it on a wing and a prayer—and comprehensively address the energy saving requirements of fuel-poor and vulnerable households, particularly in the private rented sector. The Bill needs a great deal more work in Committee. I hope that the Government Whip will not reject all the helpful and constructive amendments that are suggested, as so often happens. I am glad that the Government appear to be still thinking about the matter. If we make some significant changes, this could be—I stress: could be—a good Bill.
Zac Goldsmith (Richmond Park) (Con)
A number of speakers have already said this, but it is worth repeating that energy efficiency has for so long been bizarrely overlooked in the energy debate, despite the fact that, in terms of value for money, it is a no-brainer. I want to give just one example. Under the energy efficiency commitment, E.ON claims to have installed measures that delivered energy savings equivalent to 2.3 Kingsnorth plants at a cost of £250 million, which is a fraction of what it would have cost to build those 2.3 plants—if, indeed, it were possible to build 2.3 plants.
There will always be debate about the best source of low-carbon energy, but everyone across the House agrees that the best plant of all is the one that we do not need to build because we have eliminated the demand for it. I therefore strongly welcome the Bill, with its focus on efficiency and its simplicity. The green deal will, very simply, enable households and businesses to invest in energy efficiency at no up-front cost, thereby removing the biggest barrier to carbon refurbishment—the up-front cost—by allowing them to repay the debt through savings.
If the green deal works, it will not only reduce our dependence on imported foreign oil but insulate our homes and businesses against rising energy prices. It will also create opportunities on a large scale for green jobs and growth. More than that, it is clear that an ambitious programme of retrofitting is a prerequisite for the UK to meet its carbon targets. That has been made very clear in the fourth carbon budget report of the Committee on Climate Change, which said that we need a major energy efficiency programme to capture what it believes could be a 74% reduction in emissions from our housing stock by 2030.
The right hon. Member for Oldham West and Royton (Mr Meacher) and other Members have aired their concern about how quickly the green deal will be taken up, how far it will go and how much demand there will be for it. The truth is that we have no idea, because it is a new scheme. There are steps that the Government could take, however, to boost the programme. For example, I would strongly urge the Treasury to introduce proposals for a stamp duty rebate for homes participating in the green deal. Given that retrofitting is always disruptive, it makes sense that the biggest incentive should be at the point at which the home changes hands. I suspect that DECC is already lobbying the Treasury on this, and I suggest that if the Treasury wants to avoid being seen as the cuckoo in the nest in relation to green policies—it said that it would try to avoid that—it really ought to take that idea very seriously, because it would have a transformative impact. Another idea is for the green investment bank to have a role in helping to ensure that the necessary low-cost capital can be raised at scale. I am pleased that, as the Bill stands, it does not preclude a role for the green investment bank; at least, that is my understanding of it.
Emissions reduction targets are clearly important, and I want to take this opportunity to urge the Treasury again to accept the recommendation of the Climate Change Committee for a 50% reduction from 1990 levels by 2025. That is important on so many different levels, but they have already been covered in a number of speeches so I will not dwell on them. But, to return to my original point, irrespective of the targets that we set, they will be worth absolutely nothing unless we also develop the mechanisms for delivering and achieving them.
Claire Perry (Devizes) (Con)
Does my hon. Friend agree that one of the new and interesting things about the green deal is that it will work with human nature? One of the big impediments to greening up homes, beside the cost, is a distrust of cowboy installers. If we put together a package, working with household names, it will help to overcome that consumer distrust and give us a much better chance of achieving the targets.
Zac Goldsmith
I agree with my hon. Friend 100%. One of the great aspects of the green deal is that it overcomes the obvious barriers that exist without it. The green deal is very much part of the delivery in meeting the targets, but so too is the next energy Bill. Clearly, this is not the end of the energy story for this Government.
Ian Lavery (Wansbeck) (Lab)
The hon. Gentleman mentioned how imperative the emissions reduction targets are, and I entirely agree with him. The Committee on Climate Change has suggested this week that we should be looking at more nuclear power, rather than at offshore wind power. Taken in context, that means that there will be a shortage of energy supply that can be bridged only by gas, which would increase emissions levels rather than reducing them.
Zac Goldsmith
I am on record as being sceptical about the possibilities of nuclear power, partly because it will take so long for us to generate the new capacity that it will not address our immediate concerns. Nor do I believe it possible that we will see new nuclear power plants being built under a regime that says “No subsidies for nuclear”. I might be wrong—a number of people in the sector have told me that I am—but my hunch is that we will see new nuclear power plants only if the definition of “subsidies” is stretched beyond all recognition. But we will see; we will set the right framework and allow the market to decide. That is a party policy that I am happy with, as long as we reach a clear definition of “subsidies”.
Returning to our attempts to meet the targets that I hope will be accepted by the Treasury, one aspect of the second energy Bill—I am not sure that it is legal for me even to talk about it—is important for providing a context for this Bill. That is the concept of “negawatts”, which effectively puts energy saved on a par with energy generated. This is absolutely crucial, and represents a hugely exciting change. My understanding—although I will probably be corrected by the Minister in the wind-up—is that under the proposed reforms to the electricity market, companies will be allowed to pitch for energy contracts and then to fulfil them by reducing energy use, rather that simply by providing more energy. That in itself will transform things in this country on a very exciting scale. It is useful to consider that future Bill alongside the one that we are considering today. Even so, we are going to need more.
If the Government are really serious about energy efficiency, they need to be willing to push for much higher standards in our everyday appliances. One example that I discovered this morning is that we spend £2 billion a year powering washing machines, tumble driers and dishwashers, and a further £2.2 billion a year powering fridges and freezers. If everyone in the UK upgraded their cold appliances to a recommended energy-saving product, energy waste would be cut by two thirds. If we apply that across the board to all the appliances that we use, it is clear that this is one area in which we need direct Government intervention. We need higher levels of regulation, and we need to see standards improving on a rolling basis.
The Bill represents a significant first step in the right direction, and I strongly support it. I congratulate the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) on his involvement in it. It is clearly part of a big journey, however, and there are many more steps to come.
Dr Alan Whitehead (Southampton, Test) (Lab)
I am pleased to follow the hon. Member for Richmond Park (Zac Goldsmith), who has made a thoughtful contribution to the debate. He has underlined a number of the issues that I want to raise in connection with the Bill and the green deal. It is extremely important that the green deal should work well, so it must be as good as it possibly can be when the Bill completes its passage through Parliament. That is important because of the ambition that we must have for energy efficiency, whether through “negawatt” arrangements or other forms of energy management and energy saving. We must have the best and most energy-efficient housing stock that we can bring about. That is an essential part of our climate change action, and our action on energy management and the achievement of the CO2 emissions targets set out by the Committee on Climate Change.
Achieving that will involve an ambitious programme, and as a mechanism, the green deal is certainly ambitious. Indeed, the Minister himself said last summer that by 2050, as a result of the green deal, houses would not have to be visited more than once to assess their energy efficiency. That is the kind of ambition that we need for the green deal; we need to make it work as well as it can. My worry is that as matters stand, many things are missing from that ambition. That is what we need to concentrate on in Committee, so that when the Bill is enacted, the import of the 50-odd pieces of secondary legislation that have yet to be written, let alone enacted, will be much clearer. We shall also need to ensure that that secondary legislation provides the mechanisms to make the green deal work well.
I was pleased to hear this afternoon that among other things, the Government are not now intending to proceed with clause 105, which at the moment proposes the repeal of the Home Energy Conservation Act 1995 in its entirety. I would welcome an intervention from the Minister to confirm that that entire clause will now disappear and not go forward into Committee or beyond. Is that right?
Gregory Barker
I cannot comment on the detail, but I can assure the hon. Gentleman, as I assured the right hon. Member for Oldham West and Royton (Mr Meacher) earlier, that we have looked at this matter in the round. Having listened to a number of experts in the field, we think that we can breathe new life into HECA. It effectively became redundant under the previous Government, but we think that it could be revitalised and become an effective tool that could allow us to avoid imposing new regulation on local government.
Dr Whitehead
I thank the Minister for that clarification.
When we are talking about energy efficiency in homes, we need to understand just how big the task ahead of us is. The SAP—standard assessment procedure—rating of UK homes went up considerably under the last Labour Government. To be precise, the average SAP rating, which measures the energy efficiency of homes, went up by 11 points between 1996 and 2010—from an average of 42 up to 53. Over the last five years, the SAP rate increase went up one a half times as fast as in the previous five years and the five years before that. That shows how measures such as Warm Front and CERT—carbon emissions reduction target—which are going to disappear when the green deal comes in, were having some success in ensuring that homes were more energy-efficient.
In order to get anywhere near the sort of targets that hon. Members have suggested that the Government should consider introducing in an amendment to align energy efficiency with climate change targets—which I hope will happen in Committee—we need to move the SAP ratings much further up over the next few years, perhaps to 70 or more on average at band C by the end of the decade. That means making progress getting on for twice as fast as we have over the last few years. That is the sort of ambition that the Bill needs to encompass. My concern—hon. Members have already mentioned a number of concerns—is that it remains unclear whether that ambition can be achieved under the current mechanism, despite the claims for the efficacy of the green deal.
Mark Tami
Other Members have mentioned the problem of poorer homes, and private landlords are a particular problem, because they have no vested interest in doing anything about them. I am sure we have all had people coming to our surgeries with horrific stories about windows that do not fit, damp all over the place and so forth—yet the landlord often does not care at all.
Dr Whitehead
Indeed. I welcome what I understand to be a change of heart by the Government about the extent to which compulsion can be used to get landlords to improve their properties. Sanctions on landlords with F and G-rated properties have been mentioned; we could argue about when those sanctions might be introduced, but compulsion to prevent landlords from letting properties below certain minimum energy standards is right. The standards are well below the sort of average rating that we have talked about this afternoon, but they are nevertheless minimum standards. If that is indeed a change of heart reflected in this part of the Bill, I welcome it.
I am sure that the detailed provisions affecting landlords can be sorted out effectively in Committee—but first we have to find the landlords. It was not a good sign that when this Bill was being discussed, another Department helpfully removed the idea of having a landlords register as the responsibility of local government. Without that, it will be more difficult to find the landlords who should carry out these arrangements. I trust that the Minister will have a word with his counterpart in the Department for Communities and Local Government and perhaps think again about that particularly destructive act.
The problem of finance has been mentioned. It is essential to making the green deal work. It is not just a matter of suggesting that the market will sort the finances out one way or another and that competitive interest rates will be charged. We can be fairly clear about how finance for the green deal as it stands, without changes, will turn out, because that is how the market works in respect of the sort of return that can be expected at different interest rates. The rate may well be around 9%, or perhaps a bit less. If we look at what can be got under the golden rule with finance at 9%, we find that it turns out to be very little in terms of improvements for properties to which the green deal and the golden rule apply. Loft cavity wall insulation and draft-proofing are probably the only things that work out at that sort of level. With interest rates at 7%, we get draft-proofing, some glazing, some internal wall insulation. With interest rates at 5%, we may get loft cavity wall insulation, glazing and a condensing boiler. If the green deal comes in at 9%, hardly any of the properties that need that sort of level of serious work—glazing, condensing boilers, perhaps microgeneration—will be touched by the mechanism. We must have a better mechanism for making the green deal work.
The energy company obligation exists as a back-up for fuel poverty and hard-to-treat properties. Hon. Members might have noticed that with interest rates at about 5% or so, solid wall insulation, which is present in about 7 million homes up and down the country, will not be touched. The ECO programme might touch it and might have a substantial hand in dealing with those in fuel poverty. Perhaps they should have their green deal underwritten by the ECO so that they can join in the benefits that other people get.
If we are thinking about how the ECO might underwrite the green deal, it is important to understand whether the ECO will exist to any great extent as a financial mechanism. What greatly concerns me—I hope the Committee will be able to look at the problem in much greater detail—is that as matters stand, DECC has signed up to a Treasury-based cap on levy-based arrangements. Under the present financial arrangements—for the spending round up to 2015—DECC has signed up to a cap on renewable obligations, feed-in tariffs and warm homes discount. That cap is set at £11.8 billion over the whole period, but there is also an annual cap.
The Treasury says that any new initiatives that come in the form of a levy must be financed within that cap. If the Department wished to undertake an ECO programme and it proved to be a levy as defined by the Office for National Statistics, it would have to be found under the present cap. That means either that the Government will have to go slow on renewable obligations and reduce the amount of renewable energy, or that the ECO will prove to be so small as to make it impossible to produce the sort of mechanism that many people hoped for—one for adding value to the green deal, getting on with the hard-to-treat properties, dealing with people in fuel poverty and homes off the grid that need extra assistance to make the green deal work, and so forth.
Unless we get the mechanisms right and have the right finance in the system—and, I would suggest, among other things, unless the ECO works properly—the green deal will not work. I am the last person who would want to see the green deal fall. Because a great deal of work has to be done to make our country as energy-efficient as possible, the green deal has to work. The task of making it work properly is the task of the Committee. I hope the Government will be generous in taking on board those ideas, which will make the green deal work as well as it can to bring our energy efficiency targets as close to realisation as possible.
Mr Brian Binley (Northampton South) (Con)
I congratulate the hon. Member for Southampton, Test (Dr Whitehead) on his typically thoughtful speech, which I thought made an important contribution to the debate and was delivered in a helpful tone. I say to the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) that I greatly welcome the general thrust of the Bill. I believe it will be a major advance, provided we get it right, but there is a lot to do to help it become a better Bill. I hope that Ministers will approach Committee with that thought in mind. I think that, in general, the House wants the Bill to succeed and considers it important, and we should be able to tap into the House’s collective knowledge of an issue that is so important to the future well-being of our country. Knowing the Minister as I do, I am sure that that will be his approach.
Gregory Barker
My hon. and very wise Friend is absolutely right. We want to try to capture some of the positive cross-party engagement that ensured that the Climate Change Act 2008 was scrutinised and improved during its passage. We will seek to draw on the wisdom that exists on both sides of the House to improve this Bill, and we will be open-minded. We are extremely ambitious for the Bill, and we do not want to rule out good ideas just because they were not invented in our Department.
Mr Binley
I am sure that the whole House will welcome the Minister’s generous remarks, and I hope that we can set the stage for a consensual approach to this important matter. I was going to say something about limp lettuce leaves, but in view of my desire for that consensual approach, I shall refrain from doing so.
Mr Deputy Speaker—the change is slightly off-putting, but it is good to see you in the Chair—we all know that improvements in energy efficiency are a vital part of the wider picture of our energy policy, for a number of reasons. They are central to the success of our economy, and to the well-being of the environment that we want our children, grandchildren, and those who come even later to enjoy. They are extremely important to the jobs market. However, they are even more important to consumers, particularly those who are less privileged than many other people in the country. I believe that the Government are genuinely willing to ensure that the benefits of the Bill spread to the sections of the community that we know need help because they suffer from fuel poverty, and I believe that those people would be particularly grateful to the Government if we managed to pull this off.
The Bill provides a welcome opportunity for us to consider the wider question of the direction of energy policy, which chapter 4 of part 1 and chapters 1 and 2 of part 2 refer to in no uncertain terms. Issues such as future generation and supply, low carbon innovation and investment and energy security are vital to the overall picture, and I was pleased to learn that the Minister envisages a review and report in the coming years that will deal with those vital issues more widely.
I think we all agree that a low-carbon energy future offers the strong economic opportunities to which I have referred, but energy can be saved only if there is energy to save. The whole process of generation has become even more delicate and important as a result of happenings on the other side of the world, and the future of energy policy is now a very pertinent matter to which we need to devote serious attention. I do not think that either this or the last Government have embarked on that process to the extent that would satisfy me and, I believe, a number of other Members.
Low-carbon energy provides a tremendous opportunity for us to create new jobs, improve energy security and reduce fuel poverty, and making existing energy supply go further is a positive concept that we would all support. The green deal programme is one of most startling and innovative policies that I have seen during my time in the House. As I have said, there are ways in which we can improve it, but it is a gem of an idea on which we can build, and which will have a massive impact on the people whom we serve. I hope that the rest of the House sees the Bill in the same way. I know that the Builders Merchants Federation will be interested in it, but the federation is only one organisation that will be interested in the possibilities for job creation, let alone improvement of our housing stock and help for those who are less fortunate than many of us in this country.
I am delighted that there will be a focus on the sectors to which I have referred, and I am delighted that those sectors will help to provide the growth that we need to ensure the success of the whole Budget strategy. The Bill is at the heart of that Budget strategy, which is one of the wider considerations that we need to bear in mind in Committee and on Report. However, it poses some difficulties that I think worth identifying from the perspective of a friendly supporter. I find its tone more than a little prescriptive, and I feel that it could have been more flexible at this stage, not least because so much of the detail is yet to be supplied. I hope that my hon. Friend the Minister will take that point on board.
I believe that we should make the green deal more attractive to domestic and commercial energy consumers. In that context, I pay tribute to my hon. Friend the Member for Richmond Park (Zac Goldsmith). I agree that we need to use fiscal drivers such as council tax rebates and changes in stamp duty. Although the green deal is tremendously exciting, it must be sold carefully and honestly, and the marketing process must contain incentives to change the minds of the many people who may be suspicious about phrases such as “Everyone’s a winner”. Whenever I wanted extra money to spend at the local fairground where the guy cried out “Everyone’s a winner”, my grandmother warned me to be wary of catchpenny deals. I do not want that sort of marketing to be part of this process; the deal must be marketed in a sensible, mature and honest way.
Nicola Blackwood
When deciding on a marketing strategy, should we not think about how to attract those who are most vulnerable, most likely to be subject to fuel poverty and, in general, least likely to access the support available to them?
Mr Binley
That is an important point, and I note from one or two nods from Opposition Members that there is agreement on it across the House. If we are to attract those who are at the bottom of the poverty chain, our marketing must be subtle. It worries me that the House often does not think about the management of the projects suggested by the Executive. We have seen that in the context of support for small business, and I should hate the same thing to happen to an idea as good as the green deal.
My time is quickly coming to an end. Before it does, let me say a little more about the need to reduce our carbon need. That is particularly relevant to what has happened on the other side of the world, which has changed the way in which some countries think about the production of energy. I therefore want to refer briefly to the vital role carbon capture and storage will play in ensuring we have the energy supply that we need in order to be able to save energy. The Government claim to recognise its importance, yet the levels of uncertainty that have beset progress of late are concerning. I welcome the Minister’s recognition that CCS is the only home-grown energy source technology that can help to reduce significantly CO2 emissions from fossil fuel power stations—indeed, by as much as 90%. I also recognise that the Bill as it stands does not deal with this issue, but there are serious discussions going on about the future supply of power in this country. Doubt has been created as a result of the Government giving £1 billion for the first test model of a CCS facility but then saying we are doing away with the remaining £9 billion and we are going to deal with this from a general tax perspective. That has worried the marketplace and could hold back CCS development. I urge my Front-Bench colleagues to take this on board. There are 300 years of energy requirement under our feet and we have an opportunity to help coal communities. If we do not make progress with CCS, others will and we will miss massive opportunities.
Tessa Munt (Wells) (LD)
It is an honour to follow the hon. Member for Brighton, Pavilion (Caroline Lucas). She made many of the points that I would wish to make, so I shall briefly address the issues of particular concern to my constituents.
I welcome the green deal, in particular the potential for green jobs, the energy-saving capacity measures, the potential savings for those who most need the money and the emphasis on the benefit to individuals. The first thing I wish to focus on is that we should be setting targets on an annual basis. An annual report should be given to Parliament on the progress made, not only on the number of homes that have been dealt with, but on the carbon saving.
I am concerned that there will be no separation between the assessor and the supplier. As such, there will have to be a strong resolution capacity for those who have disputes and grievances. I wish to see something similar to a green ombudsman put in place, as that would help to keep consumer confidence high—we saw what happened in Australia when confidence fell.
Local authorities have been mentioned, and I particularly wish to know the Government’s view on including housing associations and some of the larger estates, possibly the Duchy of Cornwall, the Grosvenor estate and many others, in the Bill’s arrangements. Would they have the capacity to become green deal providers? The economies of scale that would, thus, be brought in would, of course, have to benefit individual consumers. The idea of introducing schemes so that individual roads, villages, neighbourhoods or districts are dealt with in that way—in a fairly consistent way—is an interesting one.
Heather Wheeler
The hon. Lady raises an interesting point. I recall that when I was serving on Wandsworth council 20-odd years ago we looked at regenerating areas such as the Battersea triangle. I remember writing out a cheque for £4 million for one year. We took over and regenerated entire streets, and the economies of scale involved were superb. When I think of what Battersea is like now compared with what it was like 20-odd years ago, I realise that she is hitting on an interesting point. Perhaps the Minister might be able to wrap this up later.
Gregory Barker
I can do that now. I am very happy to say that we want to make the green deal as permissive as possible. These sorts of ideas, which encourage housing associations and other community groups to come together to be green deal providers, alongside the big boys, demonstrate exactly the sort of innovative approach that we want to see.
Tessa Munt
I thank the Minister for that answer.
I wish to return to the issue of fuel poverty. I cannot say how strongly I feel about the fact that the Government must instruct the companies or the regulator, or whomsoever else we are able to instruct, to ensure that we operate a rising block tariff, rather than a falling block tariff. That would be the most green measure we could implement. Leaving things as they are would be a disincentive. It is bonkers not to make energy cheaper for the first units and more expensive as people use more. This measure would be so green and would provide such an incentive to use less energy that I make a plea for the regulator or whomsoever is able to deal with that to be instructed to do so.
The other issue that I wish to return to is that of the pre-payment meters, as it is very unfair to penalise the less well-off through higher charges for pay-as-you-use gas and electricity. I accept that those with arrears must pay them off, but they should not be penalised after that by having to pay more for their power.
Will the Minister clarify something on the issues of fuel poverty and ill health?
Andrew George
Before my hon. Friend moves on, will she take one brief intervention?
Andrew George
My hon. Friend has mentioned the manner in which the utility companies charge for their power. One further disincentive for those on low income is the advantage that is given to those who can pay their bills by direct debit, as those who live on the margins of credit clearly cannot take advantage of the various deals available to those who have no difficulty in that regard. If we are to wrap up a set of policies that help the less well-off, I would hope that this issue would be addressed as part of it.
Tessa Munt
I thank my hon. Friend for his intervention, and I ask the Minister to add that suggestion to my list.
I assume that it is Government policy, but I am unable to see where it is explicitly stated that all new homes and buildings should be carbon neutral and that that might in some way be reinforced by building regulations. I would like to be given some clarification on that point.
I also believe that it is crucial for assessors to have a duty to ensure the best for the individual customer. I am talking not about the best financial deal or the best deal for the provider, but about the best deal for the individual consumer. We should not be dependent on any one organisation to carry out those assessments, be it B&Q, Marks & Spencer or anyone else; consumers must have some protection and various options.
I would like the Minister to address one particular issue. Park homes have been mentioned and in my constituency there are quite a lot of mobile homes as well as 11-month homes, which are homes, perhaps on the coast, where people are able to live for only 11 months of the year. Do those buildings have any different arrangements? I am concerned about Airey homes and prefab homes, which are definitely not energy-efficient types of building in the first place. Are there special arrangements for them?
I am keen that there should be a tougher stance on private landlords. Private homes, certainly in my constituency, are often occupied by people who are unable to have social housing because there is so little of it. About 2,600 people are waiting for social housing in my constituency and as they have little hope of obtaining a social home of any sort, they move into the private rented sector. I would prefer it if a private landlord could not reasonably refuse any request to be part of the scheme as a huge group of tenants would be affected.
I was interested to hear about appliances, the need to replace many of them and whether that could be done more efficiently. I wonder whether the Government might consider some sort of scrappage scheme.
As I understand it, the Secretary of State has the ability to override offshore wind leases if requested by oil and gas companies. I want a clause that prevents that from happening or, if it is going to happen, provides a clear compensation mechanism for early termination. Otherwise, we will move away from having any investor security.
Finally, I ask the Government to accept the recommendations of the Committee on Climate Change. I hope that this scheme will achieve much more than any previous scheme has before.
Barry Gardiner (Brent North) (Lab)
The Bill is debated under the shadow of the report published this Monday by the independent Committee on Climate Change. The committee has been clear and it is authoritative: in order to achieve our 2050 target of at least 80% carbon reductions, we must adopt a 2025 target of at least 50% emissions reductions. That is the shadow that hangs over the debate today. The Business Secretary has clearly rejected that advice and his Liberal colleague, the Secretary of State for Energy and Climate Change, would, one hopes, wish to accept it. That is the split at the heart of the Government’s decision making on where to go with energy policy.
This is entitled the Energy Bill, but it is really a financial services Bill drawn up to enable energy supply companies to act as long-term finance providers for energy-efficiency measures with repayment coming from the anticipated savings on future energy bills. I have changed the speech that I brought into the Chamber this afternoon, partly because of the excellent speeches made by my hon. Friend the Member for Southampton, Test (Dr Whitehead) and the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Richmond Park (Zac Goldsmith). I thought they made excellent contributions and addressed very serious points.
It was, however, the hon. Member for Northampton South (Mr Binley), with whom I do not normally find myself in considerable agreement, who struck me as injecting a note of realism into the debate. We must consider carefully what the Government expect people in the country to do. It is generally accepted that on both sides of the House we would like the Bill to be effective. We would like to see it achieve its objectives in energy efficiency and energy savings. We all know the McKinsey cost curve and it is clear that it is far better to start at the left hand side and achieve the savings in the negative cost element of the curve before we go up to forestry, carbon capture and storage and so on at €60 per tonne.
Of course, we wish the Bill to be successful but we must have a note of realism about the likelihood of people taking on the loans that are on offer. Under the deal, a householder would engage an independent energy assessor to advise on the level of savings that could be made by efficiency improvements. The householder would then take out a loan by entering into a contract with an energy company that paid for a provider—it could be the energy company itself—to fit those energy-saving measures. We know that the energy companies have said that they have serious reservations about the effect that that would have on the rented sector. My hon. Friend the Member for Southampton, Test made some very apposite remarks in relation to that sector.
Are we being realistic in expecting citizens to take out loans to make anticipated savings on future bills which are, by their very nature, uncertain? Let us look at DECC’s own projections. It has calculated the green deal financial costs as being cheaper than a “market personal loan”, but they could be as high as 11%. My hon. Friend showed a range of interest rates between 9% and 5% and the differential that one might achieve for those rates, but why would a householder take out a loan at 9% to make the changes when it would be cheaper to put it on their mortgage over 20 or 25 years?
Nicola Blackwood
I share the commitment to creating the best incentives possible within the Bill but I think the hon. Gentleman is rather underselling the citizens of this country. Citizens in Oxford West and Abingdon are certainly committed to tackling climate change and I feel that they will undertake some of the financial commitments suggested within the Bill—indeed, many of them already have. Amazing examples have been set by community groups such as Low Carbon West Oxford.
Barry Gardiner
The virtue that the hon. Lady’s party usually claims for itself is that it adopts a hard-nosed business approach to things, so I offer her a hard-nosed business approach. If a householder were offered a deal at 9% over a period of 25 years, why would they take that up if they could take out exactly the same capital amount needed to fit the elements required to achieve the savings that the policy is designed to achieve but at the rate they are getting on their mortgage, which might be 4%, 5% or 6%? The simple point is that householders can already make the changes we are discussing at a lower cost than is offered in the green deal that her Government propose.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Has my hon. Friend seen the YouGov poll that was released today in which only 7% of the people polled said they would take up the green deal if the interest rate was set at 6% or more?
Barry Gardiner
I am grateful to my hon. Friend. I want to assure the Minister and all hon. Members present that I have no intention of talking the measures down. What I want is realism about their likelihood of success. Polls are polls—they are what people say about their future action, but I am not trying to present such evidence. I am simply asking hon. Members to look at what people are doing at the moment. They have the opportunity now to take out money on their mortgages and do exactly what the green deal is offering but at a lower rate of interest, and very few people are doing that. I do not want to talk this down, but I do want realism.
One has to look at this issue in the context of the Government’s overall policies. Of course, it is right that we should look at efficiency savings and energy reduction, but look at the cuts to the Carbon Trust: they do not sit easily with a Government policy of rigid focus on energy reduction. One of the premier schemes, which has been in place for a long time, is being cut. Look at the carbon reduction commitment—a very good scheme that was initiated a couple of years ago to incentivise businesses to lower their carbon emissions, which was welcomed by the CBI and the Institute of Directors. A billion-pound saving was going to be made and then recycled into those businesses. It was revenue neutral.
What did the Government do? They came in and said, “Thanks very much. We’ll have that billion pounds. We won’t recycle it into business.” They did two things: they destroyed the incentives that the businesses had in the first place to reduce their carbon footprint, and they also destroyed the trust that business had in the Government not changing the goalposts. One of fundamentals that we have heard throughout our debate today is the importance of maintaining a stable investment framework going forward. I appeal to the Government to think about everything they said in opposition about stable fiscal regimes and the need for certainty for business. Their actions in government have gone against that.
The hon. Member for South Suffolk (Mr Yeo), the Chair of the Energy and Climate Change Committee, made the point forcefully when he talked about the changes to the solar PV scheme. The important thing is not the changes themselves. It is understandable why those changes were made. The Government did not wish to see businesses profiting from the scheme that was intended primarily to be a domestic or small-scale scheme. That is not the issue. The issue is that they changed the goalposts and destroyed the confidence that business investors had in that area. That is what the Government are doing.
The Bill calls itself an Energy Bill. I am afraid that does not sit well with a coherent energy policy. If this were an Energy Bill, it would address energy much more in terms of electricity market reforms—again, those were referred to by the Chairman of the Select Committee. We should be looking at what sort of structure there is to the energy market in this country. We have a vertical integration of generator and supplier that is destroying the attempts to bring renewables into the mix, yet the four pillars of the Government’s proposals leave that market intact. It is not a reform of the electricity market; it is tinkering around the edges.
What is needed is a genuine reform of that market. That is what the Government are not doing. What is needed is a move to a pooled supply where it can be seen that companies are selling in a transparent and liquid market. At present it is an illiquid market which lacks transparency. That is why the big six are able to rip people off. The Government must do much more to claim that the Bill is an Energy Bill. They must have an energy policy, and the Bill shows that they do not. They are tinkering. Nero fiddled while Rome burned. The Government are fiddling while the planet does.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Thank you, Mr Deputy Speaker, for calling me to speak on Second Reading of the Energy Bill. I declare an interest, as I retain shares in a communications company that specialises in regeneration and development.
Over the past 15 years I have seen first-hand how the green agenda has risen up the political agenda and how developers have reacted to increasing environmental demands. Whereas most businesses are keen to keep their costs down and avoid regulation, I have noticed that the moves to improve environmental code levels have come about only because politicians have challenged the development industry to meet these improvements. To encourage private inward investment in this new sector and for developers to include windmills, solar photovoltaics and other energy-efficient schemes, it is important that we do not send a confused set of messages to potential investors.
As an aside, I recently received correspondence from a developer in Plymouth who is concerned that the decision to reduce the higher feed-in tariff from 29.3p to 8.5p by 1 August this year could make his business model unviable and waste his original investment. That would be an enormous shame. I have written about this to the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), and look forward to receiving his reply.
The Stern report, which the previous Government commissioned, clearly set out the global implications of collectively taking no action. The increasing incidence of floods and storms in some of the poorer parts of the world will have a significant impact on helping third-world countries. I welcome the measures set out in the Bill, which will help us to play our part in reducing CO2 emissions by saving energy. Specifically, I welcome the creation of a new manufacturing industry. My constituency of Plymouth, Sutton and Devonport is very dependent on the public sector and needs to use this initiative to help rebalance its economy. As one of the major global players in marine scientific research, it is well placed to help deliver the Government’s green deal by becoming a manufacturing centre for renewable products.
In the 1990s, Cambridge university set up a series of research companies that specialised in genetics. The companies were then sold to the likes of SmithKline and Glaxo to develop pharmaceutical products that helped to build the biotechnology industry we have today.
I have argued for some time that Plymouth needs to develop similar clusters of renewables industries within our travel-to-work area, which will help us to turn the tide in this low-skills and low-wage economy where 38% of the work force are dependent on the public sector. Our university, with its fine reputation for marine science research, should be the catalyst for this economic regeneration. However, to achieve this, we need the Government’s help across a number of Departments.
Later this summer, my hon. Friends in the Ministry of Defence will publish the results of the base-porting review, which I hope will identify parts of the naval estate, especially in South Yard, that are not needed for defence and could be used to realise Plymouth’s full economic potential. Last week, Defence Ministers announced that Plymouth’s seven Type 23 frigates would not be transferred to Portsmouth for the foreseeable future. That is excellent news for a naval garrison city that prides itself on the role it has played in the defence of our country. The Royal Navy’s role in that part of the south-west is a key ingredient in creating this cluster of marine industries. It is part of a commercially focused agenda, working with the private sector, Plymouth city council, Cornwall council and academic partners to create a dynamic programme that can bring ocean renewable energy to the world.
Our vision in that part of the south-west is to exploit domestic and international markets for offshore wind, wave and tidal energy. That will enhance trade and industry policy and the low-carbon skills and jobs agenda and will help us to address the urgent need for climate change mitigation and adaptation. We need to develop products that can be sold not only in our domestic and European markets, but to China, India and emerging economies. That is something that we should most certainly concentrate on in a big way.
We also need joined-up thinking between the Department of Energy and Climate Change, the Department for Business, Innovation and Skills and the Treasury, and we must ensure that we give an important role to the green investment bank to create businesses that will be worth hundreds of millions of pounds in coming decades and help the UK maintain is current commercial and intellectual property advantage.
The MOD and the Navy are well placed to benefit from sharing physical assets in Plymouth: low-carbon energy supplies in our dockyard and the presence of service industries, such as Babcock International and Serco. We need to explore a new commercial relationship between the naval estate and potential wealth creators. Those companies and their supply chains, which are largely made up of small and medium-sized enterprises, will benefit from future enterprise zone status in Devonport and elsewhere in Devon and Cornwall. I believe that it will help us to grow defence-related and civilian businesses and marine and renewable energy to the joint benefit of the country’s future military and energy security.
The Minister of State will be aware of our increasingly unstable and insecure world, with growing threats of climate change, terrorism and economic instability, and we need only to remember what happened when Russia decided that it was going to hold its next-door neighbours to ransom, but to build greater economic, social and environmental security, as well as commercial and trade advantage, we need to ensure that the relevant Departments work together effectively. In order to realise those opportunities, I hope that my hon. Friends will be able to work with me and other interested parties to establish the UK’s first marine energy park in Plymouth and the south-west as soon as possible.
I am delighted that my hon. Friend the Minister has agreed to come to Plymouth later this year to see for himself how we can deliver that economic regeneration. I firmly believe that together we can create a series of green manufacturing businesses in the south-west and help to regenerate our economies in order to improve our skills.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I, like many other Members on both sides of the House, welcome large elements of the Bill and support its general aims. As the hon. Member for Bracknell (Dr Lee) said, the challenges we face in dealing with energy policy cannot be safely confined to a five-year term, and much of the Bill builds on the work that my right hon. Friends the Members for Doncaster North (Edward Miliband) and for Lewisham, Deptford (Joan Ruddock) did in the previous Government. I am pleased to see some of that being built on and developed in the Bill and in other aspects that the current ministerial team is taking forward, and I hope that that helps to bring some cross-party support to elements of it.
There is huge potential in the green deal, which is a significant part of the Bill, and we want it to work. The aims are laudable, and they have been lauded by Ministers. There is the potential not just for energy efficiency, for wider environmental reasons, but for a positive impact on poorer households, in particular, including people with dependants, long-term conditions and a greater need for domestic heating. Many live in properties, such as those in my constituency and in other parts of the country, that by age or design are inherently inefficient. There is huge potential, and that is why, as many contributors have said today, we want to see the green deal work.
I hope that the Minister will acknowledge, however, that some significant gaps still need to be filled, including those on how the green deal will end up working, and, as many others have said, on the crucial issue of the interest rate. Its impact on what can be managed within the deal has caused concern to many within and outside the House. I hope that Ministers can provide us with further enlightenment on that, if not this evening then in Committee, so that when we return to the Bill we are able to reflect on proposed legislation that is more detailed and comprehensive than that which is currently before us.
I have listened carefully to today’s contributions, and to the Secretary of State’s responses to earlier interventions. My constituency includes many properties in which cavity wall and loft insulation are unsuitable, because they do not have lofts and their walls are too old for insulation. That is the case in many others places, too, and that is why the detail of the proposals is so significant.
I hope the fact that the Bill has been through the other place without that detail will encourage Ministers to find out how the gaps can be filled, and I hope that the work can be done in the bipartisan way that the Bill’s origins and aims naturally dictate. That is why we can support the aims of the Bill and the green deal, but we do not as yet have the confidence safely to proclaim that they will work. There is an obligation on Ministers to help us to reach that position. I am sure that I speak for most, if not all, Members in saying that we want to be in that position on this very important matter. As the Chair of the Select Committee, on which I was privileged to serve briefly at the start of this Parliament, made clear, the need for certainty also has an impact on some of the investment decisions that will help to make the most of the potential of the green deal.
As several hon. Members have said, there are problems relating to energy companies’ tariffs. The Bill includes a requirement that companies must provide information on their bills about the cheapest tariffs, if that is not done voluntarily. I am not sure that goes far enough in dealing with an issue that frequently comes to my attention in my surgeries when I see constituents who have been frustrated and confused by what they are told by energy companies. They are baffled by what their bills mean, having been told by suppliers that they would be saving money but end up paying much more. There are dozens of different tariffs for each energy supplier, and social tariffs are probably the least known about among those who need them most. Research carried out by Consumer Focus shows that many consumers not only do not understand the detail of their energy bills but do not necessarily trust the energy companies to provide them with the most accurate information.
In my constituency, we are fortunate to have Lightburn Elderly Assistance Project, or LEAP, which provides help and support to elderly people, including on energy efficiency. It does a superb job in being able to get into the detail of what tariffs people are on and whether they are the most appropriate ones for them. I am sure that other organisations in other parts of the country perform a similar role and are similarly useful and helpful. However, they will inevitably only ever touch the tip of the iceberg of people who need and will benefit from that advice and that degree of specialised knowledge. It would be much better if we were in a position where some of the vagueness and evasiveness were removed from the information that energy suppliers provide to their consumers, which often leads to mistrust and confusion, and to people who have the lowest level of financial literacy paying the highest tariffs when they can least afford it. That problem needs to be addressed. I am sure that there will be an opportunity to do so in Committee, and perhaps appropriate amendments will be tabled.
It would be wrong not to refer to the role that Consumer Focus has played. That is not covered directly in the Bill, nor is it the responsibility of the Ministers in charge. Nevertheless, it is a cause of regret and concern to me and to many others that the decision to abolish Consumer Focus and roll its functions into citizens advice bureaux might leave us without the specialised knowledge that has benefited consumers by providing expert and helpful guidance.
The Bill has laudable aims. The green deal is a laudable policy and a mechanism that many Labour Members hope will work. However, I have to say to Government Members, following their earlier remarks, that it is not partisan to point out that detail is still required, work is still to be done, and confidence is still to be infused. I hope that, as the hon. Member for Northampton South (Mr Binley) said, Ministers will consider the important issues highlighted by Opposition Front Benchers and others, which need to be addressed in the attitude that the Government take to the Committee stage so that when we come to debate the Bill again—it has already been through the other place—it will be improved, it will be more comprehensive, and it will help to give Members on both sides of the House the confidence to be able to support its most significant measures.
There is an energy challenge in this country, and I have congratulated Ministers before on being adept at facing up to that. It is a shared challenge that crosses party boundaries, and it is in the interests of all our constituents that we address it. I hope that we can do that by constructively filling in some of the missing detail in Committee. As has been said, the Opposition will find it difficult to support the measures without that detail. I hope that Ministers will be constructive in responding to this debate and in Committee.
Chris White (Warwick and Leamington) (Con)
I am pleased to speak in this debate because I believe that this issue is extremely important for our country. It is perhaps the most important issue that we face. In the midst of dealing with a difficult economic situation, restoring strength to our society and empowering local people, we also face the threat of climate change and the need to move away from our dependence on fossil fuels and towards being a greener, more energy-efficient country. The UK has rightly taken the lead on this issue, and the Bill is a welcome step in the right direction.
I am also pleased to speak in this debate because my constituency has great potential as an energy hub. Major national companies such as National Grid, Calor Gas, Wolseley and AGA, and a range of smaller companies such as Encraft, are located around my constituency, providing employment and a potential source of growth.
The Bill marks a significant step forward, but no one can expect it to be the golden bullet. It can only be part of a wider agenda to create a greener energy infrastructure. It is important that we have the strongest Bill possible to build on in the years ahead.
I wish to discuss fuel poverty in particular. In a written parliamentary question, the Department of Energy and Climate Change calculated that about 6,500 households in Warwick and Leamington—about 14% of households —were living in fuel poverty. Across the west midlands, it is calculated that about 65,000 homes may suffer from excessive cold, which costs the NHS about £12 million a year.
I am pleased that the Bill will create a framework to tackle that problem. The energy company obligation will provide a means to support the poorest and most vulnerable households in the country, who would not be able to make their homes more efficient without help from energy companies. The green deal, which will help millions of households across the country, is a welcome development, but we need to ensure that no one is left behind. The energy company obligation will ensure that we bring every home possible into the 21st century. Moreover, the most energy-inefficient households are often the poorest. It is in those homes that the greatest impact on carbon emissions can be made, and it is right for the Government to focus on them.
I believe that the Bill should be more ambitious. If we are to see real progress on climate change and green energy production, we need to ensure that it is carried out at local level. People across my constituency are proud of the efforts that we have made to increase recycling. Many people want more to be done to make our community greener and more energy-efficient. About 80% of UK emissions are generated by local activity, from heating our homes to getting to work. This is an opportunity for councils to make a difference, co-ordinate local activity and give local people a chance to set priorities.
Like many of my colleagues, I believe in localism. I believe that the Bill is an opportunity to set ambitious targets for local authorities and enable them to focus on one of the biggest challenges that our country has ever faced. A scheme that allowed local communities, through consultation, to put together their own budgets, and bound them to reductions that they believed to be sustainable, would be an excellent way forward, and could result in considerable reductions in carbon emissions. I urge Ministers, who I know have had discussions with several organisations on this subject, to look at these proposals in more detail, and to consider amendments in Committee. We need to take action swiftly, and I believe that the Bill provides the perfect opportunity to rally people and local authorities.
Julian Sturdy (York Outer) (Con)
It is a real pleasure to contribute to today’s Second Reading debate. I have a long-held interest in energy-related matters, and I strongly believe that the Bill contains some really positive measures that, together, will lay the foundations for a fairer, more efficient and greener energy market across the country.
Although wide-ranging initiatives covering energy efficiency and the empowerment of the Coal Authority are present in the Bill, it is clear that it is only the first legislative part of the Government’s promised energy reform programme. Missing from the Bill—this is no criticism of it—are provisions relating to the regulation of carbon emissions, the creation of a green investment bank and the security of energy supply, which I think is immensely important and on which a number of Members have touched. I see energy security, along with food security, as being the defining issue over the next decade. The decisions that we take in this Parliament will affect generations to come, so we have to get them right.
It is my understanding that, as the Secretary of State outlined earlier, a second energy Bill is planned for the autumn, to provide the missing pieces of that important jigsaw. In light of that assurance, I must confess that I am extremely optimistic about the Government’s energy ambitions, and thus very supportive of the Bill. However, I would not want to see the time scales in the Bill slip any further. Energy security must not become a political football, because it is far more important than any party politics.
I wish to focus my thoughts on the attempts in the Bill to improve energy efficiency. Such improvements must be made if we are to meet our international and domestic climate change targets—after all, energy efficiency can play a major role in cutting energy use and emissions of harmful gases. Alongside our requirements to meet international targets, we must tackle once and for all the tragic and unnecessary problem of fuel poverty here in our own towns and cities, and we must also bear in mind the often vast financial cost of energy to ordinary households. Together, meeting legal targets, tackling fuel poverty and reducing families’ energy bills make up the triangle of criteria by which we must scrutinise the Bill and judge its success.
In discussing a new approach to energy efficiency, it is worth briefly reviewing previous policies and schemes. The decent homes programme and the Warm Front scheme are two examples. I strongly believe that lessons can be learned from those programmes, particularly Warm Front. I have recently been actively engaged with Warm Front through the provider of the scheme, Eaga, on behalf of local constituents.
As hon. Members will be well aware, Warm Front offers grants to enable certain households in fuel poverty to install energy efficiency improvements such as home and loft insulation and heating measures. Unfortunately, in my constituents’ case, applying to Warm Front to get a new boiler to replace one that was broken took over 13 months. The paperwork was burdensome, and the inefficiency and bureaucracy of the system beggared belief at times. Spending on the Warm Front scheme and its predecessors has totalled £2.6 billion between 2000 and 2011, yet at national level too many homes, particularly in vulnerable communities, remain poorly heated and insulated. I urge the ministerial team to ensure that future schemes under the new proposals are accessible to more people, easier to follow and less bureaucratic in nature. Even those simple changes would, in my opinion, encourage households to take advantage of such Government-led measures.
For the time being, despite huge investment in various schemes, the simple truth is that too many properties continue to achieve very poor energy efficiency ratings. We must embark upon a new pathway, and the Bill provides us with a perfect opportunity to do so through the green deal. To coin a phrase, it is a game changer.
The green deal clearly has a mammoth task ahead. I am excited about the realistic tone, and the practical and flexible nature, of the policy. The current lack of investment in efficiency priorities is not only the result of poorly administrated Government schemes such as Warm Front, but because too many households have been put off by the time and money that it takes to benefit from implementing energy efficiency measures.
When tapping into the green deal, customers can take advantage of up-front money to make responsible energy efficiency improvements. Repayments will be attached to energy bills at the property, rather than the individual having an obligation to pay the money back or pass the cost of improvement on to a future owner of the property. That is an important part of the Bill, because it is increasingly clear that the younger generations move more frequently and more widely than generations before them. That simple measure will in effect encourage participation in the green deal through the flexible transfer of responsibility for repayments to whoever benefits from efficiency savings. Although I am very much in support of the principle, I look forward to more detail as the Bill develops.
I am conscious of the time, and that other hon. Members want to speak, but I shall add another note of caution, which my hon. Friend the Member for Northampton South (Mr Binley) mentioned earlier. There should be further incentivisation measures in the green deal. As the CBI has said, there is concern that the policy, which is a truly exciting one, could become a lame duck if people are not truly engaged to take it up. We must not let that happen, because the consequences are too important.
We should not understate the importance of making a breakthrough in improving energy efficiency in this country. It is therefore imperative for the Bill to win cross-party support and progress successfully. I have been heartened by many of the comments made on both sides of the House this evening. If progress is made, the framework to establish the green deal will be in place, and we can be far more optimistic about meeting our emissions targets, reducing energy bills, tackling fuel poverty and contributing to a greener and fairer energy market. I hope that Members on both sides of the House support those objectives.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Two hon. Members are yet to speak. Perhaps they could divide the time left between themselves. The winding-up speeches will begin at 9.30 pm.
Peter Aldous (Waveney) (Con)
The Government are to be commended for introducing ambitious legislation, for thinking outside the box and for highlighting the importance of realising the potential for Britain to be a world leader in the move towards a low-carbon economy. The Bill contains a wide variety of measures that can help Britain in that aim, including the promotion of smart meters and the move towards greater transparency for energy companies.
The ministerial team are to be congratulated on adopting an open-door approach in explaining their proposals and listening to parliamentarians’ views and concerns. I very much hope that that approach continues in Committee, because although the Government’s ambition and strategy are spot on, we need to look closely at some of the provisions to establish whether they need strengthening so that the Bill achieves its objectives.
It is appropriate for the Government to concentrate much of their efforts on domestic buildings, because 24% of the UK’s carbon dioxide emissions come from the domestic building stock. The flagship green deal is a bold attempt to improve the nation’s housing stock, and giving it every opportunity to succeed is vital.
However, there are a variety of issues to which I would be grateful if the Minister could give further consideration. The CBI, among other organisations, has suggested that there is a need for incentives to encourage take-up of the green deal. I am aware that the Chancellor has indicated that he will look at that. Incentives could include changes to stamp duty, VAT reductions on some works, and council tax rebates.
I would also be grateful if the Minister could consider whether the green deal should include renewables and microgeneration, both of which have important roles to play in the move towards a low-carbon economy. It is also important to consider accepting the warm homes amendment, because the production of an overall plan and strategy kept regularly under review would generate confidence in the green deal and encourage its uptake.
The private rented sector requires specific consideration. Buildings in this sector are more likely to be pre-1919 properties, and thus there is a limit to the energy efficiency improvements that can be made. However, there are other significant challenges in encouraging take-up of the green deal in the private rented sector. First, there is the problem that the initial cost of the works will be borne by the landlord, with the benefits of reduced fuel bills going to the tenants. Secondly, with many tenancies being short term in nature, investment is understandably unattractive to tenants. Thirdly, there is the worry that in the past a non-regulatory approach has invariably not worked. We need to consider how the green deal sits alongside existing tenancy laws and whether legislation is required to encourage landlords to take it up. When the Bill was being considered in the other place, the Government stated that the position would be reviewed after 12 months so that it could be decided whether further legislation was needed requiring landlords to take up the green deal. I welcome the further proposals that the Secretary of State has brought forward today.
I believe that the warm homes amendment has merit, and that consideration should be given to imposing the 2016 deadline for providing minimum energy efficiency standards in the private rented sector, after which landlords will not be able to rent out the worst-performing properties. The warm homes amendment would strengthen the Bill by helping to provide a minimum standard for the private rented sector, and it would help to provide more certainty to businesses expected to deliver the green deal. It is supported by the Federation for Small Businesses and the Federation of Master Builders, and would provide a clear direction for businesses and help to drive the take-up of low-carbon skills across the construction sector.
Although the green deal applies to non-domestic buildings, research carried out by surveyors Cyril Sweett has revealed that the nature of many buildings, such as schools, offices, industrial units and retail warehouses is such that not enough savings will be made to pay for improvements, and that thus they will not qualify for the green deal. Although the green deal will therefore largely apply to domestic buildings, it is important that the UK’s non-domestic buildings are not overlooked as they seek to reduce emissions and energy bills. I therefore urge Ministers to consider carefully the proposal made by the British Property Federation and the UK Green Building Council, which have highlighted an anomaly concerning public sector and private sector buildings: the former are obliged to provide display energy certificates, while the latter are not. The BPF and the GBC believe that a voluntary approach to take-up in the private sector will not work and are of the opinion that it is vital for the Government to provide mandatory DECs. I urge the Government to consider their representations.
It is important that the Bill is framed in such a way as to provide opportunities for small business to play a full role in the roll-out of both the green deal and the energy company obligation, and to ensure that they are not squeezed out by energy suppliers and large companies. There are significant job opportunities for small businesses, ranging from carrying out the energy surveys to installing many of the energy saving works. There is a need for both training and the building up of capacity within the sector in the lead-up to the introduction of the green deal in the latter part of 2012, while with the ECO there is the need to avoid a monopoly situation. There is also a need to encourage banks to provide funding for small and medium-sized enterprises, so that they can get involved in this major opportunity that will help to kick-start the construction sector. With the ECO, it is important to improve access to the market for independent suppliers, and consideration should be given to earmarking a proportion of the obligation for non-obligated suppliers.
Finally, I would be grateful if in Committee the Government could consider addressing a situation that is handicapping the offshore wind sector, which has an important role to play in my constituency. Currently a clause exists in the leases and agreements for lease for offshore wind projects that allows a switch from offshore wind to oil and gas to take place should new oil or gas reserves be found. In that situation, no compensation is payable to wind developers. The existence of the clause continues to cause major problems for offshore wind projects that are seeking finance, with the result that banks view such projects as higher risk than necessary. This comes at a time when both industries are seeking to develop areas of the seabed that are close to each other or even overlap. Efforts to work together to prevent problems will be meaningless unless a fair and clear framework is established in situations where co-existence is impossible. There is an urgent need to ensure that the matter is resolved quickly, through the creation of an early termination mechanism, which would detail how compensation would be paid to the wind developer if a lease is terminated. I urge the Government to take action on the issue now. It has been dragging on for some years and it is important that it should now be resolved, at a time when the offshore wind industry in the UK is rapidly expanding and when companies are looking to make investment decisions. The Energy Bill is an ideal vehicle to tackle the problem.
The Government have the ambition to be the greenest Government ever. I believe that this goal can be achieved if they take on board the helpful suggestions made by right hon. and hon. Members from all parts of the House during the debate this afternoon and this evening.
David Mowat (Warrington South) (Con)
It was not clear to me this evening whether I would make the remarks that I want to make, because it occurred to me that they might be more apposite to the next energy Bill. However, I want to make a few points that perhaps have not yet been made.
First, on the context and the legacy with which this legislation is kicking off, we have heard about two dates this evening. We have heard about 2050, which is the date by which we must reduce our carbon emissions by 80%, and 2020, which is the date by which renewables must account for 15% of electricity generation. However, we have heard less about another date that is equally important, which is 2017 or thereabouts, which is the date by which we will start having power cuts unless we put in place measures to stop that happening.
I have two other pieces of legacy data for the House. Currently, 0.5% of our total energy production comes from renewables. It is also true that 7% of electricity generation comes from renewables, but 0.5% is the measure of what we have to achieve over the next 40 years to meet that 80% reduction. Roughly speaking, even if we achieve a 40% reduction in energy use through such excellent measures as this Bill, we will need to scale up renewables by a factor of about 50. That is absolutely massive.
Although we have talked about fuel poverty, another thing that has not been mentioned in this debate is the fact that energy prices in this country are among the highest in western Europe. Our starting point is that our industries and our people pay more for fuel than others. In particular, those in competitor countries such as France have had cheap, plentiful nuclear power for many years, and they pay less than us. Why does that matter? It matters because we are trying to rebalance the economy towards manufacturing, and a unit of GDP generated from manufacturing requires more energy than a unit of GDP generated from services. That is a further challenge that we have to face.
Broadly speaking, Government policy has two thrusts to it, one of which is energy reduction, which is dealt with in this Bill through the green deal. Our target is to reduce total energy use by some 40%, and that can be achieved—the Royal Academy of Engineering is certainly of that view. Part of that will involve the measures that have been discussed at some length this evening, but part of it will involve, for example, smart meters and smart grids, and all that goes with that.
The other part of our strategy to meet the challenges that I have spoken about is the fact that we are about to manage the market. Why are we managing the market? We are doing so because if the market were left alone, we would end up using gas. That much is clear. Using gas would not be disastrous for our climate change objectives, given that so much energy comes from coal and oil, and that gas is 50% better in terms of carbon emissions, but that is nothing like enough to meet our statutory targets. That is why the strategy on the mixture of renewables, nuclear and carbon capture is important. One of the oddest things about the whole energy debate is that we talk about nuclear and renewables as though they are competing with each other, when we clearly need both. If anything, they are both competing with fossil fuels. The default solution if we react slowly is that we will have to use gas, because that can be obtained relatively quickly.
I have a couple of observations on the Government’s strategy. One relates to urgency. We have heard numbers relating to how quickly we need to implement the green deal, but I do not believe that the 2017 deadline is being treated with sufficient urgency. I was at a meeting recently with some nuclear supply chain people in my constituency, and I was disappointed to hear that they did not believe that any effective nuclear new build would start for at least another year, although time was ticking away. An ex-colleague of mine in Shell once told me that the chief executive officers of the utility companies were quite sanguine about the fact that all this was taking so long, because they had nothing to lose from our inertia. When the time comes, what they have to offer will cost even more. It is important that the Government should take the initiative, rather than leaving this to the utilities, because it would be a perfectly viable strategy for a utility CEO to take their time over this.
Another aspect of the strategy is cost. We have not said a great deal about the differential costs of the different kinds of energy. Energy has to be environmentally sustainable, but it also has to be economically sustainable. I leave the House with the thought that the brilliant technical achievement of the Thanet wind farm, which is a tremendous thing, is going to cost £1 billion in subsidies over its lifetime. It does not produce that much electricity, and its actual cost is therefore very high indeed. Some of the hon. Members who have spoken about fuel poverty today might like to reflect on the fact that a starting point for fuel poverty is when our power costs more than that of other people in the first place.
A third element of our strategy is our approach to technology. Possibly the most impressive technological breakthrough in energy in the past 30 years is horizontal directional drilling, which, combined with a fracture technology, is enabling shale gas and coal gas to be discovered in quantities that would be of material use to the US and the UK, but I am concerned that their use is not forming part of our approach. Perhaps a wider point on technology is that I believe that we should be a fast follower, rather than being at the leading edge—or perhaps the bleeding edge, as one might say. Carbon capture and storage was mentioned earlier. Of course it is a good technology, but it is unproven, and there are other technologies out there that we need to adopt more rapidly.
This all leads me to the subject of nuclear. There is no possibility that we could come close to meeting our 2050 commitment without a massive upgrading of renewables and nuclear. In fact, they go together. Renewables are, by their nature, somewhat intermittent, while nuclear has a very high base-load. The two can be put together quite well. I support the Bill. It is innovative, it is radical and it is right. I hope that it will result in a 40% reduction in energy use, but there is no realistic alternative to nuclear and if we are to meet the 2017 deadline, it is important that we move faster, because 2017 will be here a lot sooner than 2020 or 2050.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
One thing has been proved in the course of this excellent debate—that the Government’s green ambitions are lofty, but that the green reality is far less certain. Just today, we read that the Energy Secretary cannot convince his right hon. Friend the Business Secretary to support the fourth carbon budget and Ministers cannot explain why the Climate Change Act 2008 is included in the list of burdens on businesses that are currently being considered for the bonfire. Ministers are in danger of presiding over a great green betrayal. We on the Opposition Benches want to help them to meet their green ambitions.
The message we hear consistently and very loudly from consumers, industry, green groups and trade unions is that there is no clarity or consistency of policy. Green jobs are being lost; green business is moving overseas; green non-governmental organisations are becoming increasingly alarmed and frustrated. As my hon. Friend the Member for Brent North (Barry Gardiner) eloquently said, Ministers are failing to provide investor certainty from one week to the next, let alone over the next couple of years.
The threat of climate change and fuel poverty grows greater. When we look back in a decade or more at the actions of the Energy Secretary and his Ministers, we do not want to see guilty men who had a golden opportunity to secure our green future. It is not us alone that are saying this. The CBI, for example, has said that the green deal
“has clear potential to help unlock…emissions reductions…But without significant action from government to develop an attractive proposition for businesses and households, this potential is unlikely to be realised.”
As it stands, this has all the dangers of being a deeply disappointing Bill. It could be so much more effective, but warm words will not deliver warm homes.
Let me deal with some of the important contributions made by Members of all parties. I hope that they will forgive me if I fail to do their arguments justice in the short time available. The theme most constantly revisited throughout the debate was the distinct lack of detail in the Bill. As the hon. Member for South Suffolk (Mr Yeo) mentioned, it is a great concept, but as my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) said, the Secretary of State did not provide a satisfactory increment of information in his responses to the many interventions he took.
The Bill is a stab in the dark. Although the Government first published it no fewer than five months ago, none of the secondary legislation has been outlined, which leaves so many questions unanswered.
Many Members asked about the incentives to be made available to home owners and tenants to encourage take-up. The hon. Member for Richmond Park (Zac Goldsmith) referred to a possible stamp duty rebate, which was raised in the press as something that might crop up in the Budget, while the hon. Member for Northampton South (Mr Binley) referred to a possible council tax rebate.
A number of Members raised serious concerns about the maximum interest rates on the green deal. As my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) said, this will be absolutely critical. I referred in an intervention to research and polling done by YouGov, showing that more than 40% of households do not believe that the green deal is an attractive proposition for them, and if the interest rate is above 6%, only 7% of people polled said that they would take up the green deal. We need to reflect carefully on that as we go into Committee.
Another big question is who is going to come into the home to assess the situation and to what level those people will be trained. The Secretary of State said that we can get lots of quotes for the green deal. That sounds fantastic, but who is going to pay for the different assessments of the home?
A number of Members, including the hon. Members for Bracknell (Dr Lee) and for Angus (Mr Weir), referred to the opportunities for small and medium-sized enterprises to take part in the green deal. This is crucial because SMEs, co-operatives, charities and social enterprises must have equal opportunities to participate in the scheme, but the Bill does not provide the detail on that. I am also keen to know what guarantees exist that millions will not be saddled with debts that they cannot afford.
Many Members asked a crucial question: after all the work is done, by how much will our national emissions be reduced? We tabled an amendment on that very issue in the House of Lords, which was rejected. I sincerely hope that the Government will revisit it in Committee.
My hon. Friend the Member for Brent North asked what might happen if a new householder or tenant arrived and the energy savings arrangement changed as a result. The Secretary of State made a joke about a Brazilian wife, but my hon. Friend had asked a serious question that needs to be considered. [Interruption.] It was a Brazilian husband or wife.
Ministers should already have the answers to the many questions that have been asked, rather than deferring them to more than 50 pieces of delegated secondary legislation. The Secretary of State referred to a watertight legal framework. We want and need that framework, but it does not yet exist.
Another key theme that emerged was the poor deal for the consumer represented by the Bill in its current form. Several Members, including the hon. Member for Northampton South, expressed concerns about consumer rights, and my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) spoke eloquently about the confusion felt by his constituents about their energy bills and the implications of the forthcoming abolition of consumer support. If the Bill is not strengthened in that regard, the green deal has the potential to be a poor deal for the consumer. Consumer Focus has warned that it could erode consumer protections rather than enhancing them, and the consumer watchdog Which? has said that Ministers have yet to provide assurances that consumers will be protected from mis-selling and dodgy cross-selling, that they will have access to redress should something go wrong, and that they will not be expected to pay hidden charges. A lack of clarity on those issues will reduce take-up of the green deal.
Many Members also raised the issue of fairness in tackling fuel poverty. I do not have time to go into as much detail as my hon. Friend the Member for Stoke-on-Trent North and my right hon. Friend the Member for Oldham West and Royton, who made an innovative suggestion about how green deal payments might be met for the 5.5 million households in the UK in fuel poverty, but this is an important issue that urgently needs to be addressed.
According to Ministers and others on the Government Benches, the green deal will be a game-changer for fuel poverty—we heard that phrase a number of times—but that too is not yet evident in the Bill. The new energy company obligation, which underpins the green deal, will be targeted at hard-to-treat homes, but currently no amount has been ring-fenced for the purpose. It is worrying that there are no guarantees that the ECO will be adequate to deal with the scale of the problem, not least in the light of the concern raised by my hon. Friend the Member for Southampton, Test (Dr Whitehead) about the inclusion of the ECO in the Treasury’s cap on levies, which the Minister did nothing to assuage.
The hon. Member for Bracknell rightly drew attention to the need for more investment in renewables, referring specifically to marine energy. We know from the Pew Environment Group’s report, which was released only a few weeks ago and mentioned by my hon. Friend the Member for Hartlepool (Mr Wright), that in the past year the UK has fallen from third in the world to 13th in terms of investment. Just before the last election the Labour Government published a marine energy action plan, which is currently gathering dust on a shelf at the Department of Energy and Climate Change. I urge the current Government to resuscitate it and make the necessary investment in more renewables, so that we can take advantage of the £100 billion that is expected to be invested next year alone in renewables across the globe.
In his eloquent contribution, my hon. Friend the Member for Hartlepool spoke of the experience of businesses in his constituency and their concerns about the Government having to move quickly. I have mentioned the £100 million that will be spent next year, and he referred to the figure of $2.3 trillion, which is the amount that will be spent on renewable energies over the next decade. Businesses in his constituency are asking for a clear vision from Government, but they are not currently getting one, and I urge the Government to respond.
Several Members on both sides of the House talked about the private rented sector, and there are a number of relevant clauses in the Bill. Some 40% of tenants in the private rented sector live in F and G energy rated homes. We welcome the move to bring forward the timeline, but we hope we might revise that even further in Committee.
A report last week by Friends of the Earth gave a damning verdict. It talked about the great green betrayal and conducted an examination in forensic detail. The report makes it clear who it believes is to blame for what is happening. It talks about
“Liberal Democrats, who have clearly failed to use their influence inside the Coalition to ensure a better performance on the environment.”
This is not the greenest Government; it does not yet come close. With 27% of all UK emissions coming from homes, the Bill is not yet adequate for the task.
It is essential that the Secretary of State gets the green deal right. He said it was the first such deal in the world, but a similar scheme was set up in Australia. Unfortunately, it was a complete disaster. After 160,000 homes were fitted with substandard insulation, four people died and the scheme was scrapped. There is also a scheme in Germany where the take-up is 100,000 a year, but it has a Government-supported interest rate, which we are not going to get under the current Bill. Such issues must be revisited in Committee.
In spirit and in principle, we want to support the Bill. The hon. Member for Winchester (Mr Brine) tried to rewrite history earlier; it was, of course, the Labour Government who began to implement a pay-as-you-save scheme. In its current form, the Bill could end up being a wasted opportunity, but we will take the Minister up on his assurances that he will work across the Chamber to make it better. We will not vote against it tonight as we support its aim, and we will work hard and positively to make it better. In Committee, we will strive to convince Ministers to give consumers the protections they deserve, to give British businesses the confidence they require, and to build into the Bill the backbone that it so desperately lacks.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I am delighted to hear from the hon. Member for Liverpool, Wavertree (Luciana Berger) that the Opposition will not vote against the Bill, but I will hold her to blame if my hon. Friends now start to disappear from the Chamber during my winding-up speech. She has just delivered a very polished debut from the Dispatch Box. I think that winding up is a much harder job than opening, but she made a very good fist of it.
I do not agree with the hon. Lady’s rather gloomy scepticism about this important Bill, but she was spot on in one respect: this has been an excellent debate, with powerful and substantive contributions from both sides of the Chamber. In saying that, I gloss over the opening speech of the shadow Secretary of State, the hon. Member for Hackney South and Shoreditch (Meg Hillier), whose contribution was out of tune with the debate we subsequently had. I was genuinely pleased by the way in which Members across the Chamber engaged in scrutinising these radical and far-reaching proposals, and I have to say it is telling to compare and contrast the shadow Secretary of State’s speech with the master-class demonstration by the leader of the Green party, the hon. Member for Brighton, Pavilion (Caroline Lucas), of what can be achieved in an effective and intelligent critique from the Opposition Benches.
This Bill is only the first step in the new Government’s plans to reshape and renew our energy economy, but it is certainly a very clear and substantial demonstration of the coalition’s determination to be “the greenest Government ever”. These measures will be vital tools in helping to meet our stretching carbon reduction targets and they underpin our determination to stop dangerous global warming.
The Bill, however, is no tree hugger’s charter, nor is it a narrow response to the science of climate change; it can provide practical help to families and money-saving improvements to every home in Britain. The British housing stock, which for too long has languished at the very bottom of the European energy-efficiency league table, will be transformed. Finally, government will have a game-changing policy framework that is commensurate with the huge twin challenges of improving our housing stock and eradicating fuel poverty.
That said, I am very conscious of the fact that with this Bill we are putting in place a gigantic project that will stretch way beyond this Parliament and, we hope, the next too. The green deal framework is designed to continue well into the 2020s and beyond, so I do not pretend for a moment that this Bill will be the last word on the issue or that we have anticipated every eventuality. We will continue to consider new incentives and levers to drive the programme forward as the market develops and we reach towards that very ambitious level of retrofitting 14 million homes by 2020 and 26 million homes by 2030. But the long-term direction is clear: there will be no more short-term initiatives and no more stop-start schemes. Business certainty created by the green deal will be essential to unlocking the billions in private sector investment that will be key to this programme’s success.
I am keenly aware that responsible political consensus on the green deal is particularly desirable. I very much hope that, given the shared climate objectives among the parties, we can all show the same resolve and constructive cross-party engagement that was the hallmark of the Climate Change Act 2008. I listened carefully to the thoughtful speeches made by hon. Members on both sides of the House today, and I would be happy to engage in an informal evidence-based session before the House rises for the Whitsun recess. I noted not only the shared ambition that Members on both sides of the Chamber have for the Bill, but the detailed concerns and questions that have been raised. I hope to address many of these issues now. Where I am unable to do so, I hope to deal with them more seriously, and constructively, in Committee.
Broadly speaking, six main themes have emerged from today’s debate, and I hope to hear more about them in that informal session. The first was the scope of the coalition’s ambition, the scale and pace of delivery, and how we measure success. The second was the energy company obligation—the ECO—and the challenge of ensuring that we deal effectively with fuel poverty. Thirdly, hon. Members rightly urged robust consumer protection—that is absolutely essential. Fourthly, hon. Members strongly argued the case for more ways to involve local communities and local councils, and, importantly, challenged us on the provisions to tackle recalcitrant landlords in the private rented sector. Fifthly, we debated the enormous potential of the green deal to drive green jobs and green growth, and to create new investment opportunities. Finally, we must not overlook the importance of enhancing our national energy security, as well as moving our economy beyond dependence on foreign oil and expensive imported fossil fuels.
Let me deal briefly with each of those themes in turn. Many questions were asked on the fundamental point of the scale of our ambition by, among others, the hon. Member for Hackney South and Shoreditch, my hon. Friend the Member for Cheltenham (Martin Horwood) and the hon. Member for Stoke-on-Trent North (Joan Walley), with whom I have served for many years on the Environmental Audit Committee. The issue was also addressed in particularly informative contributions from the right hon. Member for Oldham West and Royton (Mr Meacher) and the hon. Member for Brent North (Barry Gardiner). I am pleased to respond to them by saying that I can announce two important developments. First, my Department will publish a formal aim—that is, on the face of the Bill—to take reasonable steps to improve the energy efficiency of the English residential sector by 2020 so that emissions from that sector follow a trajectory that is consistent with the UK carbon budgets. Secondly, I will table an amendment that commits to an annual report to Parliament on the specific contribution of the green deal and the ECO, within the context of contributing to the carbon budgets set out by the Climate Change Act that have so concerned Members from all parties in the course of the debate.
Many Members raised the issue of the ECO and fuel poverty. Fuel poverty is key to the essence of the Bill and we will certainly be judged on its success. Those Members included the hon. Member for Hackney South and Shoreditch and my hon. Friend the Member for Bracknell (Dr Lee), who is a member of the Select Committee on Energy and Climate Change as well as of the Conservative friends of Bangladesh and so has a particular interest in international climate change issues. The hon. Member for Southampton, Test (Dr Whitehead), with his usual expertise, focused on the ECO and the role it plays in the potential levies cap. The hon. Member for Brighton, Pavilion had some very vivid cases of fuel poverty from her constituency that will be reflected across the land, as did the hon. Member for Hackney South and Shoreditch.
Let me be clear that the ECO is designed to work hand in glove with the green deal to help the most vulnerable households and hard-to-treat properties. The ECO will deliver heating systems and insulation in the most effective way to help low-income vulnerable households heat their homes affordably and it will be tightly targeted. The ECO and the warm home discount provide a range of support mechanisms for low-income vulnerable households. I have heard the calls for more information and so I commit today to bring forward details on the ECO before we go into Committee.
On the subject of robust consumer protection, we heard the shadow Secretary of State’s questions about who will be the regulator and whether we could have more detail. The right hon. Member for Oldham West and Royton wanted to know more about how the green deal would work for vulnerable energy users. My hon. Friend the Member for Northampton South (Mr Binley), in his very statesmanlike speech, also highlighted the need for more protection for the most vulnerable in society.
There will be strong consumer protection. It will be necessary to propose that level of detail in statutory instruments, through which we will all have the opportunity to scrutinise those important points in more detail. There will be a green deal quality mark for installers and warranties against installation failure and poor workmanship. The golden rule is that the charge attached to the Bill should not exceed the expected savings at the time of the assessment and that will be crystal clear. The Consumer Credit Act 1974 will offer protection for green deal customers. I really appreciate the way the industry has got involved on this important issue. Voices such as Kingfisher and the Builders Merchants Federation are essential in helping us to design the green deal so that big companies and local small and medium-sized enterprises can get involved while at the same time offering strong consumer protection.
The question of involving communities and tackling the private rented sector was raised by my hon. Friend the Member for Warwick and Leamington (Chris White), the hon. Members for Stoke-on-Trent North, for Hartlepool (Mr Wright) and for Brighton, Pavilion, the right hon. Member for Oldham West and Royton and the hon. Member for Southampton, Test. We will take robust action on the face of the Bill in respect of the private rented sector. Before we came to the House today, we listened to various voices from a number of stakeholders on the subject of the Home Energy Conservation Act 1995 and we have decided to retain parts of HECA, to breathe new life into it and to ensure that it becomes part of our way of ensuring uniform delivery of the green deal across Britain. We will table those amendments in Committee.
The question of green growth and investment was mentioned by my hon. Friend the Member for Winchester (Mr Brine), who made a very powerful speech arguing that the green deal is a great carrot, rather than a stick, that will throw up a huge number of business opportunities. He also rightly tested us on the need for more training opportunities, which we are taking very seriously. The hon. Member for Angus (Mr Weir) also asked whether we would be letting in small businesses. My hon. Friend the Member for Winchester pointed out that this could mean 100,000 jobs or more. It is important that we do not just capture the carbon savings, but that we really capture the industrial opportunities that this big market push will afford us.
Gregory Barker
I will not, I am afraid, because there is very little time.
On energy security and moving beyond oil dependence, the Chairman of the Select Committee made a very important contribution at the beginning of the debate pointing out the need for stability in electricity markets and for investors and about the role for nuclear and the important role of renewables. That will be delivered through the next stage of our redesign and renewal of the sector in energy market reform. Those points were all reiterated by the hon. Members for Cheltenham and for Angus and my hon. Friends the Members for Northampton South and for York Outer (Julian Sturdy), who listed a number of energy security measures, as well as by my hon. Friend the Member for Waveney (Peter Aldous), who spoke forcefully about offshore renewables, and my hon. Friend the Member for South Suffolk (Mr Yeo). We are very keen to see a resurgence in renewables and support for new technologies, including carbon capture and storage. I promise to write to hon. Members about any important points they have raised that I do not cover in what will be a rather hasty wind-up now.
In summary, no one should underestimate the sheer scale of the ambition that underpins the Bill, which has the potential to upgrade the homes of every family in Britain by allowing every household to access finance for up to £10,000-worth of energy improvements irrespective of age or status. Further subsidy is available for hard-to-treat homes and, of course, the fuel-poor. The Bill will unleash the most far-reaching programme of British home improvements since the second world war. It will drive down family energy costs and will insulate consumers against further sharp rises in future. The Bill will unleash billions of pounds in new investment in our green economy and will create thousands of new green jobs.
The Bill will directly help those in poor rented accommodation whose landlords refuse to make improvements, and it declares war on the root causes of fuel poverty. The Bill will deliver huge steps towards meeting our carbon reduction targets and it will strengthen British energy security. The Bill will create a brand new market and will drive choice and competition. It will unleash British research and development as well as technical and industrial innovation that should propel the UK to the forefront of the giant global markets for energy efficiency, products and services—exports up, emissions down. The Bill will deliver greater choice to the consumer and fairer access to investment for the fuel-poor and it will be a massive boost to British businesses. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
ENERGY BILL [LORDS] (PROGRAMME)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Energy Bill [Lords]:
Committal
1. The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 21 June 2011.
3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
4. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
Other proceedings
7. Any other proceedings on the Bill (including any proceedings on consideration of any Message from the Lords) may be programmed.—(Bill Wiggin.)
Question agreed to.
ENERGY BILL [LORDS] (MONEY)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Energy Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—
(1) any expenditure incurred by the Secretary of State or the Gas and Electricity Markets Authority by virtue of the Act, and
(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Bill Wiggin.)
Question agreed to.
ENERGY BILL [LORDS] (WAYS AND MEANS)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Energy Bill [Lords], it is expedient to authorise—
(1) the imposition by virtue of the Act of charges under licences issued under the Electricity Act 1989 or the Gas Act 1986, and
(2) the payment of sums into the Consolidated Fund.—(Bill Wiggin.)
Question agreed to.
Business without Debate
delegated legislation
petition
Jessica Lee (Erewash) (Con)
I present and support the petition prepared by George’s Tradition, with 3,674 signatures supporting the petition or wording in similar terms.
The petition states:
The Petition of residents of the Erewash constituency and others,
Declares that England is one of very few countries in the world that does not have a public holiday to celebrate its national day; notes that St Patrick’s Day is a bank holiday in Northern Ireland, and that St Andrew’s Day is a voluntary public holiday in Scotland; and further declares that everyone who is part of England should be able to celebrate its traditions, its heritage and the English way of life with a public holiday on St George’s Day.
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals to make St George’s Day a public holiday in England.
And the Petitioners remain, etc.
[P000920]
Hospices (VAT)
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Bob Russell (Colchester) (LD)
The hospice movement is a great British success story. If we wanted to think of something that epitomises the big society, the 209 independent hospices the length and breadth of the land, with an army of more than 100,000 volunteers, tick all the boxes.
The hospice in my Colchester constituency—St Helena hospice, named after the town’s patron saint—which serves the whole of north Essex, has around 800 volunteers who help in a wide variety of ways, raising money and organising events, working at several charity shops and helping at the hospice itself, which is centred on an ancient farmhouse, Myland Hall. Around 180 professionals are employed by the hospice as medical and key support staff, but without the volunteers the hospice could not exist. It is very much a partnership, which for the past 25 years has been a beacon of community involvement. But all this has been achieved with one arm—financially speaking—tied behind their backs.
I refer to the unfairness of the value added tax which penalises the charitable hospices while exempting exactly the same level of operation undertaken at the 36 national health service hospices and hospitals, which are VAT-exempt. This unfairness—the taxman taking money raised for charitable good causes—does not affect hospices alone, of course, but tonight’s debate is specifically about hospices. I look to the coalition Government to take urgent action to provide the necessary means to ensure that the VAT currently paid is refunded so that the money can be spent for the purposes for which it is raised or donated—the treatment of patients.
I am grateful to Help the Hospices, the national umbrella group, for its assistance with background briefing for my speech. I also thank the Charity Tax Group for the information that it provided. The Charity Tax Group estimates that before VAT was raised to 20%, the total irrecoverable VAT across all charities was more than £1 billion. The new higher level of VAT has cost the charitable sector an estimated extra £143 million. For the record, I voted against raising VAT to 20%.
This is not the first time that I have raised with the Government of the day the unintended consequences of VAT charged to charities, and thanks to my intervention several years ago the then Chancellor of the Exchequer, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), moved quickly to came up with a solution whereby the Royal British Legion receives a matching grant for the VAT it is required to pay on the production of its Remembrance day poppies. I invite the coalition Government to use this as a precedent to give matching grants to hospices for the VAT that they pay, as an interim measure in advance of seeking to amend the legislation to exempt them from VAT as if they were part of the NHS for this purpose. After all, the work they do is no different from what the NHS does, other than the fact that it involves the voluntary and charitable sector.
If the “poppy” solution is not acceptable, I invite the Government to see whether the relief enjoyed by local authorities and other public bodies under section 33 of the Value Added Tax Act 1994 and certain health care provisions under section 41 of the same Act could be used to assist hospices. Failing that, why not adapt the provisions in the Finance Bill to ensure that academy schools can recover VAT on non-business supplies in the same way as local authorities can? If it is okay for academies—educational establishments that are not universally welcomed—applying the same solution to hospices would probably generate near unanimous approval. In this respect, I congratulate the hon. Member for Scunthorpe (Nic Dakin) on his ten-minute rule Bill earlier this year, which proposed a simple legislative solution.
When the original European Union VAT system was developed, the special position of charities was not considered. Alas, because hospices provide services that are either exempt from VAT or outside the scope of the VAT system, they cannot recover the VAT they pay on their expenditure on supporting their charitable aims. This is something that I am sure Members across the House would want to see changed.
Increasing demand for hospice care, alongside the Government’s public service reform and big society agendas, is likely to result in more care services being transferred to hospices. Indeed, I am grateful to the Sue Ryder charity, which already has seven hospices. It first alerted me to this serious problem, telling me:
“A recent transfer of an NHS hospice to Sue Ryder under the Transforming Community Services initiative has sparked interest in the viability of charities taking on other NHS hospices and services. We believe there should be a level playing field in VAT between charities and the NHS so that all possible funds can go towards the delivery of care.”
Martin Horwood (Cheltenham) (LD)
One of the Sue Ryder care hospices is in my constituency, and I warmly support what my hon. Friend is saying. Does he agree that as we see the outsourcing of more NHS services to providers such as Sue Ryder, that could deliver a windfall to the Treasury rather than directing funds where they are most needed, which is to health and palliative care?
Bob Russell
I am grateful to my hon. Friend for raising that point, which I was just about to mention. Let me be financially blunt about this: if the hospices did not exist, the excellent work that they do would fall to the NHS and cost the public two to three times more because of the considerably lower cost of hospices, brought about by the special working combination of professionals and volunteers, with fundraising and so on, which is the basis on which hospices were founded and have existed over the years.
I understand that, on average, charitable hospices receive about one third of their funds for the services they provide from statutory sources, which leaves two thirds to be raised to cover all the other costs. This already challenging target is not helped when it is realised that the taxman is helping himself to 20%. I am advised that most local hospices do not have three-year agreements with NHS commissioners, relying instead on year-on-year negotiations that are, by their very nature, subject to budgetary pressures within the NHS. Alarmingly, a survey of member hospices conducted by Help the Hospices last March found that 64% of primary care trusts had frozen NHS funding for hospices for the period 2010-14.
I will set out some statistics about the excellent job that the nation’s hospices do. Collectively, they provide more than 26 million hours of specialist care and support every year, 90% of which is provided through day care services and care in people’s homes, and 77% of adult palliative care in-patient units are run by hospices, with the voluntary sector providing 2,139 adult in-patient beds, compared with just 490 provided by the NHS. All children’s in-patient units in the UK are run by the voluntary sector. Independent voluntary hospice expenditure increased by a fifth between 2007 and 2009, which indicates the continuing growth and importance of hospices in the life of the nation. More than £1 million is raised every day for the nation’s hospices, from fundraising, legacies and donations.
The value of the voluntary work carried out by the 100,000-plus volunteers is estimated to be worth in excess of £112 million every year. Help for Hospices has told me:
“Hospices are unique among providers of healthcare because they contribute so significantly to the funding and provision of hospice and palliative care. In 2009, hospices spent £687 million. For every £1 the State invests in local charitable hospices, those hospices deliver £3 worth of care.”
It thus makes sense that the burden of VAT on hospices should be lifted so that they can do even more good for the benefit of the communities that they serve.
Help for Hospices also told me:
“Hospice care receives overwhelming public support in the UK. A recent survey showed more than 80 per cent of people believe everyone with a terminal illness should have the right to receive hospice care.”
My only observation is that I am amazed the figure is as low as 80%.
I would like to say a little more about the St Helena hospice in Colchester, which I visited on Saturday ahead of this evening’s debate and in order to inspect the newly extended Joan Tomkins day care centre, which was officially opened to coincide with the annual fete in the grounds of the hospice.
The original day care centre, named in memory of the late wife of local business man Mr Robin Tomkins, whose generosity made the building possible, was opened in April 1988 by the Princess of Wales. I remember that well, because my mother was in the nearby hospice and died a few days later. The princess spoke to my father at my mother’s deathbed, and he spoke afterwards of the warmth of compassion that she had shown.
St Helena hospice, the main building, was officially opened in April 1986 by Her Majesty Queen Elizabeth, the Queen Mother, so we have just celebrated its 25th anniversary. As an aside, I should have said that my mother was one of the volunteers in the early months after the hospice opened.
Like other hospices throughout the country, St Helena is rooted in the local community that it serves. It provides free medical and nursing care and therapy to adult patients with any diagnosis. Alongside the two day centres there is also one at Clacton, and there is in-patient accommodation in the purpose-built extension to the historic Myland Hall.
Services are also provided for patients in their own home. Indeed, in the past five years there has been a 58% increase in the services in patients’ homes. St Helena hospice also provides pre and post-bereavement support to family members, including children, and attached to the hospice is an education centre, providing education for health and social care professionals.
It will cost St Helena hospice more than £4.6 million in the current financial year to provide its valuable services, and it would be great if it did not have to pay value added tax, but could instead spend that money on the purposes for which people wish it to be used—supporting the work of their local hospice.
Help for Hospices told me:
“As the population ages and people approach the end of life with ever-more complex co-morbidities, a spectrum of highly flexible and adaptive hospice and palliative care services need to be available.”
Jim Shannon (Strangford) (DUP)
Not only the services and the care provided but also hospice-build should be exempt from VAT. Does the hon. Gentleman agree that the Minister should address that in his reply?
Bob Russell
The hon. Gentleman makes an exceedingly good point. We have the nonsense, right across the construction industry, whereby new-build is VAT-exempt, but when a building is added to or converted, as in the instance to which I believe the hon. Gentleman has just referred, VAT is levied. When a hospice wants to extend its building, as in the extension and modernisation of the Joan Tomkins day care centre that I mentioned, VAT is levied, as I understand it. That is wrong.
Help for Hospices also told me:
“The Government has committed to a ‘level playing field’ for all organisations delivering public services. However, charitable hospices continue to face extra costs that statutory and private providers do not.
Tax burdens should be removed from hospices where they can be. This is particularly necessary as hospices are providing public services and investing considerable charitable funds into the ‘health economy’ and, unlike other private and public providers of healthcare, are subject to significant funding and contracting challenges.”
I believe that the public would overwhelmingly take the view that the coalition Government should urgently introduce measures to deal with the unfairness of levying VAT on our hospices. I have put forward suggestions as to how that can be achieved, and I now invite the Minister to pursue these matters.
The Exchequer Secretary to the Treasury (Mr David Gauke)
I congratulate the hon. Member for Colchester (Bob Russell) on securing this debate and on speaking with such evident passion and knowledge about the hospices in his constituency and the hospice movement more widely. I think I speak for all Members in expressing a sense of admiration for what the hospice movement does. I certainly know of the fantastic work that a number of hospices perform in my constituency.
I am pleased to have a further opportunity to explain and discuss the Government’s policy on an issue that has generated considerable interest and is evidently of concern to a large number of hon. Members. It might be helpful if I could start by reminding Members of the current position with regard to VAT and the constraints that we are acting under. Before I do so, I would like to confirm how much the Government appreciate the energy and input of charities across a wide spectrum of national life and interests. We can all agree on the important role that they play in our society and agree that we are fortunate that they are prepared to come forward with their immense contribution.
As we all know, VAT is a broad-based tax levied on final consumption. It is charged by registered businesses on their supplies and can be recovered by a business when the purchase is destined for use in the making of supplies that carry VAT. In this respect, charities are no different from others when they are in business, as they can recover VAT. A business, however, bears the VAT on purchases when it is making supplies that are exempt from VAT. Since the supplies it makes do not carry VAT, it is unable to claim back the VAT. Exemption is applicable to a limited range of supplies such as the rent of land and buildings, education and health care. The application of an exemption has to be in line with international agreements—in this case, the principal VAT directive. Since health care is included in the list of exemptions, we are obliged to apply an exemption.
The hon. Gentleman’s central concern is how the impact of VAT on hospices can be mitigated. Ideas that have been mooted include the application of a refund system or arrangements similar to those applying to the NHS. With regard to a refund system, it would, in principle, be possible to introduce such a system in respect of the non-business activities of charities. However, such refunds, as a matter of Government expenditure rather than taxation, would place a very significant cost burden on the Exchequer, especially given the current fiscal position. Furthermore, many charities are engaged in activities where they could be in direct competition with private sector organisations: those activities include the provision of care and welfare services. A refund scheme for VAT incurred in relation to these services would represent a distortion of competition. Any scheme that could be devised would be complex and administratively burdensome for charities to operate.
Bob Russell
Will the Minister explain where the competition is in the treatment of cancer patients? That is something new to me; I did not realise that it was in the competitive world.
Mr Gauke
I wanted to apply this initially to the broad issue of costs incurred by charities as a whole. Clearly, there can be an issue in the provision of care and welfare services more generally, and I was looking at it in that context rather than specifically with regard to hospices.
It is true that the NHS can recover the portion of its VAT costs that relate directly to out-sourced services used in the provision of free healthcare—for example, cleaning, laundry, catering and estate management. That amounts to about 20% of the total VAT incurred across the NHS. This ability to reclaim some VAT costs is taken into account as part of the overall funding arrangements for the NHS. Refunds do not extend to VAT paid on goods and services purchased to support business activities that are exempt from VAT, such as private health care and property rental.
In addition to the obligation placed on the Government to ensure that the VAT system is fiscally neutral and does not distort competition, it is not within our gift to change unilaterally a VAT system unanimously agreed in Europe and applying in the single market. We need to apply the mandatory exemption in relation to the business supplies of health care providers, with the associated block on recovery. Similarly, under European agreements the Government cannot extend existing VAT zero rates or introduce new ones. Reduced rates can be applied only to a specific list of goods and services, and there is no such reduced rate that applies to all supplies made by all charities.
Nic Dakin
The Minister is giving a detailed explanation, which is very helpful. May I refer back to situations in which a hospice, for example, takes over services that were previously run by the NHS, for which the NHS could recover VAT on non-business services? Surely such an imaginative Minister can find a way of transferring that across to the hospice movement so that it is cost-neutral for the Exchequer, but beneficial to the community.
Mr Gauke
If the hon. Gentleman will forgive me, I will come back to that point. It is kind of him to say that I am going through this in a detailed way. If I may, I will proceed and then come back to what we can do. It is worth making the point that the last time we tried to change the list of matters that can be zero rated for VAT, it took six years and some negotiation.
It is worth highlighting the help that Government provide for charities. We are limited in the support that we can give through changes to the VAT system, but it is important to understand that the Government can and do support charities more widely through the existing VAT system and in other ways. We are committed to retaining the existing VAT zero rates that apply specifically to charities, which provide a benefit of about £200 million a year. Those include VAT zero ratings for qualifying charities on sales of donated goods, for medical and scientific equipment, and for goods for use by disabled people. Charities are not charged VAT on the costs of advertising and public media. They also qualify for zero rating on the construction of certain buildings to be used for charitable purposes. All those zero rates are derogations from the normal EU VAT rules and are not enjoyed by charities in other member states. Charities also benefit from the more widely available VAT zero rates that are applicable to purchases.
The UK has one of the most generous tax systems in the world for charities. Our existing reliefs for charities are worth more than £3 billion a year. Gift aid is the largest single relief, and it is now worth nearly £1 billion to charities each year. Our position, which is in line with that taken by successive Governments, is that the most appropriate way of supporting charities is to encourage charitable giving, rather than to create a complex and burdensome system of additional reliefs or refunds.
Martin Horwood
As a former director of fundraising for a national charity, I tell the Minister that encouraging giving is easy to say, but more difficult to achieve, whereas a VAT refund would make a substantial and immediate difference. The problem of the burden on the charity would be easily overcome in exchange for the benefit. The important point, which has been made, is that as we commission more health care services, it will not be cost-neutral for the Treasury, but will give a windfall benefit to the Treasury. Surely something can be done so that at least new services that are provided gain a refund for VAT, and do not just deliver a benefit to the Treasury for no benefit to the community.
Mr Gauke
Again, hon. Members are raising fair points. To jump to the conclusion, we are looking closely at this area.
The help that we provide to charitable giving is important. Charities are central to our big society agenda. The 2011 Budget announced the most radical and generous reforms to charitable giving for 20 years, including reducing the inheritance tax rate when 10% or more of the net estate is left to charity. From 2013, a new scheme will allow charities to claim a gift aid-style top-up on small donations that they receive without gift aid declarations for up to £5,000 for each charity every year. Overall, 100,000 charities can benefit from the 2011 Budget changes to the tune of about £600 million.
It is also worth mentioning the transition fund that was announced at the spending review. It makes £100 million available to charities, voluntary organisations and social enterprises that are delivering front-line services and are affected by reductions in public spending. The fund provides grants of between £12,500 and £500,000 to help organisations make the changes necessary to thrive in the long term. Funding was made available in 2010-11 and 2011-12, and the fund is focused on helping organisations transit and adapt to the new funding environment rather than merely keep going. The first 18 awards were made on 15 February, with further awards in March, April and May.
The Government continue to examine ways of ensuring that VAT does not act as a barrier to the reform of public services, which was the point that the hon. Member for Cheltenham (Martin Horwood) raised. We are examining such options where they are open to us and affordable within agreed funding arrangements. For example, the Government announced in the Budget that we would continue to consult charities and organisations in other sectors to explore options for implementing the EU VAT exemption for cost sharing. I can tell the House that one of the options under consideration is to issue a consultation paper on the subject within the next two months, and we are exploring that possibility closely.
More widely, there are often ways of mitigating the impact of VAT within the existing system. For example, where local authorities and other public bodies enter into contractual rather than funding arrangements with charitable providers, it can greatly lessen any irrecoverable VAT incurred by those providers in many cases. It has to be acknowledged, however, that such an approach does not offer much scope for services that fall within the health exemption.
As I said earlier, I recognise that there is genuine concern about VAT among people involved in hospices. That was why, in March, I met the hon. Members for Scunthorpe (Nic Dakin) and for Leeds North West (Greg Mulholland) and people working in the hospice sector, including for Sue Ryder. Following that meeting I asked officials to continue the dialogue, and they have met subsequently with the intention of exploring any viable options. I hope that that provides some reassurance, although I cannot give more detail at the moment. I am certainly keen that we explore options.
Mr Robin Walker (Worcester) (Con)
Will the Exchequer Secretary respond to a suggestion that has been made by Richard Shaw, the treasurer of the excellent St Richard’s hospice in my constituency? He has suggested that under the NHS reforms, if hospices’ income from doctors’ consortia could be deemed to be VAT standard rating, that would allow hospices to recover a lot more VAT on their charges. Will that be one of the options that his officials look into?
Mr Gauke
As the hon. Member for Colchester has just muttered, it will now. My hon. Friend the Member for Worcester (Mr Walker) has put that thought on the record, and my officials will certainly take it up.
As I said, there is clearly strong feeling in the House on the subject, and rightly so. We all recognise and respect the value of the hospice movement, and we all recognise the opportunities and benefits of a greater diversity of supply of services. We agree that it would be most unfortunate if the workings of the VAT system were to get in the way of sensible progress. I hope that my comments will provide reassurance to the hon. Member for Colchester that we understand the issues that have been raised and that the Government are taking them very seriously. I hope that we can continue to work closely with the hospice movement in developing proposals.
Question put and agreed to.
Petitions
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Refurbishment of Hillbourne School, Poole
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Wind Farms (Mid-Wales)
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Glyn Davies (Montgomeryshire) (Con)
This debate is on a subject that is of greater importance to me than any other issue will be during the entire time that I serve as a Member of the House, irrespective of how long that is. It is a great pleasure to serve under your chairmanship for the first time, Mrs Riordan. You can observe that I am not at my best today—not physically, at least—having had to enter the Chamber on crutches. I will remain dependent on crutches for a while. I am grateful to my surgeon at the excellent Robert Jones and Agnes Hunt hospital in Gobowen, who two weeks ago performed a successful operation on my back. Mr Trivedi is most displeased that I am here this morning. He instructed me to rest at home, but this morning was such a valuable opportunity that I would have allowed myself to be carried in by stretcher. In fact, I thought that that would add a dramatic touch to the occasion, but in the end I decided against it. I certainly hope that it is not the way I will be carried out.
I will start by declaring a sort of interest. I was born in mid-Wales on an upland farm that I still own; today, I live about a mile away from it. I love the landmass that constitutes mid-Wales and could not contemplate living anywhere else on earth. It is a place of great beauty. That beauty is important in the context of the debate because it underpins the most important and largest part of the local economy—tourism. It can be no surprise that I and almost all the disinterested population of mid-Wales are horrified that the proposals about which I intend to speak are even being seriously considered. The consequence of the proposals would be to destroy totally the place that we love by industrialising the uplands with wind turbines and desecrating our valleys with hideous cables and pylons.
For the benefit of everyone, I should outline the sheer scale, and horror, of what is proposed. It is not an ordinary development—the sort of thing that we have seen before. It is the largest ever onshore wind development in England and Wales. The proposals envisage the granting of permission for the erection of between 600 and 800 huge new onshore turbines in mid-Wales—over and above all those that currently exist and those that already have planning approval—a 20-acre electricity substation and about 100 miles of new cable, much of it carried on steel towers 150 feet high. That is scarcely believable. The scale of it is almost impossible to comprehend. Not even the enemies of Britain over the centuries have wrought such wanton destruction on that wondrous part of the United Kingdom.
Paul Flynn (Newport West) (Lab)
Is it not a little over the top to suggest that the landscape will be totally destroyed? Even when the turbines are there, although there will, no doubt, be a decline in the visual amenity, will not the mid-Wales area still be beautiful and desirable to the millions of people who live in urban areas?
Glyn Davies
I want to come later in my speech to what we will be left with afterwards, but the sheer scale of what is proposed means that the development will cause huge damage. Already people are not prepared to commit themselves to holidays in the long term. Already the prices of houses are falling. The impact is already seriously damaging. There are beautiful parts of Britain; the economy of mid-Wales depends on tourism, which depends on its beauty. What some people want is to act freely to destroy the one thing that makes the place special. That is what the authorities in their various forms are contemplating doing.
When the policy statement or technical advice note popularly known as TAN 8 was issued by the Welsh Assembly Government in 2005, I and a few others understood immediately that this monstrous proposal would be the consequence. However, the local population did not truly grasp the scale of what that policy statement meant. I suppose that it seemed almost too incredible to believe—if only it were. Now that the population of mid-Wales have grasped the degree of desecration planned for their area, there has been an uprising of anger and protest the like of which I have never seen before.
Huge numbers of people, usually approaching 500, have turned up at several public meetings. At one meeting that I called in Welshpool, at short notice and with minimal advertisement, more than 2,000 people turned up. These people are from every sector of the population, and include many who would benefit financially from the proposals. If the National Assembly for Wales had been sitting at the time and not involved in an election, all of them would have descended on Cardiff bay there and then to ensure that the politicians behind this outrage were made fully aware of the scale of the anger.
Mr Mark Williams (Ceredigion) (LD)
I congratulate the hon. Gentleman on securing the debate. He has cited meetings in his constituency. Does he agree that this is very much a mid-Wales issue? In the north of Cardiganshire, the prospect of the huge wind farm development at Nant y Moch has also caused huge concern locally. That concern has been articulated very effectively by the Cambrian Mountains Society, which is campaigning for the Cambrian mountains to become an area of outstanding natural beauty. That needs to be respected. The public anxiety to which the hon. Gentleman refers is very real and extends across the whole of mid-Wales.
Glyn Davies
There is truly a mid-Wales impact. The proposals affect part of Radnorshire hugely and all of Shropshire, depending on where the lines to the national grid go, and of course there is the proposal for Nant y Moch in Ceredigion, but the biggest effect by quite a distance will probably be on my constituency of Montgomeryshire. In relation to the impact locally, I pay tribute to the local newspaper, the County Times. It has understood what the people of its catchment area feel and has organised petitions. It realises that virtually everyone in the county opposes what is proposed. It is a proposition that everyone locally is deeply and fundamentally opposed to and always will be.
The protest that I spoke of will still take place, as soon as the recently elected Assembly Members have taken their seats. I will do all I can to ensure that that happens. We must ensure that in years to come, they cannot disclaim responsibility for the environmental vandalism and shocking waste of public money for which they will have been responsible. We do not want the people responsible for the decision saying, “We didn’t understand that it was going to cause that much damage.” It is important that they know now exactly what they are going to do. In decades to come, they will be remembered, in the way that those who were responsible for drowning the Tryweryn valley in the last century are remembered in Wales today, half a century later. We must ensure that, in mid-Wales, their names will be remembered in future decades as having been on the roll call of those responsible for splitting the Welsh nation asunder.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I congratulate the hon. Gentleman on securing this very important debate. I have two TAN 8 areas in my constituency. Does he agree with me that the Welsh Government have got TAN 8 totally wrong? It is a crass way of drawing lines on a map and placing all industrial wind developments within those areas. If we are to have large-scale multinational wind farms in Wales, surely they should be offshore. Does he agree with me on that point?
Glyn Davies
It will come as no surprise to the hon. Gentleman that in principle I do agree with him on that point, but I want to touch on that area and the relationship to the National Assembly for Wales later in my speech.
The people of mid-Wales are a reasonable people. If the proposal were essential to the national interest, or if it was necessary in some way to accept the destruction of our environment for some overwhelmingly greater good, we would in all probability accept it with traditional stoicism. We would be deeply upset, of course, but we would accept the responsibility to our nation. However, that is obviously not the case; the development is all for no good purpose.
I will not go into detail about the utterly pathetic performance of the onshore wind sector in Wales, but each day we read new reports of how poorly its performance compares with what is claimed for it when new proposals are put forward. The Renewable Energy Foundation tells me that its most recent figures show that Welsh wind farms have a load factor of just 19%—the lowest ever recorded. We also know that there is a need for back-up energy generation to cover periods when the wind is not blowing, or is blowing too strongly. Little is heard about that when onshore wind developers extol the virtues of their proposals and sell their wares. The truth is that onshore wind simply does not deliver what we are told it will; it does not do what it says on the tin.
The most important industry in mid-Wales is seriously under threat because of the proposals. In my constituency alone, the local tourism alliance estimates the value of tourism at £360 million per year, and 6,300 jobs depend on it. Tourism dominates the economy, but the beautiful landscape of mid-Wales will be sacrificed on the altar of a false god. What sense can it make to erect up to 800 new turbines in mid-Wales when they will be 30 to 50 miles from any connection to the national grid? That makes no economic or climate change sense whatever; it is almost as if the plan was drawn up with no consideration of where the national grid was.
Alun Cairns (Vale of Glamorgan) (Con)
I congratulate my hon. Friend on securing the debate, and on the exceptional work that he has done in standing up for his community in Montgomeryshire, for mid-Wales and for communities across the border. Does he regret the fact that a centralised policy framework exists in Wales, and that even if the local planning authority rejects the application for the project, the chances of success on appeal are pretty strong, so the Welsh Assembly Government will have the final say? Does he regret the fact that the Welsh Assembly Government are not following the localism framework that exists in England, which would give local people much stronger rights to object to such applications?
Glyn Davies
I thank my hon. Friend for that. I will come to the role of TAN 8 and the Assembly Government in the last part of my speech, because it is key. It might seem that I am focusing overly on the position of the National Assembly for Wales, but it is crucial. Decisions will be taken in a number of places, but against the policy background of TAN 8.
The carbon impact of the development can never be compensated for by any possible carbon benefit. There is the cost of importing materials over such a large distance and over a road network that is totally unsuitable for such traffic; huge investment will be necessary just to get them to the wind farms that are to be built. There are also other environmental costs, such as the destruction of the peat bogs and much else.
In the middle of my constituency, there is a wind farm with 103 turbines, which have been there for 20 years and which are now to be taken down and replaced with new, larger turbines. However, the huge concrete pads on which the redundant turbines are built will not be removed; the turbines will be removed, but these huge lumps of concrete will stay in the ground. There will be 103 of them, together with 40-odd for the turbines that are taking the place of the old ones, and I suppose there will be another 50 when another wind farm comes along on the same site in 15 years. The destruction over a long period is almost impossible to calculate.
Even worse is the seemingly deliberate conflation of the terms “onshore wind” and “renewable energy”, which has done huge damage to public support for the latter. Most people I know are, or at least were, proud to describe themselves as being supportive of renewable energy, but the obsession with onshore wind has undermined public support for renewable energy. Occasionally—actually, this has happened only once since the scale of the proposals became known—I have heard, or rather have heard of, words of support for turbines and pylons, but those words totally dismissed all that those of us who have chosen to stay in the area greatly value. After a recent recording session for a live Welsh TV programme, a friend complained that 90% of the mid-Wales uplands would be covered in wind turbines. A representative of a local environment organisation shouted out, “What about covering the other 10% as well?” I cannot verify that conversation with precision, but the drift is clear. Such people have no absolutely idea what damage they are doing to the cause they purport to support.
There is also the opportunity cost. The massive public subsidy that onshore wind is swallowing up is just as damaging to the future of renewable energy, which will be crucial to our energy supply over the next decades. So much more could have been done to advance the wider cause of renewable energy. Biomass potentially has a great future in mid-Wales, and I could also mention microgeneration, marine power—wave and tidal power—offshore wind and solar photovoltaics, as well as several other sources of power generation that I cannot immediately recall. Indeed, there are probably several others I have never heard of. However, those possible sources of future renewable energy are not being developed because of an obsession with onshore wind. When we have turbines on the hills, politicians can point at them and say, “We did that,” but all they have done is wreak serious damage on the land that the people of mid-Wales think of as their own. Thousands of pounds have been poured into onshore wind, restricting the development of forms of renewable energy that the public would actually welcome.
In the last part of my speech, I want to look at how we reached today’s position; often, we need to look back to decide how best to move forward. I was the chairman of the local planning authority in Montgomeryshire through the 1980s, and onshore wind farms were novel at the time. However, it quickly became clear that they were hugely divisive, and most of us will have had experience of how divisive they can be, splitting communities and even families. Even at the time, I was never convinced that onshore wind was a worthwhile technology, but I could see that it was an important new technology with possibilities and that research was needed.
Several wind farms were developed in Montgomeryshire —one was the biggest in Europe when it was built—and there are many wind farms there now. Although they had a localised impact, I did not think that they were a threat to the entire region, even though some quite visionary people warned me that we were opening the door to the sort of thing that eventually happened. The Campaign for the Protection of Rural Wales, of which I was the president for three years before I was elected to this place, was particularly vociferous, and it deserves congratulations on the position that it took from an early stage. Even though I was not convinced of the value of onshore wind farms at the time, my general attitude, and that of most of the population, was that mid-Wales was a large and beautiful place that could accommodate some new wind farms.
That was my attitude until 2005, and it was most people’s attitude until perhaps two months ago. One fateful day in 2005, however, the Assembly Government published a statement updating TAN 8, which offered local planning authorities guidance on how to deal with planning applications. I was horrified by what it meant, and those who discussed it over a quite a long period were equally horrified. Today, the entire population is horrified.
Roger Williams (Brecon and Radnorshire) (LD)
I welcome the hon. Gentleman back after his operation. It is good to see that he is vertical, even if he needs a bit of assistance. I opposed TAN 8 and its implementation. One of my critical concerns was that, unlike most planning policies, it was not open to a public inquiry; there was only consultation in the Assembly, which was judge and jury in this matter. It is quite exceptional for a planning policy to be implemented in that way, without the opportunity for a public inquiry.
Glyn Davies
I thank the hon. Gentleman for raising that important point. There was not even consultation in the National Assembly for Wales; the governing party of the day just issued a statement, with no scope for discussion or consultation—we had to take it or leave it. I stood up and immediately opposed the guidance, but even then, I did not quite realise the scale of what it meant for the future of rural Wales.
I feel a bit guilty: having spent eight years as a Member of the National Assembly, I am hugely supportive of it, but I have been critical this morning. I want to explain why. If we are to find a way to challenge the plans, we must identify the source—it is no good just shouting at everybody—and look at how the applications will be dealt with. The issue of the cable that will run from near the middle of my constituency to the middle of Shropshire will actually be decided on here, in Westminster. It will go through the Infrastructure Planning Commission process, and probably through the processes of its successor. Decisions on the larger wind farms—those of more than 50 MW—will also be taken here. The decision on a 20-acre electricity substation, which might be built within almost half a mile of a village and thus devalue it overnight, will be taken by the local planning authority in Powys. The local authority will also make decisions on the smaller wind farms of up to 50 MW, but with appeals to the National Assembly for Wales.
All those decisions will be taken against the background of TAN 8, because any inspector looking at how to decide on a proposal put before them will do so against that planning background. That is why the only possible way of saving mid-Wales from the desecration to which it is sentenced by TAN 8 is to take a more sympathetic look in some way—through a redrafting, an understanding, or a proper discussion in the National Assembly for Wales—at whether it is the right policy, and whether it is framed as it should be. I know perfectly well that at the end of the day, the state, in its various forms, will have its way. We live in a civilised country where debate and minorities are trampled on and local opinion is completely ignored. That may happen in this case, but I find it scarcely believable that it can.
Some people believe that we had gone too far before everybody understood what had happened, and I think that part of the strategy was to make certain that people did not understand what was happening. Even now, the way in which proposals have been presented is designed to split the community. There is a choice of two substations and two or three lines, and that looks like a deliberate attempt to turn one part of the constituency of mid-Wales against another, but the people of mid-Wales have not been fooled; they have stuck together absolutely. If the plans go ahead as proposed, they will be outraged for ever; they will hold those responsible guilty for ever and will never forgive them.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I congratulate the hon. Member for Montgomeryshire (Glyn Davies) on securing the debate. I am sorry to hear about his injury, but given the pain that he must be suffering, he put the case on behalf of his constituents extremely well, and I am sure that they will appreciate that. Everything he said is familiar to me as I have a very similar situation in my constituency, which is why I am so grateful for the opportunity to speak in today’s debate.
The Carrick area of Ayrshire is one of the most beautiful in Scotland—I would say in the UK, but I will not enter into a competition with the hon. Gentleman. It is obviously a rural area, and has suffered job losses and loss of services in recent years. It is dependent on tourism and will be for the foreseeable future.
I do not stand here as someone who is against wind farms per se. They are a reality whether we like them or not, but I do not personally like turbines. They do not do anything for the local environment, but they have a part to play in securing our energy needs and meeting renewable energy targets, so it would be unrealistic to take an all-or-nothing approach and say that there should be no wind farms. Although I am aware of the various research and that countries such as Denmark seem to be backtracking on the whole idea, there is not enough substantial evidence to take the view that they should simply be banned, and, on a tactical level, if someone wanted to do that, it would not be practical or realistic. I will refer to the health concerns associated with wind farms, in some cases, later in my contribution in the context of my constituents.
Not enough work has been done on alternative sources of energy other than wind farms. Carbon capture and storage is close to my heart because another part of my very large constituency is a mining area with an open-cast mine. In contrast to wind farms, which do not provide many jobs, open-cast mines could provide hundreds of jobs in a very poor part of my constituency. I am frustrated that more work has not been done in that regard.
The hon. Gentleman referred to other means of generating energy, such as offshore and tidal schemes, but, again, we have been slow to invest in such sources. Some progress has now been made, but they will not become a practical alternative in the near future. We hope to see them become so, but they are not there now. The Scottish National party Government have outlawed nuclear energy in Scotland, but given the situation in Japan it was bound to be called into question by some people. I know that the circumstances are not the same, but an incident such as that is bound to raise fears among the public, so nuclear policy may be affected as well. All in all, we have not done enough to tackle the issues to meet our renewable targets.
My worry with wind farm development is the proliferation of wind farms in particular areas. As the hon. Gentleman said, initially, everybody took the view that we must contribute for the public good, because it is important for the future of the planet, and what could be more important? I now fear that, once the doors to wind farms have been opened in an area, before we know it, the whole place will be full of them. If all the applications that were submitted for a small town in my constituency, Dalmellington—not in the Carrick area, but in a former mining area—were granted, the whole town would be surrounded by wind farms. Imagine the devastation in the community if that happened—it had been blighted already by the coal industry over many years. That has not happened yet, but the fear is always there, as more and more applications are made.
Guto Bebb (Aberconwy) (Con)
The hon. Lady makes an important point, which clearly supports the point made by my hon. Friend the Member for Montgomeryshire. (Glyn Davies) There are small-scale wind farms in my constituency, which have community support, and the concern in my constituency is that the type of monster development that we see in mid-Wales will damage those community-led developments that have been beneficial to rural communities, such as the upper Conwy valley.
Sandra Osborne
I could not agree more. The proliferation is causing wind farms per se to be called into question in a way that is not necessary or desirable.
There are 20 wind farms operational, at the scoping stage or in the planning process in my constituency and the adjacent area of Galloway, which is by no means large; it is a small area of Scotland. People will not be able to see the details, but I have a map of the area that indicates the scale of development that will happen if all the wind farm applications go through. We will have almost 600 wind turbines, and even the most ardent environmentalist must surely understand that that is not acceptable in anybody’s book.
It is my responsibility as an MP to put forward the views of my constituents on this matter, because they are in a David and Goliath battle with the big companies, which come in and say that they are consulting people, but the decision has already been made. I must put forward the real concerns of my constituents, because no one at the moment is listening—certainly not in the Scotland Parliament. The benefits of wind farms should be stated, but so should the cost, and not only the financial cost to the taxpayer, but the cost to the community.
I have constituents who are very close to wind turbines. In Scotland, the suggested separation distance—the suggested distance—is 2 km, but some individual houses are nearer than that. I have a constituent who cannot open her curtains or blinds because she is subjected to constant flicker from the wind farm. Although it is said that there is no evidence that that can happen, she would differ; her mental and physical health has been seriously affected. However, compensation is not available to allow people to move, and such people will not be able to sell their houses.
I wish to make two last points. First, I was interested to hear that England has stronger rights to object. I would like to know more about that, because such rights are needed in Scotland and elsewhere. It is not acceptable that people can be more or less bullied into accepting the situation, with no redress or appeal.
My other worry is with the new Scottish National party Government. I have a lot of worries about that, but the main one is that they have totally unrealistic targets for 100% renewables, and they cannot possibly be met in the time scale. To my constituents, that means only one thing—ever more wind farms in their area.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I congratulate my hon. Friend the Member for Montgomeryshire (Glyn Davies) on securing this debate. He spoke of his problem with crutches; conversely, I have a coughing fit as a result of a viral infection. Conservative Members seem to be going down like flies.
I was sitting in my constituency surgery on Friday and various constituents spoke to me about my hon. Friend, telling me of the growing reputation that he has secured across the border. He is an extremely hard-working Member of Parliament, is very effective in representing his constituents and is a man of great integrity and honour. It is not often that we in Shropshire talk about Members of Parliament from other countries and other parts of the region, but I was surprised at the strength of feeling among my constituents. My hon. Friend spoke with great passion this morning, and I hope that the Minister has taken on board how passionate he is.
I had a breakfast meeting this morning with the Chairman of the Select Committee on Welsh Affairs, my hon. Friend the Member for Monmouth (David T. C. Davies). I formally asked him to use his position to hold an investigation into the matter, so that some form of official work can be carried out on the strategy—where these wind farms are to be built and how the electricity is to be transported to the national grid. I encourage all hon. Members present today to join me in that. My hon. Friend was interested in my proposal, and I would be grateful if my hon. Friends and colleagues supported me in reiterating the point.
I, too, am extremely angry with those who propose these measures. I would like them to stop and think for a minute about how they would feel if these giant monsters were to be built near their homes or next to their villages. They would be devastated. Speaking as a father, I am extremely concerned about the safety aspects of the pylons, an aspect that has already been mentioned, and the effect that they will have on young children. Many of my constituents have expressed such concerns to me.
Tessa Munt (Wells) (LD)
Does my hon. Friend accept that in Sweden, for example, pylons have been taken down across the country and the transmission cabling has been transferred underground, and that as a result there is no loss of visual amenity for those who enjoy such areas? It is not only a Welsh problem, as pylons will march right across the beautiful levels and moors of mid-Somerset. The Minister is familiar with my complaints on the matter, but significant health issues have been proven, and countries such as Sweden are doing something about the problem.
Daniel Kawczynski
I am grateful to my hon. Friend for that intervention. Her pedigree of fighting on the matter is well known. Indeed, I attended a public meeting in Shropshire and the billboards referred to her work on the matter. I totally agree with her, and I shall refer to the matter later.
My hon. Friend the Member for Montgomeryshire spoke about the importance of tourism to Wales. I concur with him; tourists are attracted to these places because of their natural beauty. The hon. Member for Newport West (Paul Flynn), who is no longer present, tried to suggest that wind farms would not affect the countryside’s natural beauty, but he is totally deluded. He does not fully understand how important it is for the landscape to be turbine and pylon-free, as tourists come to the area to enjoy that beauty.
Mr Mark Williams
I know that my hon. Friend is a regular tourist to my constituency. He speaks about the general environmental damage done by turbines, but will he reflect also on the damage done in the immediate area of wind farms? Next time he visits Ceredigion, I shall take him to the summit of Cefn Croes, which at one point contained the largest wind farm in the country. There he will see the damage done to the peat bogs—there has been no attempt to restore the landscape—and the spectacle of vast concrete roads going to the summit of a beautiful landscape.
Daniel Kawczynski
I holiday in my hon. Friend’s constituency, which is beautiful, and I can recommend Mwnt bay as a lovely holiday destination. I shall take up his offer.
Tourism is the No. 1 income generator in Shropshire, and we depend upon our beautiful landscape to attract tourists, who come not only from the United Kingdom but from around the world. I pay tribute to two local Conservative councillors, Tudor Bebb and David Roberts. They are working hard with various local bodies, including the local tourism association, to analyse the impact that the proposals would have on the local economy.
If the electricity produced were brought across Shropshire to the national grid, the cables could be put underground. However, we are told by those who propose these measures that that would cost 15 times as much as pylons, the monstrosities that would have to be built on the Shropshire countryside. I ask the Minister, is it true? What analysis has been undertaken by the Government on that point? Is it the reality that putting cables underground would cost 15 times as much? I ask because we hear from colleagues in the Danish Parliament that the costs are nothing like that. If so, my constituents are being deliberately misled by these companies at public meetings about the cost of putting the cables underground rather than on pylons.
Tessa Munt
I place on record the fact that the chief executive of National Grid has admitted that he said at a meeting nearly two years ago that putting cables underground was “a no brainer”. At a public meeting with my right hon. Friend the Member for North Somerset (Dr Fox), the Secretary of State for Defence, and other MPs and candidates in Somerset, National Grid admitted that it was likely to cost only £1 per household per year to put cables underground for Hinkley Point and other connections. That conflicts with what is being said by the same National Grid personnel at public meetings in Somerset—that it would be 20 times as expensive to put cabling underground or under the sea.
Daniel Kawczynski
I agree and that is the critical point that we need to get across to the Minister. I will be formally writing to him later today and tabling written parliamentary questions on the matter. I want people to know the true cost of such cabling rather than being told that it could be 15 or 20 times higher.
Let me return briefly to the point about tourism and the natural beauty of Shropshire. The proximity of one of the proposed route corridors to the Shropshire hills means that it will have a significant impact on an area of outstanding beauty. However, let me put it on record that section 85 of the Countryside and Rights of Way Act 2000
Shawbury has one of the UK’s largest facilities for RAF helicopter training. Situated in the Kinnerley, Edgerley, Melverley and Knockin parishes is the Nesscliffe training area, which trains all helicopter pilots from RAF Shawbury. Helicopters training in our locality also fly into mid-Wales. Hence, the proposed NG pylon routes through this immediate locality would detrimentally affect the training of our servicemen and women and negatively impact on our response to natural disasters and threats to national security. How can the erection of pylons in an area that is so important to the training of our nation’s helicopter pilots be considered as a possibility?
I have been to RAF Shawbury and flown in a helicopter around Shropshire. I have seen already the extraordinary number of areas that these helicopters have to avoid. There are huge restrictions on them, so to have these huge wind farms and monster pylons all over the place will only add to their difficulties. I raise that issue because it is important that the pilots are trained effectively and properly.
Flooding is one of the greatest problems that affects Shrewsbury. It devastates not only the town but its economy. Edgerley and Melverley are at the Severn Vyrnwy confluence and experience unique flooding. The area serves as a natural holding area of water, and helps to alleviate some of the flooding lower downstream. At a time when the Government are investing millions to minimise the effect of flooding, it is bizarre to make a commitment to upland wind farms on such a massive scale because they will only add to run-off and thus increase flooding.
Families have farmed in this area for generations and accept that flooding is an element of life. However, the flooding in the Severn valley has worsened in recent years, which the Environment Agency has attributed to the drainage of upland areas in mid-Wales. Given that we are so concerned with reducing the flooding, why are the Government encouraging the construction of 800 wind turbines in mid-Wales? It is said that
“each turbine stands on a pad the size of an Olympic swimming pool. The huge quantities of concrete that will replace the bog land will also increase water runoff resulting in increased flooding.”
Let me now say something on behalf of my hon. Friend the Member for Ludlow (Mr Dunne) and my right hon. Friend the Member for North Shropshire (Mr Paterson). As my hon. Friend is a Whip, he cannot speak in this debate. None the less, he is equally passionate about the matter and how it will impact on his constituency. He is working hard to support my hon. Friend the Member for Montgomeryshire and I to raise these issues in the House.
Let me briefly explain the views of my hon. Friend the Member for Ludlow. In an e-mail, he said that it is clear
“that there are three network providers, each involved in providing electricity connection; National Grid, Scottish Power Energy Networks and SSE Renewables. All of these companies are required under licence by the Electricity Act 1989 to develop and maintain an efficient, co-ordinated and economical system of electrical transmission. The current consultation underway on the Mid Wales Connection project includes inconsistencies, which indicate a potential failure to deliver in accordance with the Act. None of these companies knows what the relative lengths of cable are for a fully populated TAN 8. National Grid appear to have proposed a sub-station position that Scottish Power are unhappy with, and residents have been told that the sites selected for consultation also differed to those under discussion with Powys council. National Grid and Scottish Power are not attending the same consultation events and have not been consistent in their communication to statutory and other stakeholders, or the public. SSE Renewables have not started their consultation and yet they contribute to the project in the same role as Scottish Power.”
I will end there. I hope that the Minister acknowledges the strength of my feelings. In the six years that I have been an MP, I have never said that such a development will happen over my cold, dead, listless body. None the less, I feel tempted to say so now. I will fight tooth and nail to prevent my beautiful county from being decimated by these ghastly electricity pylons. I hope that the Minister will give me some reassurance that he has heard how strongly we feel on this matter.
Roger Williams (Brecon and Radnorshire) (LD)
I congratulate my hon. Friend the Member for Montgomeryshire (Glyn Davies) on securing this debate. I have to be in a Standing Committee at 10.30 am, so I will leave before the Minister winds up the debate. None the less, I welcome the opportunity to make a few points. I have been opposed to on-land wind farms for a long time. I am not opposed to microgeneration that serves individual houses and communities, but the contribution that on-land wind farms can make to reducing carbon emissions is limited and not altogether positive.
When technical advice note 8 was produced in 2005, I opposed it, and in so doing I faced a lot of criticism from my party and from people in my area, because they saw such developments as a way to deal with climate change. I made a number of points about TAN 8 at the time. I said that there had been no opportunity to hold a public inquiry on the allocation of land for wind farm developments. I also said that it took no account of the difficulty of transporting the structures to such isolated places. Apparently, there was no consultation with the trunk road agencies in Wales, let alone with the highway departments of our local authorities.
My other concern was the real impact that the transmission cables would have on the beauty of our countryside. I was unaware then of the impact that the transformer stations would have, but I clearly understood the problem with the transmission lines. It seems incredible to me that such concerns were not included in the consideration of TAN 8. In many instances, one has to apply for planning permission for the transmission lines after the planning permission has been given for the wind farms. My heart goes out to my hon. Friend the Member for Montgomeryshire, because much of that will impact on his constituency.
I do not know if it is very good practice to change a planning policy as a result of planning applications that have been made. That seems to be putting the cart before the horse and does not seem to be very good practice. For instance, in my constituency there are private individuals who were aware of the implications of TAN 8 but who none the less invested a great deal of money in the sector. We are talking about not just multinational companies or large companies in Brittany but private individuals who have seen an opportunity to make an investment that is apparently in accordance with the policy of both the Welsh Assembly Government and the UK Government. They have made that investment, but where do they stand if the policy on which they made that investment decision changes? That is a point that I want the Minister to address. There must be some recompense for those people if we change our minds at this very late stage.
I think that I was awarded a medal of honour by the opponents of the Cefn Croes wind farm when that project was proposed in the early years of this century. It was during my first term in Parliament and the development was due to be in Ceredigion, before my hon. Friend the Member for Ceredigion (Mr Williams) was the MP for that constituency. I was criticised by the then MP for Ceredigion for involving myself in the opposition to that project.
Glyn Davies
I thank the hon. Member for giving me the opportunity to make a point that I wanted to make in my opening speech but missed out. His reference to Cefn Croes is important. Does he agree that the Cefn Croes wind farm area could easily have been a national park, and that it is purely an accident of history that it is not? North and south of that area are two national parks, Brecon Beacons national park and Snowdonia national park. The idea of making the area in between a national park was considered, but because things turned against the public support for national parks, there was no Cambrian mountains national park. It is still talked about a lot and it is still a long-term possibility, but we are talking about land that is the equivalent of national park land.
Roger Williams
The hon. Member makes a very good point. I have been involved with the national park movement for many years, and there is indeed a lot of countryside in and around Wales that would qualify for national park status if it was looked at again. The point that I want to make about Cefn Croes is that it has not delivered the energy that was promised. I was pleased to object to that project and I am pleased that I objected to TAN 8 when it was put forward. However, we are in a very difficult position, and I would not want to promise people that the issue can be resolved easily. Retrospectively changing planning policy as a result of planning applications does not seem a very prudent way to pursue planning policy. Although I will not be present in Westminster Hall when the Minister responds to the debate, I want to read his response later.
Tessa Munt (Wells) (LD)
I want to add briefly to the comments that I have made in interventions. I, too, have another commitment in about seven minutes’ time, and I therefore apologise to the Minister for the fact that I will not be around to hear his comments. However, he knows that I have had a great interest in the subject for a period of time.
The Minister will also know that in rural Somerset, we have the levels, the moors, and the rolling Mendip hills. Part of the land in my constituency is an area of outstanding natural beauty, and there are sites of special scientific interest. A great deal of the land on the levels is under higher-level stewardship, and the farmers there attract European funding and assistance for the way that they keep that land and the environmental benefits that it provides to the community generally. We also had a potential world heritage site; it would have been the 17th in the world, but that prospect seems to have disappeared into the ether, mainly because of the threat of what will happen to that land due to the transmission of electricity. I refer, of course, to Hinkley, but I absolutely appreciate the difficulties caused by the transmission of electricity that is generated in other ways.
I am particularly for the Minister to say what has happened to the KEMA study, which I believe was due to be produced on 24 or 25 January. It was specifically about the undergrounding of electricity transmission. The report would have been two months in the making if it had been produced in January. It is now nearly three months late; three months is longer than it was meant to take to produce the report. My concern is that perhaps those interested in the results were not happy with the outcome and perhaps the report is being rewritten in some way to fit other things. I hope that the Minister can explain to us what happened to that study. It is particularly important because, as I have said to him before, the Holford rules, which were written in 1959, and the Electricity Act 1989 are both out of date and out of step with what is happening. We should consider the whole-life costs of any development, particularly the development of pylons; that is what the Holford rules guide us towards.
I hope that the Government’s national policy statement on energy transmission will allow people to be heard. Even after inadequate consultation by the national grid, several things are absolutely clear at parish council level, district council level and county council level. First, there was recognition that the consultation had been inadequate. Secondly, it was absolutely clear that the communities in the area that I am talking about—the area between Hinkley Point and Avonmouth, which is only 37 miles of transmission route if one goes directly, which of course would lead to undersea transmission—are utterly against what is happening. Pylons would devastate our chances of remaining an area that is attractive to tourism.
I ask the Minister yet again to address the many concerns that I have raised. I hope that in the long run we will get an agreeable new way of transmitting our electricity that does not damage, in any way, parts of Wales or Wells. I thank him for his attention.
Huw Irranca-Davies (Ogmore) (Lab)
It is a delight to serve under your stewardship this morning, Mrs Riordan.
I congratulate the hon. Member for Montgomeryshire (Glyn Davies) on introducing this debate, and on speaking eloquently and passionately on behalf of his constituents. I know that the issue of wind farms has engaged him for quite some time and continues to do so. He has made that clear today, and I am sure that the Minister will respond in great depth to the debate.
I also congratulate the other Members who have spoken—my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) and the hon. Members for Shrewsbury and Atcham (Daniel Kawczynski), for Brecon and Radnorshire (Roger Williams) and for Wells (Tessa Munt). Who would have thought that a debate on wind farms in mid-Wales would have stimulated contributions from Scotland to Somerset and all points in between? That shows the pulling power of the hon. Member for Montgomeryshire, even when he is on crutches; I also wish him well in his recovery. As we strolled, chatting, to Westminster Hall today, he told me that things were going well and that he would be up and running very soon. I say “well done” to him for that.
I turn to the nub of the debate. This is a difficult situation, both for individual MPs representing their constituents and for the Minister. We wrestled with the same issues when we were in government. We are committed to local interests and local democracy, and at the same time to national interests and national democracy, whereby parties stand on manifestos and accept commitments to renewables and climate change targets. How do we square that triangle? How do we ensure that the voice of people at a local level—including my own voice and that of my constituents—is heard, while ensuring that we deliver a national imperative in terms of energy security, energy affordability and carbon targets? Indeed, we must also deliver on our global ambitions to be a world leader in renewables.
At the outset, I must point out that recently we had a very good Westminster Hall debate on wind farms; it focused on the Localism Bill and so on. I will turn to that Bill in a moment. There were 20-odd contributors to that earlier debate, and I think that a couple of the Members who are here today also attended it. I will not waste everyone’s time by re-rehearsing the arguments that we went through, but it would be fair to say that a fair degree of scepticism towards onshore wind farms was demonstrated in that debate. I do not share that scepticism, and I will explain why in a moment. I recognise the need to have local input into these decisions, but I do not share the scepticism, in various degrees, that some people have about wind farms. Let me explain why.
Daniel Kawczynski
Regardless of whether one believes in these wind farms, does the hon. Gentleman not agree that it is preferable to have them offshore rather than onshore?
Huw Irranca-Davies
There is an interesting and live debate about not only the appropriate way to deliver energy security in the UK, to which renewables definitely contribute—people often say that they are not part of our energy security—but the most affordable way to do so. That debate has continued in the past few days, and it addresses that very question: should it be onshore or offshore, or should other types of technology be involved? That is the sort of debate that we should have in Parliament. If the hon. Gentleman will bear with me, I will come to that later.
Before I do, I want, on behalf of the hon. Member for Montgomeryshire and other Members who have spoken today, to ask some questions about mid-Wales and the routing of the transmission. Can the Minister provide an update on the consultations, and on any outcomes from them, including any amendments being considered to plans or to the routing and the strategic optioneering report? Will he comment on any consideration that has been given, or is likely to be given, to the community benefits? Such benefits were remarked on by the hon. Member for Montgomeryshire, and I wonder whether the Minister will update us on the individual developments or on the grid transmission development.
The Minister has spoken not only about renewables and the offshore development off the north-east east coast of England, but about a number of technologies. How will he ensure, if this development progresses to the scale that has been outlined, that the absolute maximum benefit in the form of local and regional economic impact accrues, and that the benefits are not leaked out of the area? How will he deliver on what he has previously said—that he wants these developments to create jobs and to input into the local and regional economies? If the development is to go ahead, that needs to happen.
Can the Minister also update us on the progress of the transport routing, an issue that has caused great concern to people in the hon. Member for Montgomeryshire’s constituency and those of other Members? Will there definitely be another round of consultation in autumn this year so that people, including Members, will have a further opportunity to comment on the route alignment and other aspects of the project?
The issue should not be rushed through. Can the Minister update us on the delay in the progress of the national policy statements, both generally and in terms of transmission and the UK energy infrastructure? We all know that our 75-year-old infrastructure is exactly that. It was a landmark when it was rolled out 75 years ago, but it is not now fit for either what we are trying to do with renewables or what we need to do in developing a smart grid. The Minister and I agree on that, so can he give us an update on what is happening with the national policy statements? They have been slightly delayed, and it would be good to hear when we will see them and what input parliamentarians will have.
The crux of the matter appears in a phrase that, curiously, has been hurled at the Labour party by Conservative Members, despite our very best efforts over more than a decade in government. They have said that we had a “wasted decade” of renewables, largely because of what they saw as the failure to roll out, at speed and at scale, onshore wind. That phrase has been used if not by the Minister, certainly by his colleagues, and in recent months.
I acknowledge that the Labour Government did not succeed in rolling out onshore wind at the scale and speed that we had anticipated. Curiously, that was very much because there was strong local input into the decisions, which either slowed things down or deterred investors from staying the course and developing onshore wind to any great scale. That is why, before we left government, we put in place a huge expansion of offshore wind energy, which is much more expensive.
That cost falls, of course, on us. There is a cost implication, but the plan will now deliver if the Government hold true, as they are doing. They have delivered on the £60 million for the investment in ports infrastructure, which has led to four major companies, including Siemens and Marconi, coming in and saying that they will put the jobs into those ports, and manufacture and develop offshore. That is fantastic, and it is because we were not able, because of local input, to go as fast as we wanted with onshore. One of the critical decisions here, not only for mid-Wales but generally, is whether the Government will now see onshore as an area for expansion over the next five to 10 years.
Glyn Davies
I am enjoying listening to what seems to be a very fair and reasonable assessment of the position. In this debate I, and others, do not have a party interest; my interest is purely that of my constituency. I know that people in my party will disagree with me and that there are different views right across the parties, but surely we can all agree that if onshore wind will be part of the overall picture of dealing with our renewable energy targets and meeting our commitments to the European Union and beyond, we have to do it in the best place.
TAN8—technical advice note 8—does not do that. All it does is identify an area, without giving proper thought to access. It does not even allow onshore wind farms to be built in the best places. It is policy guidance, from the National Assembly for Wales, that is totally prescriptive about where developments should go, and which completely takes away power from local planning authorities—and, indeed, from the people.
Huw Irranca-Davies
I understand that the hon. Gentleman, in securing this debate, has spoken directly for his constituents, and in my opening remarks I tried to raise some issues that are of direct concern. The debate is also underpinned, however, by where we are heading with onshore wind, and I therefore want to put some questions to the Minister. I do not want to trespass; I know that the hon. Gentleman is a former Member of the great institution that is the National Assembly for Wales, and I do not want to tread on the Assembly’s toes—not least when, as far as I know, Ministers are not yet in place.
The Minister is aware of, and the Opposition are committed to, the renewable energy directives. We have a commitment to generate 15% of our energy from renewables by 2020. Interestingly, in the past week Policy Exchange has made its view clear, describing wind as an “unnecessarily expensive” part of the mix for energy security and affordability. I know that that think-tank does not determine Government policy, but traditionally it has had a huge influence on it, and its view contrasts with what the Secretary of State recently, and rightly, said—that unless we make use both of wind and other renewables, we will be held hostage to rising external prices, particularly of oil, as we increasingly rely on oil and gas input.
Will the Minister take the opportunity today to distance himself from that Policy Exchange report? If we go down the route of saying that wind is now unnecessarily expensive, it is not only the investors—to whom the hon. Member for Brecon and Radnorshire referred—who will suffer, but our renewables commitments and our climate change commitments.
The Committee on Climate Change report that came out a few days ago recommends, interestingly, that we continue strongly with wind as part of the mix, that we look at scaling back on offshore, because of the costs, and that we push harder on onshore. Does the Minister agree? We had a debate here recently in which he spoke sensibly about the future of onshore wind, saying that more would be delivered by the Localism Bill.
Will the Minister reiterate that he does not see the Localism Bill as an impediment to onshore wind? If it brings community gain, will we see more onshore development of wind farms throughout the UK? If so, does he have some idea, as I asked in the previous debate, of what proportion of our renewables contribution onshore wind will form? The 20-odd Members who spoke in that debate all saw the Localism Bill as a way to stop, not help, onshore development of wind, with the exception of one Member who was outspoken in favour of onshore wind and thought that it would be wonderful.
Will the Minister comment on underpinnings? Late last night, we heard that one crucial thing underpinning what we will do with renewables and where we head on carbon commitments is our response to the fourth carbon budget of the Committee on Climate Change. If we can bolt that down, we can decide the most affordable way to fulfil our climate change commitments and develop renewables. If not, we are rudderless.
Last night, Cabinet discussions were leaked showing clear disagreements between the Secretary of State for Energy and Climate Change, who seems to be for accepting the fourth carbon budget and being legally bound to the Committee’s recommendations, and the Secretary of State for Business, Innovation and Skills, the Treasury and the Secretary of State for Transport, who oppose it. Unless we can pin down those matters, we are rudderless, and this debate will be somewhat meaningless. We will be willing to change, from Government to Government and Administration to Administration, how hard we drive forward, and whether we take our foot off the pedal. Will the Minister clarify whether the Committee on Climate Change report that underpins the issue will be accepted?
Chris Heaton-Harris (Daventry) (Con)
I would like a tiny bit of clarification on the Labour party’s point of view about the budgetary proposal. If the hon. Gentleman is saying that Labour opposes accepting the proposal, that is a fantastic piece of news that liberates the Government and gives them plenty of scope to move in a more localist direction. My fear is that the people on the Committee are what we in this country call the progressive majority; we now know where they live, thanks to the referendum on alternative voting.
I would like to see a load of turbine proposals for Cambridge, Oxford, Camden and so on. I think that those people would change their minds pretty damned quickly when they saw the size of them. What is the Labour party’s position on the fourth carbon budget of the Committee on Climate Change?
Huw Irranca-Davies
I hope that that is not the Government’s position on the matter. When we were in government, we appointed successive Secretaries of State and established the Department of Energy and Climate Change to bring those themes together, and we accepted the reports of the Committee on Climate Change. I hope—I look at the Minister as I say this—that the hon. Gentleman’s intervention is not an indication that the Government, under pressure from Back Benchers or others, will make a U-turn away from our climate change commitment.
I want to hear the Minister’s response, and I have taken too long, so these will be my final remarks. The hon. Member for Montgomeryshire mentioned solar and wave and tidal power; I agree that we must do more with solar and much more with wave and tidal. If he were back in the Assembly now, I am sure that he would support the initiatives that they announced before dissolution to push forward wave and tidal power within Wales, as was done in Scotland. We must do so in England as well, but we have a way to go. At the moment, I am sorry to say, UK Government investment is in a hiatus. We have lost the grant funding mechanism for marine and tidal within England, and there is a feeling in the wave and tidal industry that things will not go forward. Solar is in disarray, and the Minister knows it. We await the end of the feed-in tariff fast-track review to see what will happen.
My final question to the Minister is this. Will he address those issues, particular to the mid-Wales situation, that relate to Shropshire and other places? Where are we on onshore wind as part of the renewable mix? Is policy changing, as the hon. Members for Brecon and Radnorshire and for Daventry (Chris Heaton-Harris) hinted, or are the Government still as committed as we always were to a mix that includes onshore wind as well as offshore wind, wave and tidal power and microgeneration?
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
It is a great pleasure to serve under your chairmanship, Mrs Riordan, at the end of a fascinating and stimulating debate. I congratulate my hon. Friend the Member for Montgomeryshire (Glyn Davies) on securing it, and on how he introduced it. I am glad that he has overruled his surgeon’s advice and come here to ensure that his constituents’ voices on this issue are heard clearly. There is no doubting the passion, commitment and integrity that he brings to the debate.
I am also pleased that, as the hon. Member for Ogmore (Huw Irranca-Davies) said, the issue transcends national boundaries. We have heard from Scotland and parts of England. It is not just a debate about mid-Wales; it has spread to every part of this country. We have no doubt whatever about the strength of feeling represented. I reassure him at the outset that I believe that onshore wind has a role to play, but it must be in the right location, and it must have more democratic support. We regularly hear hon. Members of all parties express the feeling that too often, onshore wind is imposed on communities that do not want it. I am keen to ensure that we address that democratic deficit constructively in our plans.
I am grateful to the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) and my hon. Friends the Members for Shrewsbury and Atcham (Daniel Kawczynski), for Brecon and Radnorshire (Roger Williams), and for Wells (Tessa Munt) for their contributions, as well as to those who intervened in this debate. I think that we agree broadly that there is no question but that we must become a low-carbon economy; I welcome the Opposition spokesman’s supportive comments on that. Becoming a low-carbon economy will require enormous work and a great deal of investment. Perhaps £200 billion will need to be spent in the next 10 to 15 years on new generation, transmission and distribution, so that we can build secure supplies of low-carbon generation.
It is also absolutely clear that we cannot rely too heavily on one form of low-carbon technology. The last Government were perhaps a bit of a one-stick golfer in that regard, and did not see enough of the opportunities elsewhere. That is why we have put additional focus on developing marine and tidal power as technologies that can make a big contribution in the decades to come. We also have strong ambitions for offshore wind and are implementing measures to take it forward, alongside biomass, bio-energy, new nuclear power without public subsidy, and carbon capture and storage. We recognise that some low-carbon technologies are not as cheap as onshore wind, but the costs will decrease over time as the technologies become more mature. It is crucial, as I hope my hon. Friend the Member for Shrewsbury and Atcham will agree, that we maintain that diverse energy mix.
Daniel Kawczynski
One reason why our national policy is perhaps not as developed as we would like is that the previous Labour Administration had, I believe, nine Energy Ministers in 11 years. The constant changing of Ministers by Labour Prime Ministers impeded progress within the Department. I look forward to seeing the Minister in his position for many years to come and wish him success. Returning briefly to mid-Wales, I will send the Minister a map of the national grid, with which I am sure he is familiar. The developers could not have found a site further away from the national grid than the proposed site if they had tried. Transporting the energy to the national grid will affect the most people.
Charles Hendry
I am grateful to my hon. Friend for his kind comments. I have been in office for nearly a year, so by past records, I am up for replacement. I think that it was actually 16 Ministers in 13 years. I hope that I will have the chance to stay around a little longer to ensure that we end up in a sensible place on these policy matters.
The hon. Member for Ogmore asked about the fourth carbon budget. He knows very well that I will not comment on leaked or supposedly leaked documents, but the Government understand totally the need to take the issues extremely seriously and put in place a robust set of targets and mechanisms to drive forward our ambition and our ability to respond. I will reply more directly in a moment to the point made by my hon. Friend the Member for Shrewsbury and Atcham on the important grid issues.
It is clear from all the studies that I have seen that the United Kingdom has some of the best wind resources in Europe. Wind turbines tend to generate electricity about 70% to 80% of the time—not necessarily at full capacity, but during that time, they are turning and generating some electricity. Wind, unlike most other sources of electricity generation, is a free and unlimited source of fuel. It is also reliable overall—the likelihood is that low wind speeds will affect half the country for fewer than 100 hours a year. The chance of turbines shutting down due to very high wind speeds is low.
Onshore wind is one of the most cost-effective and established renewable technologies. We have to make sure that we take account of the needs of consumers by ensuring that they do not pay more than is necessary to decarbonise our electricity supplies. We can do that by making sure that onshore wind has a continuing role. However, although it is clear that onshore wind should continue to be part of the solution to the massive energy security and low-carbon challenges that we face as a nation, it needs more democratic legitimacy than it has today, and I intend to ensure that that happens.
We have to protect communities from unacceptable developments. We have already started to review the issues that often cause concern to local communities. We recently published a report on shadow flicker from wind turbines—an issue that the hon. Member for Ayr, Carrick and Cumnock mentioned—and we have commissioned a report on wind turbine noise. We must now go much further. Wind turbines should be positioned where the wind resource is strongest, so this year we are introducing a full review of the funding mechanism of the renewables obligation certificates to ensure that subsidies will not make it attractive to put wind farms in unsuitable locations. The funding mechanism must also reflect reductions in costs.
The cost of grid connections also means that there is an incentive to put wind farms closest to where the electricity is needed, rather than where the wind is strongest. My hon. Friend the Member for Shrewsbury and Atcham has made an extremely important point about the disconnection between areas identified for development and accessibility to the national grid, and the impact that that has on communities. That is why Ofgem’s fundamental review of the way in which transmission charges are levied is so important. It is also why the Government made clear at the start of Ofgem’s review that the transmission charging regime must deliver security of supply as well as low-carbon generation. It is the Government’s responsibility to ensure that the charges that consumers pay for renewable energy are as efficient as possible.
Most importantly of all, there needs to be a new relationship between wind farms and the communities that host them, as my hon. Friend the Member for Aberconwy (Guto Bebb) said. At present, too often a community can see what it will lose but not what it will gain by having a wind farm in its midst. That is why we have been exploring the financial mechanisms that should emerge to support communities that decide to host wind farms—particularly in England, where we have more responsibility for these matters—and that do more to encourage such community developments. “Community energy online” is a scheme whereby local groups can come together and look at what will be the best renewable energy schemes for their community. I am absolutely convinced that we have to address the issue of democratic accountability and public acceptability. The more these schemes can be seen to come from the ground up—that is not intended to be a pun—and to be developed with community support, the more we can deal with the democratic deficit.
Huw Irranca-Davies
I thank the Minister for giving way. I have a straightforward question. Given what the Minister has just said, the changes that the Localism Bill will make and the desire to address the democratic deficit, does he intend there to be more development of onshore wind than in the past decade and more? Is he hopeful that more communities will take up onshore wind development?
Charles Hendry
I am afraid that the hon. Gentleman’s question shows that he does not quite understand localism. Localism does not mean that I, the Minister, say that I want more or less; it means that I want communities to decide how they want to develop. Once they have seen what will be available to them, the package of benefits and the direct support that will come to their communities, they will rightly get involved in and make those decisions. Clearly, a few of the large developments will still need to come to Ministers once the Infrastructure Planning Commission has been abolished, so those will be national issues. What we are keen to see is appropriate development in appropriate locations with community support. That will be one of the most significant changes under this Administration.
To answer a point made by the hon. Member for Ayr, Carrick and Cumnock, the Localism Bill will provide specific measures to enable communities to shape development in their own locality. That is clearly a matter for England rather than Scotland, but we hope that the new Scottish Government will look at whether they can follow in some of those areas.
We have heard much about the issues relating to technical advice note 8, and I understand the concerns that have been expressed. The process is carried out by the Welsh Assembly Government, and TAN 8 identifies seven strategic search areas where major wind farms, which are defined as those over 20 MW, should be located. Three of those—areas B, C and D—are in mid-Wales, which is why we have seen more applications for development in those areas than elsewhere. A review of that approach would have to be carried out by the Welsh Assembly Government. As a Minister who may be required to make some of those decisions, I know that we are talking about not a binding requirement but a material consideration, and applications outside those areas can also be considered.
A related issue—I know that this is of concern to my hon. Friend the Member for Ludlow (Mr Dunne)—is the knock-on consequences for the grid infrastructure of the way in which those areas have been chosen, and the possible impact in England and other areas outside those covered by TAN 8. That is a material issue that has to be looked at in more detail, because one simply cannot put in place a new development without the grid infrastructure to support it. That is the issue to which I now turn.
There is no existing high-voltage network in mid-Wales, so the necessary infrastructure will have to be built. The options are currently being developed by the National Grid Company and SP Manweb. The applications for those connections will be decided by the appropriate planning authorities, which may include Ministers, so I am constrained in what I can say on specific issues. However, to respond to a point made by the hon. Member for Ogmore, we expect a further consultation on specific routes to be completed by the end of the year. We can learn more about how that consultation process works. I understand that my hon. Friend the Member for Ludlow is concerned that sometimes it involves the National Grid Company and not the developers together. I think that people involved in the consultation process would prefer to see all the parties coming together.
The report commissioned by KEMA and the Institution of Engineering and Technology is being refined—not by us, but by the organisations themselves—to make sure that it takes full account of the data collection available and the technical analysis. I hope that it will be published soon. It will certainly give us a much more factual basis for understanding the costs of undergrounding in appropriate parts of the country, and of putting the grid connections undersea. The enormous number of parliamentary questions that I have been asked and letters that I have received on the subject as part of a national campaign mean that I am in no doubt whatever about how strongly my hon. Friends and other Members feel about the grid connection issues. I know that the National Grid Company takes the issue extremely seriously. It is required to look at both the costing and the environmental and social issues.
Ofgem’s recent transmission price control proposals, known as RIIO, or “revenue = incentives + innovation + outputs”, include incentives that should allow visual amenity to be properly assessed in conjunction with the planning process. We hope that the national policy statements can be published in the near future. As the hon. Member for Ogmore knows, we are holding them back until we have the interim report on new nuclear. The lessons from Fukushima are being looked at by the nuclear regulator, but I hope that we will be in a position to publish those shortly.
Finally, on construction traffic and the impact it may have, I am aware that the road infrastructure was not designed for the sort of transportation in which huge turbines are carried through small villages on small country roads. There has to be a solution to the problem. Individual developments have to address the issue in a constructive way. There has to be a satisfactory conclusion before a development can take place.
I hope that I have responded to many of the issues raised. This has been a fascinating and important debate. Again, I am most grateful to my hon. Friend the Member for Montgomeryshire for defying medical advice to be here to raise such a critical issue.
Ultra Low-Carbon Emission Vehicles
(13 years, 5 months ago)
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Andrew Selous (South West Bedfordshire) (Con)
I am delighted to serve under your chairmanship this morning, Mrs Riordan, and I am particularly grateful to Mr Speaker for granting me this debate on the Government’s policy on ultra low-carbon emission vehicles.
There are four main reasons why the issue is so important and matters for the future of this country. The first reason is about tackling climate change. We know that the Government are committed in law to a 34% reduction in emissions by 2020 and an 80% cut by 2050. Clearly, ultra low-carbon emission vehicles, including electric cars, will be part of the solution to helping to reduce emissions, but we also need to have low-carbon electricity. It is no good just reducing the tailpipe emissions if the electricity that powers ultra low-carbon vehicles is fossil fuel and dirty. That is a given. I do not know whether Professor David MacKay is still advising the Government, but he has made that point very powerfully in his book, “Sustainable Energy—Without the Hot Air,” and it is important that we mention it when introducing the debate. As I say, doing something about climate change is the first reason the issue is important, as ultra low-carbon emission vehicles are clearly part of that.
The second reason is that the whole sector has massive potential to create growth, wealth, jobs and employment for this country. Just under 2.5 million of our fellow citizens are looking for work, and ultra low-carbon emission vehicles are part of a massive industry of the future. Shai Agassi of Better Place has spoken of a $2 trillion-a-year industry. If the United Kingdom can increase its percentage share of that even by a few percentage points, many more jobs across the country will be created for all our constituents. Low-carbon growth and the jobs that come from it are absolutely vital.
The third reason why the issue is important is that ultra low-carbon emission vehicles are a crucial part of the United Kingdom’s response to a world with less secure energy supplies. We have only to look around the middle east at the moment to see that that is very much the case. The fourth reason the matter is vital, which will probably speak most strongly to our constituents, is that it will allow us to do something about the absolutely exorbitant cost of going to a petrol station and putting petrol or diesel in a car. Our constituents—and, indeed, we—are all paying cripplingly high prices to drive around. If we can sort out the generating issues, ultra low-carbon emission vehicles provide the potential for much cheaper motoring. If any of us were looking for a slogan on which to be elected at the next election, “Cheaper motoring” must be high up the list and would resonate strongly with our constituents. I have given four powerful reasons why the issue matters incredibly. Two reasons I would particularly pick out are the wealth and jobs we need to create, and the cost of motoring to our constituents.
To give credit where credit is due, the Government have been active in this area. The Office for Low Emission Vehicles was set up under the previous Government and is a collaborative effort between the Department for Transport, which is the Minister’s Department, the Department for Business, Innovation and Skills and the Department of Energy and Climate Change. It has a combined budget of more than £400 million. There is also the Technology Strategy Board, which is a non-departmental public body sponsored by the Department for Business, Innovation and Skills, and the plugged-in places grant, which is designed to provide the necessary infrastructure. I will talk about that grant in a moment. In addition, the industry’s own automotive innovation and growth team led to the creation of the Automotive Council UK, which is a joint industry and BIS body.
There clearly has been action and there is cross-Government co-ordination, as there should be because one Department on its own cannot make this happen. That is excellent. I am glad that the people who need to be talking to each other in Government are doing so. My central question to the Minister, who I suppose is answering on behalf of all the Departments involved, is: are we being ambitious enough for the United Kingdom? I very much want the United Kingdom to be a success story at the heart of this massive and soon to be hugely growing global industry.
Let us consider where we are at the moment. The Department for Transport’s figures show that there are only 57,000 vehicles in vehicle excise duty band A, which is the lowest emission category. That figure is, in fact, double the number of vehicles that were in the category in 2009, so the industry is clearly growing fast. However, I remind hon. Members present this morning and those who will read the transcript of the debate that there are 28.4 million cars in the United Kingdom and that 57,000 is therefore a fairly small number.
The Government’s Committee on Climate Change has recommended that we should aim to have 1.7 million electric vehicles by 2020. Will the Minister say if that is what the Government are committed to achieving and how the numbers will stack up in increasing the 57,000, which we have in 2011, to the 1.7 million, which the committee says that it wants in 2020? There will need to be very sharp increases over the coming nine years to get that far. The figure of 1.7 million cars is just under 6% of the 28.4 million cars in the United Kingdom at the moment. In the excellent Parliamentary Office of Science and Technology note attached to the debate pack, I was interested to read that Japan has set a target of 20% of next-generation cars by 2020—the same date.
Mr Marcus Jones (Nuneaton) (Con)
I congratulate my hon. Friend on securing the debate; he is making a strong and compelling case. The benefits that low-carbon vehicles can have in reducing CO2 and helping the environment are undoubted, but does he agree that the research and development and manufacture of such vehicles in this country is a real chance for us not just to broaden our manufacturing base once more, but to rebalance the UK economy?
Andrew Selous
My hon. Friend is absolutely right. We are already strong in a number of the areas he mentioned in his question. We start from a good base, but he is absolutely right that the potential is massive. My prime purpose in initiating the debate is to allow us to play our role as parliamentarians in holding the Government to account and to ensure that we do not lose out on the potential for us to benefit fully from what he is talking about.
Neil Carmichael (Stroud) (Con)
This is a very important debate for the reason noted by both my hon. Friends: the opportunity the sector offers to manufacturing. However, a problem that needs to be solved is the supply of the skills necessary to develop the technology that we have. In this country, an insufficient number of people have skills in the automotive sector that relate to electronics. That must be put right because that area will make up a larger part of any future vehicle designed to meet very strict low-carbon emissions. We must address the skills issue in the sector.
Andrew Selous
My hon. Friend is absolutely right. If he will bear with me, I intend to touch on exactly the issue of skills that he has, properly, raised. He is not the only one raising that issue. The Institution of Mechanical Engineers and others are very concerned that we are behind where we should be in the number of qualified technicians, the people who understand the new technology and the training of apprentices in this important area. The issue goes back even further than that to the number of physics teachers that we need in our schools; the number we have is far too low. It will be difficult for the Minister when he responds to the debate, because that issue touches on such a wide area of Government policy, but my hon. Friend is absolutely right.
I was making the point that, were the United Kingdom to be as ambitious as Japan—I do not see any reason why we should not be, as the industrial revolution took place in this country, we were the workshop of the world and I believe we can be again—that would lead to a figure of 5.7 million ultra low-carbon emission vehicles on our roads by 2020, rather than the 1.7 million that the Government are aiming for. My question for the Minister, therefore, is: why are we being less ambitious than Japan?
It is true that the United Kingdom has had some notable successes; for example, Sunderland’s anticipated production of 60,000 electric vehicles a year, starting in 2013. I would note again, however, that those 60,000 vehicles a year are equivalent to some 2% of the 3 million internal combustion engines that the United Kingdom currently makes every year. That is not to say that we cannot make greater progress with the efficiency of the internal combustion engine—I will say a bit about that towards the end of my remarks—but I think that colleagues will appreciate the scale of the challenge that we face to even get to the Committee on Climate Change’s figure of 1.7 million electric vehicles on our roads by 2020.
When we look across the Atlantic ocean, we see that the United States is investing some $2.4 billion to support the next generation of electric vehicles. We know that in China there is massive investment in new battery technology—I am thinking of companies such as BYD, which stands for “Build Your Dreams”. Warren Buffett already has a 10% stake—normally a sure-fire sign of a company that will do well. That is the competition that the United Kingdom is looking at around the world.
Mr Marcus Jones
Does my hon. Friend agree that Ministers from the Department for Transport need to make substantial representations to the Department for Business, Innovation and Skills, regarding where the regional growth fund is spent, in order to try to support our low-carbon industry, particularly in the automotive sector?
Andrew Selous
My hon. Friend is absolutely right. The automotive sector is very important to the United Kingdom not just for the cars we produce, but for the number of engines, the number of smaller engineering companies, the suppliers, and the technology and engineering base that supports that. It is vital to the country’s economic future. I indicated earlier that I am reassured that those lines of communication across Government are there, but we need to see delivery from those conversations, as he has rightly pointed out.
I will continue looking at what else is happening around the world a bit longer, because it is important to put what the United Kingdom does in context. As far as I can see, Israel plans to be the most ambitious of all. It intends to rid its entire road transport sector of dependence on oil by 2020. That is massively ambitious if one thinks about where Israel is in the world and its geopolitical relations with some of its neighbours. I think that we can all think of particular reasons why Israel is going down that route, but none the less it is deeply impressive.
Israel is choosing a different model, I think it is fair to say, from that of the United Kingdom. It is looking to sign up to the Better Place concept, which will largely involve changing the engines in cars—engines will be swapped over. The depleted battery is taken out of a car and in under a minute, I understand, a new, fully charged battery supply is put in and one can carry on driving. In less time, therefore, than it currently takes to fill up with petrol at the pump, the car can be on the road again—a fully-charged vehicle that will travel another 100 miles.
It is worth mentioning the context of the debate, because of Israel’s scale and ambition. The Minister will probably have good and valid reasons, which I would accept, to say that it is probably not right for the United Kingdom to go down that particular route. For various infrastructure reasons, it is probably right that we do not. If we are not going down that route, however, how do we in the United Kingdom achieve that level of transformational change? How do the Government envisage United Kingdom companies, some of which were mentioned by my hon. Friends, taking advantage of the £1.3 billion loan scheme for the development of low-carbon technologies that is available from Europe? We need to ensure that we receive our fair share of that money.
When new technology comes to the fore, initially it is clearly expensive and there is low take-up. I think that if we are honest, at the moment electric cars are—perhaps I am slightly parodying—for rich idealists. Frankly, the economics do not quite stack up at the moment. I illustrate that by looking at the on-the-road cost of the new Nissan Leaf, which will be produced in Sunderland. That is an excellent vehicle. I was privileged to see one close to Parliament recently. It is a five-door hatchback—a very nice-looking car. It will be made in Britain, which is fantastic. Its on-the-road price, however, is £30,990. The Government’s £5,000 plug-in car grant, which is an excellent initiative that I commend, brings the price down to £25,990 but, for me, that is a very expensive car. I do not know what sort of cars my hon. Friends drive, but to me that would be an awful lot of money. I expect that for many of my constituents that would be much more than they would spend on a car. Frankly, I do not think that they would get the payback from the cheaper costs of motoring after that level of investment.
There is, however, a tipping point that comes with the introduction of new technology. When there are the advantages of economies of scale—mass production and so on—prices come down as new technology comes in. More people buy these things, so they are cheaper to produce and so on. Shai Agassi, in a speech that I read recently, anticipates a tipping point around 2015 when the economics start to stack up. If that is the case, things could change very quickly, which is why I raise the issues of scale and whether the United Kingdom will be able to meet the level of demand that I anticipate. If, for all of our constituents, an ultra low-carbon emission vehicle is cheaper than a conventional fossil fuel internal combustion engine, we will all want those vehicles straight away, because we will be fed up with paying the higher costs of motoring. Those issues of scale, and whether the United Kingdom is able to provide that amount of cars and make money from those huge levels of sales, will be a significant issue.
What is the Government’s view on the economics of investing in their own fleets across various Departments? Examples might include NHS delivery lorries or Royal Mail vans that go back to the same place every night, where they could be recharged; they might have a set route or series of routes and are excellent cases for conversion into electric vehicles. What progress are the Government making in ensuring that their commercial fleets in particular consist of ultra low-carbon vehicles—whether the electric or the plug-in variety?
Mr Marcus Jones
I thank my hon. Friend for giving way again. He makes an important point about Departments, local authorities and so on investing in electric vehicles. Does he agree that it is extremely important that, where practicable, we procure such vehicles from British manufacturers?
Andrew Selous
I very much agree. I, too, am passionate about home-made British production. We ought to buy British as often as we can. We are all subject to the so-called OJEU rules—named after the Official Journal of the European Union—under which public bodies must go through strict and unbiased procurement procedures. Sometimes, therefore, we have our police driving around in Volvos or other foreign-made cars. When I go to France, Germany or Italy, however, I hardly ever see French, German or Italian police officers in anything other than a car made in their home country—likewise for fire-fighting equipment and so on.
I postulate to the Minister that this country might be a little too rigorous in applying those OJEU rules. We have a fine automotive industry that makes excellent vehicles and, frankly, the police will catch no more criminals by driving around in Volvos and BMWs rather than in fine, British-made cars.
We digress; I will hastily return to the point, before you bring me back to it, Mrs Riordan. However, I am grateful for the intervention of my hon. Friend the Member for Nuneaton.
The Department for Transport asked whether 2011 would be the year in which the electric car takes off. There is certainly increasing interest, which is tremendous, and I commend the Government for the excellent £5,000 subsidy. My view of the economics is that we are not quite at the right point yet, but we will be very soon. Lewis Booth, the chief financial officer of Ford, has asked for how long Governments will be subsidising electric vehicles. If the Minister can shed any light on that issue, that would be helpful. In this early phase, private industry needs certainty for the future, particularly in planning.
Philippe Varin, the chief executive of Peugeot, has said that the European Union’s research and development support for electric vehicles is too cumbersome and complicated, which is a concern. If we are to compete against Japan, China and America, we in the European Union and this country need to get our act together in research and development funding.
I was delighted to read that the Minister for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), said in a departmental press release that the UK was Europe’s leading producer of ultra low-carbon vehicles. That made fantastic reading. I have already spoken of the production due to start shortly, or in early 2013, at the Sunderland plant. I hope we can maintain that position.
I am conscious that France, with Peugeot and Renault, is also ambitious in the area of ultra low-carbon vehicle production. The country has a plentiful supply of low-cost nuclear electricity, and it views itself as having a chance to challenge the dominance of the Germans in the European automotive industry. I repeat that everyone here is ambitious for Britain; we were the workshop of the world, and the industrial revolution took place here. I want us to be right at the front and centre, not running behind any other European country in this massive industry of the future.
I move on to the whole issue of charging points. It is all very well having an ultra low-carbon, electric vehicle—whether a hybrid or a pure electric one such as the Nissan Leaf—but if there is nowhere to plug it in when on a longish journey, the problem is that it will grind to a halt.
Again, the Government are active on that issue, and I commend them for that. We recently had the announcement of a £20 million plugged-in places grant to provide more than 4,000 charging points in the midlands, Greater Manchester, the east of England, Scotland and Northern Ireland, building on an earlier scheme in London and Milton Keynes. Yesterday, I checked with my own local authority and found that my constituency of South West Bedfordshire does not include a single charging point. That will change, however, because we are in the east of England and will receive some of the charging points from the plugged-in places grant. Colleagues from areas that I have not mentioned might want to ask the Minister what the plans are for those areas.
Currently, London has 250 charging posts. Transport for London is aiming for 25,000 charging posts by 2015—a level of transformational change that might need to go further, but is a significant increase. Some 90% of the 25,000 posts are intended to be in workplace car parks and 250 will be fast-charge charging points, which are important for longer journeys, when someone does not want to have to stop for eight or six hours to recharge the battery fully. We need to get the mix of charging points right for the future, so that this technology takes off. In Newcastle, Sunderland and Middlesbrough, near the Sunderland car plant to which I referred, 1,300 charging points are being installed.
Smart-meter, low-cost charging can also greatly reduce energy costs. If cars can be charged when there is much less demand on the national grid, that is much cheaper. That reduction in the energy cost can be important, and it is where smart meters come in. I am interested in whether the Minister will be able to enlighten us further on that aspect of Government policy.
I am concerned about the lack of standardisation of charging points in the European Union. Indeed, why can we not have standard charging points around the whole world? In the past, technologies have battled things out. With the video or the DVD, a common format for one worldwide product was arrived at eventually. That should be the case for charging points, in Europe at least. Many British people will want to drive their electric cars to France or elsewhere in Europe for summer holidays, skiing or whatever, and they need to be able to charge while they are there. The European Union could do something useful and practical for our constituents. What representations is the United Kingdom making to ensure standardised charging throughout Europe?
Earlier, my hon. Friend the Member for Stroud (Neil Carmichael) rightly mentioned training the work force. None of what I have been discussing will happen unless we have the skilled technicians in this country; unless we get it right, we will lose out to other countries that have invested more and have an appropriately trained work force. The Institution of Mechanical Engineers is worried about the lack of apprentices with the skills to work on electric vehicles, particularly in smaller businesses that may not be able to afford to train apprentices. How will that be rectified? It said that about 10,000 additional apprentices are needed in this area of electronic manufacturing to take advantage of and to satisfy the demand that is surely coming.
I am interested in the Government’s attitude to hydrogen-powered vehicles. I read carefully the note from the Parliamentary Office of Science and Technology, which states of hydrogen fuel cells:
“This is a low-carbon form of transport if the hydrogen is generated using electricity from low-carbon sources.”
I made that point at the start of the debate, and I want to check whether that is the Government’s view. Professor David MacKay, who was a Government adviser—I should be grateful if the Minister told us whether he is still advising them—and who is an eminent professor of physics at Cambridge university, wrote “Sustainable Energy—Without the Hot Air”, to which I referred. His take on hydrogen is that hydrogen vehicles make our energy problem worse rather than better. I do not know whether he is right, but I would be interested to know the Government’s view. I know that one large UK motor manufacturer, which I contacted before the debate, was keen to obtain clarity on the Government’s view of the future of hydrogen-powered vehicles.
I have driven a hydrogen-powered vehicle round the Cranfield test centre in Bedfordshire. It drove extremely well, as did the Vauxhall Ampera, which I have also driven and which will be on sale in the United Kingdom from next year. I hope that it will be made in Ellesmere Port. I wish that it was being made in my constituency at Luton in Bedfordshire, but it would be fantastic if it was made in the United Kingdom. That, too, drives extremely well, and all the evidence is that when people get into an electric vehicle and discover that it has a nice feel and good acceleration, and is not sluggish, they are enthusiastic and keen to adopt the new technology. We just have to get over some of the financial issues to which I alluded at the start of the debate.
I should like to know the Government’s view on the use of biofuels for vehicles. There is concern about the sustainability of biofuels and the fact that we may be inappropriately using land for biofuels when it should be used to produce food. What is the Government’s view on that? Likewise, where does liquid petroleum gas fit into the Government’s view of the new technology that we have been talking about?
We must pause to consider the improvements that can be made to internal combustion engines. We have 28.4 million cars on our roads, and Britain makes around 3 million car engines every year. They are becoming more efficient and lighter, and the technology is improving. I noted from the Volkswagen website that the Blue Motion Polo—unfortunately, it is not made in this country—emits 91 grams of carbon dioxide per kilometre, compared with 89 grams per kilometre for the Toyota Prius, which I guess may occasionally ferry the Minister around; the Prius comes in at just under, but it is very close. An expertly engineered internal combustion engine produces only 2 grams of carbon dioxide per kilometre more than a hybrid vehicle. We must differentiate between different types of internal combustion engine, because new technology is advancing swiftly.
Mr Marcus Jones
My hon. Friend talks about research and development, and innovative design of combustion engines. Many of my constituents work for Jaguar Land Rover, which is near my constituency. It is doing a fantastic job in changing how it produces its engines and how its vehicles are constructed—to be lighter and more fuel efficient. Does my hon. Friend agree that policy across Government should be to encourage through the taxation system not just the production of vehicles that cost less to run, but their ownership?
Andrew Selous
I thank my hon. Friend for his further intervention. I am glad that he mentioned Jaguar Land Rover, which has not been mentioned so far in the debate. It is doing excellent work on producing an electric hybrid Range Rover, which is fantastic, and it is co-operating fully with the Government on some of the bodies that I mentioned earlier. My vision is that all British-based manufacturers will be at the front and centre of the new technology and will supply the demand that will come down the track surprisingly and frighteningly fast in a few years’ time, when we reach the tipping point at which it becomes more economic to drive such vehicles rather than pay the exorbitant and cripplingly high prices that we have to put up with at petrol stations at the moment.
The United Kingdom has a history of inventing, but then not commercially exploiting, new technologies. I do not want us to repeat mistakes of the past. If we can seize the opportunities that I have outlined, we can protect our environment, provide jobs, increase our energy security and give our constituents a low-cost motoring future. I believe that they would thank us for that.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to see you in the chair, Mrs Riordan. I congratulate the hon. Member for South West Bedfordshire (Andrew Selous) on securing this debate, and concur with much of what he said. Clearly, he speaks with a lot of knowledge of the issue. It is a pleasure to speak on the subject; it makes a change from buses, trains and trams, which is the policy area on which I lead for the Opposition. My hon. Friend the Member for Barrow and Furness (John Woodcock), who leads on the issue, is serving on the armed forces parliamentary scheme today, so I suppose that I have drawn the short straw in speaking for the Opposition in this debate.
The hon. Member for South West Bedfordshire referred to the scheme in Israel, which, as a matter of interest, I had the opportunity to see. The ambition is impressive, but like him, I am not sure that it could be exactly transposed to the United Kingdom. However, it is certainly worth looking at, and the operation of the scheme is interesting. Knowing what works well and what does not may be of some benefit to the Department.
This debate is incredibly timely, coming as it does after two reports on the Government’s commitment to making change on the scale needed to tackle the threat of climate change and the role that a shift from dependence on oil to low-carbon alternatives in motor vehicles could play in meeting that challenge. Climate change is a threat that almost everyone now recognises we must treat seriously.
It was a surprise to read in the media that three Departments, including the Department for Transport, have raised objections to the new carbon budget proposed by the Committee on Climate Change. A leaked letter from the Business Secretary stated that accepting the carbon budget would endanger the competitiveness of British industry—that hardly says much for the Transport Secretary’s green credentials. As has been mentioned, rising fuel prices have led to a growing recognition of the need for change, not only among environmental campaigners or the political elite, but across the country. We know how the volatility of oil supplies impacts on the price at the petrol pump, causing misery for drivers and contributing to the costs facing families who are already feeling a squeeze on their incomes. The decision to increase VAT on petrol has added to the burden facing motorists, and the hon. Member for South West Bedfordshire mentioned those increasing costs in his contribution.
The goal of cheaper, greener motoring should unite everyone, as I believe it does. The public need the possibility of cheap, reliable transport, and the Government need efficient and clean transport networks that rely on secure energy supplies. Businesses must look to remain profitable and competitive at a time when the economy is under strain and environmental concerns are ever more pressing. Transport—primarily road transport—is a major contributor to greenhouse gas emissions, and the hon. Gentleman spoke about the need to use clean energy because as much as one fifth of all emissions come from road transport.
We can take two major steps to tackle the problem. First, we can make the alternatives to travelling by car more attractive. The significant investment in our rail network over the past decade led to a rise of over 43% in rail use during that period. The possibility of faster journey times on new high-speed lines, and the improvement of existing routes through electrification and more advanced trains, will continue to help achieve that shift from road to rail. The risk, however, is that such progress could be set back by the Government’s decision to hike up rail fares by 3% above the retail prices index of inflation for the next three years, meaning that fares will rise by over 30% on many vital commuter routes. In opposition, the then shadow Transport Secretary, the right hon. Member for Chipping Barnet (Mrs Villiers), warned that fare rises that were lower than those now proposed would
“price people off the railways”—[Official Report, 17 July 2007; Vol. 463, c. 149.]
I fear that her prediction will now become a reality, thanks to the decisions that she has taken since the election. Similarly, the decision to cut local government transport funds so much, so quickly, is having a devastating impact on bus services, inevitably reversing the progress that has been made in getting people out of their cars and on to public transport.
Secondly, we can do more to promote alternatives to travelling, and I welcome the Minister’s championing of initiatives ranging from the use of new technologies such as video conferencing to the promotion of working from home or remotely. Such initiatives, however, will amount to little unless there is proper financial support from the Government to back up the Minister’s enthusiasm. In reality, the car is for many the only realistic way to travel, particularly in rural areas. My constituency is in an urban area of Greater Manchester and is far from rural. Most of my constituents, however, do not travel by public transport; they travel by car, which for them is the only realistic mode of travel.
When in government, we recognised that a step change was needed if we were to move away from our dependence on oil and embrace and incentivise ultra low-carbon alternatives such as electric vehicles. Of the 20% of emissions that originate from our roads, 16% comes from cars. If it were more affordable to use electric vehicles, that would have a significant impact on emissions. Such initiatives must, of course, go hand in hand with a credible strategy to increase the amount of energy generated from renewable sources—a point made by the hon. Member for South West Bedfordshire—so that when there is increased use of electricity as a result of the roll-out of electric cars, that electricity is from green sources.
I am sure the Minister shares my concern about the report published in the past few days by Jonathon Porritt, the former chairman of the Sustainable Development Commission. His damning report marks the anniversary of the Prime Minister’s commitment to lead the UK’s “greenest Government ever”, and states that
“the likelihood of the Coalition Government living up to its “Greenest Government Ever” pledge is vanishingly remote.”
The report finds that more than three quarters of the Government’s commitments have shown little or no progress, and judges 29 of those commitments to be “moribund”, with a further 29 seeing “limited progress.” The decision to prevent the green investment bank from borrowing funds until at least 2015, and the watering down of feed-in tariff rates, are two examples of the Government’s backtracking on low-carbon initiatives. In his report, Mr Porritt states:
“The fact that David Cameron has no personal vision for the Green Economy provides all the permission that is required for piecemeal decisions across the rest of Whitehall working against any notion of becoming the Greenest Government Ever.”
The report concludes that it is
“depressing to see just how rapidly things have gone backwards since May 2010.”
Significant hurdles must be overcome to achieve the mass roll-out of electric vehicles that is needed to make a difference. We need the development of a recharging infrastructure that offers the assurance wanted by potential buyers—namely that they will be able to recharge their cars wherever they are in the country. That point was made eloquently by the hon. Member for South West Bedfordshire. We must also bring down the retail costs of electric cars. Although we can argue that they are cheaper to run and offer the potential for huge savings across the lifetime of the car, that is little use for someone who simply cannot afford the up-front cost. At the danger of breaking the consensus that has developed during the debate, the zeal with which the hon. Gentleman made his contribution put him in danger of sounding a bit like an over-enthusiastic car salesman—he certainly had me sold on a number of vehicles that he described. I am not sure whether that is a better job than being a Member of Parliament in the general hierarchy of things, but his knowledge has certainly benefited the debate.
We must work in partnership with industry to support the up-front research and development costs of new technologies—the hon. Gentleman and other hon. Members made a compelling case for investment in skills. It is a high-tech sector and important to the future of the manufacturing industry in this country, and it will undoubtedly play a major part in rebalancing the British economy. I represent a constituency that is still heavily dependent—perhaps disproportionately so—on manufacturing industry, and the desire to see investment in those new technologies transcends political divides.
I am proud of the steps that we took when in government to address some of the barriers to the mass take-up of electric vehicles. The £2.3 billion of assistance provided by the Labour Government to the automobile industry during the recession was tailored to help British industry become a world leader in the manufacture of low-carbon vehicles, and aimed to promote research and development of that technology. It also helped companies such as Jaguar Land Rover to access the European Investment Bank’s clean transport facility.
Labour made a commitment to make electric vehicles more easily available for consumers, and the then Transport Secretary, Lord Adonis, worked on trial electric vehicles. An investment of £250 million was made to make electric hybrid vehicles more affordable for consumers, and funding was provided for the largest trial of electric vehicles in the world. That scheme was launched in July 2009, and 340 vehicles took part. It is hugely disappointing that the Government do not recognise the importance of supporting British manufacturing at a time when investment is necessary to protect British jobs and ensure that we set the pace in the development of green technologies.
Mr Marcus Jones
The shadow Minister is making a case for the support given by the Labour Government to the automotive industry. I am quite shocked by his comments, because many of my constituents who work for Jaguar Land Rover were very concerned in 2009 at the lack of support that the Labour Government gave Jaguar Land Rover in its time of need. A long, long delay nearly saw many departments of Jaguar Land Rover close facilities in the UK. I am glad to say, and I hope that the hon. Gentleman will acknowledge this, that the regional growth fund has supported substantial investment in Jaguar Land Rover, which will create more than 6,000 jobs in the west midlands.
Andrew Gwynne
That is not quite how it happened. What the hon. Gentleman says about the regional growth fund is certainly welcome, if it is the case, for Jaguar Land Rover. However, I have to say that it is a pittance compared with the funding that was available through the regional development agencies. If that company is benefiting from the regional growth fund, that is good news for it, but I know of many companies that were to receive funding through the regional development agencies that are not so fortunate.
Mr Jones
The shadow Minister mentions the regional development agencies. In the west midlands, private sector employment fell while the regional development agency, Advantage West Midlands, was in operation, despite it having spent far more money than the regional growth fund, so I suggest to him that perhaps he should look for outputs rather than inputs, and at what we can achieve for our money.
Andrew Gwynne
I am glad that the hon. Gentleman acknowledges that the budgets of the regional development agencies were substantially greater than that of the regional growth fund, notwithstanding the points that he makes about employment growth. With regard to the funding that was made available previously, it is hugely disappointing that the present Government do not recognise the importance of supporting manufacturing. It is crucial to ensure that we are setting the pace in the development of green technologies.
I appreciate that the Minister has at least sought to take forward the work that Labour started when it was in office in developing an infrastructure for recharging. The Department for Transport claims that 9,000 electric vehicle charging points will have been built by 2013, yet research by the BBC published last week found that only 704 are currently available. It is estimated that 8,600 electric vehicles will have been sold by the end of this year, which will require 4,700 charging points to be completed before 2012.
It is a real worry that greater progress is not being made, and there are real doubts that the Government are treating the issue with the urgency needed to ensure that even their own claims will be achieved. There are also concerns about the progress being made in supporting the sale of new electric cars. The Minister has said in a parliamentary answer that just 534 cars were registered to receive the plug-in car grant in the first third of this year. The real concern, however, is that the funding for that initiative is being ended by the Government next March. As the Minister will know, Labour committed £230 million to the scheme, yet that has been reduced to just £43 million, turning the grants into a one-off scheme when what is needed is long-term, sustained support for this emerging industry.
I will therefore ask the Minister for some assurances. Can he reassure the industry and those for whom the cost of an electric car is simply out of reach that funding will be made available to continue the subsidy beyond the current financial year? Given that the comprehensive spending review was supposed to be a three-year settlement, why has he set this budget only for the current year? Are we providing enough support to the automobile industry to research and develop new low-carbon and ultra low-carbon vehicles? What more can be done to ensure that the UK is in a good position to become a market leader in this field?
Is the automobile industry putting sufficient investment into improving the efficiency of conventional petrol and diesel vehicles? Does the Minister believe that biofuels should play as prominent a role as they have been given in the past in making conventional vehicles greener? What progress are we making towards setting a new EU-wide target of 100 grams of carbon emissions per kilometre from new cars?
Finally, I would like to ask the Minister about the Government’s carbon plan. Can he update the House on the commitment to
“Consolidate existing support mechanisms for low and ultra-low emission vehicle research and development”,
which had a deadline of April 2011? Can he confirm that the commitment to developing a
“nationwide strategy to promote the installation of electric vehicle infrastructure, including a decision on whether to use an energy Regulated Asset Base and/or changes to planning/building regulations”
will be delivered on time—by the end of June 2011? What progress has been made on the commitment to review the
“strategy to support transition from early ultra-low emission vehicle market to mass market”,
which the Government have said is under way?
More environmentally friendly forms of transport, including electric cars, could play a larger role in the coming years in this country. I certainly look forward to what the Government will say about meeting that challenge.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I am grateful for the opportunity to respond to the debate. I congratulate my hon. Friend the Member for South West Bedfordshire (Andrew Selous) on the topic that he has chosen, on his enthusiasm for it and on the large number of entirely pertinent questions that he asked during his contribution. I will try to answer as many of those as possible, which means that my response might be slightly more bitty than would otherwise be the case.
It is worth pointing out to start with that the two objectives of the Department for Transport are to help to create growth and to cut carbon. Of course, developing and promoting electric vehicles fits in exactly with those two objectives, showing that helping the environment need not be—in fact, should not be—contrary to economic development and the generation of growth for this country. If we can move that agenda forward, it will certainly be in all our interests to do so. That is why we have taken action to position Britain as a global leader in the design, production and use of electric and ultra low-carbon emission cars. Cutting spending does not have to be incompatible with a low-carbon agenda. Some low-carbon choices already offer outstanding value for money, so our future goal is a market for green vehicles that makes economic as well as environmental sense.
We have heard about alternatives to car transport. Let me deal with that issue briefly. Of course, a rounded transport strategy has to take into account alternative forms of transport. That is why we have prioritised the local sustainable transport fund to develop alternatives for shorter journeys; two thirds of car journeys are of 5 miles or less. To answer the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), that shows the commitment of the present Government to dealing with the environment, because not only is it a big way of dealing with carbon emissions in the short term, but £560 million for those areas is more over this four-year period than the last Government provided over the last four-year period, notwithstanding the difficult economic circumstances in which we find ourselves. That is a real commitment from the Treasury to this agenda.
[Mr Edward Leigh in the Chair]
The shadow Minister also mentioned rail. I was having some difficulty in following his logic, because he said on one hand that people were being priced off the railways, but on the other hand that a record number of people were using the railways. Those two statements do not seem to be entirely compatible. Also of course, the last Government changed the RPI arrangement so that every year, rail fares went up above inflation. To that extent, we are simply talking about a continuation of the policy inherited from the last Government.
Andrew Gwynne
When the Minister looks at the record of the debate, he will see that the quote about pricing people off the railways came from his right hon. Friend the Minister of State, Department for Transport, who is responsible for the railways.
Norman Baker
The point that I am trying to make is that, if increasing rail fares above inflation prices people off the railways, which I think was the argument developed by the hon. Gentleman, the policy has been singularly ineffective so far. The policy pursued by the last Government of pricing fares above inflation has led, according to his own figures, to record numbers of people on the railways.
Andrew Gwynne
I realise that the debate is not about railways, but perhaps the Minister will look at some of his right hon. Friend’s written parliamentary answers, which show that the Government’s own projections make it clear that price increases of 3% above RPI over the next three years will see the growth in rail passenger usage fall.
Norman Baker
As the hon. Gentleman says, the debate is not about railways, so we should not spend too much time on this, but the Department for Transport’s projections show increasing numbers of passengers on the railways. Only this week, record numbers of rail passengers were announced, not least because of the price of fuel, which my hon. Friend the Member for South West Bedfordshire mentioned.
I am glad that the Opposition spokesman mentioned high-speed lines in a positive sense, and I look forward to the Opposition confirming that they have retained the last Administration’s position of supporting high-speed rail. It is important that there is cross-party agreement on the issue, and I am disappointed that the hon. Gentleman’s boss has so far been unable to say definitively that high-speed rail would continue if there were a Labour Government.
Let me turn in more detail, however, to the subject before us: electric and low-carbon vehicles. Notwithstanding the comments about railways and low-carbon transport locally, the fact remains that most journeys are undertaken by car, and that will remain the case for the foreseeable future. The reason is that cars are a convenient means of getting from A to B and are the only practical alternative for a great many journeys. Yes, people can take a different means of transport if they are in a city centre, and they can use the railways if they are going from one city centre to another, but the car is the only alternative for most journeys. We must therefore ensure that it is in a good place to contribute sensibly to our environmental and economic objectives. As I said in opposition, and I am happy to say again in government, the enemy is the carbon, not the car, and that is what we should focus on in our attempts to move forward on transport policy.
In the short term, the majority of CO2 savings from road transport will come from improvements to conventional technologies, and that is broadly acknowledged across the House and across industry. I have been impressed by car manufacturers’ ability to tweak—that is perhaps an understatement—or adjust their technology in a productive way to deliver reduced carbon emissions from conventional engines, and one of the models mentioned competes favourably with a hybrid engine. EU regulations on fuel efficiency have helped to drive that process. Similarly, the manufacturing industry’s competitive will has helped to respond to the general environmental challenge that we all face. We will continue to work with manufacturers and our EU partners to squeeze more fuel efficiency out of petrol and diesel cars and vans because that will provide the biggest short-term gain. However, we are also preparing for the more revolutionary change that is the subject of the debate.
Of course, the take-up of ultra low-carbon cars may be slow at first, and nobody should be surprised by that. Whenever a new technology is introduced, there is always a slow take-up and then a rising line on the graph as people get used to the technology and gain confidence in it. The price then starts declining because the market is developed, and part of the Government’s strategy is to help to ensure that the market is kick-started and developed. There should be no concern about the number of electric vehicles that have been sold to date, because the trajectory is the one we would anticipate and is entirely consistent with our significant ambition for four years ahead, to which I will return shortly.
We are putting in place the incentives we need to establish a market for these pioneering technologies, which will be supported by measures such as enhanced capital allowances, low benefit-in-kind taxation and variable vehicle excise duty. I am happy to say that we are joined in our effort by a number of private and public sector organisations. To respond to one of the points that has been made, the Royal Mail is undertaking trials with electric vans. Sky is seeing what the plug-in Toyota Prius is like to live with. In my Department, the Government Car and Despatch Agency is testing five plug-in Toyotas and a Smith electric van, so we are doing what we can.
To support the development of the market for low-carbon vehicles further, we need to ensure that the right infrastructure, specialist supplier base and customer incentives are in place, and that is exactly what we are doing. We have confirmed our support for a range of research and development programmes across the green vehicle sector. Through the Technology Strategy Board’s low-carbon vehicles innovation platform, we are working with key partners to deliver a strategic vision for automotive R and D. Last year, we announced that a further £24 million was being awarded to six winning consortia from the latest competition, which makes a total of £52 million with contributions from business.
All of that will make a significant contribution to greener vehicle development in this country, to pick up the point rightly made by my hon. Friend the Member for Nuneaton (Mr Jones). That development includes hybrid technologies, composite materials and engines that recover waste heat energy. The vehicles that will benefit include plug-in hybrids from Nissan, Lotus and Jaguar Land Rover, extended-range electric cars and a lightweight hybrid refuse collection vehicle. Through the plug-in car grant, we are helping to lower the up-front costs of such vehicles. There are nine eligible cars, which are, and will be, on our roads, with more than 500 orders already placed under the scheme, as has been mentioned.
Our objective has always been real grants for real cars: cars that are safe and reliable, that meet the needs of real motorists and that provide a motoring experience that is as good as, if not better than, that provided by the conventionally powered vehicles people currently drive. It is important that the new generation of cars have that consumer confidence and that their performance is similar to, or better than, that of existing vehicles. If we are to have uptake, we absolutely must have that. Fifteen or 20 years ago, I did some work on green washing powders, which, quite frankly, were not as effective as normal washing powders, so the uptake was limited. If green technology is to take off, we must get its performance up to the level of that of existing technology.
The scheme was launched in January, with buyers receiving a grant of 25% of the price of a green car, up to £5,000. That, of course, also applies to business buyers. The scheme has been well received by the public and by business. We have shown our strong commitment to supporting the market by confirming support for the grant for the lifetime of this Parliament. To pick up the point raised by the shadow Minister, it is right that the sum involved is £43 million until March 2012. The spending review has confirmed the provision of about £300 million to support consumer incentives for the life of this Parliament. The hon. Gentleman can have confidence that this is not a stop-start arrangement, but something we will see through to make sure that there is confidence in the market.
Through these initiatives, we want to encourage motorists to embrace cleaner and greener vehicles. By encouraging demand, we will stimulate investment in mass production which will, in turn, bring down costs and further boost demand. That is what we have seen with all new technologies, whatever the field, and things will be no different with electric vehicles.
Let me turn now to some of the points raised by my hon. Friend the Member for South West Bedfordshire. He mentioned the carbon reduction from an electric car powered by the existing grid, and he is right to draw attention to the need to change the grid mixture. Indeed, when we came into the Chamber at the end of the previous debate, my next-door neighbour, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), was responding to a debate on that very matter. The Government are well seized of the need to develop a cleaner, greener grid, which will undoubtedly increase further the advantages of electric cars. Even if the existing grid is used with a new electric car, however, there can be up to 40% carbon savings. There are also further benefits in terms of reducing air pollution from tailpipes and so on. We should change the grid, but even if we do not, there are still many good reasons to pursue electric vehicles, which is what we are doing.
My hon. Friend the Member for Nuneaton referred to the regional growth fund, and I can assure him that the Department for Transport is drawing the attention of other Departments, including the Department for Business, Innovation and Skills, to the advantages of transport investment, including in this field. He will know of the Transport Secretary’s enthusiasm for these issues, and he can rest assured that my right hon. Friend will not lose an opportunity to advance them in discussions with fellow Cabinet Ministers.
My hon. Friend the Member for South West Bedfordshire asked about the 2020 target, as it were, for electric vehicles. There is no doubt that we want a big uptake of these vehicles. The figure achieved will be determined by external factors to some extent, for example the price of oil. If the price rises dramatically, it will, I suggest, hasten the development and uptake of electric vehicles, but if the price declines, it will make it less attractive to move forward on that trajectory. Therefore, some outside factors mean that it might not be sensible to set a target. We should say, as we have said, that we must decarbonise road transport if we are to make serious inroads in our carbon emissions in the transport sector.
We should and we have done stuff on rail and encouraged cycling and walking in urban centres, but ultimately the big gain will come from decarbonising road transport. We must put in place high-level objectives for carbon reduction and economic growth and the mechanisms to deliver the outcome we want, which, in this case, is a big uptake in electric vehicles. We must then monitor the uptake without necessarily setting arbitrary targets for how many vehicles there should be by 2020. Having said that, “The fourth carbon budget” report has made some recommendations and we appreciate the efforts made in that regard. We have not formally responded to them, but we will publish our views in October, and we might be able to give more detail on the number of electric vehicles we could achieve when we publish that.
My hon. Friend the Member for South West Bedfordshire referred to the incentives for purchasing electric vehicles, and I am grateful that he welcomes the £5,000 grant. The economics are not quite as negative as he might feel. On current petrol prices, an electric car such as a Nissan Leaf could save the average motorist up to £1,000 a year in running costs, so, taking account of the plug-in car grant and the vehicle excise duty benefits, even now someone could get a payback in seven years. I accept that that could be better and we want to make it better, but there is a sensible payback period for people to consider when they invest in such vehicles.
Andrew Selous
I thank my hon. Friend the Minister for the serious way in which he is responding. What he has just said is, in some ways, the most important thing that has been said in the whole debate, and I am grateful to him. The fact that the payback could be within seven years is very welcome news. He has told us about it here, but it is probably rather a well kept secret at the moment, so we need to publicise it slightly more. I ask him to do that.
Norman Baker
They always say that if one wants to keep a secret, tell the House of Commons. It is worth pursuing that issue further and I am grateful for my hon. Friend’s suggestion. My officials are here and we will see what we could usefully do to promote the scheme further.
I mentioned the need to ensure that the performance of electric vehicles is satisfactory, but if we are to make progress, we also need to ensure, as far as possible, that the economics are satisfactory. Once those two things are in place, people will embrace the new technology in a welcome way. People want to be green, provided that they can afford to be and that their vehicles do not lack performance as a consequence.
Those who have contributed to today’s debates raised the issue of the infrastructure. We are determined to roll out an effective infrastructure for electric vehicles, hence the inclusion in the coalition agreement of a commitment to mandate a national recharging network. Our plugged-in places programme is helping to do just that. The scheme will provide valuable data on how and where people recharge their cars, so that we can get the national network right. To help achieve that, we are working on a strategy for promoting the roll-out of charging infrastructure, and we will publish it this summer. More details will be available then.
In December last year, as my hon. Friend the Member for South West Bedfordshire knows, we announced five more plugged-in places: Northern Ireland, central Scotland, Greater Manchester, the midlands and the east of England will all receive match funding to install electric vehicle recharging infrastructure. Those projects join the schemes in London, Milton Keynes and the north-east of England, which the previous Government began.
The programme is real and happening now. Charging points are already appearing on our streets—the most visible sign of the growing market—and will soon, I hope, become a common feature on streets and in homes, workplaces, and private and public car parks, so consumers can charge their cars easily, safely and conveniently. To pick up the point made by my hon. Friend, they will have confidence that they will not be left stranded somewhere without a power source. That concern is also addressed by the development by manufacturers, who are pushing at the boundaries, of increasing range for electric vehicles.
This is a new market and these are new technologies. The projects will test a variety of business and operating models and different technological approaches. The knowledge that we gain will inform the developing national strategy for infrastructure. Of course, we want the UK to benefit from the business and competitive opportunities of ultra-low-carbon cars. We want green growth and we want it here. We want UK businesses to seize commercial opportunities in the sector and are supporting them to do so.
The move to ultra-low-emission vehicles presents opportunities to support the economic recovery, green growth and the creation of high-tech, low-carbon jobs. The automotive sector is already our No. 1 manufacturing export, directly employing around 156,000 people in the UK and a further 150,000 in the supply chain. The sector is worth nearly £6.5 billion to the UK economy in terms of gross value added, so as the automotive sector goes green, the UK is well positioned to reap the benefits. I can assure my hon. Friend the Member for Nuneaton that the Department for Transport, the Department for Business, Innovation and Skills, and the Treasury are working together and are closely focused on doing that.
The Nissan Leaf will be made in Sunderland from early 2013, with production growing to 50,000 vehicles per year. Nissan will assemble battery packs for the Leaf on the same site, starting in 2014 and growing to 60,000 units per year. Those are real, green jobs, and they are helping to create growth and cut carbon—the two objectives of the Department for Transport.
I turn to the other questions that were raised. I dealt with the length of the subsidy for electric vehicles. There is competition from Europe—there is no doubt about that. France has aggressive plans for infrastructure and vehicle uptake, but the UK has been allocated the largest number of Nissan Leafs in Europe, which demonstrates that we are seen as a leading market, and we are working to position the UK to take advantage of the business opportunities that the market brings.
To be frank, the standardisation of charging points is a difficult issue and not one for which there is an immediate solution. The International Electrotechnical Commission has developed international standards for electric vehicle recharging and there are discussions in the EU to get progress on a standardised charging system. However, the national interest sometimes has a role in the consideration of the best way forward, as my hon. Friend will understand.
Andrew Selous
Does my hon. Friend the Minister agree that this is one area in which the EU could play a useful role? Many people think that getting some form of standardisation is exactly what the EU is for.
Norman Baker
I entirely agree, and I hope that the EU comes up with a solution that does not reflect national interest, but European interest, and makes sense for manufacturers and consumers by keeping costs down. That would be an entirely sensible outcome for many EU discussions. I assure my hon. Friend that we are using our influence, as far as we have any, to push for exactly that outcome.
Mr Marcus Jones
Promoting the standardisation of such charging equipment across Europe is obviously laudable, but if other EU member states are promoting their national interests while doing so, surely we should also give some consideration to promoting our national interest and the interests of our manufacturers in those negotiations. Does the Minister agree?
Norman Baker
I agree that we do not want to leave ourselves in a position where, to be blunt, we are outflanked. We must try to achieve a consensual arrangement for a single recharging solution that everyone can embrace. That is clearly the desired outcome, and it will ultimately be to the benefit of all countries in the European Union and more widely. Indeed, as we heard earlier, the best solution will be an international one, as it will keep manufacturing costs down and therefore the cost to the consumer down, too. We are seized of the need to make progress, but the House will appreciate that it is not entirely within our control.
The matter of apprentices was raised, especially the fact that we need a sufficient number with the skill to work on electric vehicles. I am happy to reassure the House that the Department for Business, Innovation and Skills, the Department of Energy and Climate Change and the Department for Environment, Food and Rural Affairs are working together to identify the necessary skills and to consider how the demand-led further education system will deliver them. We are talking to the sector skills councils and the Commission for Employment and Skills about ensuring that the demand for green skills is shared with further education colleges and other providers. We plan to maintain a strong cross-Government focus on the STEM subjects of science, technology, engineering and maths.
Andrew Selous
The Minister is being generous in giving way, which I appreciate. What he said about schools is critical. To be blunt, if people do not have a GCSE in physics, they will probably not even make the starting gate. However, there is a chronic lack of physics teachers. I know that this is stretching the Minister’s departmental responsibilities, but it is important that we join these things up. Nothing will happen unless schools have the basic physics that will lead people on.
Norman Baker
As suggested, the number of physics teachers may be slightly beyond my brief at the Department for Transport. However, I have some sympathy for the point being made by my hon. Friend. The mindset in some areas and among some people is that manufacturing is an old-fashioned dirty business, and that people who want to progress in life should get white-collar jobs. That is unfortunate, and the Government are trying to change that mindset. Manufacturing is most important to the country, and it is a skilled task. Anything that schools can do to help promote it is entirely to be welcomed. My officials and I will ensure that my hon. Friend’s comments are drawn to the attention of the relevant Minister at the Department for Education.
Before I run out of time, I shall deal with the other points that were raised. Hydrogen was mentioned. I return to the Government’s objectives, which are twofold—to create growth and to cut carbon. I do not want to get into the business of picking winners in the technology that finally emerges. It may be that what emerges is not an overarching technology; there may be different solutions for different vehicles, with the solution for council refuse collection vehicles being entirely different from that for the car that takes people to visit their aunts and uncles.
We should be careful not to impose Government solutions, or to guess which way technology is taking us. We should specify the outcome that we want—that of decarbonised road transport—and invite manufacturers, those involved in research development and others to come up with a way of achieving that objective. It is not for us to second-guess things, although it is tempting. I do not mean that as a criticism of the previous Government, but they started promoting liquefied petroleum gas in 2001-02. They had good intentions, but it turned out that the environmental benefits were less than they thought at first. To some extent, people were being led up the hill and back down again, and we need to avoid such outcomes.
We have a similar situation with biofuels, which were referred to today, and we must be careful to avoid the same problem. Biofuels were originally seen as the big solution, the silver bullet. Pressure groups were pressing the Government to do more with biofuels, but then did an about-face, saying that biofuels were terrible and had awful consequences. Biofuels, too, went up the hill and down again.
Biofuels are within my brief, but it is taking time to get the issue right. We believe that they have a role in transport, but they must be sustainable. They must also demonstrate carbon saving and show that they do not have unwanted consequences for the environment through indirect land use or in any other way. If we get the foundations right, we can build on them, but we cannot have the biofuels industry being built on sand or we shall run into environmental difficulties in the years ahead. That is why we are taking more time. We are consulting on the renewable energy and the fuel quality directives, and people have the opportunity to feed in comments. I hope that the Opposition will get involved in those consultations, to ensure that our policies on biofuels are right.
I turn to the comments of the hon. Member for Denton and Reddish. He spoke about fuel duty and VAT on fuel. It might have been fairer if he had referred to the fact that the Chancellor cut fuel duty by 1p in the Budget; he might also have referred to the fact that the Chancellor abandoned the above-inflation increases that the previous Government intended to introduce. There is an argument to be had about where the price of fuel should be, given its impact on the environment and the economy, and it is perfectly legitimate to engage in that argument, but we should have the facts before making the necessary judgments.
The hon. Gentleman spoke about our being the greenest Government ever, but the time to judge that will be at the end of this Parliament; only then will we be able to see whether the policies that started off down the track have been enacted and where they ended. I, for one, am determined that the aspiration should be turned into reality. I want us to be the greenest Government ever, and I have no reason to think that other Ministers take a different view. I believe that the Prime Minister, too, is committed to that objective. The time to judge us will be at the end of this Parliament, and I hope that we will have an overwhelming case to demonstrate that we have achieved that challenging objective.
As for the green investment bank, it did not exist under the previous Government. Whether or not it is allowed to borrow is a moot point. We created the bank and we have given it borrowing powers, which is a substantial departure from normal Treasury policy. It does not start until 2015, but it is a major achievement, and I hope that the hon. Member for Denton and Reddish will acknowledge that; rather than painting everything as a glass half empty, he should recognise that the glass is half full—and getting fuller as time goes on.
Andrew Selous
I return, if I may, to what I believe is the most significant factor—the seven-year payback. Would the Minister be prepared to write to me, perhaps giving the matter further publicity, setting out the illustrative figures? I accept that they are illustrative and that they make assumptions about the price of fuel and so on, but that seven-year payback is critical. Would he be kind enough to set them out in a letter? I hope that he might also give the matter wider publicity, which could be critical in moving this vital industry forward.
Norman Baker
I am happy to give that assurance. I shall write to all Members present as a matter of courtesy. The Government will do whatever we can to promote electric cars and the uptake of low-carbon vehicles. We are committed to that agenda. That is why I am grateful to my hon. Friend the Member for South West Bedfordshire for introducing this important debate.
UK and Sierra Leone
(13 years, 5 months ago)
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Simon Hughes (Bermondsey and Old Southwark) (LD)
I am grateful to Mr Speaker for granting me the opportunity to debate relations between the United Kingdom and Sierra Leone. I have been a Member of Parliament for more than a quarter of a century, and I have become a great fan of Sierra Leone over that time. I became a fan because many of my constituents and others who live in the London borough of Southwark come from Sierra Leone. I have come to know them well and work with them; I have seen them become involved in the local community, stand for public office and elected as local councillors; and I have seen one, Councillor Columba Blango, become mayor of Southwark.
I am a great fan of Sierra Leone, because I have had the opportunity to visit it on more than one occasion, most recently the year before last. I place on record my thanks to Ian Hughes, our high commissioner, who hosted that visit, and to Magali Tang, who works with me on Home Office, immigration and other matters. We were given a good opportunity to catch up on matters in general and to meet much of the community, but we went specifically to look at the challenges of deforestation that face the area around Freetown and of the climate change agenda.
I have become a great fan of Sierra Leone because I have seen how the country has bounced back from one of the most terrible civil wars that Africa has seen in recent times. It was a civil war in which the most terrible atrocities were committed. Many people were killed and many lost their families and their homes. Even those who survived were often left so badly injured that they were unable to be economically self-sufficient. Many were placed in homes in Freetown because they had had both their arms or legs chopped off. The most terrible things happened in that most terrible of civil wars.
With the help of the United Kingdom, the country has come through. There is huge respect in Sierra Leone for the UK Government because of their willingness to support a great Commonwealth friend. I have joined with many Sierra Leoneans in the past few days to celebrate the 50th anniversary of their independence from the United Kingdom. They were celebrating not because they had wanted to shake off their links with the United Kingdom, but because of their growing self-confidence. There was a great service in the Walworth Methodist church in Southwark, a celebration party in Camberwell and many other events. There was a diplomatic reception hosted by his excellency the high commissioner for Sierra Leone on 27 April.
It is a pleasure to welcome the Minister to this debate. I have just learned from him that he had the privilege of representing Her Majesty and the Government at the anniversary celebrations in Sierra Leone. He will no doubt regale us with an account of the optimism that he found in that lovely west African coastal country, which was once a member of the empire and is now a proud member of the Commonwealth. Let me also pay tribute to the high commissioner of Sierra Leone in the UK. He is fully engaged with his community, and is a hugely popular and respected figure, as he was when he was in public life and politics in Sierra Leone.
There is no intention in this debate to catch out the Minister or give him a hard time. I just want to set out some of the facts about Sierra Leone as it is today, and then share with the Chamber the issues on the agenda for the future. Our link with the country comes through not just history, respect and diplomatic interchange, but the Foreign and Commonwealth Office and the Department for International Development. I will come back to the way in which we help on a day-to-day basis.
Sierra Leone is a beautiful and peace-loving place with many natural characteristics and resources. It has a beautiful coastline that provides harbouring for ships from across west Africa, and the potential for oil exploration. None the less, it is one of the poorest countries in the world, and we need to remind ourselves of that, because with poverty comes great challenges. Sierra Leone has a population of about 6 million people, and more than 20 ethnic groups. In the civil war from 1991 to 2002, there were tens of thousands of deaths and the displacement of more than 2 million people—about a third of the population. It is not surprising, therefore, that the Governments under President Kabbah of the Sierra Leone People’s party and under President Ernest Bai Koroma of the All People’s Congress party since 2007 have been seeking not only to strengthen democracy but to ensure that the economy can grow so that it meets the needs of its people.
When I was talking to the high commissioner at one of the recent celebrations, he said that the most visible sign of economic progress is the improvement in infrastructure. That will be welcome not just to Sierra Leoneans but to many visitors. On my first visit, I had to go by road from Freetown to Bo and, as I told the high commissioner, it was the least comfortable road journey of my life because there were more potholes than road. I am talking about not little undulations in the road but serious holes. Sorting out the road surface, the road structure around the country from the capital to the provinces and the internal air flights is fundamentally important if people are to be able to travel for work or for social activity, to sell their wares or to exploit natural resources.
The list of Sierra Leone’s natural resources is not small or insignificant. It includes diamonds, titanium ore, bauxite, iron ore, gold and chromite. Unlike Zambia, most people in Sierra Leone do not work in mines. They work on the farms, scratching a living from agriculture, which brings me to the other important background fact. Like every other country, Sierra Leone has been challenged by climate change. A huge percentage of the population is under the age of 16. People have responded to the rapid growth in population by over-harvesting timber and taking away some of the forests, by expanding cattle-grazing, and with some slash-and-burn agriculture. That has been no good for the forests or the soil. Furthermore, the civil war has depleted many of the country’s natural resources, and there has been significant over-fishing.
The challenge is to ensure that the good order of nature is restored in Sierra Leone and that there is careful husbanding of natural resources. The country is concerned to ensure that any exploration for oil is conducted very carefully. It is keen to avoid the problems that Nigeria went through—huge exploitation, corruption and environmental disadvantage.
One encouraging sign is that refugees in surrounding countries are slowly returning. The increase in the population is not just due to the birth rate rising; people feel that it is now safe to come home. The increase puts huge pressure on the urban areas such as Freetown. Although it is mainly a rural community, some 30% of the people of Sierra Leone live in urban areas. The challenge is to find enough work for people, which is where the United Kingdom can be of help. One area in which we have started to do significant amounts of work is in building up the public services. I think that I am correct in saying that in the last full financial year, DFID spent just short of £45 million on Sierra Leone. The largest single item on that budget was money for better governance, to ensure that corruption was reduced and did not return and to support the presidential elections next year. The next largest area of support was health, and there were other financial commitments to social services and education.
The reason those financial commitments are so important is to be found if we look at the specific indicators of health and deprivation in Sierra Leone. For example, there are key indicators on health in the country in a report by the United Nations Development Programme. The report shows that 46% of the total population is undernourished; expenditure on public health in Sierra Leone as a percentage of GDP is only 1.4%, and the under-five mortality rate for every 1,000 live births is 194, so nearly 200 out of every 1,000 children who are live births—or nearly 20%—do not survive to the age of five. There are also education indicators in that report. The percentage of those of both sexes aged 15 and above who are literate is just over 40%; the expenditure on education is under 4% of GDP. The mean years of schooling for those who are currently adults has been just under three years, and the expected years of schooling for children is currently just over seven years. In addition, 81% of the population is in poverty and nearly two thirds of the population live on less than $1.25 a day. Those figures show the economic and social situation in Sierra Leone.
It is not surprising, therefore, that until recently Sierra Leone was at the bottom of the league in the UN development index. Although there has been some slight improvement in that respect since 2000, the graphs comparing Sierra Leone with sub-Saharan Africa and the rest of the world show that Sierra Leone stayed at the bottom of the league. It is a great tribute to the Government and the people of Sierra Leone, and to our relations with that country, that in the last year—when the last UN development index was produced—there has been a significant and noticeable improvement in Sierra Leone’s place in the league table. It had been 169th in the world, but it has moved up. It may not be halfway up that table, but it has moved up to 158th. For Sierra Leone, that improvement is really important, and the country’s high commissioner leads me to believe that the next publication of the UN development index may well show that Sierra Leone has made further progress.
I want to flag up what seem to me, from my visits to Sierra Leone and my conversations with Sierra Leoneans, to be five specific issues on which I hope that the Minister can give me positive encouragement, in addition to the general encouragement that I know he is capable of giving, and that is hugely well received in Sierra Leone.
First, we must continue to support the development of a decent public health service in Sierra Leone. On my last visit to the country, 18 months ago, I went to the maternity hospital in Freetown and I was told that there are two gynaecological consultants for the whole country. There is a desperate shortage of specialist doctors and specialist nurses. The challenge for the health service in Sierra Leone is not only to train Sierra Leoneans to become specialist doctors and specialist nurses but to ensure that they are not then lost to Sierra Leone as a result of their coming to this or another country and not going back. There is absolutely no problem with us helping in the training of Sierra Leoneans to become doctors, dentists, nurses, radiographers and consultants, but it is really important that people with those specialist skills do not become part of the diaspora, helping in countries such as the UK, but instead remain in Sierra Leone. One of the big challenges is to ensure that those people are in place in Sierra Leone, not only in Freetown but in the other towns and cities.
Secondly, we must continue the work in public health that has begun. In Sierra Leone, there is still a high risk of people dying or becoming seriously incapacitated because of disease. The vaccination and public health programmes—and, partly, the education programmes—as well as the actual delivery of vaccination and the like, are all hugely important. For example, pneumonia, malaria and other diseases can either kill people or reduce their capacity for survival and economic activity. That public health activity, in the rural areas as much as in the urban areas, must remain a priority in our practical links with Sierra Leone.
Thirdly, we must continue the good military and defence links that we have had with Sierra Leone. It is very important that the UK continues to enjoy the huge benefit to our reputation in Sierra Leone that results from our support for the country during the civil war and our help in bringing that civil war to an end. Of course it should not spend excessive amounts of money on military and defence—that would be absolutely the wrong thing to do—but if Sierra Leone is to remain proud and free, its military and law-and-order agencies, including the police, need the capacity to protect its independence and its national assets, such as its diamonds, from future incursions like the incursion that happened in the past from over the border with Liberia. In that respect, the continuing collaboration with and training of the military and, where appropriate, the police in Sierra Leone are very important.
Fourthly, we must continue the really good educational links between Britain and Sierra Leone. The Commonwealth has provided a wonderful opportunity for continuing links with further and higher education in Sierra Leone. Along with colleagues from both the other main parties in the UK, I have sought to ensure that Commonwealth scholarships are retained, and that we maximise the opportunities for people in Sierra Leone to study abroad, whether they are undergraduates or studying for a postgraduate degree, such as a master’s degree. It is important that we continue those educational links, because the exposure of young people from Sierra Leone to this country and of young people from this country to Sierra Leone can only benefit future generations in the two countries, promoting mutual understanding between the UK and Sierra Leone and economic progress in Sierra Leone.
Fifthly and lastly, it is of course vital that we continue to help improve the governance of Sierra Leone and continue to support the country’s Government, both in the country’s Parliament—by giving the Parliament and the country’s MPs the support that they need—and in regional and local government. The other day, a significant anti-corruption agreement was signed. Corruption has been the bane of much of African politics. However, Sierra Leone has been determined to try to tackle the issues of corruption. It has dealt with many of them well, but many challenges still remain. I hope that we can give the people of Sierra Leone all the support and encouragement that we can to ensure that the rule of law is understood and followed, and so that people who think they can exploit Sierra Leone do not get away with it and instead are brought to justice and pay the price for their actions.
I hope that this debate sends a clear signal to Sierra Leone about how much we value it. I think that the last debate that we had in this House on Sierra Leone was the one that took place at the time of the civil war, when things were very dark and grim indeed. The picture there is wholly different now. We encourage the people of Sierra Leone to ask when they need our support and to tell us when they do not need it, so that they can be independent. We also want to say to them how much we value the progress that they have made and the recovery that they have embarked on. They need to maintain economic growth, but above all, they need to keep the civil and civic peace that is such a wonderful development after the civil war in their country. Sierra Leone is a country of many faiths; it is predominantly Muslim, but there are many Christians and people of other faiths, and all of them live in harmony with each other.
We salute Sierra Leone on the 50th anniversary of its independence, and we thank it for its contribution to Africa, the Commonwealth, this country and the world. I hope that the Minister can say, on behalf of the Government, how much support we will continue to give to Sierra Leone and how much we value the precious links that have been established over the years between our two countries.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
I congratulate my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) on raising the issue of the relations between Britain and Sierra Leone, which is of great importance to his constituents. I understand that his constituency has one of the largest diaspora communities from Sierra Leone. He has worked tirelessly on behalf of that community. He said that he is a great fan of the country. The feeling is mutual in Sierra Leone, where he is hugely respected.
This debate is timely for two reasons. The first is that Sierra Leone has recently celebrated 50 years of independence from the UK. The second is that I myself have just returned from a four-day visit to the country to take part in those celebrations as the official representative of Her Majesty’s Government. I welcome this chance to discuss matters that are of interest to many Members. Although recent events in the middle east and north Africa, as well as in nearby Côte d’Ivoire, continue to demand the attention of my ministerial colleagues, it is important that we do not lose sight of developments elsewhere in the world, including developments elsewhere in the region.
Sierra Leone is on the cusp of a better and brighter future. Fifty years after attaining independence, 10 years after the end of a bitter and bloody civil war, nearly four years after the present Administration came into office and just over a year before a historic fourth post-war election, it is set to complete a difficult transition and to step forward into a brighter and better future for all Sierra Leoneans.
Sierra Leone is a rare success story in west Africa. The 10 years since the end of the civil war have seen slow but steady progress, including a functioning democracy at the service of its people, who have seen a rare peaceful handover of power from one party to another in a democratic election. There has been refurbishment and extension of the national infrastructure, which is so essential to the economy and to a functioning society and, as my right hon. Friend pointed out, the roads have improved immeasurably and are vital in ensuring that the rural economy can move forward. Progress has also included macro-economic stability at a difficult time in the global cycle and steady economic growth, with the prospect of a step change upwards when mineral exploitation plays its proper part in the development of the economy and the country.
The UK and the international community continue to support that progress, and we welcome Sierra Leoneans’ efforts to shoulder a greater burden themselves. We encourage them, their Government and their institutions to grasp confidently the reins of their own future. We also recognise that despite the remarkable progress in the past decade, Sierra Leone faces huge challenges.
However, as my right hon. Friend highlighted, although there is still a long way to go—there obviously is—progress is in the right direction in the league tables. That is why colleagues in this House, and indeed elsewhere, applaud the progress but also recognise the very significant challenges. It is also why my right hon. Friend the Secretary of State for International Development and his Ministers prioritised Sierra Leone in the recent bilateral aid review, which will ensure that the country continues to receive much-needed UK aid.
As a friend of Africa and of Sierra Leone, I follow events in the country and the region very closely. As I have already mentioned, I was very pleased to be able to attend the recent independence day celebrations as the official representative of Her Majesty’s Government, and I found Sierra Leone to be a firm friend of the UK. The celebrations were truly authentic, and although they were held in a hot, humid stadium and other venues, the spirit of national celebration and the optimism for a bright future were there for all to see. The President made an excellent speech, calling on all Sierra Leoneans to put their past behind them, without blame, and to commit to learning the lessons of that past and to dedicating those lessons to working together to make a better country for their children and grandchildren. The President’s rhetoric was truly inspiring and uplifting.
As well as the 50th anniversary celebrations, my visit focused on prosperity, security, the UN and regional issues. I had an excellent meeting with the President, who thanked the UK for our consistent support since the end of the civil war 10 years ago. His country is a radically different place now, but he entirely appreciates that there is still more to do to heal the wounds of war, and we agreed that getting the economy right was a crucial part of that.
The UK can be proud of its contribution to helping Sierra Leone’s economy to grow. Since the end of the war, we have supported the economy through the judicious use of budget support, which has helped to assure macro-economic stability. As a result, Sierra Leone has seen an average annual growth of 6.4% since 2003, which is a big achievement by any standard. To ensure that that continues, we are using UK aid to support the development of the energy sector and to improve access to micro-finance and finance for new businesses, and, through our prosperity agenda, we are encouraging further investment. The successful London trade and investment conference in 2009 saw a fourfold increase in new foreign investment inquiries, which is incredibly encouraging. We will continue to work closely with the Sierra Leone Government and business to help the economy grow, generate wealth, create jobs and increase Government revenues, to enable the country to stand on its own feet.
One initiative that has great potential is the Salone business network, which was formed to support Sierra Leone’s efforts to raise its international profile and attract blue-chip companies. Sierra Leone’s resource wealth and natural beauty have the potential to transform the country, with its fertile soils that can become the basis for a successful and lucrative contribution to solving the food shortages that are pushing up prices around the world.
Minerals—iron ore, diamonds, gold, rutile, and potentially oil—could truly transform the economy of the country and the lives of its people. However, as my right hon. Friend pointed out, success cannot be assured, and careful thought and difficult decision making will be needed. Experience elsewhere demonstrates that economic development can have both positive and negative consequences—we have all seen and studied the resource curse of Africa.
To ensure that Sierra Leone reaps the benefits of agriculture, tourism and natural wealth, it is crucial to bear in mind the following: transparency, on the part of both companies and Governments to maintain credibility and ensure efficient bureaucratic process; equity, providing a fair return for the Government, the people and the companies investing their cash and knowledge; and competition, with companies exerting themselves to the utmost to ensure they are the most profitable and flexible, and pay the best wages, to attract the best workers. Similarly, to attract the best businesses and to ensure that Sierra Leone sees the full benefits of commercial development, the necessary institutions and processes must be in place. The UK is working with Sierra Leone to make that a reality.
My right hon. Friend made four additional key points. He mentioned health, and in particular maternal health. When I was in the country, I visited the excellent Princess Christian maternity hospital in Susan’s Bay. That was one of the high points of my visit because I had the chance to see for myself the work that the Department for International Development has done in putting in expertise on the ground.
I do not know the exact numbers of specialist doctors, nurses and gynaecologists, but I will get back to my right hon. Friend on that. What I can tell him is that the hospital is functioning really well and is saving lives by enabling a large number of Sierra Leonean women to have their children in a maternity hospital. That is encouraging and uplifting. I completely agree with my right hon. Friend about the crucial importance of extending the health service and medical treatment out into the rural areas, and DFID is certainly on the case. I also agree entirely about the crucial importance of building up capacity and progress in those areas. Significant progress has been made, but more can be done.
On military training, one of the abiding observations that I came away with was the huge gratitude on the part of the Government and the people of Sierra Leone for the UK’s intervention at the end of the civil war. It was a very well timed intervention, which enabled the progress through to democracy, and the rebel forces to be beaten. Since then, we have had the British training team in place, which has been transformed into the international military advisory and training team. The team is still led by Britain, and the vast majority of its officers and non-commissioned officers are from Britain. It is running a staff college there, which is a centre of excellence. I am keen to see the IMATT continue and develop original scope, training not just the military from countries in the region, but the police, building capacity and professionalism in the key security and police sectors.
This debate has provided an ideal opportunity for me to praise the work of the Sierra Leonean diaspora in the UK, many of whom live in my right hon. Friend’s constituency. Diaspora communities play a vital role in encouraging socio-economic recovery in their mother countries. Foreign and Commonwealth Office officials have had several meetings with the Sierra Leone Diaspora Network in recent years, and the excellent British high commissioner in Freetown, Mr Ian Hughes, joined my right hon. Friend in addressing a group of his Sierra Leonean constituents last year. It is important that we maintain those strong links with the diaspora community. Incidentally, I want to pay tribute to the hard work of Mr Ian Hughes and all his in-country team, who do an absolutely first-class job in supporting Sierra Leone as it continues its recovery and development.
I have seen first hand the excellent results that the DFID team has achieved on the ground. Sierra Leone used to be one of the most dangerous countries in the world for women to give birth in but, through judicious intervention and a really imaginative aid programme, that has changed. Sierra Leone has come a long way since the civil war, and with the recent instability in Côte d’Ivoire, it should be seen as an example of how a west African nation can move forward, heal divisions and rebuild itself. Sierra Leone is an extraordinary place, and I have a vision that in the future it will be a confident, independent and self-sufficient country, of which its people can be incredibly proud. We look forward to working with them over the next 50 years.
Employment and Support Allowance
(13 years, 5 months ago)
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Angela Smith (Penistone and Stocksbridge) (Lab)
It is a pleasure to have secured this debate and to speak under your chairmanship, Mr Leigh. This is an important matter for many of my constituents. Employment and support allowance was introduced by the last Government to replace incapacity benefit. As we are all aware, it is designed to support people who are too sick or disabled to work full-time or at all, or who need significant retraining, and who meet certain conditions. The benefit is funded by the Department for Work and Pensions.
There are two types of ESA. Claimants may be able to get either or both, depending on their circumstances. The two types are contributory ESA, which is available to those who have paid enough in national insurance contributions, and income-related ESA, which is available to those whose income and capital are low enough. ESA claimants must be over 16 and under state pension age, unable to work due to sickness or disability and not entitled to statutory sick pay. Most importantly for this debate, they must satisfy certain tests. Between October 2010 and March 2014, all current incapacity benefit claimants will be reassessed under the new work capability assessment, rather than under the personal capability assessment used under the old regime. Work capability assessments are causing much concern among many of my most vulnerable constituents.
I think that all parties agree that our benefits system should screen out those who try to access disability benefits despite being entirely fit to work. However, disability benefits should not be used, as incapacity benefit was by the Tory Government in the 1980s, to manage unemployment numbers artificially. The work capability assessment has been in use for some time, and I am confident that I am not the only Member of the House being approached regularly by constituents who are angered by how it works, or whose disability benefits have been withdrawn after an assessment. Work capability assessments have been contracted out to a private organisation, Atos Healthcare, in a £300 million deal by the Government. Atos Healthcare is part of the Atos Origin group of companies, most noted for its IT outsourcing operations. It has Government contracts in the Home Office and elsewhere.
The assessments carried out by Atos Healthcare no longer take into account GPs’ assessments of an individual’s impairment or long-term condition, ignoring them in favour of a set of questions, which take an average of 15 to 45 minutes to answer, administered through software developed by Atos. The software requires assessors to ask a set of questions on which the applicant can score up to 15 points, putting him or her into the ESA support group. GPs, who in many cases might have known applicants all their lives, and who in any case have a good understanding of applicants’ medical, social and emotional status, are ignored by the new system.
Instead, a new set of individuals called health care professionals come into play. They are trained by Atos for an average of four to 16 weeks in understanding targets—that is most worrying—and the all-powerful LiMA, or logic integrated medical assessment, software. They are given time limits for each assessment and told that the more people they can see in a given period, the better it is for the targets. Health care professionals consist of physiotherapists, nurses and doctors. I am not saying that those professionals do not know what they are doing. However, they are bound by the software that they are operating.
Work capability assessments mean that under the new system, blind claimants who can get around safely with a guide dog can be forced on to jobseeker’s allowance, as can deaf claimants who demonstrate that they can read and write. Claimants who cannot walk but who can use a manual wheelchair will no longer score points. In addition, references to hands have been removed from the picking-up activity, specifically to make it harder for amputees to score points.
Some activities have simply been cut altogether. For example, the activity “bending and kneeling”, which I would have thought critical to determining whether an individual is fit for any kind of work, has been completely abolished for health and safety reasons, as people apparently should not bend forward when lifting. Perhaps most worryingly, half of all the scoring descriptors for mental health and learning difficulties have been removed from the procedure, making it much harder for people with depression, anxiety and many other forms of mental illness to get ESA.
A constituent recently visited my surgery who was assessed and passed as completely fit for work of any kind, despite the fact that she could not walk without crutches and could not stand or sit for long periods because the discs in her back had completely disintegrated. Because she could both stand and sit, she was classed as fit for work. Another constituent visited my surgery to tell me that the examiner told him that he had no problems moving, despite the fact that he suffered from rheumatoid arthritis. Good days and bad days are a feature of rheumatoid arthritis. On bad days, movement can be much more severely restricted. It is difficult to understand how such a bland, all-encompassing assessment can be made of an individual’s health needs. My constituent’s condition highlights a great concern about the tests, which is that they assess claimants only on a particular day and not over a period of time. That is important, because claimants with rheumatoid arthritis, multiple sclerosis and Parkinson’s disease all fall into a similar category.
In 2010, an independent review of the tests by Professor Harrington concluded:
“There is strong evidence that the system can be impersonal and mechanistic, that the process lacks transparency and that a lack of communication between the various parties involved contributes to poor decision making and a high rate of appeals…evidence has consistently and regularly highlighted problems with each stage of the WCA process, which limit both the assessment’s fairness and effectiveness.”
Atos’s own staff have said that the assessments are too harsh. Prospect, the trade union representing 135 Atos doctors, has stated that the target of seeing 10 or more people a day is unrealistic and will lead to inaccurate assessments, especially in complex cases. It should come as no surprise, then, that ESA appeals have increased by 56%. Figures rose from 25,700 in the second quarter of 2009-10 to 52,000 in the same quarter of 2010-11. Almost half of cases were overturned on appeal. Such a degree of failure is staggering and makes a powerful case for change.
Furthermore, the assessments do not consider the context of the claims or the claimants. A representative survey by Ipsos MORI compiled from a face-to-face survey commissioned by DWP found that nearly a third of those going through the ESA process were described as having literacy problems. A further 6% had problems speaking English, 11% had numeracy problems and 22% were described as being in one or more disadvantaged groups, including those with mental health issues, ex-offenders, and those with perceived learning difficulties. An overwhelming 69% of those going through the WCA had multiple health conditions. That is greatly similar to other assessments, such as for special educational needs, which are often made more difficult by multiple health conditions. I acknowledge that that makes it hard for assessments to be as accurate as they should be. It underlines the case for changing the procedure, which is too simplistic and inaccurate.
Those in the support group and in the fit-for-work group had the same number of health conditions, namely 31. In all groups, 81% of people were receiving medical treatment for their condition, with 38% waiting for hospital or additional treatment. Those statistics do not suggest to me that we are dealing with a set of fraudsters pretending to be sick or disabled, or a set of individuals who have been languishing on incapacity benefits for years. In fact, 71% of applicants for ESA were new claimants making their first claim.
Evidence is mounting that the entire process is likely to cost the taxpayer more than the original benefits bill that it is designed to cut. The cost of Atos contracts, tribunals and additional health care caused by the misery and failure of the work capability assessment adds up to higher long-term costs, yet it is all being done under the guise of state efficiency. Despite the overwhelming evidence that WCAs are not working as they should, Atos was awarded a further contract by the Department for Work and Pensions in 2010.
I do not want to be tribal about this. I am perfectly aware that it was the Labour Government who introduced the new system. I am not interested in blame, but in seeing what is wrong put right. I am not saying that people should just be left to rot on ESA. I know all too well, from my own family history, what incapacity benefit did to people’s mental health when they were thrown on to it after losing employment in the 1980s. Nor am I saying that it is not right for the state to make sure that only those eligible for the benefit should get it. There is no doubt—the evidence is indisputable—that people who are on ESA, or who were on incapacity benefit before that, for a period of time are more than likely to spend the rest of their days on it, and that is wrong. It always has been and always will be wrong. What I am saying is that the system that has been put in place is not only unfair in how it assesses disability, but too rigid and inflexible. It does not take into account the needs of individuals, and it is more about saving the Treasury money, ironically, than helping the individual.
Another constituent came to see me recently, because he had also been refused ESA. He was a manual worker—a printer—and that was all he knew, in terms of work. He had been in printing all his life. He had emphysema and had suffered a heart attack, which, as I think most of us would agree, would make it very difficult for him to do manual work again. Anyone who knows anything about emphysema will say that it is a disease that kills and that tends to kill slowly, disabling the individual suffering from it in the process. Those of us who live in the old coalfield areas and in steel communities know all too well what the disease can do. It is terrible. I know, because I have seen members of my family suffer from it. It is a shocking, awful disease.
My constituent needed help to train to do something else. He may only ever be able to work part time, and certainly not in the job that he had been used to all his life. It also has to be said that my constituent desperately wants to go back to work. However, because of the way in which the current system is set up, he was refused ESA and forced to go on to the jobseeker’s allowance, and he is now being chased to take any job that comes along, regardless of the potential long-term impact on his health condition, emphysema. There is no support for retraining, which is what ESA should offer, and no recognition of the fact that he, a manual worker, is no longer fit to engage in that type of work. That is not acceptable. We need a much more flexible view of how we help people who often have multiple health conditions and who need help, not punishment. Significant investment would be required, but in the long term I am sure it would pay dividends by way of increased numbers of disabled people back in work and reduced health costs. I look forward to hearing the Minister’s response on that point.
I also seek a response on several other points. I would like confirmation of when each of the 25 recommendations in Professor Harrington’s report will be implemented, including a change to the form for claimants that would allow them to describe in detail how their symptoms and why their condition make it difficult or impossible for them to work, and allowing them to receive a summary of the report on them that Atos submits.
Will the Minister give us details of what the implementation will mean? How will DWP ensure that the assessment is carried out in accordance with the recommendations and, in particular, is improved to be fairer and more accurate for people with fluctuating conditions? That includes what happens to disabled claimants and those with long-term conditions who drop out of the process. Finally, why has the migration of the 1.5 million people on incapacity benefit already begun without the implementation of the recommendations to which I have referred?
This is a debate of immense importance for disabled people throughout the country and for workers who, for one reason or another—usually because of the form of work in which they have been engaged—have ended up with lung or heart conditions and so on. The issue is important and is causing a great deal of distress. I await the Minister’s response, particularly on when Professor Harrington’s recommendations will be implemented.
The Minister of State, Department for Work and Pensions (Chris Grayling)
I congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on securing this debate. It is a useful opportunity to put on the record, once again, the things that we are doing to make sure that this is a proper, fair and appropriate process.
I should like to correct the hon. Lady on a number of things that she has mentioned where she has not got her facts right or is a little out of date. First, however, I pay tribute to her for referring to the fact that it was the previous Government who introduced this system. She has set out in detail the context for the changes that we are putting in place. I agree with her that the system that we inherited was not adequate. It did not do the job properly and in many cases led to wrong decisions about individuals. I and my colleagues in the Department for Work and Pensions have spent the past year trying to sort all that out, so that we were ready for the start of the migration process. I shall explain to the hon. Lady in some detail how that was done.
I shall begin by picking up on some of the points made about Atos, the contractors. The hon. Lady mentioned that Atos was contracted, but, as she knows, it was contracted originally by the previous Government. We have not sought to change the contracting arrangements because, frankly, it would be massively disruptive to do so in the middle of the process. What we have sought to do is address the issues surrounding Atos that have led to concerns being raised. Let me be clear—Atos has no financial targets. A myth has been circulating for some time that our contractors are incentivised to find people fit for work. That is absolutely not the case and I am happy to put that on the record.
It is also not the case that there is a target of seeing 10 people a day. The only indicators and targets that Atos has relate to the quality of the work that it does for us. We have been careful to make sure that that is the case. It would be absolutely inappropriate to have a situation in which a third-party contractor was incentivised to reach a particular outcome in an area as sensitive as this. The hon. Lady can be reassured that that is not the case.
Before moving on to the details of the Harrington review, I shall address the hon. Lady’s query about the internal review, which was carried out by the previous Government, which made a number of recommendations to us, and with which we have decided, after much thought, to proceed. The internal review was carried out over the last 12 to 18 months of the previous Government. It looked at how the assessment was working and made a number of recommendations about changes. It did a number of things in particular, and there are two or three reasons why I decided to accept the recommendations of the previous Government and to implement that set of changes—they were introduced at the start of last month—to the assessment. The first of them related to mental health. The hon. Lady is not right on the mental health issue. This is a matter of great concern to me. I am acutely aware that mental health problems and fluctuating conditions are crucial, as she rightly said. Getting them right is fundamentally important. They are the most difficult areas of health challenge to deal with as we go through the assessment process.
We looked carefully at the impact that changes to the assessment recommended by the internal review would have on people with mental health conditions. The assessment we have carried out shows, in fact, that more people with mental health conditions will find themselves in the support group with long-term unconditional support than would have previously been the case. The set of changes we have just introduced should increase the number of people who receive ongoing unconditional support for mental health conditions. That seemed the right thing to do.
The second thing we did was to address the fact that people in between periods of chemotherapy could, theoretically, be found fit for work. We did not think that that was right and therefore we have excluded people who are in between courses of chemotherapy from any kind of return-to-work process, as well as those involved in chemotherapy at a particular moment in time. Again, that seemed the right thing to do.
On the change the hon. Lady referred to in relation to people who are blind, partially sighted or in wheelchairs, we had a situation that was inappropriate and wrong. Let us think of the motivation behind these changes. Fundamentally, we are trying to help people with the potential to work to get into work and not end up spending the rest of their lives on benefits. The internal review highlighted that, under the previous system, if someone was a Paralympic athlete with a university degree, there was no obligation for them to look for a job. That is not right. Some people who are blind or partially sighted and are out of work have long since adapted to that condition and have worked before. They should be looking for another job and it is wrong to say that that should not be the case simply because they are blind or partially sighted. I am not suggesting that that is what the hon. Lady was saying, but that is what the previous system provided for. We have introduced an adaptation factor into the assessment, so that a judgment is made about how well somebody has or has not adapted to their condition. That factor will have to be considered.
I want to give the hon. Lady more detailed context on the way in which that consideration now takes place. Over the past few months, we have made big changes to the whole process precisely because of the kind of issues she has rightly identified. I have no interest whatsoever in putting anybody who is not fit for work into a position whereby they are being pushed towards trying to find work. That is not in our interests as Ministers, as a Government, as individuals or as a society. Indeed, if somebody is not fit for work, an employer will not hire them, so we would achieve nothing from such an approach.
We inherited the internal review and looked at its conclusions, which we have implemented. We set up the Harrington review precisely because we had concerns of the kind that the hon. Lady has raised. She has rightly looked at the Harrington recommendations, of which there are 25. As we stand here today, all the recommendations bar, I think, two have already been implemented and the other two are due to be implemented by the end of this month. By the time we get to the point in June when the first big wave of people will be reassessed as part of the incapacity benefit-employment and support allowance migration, all of the Harrington recommendations will be in place. The ESA50 form has already been updated and the various other recommendations have all been put in place. I reassure her that there is no question of waiting for a point much later in the year before all that happens; it is happening now. When Harrington provided his recommendations, something I insisted on with officials is that we cracked on and delivered these changes, so that they are in place for the IB-ESA migration.
The most important of Professor Harrington’s key recommendations was about the decision-making process. We had a situation whereby, up until the past few months, the final decision about whether somebody was found fit for work was technically taken by a decision maker who was a senior member of staff within Jobcentre Plus. Those members of staff had tended to view the outcome of the Atos assessment—the work capability assessment—as gospel because it was carried out by a health care professional. They thought such assessments just had to be rubber-stamped.
We have changed that totally and have created a process through which the decision makers are told not only that it is their decision, but that they have to look at other evidence—for example, the hon. Lady referred to GPs’ evidence. Our decision makers are expected to look at other medical evidence submitted by the individual concerned and at the GP’s and consultant’s comments to form a rounded view. Indeed, if they believe that they do not have enough evidence, they have the freedom to go back and ask for more. That is a big change. We have effectively downgraded the role of the work capability assessment in the process. It is an important part of the decision, but it is no longer the only part of the decision. That will make a big difference.
Professor Harrington highlighted precisely the situation the hon. Lady identified surrounding mental health conditions. That issue is a hugely complex and sensitive area that needs to be dealt with carefully. Within the Atos health care professional network, Professor Harrington recommended that we introduce mental health champions to whom the assessors can turn for advice if they are uncertain about how to react to particular responses. Those champions are already in place. In fact, we have gone back to Atos and said, “We’d like some more of them please.” The numbers will be increased by the early summer. I am very keen to ensure that we provide a proper focus on and expertise in the mental health field.
Guto Bebb (Aberconwy) (Con)
On the decision makers and support for mental health, could the Minister provide some numbers and the geographical basis of those numbers, because it is an issue of real concern in north Wales?
Chris Grayling
In terms of the mental health champions, there are I think about 50 in the network. The number will rise further and is rising; they are being recruited all the time. By the time the process is finished, there will be one champion for about every two to two-and-a-half assessment centres. Someone will be constantly on call. In some cases, those champions will be present and, in other cases, they will be at the end of a phone line. The hon. Lady made reference to the Harrington recommendation on the individualised statement—the summary of the assessment. We want the champions to be involved when the individual concerned picks the phone up and says, “I’m not quite sure about this.” That view can be reflected in that statement, which will be introduced later this month. So that recommendation will have been dealt with as well.
Angela Smith
I am very pleased with the fullness of the Minister’s response, but will he comment on the situation that threatens individuals with long-term and sometimes terminal conditions, such as emphysema, who may be fit for some form of work, albeit only for a few hours a week? Those people are currently failed by the system.
Chris Grayling
I will come on to that because I want to make another point in response to the hon. Lady’s question about fluctuating conditions. Professor Harrington is currently working on that to see if there is anything else we need to do. However, we are trying to ensure that there is expertise within the Atos network of individuals and that training is provided to both decision makers and Atos professionals about fluctuating conditions.
On the hon. Lady’s other point, a crucial part of this jigsaw puzzle is the Work programme that will start in about three or four weeks’ time. That programme is designed to provide specialist support for precisely the kind of person she has mentioned. She said that the person concerned wants to work, but that he clearly cannot work in the job he had before. If we put him into the sickness benefits environment and leave him there, he will probably never work again. We can offer him the opportunity to have specialist support through the Work programme, with providers who are contracted on a payment-by-results basis and in a system where we pay different amounts for different levels of challenge. For example, somebody who is coming off sickness benefits will command a higher tariff than somebody who is a conventional job seeker without sickness challenges. The aim is to encourage the providers to work with somebody in that position to find a job that he can fulfil.
I do not regard it as acceptable—I am sure that the hon. Lady and I share this view—to have a situation whereby anyone who has the potential to work is parked on the sidelines and is unable to get the support that they need to get into work. From our point of view, the most fundamental part of the change is not to try to find people who cannot work fit for work. Indeed, those who end up in the support group—the group that needs ongoing unconditional support—will get more money as a result of the change.
The key goal is to identify those people who have the potential to return to work so that, through the Work programme and other support provided by Jobcentre Plus, we can give them the help they need to get into the workplace. That is what this is all about. We will do our best to get it right, but I am sure that we will make some mistakes along the way. We have introduced a reconsideration stage at Jobcentre Plus to try to ensure that we catch our mistakes early. However, it is important to realise that this is all about helping people who could work to do so. Otherwise, the only alternative is for them to spend the rest of their life on benefits, and I do not believe that that is in their interests or in any of our interests.
European Union (UK Permanent Representative)
(13 years, 5 months ago)
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Mr Douglas Carswell (Clacton) (Con)
I am grateful for the opportunity to have this debate, Mr Leigh, and to the Minister for coming to respond for the Government. I am also very grateful to my colleagues. To allow for those who wish to speak, I will try to limit my comments to less than 10 minutes.
Exactly a year ago today, at an emergency meeting of EU Finance Ministers, the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), committed Britain to bailing out the eurozone. The deal he struck has made UK taxpayers liable for more than £10 billion—so far. By any measure, that has been a pretty disastrous deal for Britain. Having spent the past 12 months struggling to cut public spending by £6 billion, we have ratcheted up liabilities worth far more than that.
At a time of austerity at home, the Portuguese component of the bail-out alone could have covered the basic salaries of either a quarter of a million nurses or private soldiers, 114,000 NHS doctors or 160,000 police constables. Why are Ministers about to promote Sir Jon Cunliffe, one of the senior officials behind that disastrous deal, to be the next head of the United Kingdom Permanent Representation to the European Union?
We do not actually know for certain that Sir Jon will be the next head of UKRep. Perhaps the Minister will confirm that in his comments in due course. Indeed, despite attempts through parliamentary questions and letters, and freedom of information requests, we are not even allowed to know that his predecessor, Sir Kim Darroch, is standing down next month, in June; we know or suppose that only on the basis of anonymous Whitehall press leaks.
My point is this: why should we not know? The head of UKRep is a public servant, and yet is almost entirely without accountability to the public in whose name he cuts such deals. Not only should the public have a right to know, but those whom they elect should have the right to approve—or indeed veto—candidates for the role. Through an accident of history, the Prime Minister has inherited, more or less intact, the powers that once attached to the monarch: the award of peerages, treaty-making powers and, most importantly, the power to appoint officials. I propose that those powers should pass to Parliament. The next head of UKRep should be appointed following an open confirmation hearing before the Foreign Affairs Committee.
Now that we have changed the Standing Orders to free Select Committees from the dead hand of the Whips and placemen, the Commons Select Committees are no longer the hiding place for such people. I believe that the Committees are up to the task of holding the Executive to account. They should be given responsibility for confirming key Executive appointments, beginning with that of Sir Jon Cunliffe.
Democratising the appointments process, when it comes to senior officials, is hardly controversial. Indeed, we have been toying with the idea for more than a decade. As early as March 2000, the Commons Liaison Committee issued a report, “Shifting the Balance: Select Committees and the Executive”, which mooted the idea. Indeed, as early as July 2007, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), in his first statement to the House as Prime Minister, promised pre-appointment scrutiny hearings—even if his Ministers chose subsequently to ignore the views of some of us on the Children, Schools and Families Committee regarding the appointment of a new Children’s Commissioner.
Guto Bebb (Aberconwy) (Con)
My hon. Friend will be glad to know that the Government are taking the issue seriously. Yesterday, the new chairman of S4C, the Welsh television channel, was announced by the Department for Culture, Media and Sport. The Department has agreed that the Welsh Affairs Committee will be allowed to undertake a pre-appointment hearing to see whether it approves the appointment. That is a positive way forward and shows that the appointment has to be scrutinised by Parliament.
Mr Carswell
Absolutely. My hon. Friend makes a very good point. As in many things, Wales is ahead of us. His point also shows that across the board there is an appetite for restoring to the people’s tribunes the power to say yes or no to appointments made in the name of the Crown. It is an abuse of Crown prerogative when key appointments are made without those we elect having the right to their say.
Bob Stewart (Beckenham) (Con)
Does my hon. Friend think that this could happen with immediate effect?
Mr Carswell
Absolutely. When the chairman of the BBC Trust was appointed recently, it was made clear that he would be appointed only following a confirmation hearing. It is one of those great things—it does not actually require primary legislation, or even a change in the Standing Orders of the House, to bring into effect.
The Liberal Democrats have supported measures to strengthen the legislature over the Executive for as long as anyone can remember; I hope that they remain as committed now that they have joined the Executive. In opposition, the Prime Minister specifically championed the idea of reforming Crown prerogative. In government, he threw his weight behind the idea of confirmation hearings, insisting that Chris Patten face such a hearing before being confirmed as chairman of the BBC Trust. Why not hold a similar confirmation hearing for the man who, more than any other, will be responsible for negotiating our future in Europe? As its own website states, UKRep
“represents the UK in negotiations that take place at the EU level, ensuring that Britain’s interests are heard”.
Kim Darroch, the current head of UKRep, apparently
“represents the UK’s interests at weekly meetings of heads of mission from all 27 Member States.”
At what point do those who profess to represent our national interests answer to the nation for the deals that they strike in our name?
We fight general elections with politicians promising, to one degree or another, to change policy on Europe, yet in what sense are those who make European policy answerable to the people’s tribunes? The conventional model of accountability for European policy via Ministers no longer works. The Brussels agenda is too vast and all embracing, and the scope of deal making too wide for Ministers to track how it works two or three days a week from London. That leaves too many Ministers signing deals that they did not actually author, and nodding through agreements that they have not properly considered.
Ministers in Brussels might make key decisions about what is on the wine list, but in Brussels the real business is conducted all too often by permanent officials. As the great diarist Alan Clark—some of us may have read his books—commented about a Council of Ministers meeting run by UKRep, way back in 1983:
“A succession of meetings, but no possibility of getting anything changed…Everything is fixed by officials in advance. Ministers shaking hands are just window dressing”.
I suspect that very little has improved in the past 28 years.
Mark Reckless (Rochester and Strood) (Con)
My hon. Friend speaks as if the appointment of Mr Cunliffe as our next ambassador to Brussels is a done deal. Did he not read two weeks ago in The Sunday Times a profile of the Prime Minister by Anthony Seldon, which said that the Prime Minister was taking a close, personal interest in this appointment?
Mr Carswell
I did, and I glean the pages of the newspapers for little hints and Whitehall leaks as to who may fill that vital role. Precisely because we are led to believe that the Prime Minister takes such a keen interest, I have every hope that he may do the right thing and allow the people’s legislature to have the final say on whether that man should indeed occupy that important position.
I suspect that if Ministers and ex-Ministers today were as honest and candid as Alan Clark, they would perhaps admit that much the same happened at the two ECOFIN meetings last May, with officials making key decisions that Ministers nodded through. The Economic Secretary to the Treasury, my hon. Friend the Member for Putney (Justine Greening), wrote candidly in a letter dated 18 July to a Lords Select Committee about the decision to participate in a bail-out mechanism:
“While these decisions were taken by the previous Government, this Government judges them to be an appropriate response to the crisis.”
I am not sure how easily that sits with the Government’s claims that we are necessarily reluctant participants in the bail-outs. Perhaps that conveys the impression that Ministers may change, but the permanent officials and the policy that they determine remain the same.
Requiring Mr Cunliffe—or Sir Jon, I should say—to appear before the Foreign Affairs Committee to explain why he is the best man to negotiate for Britain in Brussels begins a process of changing all that. Regardless of whether Sir Jon is given the job, the process of confirmation hearings would end the appointment and promotion of senior Europe diplomats without scrutiny.
When George Shultz was US Secretary of State in the 1980s, he had a routine for appointing US ambassadors. He would ask them to come into his office and to point to their country on a large map in his office. They would duly point to Kenya, Uganda, Guinea Bissau or wherever. “Nope,” he would tell them while tapping the USA, “this is your country.”
It is perhaps no coincidence that the US, which has always had a degree of legislative control over both appointments and treaties, has a clearly defined strategic vision and a readiness to deploy proportionate force in defence of its interests. Nor can it be entirely coincidental that, when Parliament was supreme and our diplomatic service small and subordinate, we, too, were willing to project our interests. Without effective parliamentary oversight, however, our salaried officials negotiating with Brussels last May managed to make us liable to bailing out a common currency of which we are not even a part.
For too long, Westminster politicians have contracted out large chunks of international relations to the permanent functionaries in Whitehall. Regardless of whether they come from a background in the Treasury, the Cabinet Office or indeed the Foreign Office, we should no longer defer key policy making to unelected officials.
Hugo Young, not a man I quote often, was a convicted —sorry, convinced—Europhile, Guardian journalist, author of “This Blessed Plot” and perhaps the foremost federalist of his generation. He understood how contracting out policy to permanent officials had profound consequences for the development of Britain’s Europe policy. As he perceptively grasped, it meant that Britain’s Europe policy was driven by diplomats rather than by their elected, albeit nominal, masters or bosses:
“By 1963, a corpus of diplomats was present in and around the Foreign Office who saw the future for both themselves and their country inside Europe. The interests of their country and their careers coincided. It was an appealing symbiosis.”
Sir Oliver Wright, who served as ambassador to Germany and the United States, describes the phenomenon as “déformation professionelle”—the skewing of someone’s outlook by his career imperatives. It happens to Whitehall officials as much as to us politicians. The Europeanism of the Whitehall grandee is just one manifestation of his déformation professionelle.
Unchecked by the people’s tribunes, our salaried officials negotiating with Brussels have brought home a succession of dreadful deals. If Sir Jon is to get the role of chief deal maker with Brussels, he must come before this House to explain why he is the best man for the job. In doing so, he might at last start to realign the policy that officials pursue in our name with the kind of Europe policy that the rest of the country would like to see.
Mr Edward Leigh (in the Chair)
The hon. Gentlemen may speak if they have had the permission of the hon. Member for Clacton (Mr Carswell).
Chris Heaton-Harris (Daventry) (Con)
I congratulate my hon. Friend the Member for Clacton (Mr Carswell) on securing this 30-minute debate. I come at the subject from a slightly different perspective because, in my former life, I was a Member of the European Parliament and spent 10 years working with some of the officials who performed in the role of the permanent representative.
I have a relatively close friendship with the current incumbent, Sir Kim Darroch, who is a brilliant diplomat. We should not underestimate the brilliance and intellect of some of the top mandarins who have pushed themselves forward and have gone into such roles. Nor should we underestimate their independence. We can, however, take something from the European institutions. When we appoint European Commissioners, they must go through a confirmation process in the European Parliament, to which they supposedly answer. The United States, too, has confirmation processes for all the top appointments.
My hon. Friend is not going as far as he should: when we have a change of Government, we need a change in the Administration at the same time. We need to bring in people who truly believe in what that newly elected Government will do, and we need to have proper appointment and confirmation processes for all our top officials. We should not be so timid as to look only at the head of the UK Permanent Representation to the EU, important as it is. We should expand our view to include most top appointments. I have been in trialogues and all sorts of exciting meetings in European institutions; I have seen British representation at its best and at its worst, and I have seen deals done behind the scenes and in front of people.
During the current passage of the European Union Bill through the House of Lords, I noticed a funny noise—the opening of the tombs of the Cross Benchers and all those who had served in our diplomatic service before they reached that place. I then noticed the amazing energy and dislike for the number of referendums placed into the proposed legislation—a distrust of the people and, indeed, of their elected Government—and the desperate attempts to change the legislation passed in this House.
Those people were exhibiting the problem identified by my hon. Friend. They do not like the subtle change going on, with the European Union Bill providing a lot of referendum locks on transfers of competence from Britain to Europe in many policy areas. They are the Hugo Young college of Europe-type persons: they have been through the process, might rely on a European pension and enjoy going out with fellow diplomats everywhere. I worry about the influence of our current top civil servants, so I very much welcome my hon. Friend’s ideas.
Mr Edward Leigh (in the Chair)
Another hon. Member wishes to speak and I intend to give the Minister at least 10 minutes to reply, which is only fair, so perhaps the hon. Gentleman will bring his remarks to a close shortly.
Mr David Nuttall (Bury North) (Con)
I am conscious of your comment, Mr Leigh, and will leave the Minister time to make a full contribution. I congratulate my hon. Friend the Member for Clacton (Mr Carswell) on securing this debate. It is absolutely right that the United Kingdom permanent representative to the European Union should be subject to a confirmation hearing before either the Foreign Affairs Committee, as was suggested, or some other appropriate Committee of the House. There are many arguments for holding such a hearing and for having a confirmation process, but no convincing arguments against the idea. I pray in aid none other than the Prime Minister.
My hon. Friend the Member for Clacton mentioned that the Prime Minister supported such an idea when Leader of the Opposition, in an article for The Guardian, published on 25 May 2009:
“I believe the central objective of the new politics we need should be a massive, sweeping, radical redistribution of power: from the state to citizens; from the government to parliament; from Whitehall to communities; from the EU to Britain; from judges to the people; from bureaucracy to democracy. Through decentralisation, transparency and accountability we must take power from the elite and hand it to the man and woman in the street.”
Politicians and the senior civil servants and advisers who work for them instinctively hoard power, because they think that that is the way to get things done. We have to kill that instinct, and I know how hard that will be, requiring a serious culture change among Ministers and Whitehall officials, and beyond.
The then Leader of the Opposition went further in his speech on fixing broken politics two years ago, in which he specifically addressed the issue raised today:
“We should also limit the use of the Royal Prerogative, so Parliament is properly involved in all big national decisions—and expand the use of confirmation hearings for major public appointments.”
We have heard that the Select Committee on Welsh Affairs is to hold a confirmation hearing for the boss of the Welsh TV channel. If that post in Wales warrants a confirmation hearing, the post of the UK permanent representative to the EU does as well. We have the perfect opportunity to put the Prime Minister’s idea into action. I look forward to hearing the Minister agree with what the Prime Minister said two years ago.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)
I congratulate my hon. Friend the Member for Clacton (Mr Carswell) on securing this Adjournment debate and bringing the issue before the House today. I also thank my hon. Friend the Member for Daventry (Chris Heaton-Harris), who has huge experience in all matters European, and my hon. Friend the Member for Bury North (Mr Nuttall) for their contributions. They have obviously spoken on the issue in the past, but my hon. Friend the Member for Clacton has great expertise, and he always brings his passion to bear.
The position of the UK permanent representative to the European Union is important. He and his team play a crucial role in advising and negotiating on behalf of the Government on a wide range of issues, promoting and protecting UK interests in the EU. In promoting and defending national interests, the permanent representative and the representation, in working groups, negotiate important draft documents ahead of councils and European Council meetings. To do so effectively, they monitor closely and interact with other permanent representations and EU institutions, principally the Commission, the Council secretariat, the European External Action Service and the European Parliament.
Let me briefly give some recent examples of where our mission, UKRep, has played an invaluable role, so that my hon. Friends get a flavour of the work done in Brussels. In the domestic sphere, UKRep has helped to defend UK interests by preventing disproportionate legislation on, for example, the pregnant workers directive and the soil directive. Under this Government, it is being extra vigilant in taking pre-emptive action against any job-destroying employment and social measures. It has also helped to secure outcomes in the UK interests on cross-border health care, as well as on a range of environmental legislation dealing with industrial emissions, hazardous substances and limiting CO2 from vans.
On foreign policy, UKRep has played an instrumental role in forging and maintaining a strong European political stance towards the recent crisis in Libya. It has taken forward with skill the names of people identified by our bilateral posts by successfully negotiating the detail of the sanctions and travel bans for Egypt, Libya and Syria, as well as for Burma and Zimbabwe—in the latter country in particular, we have specific interests.
Mark Reckless
Would the Minister include in that description of UKRep’s various diplomatic successes negotiation of the euro bail-out funds around the weekend of 10 May last year?
Mr Edward Leigh (in the Chair)
Order. This debate is about the appointment process for the UK permanent representative. It is perfectly in order for hon. Members and the Minister to introduce the subject, but we must now return to the appointment process, which is the subject of the debate.
Mr Bellingham
Thank you, Mr Leigh. I will return to the subject of the debate, but if my hon. Friend the Member for Rochester and Strood (Mark Reckless) writes to my right hon. Friend the Minister for Europe, I am sure that he will provide a detailed response, which I do not have time to do now.
Work continues with the development of a reformed and effective neighbourhood policy on the back of the Arab spring, which will continue to require skilful and proactive negotiation from UKRep. In the area of economic policy, the permanent representative and his team played a vital role in ensuring that the Prime Minister was able to secure positive and robust language in December for the next financial perspectives. They also developed a broad level of consensus for the Prime Minister’s joint letter on growth ahead of the spring European Council. Similarly, UKRep played a vital role in preparing the ground for a good set of European Council conclusions on the euro-plus pact.
My hon. Friend the Member for Clacton made various comments and assertions about particular officials and their roles in negotiations on EU issues. The topic for debate today is the appointment process, not the policies, as you rightly pointed out, Mr Leigh, so I will not dwell on the policy issues that my hon. Friend raised, and I will not comment on individual civil servants. However, what is clear to me is the importance of the distinction between the roles of Ministers and officials. Ministers take decisions on policies, and are accountable for them to Parliament. Officials in UKRep then negotiate within the mandates and instructions that Ministers have provided. Those mandates are adjusted and updated as the negotiations progress, but it is a myth that UKRep has the freedom to operate outside the negotiating mandates that they receive from Whitehall, or to make independent judgments about compromises or deals.
The House of Commons has the opportunity, through its excellent European Scrutiny Committee, which is under the proactive and assiduous chairmanship of my hon. Friend the Member for Stone (Mr Cash), to set out its views on European documents ahead of agreement. The Committee has the right to ask for a debate in Standing Committee or on the Floor of the House. This Government value the work done by Parliament on EU work, as it is fundamental to making the Government of the day more accountable to EU decision-making, as well as to making the EU process more transparent.
My right hon. Friend the Minister for Europe made a statement along those lines to the House on 20 January, and encouraged the Government and Parliament to explore ways in which Parliament’s scrutiny role could be further strengthened on EU issues, including on justice and home affairs. That is the right way for Parliament to be satisfied that, through ministerial accountability, officials throughout Whitehall and posts—including the Permanent Representation—are promoting the national interest effectively in the EU.
Mr Bellingham
I do not have long, so I shall carry on. Like other diplomatic service appointments—I am coming to key points about the process—I am clear that the permanent representative’s role is to advise Ministers on how to secure the best results for the UK in the EU, and to negotiate to achieve those results for the Government. Ministers decide and are accountable to Parliament for policies on European issues, and for the positions that the UK Government take in negotiations in the EU. The appointment process for the position—the appointment of an official, not a politician—therefore follows the general principles followed for diplomatic civil service appointments, and the code. It is critical that the appointment be made on merit. The civil service and diplomatic service are founded on the principle of impartiality. Officials must be able to serve with integrity the Government of the day, of whatever political party or parties.
Robert Peel said to this House in 1827:
“I may be a Tory—I may be an illiberal—but…Tory as I am, I have the further satisfaction of knowing, that there is not a single law connected with my name, which has not had for its object some mitigation of the severity of the criminal law; some prevention of abuse in the exercise of it; or some security for its impartial administration.”—[Official Report, 1 May 1827; Vol. 17, c. 411.]
That principle has served successive Governments well, allowing them when they come to office to make use of the continuity of expertise and professionalism of civil servants and diplomats. Indeed, I have seen for myself since I was appointed nearly a year ago that civil servants and diplomats who served the previous Government with great professionalism and integrity now work with Ministers with a different set of priorities. The seamless transition to the new team—the commitment, tireless hard work and dedication—is a huge credit to the British civil service. For those reasons, I continue to believe that to introduce a further stage in the appointment process for the permanent representative or for other senior appointments when a selection has been made would not be consistent with the principles of impartiality and appointment on merit, and could indeed be seen to politicise the appointment process.
I am sorry to disappoint my hon. Friend the Member for Clacton, but I do not intend to propose that Parliament should be offered hearings on senior appointments. That would blur the distinction that I emphasised earlier, by implying that officials in UKRep, however senior, had some sort of independent role, separate from the Whitehall process. As I have said, officials implement the policies and work within negotiating mandates decided on by Ministers, and for which Ministers are rightly always accountable to Parliament.
However, I welcome the House’s interest in the issues raised today. I therefore propose that the Foreign Affairs Committee be informed in writing of appointments to the most senior overseas positions at permanent secretary level—obviously including that of the permanent representative to the EU—when the selection has been made, providing a copy of the successful candidate’s CV and job specification. In the case of the permanent representative to the EU, I propose sending a copy of that letter to the European Scrutiny Committee. I hope that that goes some way—not the whole way, but a small way—in the direction that my hon. Friend wants.
My hon. Friend is concerned that some questions to the Foreign Office have not been properly answered. I have looked at the correspondence and some of the parliamentary questions that he tabled, and I am satisfied that the issues raised by my hon. Friend have been addressed as fully as possible. Both officials and Ministers have addressed the questions about the nature of the contract and the way in which the permanent representative is tasked and appraised.
Similarly, the permanent representative’s personal performance is assessed on a personal basis between him and his line manager. My hon. Friend would like to make the permanent representative more directly accountable to Parliament. I have said that I believe that it is right that Ministers remain accountable to Parliament for policy decisions and for the positions taken and agreed in the EU.
Around 157 years ago, the Northcote-Trevelyan report on the organisation of the permanent civil service stated its principles. It says:
“It may safely be asserted that, as matters now stand, the Government of the country could not be carried on without the aid of an efficient body of permanent officers, occupying a position duly subordinate to that of the Ministers who are directly responsible to the Crown and to Parliament, yet possessing sufficient independence, character, ability and experience to be able to advise, assist, and, to some extent, influence, those who are from time to time set over them.”
Those principles held firm 157 years ago, and still do today.
Question put and agreed to.
Written Ministerial Statements
(13 years, 5 months ago)
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UK Trade and Investment (New Strategy)
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
My noble Friend, the Minister of State for Trade and Industry, Lord Green, has made the following statement:
I would like to inform the House of a new strategy for UK Trade and Investment (UKTI), the lead UK Government body for export and inward investment promotion. The new strategy sets out the context for the Government’s approach for trade and investment, including through the recent trade and investment White Paper and growth review. It identifies pathways to balanced growth through trade and investment. It announces the new focus for our trade and investment promotion efforts. Finally, it explains new ways of working for UKTI. It will run from now to 2015. Alongside it a BIS Economics paper is to be published. “Trade and Investment: the Economic Rationale for Government Support”. Copies of the new UKTI strategy have been placed in the Libraries of both Houses.
ECOFIN: 17 May 2011
(13 years, 5 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
The Economic and Financial Affairs Council will be held in Brussels on 17 May 2011. The following items are on the agenda:
Regulation on short selling and certain aspects of credit default swaps
Following further work, ECOFIN will be asked to agree a general approach on the short selling regulation. The regulation intends to harmonise both short selling requirements across the EU and the powers that regulators may use in exceptional situations where there is a serious threat to financial stability or market confidence. The Government believe that proposals should not impact market efficiency and liquidity, in particular in relation to sovereign debt.
Draft general budget for 2012
The Commission will present its draft budget for 2012. The Government believe that, in proposing a 4.9% increase in payments, the draft budget for 2012 is unacceptable. In line with the agreement made between the UK, France, Germany, the Netherlands and Finland in December 2010, the Government’s opinion is that growth in the EU’s annual budget must be curbed, in order to reflect difficult economic conditions and tough measures taken by national Governments to cut spending. The Government intend to work with other member states to achieve the best possible deal for the taxpayer.
Savings taxation directive
The savings directive forms part of the EU’s “good governance in taxation” agenda, which complements G20 efforts to improve international tax co-operation and reflects the latest OECD standards on tax transparency. The Council may hold an orientation debate on amendments to the directive, which seek automatic exchange of tax information with the aim of combating cross-border tax fraud. The UK fully supports the aims of the amending directive, and hopes that the EU can move towards an agreement.
Financial sector taxation
The Commission will present an interim report to the Council on financial sector taxation. The Government are content with the report, which stresses the need to look at financial sector taxation in the round, notes the importance of establishing the purpose of any financial sector tax, and sets out next steps.
Commodity markets
Following discussion by Ministers at the informal ECOFIN in April, the Council will agree conclusions on commodity markets. The Government support the conclusions, which aim to: improve the efficiency and transparency of global commodity markets; improve supply responsiveness and productivity, especially in respect of the agricultural sector; and mitigate demand for commodities, in particular reducing the energy-intensity of future growth.
Financial support to Portugal
Following the request by the Portuguese authorities for financial assistance and subsequent discussion at the informal ECOFIN in April, ECOFIN is expected to adopt a Council recommendation to Portugal with a view to bringing an end to the situation of an excessive Government deficit and a Council decision on granting Union financial assistance to Portugal.
Review of the economic adjustment programme for Ireland
The Commission will present the outcome of the first and second quarterly reviews of Ireland’s programme by the IMF, Commission and ECB in April, and its assessment on whether to release the second tranche of funds. The Government expect the assessment to be broadly positive. The first tranche of the UK bilateral loan is available to Ireland following the programme’s third review, which is expected to take place in September 2011.
Financing climate change, preparation of UN meetings
In preparation for discussions by the United Nations, ECOFIN will be asked to endorse the EU report on “Fast Start” climate finance, and to approve Council conclusions on issues and next steps for international climate finance. The fast start report sets out details of the €2.34 billion of fast-start finance provided by the EU in 2010, and details of specific actions supported by this finance. The UK welcomes the report and hopes that any conclusions build substantively on previous Council conclusions, as well as demonstrating our commitment to delivering our long-term climate finance target.
Information on the informal ECOFIN meeting
The presidency will give a debrief of the April informal ECOFIN.
Building and the Environment
(13 years, 5 months ago)
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The Minister for Housing and Local Government (Grant Shapps)
Today the Government are publishing a further group of reports presenting the findings from research projects commissioned by the previous Administration. There is a significant backlog of unpublished reports that were produced by the previous Government and over the next few months we will be publishing further reports in groups themed on particular topics.
The reports and findings are of general policy interest, especially on the issues of building and the environment, but they do not explicitly relate to forthcoming policy announcements and are not necessarily a reflection or statement of the current Government’s policy positions. We are publishing these documents in the interests of transparency and as part of our freedom of information commitment to publish the results of all commissioned research. For transparency, all completed work is being published regardless of format or robustness.
The six reports published today represent the findings from research projects at a total cost of £697,819. These findings cover the topics of building and the environment.
Domestic sector airtightness—This report by the Centre for Built Environment assesses the impact on airtightness of different methods of construction and the implications for future building regulations policy. The work found that certain construction types are intrinsically more airtight than others, and that dry-lined masonry cavity and steel-framed construction require much greater attention to detail if they are to reliably achieve high levels of airtightness. The complexity of design can have a significant impact, and certain approaches are likely to be more robust than others. This report was commissioned in 2003 at a cost of £233,325.
Condensation risk—impact of improvements to Part L and robust details on Part C—This report by Faber Maunsell evaluates the impact of higher insulation and airtightness levels on moisture performance and interstitial and surface condensation risks. It highlights how hygrothermally robust detailing and appropriate workmanship is critical to the achievement of energy efficient, healthy and comfortable buildings; and how possible degradation of building materials and the deterioration of thermal performance as a consequence of the calculated maximum amount of moisture should be considered. The report was commissioned in 2003 at a cost of £158,560.
Evaluation of unventilated pitched roofs with vapour permeable membrane—This report by Faber Maunsell identifies an ideal calculation approach to predicting condensation risk in unventilated roof systems might be via a whole building simulation package. It also identifies why the performance of roof underlays should not be considered in isolation from the whole roof system including moisture vapour movement from the interior through the ceiling. The report was commissioned in 2003 at a cost of £113,103.
Product emission labelling scheme—scoping study—The report by AECOM investigates the potential for introducing a scheme to label building products for their emissions of volatile organic compounds. It describes existing schemes, identities relevant British, European, international and American standards, and outlines research into the health effects of volatile organic compounds. The report was commissioned in 2005 at a cost of £45,972.
Comparing PStar and co-heating test results—This report by AECOM compares the “PStar” method for determining heat losses from a dwelling with the more established “co-heating” method. The study showed that PStar tests take three days to complete and have the potential to be used for compliance purposes, but the results they produce are different from co-heating test results, and further investigations are needed. The report was commissioned in 2008 at a cost of £29,000.
Reducing water consumption in buildings—This report prepared by WRc (as part of a CIRIA-led consortium) addresses issues connected with reducing water consumption in buildings. The report recommendations were used to inform a comprehensive review of Approved Document G to the Building Regulations. The report was commissioned in 2008 at a cost of £117,859.
At a time when public budgets must be reduced, the new Government want to ensure their research delivers best possible value-for-money for the taxpayer and that sums expended are reasonable in relation to the public policy benefits obtained. My Department has put in place new scrutiny and challenge processes for future research. Any new projects will be scrutinised to ensure the methodology is sound and that all options for funding are explored at an early stage. This includes using existing work from other organisations, joint funding projects with other Departments or organisations and taking work forward in-house.
The reports and findings are of general policy interest, especially on the issues of building and the environment, but they do not explicitly relate to forthcoming policy announcements and are not necessarily a reflection or statement of the current Government’s policy positions. DCEG is publishing these reports in the interests of transparency.
Copies of these reports are available on the Department for Communities and Local Government website. Copies have been placed in the Library of the House.
Munro Review of Child Protection
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Education (Tim Loughton)
Few things are more important than helping and protecting vulnerable children and young people. I am reminded daily of the immense dedication of professionals and their unstinting efforts to keep children and young people safe. Despite this, the system is not working as well as it should. That is why, in June last year, the Secretary of State for Education, asked Professor Eileen Munro to conduct a wide-ranging independent review to improve child protection.
Professor Munro was asked to set out the obstacles preventing improvements and the steps required to improve child protection, including giving consideration to how effectively children’s social workers and professionals in other agencies work together. I am pleased to announce that today, following her first two reports, Professor Munro has published the final report of her review, “A child-centred system”. Copies have been laid before the House.
Professor Munro has carried out a wide-ranging and in-depth review. Her report makes 15 recommendations and signals a shift from previous reforms that, while well intentioned, resulted in a tick-box culture and a loss of focus on the needs of the child.
I welcome Professor Munro’s thorough analysis of the issues. It is important that we consider carefully, with professionals themselves, how best to respond to her proposals to bring about the long-term reform needed.
I am therefore establishing an implementation working group drawing together key individuals from the social work profession, local government, health, police, education and the voluntary sector. The Government will work closely with this group, whose membership I will announce shortly, to develop a full response to Professor Munro’s recommendations before the summer recess.
I am very grateful to Professor Munro for all the hard work, professionalism and expertise she has shown in delivering this review and to the many professionals and members of the public, including children and young people themselves, who have contributed to it.
Post Informal Energy Council Meeting
(13 years, 5 months ago)
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The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I represented the United Kingdom at the EU Informal Energy Council in Hungary on 2-3 May 2011.
Discussions at the Council focused on the 2050 Energy Roadmap. Commissioner Oettinger emphasised the importance of a road map as providing a framework for the EU’s transition to a low-carbon economy with virtually decarbonised electricity generation and noted the importance of considering intermediate milestones, for example for 2030. Discussion by Ministers of priorities for the road map touched on renewables deployment, infrastructure, low-carbon development, the importance of giving the right investment signals and the need for scenarios to be underpinned with robust analysis, including of costs. I noted that a focus on both low-carbon development and energy security was essential as was consideration of the full range of fuel mixes. The discussion at the Council will feed into the communication that the Commission is preparing and planning to issue in the autumn.
Over lunch, there was a discussion of external European energy relations, which will feed into a communication that the Commission plans to publish after the summer on energy security and international co-operation. This will be one of the priorities for the Polish presidency.
NATO Parliamentary Assembly
(13 years, 5 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
My noble friend Lord Hamilton of Epsom (Archie Hamilton) has replaced my noble friend Lord Bates (Michael Bates) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.
Court Funds Office Modernisation
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I am pleased to announce today that the Court Funds Office (CFO) will be working in partnership with National Savings and Investments (NS&I) to modernise the service it provides to clients.
Under the Administration of Justice Act 1982, the CFO, acting on behalf of the Accountant General of the Senior Courts, provides a banking and administration service for some 140,000 clients with a total of £3.3 billion cash and £0.2 billion securities held under the control of the civil courts in England and Wales, including the Court of Protection (CoP). It also acts as custodian for any investments made with that money.
The money held by CFO originates from three main sources:
Damages awarded to children as a result of civil legal action in a county court in England or Wales or the High Court of Justice. These assets are held on their behalf until the child reaches majority (18 years of age);
Assets belonging to people who lack the capacity to manage their own financial affairs where the CoP has appointed someone else to manage their affairs;
Cases where money is held in court pending settlement of civil court action, or on behalf of dissenting shareholders, widows and other clients whose funds are held under a variety of different statutes.
Working with NS&I will allow CFO to take advantage of the business transformation and service management skills, technology, and processes that are already well established within NS&I. It will provide customers with a more effective and efficient service and therefore an improved customer experience.
Clients will interact with CFO in the same way as they do now and their accounts will be administered in line with existing legislation. They will also continue to use specific CFO investment products but will not have access, under this arrangement, to NS&I products. The Accountant General will retain all of their current responsibilities and be ultimately responsible for the safeguarding of funds in court.
Judicial Appointments
(13 years, 5 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I am today announcing that the criteria for appointing judges who, on appointment, will be authorised to chair restricted patients cases in the mental health jurisdiction in the health, education and social care chamber of the first-tier tribunal will be amended to better reflect the needs of the jurisdiction.
Restricted patients cases involve individuals who are detained in hospital by virtue of a restriction order imposed by the Crown court, or by virtue of being transferred from prison by direction of the Secretary of State. The convention has been that retired circuit judges or recorder QC judges who chair the cases must refrain from chairing cases once five years post retirement has passed. The convention was designed to provide assurance that an experienced member of the judiciary would be involved in decisions on whether to direct the discharge of a patient and the concept of experience was predicated entirely on current experience of criminal sentencing.
The existing criteria no longer provide the most appropriate basis for determining competency for hearing restricted patient cases. While experience of criminal sentencing remains central, I recognise that restricting eligibility to recorder silks for appointment to the tribunal for the purpose of chairing restricted patient cases excludes non-silk recorders with heavyweight crime experience or substantial relevant experience in such areas as restricted patients cases or the Parole Board. I also recognise that requiring retired circuit judges or recorders to refrain from sitting after five years on the panel, in the absence of other factors to suggest they are not suitable, removes individuals with significant and continuing experience of working in this specialist jurisdiction. Deployment of available judges is a matter for the senior president of tribunals.
The changes will increase the pool from which potential chairing judges are drawn, and will retain the services of experienced judges.
Aircraft Cabin Air Quality
(13 years, 5 months ago)
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The Minister of State, Department for Transport (Mrs Theresa Villiers)
Cranfield university are today publishing their research into aircraft cabin air sampling on commercial aircraft in scheduled operation. A link to the report is being provided on the Department for Transport website.
The consideration of this matter by the Committee on Toxicity (COT) in 2007 provided an important opportunity to examine this issue in depth. Further scrutiny was provided by the investigation carried out by the House of Lords Science and Technology Committee.
The Department commissioned this independent research in 2008 (once tests had been completed to find suitable scientific equipment for the task) as a result of a recommendation by the COT—the first time such a study had been carried out by any country in the world.
The main conclusion of Cranfleld’s research was that there was no evidence of pollutants occurring in cabin air at levels exceeding available health and safety standards and guidelines. Levels observed in the flights that formed part of the study were comparable to those typically experienced in domestic settings.
The study monitored a total of 100 flights in five different aircraft types: Boeing 757, Airbus 319, 320 and 321 and the BAe 146. A series of air samples were taken at defined points on all flights, with additional samples taken during any “fume events” if any occurred. All flight crew, cabin crew and researchers were requested to complete a post-flight questionnaire, including questions about any fumes or smells that occurred during the flight.
The study’s objective was to analyse cabin air for volatile organic compounds, semi-volatile organic compounds, particles and carbon monoxide in normal operations during all phases of flight (e.g. climb, cruise, descent); and to detect and characterise any anomalous elevations of these elements during any “fume events” where unusual smells or similar occurrences were reported.
The European standard “Aircraft internal air quality standards, criteria and determination methods” sets safety, health and comfort limits for a number of substances, including two that were measured in the study—carbon monoxide and toluene. The study’s results indicate that concentrations of both carbon monoxide and toluene remained within these limits. In the absence of specific cabin air standards for the other pollutants measured in the research, the study referred to other standards and guidelines established, for example, for domestic (home) or occupational environments. Again, none of these standards or guidelines was exceeded.
I am grateful to Cranfield university for their rigorous and painstaking work. I am also grateful to the participating airlines which made their flight staff and management time and their aircraft available to the project. Without this invaluable practical help, the research would not have been possible.
The Department will always take the health of persons on board aircraft very seriously and I hope the publication of this thorough and independent analysis by Cranfield university will provide reassurance on this issue. We will continue to keep in close touch on all aviation health matters with the UK’s aviation regulator, the Civil Aviation Authority.
The Department will now take forward the one remaining cabin air study outstanding—the swab test research being conducted by the Institute of Occupational Medicine in Edinburgh.
When that has been finished all the completed research projects will be submitted to the Committee on Toxicity for their consideration so that the public can be assured that this matter has been thoroughly investigated.
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Faulkner of Worcester)
My Lords, before the noble Lord, Lord Hunt of Kings Heath, moves his first Motion, I remind noble Lords that in the case of each statutory instrument the Motion before the Committee will be that the Committee do consider the statutory instrument in question. I should make it clear that the Grand Committee is not being invited to agree or disagree with the instruments. In the very likely event of there being a Division in the House, the Committee will adjourn for 10 minutes.
Immigration (Designation of Travel Bans) (Amendment) Order 2011
(13 years, 5 months ago)
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Lord Hunt of Kings Heath
That the Grand Committee do report to the House that it has considered the Immigration (Designation of Travel Bans) (Amendment) Order 2011 (SI 2011/547).
Relevant document: 24th Report from the Merits Committee.
Lord Hunt of Kings Heath
My Lords, I shall also speak to the Libya (Asset-Freezing) Regulations 2011. Both instruments were drawn to the special attention of the House by the Merits Select Committee, to which I am grateful for its assiduous attention to Home Office statutory instruments.
The Immigration (Designation of Travel Bans) (Amendment) Order 2011, otherwise known as the travel bans order, adds UN Security Council Resolution 1970, issued on 26 February 2011 in response to the situation in Libya, to Part 1 of the schedule to the Immigration (Designation of Travel Bans) Order 2000. The effect of the amendment is to impose travel bans on Muammur Gaddafi, his family and certain Libyan government officials. The helpful Explanatory Memorandum accompanying the SI says that the travel bans order thereby implements the UK’s obligations under the UN resolution.
On 28 February, the Government also laid before Parliament the Libya (Financial Sanctions) Order 2011. The Explanatory Memorandum says that the financial sanctions order implements in the UK the asset-freezing measures in the UN resolution and prohibits any dealing with the funds and economic resources of certain individuals and entities, and making available funds or economic resources to or for the benefit of those persons. The financial sanctions order came into force on 27 February and was accompanied by a letter to the Lord Speaker. Although the financial sanctions order is required to be laid before both Houses of Parliament under the United Nations Act 1946, it is not subject to parliamentary procedure.
The two instruments need to be considered in the context of two other orders, the Export Control (Amendment) Order 2011 and the Export Control (Amendment) (No. 2) Order 2011. The Export Control (Amendment) Order 2011 introduces a new control on the export of uncirculated Libyan bank notes. The Export Control (Amendment) (No. 2) Order revokes the original order and embraces unused Libyan coins as well as unused bank notes. Taken together, these four instruments form a legislative response to the situation in Libya, much of which follows the international response to developments in that country.
I want to make it clear that I do not seek to oppose these instruments; indeed, I support them. However, I thought that it would be useful, and a service to the Committee, if the Minister was in a position to provide further information on the implementation of the instruments. The travel bans order came into effect on 28 February 2011 and the Libya (Asset-Freezing) Regulations came into force on 3 March. I would be very grateful to the noble Earl, Lord Attlee, if he could say how implementation of the instruments has proceeded so far and whether any particular problems have been experienced. I would also be grateful to him if he could say whether other countries are likely to be affected by similar action, given the events that we are seeing in a number of countries in the vicinity of Libya, about which there is great concern. I note that the asset-freezing regulations apply to small businesses. Can the noble Earl tell me how many such businesses might be affected? Perhaps he can also say whether any further action is contemplated against Libya in this area.
Overall, I have prayed against these statutory instruments because they have been drawn to the special attention of the House and there ought to be an opportunity to allow the House to debate these matters. As I have said to the Committee, I do not object at all to what is in the statutory instruments, but it would be good to know what progress has been made. I beg to move.
Baroness Falkner of Margravine
My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for giving us an opportunity to exercise our scrutiny function rather better by putting some very apposite and relevant questions on the table about the statutory instruments. We Liberal Democrats welcome the imposition of a travel ban on Muammur Gaddafi and his family and certain other Libyan government officials, which has allowed the implementation of the UK’s obligations under the UN Security Council resolutions in response to the situation in Libya.
I, like the noble Lord, Lord Hunt, am concerned about the practical implication of the implementation of these statutory instruments. We undoubtedly agree that we must guarantee that the excluded persons watch-list, which will be used both by staff overseas and at UK ports, identifies accurately people who are not to be admitted to the UK, and I hope that any individual who is subject to the ban and who entered the UK by deception, and so is in breach of the travel ban, will be identified and treated as an illegal entrant and will be subject to appropriate action before the jurisdiction of the International Criminal Court, if that applies. I say that advisedly because, having looked at the list of people who are covered by the United Nations travel ban, and given that the International Criminal Court’s criminal prosecutor is expected to make an announcement in September, the months leading up to then will be when these people will attempt to flee to safe havens if they choose to do so.
I am concerned to read that the ban could also be lifted in very limited circumstances, and I wonder whether the noble Lord the Minister will tell us in what circumstances the ban could be lifted here in the UK and what procedures we would go through for it to be lifted. I also wonder whether there has been any record of an individual who is as yet subject to the travel ban and who has been arrested in the UK or who is known to have connections to the UK and might already be here.
On the asset-freezing regulations, I thank, through the Minister, his noble friend Lord Green of Hurstpierpoint for his extensive response to me, in a letter dated 1 April 2011, on the travel order. It clarified a lot of my questions about how the asset-freezing regulations would be implemented in the UK. I am further pleased to note that the UK asset freezes will not be limited to assets that are held only in the name of Muammur Gaddafi, that there are several other designated individuals and that the list continues to be updated.
The issue for me is the extent to which Libyan state entities, or entities that have links to the Libyan state but that might not be official state entities, should be regarded as directly or indirectly owned or controlled by the Gaddafi family acting on behalf of, or on the direction of, members of the Gaddafi family. I know that the Treasury has issued guidance that the financial sector and other persons should bear in mind that Muammur Gaddafi and his family have considerable control over the Libyan state and its enterprises in deciding how to conduct proper due diligence over any transaction that involves Libyan state assets. Although we welcome the guidance, I have to say to the Treasury—I have raised this previously—that it seems to us that UK financial institutions are not really clear as to how to deal with freezing the assets of individuals rather than of readily identifiable state organisations or commercial enterprises. That issue has gone on over the years and I would like to record some concern that Treasury guidance does not seem to be more specific. You speak to people in the banks who tell you that they have very limited means of identifying individuals because the money is laundered in so many different ways before it arrives here. Perhaps we need to invest, through HMRC or some other body—I cannot identify the body—a little more in clearer intelligence about all those front organisations that use the City of London and other European centres to launder assets.
I conclude by saying that it is important to know that those sanctions and regimes differ from one another and from a US sanctions regime, and that people who are involved in moving their assets around, particularly when there are these sorts of asset freezes, are capable of hiring smart white-collar advisers to tell them how to buck the rules in one regime to another. I hope that here in the UK, not least to safeguard our reputation on money laundering, the Government ensure that companies monitor the position and keep abreast of new legislation, new designations and potentially new licences.
Earl Attlee
My Lords, I am very grateful that the noble Lord, Lord Hunt, has asked the Committee to consider the travel ban amendment order and the Libya (Asset-Freezing) Regulations that were laid in February. Normally such technical measures attract little comment, but as the noble Lord says, they concern important matters of public policy. It is therefore only right that the Committee has the opportunity to learn more about the scope and purpose of such amendments and instruments and to question the Government about the circumstances that give rise to them.
These instruments are part of the Government’s wider strategy to put pressure on the Gaddafi regime through the full implementation of the relevant UN Security Council resolutions and EU instruments. Noble Lords were able to explore something of this wider strategy on 26 April when my noble friend Lord Howell of Guildford repeated the Statement made in another place by my right honourable friend the Foreign Secretary. I have no doubt, given the fast moving and appalling events unfolding in north Africa and in the Middle East, that there will be many such further opportunities to question the Government about our country’s response. I am therefore sure that noble Lords will understand if I say that on this occasion I intend to focus on the subject of the noble Lord’s Motion rather than on the wider strategy. I should also point out that yesterday the EU imposed sanctions on 13 Syrian officials, although I am not yet fully briefed on those sanctions. However, the Government will make similar UK orders using the same methodology as the Libyan regulations.
Noble Lords will be aware that UN Security Council Resolution 1970 was issued on 26 February as the international community’s response to the gross and systemic violation of human rights and international humanitarian law in Libya and the crimes that were and still are being perpetrated by Gaddafi and his supporters on his own population. The resolution placed a number of obligations on UN member states. Two of these—on travel bans and asset freezing—resulted in the implementing measures that were laid before the House in February and which the noble Lord, Lord Hunt, has brought to the attention of the Committee. Before saying something about these measures, noble Lords may be aware that they were the first of several travel ban and asset-freezing instruments that have come into force since the end of February in response to events in Libya. There have been a total of three travel ban amendment orders.
Taking the measures listed in the noble Lord’s Motion in turn, I shall first address the travel ban order. When travel bans are imposed on particular named individuals as part of a UN Security Council resolution or EU Council instrument, the UK is obliged, except in very limited circumstances, to refuse these individuals entry to or transit through the UK. There are a number of ways of achieving this. The most effective way is for the Government to add the resolution to the schedule of the Immigration (Designation of Travel Bans) Order 2000. That is done by means of an amendment order.
Lord Hunt of Kings Heath
My Lords, I am very grateful to the noble Earl, Lord Attlee, for that and to the noble Baroness, Lady Falkner, for her contribution to the debate. Let me start by making it clear that we support the two instruments before us and the other two that are associated. I was not expecting the noble Earl to give a detailed assessment of the Government’s overall approach to Libya and to the situation, but I take his point and I am sure that it would be welcomed should there be further opportunities in your Lordships’ House for debates on these matters over the next few weeks and months. I have also noted that we might expect orders in relation to 13 individuals in Syria—I think that that was what the noble Earl said—following action—
Earl Attlee
My Lords, I now understand that the instruments will come into force at 6 pm tonight.
Lord Hunt of Kings Heath
My Lords, I was just going to say that I welcomed that information, and the fact that action has been taken in this area. The noble Earl has also explained the reason for departing from normal practice in laying the travel bans order. I have no problem with that. He made some very interesting comments about the proportionate application of the asset-freezing regulations. I say again that I fully understand the reasons for that proportionate approach. I hope that his department will be able to monitor that effectively, as experience shows that proportionate application sometimes leads to gaps that people can find their way through. Therefore, it would be good if one could be assured that these matters will be kept under review. I was glad that the noble Earl was able to report that no particular practical measures have so far surfaced in relation to the instruments before us. Overall, I am grateful to him for the information that he has given us.
Earl Attlee
It might be helpful if I clarify the position slightly. The asset freeze comes into force at 6 pm tonight, not the travel ban—that will come later. However, I do not advise the designated people to try to travel to the UK.
Lord Hunt of Kings Heath
I am sure that we are all reassured by that clarification.
Libya (Asset-Freezing) Regulations 2011
Lord Hunt of Kings Heath
That the Grand Committee do report to the House that it has considered the Libya (Asset-Freezing) Regulations 2011 (SI 2011/605).
Relevant document: 24th Report from the Merits Committee.
House of Lords
Health: Cancer
(13 years, 5 months ago)
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Lord Davies of Coity
To ask Her Majesty’s Government what steps they are taking to improve outcomes for kidney cancer patients.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, our cancer strategy sets out a range of actions to improve outcomes for all cancer patients. It shows how we intend to tackle preventable cancer incidence, improve the quality and efficiency of cancer services and deliver improved outcomes. We are providing £450 million to achieve earlier diagnosis of cancer, and we are working with a number of rarer cancer charities to discuss current barriers to early diagnosis of rarer cancers and possible solutions.
Lord Davies of Coity
My Lords, I thank the Minister for that Answer. Is he aware that each year more than 8,000 people in the United Kingdom learn that they have kidney cancer? That is approximately 22 people a day. Is he aware, too, that some of the treatment options contained in the UK guidelines for the systemic treatment of renal cell carcinoma have not been approved by NICE? Finally, will the Minister meet the James Whale Fund for Kidney Cancer and leading clinicians to explore methods and systems to improve the diagnosis of kidney cancer at the early stage?
Earl Howe
My Lords, I pay tribute, first of all, to the James Whale Fund for Kidney Cancer, which is an organisation that I know quite well, as the noble Lord is aware. It is doing tremendous work, not least in the field of specialist cancer nursing but also as regards its care line, on which I congratulate it. The noble Lord asked whether I would agree to meet the fund. For my own part I would be very happy to do so, but it may be more appropriate for my colleague in the department, who deals with cancer services, to do so as well. We recognise that more needs to be done to raise awareness of the signs and symptoms of rarer cancers such as kidney cancer. Our strategy for cancer sets out our commitment to work with a number of cancer-focused charities. Officials have already met such charities and more meetings are planned over the summer.
Lord Alderdice
My Lords, the noble Lord, Lord Davies, raised the question of National Institute for Health and Clinical Excellence approval of chemotherapeutic drugs. After a nephrectomy, not much else is available, because radiotherapy is generally not terribly helpful in renal cell carcinoma and other cancers of the kidney. The National Institute for Health and Clinical Excellence has to look, with these often quite expensive drugs, at how much benefit is being achieved for the cost of the drug. It is not an easy decision, which is why the noble Lord, Lord Davies, raised the question of some non-approved drugs. Is the Minister satisfied about the judgments being made by NICE about the benefit as against the cost? They are difficult judgments, but is he satisfied with the judgments being made?
Earl Howe
I am grateful to my noble friend. He is absolutely right; these are very difficult decisions to make. NICE issues final guidance on the use of a drug only after very careful consideration of the evidence and wide consultation with stakeholders. The noble Lord, Lord Davies, and, I am sure, my noble friend will be aware that one particular drug has been refused or not recommended by NICE. However, we have established the cancer drugs fund, which will enable individual clinicians on a patient-by-patient basis to apply to access drugs even though they have not been recommended by NICE.
Baroness Masham of Ilton
My Lords, will the Minister look at the problem of neuroblastoma, which is an aggressive type of child cancer? I have to declare an interest as I had a small cousin who had his kidney removed at five with a tumour. He had to go to America for treatment. Will the Minister ensure that the UK, which does not have a good survival rate for these children, looks with America at the research needed for them? There are only about 100 a year in the UK who have neuroblastoma.
Earl Howe
The noble Baroness raises an important issue, because these conditions are devastating even though they affect only a comparatively small number. There is a good deal of research going on into cancer, some of it funded by my department. I do not have details of whether that condition is the focus of any such programme but I will take away her concern and write to her if I have further information.
Baroness Thornton
My Lords, today the Cancer Campaigning Group, which represents dozens of cancer organisations including Kidney Cancer UK, has launched a survey of GPs in which 71 per cent agree or strongly agree that they will require specialist advice effectively to commission cancer services. Given that the cancer networks’ funding is not guaranteed beyond 2011-12, how will that commissioning support be provided? On an individual basis, how will support be provided to GPs when they have to tell a kidney cancer patient that they will not be able to afford to offer Afinitor? That is the drug the Minister referred to, which is not approved by NICE and which costs £200,000 per course of treatment.
Earl Howe
My Lords, there are drugs which NICE has recommended for kidney cancer, so Afinitor is not the only drug on the menu. GPs have a crucial role to play if we are to achieve earlier diagnosis of cancer and meet our ambition of cancer outcomes that are among the best in the world. The National Cancer Director, Professor Sir Mike Richards, is working with pathfinder GP consortia to understand how we can support them in commissioning services that deliver the best outcomes. He is clear, as are we, that cancer networks will have a central role in the reformed NHS as a place where clinicians from different sectors come together to improve the quality of care across integrated pathways.
Baroness Knight of Collingtree
My Lords, has my noble friend made any assessment of the difficulties of treating cancer patients, when the trouble is with the kidneys, because of lack of spare parts?
Earl Howe
I think I shall need to clarify with my noble friend what she means by spare parts in this context. I am aware that if we look at treatment options for kidney cancer, neither chemotherapy nor radiotherapy is generally appropriate. Usually, surgery is the preferred course of treatment. If my noble friend will allow, I will speak to her afterwards and investigate as appropriate.
Arts: Local Provision
The Earl of Clancarty
To ask Her Majesty’s Government what steps they are taking to encourage the provision of arts at a local level.
Baroness Rawlings
My Lords, Her Majesty’s Government will invest more than £2.2 billion in the arts over the next four years via Arts Council England. This money will support artists and organisations working at every level, from small community arts groups to our major national institutions.
The Earl of Clancarty
My Lords, I thank the Minister for her reply. However, in view of the fact that we already have unacceptable levels of funding to the arts locally—100 per cent cuts have been made by some local authorities—and that we are just at the beginning of this, does the Minister agree that what is urgently required is the introduction of a statutory obligation on local authorities to provide proper funding of the arts and cultural services, since these are such a necessary part of the life of local communities?
Baroness Rawlings
My Lords, I understand fully the thrust behind the question of the noble Earl, Lord Clancarty, but we feel that imposing a statutory duty would also place added burdens upon local government at a time when deregulation is a priority. We want to continue to give the funding responsibility to local communities and local authorities so that they can take the decisions which are most appropriate for their area, rather than imposing a one-size-fits-all model of cultural provision.
Baroness McIntosh of Hudnall
My Lords, does the Minister agree that Arts Council England, to which she referred, has made a pretty good effort through the creation of its new national portfolio to ensure that there is coverage across England of arts organisations at all scales, as she mentioned? I should, perhaps, register an interest as the author of a report, three years ago, on its last effort, which was, perhaps, slightly less successful. Does she not agree, however, that the random nature of the way in which funding has been withdrawn by local authorities makes the Arts Council’s job a great deal more difficult and means that the available funds are used less well? It would be in the interests of the Government, as well as those of arts communities, for local authorities to be more consistent in the way they apply their funding to the arts and culture.
Baroness Rawlings
My Lords, the noble Baroness is absolutely right. The arm’s-length principle means that individual arts funding decisions are taken at arm’s length from government. To go back to the main part of her question, on 30 March Arts Council England announced its new national portfolio organisations. These are bodies which will receive regular funding over the next three years. As for the geographical breakdown, the spending will remain largely the same, so it will cover all areas.
Baroness Gardner of Parkes
My Lords, we hear a lot about National Lottery funds and the fact that the lottery gives money to the arts. Will the Minister say how that compares to the amount given by DCMS to the arts?
Baroness Rawlings
I thank the noble Baroness, Lady Gardner, for that. While grant in aid, just one part of the Arts Council overall income, is being reduced, we are reforming the lottery so that more money will go to the arts. An additional £80 million will go to the arts from the National Lottery each year from 2013.
Lord West of Spithead
My Lords, I declare an interest as the patron of the wonderful Docklands Sinfonia. In terms of the Cultural Olympiad planned for 2012, will we be picking up local arts activities within schools in the East End and also all the musical possibilities, rather than just going for stilt walkers and things like that—not that I have anything against stilt walkers?
Baroness Rawlings
The noble Lord brings up a very good point regarding the Cultural Olympiad, with which we in the department are all deeply involved. He is absolutely right and that is what we hope to continue to do.
Lord Scott of Foscote
My Lords, is it right that the Department for Communities and Local Government is preparing guidelines to assist local authorities in deciding what approach to take to proposed cuts in the fields of the arts, heritage and sports? If it is right, is it right also that these are proposed to be given statutory effect? Will the guidelines, once produced, come before Parliament for approbation?
Baroness Rawlings
To return to the actual funding, the Department for Culture, Media and Sport feels strongly that individual arts funding decisions must be taken at arm’s length through Arts Council England.
Lord Roberts of Llandudno
My Lords, there is immense talent throughout the United Kingdom. What is being done to encourage the exchange of art collections between Scotland, Wales, Northern Ireland and England? It is not just Arts Council England that is involved in this.
Baroness Rawlings
Decisions in the Welsh Assembly regarding the Arts Council, for example, are devolved. It is a devolved issue and does not come under Arts Council England.
Lord Stevenson of Balmacara
Does the Minister agree that in practice the situation facing local arts organisations is made much worse by the fact that, in addition to the 29.6 per cent cut in Arts Council funding over the next four years and the reductions in local authority funding, about which we have just heard, the RDAs, which significantly supported our creative industries and the arts right across the country, have been abolished? What progress are the Government making in replacing those lost funds before too much damage is done?
Baroness Rawlings
The Department for Culture, Media and Sport has negotiated a substantial settlement for the arts, and it is not true that they are facing major cuts. As your Lordships know, though, we need to contribute, like others, to reducing the deficit. In the longer term, our areas that rely on several different sources of funding will benefit, like elsewhere, from a strong economy and stable public finances. It is simply not an option to protect arts funding while cutting public spending in other areas, but in time much more money will be coming from the lottery, as the noble Lord knows.
Lord Grade of Yarmouth
My Lords, however regrettable and inevitable the cuts in funding for the vital arts in this country, unlike other sectors that are susceptible to cuts, the arts sector has the opportunity to find a new source of funding from charitable giving, which is the foundation of the thriving arts in the United States where there is no public subsidy whatever. It is time that we worked harder at finding incentives for charitable giving. Does the Minister agree?
Baroness Rawlings
I thank my noble friend Lord Grade for that question, which he knows is very near to my heart. We have announced a package of measures to boost charitable giving, including an £80 million matched funding pot. In the Budget of 23 March, the Chancellor of the Exchequer announced a significant package of new measures to support a drive towards greater charitable giving, worth around £600 million to charities. We would all like still more, and perhaps we should follow the American route a little more.
Children: Adoption
(13 years, 5 months ago)
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Lord Waddington
To ask Her Majesty’s Government what steps they propose to take to ensure that children do not lose the chance of being adopted as a result of the closure of adoption agencies following the Equality Act (Sexual Orientation) Regulations 2007.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, the Government are committed to adoption where this is in a child’s best interests. We have been monitoring the effect of the introduction of the regulations, and have made it clear to local authorities that they should work with the voluntary sector to maximise the number of successful adoptions. My honourable friend Mr Loughton is leading a drive to speed up adoption and remove potential barriers—for example, for children from minority ethnic backgrounds.
Lord Waddington
I thank my noble friend for his reply, but in light of the Times report of 2 May that five of the remaining Catholic adoption agencies have gone out of business rather than abandon their Christian beliefs, with the likelihood that this will make it harder for some of the most vulnerable children to be found a home, should not common sense and tolerance come before political correctness? With gay couples able to go to any number of agencies specialising in gay adoption, should not the law allow the Catholic agencies the same freedom of conscience as was allowed to conscientious objectors during the war?
Lord Hill of Oareford
I understand the point made by my noble friend and know the strength of feeling that he brings to bear on this. The department has approached adoption from the point of view of what is in the best interests of children by trying to have as a wide a pool as possible of potential adopters. No one on this side of the House is keen to do things that are driven by political correctness. That is one of the reasons why we are looking, for example, at the adoption of minority ethnic children. I understand the points that my noble friend makes, but at the moment we have no plans to respond directly to them.
Baroness Howarth of Breckland
My Lords, in welcoming the Munro report today, which talks about some aspects of social work but has implications for the whole field, does the Minister agree with me that the complexity of the task that Mr Loughton is taking on involves improving social work practice and the practice of panels, reviewing the court processes, and ensuring that guardians move quickly? All of those things will take time and are much more significant than the matter being raised.
Lord Hill of Oareford
I very much agree with the point about the complexity of the issue and the need to look at all the issues in the round. The points that have been raised to do with court processes, finding suitable adopters, speeding up the process and tackling obstacles are all extremely important. As the noble Baroness will know, in responding to Munro my honourable friend Mr Loughton will take advice from an expert group on precisely these issues. He will come back later in the year to pull the various strands together and, I hope, come up with solutions. The whole House, irrespective of from where we are coming on some of these issues, will share the view that we need to find more good adoptions for the children who need them most.
Baroness Benjamin
My Lords, voluntary adoption agencies such as Barnardo’s—I declare an interest as a vice president—welcome the Government’s focus on adoption. However, for adoptive places to succeed there needs to be long-term commitment. Are there any plans to ensure that specialist therapeutic services and multi-agency support for adoptive families are made more widely available so that adoptive placements succeed, especially for older children who come from a traumatised or abused background?
Lord Hill of Oareford
I agree with my noble friend about the importance of support services and specialist support services. Part of a good solution to the problems of adoption is finding a bigger supply of adopters, speeding up the process and supporting those families who have adopted children. On her specific point about what support might be available, I will follow that up with my honourable friend Mr Loughton and respond to her in more detail.
Lord Campbell-Savours
Does the Minister recognise that the position taken by the noble Lord, Lord Waddington, may well be the position taken by the majority of people in this country? Should we not be listening to people?
Lord Hill of Oareford
My Lords, as I said, I understand the point of view expressed by my noble friend Lord Waddington and always listen to him most carefully, as I do to the noble Lord, Lord Campbell-Savours. However, there is not much that I can add to my previous reply to my noble friend Lord Waddington.
The Lord Bishop of Norwich
My Lords, a significant number of faith-based children’s agencies are still providing adoption services in compliance with the Equality Act, while others are now restricted in that area to providing services after adoption. Does the Minister agree that, taken together, all these faith-based children’s agencies provide a key service to vulnerable children—one that could be further extended?
Lord Hill of Oareford
I very much agree with that. As we have said in previous debates and exchanges about adoption, the role of the voluntary adoption agencies is extremely important in this. One of the issues that my honourable friend Mr Loughton is looking at is encouraging the take-up of the services provided by the voluntary adoption agencies. Some local authorities seem more resistant than others to using those services. One would want to tackle that because the range of different performances from one local authority area to another is very wide. It would be good to narrow it. The role of voluntary adoption agencies in that is an important part of coming up with a solution.
Baroness Jones of Whitchurch
My Lords, does the Minister agree that the application of the Equality Act, far from resulting in children losing the chance of being adopted, will open up new opportunities for a much more diverse group of prospective parents to offer a stable and loving home to children in care?
Lord Hill of Oareford
I reiterate my point that all sides of the House would agree that having a wide number of potential adopters—those with strong religious beliefs and those without—who can help children and provide loving and stable homes for them is what we would all seek to encourage.
Bahrain
(13 years, 5 months ago)
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Lord Ribeiro
To ask Her Majesty’s Government what representations they have made to the Government of Bahrain following the arrest of doctors and nurses charged with crimes against the monarchy.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, we are deeply concerned about reports of the severe charges brought against a large number of doctors and nurses by a Bahraini military tribunal. It is essential that medical personnel can treat their patients free from political interference. Our ambassador raised the case with the Bahraini Minister of Justice on 4 May.
Lord Ribeiro
I thank my noble friend for his considered response. He has a list of 17 doctors who are currently detained, the majority of whom are surgeons. The accounts of torture and beatings reported in the Independent today confirm that the Government of Bahrain are failing in their duty of care to protect doctors and medical staff. The International Code of Medical Ethics, adopted in 1949 and amended in 2006, states:
“A physician shall give emergency care as a humanitarian duty”.
Will my noble friend join the leaders of the medical profession in condemning the attacks—as he has done, but more forcefully—and in seeking independent monitoring of any future trial?
Lord Howell of Guildford
The feelings of the Government are largely in line with those of my noble friend. The arrest of doctors and nurses seeking to perform their duties is clearly an appalling situation. I have to tell my noble friend that not all aspects of this case are clear at the moment, but we take the view that it is very important that the accused have proper access to legal counsel and be tried by impartial and independent courts. We take a strong view on that matter. Other aspects have been raised, and will continue to be raised, by our ambassador, but not all aspects of this case are clear at the moment.
Lord Avebury
My Lords, does the Minister agree that these arrests of doctors, nurses, ambulance workers and paramedical personnel are part of a massive sectarian purge of intellectuals throughout Bahrain that includes university teachers, journalists, the editor of a newspaper and two MPs? Should not the Government call in the Bahraini ambassador and inform him that, unless these detainees are released and the UN High Commissioner for Human Rights is permitted to carry out an impartial investigation, we will impose a travel ban on leading members of the regime and ask the prosecutor of the International Criminal Court to consider charges against the leaders of the regime for crimes against humanity?
Lord Howell of Guildford
At this present stage, we do not consider travel bans or other charges and moves of that kind to be a proper way forward. We are in constant contact, not merely with the ambassador here but, through my right honourable friend the Foreign Secretary, with the Foreign Minister of Bahrain and other Ministers, including the Minister of Justice. We continue to believe that the aim is to have a national dialogue to meet the problems of what my noble friend rightly calls an appalling situation of inter-regional strife between the Shia majority and the Sunni minority that represents the ruling group. This is an intense tension. Its effects are in danger of spreading to other parts of the Middle East, with all kinds of results that we do not want. Therefore, for the moment, we stick to the view that we must urge these countries, the ruling family and the leaders on both sides—the opposition and the ruling group—to move towards a national dialogue. That is what they say they want and that is what we are urging them to do as hard as we can at the moment.
Lord Owen
Will the Government ensure that, besides making very strong bilateral representations, we use our position in all the international bodies available, including the Security Council, the WHO and all the humanitarian bodies, to raise this issue at the very highest level? There is now very clear evidence of targeted action against individuals who are caring for people who come into hospital as a result of demonstrations. The Bahrain Government, who have had good relations with this country over many years, must now listen to those representations.
Lord Howell of Guildford
The representations we are making are strong. I have to repeat what I said to my noble friends: not all aspects of this issue and this whole case are entirely clear at the moment. Any evidence of deliberate maltreatment or withdrawal of treatment by medical personnel from people on religious grounds would be appalling. Any interference with those who are trying to dispense treatment—if they are arrested and treated as criminals—would be appalling. All those matters need very close investigation. Whether it is the right moment to raise them in all the bodies that the noble Lord mentioned, I am not yet convinced, but they are matters which we are watching very closely, and that time may come.
Lord Triesman
My Lords, I am sure that the statement made by the Minister about the intervention in respect of the medical staff will be welcomed by the House. Can he tell us of other instances of intervention in Bahrain and whether the Government believe that they have been successful in any of them?
Lord Howell of Guildford
I do not totally follow the generality of the question. If the noble Lord means to ask whether we have constant contact with Bahrain and whether we are putting considerable pressure on those with whom we have had close contact—because Bahrain remains a close ally and good friend of the United Kingdom, and vice versa—those interventions are going on all the time. Have they had effects? They have not had the effects we want by any means so far. On the contrary, we have seen a deterioration in the situation, which is very disappointing. The issue now is how we handle it: whether we put even bigger barriers between ourselves and the Bahraini authorities, or whether we use our former links to work very hard with them to change their ways and develop a dialogue—which earlier they said they wanted, in contrast to other countries where there has been a tendency towards civil war, mass killings and other violent and hard-line activities.
Greenhouse Gas Emissions Trading Scheme (Nitrous Oxide) Regulations 2011
(13 years, 5 months ago)
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Lord McNally
That the draft regulations and orders be referred to a Grand Committee.
Fixed-term Parliaments Bill
(13 years, 5 months ago)
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17:18 - Division on Amendment 1 - Ayes: 209 / Noes: 257 - Amendment 1 disagreed.
17:36 - Division on Amendment 2 - Ayes: 200 / Noes: 253 - Amendment 2 disagreed.
17:54 - Division on Amendment 3 - Ayes: 199 / Noes: 244 - Amendment 3 disagreed.
19:41 - Division on Amendment 4 - Ayes: 190 / Noes: 184 - Amendment 4 agreed.
Lord Grocott
My Lords, before we consider the Report of the Bill, I should like to put a couple of points to the Minister. We are about to embark on a major constitutional reform at Report, but since we considered the Bill in Committee, a matter of considerable constitutional significance has taken place. That is to say, there was a referendum on the alternative vote system which, I am delighted to say, was overwhelmingly defeated by the British public—including, I might say, a 72 per cent no vote in Telford and a Labour-control gain from the Conservatives in Telford.
It is normal, if significant national events occur after Committee or between any stages of the Bill, that there be some reaction and, perhaps, amendments to the Bill. I see the Minister looking a little startled and, I am sure, thinking, “What is the significance of the referendum to this Bill?”.
I put it to him that there is considerable significance. Many of us on this side of the House spent a lot of time, when we debated the Bill that set up the referendum, arguing strongly that this was not an issue that the British public wanted put to them in a referendum, and that it was certainly not at the top of their list of priorities. I suggest that the read-across ought to be that the Government, rather than concentrating on constitutional Bills for which there seems to be very little public support, should concentrate on bread and butter issues.
The Deputy Prime Minister has repeatedly said that the three Bills that we will consider—the Fixed-term Parliaments Bill, the constituency boundaries and referendum Bill, which we have already considered, and the Bill to reform the House of Lords—are part of the greatest reform package since 1832. Therefore, if one plank is shown to be fallible, one would assume that, even in the view of the Deputy Prime Minister, other parts would be as well. I do not know what the Minister's experience was when he canvassed, but after the canvassing that I did my judgment is that there is as little public support for, or interest in, the Fixed-term Parliaments Bill—and I predict the same for the Bill to abolish the House of Lords and replace it with a Senate—as the yes campaign garnered in the referendum.
I will put two questions to the Minister. First, what is the urgency to consider the Bill on Report, in particular as the Government have decided very wisely that a period of three months’ reflection is sensible between Committee and Report for the health Bill? That is a welcome development and—I think the Minister will agree—a clear precedent for doing a similar thing with this major constitutional Bill. Secondly, does the Minister, with his long political experience, have any grounds for thinking—perhaps I have missed something—that there is strong public demand for the Fixed-term Parliaments Bill and for the Bill to abolish the House of Lords in its present form? If he cannot answer those questions reasonably positively, it would make sense to have a period of reflection before we go on with constitutional Bills in which there is no public interest and for which there is no public support.
Lord Cormack
My Lords, I will briefly but thoroughly endorse what the noble Lord, Lord Grocott, said. When one talks to people in the country, they say that they are desperately concerned about matters of health, education, taxation and all of those things. At the moment, they are deeply concerned about events in the Middle East and in other parts of the world. They find it quite incredible that the two Houses of Parliament, and this one in particular, should detain themselves by debating measures that are of no possible benefit to the public good, are diversionary and—to most people, whether it be in the club or the Dog and Duck—are of very little interest or relevance.
Along with the noble Lord, Lord Grocott, I urge that we have a period of reflection. We should recognise that the constitution is the most important part of our democratic heritage. It should be the plaything of nobody, and certainly the consolation prize of nobody. Therefore, I hope that the Minister, who will shortly address the House, will recognise the strength of feeling not only in the House but in the country, and will discuss with government business managers how the House can more properly and sensibly address issues that are of real importance to the people of this country.
Baroness Farrington of Ribbleton
My Lords, will the Minister confirm that there is nothing at present, without the Bill, to prevent the Conservative-led Government from serving a term of five years? The Bill is not necessary to achieve that end, unless the Government were to implode from within.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I have heard the comments of the noble Lord, Lord Grocott, my noble friend Lord Cormack and the noble Baroness, Lady Farrington. I am sorry to disappoint, but it is worth pointing out that this Bill was introduced in the other place on 22 July last year. It had its Second Reading in the other place on 13 September and was introduced in your Lordships’ House on 19 January this year. I do not think that, by any stretch of the imagination, it could be said that the Bill is being rushed through. There has been plenty of opportunity for scrutiny, and there will be further opportunity today and on a second day on Report in your Lordships’ House. This in no way diminishes the Government’s attention to the important issues facing this country—not least addressing the deficit that we inherited from the party opposite.
Lord Falconer of Thoroton
Lord Falconer of Thoroton
My Lords, the opportunity has not been taken, so we must now build on the work done by this House. I am very disappointed in the lack of interest in this rather staggeringly important constitutional Bill—which confirms that this House seems to have the same view as the people in the Dog and Duck to whom the noble Lord, Lord Cormack, referred. I will leave it to noble Lords to get to the Dog and Duck.
This is an important Bill: it will have an impact constitutionally. It is a Bill to take seriously in the course of this scrutiny at Report stage, which will last two days. I am grateful to the usual channels for providing two days, which seems entirely appropriate. It is time for this House to take decisions, building, I would respectfully submit, on the work that this House and the other place have done. When I say building on the work that has been done, I include the work done by the Select Committees in both Houses—the one chaired by Mr Graham Allen in the other place, and the one chaired by my noble friend Lady Jay. I am very glad to see my noble and learned friend Lord Goldsmith and other members of the committee in the Chamber today.
We as a party support fixed-term Parliaments. However, the investigations done by both Houses, including both Houses’ Select Committees, have increased Parliament’s doubts about fixed-term Parliaments. Our own committee, the House of Lords Select Committee on the Constitution, said that the case made by the Government for fixed-term Parliaments had “not been made out” to its satisfaction. A similar view was expressed by the House of Commons Select Committee.
There were three specific anxieties that underlay that view. The first was the length; both Select Committees concluded that four years was better than five. Secondly, both Select Committees concluded that the provisions could be abused by a Prime Minister who, with a majority in the House of Commons, could go for an election whenever he wanted. Thirdly, the Houses of Parliament were seeking to include in legislation the House conventions in determining when a Government lost the confidence of the House of Commons, which is a critical part of our constitution.
These anxieties were well expressed in good debates on Second Reading and in Committee in this House. In today’s Report stage we on this side of the House intend to try to address those specific anxieties, and to support the Government and other Members of the House who have tabled amendments to try to resolve them. However, resolving these specific problems will not deal with the underlying sense of anxiety which still exists in this House about the Bill.
In those circumstances, the opposition party—the Labour Party—intends to support the amendment to be introduced by a number of Cross-Benchers, including the noble Lords, Lord Pannick, Lord Butler of Brockwell and Lord Armstrong, and the noble Baroness, Lady Boothroyd. The effect of their amendment is that if there is to be a fixed-term Parliament after each subsequent election, it will have to be approved by a resolution of both Houses. That seems to us a suitable response to a constitutional Bill which is of such importance but which has been introduced without pre-legislative scrutiny, proper public consultation or an adequate response from the Government to the particular issues raised. So I preface my remarks by indicating our support for that amendment. It does not stop us going into the Bill’s detail or—in the context of a Bill with this provisional aspect—seeking to improve it.
The first three groups of amendments concern the length of a Parliament, the issue being whether it should be four or five years. We have evidence on this: I refer to the speech of the noble and learned Lord, Lord Lloyd of Berwick, in Committee. He completely demolished the argument that it is a matter of judgment—the implication being that if it is a matter of judgment, any period would do. If it is a matter of judgment, it is all the more important, as the noble and learned Lord pointed out, to analyse what the “good judges” have been saying about what the right conclusion is. The first judge, I would respectfully ask the Government to bear in mind, is the person who introduced the current arrangements, namely Herbert Asquith. When introducing them in 1911, he rightly said that a maximum of five years was likely to produce Parliaments lasting about four years, which is close enough to the previous election or the coming election to ensure that Parliament remained properly accountable to the people.
The weight of academic evidence given to both Select Committees was overwhelmingly of the view that a fixed-term Parliament should be four years rather than five. Professor Robert Hazell told the Commons Select Committee:
“The balance between four and five years is more even than folk memory might suggest. But those parliaments which lasted for five years did so because the government had become unpopular and did not want to hold an earlier election. The Prime Minister stayed on hoping that his or her party's luck might change. It did not, save for the case of John Major, who scraped through with a narrow majority in 1992”.
Professor Blackburn, who has done a lot of work on this, was quoted by the noble and learned Lord, Lord Lloyd of Berwick, in his speech. The Select Committee in the Commons reported:
“Professor Blackburn suggested to us that when governments have lasted five years between elections, ‘the last year of every one has been pretty awful’”.
The Bill seeks to make it the norm that we should have five years. I would respectfully ask this House, if it wishes to have a proper process of scrutiny, to acknowledge where the weight of evidence is from all those who have looked at the issue, including Members of this House. I also pray in aid the following people: Mr Tony Wright, who introduced a Bill saying four years; my noble friend Lord Rooker, who is greatly respected in this House, and who introduced a Private Member's Bill in the House of Commons saying four years; and Mr David Howarth, no longer an MP, who introduced a Bill for fixed-term Parliaments which said four years and had the support, as co-sponsors of the Bill, of Mr Simon Hughes, Mr Chris Huhne, Mr Nick Clegg, Mr Danny Alexander, Mr David Heath, Ms Lynne Featherstone and Mr Paul Burstow. I mention these names only because every single one of them, with the exception of Mr Simon Hughes, is now a Minister in a Government proposing five years. Furthermore, the noble Lord, Lord Plant, who is not in his place, conducted an inquiry into our constitution in 1991 and 1992 and he recommended that there should be fixed-term Parliaments. He also said four years. The Liberal Democrats, as they proudly point out, have said for many years that there should be fixed-term Parliaments and that they should be four years.
Perhaps I may say with respect that if you are responding to a proper analysis of the evidence, the conclusion would be four years, not five years. If it should be four years, should it be four years for this Parliament or should it be five years for this Parliament and four years for subsequent Parliaments? In Committee, the noble Lord, Lord Cormack, said—I suggest with a heavy heart—that it should be five years to give this Government their coalition agreement, but four years thereafter. As I made clear on 21 March at cols. 505 and 512, I do not support that siren song. I have three reasons for not supporting it.
First, if five years is wrong for the future, it must be wrong for this Parliament. Secondly, if the reason that five years is wrong is that you end up with an “awful” fifth year, to quote Professor Blackburn, imagine the circumstances that we are currently facing. We have a number of politicians, the Liberal Democrats, who are greatly respected by all in this House. Let us assume that they do what every other politician in their position—that is, facing defeat—does; namely, they cling on until the last moment. If we pass a Fixed-term Parliament Bill of five years, we will allow the Liberal Democrats to do what MPs have done since time immemorial—to cling on to the bitter end. We are going to have an awful fifth year. I strongly recommend not succumbing to the siren song of five years for this Parliament and four for the next.
The third reason that we should not succumb to the argument is this. I can imagine no worse precedent than a Government coming into power and setting in place special arrangements for how long the first Government should be and then changing the constitution for everyone else thereafter.
Lord Phillips of Sudbury
I commend the noble and learned Lord on the eloquence and persuasiveness of what he has been saying so far, but might it be the case that the fifth-year syndrome he has described, and to which Professor Hazell referred—that the fifth year is always difficult—might just be a final-year syndrome? Might it not then become the fourth year that would be misery hereafter?
Lord Falconer of Thoroton
No, I do not think it would. Can you identify a third or fourth year which has been as been as awful as the fourth or fifth year? I also refer to what was said during debates in Committee by the professor and noble Lord, Lord Norton of Louth, who sadly is not in his place. He said that it was extremely unlikely that any Government would have something proper to fill in their fifth year. So there is no historical precedent for the fourth year being as bad as the fifth year, nor do I think that if the fixed term were four years would the third to fourth year become awful. But that is a matter of judgment for this House to make. My own judgment of it is that the third to fourth year would not be remotely as bad as the awful fifth years that we have had on previous occasions.
We in the Opposition are going to vote for Amendment 1, which alters the date of the first election from five years from the date of the last election to four years, and we are then going to vote for four years thereafter. We are going to vote for what might be called the “Baroness Boothroyd, Lord Pannick, Lord Butler of Brockwell, Lord Armstrong” amendment because we do not think that the Government dealt effectively with the fundamental criticisms of fixed terms.
Lord Rennard
The previous Labour Prime Minister of course went for five years. If this legislation is passed in its current form, would a future Labour Government amend it to change back the fixed term from five years to four years?
Lord Falconer of Thoroton
I cannot commit a future Labour Government, but people should form their own view about whether fifth years have been good years. We should look at this in a non-partisan way. Do Mr Major or other Labour Prime Ministers in the past who have gone a fifth year fit the rubric of Professor Hazell; namely, people hanging on to the last moment and ending up in a situation where there is a pretty awful year? Four years is good, because it means that you are accountable to the electorate much more regularly. It would probably have meant three or four more general elections since 1945. Let us remember what the much revered Deputy Prime Minister told the Select Committees. He said that the reason for which these provisions were being introduced was to make politicians more accountable to the electorate. It is quite hard to see how you make politicians more accountable to the electorate by reducing the number of general elections. In those circumstances, we will vote for four years for this Parliament, for four years for the future and for the Boothroyd/Butler/Armstrong/Pannick amendment. I beg to move.
The Lord Speaker (Baroness Hayman)
I have to inform the House that if Amendment 1 is agreed to, I cannot call Amendment 2 by reason of pre-emption.
Lord Lloyd of Berwick
My Lords, I support four years rather than five years for the reasons which I spelt out in Committee and to which I had intended to return when we reached Amendment 3, but maybe I should address that a little earlier in view of certain observations made by the noble and learned Lord, Lord Falconer, with which I agree.
I put my name to Amendment 3 last week because it followed very largely the amendment which was debated at length in Committee. I was therefore surprised to receive an e-mail over the weekend informing me that the noble and learned Lord was seeking to withdraw Amendment 3 and to substitute Amendments 1 and 2, which we now have, and asking me whether I would support them instead. I say at once that I cannot support Amendment 1.
At Second Reading, the noble and learned Lord accepted that it is open to any Government at any stage to indicate the date of the next election. That can be done within existing constitutional arrangements, as I believe everybody accepts. It did not require an Act of Parliament to establish May 2015 as the date for the next general election, but that is the course that the Government have chosen to take. There is nothing as such that is wrong with that course; it is the date that they have chosen and have put in the Bill.
If, therefore, May 2015 was to be challenged by the Opposition, surely it should have been challenged in Committee and not left to the 59th minute of the 11th hour before Report. Far from challenging that date, the amendment in Committee built on Clause 1(2). It assumed May 2015 and then substituted in Clause 1(3) “fourth” for “fifth”, and that is the amendment which I supported and still support.
It is true that, in response to the noble and learned Lord, Lord Wallace of Tankerness, on 21 March at col. 508, the noble and learned Lord, Lord Falconer, said that it had always been the Opposition’s intention to challenge the date in Clause 1(2), but that was not what they did. It is true also that at the end of the debate in Committee, it was argued that if four years was to be the norm for future Governments, it should be the norm for this Government. I do not agree. The Select Committee pointed out in paragraph 17 of its report the crucial,
“distinction between ‘the immediate concern of the Government’”—
this Government—
“‘that it should continue for five years’ and ‘the long-term issue’”,
of what should be the norm for future Governments. Those are distinct issues and it is the long-term issue to which all the evidence given in the Select Committee was directed.
It is the same as the distinction that was drawn very clearly by the noble Lord, Lord Cormack. He accepted May 2015 as the date for this Government because that is the date that any Government could have fixed. He thought that it was unnecessary to include it in an Act of Parliament, but there it is. Nevertheless, he favoured four years thereafter.
Lord Falconer of Thoroton
Is it not right that the same restrictions apply to this Government in this Parliament up to 2015 as would apply after 2015? If the same restrictions on having a general election apply in this Parliament, why is five years okay for this Parliament but not the next?
Lord Lloyd of Berwick
I am grateful for the noble and learned Lord's intervention, but he is ignoring the crucial distinction between the two issues. One is the issue as to what this Government are going to do. He accepts as we all accept that this Government can choose 2015 if they want. The issue that we ought to be discussing is not for this Government but for future Governments. It is entirely consistent, if I may say so, for us to accept May 2015 for this Government yet to say that the norm hereafter should be only four years.
Baroness Jay of Paddington
I wonder if I could draw the noble and learned Lord’s attention to the conclusion of the Select Committee report. He is right that in paragraph 17 of our report we distinguished between the long and the short term. That was in the context of the broader discussion of the relevance of fixed-term Parliaments. But when we came to draw up our conclusions, we said that,
“the majority of the Committee consider that a four year term should be adopted for any fixed-term parliamentary arrangement at Westminster”.
We went on to write to the Minister, Mr Mark Harper, to say that our first conclusion stated that:
“We acknowledge the political imperative behind the coalition Government's wish to state in advance its intent to govern for the full five year term, but this could have been achieved under the current constitutional conventions”.
The noble and learned Lord has already drawn attention to that point. We did not get a response from the Government on it and I understand that there has been no particular response forthcoming. But I emphasise that the conclusion of the committee was that a four-year term was preferable.
Lord Lloyd of Berwick
I certainly had not read the report, which I read carefully, as having drawn the distinction that I am seeking to draw between what this Government are going to do now and what future Governments should do. I had certainly not understood the report as suggesting that the committee would support four years for this Government. Thus, I am setting aside what we all accept—that any Government can choose when they wish to go to the electorate. That is all I have to say on Amendment 1. If it is put to the vote—and it appears that it will be—I shall vote against it.
Since the noble and learned Lord has gone on to develop the whole argument in relation to Amendments 1 and 3, perhaps it would be convenient for the House for me to develop my reasons for saying why I agree with him that for subsequent Parliaments the norm should be four years rather than five. That was, as he said, the clear conclusion, which has been confirmed, of the Select Committee. The reason it gave was an obvious one: that five years,
“would be inconsistent with the Government’s stated aim of making the legislature more accountable”.
With that, I wholly agree. Indeed, it is obvious.
It is not surprising that the Select Committee reached that view, since it was the unanimous view of all the experts who gave evidence before the committee, including such acknowledged experts as Professor Dawn Oliver and Professor Vernon Bogdanor. Exactly the same was true of all the experts who gave evidence in the Political and Constitutional Reform Committee of the House of Commons, including Professor Robert Hazell and Professor Blackburn. As has been pointed out, Professor Blackburn is particularly important because he has made a specific study of this issue.
If some of this evidence had been one way and some the other, or indeed if it had been subjected to any sustained challenge when it was given, one could understand the Government sticking with their five years. However, the evidence was all one way and was virtually unchallenged. That evidence simply cannot be brushed aside or disregarded, otherwise there is really no point in having Select Committees, or them listening to evidence, because the witnesses would all be wasting their time. I cannot help thinking that if the Government had been aware of the expert evidence that was subsequently given, both in the House of Commons and here, they would not have chosen five years in the first place. Indeed, the point was almost conceded—as your Lordships may remember—by the Minister in charge of the Bill. When he was asked by the noble Lord, Lord Powell, in the course of his oral evidence, he said:
“If we had been starting with a clean sheet of paper, we might have reached a different conclusion, but we started from our existing position where the length of a Parliament is up to five years”.
I simply cannot understand the logic of that reasoning. The question is what the norm is, not how it relates to the existing maximum.
Alongside all that weight of evidence, many noble Lords also spoke at Second Reading in support: the noble Lords, Lord Hennessy, Lord Grocott, Lord Norton and Lord Morgan, and the noble Baroness, Lady Taylor, were all in favour of four years. To that list we must now add the noble and gallant Lord, Lord Stirrup—I do not know whether he is in his place—who made a most impressive speech at Committee in favour of four years; as well as my noble friend Lord Martin, and of course the noble Lord, Lord Cormack, himself. All these noble Lords were well aware of the only argument that I know of in favour of five years, which is roughly as follows: it takes an incoming Government a year to get going and the last year is spent in preparing for the election, which leaves only three years of a five-year Government for implementing policy. If there is anything in that argument at all—and I suggest there is nothing—it is surely outweighed by the need to make Parliament more, rather than less, accountable to the electorate, The electorate should be able to get rid of Governments who are tired and unpopular, for whatever reason, after four years rather than five. That is why, while I will support the Government on Amendment 1, I hope that they will accept Amendment 3.
Lord Cormack
My Lords, the noble and learned Lord, Lord Lloyd of Berwick, will hardly be surprised that I find myself very much in agreement. I am sorry that the noble and learned Lord, Lord Falconer, suggested that I sang a siren song; I do not think that I did, but I will risk a siren encore. The noble and learned Lord, Lord Lloyd of Berwick, demonstrated with impeccable logic that there is nothing contradictory in the present Government, having said that they wish to serve for a full five years, doing that, and, having sent a piece of legislation to this House and asked for our opinion, in our saying, “Okay, if you want to do that, do it, but thereafter we believe that it should be four years”. That seems to be an entirely reasonable position to take.
Every moment of our debates on the Bill—and I have been present for almost all of them—has illustrated to me that this is an unnecessary and unfortunate exercise. I also think that every word uttered by the noble and learned Lord, as well as the intervention of the noble Baroness, Lady Jay, underlines the need for pre-legislative scrutiny of a Bill of this sort. Had the Government had the good sense to subject the Bill to such scrutiny, all the evidence to which the noble and learned Lord, Lord Lloyd of Berwick, has just referred would have been heard and perhaps Mr Harper would have made up his mind rather differently. He might even have concluded by asking what the point of this exercise is.
The point of the exercise is that the Government, having brought themselves together as a coalition—I admire the courage of all the parties in doing that and I support the coalition, as I have made plain on many occasions—wanted to try to reinforce that position by making a statement or declaration that they would serve for five years. That declaration would of itself have been quite sufficient, and I am glad to see the noble Baroness, Lady Boothroyd, nodding assent at this point. We did not need to take up time with this legislation—a point already referred to by the noble Lord, Lord Grocott, and by me—and I regret that it is taking so much time. However, if we are to fulfil the constitutional duty of this House, we must try to put the Bill into somewhat better order than it was in when it came to us. That has not been an easy task with any of the Bills that we have recently had the privilege of examining, and the same will apply tomorrow.
Therefore, I will take the same line in the Division Lobbies, if it is necessary so to do, as the noble and learned Lord, Lord Lloyd of Berwick. I do not think that the position to which I referred at an earlier stage of the Bill was illogical or unsound, and I shall stand by that, but I shall certainly vote for the sunset clause that stands in the name of the noble Baroness and her noble friends on the Cross Benches.
Lord Tyler
The noble Lord has been a doughty defender of the constitution for many years in both Houses. I respect him very much for that and I have expressed that view previously. Can he explain to your Lordships why he now thinks, after 100 years of experience of a quinquennial maximum for Parliament, we should suddenly make a radical change to a maximum of four years? What particular experience over those 100 years has changed his attitude?
Lord Cormack
My memory does not go back throughout the whole of that century, as the noble Lord knows. In a sense, I have already answered that question because I do not think that we should be wasting our time with this Bill at all. I consider it to be unnecessary but, as the Government have determined that we should have fixed-term Parliaments, it is right that we should address the term. It is perfectly reasonable to say, “All right, you’ve made your statement that you wish to have five years. Please have them, but we believe, having weighed the evidence placed before committees of both Houses, that for the future it should be four years”. However, I know as well as the noble Lord and every noble Lord present today that no Parliament can bind its successor, and the first Act of a new Parliament could be to repeal the whole shooting match—it might be the best thing that it could do, but that is another matter entirely.
The point that I was about to make when the noble Lord intervened was that I believe there is a lot to be said in almost every constitutional measure for a sunset clause. It would provide the opportunity to take stock, to reflect and to say, “Is this really what we want to do? Is this really the way forward?” Therefore, unless my noble and learned friend Lord Wallace of Tankerness, who is a very fair-minded man, is able to meet us on that point, I would find myself in the illustrious company of the noble Baroness, Lady Boothroyd, and her friends at the appropriate time, but not before.
Lord Goldsmith
My Lords, but for one point, I entirely agree with the noble and learned Lord, Lord Lloyd of Berwick. On the principal question of the term, he and my noble and learned friend Lord Falconer of Thoroton are right: all the evidence points one way—the evidence of international experience and of the experts who were before the Select Committee on the Constitution, on which I also had the privilege to serve—and all the history points in favour of four years.
The principle points are in favour of it as well. As has already been pointed out, the constitutional programme put forward by the coalition is supposed to be a programme of empowering the people, not disempowering them. It is worth reminding ourselves of what was said by the Deputy Prime Minister in his evidence to the Select Committee that,
“it is an unambiguous judgment on our part that reducing the power of the executive, seeking to boost the power of the legislature, making the legislatures more accountable to people … collectively introduces the mechanisms by which people can exercise greater control over politicians”.
Increasing the term of a Parliament so that it necessarily lasts for five years cannot conceivably meet those objectives, and I have never heard any explanation given by the coalition as to how it does. Nor, indeed, have we heard any explanation from the coalition as to why five years was chosen. The noble and learned Lord, Lord Lloyd of Berwick, pointed to the evidence that was given to the committee which illustrates that the figure was chosen before the evidence was there.
It is worth also spending a moment more on the purpose of pre-legislative scrutiny. It is not an answer, as the noble and learned Lord, Lord Wallace of Tankerness, said, to say, “We are scrutinising it”.
Lord Falconer of Thoroton
I apologise for interrupting my noble and learned friend Lord Goldsmith but he is obviously unaware that there is evidence as to how the five years came in. Mr David Laws’ book states that Andrew Stunnell pointed out that,
“trust and confidence was very important to us, and that we wouldn’t want to find the PM calling an election at a time that did not suit us. ‘That works both ways!’ said William Hague. We mentioned that our policy”—
this is the Liberal Democrats—
“was for four-year, fixed-term parliaments. George Osborne made the point that five-year parliaments were better, as they allowed governments to get into implementing their plans … We made no objection to this, and Britain was on its way to five-year, fixed-term parliaments for the first time in its history”.
I thought my noble and learned friend would like to know what the evidence was.
Lord Goldsmith
Noble Lords will notice from this that over many years, both in this House and at the Bar before, my noble and learned friend and I have made quite a good double act. I intended to come to that very point shortly but I do not blame him for trying to get in first. As an advocate, it is important always to make a point that you think is a good one before the other advocate does so.
On the point about pre-legislative scrutiny, it is not only a question of having an opportunity to scrutinise in this House; the committee asked the Minister responsible, “What do the people think about this? Have you asked the people what they think not only about the principle but also the term?”. As noble Lords will see in the evidence, that has never been done; there has been no attempt to consult on that kind of question. The Minister drew attention to two newspaper polls and a survey by the Scottish Youth Parliament, which were no doubt very worthy, but, as far as I am aware, they were not on the question of term but simply on the question of fixed-term Parliaments.
So the Government had nothing to support their view other—and we come now to the evidence to which my noble and learned friend Lord Falconer has drawn attention—than a political decision, a political compromise, that this Parliament was going to last for five years. We all agree in this House that that could have been done by a statement by the Government that they were going to do that and sticking to their guns. It did not need a Fixed-term Parliament Bill at all.
That brings me to the point made by the noble and learned Lord, Lord Lloyd of Berwick, that we should allow the Government to have five years this time round and four years thereafter. With respect, that makes no sense to me at all. The recommendation in the report from the Select Committee on the Constitution was not that it should be five years this time and four years thereafter. It was very clear in saying at paragraph 62 that,
“the majority of the Committee consider that a four-year term should be adopted for any fixed-term Parliamentary arrangement”.
When I put my name to this, I did not for a moment think that the report was saying that we should let the Government have five years this time and four years thereafter. They could have achieved that if they had done what the committee wanted, which was to spend the time during this Parliament to consult properly, reach a view, legislate for hereafter but not to rush this through in this way. So I have no hesitation at all in rejecting the shabby compromise that ended up with a five-year term in the discussions to which my noble and learned friend Lord Falconer has referred, and I would reject any compromise on four years. If it is to be four years for a fixed-term, it should be four years now and hereafter.
Lord Lloyd of Berwick
The noble and learned Lord will not have overlooked paragraph 17 of the report, which explains the important distinction between the Government’s immediate concern that they should continue for five years and the long-term issue of the fixed-term Parliament.
Lord Goldsmith
That is the point. The Government could have said that they had decided that they wanted the term to last for five years, that they would do that by making a commitment now for it to last for five years, unless there are unforeseen circumstances, and that they would legislate for future fixed-term Parliaments of a different level. It was not at all a question of the committee recognising that five years, as a legislative fixed-term as opposed to as a result of the exercise of prerogative, was right for this Parliament.
Lord Pannick
My Lords, I, too, support these amendments. If we are to have fixed-term Parliaments, a change to the constitutional practice over the past 100 years advocated by the noble Lord, Lord Tyler, then four years is manifestly preferable to five. The Constitution Committee, of which I, too, am a member, heard evidence from a vast number of witnesses who advocated four years. Almost all of them did so on one simple, fundamental ground: you do not enhance the accountability of Parliament to the people, which is the aim stated in the coalition agreement, by reducing in practice the length of time between general elections.
There was a further piece of evidence, which I add to that cited by the noble and learned Lord, Lord Falconer of Thoroton, which came from the Deputy Prime Minister himself. At paragraph 57 of our report, we quote the extraordinary evidence given to us by the Deputy Prime Minister last October, when we considered the Government’s programme for constitutional reform. Mr Clegg told us that he did not accept that,
“people are straining at the bit to vote in elections more frequently”.
He added that he had never met anyone who had said to him,
“‘Well, I kind of like voting every four years.’”
I can introduce the Deputy Prime Minister to many people in the Dog and Duck referred to by the noble Lord, Lord Cormack, who are very keen to exercise a right to vote in general elections at least every four years to determine who represents them in Parliament and what the policies of their Government should be.
It is quite bizarre that the Government's response to the diminution in public respect for Parliament and the search for methods of making Members of Parliament more accountable to their constituents should be to propose to insulate Members of Parliament so that there will be a longer period, in practice, before they are answerable at the ballot box. When the Minister responds to this debate, will he please tell the House how a five-year term promotes accountability?
Lord Renton of Mount Harry
My Lords, I must confess that I was in the minority on the report of the committee that the noble Baroness, Lady Jay, chaired. I was one of two people who felt that it would be incorrect to move towards always having four-year Parliaments. My reason for this was much as the noble and learned Lord, Lord Lloyd, a very old friend of mine, expressed it. It is just that if you only have four years for a Parliament, you spend your first year in power finding out what it is all about, getting to know your civil servants and how the Treasury works—how you squeeze a bit more money out of it and so forth. In four years, you then have just two years in which to put your thoughts, policy and plans for the future into effect. In the fourth year, you are quite simply back thinking, “How are we going to win the next one?”. That is wrong.
From my experience, five years would therefore give a Government at least three years in the middle to think what they want to do and how they will put it over, so that is the right way to go. To those who do not know me well—there are quite a few present today who do—the reason I came to that in our debate, which the noble Baroness, Lady Jay, chaired very well, was that I was in Parliament in the Commons for 23 years and have been in this House for 11 or 12. I served in three Governments and I therefore got a fairly and inevitably tough view of how difficult it is being in Government and getting on with your policies. I was also then a Government Chief Whip but that is another story—it is not like being a Minister at all.
Lord Renton of Mount Harry
After my personal experience through those years, I therefore think that four years fixed for a Government is not enough. I would much rather see it for five years, whether it is fixed or can be changed by the next Parliament. I beg the pardon of my noble friend, who is someone I know very well.
Lord Cormack
Indeed, and I remember my Chief Whip with great affection, but would my noble friend not accept that the two most successful periods of Conservative Government in recent history were both of four years?
Lord Renton of Mount Harry
That is the start of a very good argument as to whether they were the most successful. It much depends, obviously, on who is the Prime Minister and who is the Chancellor. That will have an enormous effect and will make one Government better than the other, simply because the Ministers at the top are better.
Lord Lea of Crondall
Would the noble Lord like to reflect again on the doctrine that Governments tend to do nothing in their first year? Would he like me to enumerate how many major Bills—not just any little old Bills to do with the upkeep of the Battersea dogs’ home—have been done in this Government’s first year? Perhaps he has that in a list or perhaps the Chief Whip would like to enumerate it. It is exactly one year and I am sure it has been quite a busy one.
Lord Renton of Mount Harry
Yes, that is true and we know very well at the moment that this Government, despite having to be a coalition, have lots of thoughts planned, but there is a great deal of difference between planning in advance and getting on with the really difficult problems when you have got to know what the Treasury is promising you for money in the future, et cetera. I am not going to go on repeating myself, but I would very much like colleagues in this House to think carefully about the real advantages of having a five-year Parliament over a four-year one.
Lord Richard
My Lords, the noble Lord is dealing with this great difficulty of Governments coming in, getting to know their civil servants and all the rest of it. That, of course, assumes that there has been a change of Government at the election. If there has not been a change of Government at the election, surely you do not need that initial year.
Lord Renton of Mount Harry
I am sorry, but I do not really follow the point that the noble Lord is making.
Lord Richard
The noble Lord says that you need a five-year Parliament because you spend the first year getting to know your civil servants, finding out what the Treasury is going to say and generally getting your tackle in order. If there has not been a change of Government, if it is the same Government coming in as was governing before the election, surely none of that applies.
Lord Renton of Mount Harry
I think that is a perfectly fair point; I cede the point, but the fact is that Governments do change a great deal. We have seen it in recent years and it will go on. Others will win; they will come in for the first time. Without wishing to go into detail, I totally agree with the description by the noble and learned Lord, Lord Lloyd, of what a five-year Parliament could do, but I think that that is the right way to go and that this House should be very careful before backing a four-year Parliament.
Baroness Farrington of Ribbleton
My Lords, would the noble Lord care to ponder on the thought that the British public might wish to have a Government that is taking into account public opinion once every four years as opposed to once every five years? His argument is that the fifth year is the year when the Government of the day is having regard to the next election and public opinion. In my experience, the public form an opinion about Governments fairly quickly and to ask them to wait for five years before expressing that view is rather long.
Lord Renton of Mount Harry
I only make the point, before I give way to others, that it is very interesting to see just how many people voted on the AV matter and all that a few days ago: just 42 per cent. One may think that most of the public are longing and waiting to have a vote; it is not true. Most members of the public are very difficult to interest in politics and many members of the public would much rather only have to vote once every five years rather than every four.
Lord Owen
My Lords, I would like to inject, not legal points, but a few raw political questions. Why are we being asked for this legislation? It is because a coalition was formed. If we go back to the circumstances in which that coalition was formed, the general view was that the purpose of that coalition, above all else, was to deliver a programme, over a fairly long period, to deal with the very serious economic situation, namely, a structural fiscal deficit. It seems to me not an accident that in the discussions that took place—perhaps we should call them negotiations—the person who was in favour of five years was the present Chancellor of the Exchequer, according to the report we have had. I think that was a very reasonable assessment of how long it would take to deal with the economic problems. Given the present situation, where the Government’s forecasts are already not fulfilling the growth which they themselves predicted, we may well find that this goes on for longer than five years.
The political reality is that coalitions like fixed-term Parliaments. Why? Because they know that, unless there is a restriction on a Prime Minister’s right to call for an election, which by common precedent the Queen or monarch grants after a period of six months of government, in order to curb that one of the coalition partners, namely the most junior or smaller coalition partner, wants to be sure that the Prime Minister cannot cut and run when the opinion polls are in favour of the majority part of the coalition at the disadvantage of the minority part of the coalition. You can have all the legal arguments that you like but this seems to me purely practical, sensible politics. It would be quite wrong to deprive the coalition—if it wished it, which is what this is predominantly about—of the ability to exercise its right to go for five years, which is the constitutional precedent. It wishes to lock itself into a situation where only under rather exceptional circumstances can an election be called during the five-year period. That is perfectly legitimate. I am in favour of five years, as the Government wish, and in favour of a fixed-term Parliament as a mechanism for making coalitions successful. In Europe we have seen that coalitions can be successful but they need certain parameters, one of which is knowing how long they are likely to last.
The wider question, which is really the issue of debate, is: should the period be four years or five? I am not sure. The great advantage of the British constitution has been its flexibility. Most people consider five years the limit but, for a variety of very good reasons, Prime Ministers with large majorities, both Margaret Thatcher and Tony Blair, have chosen to go after four years—broadly speaking, for the benefit of the country as a whole. I am against putting restrictions on this, so I am open-minded about trying to retain some flexibility within a fixed-term Parliament. I am therefore not convinced by the argument that we should choose four years. I am attracted to an interesting amendment that is to be moved later, although I do not want in any way to pre-empt it.
My fundamental point about fixed-term Parliaments, if we are making this legislation for the future, is that this is a profound constitutional change. It deserves a referendum—a proper referendum. What we have just experienced was not a proper referendum but a rigged one. If we had had a proper referendum, there would have been three options on the ballot paper. I do not know what the right choice is for a referendum on fixed-term Parliaments; some people may say that it is three years, others four or five. Maybe there should be only two options. However, if there is a body of opinion in the country that thinks that, like Australia, you should have only a three-year term, that should be represented in a referendum.
Referendums are not to be part of a political fix; they are part of our constitutional future. If we are to have fixed-term Parliaments—I hope that eventually we do; I would support them—then let us have a proper referendum, let the period be something that people can reflect on and make their judgment, and let it not be handed down to them as a political fix. There is a big warning in the referendum that we have just gone through. The country spotted a manipulative political fix of a referendum. People knew and felt that they ought to have been given the choice of whether there should be proportional representation. Furthermore, they also spotted something else: they should have been given that choice after the coalition had been in office for at least a period of three to four years so that they could make a judgment on coalitions. Let us have an end to rigged referendums. Let us accept referendums on major constitutional questions, and let them be open and proper choices. Since I think that ultimately we will have to have another referendum on European entry—I do not particularly relish it, but I suspect that it is coming—let us learn that that referendum must be a proper choice too.
On the question of sunset clauses or anything like that, I see great flexibility when an incoming Government are formed. I like the idea that when they are formed they choose under what restriction they will operate. If they are a coalition, as likely as not they will choose that they wish to have the rigidity, if you like, of a fixed term, and let them choose whether it will be three years, four years or five. That seems to me to be their choice. If they come in with a large majority but do not want to have the inability to call an election earlier, I am not sure that that should not be part of the flexibility of the constitution. If they have a full majority, they can legislate for it anyhow. We might do better to recognise this.
Lord Wills
My Lords, I rise briefly to support this amendment, primarily because it will give the Government a chance to reconsider a key part of the Bill. The case for a fixed term of four years is not beyond argument, although my noble and learned friend Lord Falconer and many other noble Lords have made a good case for it being so. However, I agree with what the noble and learned Lord, Lord Wallace of Tankerness, said at Second Reading: whether a term should be of four or five years is in the end “a question of judgment”. That judgment should be informed by principle. I have struggled hard to find any principle advanced by the Government in favour of the Bill. Indeed, the noble and learned Lord, Lord Wallace, at Second Reading seemed to base the argument primarily on precedent—on what had happened in our recent history, in several countries in the Inter-Parliamentary Union, and so on.
However, there is a principled argument for the Government’s position. It was put forward, for example, from the Cross Benches, by the noble Lords, Lord Armstrong and Lord Butler, from all their experience of serving the state over many years. It is an argument rooted in the importance of stability for the governance of this country. This is not a negligible argument, but it comes up against the argument that accountability should be paramount. That is a judgment that I support. More importantly, it is a judgment that almost all noble Lords who have so far spoken in these debates have favoured. It is overwhelmingly, as we have heard, the view of all the experts who have given evidence to both Houses of Parliament. The search for an accommodation between the principles of accountability and stability is fundamental to the constitutional arrangements of all modern democracies. The question that still has not been adequately addressed in all the parliamentary scrutiny of this legislation is: who should make the decision about how best to make that accommodation?
Today we have heard the case for greater consultation. Even if the Government did not take the decision in favour of five years quite as casually and self-interestedly as the account given by Mr David Laws MP suggests, it is still a fact that there has been no public consultation on this fundamental issue. This legislation seeks to determine the shape of future Parliaments, yet those most affected by it—the voters of this country—have not yet been asked what they think about the judgment that the Government have made. They should be asked. We have heard a great deal about the views of academic experts and politicians; what about the people we all serve? I am not in favour of referendums in general. I am certainly not in favour of a referendum on this point. However, I am in favour of the Government embarking on one of the many forms of public engagement that already exist—exercises in deliberative democracy and so on. They are available to the Government, who should now take advantage of them.
Listening to all the rhetoric of the Deputy Prime Minister and the Prime Minister, you would think they believed in the greater engagement of the public in policy formation between elections. Here is an opportunity for them to put some substance into all this airy rhetoric. If your Lordships support this amendment, I fear it will not change the Government’s mind on how long a term should be. This Government have shown very little inclination to listen to your Lordships’ House on all their measures of constitutional reform. However, the amendment will at least provide an opportunity for taking a pause. My noble friend Lord Grocott made this case persuasively at the start of this debate.
If the Government can take a pause to consult widely on measures such as NHS reform—profoundly important as they are—surely they can do the same with this important measure of constitutional reform. I hope that your Lordships will give the Government an opportunity to do so.
Lord Rennard
My Lords, I set out in Committee three reasons why I felt strongly that a fixed-term Parliament of five years was more appropriate than one of four years. I shall not repeat those arguments at length. However, since I made the first argument there has been even more discussion about the principle of pre-legislative scrutiny, and there has been a considerable demand in this House and elsewhere for more pre-legislative scrutiny. A five-year fixed-term Parliament in many ways incentivises a Government to have more pre-legislative scrutiny than has previously been the case. If a Government feel that they may be in for only four years, and there was a four-year fixed-term Parliament, we would have rather less pre-legislative scrutiny than would happen if they knew they would last for five years.
I agree with the noble Lord, Lord Renton, who said earlier that there is a clear danger that a four-year Parliament would not provide much time in the first year for pre-legislative scrutiny, and we all know that in the last year of almost any Parliament there is perhaps more attention on campaigning than on legislating. This would mean that in a four-year fixed-term Parliament perhaps only two years would be devoted to serious legislative work. Many people believe that in the model of the United States, which has a four-year fixed-term, there are only two years of effective governing and two years of campaigning.
Secondly, I pointed out in Committee—I thought that perhaps the noble Lord, Lord Wills, would have said something about this—that there should be consistency in the way in which you conduct elections in terms of how you regulate constituency election expenditure. The previous Labour Government brought in rules that kick in four years and seven months after a general election and last for 60 months after the previous general election. In other words, the rules last to control expenditure at constituency level in general elections only for the final six months of a five-year Parliament. As we said in debates a year or two ago, it is not logical to have rules controlling constituency expenditure in that last six months of a five-year Parliament unless there is a five-year fixed-term Parliament.
My third argument relates to our recent debates of great controversy. However, we decided in legislation that reviews of parliamentary constituency boundaries would take place every five years. The principle of revising constituency boundaries to take into account shifting population is recognised by all parties. However, the frequency with which that takes place is the subject of some dispute. Revising constituency boundaries more frequently than every five years would have many disadvantages and would certainly be unpopular in another place. The reviews of constituency boundaries should be synchronised with general elections.
There is, however, an additional argument that points in favour of a five-year fixed term. The Scottish Parliament and the Welsh Assembly are about to begin five-year terms, and this is likely to become the norm for future elections to the Scottish Parliament and Welsh Assembly. There is no appetite at all in Scotland and Wales—
Lord Martin of Springburn
I thank the noble Lord, but it is my understanding that the five years was a facility given by this Government so that there would be no clash with other elections. Four years was the norm. The five years was an accommodation that suited this Government.
Lord Rennard
In response to demand from the Scottish Parliament and the Welsh Assembly not to have a clash in 2015, the Government said that they would facilitate whatever was required to postpone the elections to the Scottish Parliament and the Welsh Assembly for a five-year, rather than a four-year, term. My understanding is that that will now become the norm in Scotland and Wales, and that people in Scotland and Wales have no desire for their parliamentary and Assembly elections to coincide with Westminster elections.
A year ago, in the general election campaign, both the Labour Party and the Liberal Democrats said in manifestos that they wanted fixed-term Parliaments, but neither of them said for how long they should last. David Cameron said before the general election that he would seriously consider the principle of fixed-term Parliaments, but again did not say how long the period should be. So none of the three main parties specified a year ago during the general election campaign what period would be appropriate for fixed-term Parliaments.
For all the reasons I have given—the fact that there will be more pre-legislative scrutiny; we will tie in constituency election expenditure; we will tie in the boundary reviews; and we will tie in processes with the Scottish and Welsh Parliaments—I think that a fixed-term Parliament of five years is most appropriate.
Baroness Farrington of Ribbleton
Before the noble Lord sits down, I hope that he will forgive me for feeling that he might be using a slightly cynical argument. I have listened carefully, because I know how experienced he is in politics, but given that the coalition Government came in and announced that there would be a five-year term and then produced major constitutional change legislation without pre-legislative scrutiny, I find that argument hard to take. The noble Lord referred to his experience in the referendum campaign. My experience was that more people were saying, “When can we have a general election?” than even were fired up on AV. Those who claim that the number of people turning out in the referendum on AV is an indication of how strongly people feel about the Government may be wrong.
Lord Rennard
With great respect to the noble Baroness, I did not refer in my remarks to the events of last week in the referendum. I was simply making the point that so many people here argue for more pre-legislative scrutiny. I believe that there would be more pre-legislative scrutiny in a five-year fixed term Parliament than there would in a four-year one, because in a four-year one, the Government would be so anxious to do so much that they would not have as much pre-legislative scrutiny.
Lord Goldsmith
Before the noble Lord sits down, as I think that he is the first Liberal Democrat who has spoken on Report, is it his party's position that fewer general elections increases democratic accountability?
Lord Rennard
It is the position of my party that general elections in which people get what they vote for is the most fundamental democratic reform. I agree with the noble Lord, Lord Owen, that if those people who support other systems, such as first past the post, really had the courage of their convictions, they would have allowed proportional representation to be on the ballot paper last week, as I believe that one day it will be.
Baroness Farrington of Ribbleton
My Lords, my recollection is that the noble Lord’s party voted against alternatives being put forward in the referendum alongside AV. Many of us felt very strongly that the public were being given about one-third of a question in the referendum rather than the whole question, which would have given them a choice. For the noble Lord now to claim that somehow the Liberal Democrats are in favour of the widest possible consultation is a bit hollow.
Lord Rennard
We are rather going off the subject of the Fixed-term Parliaments Bill. Briefly, I remind the noble Baroness that her party's manifesto promised a referendum on AV but no other subject. The Conservative Party promised as part of the coalition negotiations to have a referendum on AV but on no other subject. The Liberal Democrats won only 57 out of 650 seats and were therefore not in a position to insist on what we really wanted, which was a referendum on proportional representation.
Lord Dobbs
I have listened to this debate and the previous one with fascination. We have gone today from Herbert Asquith in 1911 to Mr Chris Huhne and Mr David Laws—and other notorious parliamentary double acts. We have been from the dog to the duck and all the way to Battersea Dogs Home. We have heard that this is a matter of high principle. Perhaps that is right. I can just imagine the scene when Mr Gordon Brown in 2007 was urged to go for an early election. Did he say, “No, Miliband. Get behind me with your temptation. It has been only two years since the last election and I must soldier on to the end as a matter of principle?”. It might have been like that, but I thought that it was my task in my other life to ask for the suspension of disbelief. Certainly it was not like that with John Major in 1996. The question then was simple; can we win in four? “No? Okay, we’ll try five”. Of course, I was not with Jim Callaghan in 1978 or Alec Douglas-Home in 1963, but I suspect that the conversations in No. 10 were along much the same lines.
Lord Morgan
I listened with great fascination to the entertaining speech we just heard, which included the argument, “Why should we change? The present system works perfectly well”. That seems to be an interesting litany on the entire programme of constitutional reforms, which have been introduced on very thin intellectual foundations time and again. I am, however, glad to hear a voice for continuity on the Conservative Benches.
I am driven very much to the view, after listening to very interesting speeches, that there is an overwhelming case for flexibility. It would be highly desirable, in my view, to allow circumstances to develop without a fixed term being announced. One could think historically of a large number of instances where, long before four years let alone five, the useful work of a Government has been done and there should be recourse to the people. Such was the case with the Eden Government, who lasted only two years and were—mercifully, in a sense—terminated by the Suez invasion, which let the Government off a very nasty domestic predicament.
So I think there is a case for flexibility, but historically, in recent decades, the argument has been overwhelmingly for four years. All Governments who have actually gone on for five years—the Callaghan Government in 1978, the Major Government in 1996, the Gordon Brown Government in 2009—have been Governments who were struggling, where their continuation led to economic and other difficulties, was a sign of weakness and led to significant parliamentary malaise. That is something on which we might want to reflect.
Much has been made by the noble Lord, Lord Rennard, and others—and I respect the point—about the very long time it takes to get things going, meet the civil servants and organise things. Many of these arguments rest on the experience of this coalition. This coalition was formed in very curious circumstances: it was not the result of success at the general election; the voters did not vote for it. They certainly did not vote for the Liberal Democrats being in coalition with the Conservatives. The coalition was a result of a coalition agreement concocted in hectic circumstances, and that is why we have had so many measures that have required legislative scrutiny—not only on the constitution, but as we have seen very spectacularly, on health and other matters currently being considered in the House of Commons.
I feel there is a strong case for flexibility, but I also feel there is a very strong case for the argument put forward by my noble and learned friend Lord Falconer. I believe it is entirely possible to accept the general principle of flexibility but to say that, if there is a choice—and nobody has argued for Parliaments lasting beyond five years, as they did before 1911—then there has to be a terminal point and there is a good case for four years. I normally listen to the noble and learned Lord, Lord Lloyd, with great approval, and I frequently have voted and spoken with him on issues in your Lordships’ House. I was disappointed in the line he took today. He seemed to have two arguments for not supporting the amendment moved by my noble and learned friend Lord Falconer. The first was, in a sense, a debating tactic: that he was going to support Amendment 3 and was now being asked to support Amendment 1. I did not think that was sufficient to reject the important case made by my noble and learned friend.
Then there was the important distinction made by many noble Lords between this Parliament and future Parliaments. It was said, quite correctly, that this Government have the right, as any Government have, to determine their own length. The question is not whether the Government have the right to determine their own length, but whether they should do it by statute. That is what we are debating. This Bill lays down in statute at the beginning of a Parliament, for purely party-political reasons which David Laws’s book exposed, that it was determined at a very early stage that there should be a Parliament whose length would be determined by statute. Furthermore, it is not only this Parliament. This Parliament is deemed to be setting the template for future Parliaments, and it follows logically one from the other. I therefore think that the case goes together, as my noble and learned friend Lord Falconer said, with whether this Parliament and future Parliaments should or could be considered differently.
The main point about this proposal goes beyond that. This is a very disreputable Bill. It purports to strengthen the power of the legislative over the Executive. It does not. Like many of the Bills we have had, it weakens the power of Parliament. Later, we are going to debate when a general election could be held, but here we have the Executive laying down by statute at the beginning of a term that a Parliament should last for five years and no longer. It weakens the control of Parliament, as many noble Lords have said. It also weakens popular involvement and popular control. Every inquiry we have had—the Power inquiry chaired by my noble friend Lady Kennedy and others—has testified to the evidence from people that they want regular control and authorisation of what is being done and that the Government and the House of Commons should be truly accountable. This is a way of obstructing that and making Parliament very much less accountable. At a time when the repute of Parliament has, by general consent, degenerated and when people feel that politicians are doing things of which they strongly disapprove politically and perhaps morally and that their control over Parliament is diminishing, this is exactly the wrong way to do it. Therefore this Bill—it purports to be on the basis of high principle but has, like all these other constitutional Bills, been produced for disreputable, partisan reasons—is the strongest reason why we should support the amendment moved by my noble and learned friend Lord Falconer.
Baroness Stowell of Beeston
My Lords, I support the principle of fixed-term Parliaments and, since the start of scrutiny of the Bill, I have supported terms of five years, not because five-year terms or fixed-term Parliaments themselves offer some kind of trendy radical change but because they offer the electorate certainty. Right now, people elect a Government for up to five years, but a Prime Minister gets to decide that the Government will serve for fewer if it means that his party has a better chance of serving for more. If this Bill passes, people will elect a Government in exactly the same way as before and they will know two things for sure: that the Government and their opponents will have to face the electorate on a predetermined date, whatever the political conditions at that time, and that it will happen once every five years.
Let me expand further on why I support five-year terms. In my Civil Service career, I spent five years in 10 Downing Street. I was very lucky that my time in No. 10 coincided with the tenure of the noble Lord, Lord Butler of Brockwell, as Cabinet Secretary, and I am pleased to see that he is in his place. I was never as distinguished as the noble Lord, but like him and the noble Lord, Lord Armstrong of Ilminster, I have served at the heart of government in periods immediately before elections—in my case, before two general elections—and I know how Ministers and the machinery of government become distracted by them.
The noble Lords, Lord Armstrong and Lord Butler, do not support the principle of fixed terms; indeed they are supporting the sunset clause, which we will debate later. However, at previous stages in the passage of the Bill they voiced their view that, if we are to have fixed terms, they should be for five years in order that the country receives effective government for more than four of those five years. As a former civil servant, I wholeheartedly share that view.
Lord Blencathra
My Lords, I rise, as far as it is necessary, to make a few observations on this Bill. I support the five-year term. I hope that your Lordships will not consider it impertinent of me to speak on this measure since I was not in the House when it was first debated. I have had an opportunity to read the Select Committee reports and so on, and I can only offer what is perhaps the doubtful benefit of 27 years’ experience in another place as an elected Member of Parliament. I went through six Parliaments in the other place, three Parliaments of four years and three of five years. I must say that, at the time, I did not feel that the five-year Parliaments were somehow depriving the British people of some fundamental human right or a great opportunity which they had missed because we had gone beyond four years.
Arguments have been made today that four is better than five. I do not accept that and see no great body of evidence for it. I accept that there is a considerable weight of opinion for it. Some of the opinion which has been given to your Lordships’ distinguished Select Committees is learned, some is notable and a lot of it is tremendously experienced, but it is still opinion. I would not say that it is firm evidence which this House is therefore bound to follow and pass judgment on.
Perhaps I may deal with a point raised by the noble and learned Lord, Lord Falconer. He pointed out that the evidence was that every time a Prime Minister went beyond four years, it was pretty awful. I would not entirely disagree with that, but it was not the fact that the Prime Minister went beyond a magic four-year trigger that made it awful. I was privileged, honoured and proud to serve in John Major’s Government right up until 1997, but the difficulties that the Prime Minister experienced did not materialise in 1996 because he had passed four years; they materialised after the ERM problems. From then on, it became difficult for the Prime Minister; indeed, it became a bit bloody for him. Moreover, he had a low majority. One has to look at the majorities that Prime Ministers have to determine whether their last year will be difficult. That may happen after two years, three years or four years.
Where Prime Ministers went to the polls after four years it was not because they wished to give the people a chance to make their Government accountable; it was not through some great constitutional issue of principle. In fact, they breached our 100-year, five-year norm because they thought there was a dashed good chance they would win, and good luck to them. Margaret Thatcher did that exceptionally well and so did Tony Blair. But let us not pretend that those four-year Parliaments came about as a result of some issue of principle or great conscience, or moral wish to give the British people more accountability. Therefore, I do not accept the argument that going beyond four years is somehow bad for the Government and nothing can be done. Considerable things were achieved towards the end of those five-year terms in office.
There has been discussion on whether the people want four or five years. I was for 27 years the Member of Parliament for Penrith and The Border, the largest constituency in England. I do not a recall a Dock and Duck there, but in The George, where I had regular surgeries, I would constantly meet constituents who, within weeks of an election, irrespective of who had won, would say to me that it was time to get rid of the Government, or that they wished they would continue for 20 years. I never met a single constituent who had a view on whether it should be a five-year term or a four-year term. All they wanted was that, in due course, at some point, not more than five years, they would have the chance to express their view and for it to be taken into account.
I hope that your Lordships do not consider it too impertinent of me to comment on a Bill where I was not here for the Second Reading nor able to participate in the early stages, but it was my experience in 27 years in the other place that five-year Parliaments were no less accountable to the people than four-year ones. I accept the point of the noble Lord, Lord Pannick, that if we move to fixed five-year terms, over a period of many years, the public will have slightly fewer general elections, but I submit once again that having an election every five years instead of every four years does not somehow remove accountability and give the British public less say in the Government whom they want. Therefore, I support the five-year term.
Lord Wallace of Tankerness
My Lords, I thank the noble Lords who have taken part in this debate. It has been a very full debate with some thoughtful and challenging contributions and strong arguments on both sides. I hope that the noble and learned Lord, Lord Falconer, will not object if, in dealing with his amendment, I take account of Amendment 3, to which the noble and learned Lord, Lord Lloyd of Berwick, spoke. It gives a different perspective and a different choice.
The position taken by the noble and learned Lord, Lord Falconer, is that if you are going to have four-year fixed-term Parliaments we should start with a four-year fixed-term Parliament, whereas the noble and learned Lord, Lord Lloyd of Berwick, takes the view that this Parliament, elected for five years one year ago, should be allowed to complete its five-year term and thereafter move to four years. Clearly there is a distinction. The noble Lord, Lord Owen, gave a good explanation as to why five years for this Parliament is proper—the fact that very difficult decisions have to be taken. There is accountability, too, in being able to make a better judgment at the end of five years than might be possible at the end of four years.
As a Government we believe that it is not just five years for this Parliament but that there should be five years for subsequent Parliaments as well. In saying that, I was getting slightly confused with the arguments that I had to address. I understood, and I apologise if I got it wrong, that the noble and learned Lord, Lord Goldsmith, said that the Government could have five years if they wanted and thereafter four. I may have misunderstood what he said.
Lord Goldsmith
That is the position under our present arrangements, which do not provide for a statutory term for Parliament other than the maximum term. If that is what the Government had wanted they could have had that without the fixed-term Bill. They could simply have said, “This is what we are going to do”. History and time would have told us whether that was actually what would happen. That is what I was saying.
Lord Wallace of Tankerness
I apologise. I misunderstood the noble and learned Lord. I thought that he was arguing for four years subsequently. But the noble and learned Lord, Lord Falconer—as one of the three key reasons why he said it should be four and four—said that it would be wrong if the Government had one set of rules for the first Parliament and a different set of rules for the others. Of course the Government are not seeking to do that. We are seeking to be consistent with five years both for this Parliament and for subsequent Parliaments. Therefore, he cannot hold that argument against the Government.
Lord Wallace of Tankerness
I will just finish the point and then give way to the noble and learned Lord.
If the Government had come forward with a proposal for five years for this Parliament and four years thereafter, I can imagine the criticism that would, with some merit, have been directed at us.
Lord Falconer of Thoroton
So if this House decided that it should be four years for subsequent Parliaments, the right course would be for the Government to say that it should be four years for this Parliament as well?
Lord Wallace of Tankerness
I have made the point that it is not the Government who are proposing four years for subsequent Parliaments; we are proposing five years. I indicated that if we had proposed five years for this Parliament and four years subsequently, that would have been the subject of legitimate criticism. But that is not what we propose—we propose a consistency of five years. I will come on to argue why we believe that five years is right for subsequent Parliaments as well.
Baroness Jay of Paddington
I understand the noble and learned Lord’s point. However, as I tried to ask on previous occasions, does he take the point that a five-year term for this Parliament and this Government could have been achieved in a way that did not involve this Bill?
Lord Wallace of Tankerness
Clearly the Government could have continued for five years, but the point is that the Government are seeking to introduce the principle of fixed-term Parliaments. In wishing to introduce that principle, we believe that it should apply to this Parliament as well. It is not just the length of time; it also involves the trigger mechanisms for an election other than at the end of the five years. In terms of consistency, we are saying that what is right for the future—and we are self-evidently legislating for the future—is something that this Parliament should equally be obliged to have regard to and, indeed, to be bound by. I hope that I can make some progress.
Baroness Farrington of Ribbleton
My Lords, surely the point is that this Government could have determined and announced that they were going to last for five years. They could then have produced legislation for the future, were that their wish, on which there could have been pre-legislative scrutiny—which the noble Lord, Lord Rennard, believes, and I share his view, we would all have been the beneficiaries of. So why on earth are we doing this Bill now, dealing with the future?
Lord Wallace of Tankerness
The answer is the same as I gave a moment ago to the noble Baroness, Lady Jay—we believe there should be fixed-term Parliaments for the future and that this Parliament should be subject to the same rules, including of course the rules that would trigger an early election. Of course, there is no guarantee that either of the coalition parties will be in power after 2015 and that is why we reject the case that this is somehow our own self-interested political fix. We believe that this ought to be implemented for future Governments, including ones where we may not be in power. It was very interesting that when my noble friend Lord Rennard challenged the noble and learned Lord, Lord Falconer, as to whether, when this Bill is enacted with the five years as proposed, a future Labour Government would amend it to four, he was not able to give a definitive answer that they would.
However, it must be recognised, too, that even under fixed terms, Parliaments come under pressure, both in their earlier and in their later years. We have had a number of speeches to that effect. At the beginning of the term, new Governments are understandably keen to start implementing their ideas, but there is increasingly a tension between that and the desire to allow more parliamentary scrutiny. If we go back to the 1970s and 1980s, there was very little pre-legislative scrutiny. We have come under some considerable criticism for not having had more pre-legislative scrutiny in our first year and it is inevitable that we are going to move to having more. If that is the case, it will limit the ability of the Government of the day to bring forward more legislation during the first year of their term of office.
Moving to the final year of a term of office, my noble friend Lord Renton of Mount Harry indicated that in his experience five years was right, given all the pressures that were on a Government, in order to get a legislative programme through. There are real advantages, therefore, to five years. I regret that what we have been asked to do in some respects with four years is to fit a quart into a pint pot, with a squeeze at both ends. At the other end of the term, the predictability of the election date may limit some of the hurly-burly of anticipation that up until now has inevitably attended the speculation as to when an election will be called. However, at Second Reading the noble Lord, Lord Armstrong of Ilminster, albeit opposing the principle of fixed-term Parliaments, made it clear that if there were to be a fixed-term Parliament, he thought that a four-year term would not leave enough room for sensible policy-making and a good parliamentary debate before a forthcoming election began to cast what he described as its distorting shadow.
The noble Lord’s concern was that if we had a four-year term, it would start to disrupt the parliamentary business as we approach the end of three years. The noble Lord, Lord Butler—who is in his place, and I hope I am not misrepresenting him—has also expressed strong reservations about the principle of fixed terms, and indicated that his experience also lends him to the view that five years would be more effective than four. That experience was shared by my noble friend Lady Stowell, when she was in government as an official.
Clearly, if we have four years, it shrinks the time available to Governments to deliver their programme; especially if we are going to have even more pre-legislative scrutiny. Some of the arguments against five years insist that precedent in our own system favours a four-year term. In fact, if we exclude the elections since the war that took place after less than two years, the average, I think, is between four and a quarter and four and a half years. The fact of the matter is that elections that are called at the end of four years are often examples of the Prime Minister of the day seeking to give his or her party a political advantage. It was not that they thought four years was the appropriate length of time, or that the term had come to its natural break, but that it was a judgment for them—as my noble friend Lord Dobbs indicated—as to when they thought they could win. If they thought they could, that was when they went. Indeed, on the second day in Committee, my noble friend Lord Dobbs said:
“I am afraid that these decisions have nothing to do with the astrological significance of the figures four or five. It has simply been a matter of self-preservation”.—[Official Report, 21/3/11; col. 495.]
I think that when an election has been held after four years, it has been because it has been more electorally convenient for the party in power than for any great reasons of measuring accountability or suiting the political biorhythm—a view that I think is shared by my noble friend Lord Blencathra. In holding up this practice as a standard for fixed terms, the advocates of four years are arguing strongly for the very enemy that the Bill is seeking to combat—that of political expediency triumphing over the national interest, with parties holding an election after four years when they see it as expedient to do so. We are trying to take that power out of the hands of the Prime Minister and give it to Parliament. Indeed, as the noble Lord, Lord Hennessy, said at Second Reading, for that reason this is a “collector’s item” of a Bill. The noble Lord, Lord Morgan, clearly wishes to intervene.
Lord Morgan
Is that not a totally false distinction? Do not a Government necessarily equate their party interest with the national interest? Is that not precisely what the Liberal Democrats have done by serving in this Government?
Lord Wallace of Tankerness
My Lords, I am not sure that last Thursday would necessarily have been thought to be in my party’s interest. I shall not rehearse all the arguments for the coalition but we heard the comments of my noble friend Lord Dobbs, who has been there when some of these decisions have been taken. As he indicated, the question has been: can we win? No doubt all parties think that they are right for the country but clearly the decision is taken for partisan reasons—when they think they can win. If one looks at 1983 and 1987, it is interesting that Mrs Thatcher, as she then was, did not hold an election exactly after four years—or at least she did in 1987—but she made the decision in 1983 after the local election results had come through. If I recall correctly, that was when I was first elected. The Dissolution took place the week after the local government election results in the first week in May, when she quite clearly saw that that would be to her party’s advantage.
It is also suggested that Parliaments that have gone to five years have been destabilising—I think that the noble and learned Lord, Lord Falconer, used the expression “an awful fifth year”—but in many respects the term has been self-selecting, as my noble friend Lord Blencathra indicated. There have been fifth years under Governments who did not have the confidence to go to the country after four years because they did not think that they could win, having run out of steam and lost their way. No doubt they thought that if they carried on for a final year something might just turn up. That is not a very good argument for saying that five years would not work. I shall pay a passing compliment to the Government of whom the noble and learned Lord, Lord Falconer of Thoroton, was a member. I suspect that if the Government elected in 1997 had gone into a fifth year, that year would still have been very purposeful. The noble and learned Lord shakes his head but I think that he may be doing a disservice to his party.
As my noble friend Lord Rennard pointed out, it is also interesting that when the Government gave the devolved Parliament in Scotland and the Assembly in Wales the opportunity to change their election date to avoid a clash with an election in 2015—the offer was to hold an election between the first Thursday in May 2014 and the first Thursday in May 2016—in each case they opted for a five-year term. They could have gone for four years and six months or three years and six months but they opted for five years, and that Motion was, I think, assented to by the leaders of all parties, including the Labour Party, in both the Parliament and the Assembly.
The question that has been raised, not least by the noble Lords, Lord Wills and Lord Pannick, is: how do we ensure accountability? Accountability can come in many ways. It is not just in parliamentary general elections that parties and politicians are accountable. My noble friend Lady Stowell talked about some of the ideas that came out in the Power inquiry to try to engage ordinary people in the political process. The point was made by the noble Lord, Lord Owen, in what I thought was a very thoughtful contribution, that five years is very often required for an assessment to be made of the effectiveness of a Government’s early policies and for people to make a proper and informed decision after there has been an opportunity for those policies to feed through.
Lord Wills
I am grateful to the noble and learned Lord for his espousal of these methods of public engagement. I, too, was pleased to hear that espousal from his noble friend Lady Stowell. Can he explain to the House why they have not taken advantage of one of these methods of public engagement to ask the public what they think about this measure?
Lord Wallace of Tankerness
My Lords, in the Constitution Committee, the noble and learned Lord, Lord Goldsmith, asked my honourable friend Mr Mark Harper about opinion polls which showed public support for establishing fixed terms. These are not old opinion polls: the Populus survey conducted for the Times, published on 30 May 2009, found that 74 per cent of those surveyed supported the establishment of fixed terms; a poll conducted by ICM Research for the Sunday Telegraph, published on 26 May 2010, found that 63 per cent of those surveyed supported the establishment of fixed terms; and a survey by the Scottish Youth Parliament conducted in August 2010 found that 76.4 per cent of the young people surveyed were in favour of establishing a fixed term for the United Kingdom Parliament. I accept that the question as to whether it should be four or five years was not put, but there was clearly in the surveys support for the principle of fixed-term Parliaments.
My noble friend Lord Dobbs talked about the opportunity for policies to mature and to be assessed. Therefore, there is an opportunity for accountability because the electorate can see what has been delivered, not only by this Government in the present Parliament, where it may take some time for the necessary remedial measures to work through, but by other Parliaments. It is possible for a Government coming into office at the beginning of five years to plan their legislative programme and the other things that do not require legislation, and at the end of which the public can make their decision and judgment on the effectiveness of the Government over those years. That will help accountability.
Practical issues were raised by a number of noble Lords, not least by my noble friends Lord Renton and Lord Blencathra. The questions of stability, practicality and allowing for accountability point to five years.
Lord Bach
Something is troubling me. If the noble and learned Lord has all these strong arguments against four years rather than five, why was it that his party went into the 2010 general election supporting a fixed-term Parliament of four years? What changed? When did the noble and learned Lord change his mind?
Lord Wallace of Tankerness
My Lords, if the House will bear with me, I shall find the quote from the Liberal Democrat manifesto of last year. It states:
“Introduce fixed-term parliaments to ensure that the Prime Minister of the day cannot change the date of the election to suit themselves”.
As my noble friend Lord Rennard indicated, there is not a reference to four years. However, in the past the party has supported—
Lord Bach
Is the noble and learned Lord really suggesting that the Liberal Democrat party was in favour of five-year fixed Parliaments at the time of the general election of 2010? We know about the Private Member’s Bill that was supported by many of those who are now prominent in Government. Liberal Democrat policy has always been four years. Why has it changed so suddenly?
Lord Wallace of Tankerness
What the noble Lord claimed was in the Liberal Democrat manifesto was inaccurate. I am not shying away from the fact that four years had been Liberal Democrat policy, but everyone knows that you have to have negotiations if you want to get the outcome of a fixed-term Parliament, and that was the negotiation. I have listened to the argument and, heaven forfend, I am persuaded by it. The arguments that have been made for five years are very compelling indeed.
On the point made by my noble friend Lord Blencathra, although there has been a great deal of opinion in favour of four years, we have heard in today’s debate—and from the noble Lords, Lord Armstrong and Lord Butler, in Committee—that the evidence points in favour of five years. I urge the noble and learned Lord to withdraw his amendment.
Lord Goldsmith
The Minister confirmed a moment ago—I am grateful to him—when he spoke about opinions that none of the three surveys asked the people what they thought about the precise length of term. Can he say why it is—he did not address this in his remarks—that the experts, I think without exception but certainly the vast bulk of them, who came to the Select Committee spoke in favour of four not five years, and none of them supported five? Why is that?
Lord Wallace of Tankerness
My Lords, I am not here to speak on behalf of these experts. In my closing remarks, I picked up the point made by my noble friend Lord Blencathra that there has been a lot of opinion on this from people who have had experience, including former Cabinet Secretaries and Chief Whips as well as those in the Scottish Parliament and Welsh Assembly who favoured five years when given the opportunity to do so. Some of them have indicated that they would quite like five years to be put on a more permanent footing. The evidence suggests that they have had practice and five years is what they have concluded is probably the right period of time. So again I invite the noble and learned Lord to withdraw his amendment.
Lord Falconer of Thoroton
My Lords, it has been a good and a very important debate. If what the noble and learned Lord says is right about trying to engage the public more in politics and if the Deputy Prime Minister is right when he says, describing the suite of Bills, that,
“it is an unambiguous judgment on our part that reducing the power of the executive, seeking to boost the power of the legislature, making the legislatures more accountable to people ... collectively introduces the mechanisms by which people can exercise greater control over politicians”,
surely the minimum that this Government should do is to respond to Parliament’s independent view about these issues, not put on a party-political basis. Both Select Committees, which contain a majority of people from the coalition, said that five years was wrong and that four years was right. If this Government are going to demonstrate their sincerity about new politics, should they not abandon simply doing things on the basis of what their own whipped majority wants and listen to what Parliament says? Parliament has said on an independent basis that four years and not five years is right. If the Government do not listen to that, I have to say that it puts in doubt their repeated statement, in particular through their Deputy Prime Minister, that they want to give more power to the legislature.
I shall not repeat the arguments in support of four years. For my own part, the independent evidence supports it very strongly. The only point that I shall refer to is the one made by the noble and learned Lord, Lord Lloyd of Berwick, that you could have five years for this Parliament and four for the next. Myself and the noble and learned Lord, Lord Wallace of Tankerness, are in agreement on the principled position in relation to that. If it is to be four or five years for the future, it should be the same for this Parliament, because this Bill introduces fetters and difficulties in having an election before the end. So I agree with the Government when they say that it should be the same now as for the future.
For all the reasons given, in my respectful submission the right answer is four years. Sadly, I shall not accept the invitation of the noble and learned Lord, tempting as it is. I wish to test the opinion of the House.
Lord Falconer of Thoroton
Lord Falconer of Thoroton
My Lords, I do not think that the House has any appetite for long debates on any of these next votes, but they are alternatives to the vote that we have just had. This next vote, which is on Amendment 2, involves the following: instead of this first Parliament being fixed for five years, the position should be left as it is. In effect, if the Government want to go on for five years, they can do so and the arrangements should be left as they are, and a fixed-term Parliament can be introduced for the future. I detect some support for the view that, this first time around, the Government should be able to last for five years if they want. If that is the Government’s position, they do not need to amend the law to do that; they can just do it by agreement and all that is required is trust.
I do not intend to go through the arguments about four years or five because the basis of this proposition is that we end up in a situation where we do not change the law for this Parliament but leave it as it is, which would allow the Government to go for five years if they wanted to, but then I will be arguing that it should be four years for the future when we come to those votes. I therefore invite the House to reach a compromise position of no change for the first Parliament and four years for the subsequent ones.
The Lord Speaker
I have to inform the House that, if this amendment is agreed to, I cannot call Amendments 3 to 7 inclusive by reason of pre-emption.
Lord Wallace of Tankerness
My Lords, in the spirit in which the amendment was moved, I do not wish to detain the House. We have had a full debate about the arguments about four years and five, but I shall simply talk about how the Government would prefer the position to be determined with regard to this Parliament. I think that I indicated in my reply to the previous debate that if we are going to have fixed-term Parliaments, it makes sense if we oblige this Parliament to move into the same rules as those governing what will happen in future Parliaments. I understood the noble and learned Lord to say that he thought there was some merit in that consistency.
While I have no doubt that this Government will carry on in our measured fashion up to an election in May 2015, if something is not fixed at that date it is inevitable, as one knows only too well, that speculation can start running rife, and the measure not being in place would perhaps give more grounds for speculation. That would actually hinder the productivity of this Parliament in its latter years when there might be more focus on opinion polls than on the legislative programme, something that the Bill is intended to avoid. We would be far better knowing definitely when the next election would be—namely, the first Thursday in May 2015. I therefore invite the noble and learned Lord to withdraw his amendment.
Lord Falconer of Thoroton
Persuasive an advocate though the noble and learned Lord is, I wish to test the opinion of the House.
Lord Falconer of Thoroton
“( ) Following the next parliamentary general election after the passing of this Act, the polling day for each subsequent parliamentary general election is to be the first Thursday in May in the fourth calendar year following that in which the polling day for the previous parliamentary general election fell.”
Lord Falconer of Thoroton
My Lords, the final amendment in this sequence is the only combination left, and although it proposes five years for this Parliament—I have been cruelly rebuffed in my two attempts to avoid that—it proposes four years for the future and will, I think, unite the House on my side, apart from a very few noble Lords who I regard as outliers. There is no point in debating the amendment again, because we have done so for the past two hours. I beg to move.
The Lord Speaker
If this amendment is agreed, I cannot call Amendments 4 to 7, by reason of pre-emption.
Lord Wallace of Tankerness
My Lords, this is what the noble and learned Lord, in earlier discussions, described as the “five-four-four” amendment. The Government are opposed to it for reasons that have been advanced and I do not propose to repeat. I am sure that it will be to the noble and learned Lord’s great disappointment that we cannot accept the amendment. If he wishes to test the opinion of the House, I should make it clear that we believe there should be consistency and that there should be a term of five years for this Parliament and for ensuing Parliaments.
Lord Pannick
Lord Pannick
My Lords, the amendments are in my name and those of the noble Baroness, Lady Boothroyd, and the noble Lords, Lord Butler of Brockwell and Lord Armstrong of Ilminster. The noble Lord, Lord Armstrong, regrets that he is unable to be in his place because he is chairing a Joint Committee.
The purpose of the amendments is to address the deep unease on all sides of the House, as expressed at Second Reading and in Committee, as to whether it is appropriate to confine the circumstances in which a general election may be called within a five-year term. The amendments would ensure that the coalition Government will have their way as to the criteria governing this Parliament, but would leave future Parliaments to decide for themselves whether to apply the provisions in the Bill. That sunrise provision would thereby limit what many noble Lords regard as the constitutional damage which would be caused by this unhappy Bill. The amendments do not touch on the distinct question of the length of any fixed-term Parliament, which we have just debated.
I want to make four points. First, the Bill would not in fact introduce fixed-term Parliaments. There is general agreement on all sides, and it is embodied in the Bill, that it is essential to allow for early general elections in some circumstances. The dispute concerns in what circumstances and by what means. Many noble Lords believe that it is impossible satisfactorily to define in legislation the circumstances in which an early election is appropriate. Such matters are far better left to convention and practical politics than to legalistic constraints. Your Lordships’ Constitution Committee heard compelling evidence to that effect, in particular from Professor Vernon Bogdanor. It is easy to envisage circumstances in which an early general election may well be appropriate, whether or not the criteria in Clause 2 are satisfied—for example, a change of Prime Minister; a change of coalition partner; or a new policy, such as Asquith’s in 1910 to gain popular approval for Lloyd George's Budget and then popular approval for limiting the powers of this House.
Clauses 2 and 3 are worthy but necessarily cumbersome attempts to allow for early general elections in some circumstances. Such is the splendid unpredictability of politics that no one can foresee all the circumstances that justifiably lead to an early general election. That is the first point.
Secondly, many noble Lords on all sides of the House have doubted the premise of the Bill, which is that the power of the Prime Minister to call an early general election is a political advantage for him or her. The evidence is very weak that this power has assisted Prime Ministers who would otherwise have lost subsequent general elections. Many noble Lords have spoken from experience of the agonies of decision-making caused to Prime Ministers with whom they have worked closely. Our political system has worked well; people can and should be trusted to decide whether to penalise a Prime Minister who calls what the people regard as an unnecessary or inappropriate early general election.
Thirdly, it is of special importance—we heard discussion of this earlier—that a constitutional measure of this sort should be grounded in public consultation and in pre-legislative scrutiny. There was none. The Government should recognise that one reason why the referendum campaign on AV—I say nothing of the result—was so unsatisfactory was that there was no process of prior analysis of the options for change and of the merits and demerits of different voting systems. The absence of public consultation and pre-legislative scrutiny in this Bill is even more troubling, because there will be no opportunity for the public to express a view by way of a referendum. Unless and until there is proper public consultation on the issue, in a referendum if appropriate, we should do no more than legislate for this Parliament.
Fourthly and finally, we should identify why this Bill is before Parliament. No one could seriously dispute the conclusion of your Lordships' Constitution Committee, which stated in paragraph 20 that,
“the origins and content of this Bill owe more to short-term considerations than to a mature assessment of enduring constitutional principles or sustained public demand”.
I recognise that the Liberal Democrats have been arguing for fixed-term Parliaments for some time. However, they could not dispute seriously that the inclusion of this measure in the coalition agreement is due solely to the desire of the two parts of the coalition to ensure that their union lasts for five years and does not end in tears before then. That is a short-term political need. I do not deprecate it, but it does not justify a long-term alteration to the constitution of this country.
Lord Howarth of Newport
My Lords, I congratulate the noble Lord, Lord Pannick, and his hugely distinguished co-signatories, on the amendment. It is elegant, precise, effective and clever. I am very attracted to it, because I take the view that the principle of fixed-term Parliaments is misguided. The more I have listened to debates on the subject in your Lordships' House, the more convinced I have become that the course on which the Government have set themselves is ill judged and will be damaging. Fixed-term Parliaments are anti-democratic and reduce accountability. Moreover, there is no evidence of public dissatisfaction with the state of affairs that we have. It is a good maxim in constitutional matters that if it ain't broke, don't fix it.
In this unelected second Chamber, we accept—often with reluctance—that we should not oppose the central purposes of government Bills and should not vote them down at Second Reading, particularly if they are sent to us after being endorsed by the elected Chamber. Therefore, this House has conducted itself with restraint and responsibility. The beauty of the amendment that the noble Lord moved is that it would allow the coalition to achieve its political purpose of providing an arrangement whereby the two parties are handcuffed together for the duration of this Parliament, giving themselves a five-year term or a very good chance of one. The noble Lord spoke of the possibility of the coalition ending in tears. It has already reached the stage of curses and maledictions such as I can rarely, if ever, recall in politics, but we cannot be certain that it will not totter through the full five-year term. However, it is not respectable for the coalition Government to hijack the constitution for their political convenience.
The amendment provides the opportunity for a subsequent Parliament to prevent the constitution being damaged in perpetuity. It would allow the next and subsequent Parliaments to reconsider the principle of a fixed term, or to reconsider particular features of the legislation such as whether four years or five years is the right length for a fixed term, or whether the two-thirds or 14-day provisions should be retained, in the light of the experience that by then we as a country shall have had, and not just in the light of preconceptions or deals put together for short-term political advantage. In that sense the amendment offers the possibility that the whole experience of this Parliament—here in both Houses of Parliament, and the experience in the country—would effectively provide an opportunity for pre-legislative scrutiny, because the opportunity would be provided for the legislation to be revisited and approved or not approved at the beginning of a subsequent Parliament. I think that the amendment would not permit future amendments to the legislation: it would either have to be accepted as a whole or rejected as a whole for the Parliament to come. However, I do not worry too much about that because, as I say, I am not in favour of fixed-term Parliaments and I am not sure that trying to patch the legislation would make it any more acceptable.
I do have a worry that it would be too tempting—too attractive—to an incoming Prime Minister armed with a good majority, or to a coalition which had patched together a majority, to seize the opportunity to assure themselves of another five-year term. That possibility would be fairly seductive. So I worry that the vote at the beginning of a Parliament which would be provided for by the legislation if it were amended as the noble Lord has proposed, would become like other ritual Motions which are passed in the opening Session of a Parliament. None the less, I think that this is an attractive and a good amendment. To me, it is preferable to the options that we have considered in the three previous debates this afternoon. I very much hope that the House will pass it.
Baroness Boothroyd
My Lords, this is the Bill’s first outing in this House since last week’s referendum, so I think we are entitled to take stock of the coalition’s position in the light of the electorate’s aversion to radical reform. Clearly, as the noble Lords, Lord Cormack and Lord Grocott, strongly said before we opened the Report stage today, the referendum casts fresh doubt on the wisdom of persisting with major constitutional measures that lack popular support. Ministers have changed tack on the timetable for this Bill before, and I suspect there would be few tears shed on the Conservative Benches if they took another look at it even at this late stage. However, we have to proceed and we have to deal with what is before us this afternoon.
I imply no criticism when I observe that the new politics that the coalition claimed to represent in its early days has lost a bit of its sheen. Ministers would be wise to take account of reasoned objections in this House to some of the Bill’s more doubtful features. It is in the light of this that I support and commend the amendment moved so ably by the noble Lord, Lord Pannick. The amendments in this group do not challenge the Government’s intention to hold the next election in May 2015 or 2014, whatever may finally be decided. Nor do they challenge the Government’s proposal to introduce legally binding procedures to make an early election unlikely. However, as currently written, this legislation goes much further than the lifetime of this Parliament in a way that I believe is unwise and unjustified. This legislation seeks to bind future Parliaments to the same legal restraints intended primarily for the lifetime of this coalition Government and this Parliament. These restraints are destined to last “henceforth” according to Mr Clegg, the Deputy Prime Minister.
I understand perfectly the coalition’s wish to serve for a fixed period of years, to tackle the current economic situation and to see that its programme is enacted. However, I reject the same imposition being placed on the freedom of action of future Parliaments, and this will be the situation without these amendments. Without them, the constitution is being blighted permanently and unnecessarily. The amendments allow future Parliaments to accept or reject the Bill’s provisions after every election as they see fit and to do so by means of a resolution of both Houses. Mr Clegg disagrees with me on this: we disagree on a number of things, but certainly on this. Last year, he described the Bill as,
“a constitutional innovation of significant proportions”.
He argued that it would be “bizarre” to confine it to one Parliament. These amendments do not propose that it should be left to one Parliament only. Importantly, they propose that future Parliaments should decide for themselves.
We know that countries with written constitutions have the kind of entrenched laws that the Deputy Prime Minister appears to want—but Britain is not one of those. The Government would do well to remember that. As far as I can recall, at the last election the country did not exactly clamour for fixed five-year Parliaments. If I interpret the public mood correctly—as did the noble Lords, Lord Grocott and Lord Cormack, with whom I entirely agree—people in this country want honest politics. They want good government and greater scrutiny of what Governments are doing in their name. They do not want an assortment of ill considered proposals to turn Parliament upside down to suit a political elite.
Your Lordships will not be surprised to know that I do not regard this legislation with great affection at all. In fact, I believe it is quite unnecessary. This House is charged with the responsibility and the role of examining legislation and scrutinising it. As a Member of this House, I reckon I have to make the best of what I think is a very bad job. The amendments before us today would preserve the freedom of future Parliaments to face their own challenges in their own way and in the circumstances of the time. I strongly support them and hope that many of your Lordships will do likewise.
Lord Tyler
The noble Lord, Lord Pannick, and his distinguished collaborators have, as ever, tabled very interesting, very seductive, amendments. I examined them with great care because I respect their expertise. Reluctantly, I believe the amendments are flawed. The purpose of the Bill is to do one very simple thing: to remove from the Prime Minister—the leader of a political party—and, by extension, from the governing party, the right to time elections for their own political convenience. I give credit to the present Prime Minister: he has been the first Prime Minister to accept the logic of that position.
Hitherto, Prime Ministers—leaders of political parties—have been able to look at the polls and see if they look good in order to be able to say yes to an early general election or no to postponing it. The Government’s objective is to remove that question of when elections should be held from routine partisan political advantage and its consideration. After all, that is already the case in local government; it is the case in the devolved Assemblies and Parliaments throughout the United Kingdom. This Parliament has insisted that that should be the case, and clearly that is right.
This Parliament has recognised in primary legislation time and again that elections are the mechanism by which political parties are held to account. It surely cannot be right, then, that any one party or collection of parties should be able to contrive to time the election for a moment which is propitious for their own advantage. That is the clear principle and objective of this Bill.
I invite your Lordships to look very carefully at Amendment 25 in this group. This would undermine the central objective of the Bill by setting up a routine for Governments to instruct their newly elected majorities in the Commons after 2015 as to whether they particularly fancied a fixed-term Parliament or not—for their own party advantage, not in the interests of good governance. There would be an immediate return to the worst feature of prime ministerial prerogative. If the Bill were amended, it would be not a fixed term but a semi-fixed term, subject to the machinations and inclinations of the Prime Minister and party leader of the day, the exact opposite of what the Bill seeks to achieve and what the other place has already voted to do. This Bill is already more flexible than some of us would like. I would favour a superglue fix in the fixed-term Parliament, without extensive opportunities for early Dissolutions, but I accept that a sensible middle way has been achieved.
Baroness Jay of Paddington
Before the noble Lord sits down, will he help me with the force of his argument about the imposition of party politics on the kind of provision that the noble Lord, Lord Pannick, and his associates have suggested to the House when that will take place, as I understand it, immediately after a general election? It is not, as it was in the circumstances which he describes, something that Prime Ministers could calculate towards the end of a Parliament was to their party advantage, or was not, as the case may be.
Lord Tyler
The noble Baroness may recall that I was elected on 1 March 1974, and given the convention—it was referred to earlier—that normally it is six months before another election is agreed to by the monarch, that would have been precisely the situation. It was entirely wrong that the Prime Minister of the day decided for party advantage that he would ignore all the big economic problems of the summer of 1974, did nothing to disturb the popularity of his Government, carried on to the autumn without taking important strategic decisions about the future of the country and then went to the country in the autumn. That is the sort of situation that we should certainly avert because party advantage could, very soon after a general election, be uppermost in the mind of a party leader who would therefore take advantage and destroy the fixed-term legislation for his or her own party advantage.
Lord Hamilton of Epsom
My Lords, as a Conservative, I am extremely reluctant to see Parliament at any stage fiddling about with our constitution, and I very much agree with the noble Lord, Lord Howarth of Newport, that if it is not bust, why fix it? Having said that, the coalition quite clearly finds it necessary as part of its agreement to have a five-year fixed Parliament, and if that is what it wants to do, so be it. I have a little trouble in understanding how a Government continue to govern when they no longer have a majority in the House of Commons, but that is another issue. I do not think there is any strong reason why this legislation should go through in perpetuity. I do not see what is wrong in returning to the status quo ante. There seemed to me to be nothing wrong in the way the system worked, and I do not know why we should therefore be trying to commit future Governments to five-year fixed Parliaments just because it is convenient for this coalition Government to have a five-year Parliament this time round. Therefore, I will be more than happy to support the amendment moved by the noble Lord, Lord Pannick.
Lord Grocott
My Lords, I strongly agree with the comments made by the noble Lord, Lord Hamilton. I want to make a pretty brief point. The trouble is that when I listened to the noble Lord, Lord Tyler, he almost tempted me to a Second Reading observation. I was astonished by his last argument, as I understood it—he must stop me if I am factually wrong at any point—that he was elected in February 1974. Did he lose his seat in October 1974?
Lord Grocott
I thought so, so his view is that after the February 1974 election there should have been a fixed, five-year Parliament. I can see where he is coming from, but I know he is a Liberal Democrat, so I know his argument will be based on deep principle rather than on any short calculation. I think he needs to think again about the repeated mantra that this measure strengthens Parliament, weakens Governments and strengthens the people. I cannot understand that argument. How on earth a Government who are guaranteed five years, except in the very tightly drawn exceptions, can in any sense be said to be weakened in respect of Parliament, much less weakened in respect of the public as a whole, by this Bill is beyond me.
Surely we can agree on one factual point, and I would beg the noble and learned Lord, Lord Wallace, to concede this. The Bill will obviously reduce the number of general elections. By law, it certainly cannot increase them. The possibility for the public to express their opinion on the Government will be reduced; that is surely unarguable. We now know enough after five days of debate that this Bill is designed to strengthen the Government. It is in the national interest because it would give them a secure five years. No wonder the Chancellor of the Exchequer wanted it.
You are subject to paranoia quite early if you are a lifelong member of the Labour Party, but I cannot help being a little paranoid about the commentariat, if that is the right word, who had only one story in town under the last Labour Government, which was: “This Government are too strong. We must strengthen Parliament and the public. Governments these days are too domineering and powerful”. But on the day of the general election, the whole argument suddenly shifted and the chatterers were absolutely convinced that the crucial thing was strong government. “We must not have too much of this democratic stuff. We need a strong Government so we will bring in a Bill to guarantee them five years, barring some convoluted exception in Clause 2”. Those exceptions include the absurd one that even if the Government lose a vote of confidence, they can still chatter on for another 14 days to see whether they can survive.
I want to make a simple point. As far as I can see, the objective behind the Bill is that, somehow or other, over the years Prime Ministers have been abusing the power to call general elections. For those who like looking at tables, as I do because in this House we are all anoraks to varying degrees when discussing issues of this kind, I refer them to British Electoral Facts by Colin Rawlings and Michael Thrasher. On page 139, there is a table headed:
“Reasons for Holding General Elections 1832 to 2005”.
It is pretty comprehensive. Looking at the list indicating when Prime Ministers have determined to hold general elections, I defy anyone to find a frivolous or absurd reason why they called an election when they did. Let me quote briefly from the list. In 1931, we had an early general election:
“Resignation of the Labour Government and formation of a National Government by James Ramsay MacDonald who six weeks later asked for a Dissolution in order to obtain a new mandate”.
Is that stupid or frivolous? Obviously, I think it was a pretty disastrous period in our history and he is not my favourite Labour Prime Minister. In 1955:
“Sir Winston Churchill resigned as Prime Minister and was succeeded by Anthony Eden who immediately asked for a Dissolution”.
Is that a stupid or indefensibly partisan reason for calling a general election? In 1966 there was a:
“Request by the Prime Minister for a Dissolution to obtain a renewal of the electors’ confidence in the Government and an adequate parliamentary majority”.
That is a perfectly valid and sensible thing to do. Again, I defy anyone to find anything in this list that is a bad reason for calling a general election.
Finally, I shall say why I strongly support this amendment. I would have much preferred that the Bill had not been introduced. I would have much preferred that we could at least have agreed on four years, but this is a compromise in the classic tradition of the Cross-Bench Peers. It simply provides that if after the next general election, which obviously I hope will deliver a majority Labour Government, the Government want to persist with this procedure that we are probably going to be forced to accept, they will need a resolution of both Houses in order to do so. I would love my party, should it be re-elected, to commit itself to abolishing this legislation. But as my noble friend Lord Howarth made perfectly plain, I am realistic enough to see the temptation for an incoming Prime Minister to say, “Yippee, I’ve got five years”, under the Bill as it stands. Why on earth would he want to get rid of that power? What is all this stuff about the Bill being about weakening the powers of Prime Ministers? It would be very difficult indeed, particularly since all incoming Governments have ambitious legislative programmes and want to get cracking quickly. So it is very unlikely that unless my party commits itself to repealing the Bill, we will indeed go on with it for ever and ever.
This amendment is a clever proposal. It gives the Government what they want, which is something I do not find easy to accept, but it requires every subsequent Government to make a conscious decision to stick by this piece of legislation as a requirement of our new constitution. I strongly support the amendment.
Lord Cormack
My Lords, not for the first time today I find myself very much in sympathy with the noble Lord, Lord Grocott. I cannot say that I share his aspirations regarding a future Labour Government, but apart from that, he has spoken very persuasively and sensibly, as he always does. The noble Lord is a constitutionalist and thus, in the constitutional sense, a true conservative. As I listened to him, I thought of my dear friend, the late, great Jack Weatherill. He used to say, “I am all in favour of progress so long as it does not mean change”. I think that Members from all sides of the House to some degree view this Bill in that spirit. I have never been totally opposed to the concept of fixed-term Parliaments, and indeed I made that plain in my maiden speech. But I must say that the more I have heard of the debates as they have gone along, the more I am convinced, as I said earlier today, that this is unnecessary legislation which is taking up a lot of our time and need not do so.
Some exceptionally distinguished Cross-Benchers—I pay tribute to them all, particularly the noble Baroness, Lady Boothroyd, a former Speaker of the House who has unparalleled experience—have put down an amendment that, in a sense, saves us from ourselves. It is a wise and sensible amendment in the best traditions of this House because it accepts, however reluctantly, that it is the will of the Government to have a fixed-term Parliament Bill. I have never for a moment challenged the right of a Government to serve for five years and have said repeatedly that I applaud that desire. I do not think that this legislation is necessary for it, but I applaud the desire. I am pleased to support the coalition Government and I hope that they do survive for five years. I hope that, as the years go by, they become more and more politically mature, less and less bent on messing up the constitution, and then more and more inclined to concentrate on those issues which truly concern the people of this country, wherever they may live.
What the amendment does is recognise the right of the Government to do what they are seeking to do, but enshrines in the legislation one of the principles of our unwritten constitution, which is the right of every new Parliament to determine which way it will go. That does not in any way inhibit future Governments. If, after the next general election, there is a majority Conservative Administration, which I personally would like to see, or a majority Labour Administration, which the noble Lord, Lord Grocott, would understandably like to see, it matters not. If the Government wish to continue with the fixed five-year term, they can do so, but they have got to say to Parliament, “Let us look at this”, as one of their very first acts after the election.
I can imagine that in 1974, because I was there, it would have been difficult for Prime Minister Harold Wilson to have got through the necessary clause to create a five-year Parliament. I am exceptionally sorry, of course, that that would have prevented the noble Lord, Lord Tyler, or Paul Tyler as he was then, serving out the five years which he had hoped to serve, but to have a Government with a tiny majority or, in that case, no majority at all, enshrined for five years would have been a legislative and constitutional nonsense. Of course, Harold Wilson had the right to go to the Palace in the late summer/early autumn of that year, to ask for Dissolution and to have another general election, which had as a catastrophic by-product the loss of the services of the noble Lord, Lord Tyler, but was nevertheless the right thing constitutionally to do.
All that this amendment does is to recognise reality and it ought to command a degree of support from those of us in all parts of the House who truly treasure our constitution. I said earlier today that it is the most important part of our democratic heritage. The Government are not damaging it irrevocably by producing this Bill, but we are putting in a safety clause. We are giving an opportunity for future Parliaments not automatically to be saddled with this but to have to face up to the question: do we want it? I was delighted that my noble friend Lord Hamilton made the brief and telling speech that he did. I think that he spoke for many who share our views and our prejudices—because we all have them. This is an amendment which ought to commend itself to my noble and learned friend Lord Wallace, for whom I have a genuine regard and who has always handled matters in this House extremely sensitively and considerately. I hope that he will say that he can commend the amendment, just as he has put his name to another amendment lower down the Marshalled List.
The amendment paves the way for the important debates next week when we have to decide the circumstances in which an early election can be called, all of us having recognised that there must be a proper, comprehensible and simply expressed formula which can provide for that. For the moment, we are dealing with this amendment and it should command widespread support.
Lord Butler of Brockwell
My Lords, I and, I am sure, my noble friends are very grateful for the generous things which have been said about this amendment. They have been said so well that I need speak only briefly, but I hope that brevity will not disguise from your Lordships the constitutional importance of the principle which underlies the amendment.
I do not question or doubt for a moment the sincerity of the noble Lord, Lord Tyler, and his colleagues who believe in a fixed-term Parliament. I do not agree with them, largely for the reasons that were so well put by the noble Lord, Lord Grocott, because there are circumstances in which it is in the national interest for a Prime Minister to seek an early general election and a new mandate. The circumstances which the noble Lord described bear that out. I simply do not think that it is true that all Prime Ministers who go for an early election do so for their party advantage. There are very often national circumstances, as there certainly were in my experience, which make that desirable.
Perhaps I may state some propositions on which I think we can all agree. The first is that to go from flexible-term Parliaments to an arrangement for fixed-term Parliaments is a constitutional change. As the noble Lord, Lord Owen, said, it is a major constitutional change; arguably, it is more important than the change to the alternative vote system on which the country had a referendum. Secondly, I think that it is unarguable that the Government do not have a mandate for this proposition. It was in the coalition agreement, but it was not in the Conservative Party manifesto and it is not something on which the public voted at the last general election. Thirdly, as was said, there has been no pre-legislative scrutiny of the Bill. It has been introduced very quickly; I think that one could say that aspects of it were not properly thought out. That is not the way that a major constitutional change of this sort ought to be introduced.
As has been said, the Government have a perfect right to commit themselves to a fixed term for the present Parliament, provided that they continue to maintain the confidence of the House of Commons. As the noble Lord, Lord Cormack, and others have said, it is not necessary to have legislation for that purpose, but if the Government want such legislation, to bind themselves with hoops of iron, I regard that as their business; I do not challenge it. What I do challenge is their right by making a permanent constitutional change to bind future Parliaments. Certainly, they do not have the right to make a permanent change to our constitution to meet the convenience of a temporary coalition.
As has been said, this amendment seeks to deal with this situation in a reasonable way. It does not defeat the Bill. It allows it to apply to the present Parliament, which is the Government’s wish. It allows the legislation to remain on the statute book in case a future Government or coalition wish to bind themselves similarly. However, while giving a future Parliament that choice, it avoids a permanent change to our constitution. I urge noble Lords in all parts of the House, whether they agree with a fixed-term Parliament or not, to uphold the principle that we do not make permanent changes to our constitution without more consideration than has been given in this instance and that we do allow future Parliaments to apply this legislation to themselves if they choose it.
Lord Marks of Henley-on-Thames
My Lords, like my noble friend Lord Tyler, I agree that these amendments are clever and elegantly drawn, and the quality of the speeches in favour of them supports that. However, upon analysis, one sees that the effect of the amendments is to undermine the entire Bill from the next election. Having listened carefully to the speeches that have been made in support of them, it is plain to me that that is the desire of those who have made them. The effect of the amendments is that a resolution of both Houses would be required to make any subsequent Parliament fixed term. As has been rightly pointed out, this and any Government already have the power to decide the date of the next election, which they can, if they wish, fix. That being the case, with these amendments, this Bill would add nothing to the existing law.
The Bill, which has been extensively debated, is intended to legislate for the principle of fixed-term Parliaments for the long term. To the extent that it is enacted and stays in force, it will ensure that the power to dictate the timing of elections is removed from the Prime Minister of the day. That is, however, subject to the provisions in Clause 2 for early elections. Much humour has been made of the loss to the House of Commons of the noble Lord, Lord Tyler, in October 1974. It is likely that this Bill would not have saved the noble Lord’s career then, because the House would probably have been dissolved in any event pursuant to the early election provisions had this Bill been in force.
Lord Butler of Brockwell
Since it is agreed that the legislation is not necessary to bind the present Government, what purpose can it possibly have except to bind future Governments?
Lord Marks of Henley-on-Thames
My Lords, that is an important point, but the answer is that if you legislate on the principle, as this Bill when an Act will seek to do, the electorate will be entitled to know what it is voting for at any election. Will it get a fixed-term Parliament unless the legislation is amended or repealed, or will the Government and the Prime Minister retain the right to choose when to go to the country? If the Government decide to repeal the legislation or amend it, they are likely to put that in their manifesto. On the basis of these amendments, the Government will have the right after the election to determine what the electorate has given them. That, in my respectful submission, is wrong in principle.
Furthermore, the amendments are inconsistent with the Parliament Act 1911. By that Act, the House of Commons can insist on legislation that does not extend the life of a Parliament and this does not extend the life of a Parliament, with the exception of the possible two-month extension, and we do not know what will happen to that. This House can only delay legislation. By these amendments, because of the provision for a resolution of both Houses, the power of this House would be there to deny passage to a resolution that the House of Commons wished to pass. That again is contrary to the principle and militates against these amendments.
The so-called sunrise clause in Amendment 25 would cause chaos. By way of example, under Amendment 25, the schedule would come into force only to the end of the first meeting of the next Parliament, but that schedule is the one that would repeal the Septennial Act 1715 among other things. Would that suddenly come back into force after the next election?
The amendments are understated in their presentation. They hand straight back to the Prime Minister and the Government of the day, with no need for legislation, the power to choose the timing of the next election. That is the answer to the point made by the noble Baroness, Lady Jay, when she intervened on my noble friend Lord Tyler.
Lord Gilbert
I have listened very carefully to the noble Lord’s speech. Over and again I heard him say that the Prime Minister would have total power to choose the general election date. Has it never occurred to him that the monarch has a say in that? The noble Lord finds that funny, but I do not.
Lord Marks of Henley-on-Thames
We plainly take a different view of the constitutional arrangements. The monarch has a say in certain very limited circumstances but, by and large, in a constitutional monarchy she takes the advice of the Prime Minister and is very careful to avoid becoming embroiled in constitutional disputes of this sort.
Lord Gilbert
Is the noble Lord actually advancing the proposition that the monarch has no discretion whatever as to whether she actually accedes to a request for a dissolution?
Lord Marks of Henley-on-Thames
Noble Lords will have heard me say that her discretion is very limited and that she seeks to stay out of controversy of this sort where she possibly can. Plainly, sometimes, the monarch’s role is to get involved and sometimes that is unwisely exercised, as with the dismissal by Sir John Kerr of the Government of Gough Whitlam in Australia. That was not the monarch directly, but it was the monarch’s representative and that shows the danger of the monarch becoming involved. Controversy has raged ever since in Australia and elsewhere about that exercise of the royal prerogative. It is a dangerous one.
My point is that if you read these amendments carefully, a resolution of both Houses would be required for this legislation to survive beyond the first meeting after the next election. That is wrong. If Parliament wishes to change the law, it needs to pass new law to do so.
Lord Falconer of Thoroton
My Lords, as I indicated earlier, I support this suite of amendments. They are important in relation to the position of Parliament and this Bill for three reasons. First, such a series of clauses might well be appropriate in any constitutional legislation that makes a significant change. I do not think that anybody doubts that, because that is how the Government are putting it. I agree with other noble Lords who have said that this is potentially a significant constitutional change. In my respectful submission, before we commit ourselves irredeemably to this change it is sensible to see what happens. For that first reason, I support the amendments.
Secondly, we broadly know—there is no real dispute—the provenance of these constitutional changes. There is no suggestion that there is a widespread desire among constitutionalists or the public for this particular change. It is an insider’s deal in relation to politics, which suits two political parties. As far as one can see, it has no broad political support beyond the two political parties. I venture to suggest that, if the public's interest could be engaged in this and one explained to the public that we might have a situation under the Bill where the Government could be defeated on the Finance Bill, then defeated on a vote of confidence that they put down and they would still not have to have a general election—or that the Government could be defeated on a vote of no confidence put down by the Opposition and they would still not have to leave because they could spend 14 days bribing a variety of rebels and other small parties to join them, so they could hold on in Government—the public might not find this Bill worth supporting. It is an insider's Bill, which does not feel particularly attractive to me.
There is a third reason of importance. I have found in the course of these debates in the Commons and in your Lordships' House that people think that, in relation to a significant constitutional change, there should be public consultation, a desire to find consensus and pre-legislative scrutiny. Indeed, on 25 May, David Heath, the Deputy Leader of the House of Commons said that he favoured pre-legislative scrutiny for this Bill. His only concern was that such scrutiny might lead to the Bill being forced into the next Session of Parliament. Noble Lords will remember that the coalition in the Commons then extended this Session by approximately nine months thereby making it clear that there could be no clash. There was still no pre-legislative scrutiny.
Therefore, I think most people who have debated this would agree that this Bill has not gone through the appropriate procedures for a Bill of this importance constitutionally. Is there no price to be paid for this? Is Parliament to be absolutely supine in relation to this? It is a big opportunity for the coalition Government to put their money where their mouth is. They say they believe in new politics and they say they believe in reaching out for consensus; I cannot see any reason why the noble and learned Lord cannot say, on behalf of the Government, that he agrees with what has been said and that we should see whether the way that the Bill operates between now and the next election gains public support and, if it does, Parliament can form a view about whether to pass the resolution next time around. That would not cost the Government anything, because they would have the Bill they want.
Lord Rennard
The noble Lord is of course a very clever lawyer, so perhaps he could just explain to the House, for the purposes of clarification, how he considers supporting an amendment that says that each Parliament, after each general election, should meet to consider how long the Parliament should last, is compatible with the Labour Party manifesto commitment a year ago, which said that if the party returned to government, it would legislate for fixed-term Parliaments?
Lord Falconer of Thoroton
What you do here is you have a Bill for fixed-term Parliaments, you see how it works and, if it works, you determine whether, as a Parliament, you should continue with it.
Lord Elton
Can he answer the points made by my noble friend Lord Marks, in particular those relating to the Parliament Act and the lapse in the schedule?
Lord Falconer of Thoroton
With respect, the Parliament Act is a total red herring. The noble Lord, Lord Marks of Henley-on-Thames, says that by allowing the decision to depend on a resolution of both Houses, we—Parliament—are giving the power back to a Government with a majority. Of course we are, but we are doing that anyway because they could pass a repealing Act. Surely it must be right for this House to express its disapproval of the way that the Bill has been brought forward by supporting the amendment tabled by the noble Lord, Lord Pannick, the noble Baroness, Lady Boothroyd and the noble Lords, Lord Butler and Lord Armstrong, and to say, “Yes, you can have your Bill, but let us see whether or not a major constitutional change like this—which is very much an insider’s Bill—works, let us see whether or not it is something worth continuing and let the next Parliament decide”.
Lord Marks of Henley-on-Thames
I do not understand how what the noble Lord has said answers my point that in order to revive the Fixed-term Parliaments Act after the next election, you would have to have a resolution of both Houses, while ordinary legislation could be insisted upon by the House of Commons after a delay of a year.
Lord Falconer of Thoroton
Parliament could use its majority to get the repealing Act through, just as it could use its majority to pass the resolution. In my respectful submission, there is no difference between the two.
Lord Turnbull
Can the noble Lord explain my one reservation about a provision I otherwise support, which is about the point in the next Parliament when this option has to be exercised. Can it be exercised at any time through that Parliament, or does it have to be done early on? If it is not early on, is it fair that you do nothing for, say, two or three years, then when it looks as though you might quite like the protections of this Act, you decide in about the third year to revive it? Should there be some point at which you have got to place your bet?
Lord Falconer of Thoroton
I understand the amendment tabled by the noble Lord, Lord Pannick and the noble Baroness, Lady Boothroyd, to be governed by Amendment 25 in this respect. What happens is that this Bill continues only up until the first meeting of the next Parliament, and I assume that the resolution can be passed at any time thereafter. I hope that satisfies the noble Lord, Lord Turnbull.
Lord Turnbull
I think it satisfies me as regards the explanation, but I am not sure that it satisfies me as to whether that is the right outcome.
Lord Falconer of Thoroton
I would have thought it is sensible for Parliament to decide when it wants to consider the resolution—it might well want to consider it early on, or it might well want to consider it later on. I do not see any purpose, as far as the amendment is concerned, in restricting the time as to when the resolution needs to be considered. In my respectful submission, the key point in relation to this is that this is a bad piece of constitutional legislation, in the sense that the process used is agreed by all to be a bad process. Putting aside the argument that says all constitutional legislation should be subject to a sunrise clause, it is right, if we are going to make a change to our constitution of this importance, that there should be some protective measures. This seems, with respect, to be a very sensible protective measure. If we see our role as being to protect the constitution, and we can do that without denying the Government what they want politically, then I respectfully suggest we should take that opportunity. I am grateful to the noble Lord, Lord Pannick, and the other co-signatories to the amendment for giving us that opportunity.
Lord Tyler
The noble Lord has made a very important point about protecting the constitution. Has he considered the consequences, in terms of a very considerable constitutional crisis, if, under the wording of this amendment, one House votes in one way and the other House votes in the other way? That would raise huge problems in terms of the primacy of the other place.
Lord Falconer of Thoroton
In the situation where you have a proper constitutional arrangement, whereby we protect the constitution here, if you took the view that we were not going to support such a resolution, that is the way that our constitution works. We have been good as a House in determining when we defer to the other place. We do not defer only when we think a real constitutional principle is in issue; if we did not defer to the other place on an issue like that, we would be assuming—I would be assuming—that an important constitutional principle was at stake. What is wrong with that? What is our purpose if a part of it is not to defend important constitutional principles?
Lord Gilbert
Is not the danger to which the noble Lord, Lord Tyler, has just referred only likely to arise if both Houses are elected? [Laughter]
Lord Falconer of Thoroton
It is very difficult to answer that question, and I will not try.
This is an important opportunity for the Government to show their sincerity in relation to the way that constitutional legislation should be done and to accept the amendments. If they do not, I will support the movers of the amendment if they put it to the vote.
Lord Wallace of Tankerness
My Lords, as we have heard, Amendments 4, 5 and 25, tabled by the noble Lord, Lord Pannick, with the support of the noble Baroness, Lady Boothroyd, and the noble Lords, Lord Butler and Lord Armstrong, provide that the Bill’s provisions would be subject to a sunset clause combined with a potential sunrise clause after the next general election. As my noble friend Lord Tyler said, these amendments are both interesting and seductive. It is also fair to say that they are somewhat complex.
I want to take a moment to set out what the amendments seem to be designed to achieve. They would enable the next parliamentary general election to be on the date set out in the Bill, namely 7 May 2015. After this parliamentary election, however, the apparatus in the Bill—the date of general elections after the 2015 election; the process for calling early elections, and it is important to remember that there is a process for calling early elections which has sometimes been overlooked; and the consequential matters in the Bill—would all cease to apply unless revived. It could be revived by a resolution of each House of Parliament—a sunset clause combined with a sunrise clause. I think that the noble and learned Lord, Lord Falconer of Thoroton, gave an accurate and factual answer to the noble Lord, Lord Turnbull, when he said that that resolution could take place at any time. It could add to the uncertainty, and I do not think that that is a particularly happy arrangement.
In bringing forward this Bill the Government sought to put in place a provision that we hoped would become part of our constitutional arrangement—fixed terms for the United Kingdom Parliament, just as there are fixed terms for local government, for the devolved Parliaments and Assemblies and for the European Parliament. Two of the Bill’s key provisions are: to deny the Executive the ability to choose a date for a general election to suit their own party political ends, and to deliver certainty about how long a Parliament should last. On Second Reading, the noble Lord, Lord Hennessy, remarked on the importance of these provisions. I think that he also called them a collector’s item, not least because the Executive, and specifically the Prime Minister, were surrendering a long-held power.
If these amendments were accepted, the position would not be clear not only in the Parliament elected after May 2015 but, indeed, in subsequent ones. Again, the political parties would be able to choose whether Parliaments should have a fixed term, in which case all the arrangements would be in place, or whether to return to the default position of the Prime Minister of the day choosing at some stage during the five years, assuming the quinquennium was revived, when to hold an election. That would mean that in each Parliament the Government of the day could have the allegation levelled against them that they were in some way operating for a partisan advantage.
It has been suggested not just in this debate but in a number of debates that the whole purpose of the Bill is to make arrangements for this Parliament. However, it is clear that it is intended that the fixed-term Parliament should, as I said, become part of our constitutional arrangements. That is what the Labour Party said in its manifesto and my own party has argued that for some time. I thought I heard the noble and learned Lord, Lord Falconer, say that that was still the Labour Party’s policy but I fear that supporting this amendment, as he does, puts that into question. It would allow the Government of the day elected after 2015 to decide, if they had a majority, whether to table the Motion or resolution to re-establish fixed-term Parliaments or whether to revert to the situation that existed prior to this Bill.
Lord Falconer of Thoroton
If we discovered that these provisions did not work well or reduced confidence in our constitution, would it not then be right not to prolong them?
Lord Wallace of Tankerness
My Lords, in spite of all the criticisms that the Constitution Committee of your Lordships’ House made of these proposals, it thought that the architecture of Clause 2 and the double triggers for Dissolution were suitable and appropriate. However, if it were felt that other mechanisms were required, clearly amending legislation could be brought forward, and later I shall say something about the importance of using legislation.
In establishing fixed-terms, we are providing that the Government and the Opposition have to face the electorate on a set day. As my noble friend Lady Stowell said on the first day in Committee,
“it would ensure that the Government and the Opposition had to face the electorate on a predetermined date, whatever the political conditions are at that time. That is the most compelling thing about fixed-term Parliaments”.—[Official Report, 15/3/11; col. 223.]
If this amendment were passed, we would allow the situation to revert to the status quo and, as a number of my noble friends have indicated, it would mean that the fixed term would apply only to this Parliament. When this Parliament established fixed terms for the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, a sunset clause was never suggested, and indeed no one in any of the devolved institutions has ever suggested that we should revisit the idea of fixed-term Parliaments. No one is suggesting that Mr Alex Salmond should be able to choose to call an election to suit the best interests of the SNP some time over the next five years. I accept all the caveats that it is not possible to make a complete comparison between this Parliament and the devolved institutions; nevertheless, fixed-term Parliaments for legislatures have worked and no one is suggesting that that should change.
A fixed-term Parliament will deliver certainty. We debated earlier whether better planning is achieved over four or five years, but we believe that a fixed term will facilitate better planning across government. The nation will no longer be left on tenterhooks or have to deal with wild speculation about whether the Prime Minister will go to the country or how the opinion polls are going. In introducing his amendment, the noble Lord, Lord Pannick, talked about Prime Ministers agonising over the decision, and sometimes they got it wrong. Harold Wilson arguably got it wrong when he called an election in June 1970. However, let us not kid ourselves: the agony is over whether it is going to be in the best interests of their party. As my noble friend Lord Dobbs has said on more than one occasion during our debates, the key question is, “Can we win?”. It is not unreasonable for a political party to want to win but that is not necessarily the same thing as national advantage. In his book, The View from No. 11: Memoirs of a Tory Radical, my noble friend Lord Lawson said about the then Prime Minister, now the noble Baroness, Lady Thatcher:
“Her view was that a Government should always wait until the final year of the quinquennium, but once there should go as soon as it is confident it will win”.
Noble Lords may say that that is stating the obvious but that is what the Bill tries to change. There will be a fixed term and it will not be possible for the Prime Minister of the day to choose the moment that will be to the party’s partisan advantage.
I should be interested to know how the proposers of the amendment would react if the change were made by repealing legislation rather than having an affirmative order. How would they react if a Minister came to the Dispatch Box of your Lordships’ House and argued that the Government wanted to return to the Prime Minister of the day being able to make a decision to suit his party interest rather than sticking with fixed terms? Perhaps in his reply the noble Lord, Lord Pannick, will tell us how he expects all this to work. The schedule of consequential amendments contains quite important and weighty matters—for example, the repeal of the Septennial Act, changes to the Regency Act 1937 and provisions relating to the demise of the Crown. Does he see those being revived, having been repealed? He will know that there are provisions in the Interpretation Act concerning the revival of an Act that has been repealed. However, I think that there is some uncertainty about whether these would be revived.
The other point that has been made is that not much has changed from the present situation, in which a Government have come to power and introduced a maximum fixed five-year term. I do not think it is fair to say that that is analogous to the situation that would be in place after 2015. The present system is uncertain for the voter and we think that that uncertainty should be removed by introducing fixed terms. However, these amendments would add an entirely new layer of uncertainty for voters. Not only would they not know, when voting, when a subsequent general election might be but they would not even know the legal system under which the next Parliament would operate and how the next general election date would be chosen. I do not believe that that is fair or sensible for the electorate.
It has also been pointed out that the Bill alters the apparatus for calling elections. The crucial difference is that the Government propose moving to fixed terms through an Act of Parliament subject to all the safeguards that that implies. We have heard much in this debate about the importance of our constitution. The noble Baroness, Lady Boothroyd, talked about the fact that we do not have a written constitution. However, if the constitution is changed, it is done through an Act of Parliament rather than through a special procedure, and people have cherished the idea of parliamentary sovereignty.
It is not the case that this Parliament, through this Bill, is trying to bind its successors. That point was made forcefully by the noble Lord, Lord Butler of Brockwell, but it was answered by my noble friends Lord Tyler and Lord Marks. We do not seek to entrench these provisions. We cannot bind a future Parliament. However, we can say that this important constitutional change has been brought into the law of our land through an Act of Parliament—by First Reading, Second Reading, Committee, Report and Third Reading in the House of Commons and by the procedures that we know in this House of First Reading, Second Reading, Committee, Report and Third Reading and by Her Majesty giving Royal Assent. That is how we change our constitution—by Act of Parliament.
Surely, if we were being true to our constitutional heritage, we would say that any change to that heritage should also be carried out through an Act of Parliament. It would have to have the same scrutiny as this Bill has clearly had and Ministers would, in the other place and this place, have to argue their case for making the change. I do not think that we can just sweep aside the concerns raised by my noble friend Lord Marks. With the exception of amendments to the Parliament Acts, with this amendment a resolution of the House of Commons could be overturned or at least thwarted by a resolution of this House. It is a unique situation and we should think long and hard before going down that route. If we do go down it, one can imagine the tensions there would be at some stage if the other House had voted for a fixed-term Parliament but this House decided it would not. I fully understand and associate myself with the concerns about our constitutional procedures and heritage, but we change the constitution by Act of Parliament and not by simple resolution. A very new venture is embodied in these amendments.
Lord Mackay of Clashfern
Can my noble and learned friend tell me whether he knows of any mechanism by which an Act of Parliament which has come into force can have its force suspended for a given period?
Lord Wallace of Tankerness
I cannot readily think of one off the top of my head. However, there are enough people in the Chamber and, if there is such a mechanism, I am sure that one of them will be able to tell us. My noble and learned friend, who has wide experience, might be able to think of one, but I cannot. However, the “sunsetted and sunrisen” approach is very novel.
Lord Falconer of Thoroton
My recollection is that we put sunrise or sunset clauses into a significant amount of the terrorist legislation, the result being that they would continue to have an effect only if there had been a resolution in both Houses of Parliament to carry on with them. I think that that is an answer to your Lordships’ question.
Lord Mackay of Clashfern
With respect, that is not an answer to my question. The terrorism provisions end the Act of Parliament unless it is continued by a resolution, whereas this proposal, as I understand it, would suspend the operation of this Bill, supposing that it becomes an Act, for a certain period without repealing it. At the moment—I am willing to be taught—I cannot think of that having happened before. However, novelty is perhaps the watchword of the season.
Lord Falconer of Thoroton
The noble and learned Lord is right. There is a difference between an Act lapsing and not being revivable and the situation under this provision where if it lapsed for the first Parliament because it was not passed in resolution, it could be revived for the second Parliament. In practice, however, the difference may not be that great.
Lord Wallace of Tankerness
My Lords, I stand to be corrected, but as far as I am aware it is a novel approach. Not only could it lapse and be put in suspension; it could be revived, lapse again and be revived again. We are not switching on and off light bulbs. There are quite important issues here and I am not sure that these procedures are designed to give them proper weight. That is why we argue that primary legislation should be the way of dealing with the issue, if it is felt that the provisions for a fixed-term Parliament are not working and should not be the basis for the future.
Lord Pannick
My Lords, I am grateful to all noble Lords who have spoken in this interesting debate and for the support that has been expressed on all sides of the House. My answer to the noble and learned Lord, Lord Mackay of Clashfern, is that we are dealing with an exceptional Bill which is being brought forward by the coalition Government to deal with a particular short-term political problem. In the light of that, we should think very carefully before we embody on the statute book, as a permanent measure introducing permanent constitutional change, a measure which has at best a short-term political purpose.
I respect the views expressed by the noble Lords, Lord Tyler and Lord Marks, and by the Minister. I respect their views because they and the Liberal Democrats strongly believe in fixed-term Parliaments as a matter of principle. However, their difficulty is that large numbers of noble Lords on the government Benches do not agree with fixed-term Parliaments as a matter of principle. They are rightly concerned about the constitutional implications of such a measure, as so eloquently expressed by the noble Lords, Lord Hamilton and Lord Cormack, in this debate. They are particularly concerned about this matter in the absence of any public consultation on this issue, in the absence of any pre-legislative scrutiny and given the lack of any evidential basis for the new constitutional principles we are about to enact.
The inescapable reality is that the Government and large numbers of noble Lords on the government Benches are supporting the Bill not because they believe in the constitutional principle but because it is part of the coalition agreement, and it is part of the coalition agreement because of the political needs of this coalition Government to remain together for five years. I repeat: I do not deprecate that; it is a perfectly proper political position to adopt as a basis for legislation which applies to this Parliament. However, it is not an acceptable basis for general constitutional change, as the noble Lord, Lord Butler, has pointed out.
The noble Lord, Lord Turnbull, asked whether under the amendments a future Parliament could approve a resolution at any time during that Parliament. The answer is yes, and the reason the amendment is so drafted is that it would be inappropriate to limit the events and the circumstances that may occur during a future Parliament. It is quite possible that a coalition Government might be formed part of the way through a future Parliament. The noble Lord, Lord Marks, and the Minister were concerned about the Parliament Act, but of course a future Parliament could at any time enact primary legislation on this subject.
The Minister asked a fair question—all his questions were fair, of course, but he asked me to address this one in my reply—about how this will work in the future. My belief, my expectation, is that no future Government will want to apply the provisions in this Bill as they are unless there is another coalition Government with similar political demands to this one. I hope and expect that after the next general election, if there is a desire in principle for fixed-term Parliaments, the relevant responsible Government will bring forward new primary legislation that will be based upon proper consultation and pre-legislative scrutiny and in the light of experience.
Lord Marks of Henley-on-Thames
I am sorry to interrupt the noble Lord, but what is his answer to my point and to that of the Minister that there should be proper, full parliamentary consideration of primary legislation to amend or appeal this Bill rather than the odd mechanism proposed in his amendments.
Lord Pannick
If this amendment were to be approved by this House and if it were to be approved by the other place, that would be the parliamentary consent to the provisions of this Bill. That is no different in principle from any other circumstance where both Houses approve a particular procedure.
The issue before the House is very simple. Accepting, as these amendments do, that the coalition Government can have their way for this Parliament, should we as a House enact constitutional change for the future on a permanent basis when, to put it at its very lowest, the case for permanent constitutional change has not been made out? I wish to test the opinion of the House.
Lord Pannick
Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
21:04 - Division on Countess of Mar’s Motion - Ayes: 122 / Noes: 155 - Countess of Mar’s Motion disagreed.
The Countess of Mar
That this House regrets that it has been given insufficient information to understand the policy objectives of the Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011 (SI 2011/688), how the scheme will work and whether claimants’ prospects of obtaining employment will be improved.
Relevant document: 27th Report from the Merits Committee.
The Countess of Mar
My Lords, in moving this Motion I may cover some of the ground to be covered by the noble Lord, Lord Knight of Weymouth, in his Motions. The 27th report of the Merits of Statutory Instruments Committee draws our attention to the fact that:
“Although there is a considerable amount of paper attached to this instrument the information it contains is … vague”.
The committee makes it plain that it has asked for clarification on the regulations from the Department for Work and Pensions and that very little has been forthcoming. The committee points to several inconsistencies between the Explanatory Memorandum and the departmental memorandum to the Social Security Advisory Committee. Like the SSAC before it, the Merits Committee is particularly concerned because,
“the sanction on the individual claimant for failing in any element”,
of the scheme,
“is the loss of 3 months’ benefit”.
It also points to how:
“The degree of flexibility and discretion built into the arrangements causes the Committee to question how it can be delivered with any degree of consistency”.
Noble Lords have always been assured by Ministers that primary legislation lays down the framework and that the detail would be provided in secondary legislation. In this statutory instrument, we have little detail. We are told that the Department for Work and Pensions does not intend to provide detailed guidance on the criteria within the regulations, as it believes the best way to select participants is via adviser discretion. It admits that it has limited evidence for the effectiveness of the four-week placement in mandatory work activity and that that activity is a new scheme. In other words, it is making the rules on the hoof—rules for which there will be no scrutiny and no appeal for the claimants.
I have the greatest sympathy with anyone not versed in legislation who may need to refer to it for a particular purpose. I feel that I almost fell at the first post when I tried to find Section 17A(10) of the Act for the meaning of “jobseeking conditions”, as referred to in the last footnote on page 3 of the statutory instrument. I have a copy of the Jobseekers Act 1995 with a Section 17 but no Section 17A, let alone Section 17A(10). There is no indication of when or under which legislation Section 17A(10) was inserted. I would have thought that I would find Section 17A on the internet, but no such luck. With the help of the wonderful staff in the Printed Paper Office, I was led to Section 1 of the Welfare Reform Act 2009—but still no luck. I found that “jobseeking conditions” means conditions set out in Section 1(2)(a) to (c) of the Jobseekers Act 1995. Why on earth could the footnote not have read just that? I can imagine that a member of the public would be enraged at having to spend an unnecessary £18 for a copy of the Welfare Reform Act in addition to the £7.70 for the Jobseekers Act simply to find the definition that is pivotal to the statutory instrument.
Regulations 4 and 5 are clear in so far as they go. Noble Lords will be aware that I am concerned with a number of charities that represent people with CFS/ME, but may not know that this week is ME Awareness Week. The Department for Work and Pensions seems to be singularly unaware of and indeed determined to ignore the disabling symptoms of this fluctuating condition. It seems odd to me that the World Health Organisation and the Department of Health recognise it as a neurological condition, while the former Chief Medical Officer, Professor Sir Liam Donaldson, told the BBC online on 11 January 2002 that CFS/ME should be classified alongside multiple sclerosis and motor neurone disease. The National Institute for Health and Clinical Excellence recognises it to be as disabling as multiple sclerosis, rheumatoid arthritis, congestive heart failure and other chronic conditions.
I note from a Written Answer that the Department for Work and Pensions refers to chronic fatigue syndrome when my Questions relate to chronic fatigue syndrome/ME. The two are entirely different conditions, defined by different sections of the International Classification of Diseases in ICD-10. It is high time that the department recognised this, for its failure to do so by applying unjustifiably harsh sanctions which seek to force people with CFS/ME back to work before they are ready could be counterproductive, resulting in a deterioration of their health or delaying their recovery.
I have recently been sent correspondence from a person helping claimants with CFS/ME who are being transferred from incapacity benefit to employment and support allowance. She explains that the claimants are first sent a letter, as outlined in Regulation 4 of the statutory instrument, and states:
“This tells them briefly about the start of the process and that they’ll be contacted by ’phone”.
The time period appears to be about two weeks. She says:
“When the claimants get the ’phone call they are read a statement outlining the process. This appears to be read from a script. The claimants are also given the opportunity to ask questions. I'm aware of several claimants who say the statement is lengthy and due to their cognitive problems, they have been unable to remember the content of it. One claimant asked for a written copy of the statement to be sent to her but was told this wasn’t possible as ‘they were doing it this way’ i.e. verbally”.
She says:
“I feel this highlights the inadequacy of the DWP in catering for those with conditions that involve cognitive problems and further underlines just how these problems are being ignored and poorly understood by this Government department”.
She goes on to say that her contacts are from Kent and the Midlands,
“so they cannot say they are dealing with the process differently—my contacts were both read the same statement over the phone”.
Lord Knight of Weymouth
My Lords, it is a pleasure to follow the noble Countess and I am very supportive of what she has said and of her Motion, but I am now speaking to the Motions standing in my name on the Order Paper. In that context, it is probably as well for me to explain to your Lordships why I thought it necessary to add to her Motion by tabling two of my own.
I am only too aware that it is exceptional for your Lordships to agree an annulment. In this case, I am not opposed in principle to the subject of the regulations, to mandatory work activity—I was a Minister when we proposed a pilot of something similar, just referred to by the noble Countess. I was therefore very reluctant to seek to annul these regulations. What I was after was a mechanism that required the Government to take back the regulations and return with them, in improved form, with the necessary evidence to support their introduction on a national scale, much as the noble Countess has said she would like. In this, I too was informed by the 27th report from the Merits Committee that she referred to.
As I understand it, the regret Motion in the name of the noble Countess effectively reprimands the Government, but does not prevent the regulations from proceeding. Given the extent of criticism from the Social Security Advisory Committee and then from the Merits Committee, it seems appropriate to offer your Lordships the option of requiring the Government to address the concerns of those committees and come back with sufficient information before the instrument is agreed, but giving an indication orally that if they have such evidence the instrument will of course be passed. I was therefore delighted to discover a 2006 report from a Joint Committee on conventions to your Lordships. On page 63 of the report, at paragraph 232, it says:
“In the absence of a power to amend SIs, the most constructive way for the Lords, as the revising chamber, to reject an SI is by motion (or amendment) incorporating a reason, making it clear both before and after the debate what the issue is”.
I therefore tabled such an amendment in this spirit, incorporating a reason, and it was initially accepted. It was quickly then unaccepted, because such a Motion was without precedent. After further discussion, it was then accepted again before finally being rejected by the Clerks. The Clerks were then very helpful in splitting my Motion into the two we have before us tonight. The first is a traditional annulment and the second regret Motion is the explanation. I am most grateful to them for their assistance, but I have to say to your Lordships that I think the current situation a little odd. The way my two Motions sit on the Order Paper is not in the interests of transparency and has elicited a number of media enquiries as to what I am up to. I am therefore writing to the Procedure Committee to suggest that the recommendation of the 2006 committee be accepted so that we can be clearer in future on the Order Paper.
I turn to the substantial issue. As we have heard, the regulations allow the Secretary of State to introduce mandatory work activity for customers in receipt of jobseeker’s allowance from April of this year—that is, last month. Each placement consists of up to 30 hours’ activity per week and lasts for up to four weeks. Participants will at the same time be expected to be actively seeking work, attend fortnightly interviews and be available for work. If they fail to meet these conditions, they can lose 13 weeks’ benefit for the first offence and 26 weeks’ benefit subsequently.
While there is an appeal process for the sanction, there is no appeal for being mandated on to the scheme. There will be around 10,000 places per year and customers will not be able to volunteer to take up these places. An enthusiast would therefore have to persuade their adviser to make them go on the scheme. The DWP does not plan on issuing detailed guidance, as we have heard, but wants to give flexibility to Jobcentre Plus in how it uses this new weapon in its armoury. I was an early evangelist for local flexibility but I worry that this is all left a little too vague, given the seriousness of the sanctions that I have set out.
As I have said, I am not against the general principle; when in government, we legislated for a pilot to mandate Work for your Benefit. However, I am concerned about proceeding with a national scheme without evidence. If this Government had proceeded with the pilot for Work for your Benefit, they would have that evidence on whether this will work.
As the Social Security Advisory Committee has said in paragraph 4.2 of its report,
“published evidence is at best ambivalent about the chances of ‘workfare’ type activity improving outcomes for people who are out of work. The Department’s research indicates that ‘there is little evidence that workfare increases the likelihood of finding work’ unless conditions are as close to work as possible. The evidence suggests that the mandatory work activity must be carefully tailored to an individual’s specific needs and carefully timed to be of maximum effectiveness”.
In the light of that clear statement from the department’s independent experts, how does this four-week work activity differ from the work done on, say, community punishments? How will advisers be trained to tailor it to the individual’s needs and timed to be most effective?
As the Merits Committee said, the purpose of the mandatory work activity is not clear. Is it, as the Explanatory Memorandum says, to require extra support to help customers refocus their approach to job search? Or is it more, as the department’s memorandum to the Social Security Advisory Committee says, to give jobcentre advisers another intervention to deal with those doing only the bare minimum to comply with the requirement to seek work? The SSAC is concerned about the,
“precedent set by appearing to punish claimants who are satisfying the conditionality rules but who in the view of the Personal Adviser appear to display the ‘wrong attitude’”.
Is the committee not right that this is an extension of the conditionality rules by the back door, by negative instrument, and with no evidence to support it?
Why not delay the regulations and proceed with the pilot to ensure that the 10,000 work experience places are an effective use of taxpayers’ money in helping people into work? How would the Minister respond to those who suggest that this is going to end up just being a way of parking 10,000 customers and generating a few headlines in the Daily Mail, but not actually helping anyone?
Then there are the concerns about certain groups being able to do the activity and fulfil the other conditionality rules. I shall quickly run through those, and if he has time perhaps the Minister could address them too. Rural residents may be sent to work at some distance, at their own transport cost, and potentially a long way from the local office for signing on. Will the requirements be relaxed to allow them to sign on by phone during the period of the placement?
What about participants with children? According to the SSAC report, their childcare has to be funded from their benefits. Can that be right? Does that not put them in a position of choosing to use all their benefit for 30 hours’ childcare leaving nothing to live on, to lose a benefit sanction of three months, or to take risks on the reliability of informal childcare, which might mean that they were unable to get to work? What will that do to their experience of work as a positive activity? Remember, they have no appeal on the mandation. The Minister could assist greatly by being clear now that advisers will put the interests of children first in applying these regulations, and that parents will be mandated on to the scheme only if the childcare arrangements are adequate and affordable.
Baroness Thomas of Winchester
My Lords, I, too, am glad to have the opportunity to debate briefly the thinking behind this order, which raises some important questions. I am not unsympathetic to the whole scheme. It has been introduced, we are told, because Jobcentre Plus staff wanted a tool to enable them, in the words of the Minister, Chris Grayling, when he gave evidence to the Merits Committee, to refer someone on JSA for a period of full-time activity to instil the discipline of work, and re-energise, refocus and remotivate them to enter or re-enter the world of work. This sounds reasonable until one looks at the process. It is very rare for the Merits Committee, of which I used to be a member, to draw the special attention of the House to an order using the following words:
“The Committee considers it unacceptable that the House has been given insufficient information to understand the policy objective of the scheme; to determine how the scheme will work; and effectively to assess whether the outcome will help claimants to improve their prospects of obtaining employment”.
Since then, the noble Lord, Lord Knight, has told us what the up-to-date situation is, which I had not heard about. I am glad he has given us that news.
It is important to say that this mandatory work activity scheme is not work-related activity, which is a very different scheme for those on the employment side of ESA. However, there is a similarity between the two schemes—not just between their names, which is unfortunate. Both are supposed to help unemployed people prepare for the world of work and both carry a sanctions regime, although neither is a sanction in itself.
The two sanctions regimes are very different. Work-related activity for ESA claimants carries a relatively mild sanctions regime, whereas this scheme—although placements under it last for only four weeks—has a much tougher regime. As we have heard, if someone defaults without good cause there will be a fixed sanction of 13 weeks. If this happens twice within 12 months, the sanction will be of 26 weeks. No wonder the SSAC considered this disproportionate. It was also critical of the fact that the sanction could not be overturned or shortened by a claimant re-engaging with the process, thus turning the whole placement, in this circumstance, into nothing much more than a punishment. How do we know what a good cause is for this particular scheme? We do not; it is left, presumably, to the decision-makers in Jobcentre Plus. Why? It is apparently felt that prescribing in regulations what constitutes good cause will limit the circumstances in which it can be applied, although it is prescribed for other sanctions regimes. Does this mean that there is likely to be inconsistency up and down the country in how good cause is judged? Yes, this is bound to happen, which must surely be why these regulations, as drafted, are unacceptable and leave Parliament unsighted as to how the scheme will work in practice.
One matter I am puzzled about is the nature of the placements under the scheme. The Minister in his evidence said that placements would be in the not-for-profit sector. He cited the examples of work in a charity shop or on a conservation project. However, nowhere is it spelt out in the regulations that these placements will be in the not-for-profit sector. Clearly there are all kinds of implications if placements are to be made in ordinary businesses, including the danger of exploitation. I wonder why this is not stated in the regulations. Many other questions are raised by the order. Perhaps two, crucially, are: is the balance right between what the Secretary of State lays down and what is left to local determination; and what will success look like?
All in all, Parliament is being asked to buy a pig in a poke with these regulations, framed the way they are. As I said at the beginning, I am not against the policy of trying to engage perhaps recalcitrant jobseekers with the world of work, but the lack of information we are given in these regulations leaves me with no option but to vote for the regret Motion of the noble Countess.
Lord Rix
My Lords, this is the first time that I have been in your Lordships’ House since the debate on disability last Thursday, when it was announced that the noble Lord, Lord Freud, had had an unfortunate accident. I am glad to see him back in his place and I hope that he is fully recovered.
I start by stating that I am, of course, in support of the principles behind universal credit—namely, making work pay and helping more people into employment, if they are able to work. I doubt that anyone in the Chamber opposes that. However, the means by which this is achieved must be sensitive to the wide-ranging needs and abilities of potential jobseekers. It is within these parameters that any assessment of the fairness and value of the Mandatory Work Activity Scheme must be considered to ensure that people are not disproportionately disadvantaged. I intend to focus on the impact that this regulation would have on disabled people and, as President of Mencap, especially on those with a learning disability, because I fear they stand to lose most as a consequence of these regulations.
Recently, the Employment Minister claimed that three-quarters of incapacity benefit claimants have now been found to be fit for work. Coupled with the removal of the exempt group, which means that people with a learning disability are not automatically exempt from the work capability assessment, this could result in a significant number of disabled people being found to be fit for work and migrated onto benefits, most likely JSA, where they will be subject to conditions such as the Mandatory Work Activity Scheme.
This holds many challenges—primarily the risk of imposing unreasonable demands on people who might struggle to fulfil them because of their disability or those who might not fully grasp the requirements made upon them. A failure to attend a mandatory interview, for example, may be as a consequence of an individual’s lack of understanding of what was expected of them, rather than a deliberate act of non-compliance. Indeed, the Social Security Advisory Committee has warned that:
“Evidence from the Department’s Equality Impact Assessment and DWP research shows that ethnic minority claimants and those with a learning difficulty tend to be disproportionately sanctioned for not actively seeking employment. This, alongside other societal factors, could lead to these groups being disproportionately referred to this scheme and, as a consequence, at even greater risk of sanction”.
I seek assurances from the Minister that the correct protocols will be put in place to ensure that people with a learning disability fully understand the obligations they must meet. It is also vital that these obligations are reasonable and that individuals are provided with appropriate support. This is particularly important because disabled people are statistically more likely to live in poverty and will often be unable to cope with the sanctions.
Additionally, I am very concerned about the precedent being set to punish people for having the “wrong attitude” when it comes to job seeking. It is imperative that the Government are clear about the intention of the scheme. If the aim is to incentivise work, I would suggest that there are better ways of monitoring how proactive people are being when in search of employment, rather than penalising them if someone determines that they are not looking hard enough. The truth might be that an unsuccessful passage into work might not be as a result of a lukewarm motivation but because of a lack of available opportunities to work.
People with a learning disability have very specific and individual support needs when seeking employment. With the increased likelihood of disabled people moving onto jobseeker’s allowance come the increased responsibilities to ensure that these people are properly supported in getting a job and are not given the added onus of unfair sanctions or conditionality if they are unable to do so. Equally, there seems to be no detail about a complaints procedure in the event of this support not being available. Given the significant evidence of prejudice that befalls many disabled people when seeking a job, what assurances can the Minister provide that this will be adequately addressed in the scheme?
As I said before, my concerns arise out of a lack of clarification from the Government about the details of the scheme and I hope that the Minister will be able to allay my concerns by assuring me that disabled people, especially people with a learning disability, will not lose out under these regulations; but, frankly, I fear the worst.
Baroness Lister of Burtersett
My Lords, being new to the House, I am no connoisseur of Merits Committee reports, but on reading its 27th Report over Easter, it struck me as being damning in its conclusion that the lack of information attached to the regulations was unacceptable. The noble Baroness, Lady Thomas of Winchester has confirmed that view.
I am rather more familiar with the reports of the Social Security Advisory Committee, having read many of them over the years. Its report on these regulations, to which the Merits Committee refers, is at the more critical end of the spectrum of SSAC statements. Its key recommendation was that mandatory work activity should not proceed. Nevertheless, it is proceeding on the basis of regulations deemed inadequate by the Merits Committee for their lack of clarity of purpose. As the committee underlines, these are important regulations, the effects of which could have serious implications for the livelihood of thousands of unemployed people. As we have heard, where sanctions are imposed, JSA will be withdrawn for 13 or 26 weeks and, if further primary legislation is passed, we could be talking about loss of benefits for 156 weeks for a third so-called offence from April 2012.
The evidence suggests that it is often the most vulnerable who are subjected to sanctions. Both the Merits Committee and SSAC comment on the ambiguities surrounding the scheme's purpose. The department denies any punitive intent, emphasising how the scheme is supposed to help customers develop behaviours and attitudes required to get and keep work, yet it is adamant that sanctions must be applied to those who do not comply. I do not find the department's response to SSAC’s concerns very convincing. The velvet glove and warm words about support surrounding the iron fist of sanctions look rather threadbare.
I am reinforced in that view by my reading of a recent systematic review of international evidence on the impact of benefit sanctions published by the Joseph Rowntree Foundation. The review questions the efficacy of sanctions in changing claimants’ motivation or attitude towards work. It suggests that although sanctions may have a short-term effect in shortening unemployment spells, the longer-term effects can be counterproductive in jobs and earnings progression. It is worth citing the report's conclusion:
“this report brings into focus the gulf between the rhetoric of welfare reform and the evidence of the effects of sanctions … policy-makers continue to justify the extension of sanctions (and sanction-backed conditionality) on moral philosophy grounds while taking an ambivalent attitude to the evidence … with evidence being marginalised by discussion of principles and what can be expected of claimants in return for benefits”.
I fear that, in a moral crusade against the supposed welfare dependency, Ministers read the evidence through a distorting lens. As the TUC warned in its submission to SSAC, these regulations seem to move employment policy further away from an evidence-based approach. The SSAC report comments:
“The evidence on the efficacy of ‘workfare’ schemes is, at best, mixed”,
as the noble Countess has already pointed out.
Personally, I was unhappy about the previous Government's work-for-your-benefit proposal, but at least, as the Merits Committee notes and my noble friend pointed out, it was to be a pilot scheme with a clear evaluation plan aimed at examining whether mandatory work activity had demonstrable benefits. These regulations introduce mandatory work activity nationwide without any such evidence.
That makes all the more important the monitoring of placements to ensure that, among other things, participants are treated properly and are not used to replace waged workers. I am pleased that the department has accepted SSAC’s recommendation on that point, and I would welcome more information from the Minister about the placement monitoring system. However, as the Child Poverty Action Group points out—I declare an interest as its honorary president— there are no guarantees of minimum standards that can be expected from employers. I regret that the department has rejected SSAC’s recommendation that detailed guidance should be given to employers about placements.
My other main concern, which was also picked up by the Merits Committee and SSAC and was commented on by the noble Countess, is the question of discretion. The Merits Committee questioned how the scheme can be delivered with any degree of consistency given the degree of flexibility and discretion built into it. In its 28th report, drawing attention to oral evidence provided by the Minister for Employment, the committee observed that,
“The targeting of the Mandatory Work Activity Scheme is to be left almost entirely to the discretion of Jobcentre Advisers, and the Minister is sanguine that there will be local variation and a lack of consistency in the way that the Advisers apply their judgment”.
That is just one example of how discretion is being extended in the social security system, and I find it worrying.
Flexibility sounds very positive, but its flip side is a lack of clear rights and the danger of arbitrary and inconsistent decision-making and lack of transparency. Moreover, the JRF review suggests that the administration of sanctions is not rational or equitable and can lead to bias, including racial bias. Important decisions with implications for a claimant's livelihood will be taken on the basis of what SSAC refers to as the
“views and opinions of the personal adviser”—
views and opinions about attitudes and motivations that will require considerable skill to interpret correctly. I would be grateful if the Minister would tell us about the kind of training that advisers will receive to make these decisions, and whether all advisers will have received this training by later this month when the scheme is introduced.
Will the Minister also clarify the department's response to SSAC's recommendation that,
“detailed information is provided to potential participants about the criteria for selection”?
In its response to SSAC’s report, the department says that it accepts the recommendation, but in explaining how it accepts it the department does not state explicitly that potential participants will be told the criteria for selection. I would be grateful if the Minister would confirm whether they will be told.
Another extension of discretion lies in the refusal to prescribe in regulations factors to be taken into account when deciding whether someone has good cause for failing to take part in the scheme when required to do so. This point was made by the noble Baroness, Lady Thomas of Winchester. The department's response to SSAC, namely that doing so risks limiting the circumstances in which good cause could be applied, again is unconvincing. Clear good-cause provisions in the regulations would provide a safeguard for claimants, without necessarily limiting the circumstances to those listed.
In conclusion, the Merits Committee complains about the vague and insubstantial basis on which we are expected to assess whether the regulations will achieve their objective. On the basis of research evidence, I fear that the regulations will do more harm than good. I support my noble friend's prayer that they be annulled, and the Motion of Regret tabled by the noble Countess.
Lord Kirkwood of Kirkhope
My Lords, the House owes a debt to the noble Countess, Lady Mar, for raising these regulations this evening. As always, it also owes a debt to the Merits Committee and the Social Security Advisory Committee for their excellent work. The debate highlights very important points, many of which have already been made.
The first thing that I will say relates to the initial observations about procedures made by the noble Lord, Lord Knight. I would support him in pursuing the clarity that we need to enable the House to demonstrate and exhibit displeasure to the department without necessarily seeking to completely torpedo and annul regulations. The Motion in front of us in the name of the noble Countess, Lady Mar, is well judged. It is not always a Minister's fault—indeed, I completely absolve my noble friend from some of the worst excesses of this order. However, we should have the ability to make it clear that if there is insufficient detail, and if we do not feel that it is safe to endorse proposals that are brought to the House by the department via Ministers, we should have a method of expressing that in a grown-up way, and we should be able also to test opinion in the Division Lobbies. I encourage the noble Lord to pursue that line of thought.
Secondly, my noble friend must have bigger fish to fry. I have spies everywhere and they tell me that this is an £8 million scheme. That does not mean that it is not important—there are important principles here—but he has much more important things to worry about, such as universal credit and the work programme, which are both crucial. I also understand that we have managed to get such a keen price out of the contractors that we have been able to double the number of places for the mandatory work activity scheme and are now thinking about 19,000. That raises questions about the quality of the schemes that will be provided. I have a calculator, and I can divide 19,000 into £8 million and see that it works out at something like £430 per four-week placement. These figures need to be confirmed; otherwise, we will all be confused. The point I am making is that, if we have four-week schemes that are costing £430 to provide, one wonders about the disproportionate sanctions referred to by colleagues earlier in this debate of £1,800 or thereabouts, being equivalent to 26 weeks’ benefit at £67.50. There is a disproportionality about some of this, as well as the question of whether the quality can be delivered on a four-week scheme for £430. We need to keep this in context, but there are some really important questions that worry me about these regulations that are creating potential precedents. These deserve attention.
First, if I understand it right, contributory JSA benefit claimants are covered by these regulations. Contributory benefit claimants are different from means-tested JSA benefit claimants. They have been paying national insurance contributions to enable them to be entitled to this benefit, at least in the first year, before they go into the work programme, as I understand this scheme as it is going to be rolled out. They are going to be tapped on the shoulder by some Jobcentre Plus personal adviser and be told that they are going to be subject to the mandatory work activity scheme. People who make contributions through the national insurance system should be in a different place from those on a means-tested JSA regime. I would like the Minister to comment on whether that is correct.
I also worry greatly about the way we are potentially interfering with the well-established legal definition of “actively seeking work”. The way I read this—and again, I would like to be corrected if I am wrong—being able to do just enough to satisfy JSA legal entitlement requirements is not going to be enough anymore under this scheme, because if you are only undertaking activity that is just enough to satisfy your personal adviser, you can still be mandated to be put on this mandatory work activity scheme. So I think we are stretching some of the well-established concepts. What people really clearly understand about “actively seeking work” has been built up over years in case law. We interfere with that at our peril, and I hope the department is thinking carefully about that.
I also concur with the comments made about adviser discretion, which is unappealable, to nominate candidates for this scheme. Obviously, the decision about a sanction is appealable and that is understood, but the noble Baroness, Lady Lister, was right to draw attention to giving discretion to advisers, as other colleagues have done in terms of local flexibility to contractors.
Part 6 of these regulations causes me some concern because I do not know that I have ever seen anything like this, but I may be wrong. Part 6 talks about “contracting out certain functions in relation to the scheme”. If we are starting to contract out certain functions of the scheme—I understand that does not include sanctions—that is new territory as far as I am concerned. We have to be very careful about what Jobcentre Plus staff and personal advisers can do, as well as some of the providers of these schemes.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, thank you for giving me the opportunity to clarify the objectives of the mandatory work activity scheme and to explain further how the scheme will operate.
Before I go into that, I want to say that the department takes the concerns raised by this House very seriously. The concerns raised here and by the Merits Committee tell the ministerial team in the department that something has gone wrong. I am aware that this is not the first time in this Session that the department’s instruments have been called to the attention of this House, and we find that very serious. The full ministerial team is in agreement that providing the Merits Committee and the House with all the necessary information is of central importance, and we all regret—I particularly regret—any occasion when the Committee felt it received inadequate information. We are working hard to improve on this. We have arranged for senior officials to meet with the committee’s advisers this week in order to take a serious look at how we are falling down, and they will work with the committee team to ensure that the House is in future supplied with all necessary information. I can assure noble Lords that I am going to make sure that there is a process in the department that makes sure that the right information goes to the committee. This will not continue in this way.
Let me now offer some assurances about this particular instrument. The mandatory work activity scheme represents a new approach. I understand why some noble Lords feel that we should have conducted a pilot before introducing the scheme nationwide. Such an approach may have been the norm in the past, but there has been a change of philosophy in this area. The problem with small, limited pilots is that in the mean time they leave you with a moribund system. Central to the new philosophy of the department is that it is best to provide the freedom to allow initiatives to flourish into success. That is what the structure of the work programme is designed to do. It provides our own staff with the freedom to innovate. Advisers are given greater flexibility to make decisions on what help an individual needs in order to find work. It is one of a range of available support options that can be considered.
The budget is set by a central contracting process, but it will up to Jobcentre Plus to decide whether to use it and in what numbers. It will depend on whether there are claimants in a particular Jobcentre Plus area whose characteristics suggest that they would benefit from this intervention. Contracted providers will not be paid for places we do not use, so there is no incentive to use places that customers do not need. My noble friend Lord Kirkwood’s maths on his calculator is more or less spot on. We have the money for up to 19,000 places costing £8 million, which on the calculation of my team in the Box comes to £421. That is close enough to my noble friend’s answer of £423. How he got that discrepancy suggests that it is obviously a Hewlett Packard calculator.
It is important to recognise that we are not undertaking this work without assessing its place in the wider picture. We intend to learn from how mandatory work activity is used and what impact it has on the customers who are referred to it. I shall come back to precisely how we plan to report to the House on that.
I should also like to take this opportunity to address some of the other concerns that have been raised in the debate. It is vital to recognise that this support was asked for specifically by Jobcentre Plus personal advisers themselves. After all, they are the people best placed to understand what help those struggling to find work really need. During the summer, ministerial colleagues went out, listened and gathered opinions from Jobcentre Plus advisers. The consistent message was that they wanted a tool like this to engage a particular group of people. So the introduction of the mandatory work activity programme has been driven by the grass roots. The programme is aimed at a particular, rather small group of people who have become disengaged and stuck in a rut in their search for work. By getting them involved in mandatory work activity within their local communities, the aim is to give them the confidence they need to approach finding employment proactively as well as the basic disciplines that any employer would expect.
The noble Lord, Lord Rix, was particularly concerned about people with learning disabilities. We aim to replicate all the existing protections in referring people. JCP advisers are not looking for customers in this group. Equally, I shall pick up the concerns of the noble Countess, Lady Mar. Customers in poor health are absolutely not the target group for this scheme, which is aimed at those whose key barriers to work are the disciplines of employment. We know that every customer’s circumstances are different. As much as possible, we are giving discretion to Jobcentre Plus advisers on when to refer customers to mandatory work activity.
Although we are not being prescriptive, we are providing guidance to JCP so that it can provide a framework and achieve continuity of approach across the country. The guidance will indicate the type of characteristics that we expect claimants who benefit from this provision to display. As a department, we are choosing to trust those who have day-to-day experience of working with jobseekers. They are, after all, the people who are asking for greater freedom in how to help customers.
The noble Lord, Lord Rix, was concerned about the complaints procedure. A clear, independent complaints procedure exists through the independent case examiner. If providers are at fault, a hefty fine will be attached. The noble Countess, Lady Mar, expressed concern about trickery and quoted from an article in the Guardian. I can assure her that there are no targets in place to deliver sanctions, either in JCP or among providers. The noble Lord, Lord Knight, was concerned about costs. We have taken on board the recommendation of the SSAC that we pay childcare costs. Lack of suitable childcare is good cause for failing to attend. Therefore, there would be no sanction. We also pay transport costs under the programme. More detailed guidance will be available to JCP advisers. The guidance will be internal for them, so it would not make much sense to publish it.
We have now completed the procurement process and are able to discuss the suggestions of those who participate in the scheme. That may be helpful in clarifying how mandatory work activity will help customers as they look for employment. The noble Lord, Lord Knight, and the noble Baroness, Lady Lister, said that research shows that workfare is not effective. We must make it clear that this is not workfare; it is a short, supportive and personalised programme. That is why flexibility is built into it. The noble Baroness said that that can be looked at in two ways, but the intention here, given the brevity of the programme, is to be supportive.
We have not asked contracted providers to give us details of every placement, but, as an example, several organisations have suggested that they will place people with charities that renovate old furniture to be used in social housing or by low-income families. The noble Baroness, Lady Thomas of Winchester, spoke of benefiting the community. Examples of placements include improving local green spaces, improving community cohesion by working with excluded groups, maintaining cultural spaces and helping the development of social enterprises. Our aim is not only to provide visible benefit for local communities but also to give people the chance to develop skills that they can take forward when looking for work in the future. Most importantly, they will be expected to turn up for work every day for four weeks. They will be expected to work with their colleagues and to complete tasks that they have been set in a timely way.
In response to the concerns of the noble Baroness, Lady Lister, about placement monitoring, we will monitor placements through direct relationships with providers. It is clear in the contracts that placements must not replace current or future employees. We are seeking in this programme to instil essential work disciplines. Research with employers has consistently shown that they value such characteristics highly. A short experience of the workplace can help that development.
My noble friends Lady Thomas and Lord Kirkwood were concerned that there was no indication about how we would operate good cause. We will explicitly include good cause in the guidance in a similar way to that in other regulations. The noble Lord, Lord Knight, was concerned about there being no appeal for mandation. The decision to refer is an administrative decision subject to judicial review if it is unreasonable.
I thank noble Lords for allowing me this opportunity to try to explain these regulations more than we seem to have done to the Merits Committee. I hope that I provided some enlightenment. I recognise that some noble Lords hold deep concerns and I respect and acknowledge those. But in response to those concerns, I assure noble Lords that as well as monitoring the management information generated by the scheme from day one, we will be conducting an impact assessment in November 2012 to assess how mandatory work activity has changed outcomes for individuals.
On top of that, we have set aside £150,000 to conduct external independent research in February 2012 to learn about the experience that customers have while on the scheme, and the difference that it makes to the approach that customers take on their job searches. That will report in summer 2012. Any decisions about the future of the scheme will be based on the outcome of those reports. In order to ensure that the House has the opportunity for further scrutiny of any future changes, I commit that these reports will be laid before the House and noble Lords will be alerted that that has occurred allowing for further debate at that time. I hope that those offers are satisfactory and I urge noble Lords not to press their Motions.
The Countess of Mar
My Lords, I am grateful to the noble Lord, Lord Freud, for going to so much trouble, and I have no doubt about his sincerity. I doubt that any noble Lord in this House is completely against these regulations. We agree that some people need to be offered the discipline of work. But we are not happy about the sanctions and the noble Lord has made no effort to justify these draconian sanctions—they are very severe.
I am very grateful to all noble Lords who have taken part. I will not go through their speeches individually because I know that everybody is hungry and will want to go to dinner. I am not satisfied despite the Minister's efforts that he has filled in all the gaps. We have a statutory instrument before us that is not clear and I wish to test the feeling of the House.
Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011
Lord Knight of Weymouth
That a Humble Address be presented to Her Majesty praying that the Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011, laid before the House on 14 March, be annulled (SI 2011/688).
Relevant document: 27th Report from the Merits Committee.
Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011
Lord Knight of Weymouth
That that this House regrets that in relation to the Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011, laid before the House on 14 March (SI 2011/688), “the House has been given insufficient information to understand the policy objective of the scheme; to determine how the scheme will work; and effectively to assess whether the outcome will help claimants to improve their prospects of obtaining employment”, and calls on Her Majesty’s Government to make new Regulations when these concerns have been met.
Relevant document: 27th Report from the Merits Committee.
Fixed-term Parliaments Bill
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Grocott
“( ) Each five-year parliament shall include a minimum of five parliamentary sessions.”
Lord Grocott
My Lords, this is a very simple amendment with a very simple objective which I hope the Government will be able to accept. As the House knows, I find the Bill entirely unattractive and wish that we were simply getting rid of it, but if we are to have a Bill where there are fixed five-year Parliaments, then it follows, as night follows day, that there ought to be a rule governing the number of Sessions within the fixed five years.
It is very odd trying to put our constitution into a straitjacket, but the Government seem intent on doing so. This amendment was considered in Committee but not very satisfactory answers were given. The reason I have been inspired to table it is that whereas we normally know that a parliamentary Session will last about a year—with the exception of the first year of a Parliament, which can frequently be 18 months, from, say, May in one year until November the following year—I am sorry to say that this Government have unilaterally decided that there would be a two-year Session to begin this Parliament.
If we were following the normal conventions of our democracy then we would not be debating the Report stage of a Bill now, we would be having a Queen’s Speech. It is a year since the general election and that is the normal length of a Session of Parliament. The Government have already told us that the next general election will be in May 2015, so it seems an incredibly simple proposition that there should be five Sessions of one year each. Normally it would be completely unnecessary for me or anyone else to move an amendment requiring that this should be the case, but the Government have broken the normal rules. I do not know where the decision to have a two-year Session came from. I ask the noble and learned Lord, Lord Wallace, what consultation the Government had with the Opposition or anyone else when they decided that we should have a two-year Session of Parliament.
As we all know, the sessional discipline is part of the delicate balance between Government and Opposition. Oppositions get stronger, in a sense, as the Session progresses because the Government know that they are up against the deadline of a Queen’s Speech; and we have had, quite properly, to establish precise mechanisms to enable a Bill to be carried over from one Session to the next. I say “quite properly” because we have all recognised in the past—although apparently not now—that it would be quite wrong for a Government simply to be able to extend at their convenience the periods between Queen’s Speeches.
As I say, I do not like translating conventions into rules, but it is necessary in this case. Why are we not having a Queen’s Speech now? Why are the Government not bringing the first year of this Parliament to a conclusion in the normal way, after 12 months, making concessions on Bills—which is what Governments do towards the end of a Session—and then preparing for the next statement of the Government’s policies and legislative objectives, which of course is what we get with a new Queen’s Speech? If the Government are intent on having five years after five years after five years ad infinitum—although I am obviously delighted with the amendment that has been passed that will require any new Government to think again about this—what could conceivably be the objection to insisting in this legislation, which provides us with the opportunity, that there should be a minimum of five Sessions in a five-year Parliament?
I looked in vain, having reread the Committee stage when this was discussed, but no one spoke against it except the noble and learned Lord, Lord Wallace. Maybe it was wishful thinking on my part, but I got the feeling that he was not wildly enthusiastic about speaking against it. The only objections that he offered were that this could present problems should there be a Dissolution of Parliament under the terms of this legislation in less than five years. We all know that that is a possibility; again, it is a part of the Bill that not many of us like, but there are precise provisions for saying how Parliaments can be of a period of less than five years. If the Government have found the mechanism for dealing with a Parliament that lasts less than five years, surely it is not difficult to find a mechanism for dealing with the consequences for parliamentary Sessions. It is unfortunate that we have to go down this road but, if we have, it cannot be beyond the skill of parliamentary draftsmen to deal with that objection.
The only other case that the noble and learned Lord, Lord Wallace, offered in Committee comes in col. 526 of Hansard on 21 March. He explained why the Government decided that it would be not a one-year Session but a two-year Session; it was announced unilaterally to Parliament last September without consultation, as far as I know—although I would be delighted to be proved wrong in that respect. The explanation that was given was as follows:
“An announcement was made in September, which would normally have been between a third and half way through the Session”.
He is referring to the last Session, which should have concluded this May, as I have suggested.
“There was an option to truncate the Session about now”—
he was speaking in March—
“but it was thought that the best thing to do was to go to next year”.
The Minister is very precise with words; he is a lawyer and is careful what he says. It is not exactly truncating a Session to suggest that it should be for a year, however. It really is a fairly loose use of the word.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
Does the noble Lord not recall that the normal practice has been for the first Session after a May election—indeed, I think that it happened with almost every Government elected when Mr Blair was Prime Minister—to last not a year but until the following autumn? So when I say truncated, I mean that there would not normally have been a Queen’s Speech this May; it would still have been in November. The first Session would probably have gone 18 months, so to have had a Queen’s Speech in March or April would have been to truncate the normal practice after a May general election.
Lord Grocott
The problem with that argument is that, yes, it is true that if the election is in May then normally you have the Queen’s Speech the following year, in November. But if there is an election in October—and one that I vividly remember is the one in October 1974, because it was when the noble Lord, Lord Tyler, went out and I came in—the Queen’s Speech is the following November. The convention is that the Queen’s Speech is in November and if the sequence of elections means that that does not happen, it is quite right that there is a long Session of 18 months. There is a bit of a case for that, I suppose; all Governments are wild with enthusiasm when they come in and have lots of exciting things to propose, such as Fixed-term Parliament Bills, and so on. So it goes for a longish Session. But this was a choice for the Government, once they had decided that there would be a five-year Parliament, between having a year Session or a two-year Session. If he thinks there is not much to choose between an 18-month Session, which as he rightly says obtains when there is a May election, and a two-year Session, let me say that it would have been heaven to me as Chief Whip to have had a two-year Session. There is no pressure on you and no trouble; you can spend as long as you like on Committee and Report stages, and so on. So I do not think that that argument held up very well.
I do not suggest evil intent on the part of the Minister or anyone else in the Government in this respect at all. I am simply saying that not much thought went into what was in fact a quite substantial shift of power between Government and Opposition. As I said, that is a pretty delicate matter in our parliamentary procedures in both Houses, because it shifted the balance of power substantially in favour of the Government. I thought that the Minister really gave the game away in this second sentence:
“There was an option to truncate the Session about now, but it was thought that the best thing to do was to go to next year”.—[Official Report, 21/3/11; col. 526.]
The question from where I am standing is: the best thing to do for whom? In whose interest was it unilaterally to determine that there should be a two-year Session?
I simply put two questions to the noble and learned Lord, Lord Wallace. First, was there any consultation through the normal channels about the Government's decision unilaterally to decide, for the first time in the past 30 or 40 years—I am sure that the historians could go much further—on a two-year Session which is massively to the Government’s advantage? Secondly, I really would like to know, once it was determined to be the “best thing to do”, in whose interest the decision was thought to be made. I beg to move.
Lord Falconer of Thoroton
My Lords, we support this amendment. It goes to the heart of this Government’s claim that they wish to empower the legislature as against the Executive. The reason it matters, as my noble friend Lord Grocott said, is that where there is a restriction on the time to get legislation through, there is a huge incentive for any Government, whatever their hue, to reach agreement with the Opposition on as many issues as possible. If they do not reach agreement on those issues, the consequence is that their legislation is delayed.
Parliament is disempowered if a Government feel able, as this one did, to double the length of a Session. This Government did so on a whim, as there was no consultation. It appears from the speech of the noble and learned Lord, Lord Wallace of Tankerness, that they simply decided to go for two years without giving any justification. This House is entitled to hear the Government's opinion on the number of Sessions there should be in a Parliament and their commitment in relation to that. Do they understand the importance of empowering the Chamber in each House by having a limit on the time available to them for the passage of legislation?
If satisfactory answers are not given, this should be put to the vote. It is an important issue. The answers must include one to the question which my noble friend Lord Grocott put, because that is really the litmus test of how committed the Government are to the idea of there being a year-on-year Session. This is another opportunity for the Government to put their money where their mouth is. Are they true exponents of what they describe as the new politics, or are they simply motivated by a desire to make their life as easy as possible—that is, the worst sort of Executive?
Lord Brooke of Sutton Mandeville
My Lords, I apologise for speaking at this late hour but I made it clear in Committee that if anybody referred to Mr Asquith again, it would stimulate me into speaking. Although I was not here to hear the reference to him at the beginning of this afternoon's proceedings, it was alluded to later in the debate on Amendment 1. Therefore, here I am, on my feet.
Your Lordships’ House will recall the Sherlock Holmes case where the great detective pointed out to Dr Watson the significance of the dog not barking in the night-time. Those of your Lordships who were here to listen carefully to the powerful speech by the noble Lord, Lord Morgan, on Amendment 1 will have noticed that he omitted from his list of five-year Parliaments in the post-war era the period from 1945 to 1950. He thus omitted the great achievements of the Labour Government of the Earl Attlee of that period.
In generosity, I take it that the noble Lord, Lord Morgan, realised that it required a five-year Parliament to produce the achievements of what I understand the Labour Party has always thought was the greatest Labour Government of them all. As to the reason he omitted it, I suggest that it was considered either that it would be sacrilege ever to run the risk of toppling the Attlee Government’s record from its plinth or that Labour had given up hope of ever challenging the Attlee Government’s record and felt that Labour should conceal the dilemma I am describing by limiting the life of any future Labour Government to, at most, four years as a self-immolating, self-denying ordinance. The noble Lord, Lord Morgan—not to mention the noble and learned Lord, Lord Falconer—was prudent enough not to announce which of the cases I have adumbrated was correct and now we shall never know.
Lord Norton of Louth
My Lords, I had not planned to speak on this but, reflecting on what has been said, I am rather torn. I accept the logic of what the noble Lord, Lord Grocott, has said—I think that the argument he has advanced is impeccable—but I am reflecting on the value of the sessional cut-off, keeping it to a year, as has been advocated. It is quite right that the sessional cut-off is a discipline on the Government and it gives some leverage to the Opposition—capital “O”, and sometimes small “o”—because of the pressure. I am not sure that compression within one year as the length of the Session necessarily benefits Parliament, because legislation has to be got through in that time and it limits the two Houses in the amount of time they can devote to deliberation in Committee. In the Commons, there is a problem now with Public Bill Committees, because there is very little time between taking evidence and having then to consider the Bill in the normal way.
I am just reflecting on the fact that, while I accept the logic of what the noble Lord has said, maybe we need to think a little more imaginatively about how long each Session actually lasts. In a five-year Parliament, maybe we should think about a three or four-Session Parliament. There needs to be some discipline, but one has to try to get the balance on that right. I am grateful to the noble Lord, Lord Grocott, because he has prompted me to think about that. We perhaps ought to reflect a little more seriously about it; there is a problem with the nature of rushed legislation of this sort, when perhaps we should be sitting back and thinking a little more constructively about how we want our Parliament to be run to the benefit of Parliament. As I say, there is that balance to be met between giving leverage to the Opposition and benefiting Parliament so that it has proper time to thoroughly scrutinise what the Government are bringing forward.
Lord Howarth of Newport
I suppose we could do what the Scottish Parliament does, which is to have no sub-division into annual Sessions within a four-year term—apparently shortly to be a five-year term in the Scottish Parliament. I think that we should either go the whole way in abolishing parliamentary Sessions and having some kind of continuing, rolling process of legislation, or have a rational, predictable, orderly division of the time available in a Parliament.
The amendment in the name of my noble friend Lord Grocott should not be necessary. It is clearly undesirable to legislate on internal proceedings in Parliament, but we have been driven to it by the behaviour of the coalition Government in awarding themselves a two-year Session in which they should have been able to get anything at all through. Their potential abuse of parliamentary strength has been mitigated only by their incompetence in failing to take advantage of the situation that they created for themselves. In the early months of this Session, we had almost no legislation introduced; we then had an immense amount of time spent on constitutional legislation, which the public did not want, culminating in the fiasco of the AV referendum. We now have the pause in the NHS legislation. I am given to understand that there are going to be new Bills introduced at Second Reading this summer, so that even with a two-year Session, they may run out of time to complete their programme; it really is pretty chaotic.
My noble friend does the House, and indeed Parliament, a service in drawing attention to this consideration. While I would not wish to see his amendment get on to the statute book, he very properly challenges the Government to think carefully about how they handle proceedings within this House. I do not want a written constitution but I want respect for the unwritten constitution.
Lord Wallace of Tankerness
My Lords, I thank the noble Lord, Lord Grocott, for affording the House a further opportunity to consider and scrutinise this point, which, as has been indicated, he first raised in Committee. At that point I indicated that the two-year Session that we are currently in was intended as a transitional situation so that we could get into a position where we had 12-month parliamentary Sessions that fitted in, should Parliament pass a fixed-term Parliament Act.
I draw your Lordships’ attention to the Written Ministerial Statement made by my right honourable friend the Leader of the other place, Sir George Young, on 23 March. He reiterated the Government’s decision to extend the current Session of Parliament to spring 2012,
“in order to ensure a smooth transition towards five, 12-month Sessions over a Parliament, which would be a beneficial consequence of Parliament agreeing the Fixed-term Parliaments Bill”.—[Official Report, Commons, 23/3/11; col. 57WS.]
I hope that the House and the noble Lord will be assured that it is our intention that there should normally be five Sessions in a five-year Parliament. While the expectation is that future Sessions will last for 12 months, it remains inappropriate to enshrine that in statute; indeed, I think that I understood the noble Lord himself to indicate that he would prefer that working practices and conventions were not enshrined in statute. It is our intention that in future Parliaments there should be five 12-month Sessions.
In the Bill we have sought to do only what is necessary to establish fixed-term Parliaments for the United Kingdom. I am not convinced that the case has been made for legislating for the number of Sessions. The Bill does not abolish the prerogative power to prorogue Parliament, which will continue to be used to set parliamentary Sessions, nor does the Bill affect the powers of each House to adjourn. It is worth noting that the Constitution Committee has endorsed our decision not to abolish the prerogative power to prorogue.
Future Sessions after this one will last for only 12 months. The noble Lord asked me about the points that I made in Committee. When I talked about truncating this Session, that was on the basis that, as he acknowledged, when elections have been held in May or June it has been customary for that first Session to continue through to the following October or November. To have had a Queen’s Speech around now would therefore have meant truncating what had been expected at the outset.
I have made it clear that the decision to go for two years and thereafter to have 12-monthly Sessions was taken not in May last year but at a later stage. I am not aware that there was any consultation—I accept that criticism—but this was intended to be a transitional measure. By that stage, the Government’s legislative programme had been announced and it would have been very difficult if we had moved immediately to a 12-month Session for the first Session, although that could have been done if it had been thought about at the outset. I hope that the House will accept that that is the purpose of this being a two-year Session. It is not intended that this should be repeated. My right honourable friend the Leader of the other place has indicated that it would now be our intention to move to five 12-month Sessions in a Parliament.
I take the point made by my noble friend Lord Norton about this always being in the interests of Parliament. My experience in your Lordships’ House in the run-up to the most recent general election is that, with the final Session starting in November and finishing in March in order to accommodate a May election, we have tended to have a short Session that I do not believe allows proper scrutiny of legislation. This led to a very unfortunate situation in the wash-up where large parts of Bills were ditched, some of which are now on the statute book but certainly did not have the kind of scrutiny that we would normally expect. Having five 12-month Sessions will allow for proper planning of legislation. While it would be unwise to say that there will never be any kind of wash-up at the end of the final Session, one hopes that there will be far less than has been the case hitherto. One of the advantages of a fixed-term Parliament is that it will be possible to plan a legislative programme in a way that will not lead to these log-jams at the end, when much legislation is virtually nodded through.
The decision having been taken to move to fixed-term Parliaments, and since we seem—for better or worse—to have moved into a situation where elections are held in May, the Bill provides for elections in May. Therefore, it makes sense that we should have annual May-to-May Sessions. I repeat: the current two-year Session is a transition. No doubt what we gain here is that there is only a finite amount of legislative time in the Parliament as a whole if it lasts for five years. It would not be appropriate to put that in the statute. I am grateful to the noble Lord for giving me an opportunity to reiterate the position and to flag up what my right honourable friend the Leader of the other place has said on this matter. With these reassurances, I hope the noble Lord will be prepared to withdraw his amendment.
Lord Grocott
I am grateful to the noble and learned Lord, Lord Wallace, for that response. He simply holds a fundamental view on the constitution. So do I, but it is a different one. He is comfortable with a legislative programme being neatly sliced and organised over a fixed-term Parliament, whereas I have been straightforward with the House in saying that I am not at all comfortable with that. I like the flexibility that normally obtains with our parliamentary system. I do not even have the problem that he has with the last Session of a four-year Parliament quite frequently being a five or six-month pre-election Session. All that the Bill will do is make sure that it is a 12-month pre-election Session instead of a six-month pre-election Session. It will also lead to a lot of uncertainty.
I was straightforward with the House in saying that I was, in some respects, very uncomfortable with my own amendment. For the reasons I have already set out, I do not like putting our constitution in any more of a straitjacket than it needs to be. I am very grateful for the contributions that have been made. As ever, I find myself agreeing with the noble Lord, Lord Brooke, on most things, particularly his reference to the 1945 to 1950 Labour Government having been the greatest Labour Government. I would go marginally further and say that it was the greatest peacetime Government in the history of this country; there is only a word’s difference between us.
I was taken with the point made by the noble Lord, Lord Norton. I agree with him that maybe a year is not necessarily the best period. Maybe it is worth discussing that. I strongly believe in the convention that we have. If a Government are unable to contain their legislative programme within an agreed period of time, there should be an agreement by either House to carry a Bill over from one Session to the next only after the most rigorous tests. However, I take the noble Lord’s point. I must admit that I was stopped in my tracks by my noble friend, who reminded me that it was against the philosophy of several of us to try to put the proceedings of this Parliament into too strong a legislative framework.
The point has been made, as the noble and learned Lord, Lord Wallace, has acknowledged. It is written in blood in Hansard that there will be 12-month Sessions for the remainder of this Parliament until the happy day when it comes to a conclusion and a Labour Government can repeal the whole of this legislation. In light of what has been said, I beg leave to withdraw the amendment.
Lord Norton of Louth
Lord Norton of Louth
My Lords, I shall speak also to Amendments 15 and 17. These amendments remove the provision that enables the Prime Minister by statutory instrument to vary the date of the general election by two months either way. We discussed subsection (5) in some detail in Committee and, in the light of that discussion, I came to the conclusion that rather than trying to build in safeguards or qualifications, as I sought to do on that occasion and as my noble friend Lord Rennard seeks to do today, it would be best to remove the provision altogether.
The principal reason why subsection (5) is included is because it is in the devolution legislation. It appears to have been included without much thought. I have still not been able to find anyone who can think of a circumstance in which the provision to bring the election forward by two months could apply. What sort of emergency can one anticipate before it has happened? Is there really any prospect of the Prime Minister announcing that the election should be brought forward by two months because the Government anticipate that there may be a foot and mouth outbreak at the time of the election?
It is also not clear why the subsection is needed, given the provisions of Clause 2. If there is all-party agreement that the election should be brought forward by one or two months, one can introduce an early election motion under Clause 2(1). That would cover it. The only difference between this subsection and utilising a motion under Clause 2(1) would be that this subsection provides a role for this House, because both Houses have to approve the order, but I do not see why we should be empowered to block an election being held up to two months early when we cannot exercise a similar power over a motion to hold it some time in the preceding four years and 10 months. I also doubt that we would wish to challenge the will of the House of Commons on this matter. I thus favour the removal of the provision for the Prime Minister to bring forward a statutory instrument to bring forward the date of the election by up to two months. My noble friend Lord Rennard seeks to do likewise.
I also favour removing the other half of the subsection. Enabling the election to be delayed by two months is an arbitrary provision. Why two months and not three? A delay needs to be determined in relation to the particular crisis that prompts it. Given that, and the likelihood that any delay will be required only in the most exceptional circumstances, I suggest leaving it to the enactment of a specific Act tailored to the needs of the time, as happened with the foot and mouth crisis in 2001.
The requirement for an Act also emphasises that it is exceptional and does not, as this provision may do, tempt a Prime Minister to use his parliamentary majority to approve an order to delay the election for the purposes of political gain. Two months can make quite a difference. This House would be the only potential block on the provision being used in this way, but we may wish to avoid the potential for a major clash between the two Houses.
My noble friend Lord Rennard seeks to retain the provision but subject it to similar safeguards to those that apply under Clause 2(1) in relation to an early election. If one were to retain the provision to delay an election by two months, I would very much support his amendment. However, on balance, we may as well remove the whole subsection. There is no need for the “before” provision, and the “after” provision is likely to be so exceptional—and may require a delay of more than two months—that we should leave it to Parliament at the time to craft a measure appropriate to the nature of the crisis. I beg to move.
Lord Rennard
My Lords, I rise to speak to Amendments 12, 14 and 16 in my name and those of my noble friends Lord Tyler and Lord Marks of Henley-on-Thames. Amendments 12 and 14 reflect the position that I set out in Committee, when I made plain that I could not see any justification for a provision to bring forward polling day in a general election by two months, in the way that the Bill originally suggested. In all my consideration of the debates here and in another place, I have yet to hear advanced any argument for why it might be sensible to say that a Prime Minister might be able to foresee circumstances in which he needed to bring forward the election by two months.
As the noble Lord, Lord Norton of Louth, said, no Prime Minister could be so prescient as to foresee such events and decide to bring forward the election in anticipation of them. I simply do not see the justification for the provision. However, there will remain in the Bill and in the detail now in Amendment 20, which we will come to later, a power for Parliament to have elections early if MPs vote for it by a two-thirds majority and this House endorses that proposal. I have no doubt that if there is reasonable political consensus on the need to bring forward polling day and have an early election, that will happen.
Amendment 16 deals with a power for which, I accept, there is a rather stronger case. That is the power for delay by two months. The commonly cited example of how a general election planned for one day might be postponed for a short while is our experience in 2001, when the foot and mouth epidemic broke out. Everyone knew that we would probably have an election in May. We had planned to have local elections in May. Those local elections were postponed and the general election, expected to coincide with them in May, was also postponed. I am therefore content that some power remains in the Bill for a delay and am now fairly convinced that there is at least some provision in the Bill to safeguard against abuse. That safeguard is this House, which would be asked to approve such a delay.
I was seeking through Amendment 16 to have a further safeguard built in for that—also a two-thirds majority in the House of Commons—but I now look at the changes that the Government have made by accepting Amendment 20. That dispenses with the role of the Speaker’s certificate. On that basis, I am prepared to accept that Amendment 16 is no longer appropriate, and I will not press that case; but the case for Amendments 12 and 14 remains strong. They simply retain the principle that if polling day is to be brought forward, it is Parliament by reasonable consensus and not the Prime Minister who should decide to bring forward the election.
The whole purpose of the legislation is to fix parliamentary terms at five years, notwithstanding the amendment which this House narrowly approved some hours ago. We need to remove from the Prime Minister the privilege of being able to hold the starting pistol in a race where he is also one of the runners. Amendments in the same form as Amendments 12 and 14 received substantial support from across the House when they were tabled by the noble Lords, Lord Norton of Louth and Lord Rooker, in Committee. I therefore hope that the Minister will have had time since Committee to reflect on those amendments and to consider them favourably.
Lord Pannick
My Lords, both the noble Lords, Lord Norton of Louth and Lord Rennard, proceed on the basis that the power to bring forward or postpone a general election would be exercised only in circumstances of crisis. It is very difficult—or impossible—to foresee such a crisis. I give noble Lords a possible example of when one would need to use such provisions where there is no crisis. Suppose that this country is awarded the Olympics or the World Cup. Each of those events will occupy a period of two weeks, for the Olympics, or four weeks, for the World Cup. One would know of such events years in advance, so there would be no crisis, but it would be entirely appropriate for a general election not to take place by consent of all concerned during such events.
Lord Falconer of Thoroton
I had thought before hearing the debate that I would tend to support the noble Lord, Lord Rennard, but I found what the noble Lord, Lord Norton of Louth, said powerful. Everyone appears to agree that the election is unlikely to be called early anyway; if there is sufficient consensus for it to be called early, that can be dealt with by the two-thirds provision. If it is to be up to two months late, that is a moderately massive exception and if it is to be done, there needs to be consensus. If there is that degree of consensus, it is extremely likely that emergency legislation can be got through in order to achieve it. We are much better off being certain. Having not intended to take this view, I am afraid that I found what the noble Lord, Lord Norton, said, rather powerful. I invite the Government to reflect on what the noble Lord said and perhaps bring the issue back at Third Reading. If the Minister brings back the issue at Third Reading in a way that reflects the arguments of the noble Lord, Lord Norton, or alternatively says, either now or at Third Reading, why the noble Lord is wrong, I would not support the noble Lord. However, if he does not, my inclination is to support the noble Lord, Lord Norton, either now or, as seems more sensible, after the Government have had an opportunity to reflect and come back at Third Reading.
Lord Wallace of Tankerness
My Lords, as has been indicated, the purpose of the operation of the order-making power in Clause 1(5) is to provide, by a resolution of both Houses, for a Parliament to be extended by two months or for an election to be brought forward by up to two months because of an emergency or unforeseen circumstance. The Bill provides for five-year fixed terms and it is envisaged that elections would happen on the first Thursday in May every five years. However, we are conscious that there could be a short-term crisis that would mean that it would not be practicable to hold the election on the prescribed date. As was discussed in earlier debates and again this evening, such a scenario occurred in 2001 when an outbreak of foot and mouth disease meant that it was necessary to delay the date of the local elections in England, which were set by statute, and primary legislation was required. As it was only four years into the Parliament, it did not theoretically affect the date of the general election, although the widely anticipated date of the election was postponed because of the outbreak.
The power would allow the Prime Minister to vary the date by affirmative order by two months, earlier or later. It is worth bearing in mind that the Delegated Powers and Regulatory Reform Committee examined this power and concluded that it,
“does not consider the power to be inappropriate in principle”.
However, it recommended that the Bill should be amended to require that a statement setting out the Prime Minister's reasons for proposing the change of polling date must be laid before both Houses at the same time as the draft order. The Government considered and listened to the recommendation and the case made by the committee and, as noble Lords will recall, made the appropriate amendment in Committee, which indicated that we were ready and willing to respond to the committee.
The power is deliberately framed to be non-prescriptive. It is intended to be used in emergencies when we cannot predict what situation will arise, and to deal with a variety of scenarios. When including this power in the Bill, as my noble friend Lord Norton indicated, we looked at powers in the devolution Acts that allow for the dates of general elections to the devolved institutions to be delayed or brought forward. In the case of the foot and mouth outbreak in 2001, there would have been no point in bringing forward the election.
I accepted earlier that I had struggled to find a reason why we might want to bring forward an election. The noble Lord, Lord Pannick, suggested that the Olympics or the World Cup might be such occasions. We considered these as well. We know that the Olympics are unlikely to be awarded again to Britain for the foreseeable future, given that they will happen here next year. Regrettably, England did not succeed in its bid for the World Cup, and I am not sure that Scotland, Wales or Northern Ireland have a bid in preparation. I offer as a piece of political trivia that, such is the importance of the World Cup, the one parliamentary election in recent times not to be held on Thursday was the Hamilton by-election in 1978, which was held on a Wednesday so that it did not clash with Scotland's opening match in the World Cup in Argentina. I am not sure that it did Scotland much good.
Lord Wallace of Tankerness
My apologies. I am not sure that the World Cup has traditionally been at this time of year. It would clash with the exciting climax to the Premiership and the build-up to the FA Cup final, the Scottish Cup final and the Scottish Premier League, whatever shape or form they may be in by 2026. My point is that we have struggled and we cannot readily think of a situation in which one might wish to bring forward an election.
It was our intention to future-proof the Bill, but, with regard to Amendments 12 and 14 in the names of my noble friends Lord Rennard, Lord Tyler and Lord Marks, I do not believe that by accepting them we undermine what we seek to achieve in the Bill. As has been pointed out, if it was necessary to bring forward a scheduled general election because the unforeseen event that none of us can think of actually happens, it would be open to the other place to pass a Dissolution Motion with the support of at least two- thirds of all MPs to trigger an early general election. That point was made by my noble friend Lord Norton. In the light of that, the Government would be willing to support these amendments and I hope your Lordships’ House would be willing to accept them.
Lord Norton of Louth
My Lords, I am grateful to all those who have taken part in the debate. In response to the noble Lord, Lord Pannick, I was thinking along similar lines trying to anticipate possibilities. I thought about things such as the Olympics, but although they are not a crisis, neither are they an unforeseen circumstance. The same is true for the World Cup. They are not something that would necessarily get in the way, and those events would not require us to delay the holding of a general election in any event. To bring a general election forward, the provisions of Clause 2(1) could be utilised in any event.
My noble and learned friend Lord Wallace has accepted the provision that the Prime Minister would have to make a statement about why this power should be used, but I would have thought that if the Prime Minister planned to delay an election or bring it forward, he would in any event explain why. That really confirms what would be the practice. I cannot imagine the Prime Minister deciding to delay the election and not telling us why.
I do not want to respond on behalf of my noble friend Lord Rennard, but I am in a position where I suspect I might have to. An affirmative order requires just a simple majority, so that does not address the problem and the point made by my noble friend still holds. The only problem with his amendment is, as he admitted, in terms of drafting to refer to the Speaker’s certificate rather than to the principle that he advanced. I still maintain the argument I advance, for which I am most grateful to the noble and learned Lord, Lord Falconer of Thoroton, who I have clearly persuaded on this matter. My noble and learned friend really did not provide a convincing argument in response to what I said. Primary legislation could be introduced and could provide for quite a long delay, but that is true in any event as long as you have a parliamentary majority. You could then craft it to the particular crisis of the time. He mentioned wartime when Parliament had to pass an Act each year extending its life.
The circumstances would be so exceptional that they would need a response crafted to the particular exception rather than just allowing a situation where a Prime Minister could come along and announce that he is bringing forward an SI to delay the election by two months and all that would be required is a majority in the House of Commons. We would then be in a position, if necessary, to block it, but I am not sure that the House would wish to invite a major challenge with the Commons, particularly on a matter of this nature, so I would be very wary about that. I would far prefer that there was all-party agreement and that legislation was introduced. If it was an emergency, you would require all-party agreement to get it through, and if you did not have it, you could not do so. I think that is entirely appropriate. I hope that my noble and learned friend will take up the invitation of the noble and learned Lord, Lord Falconer, to reflect on this and to think further because I remain unpersuaded that this subsection should remain in the Bill. In the interim, I beg leave to withdraw the amendment.
Lord Rennard
Lord Rennard