House of Commons

Thursday 19th May 2011 Commons Chamber

Thursday 19 May 2011

The House met at half-past Ten o’clock

Prayers

Thursday 19th May 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 19th May 2011 Commons Chamber

The Secretary of State was asked—

[Dr Julian Huppert (Cambridge) (LD)]

1. When he expects the green deal scheme to begin operation.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

The Energy Bill, which was introduced to the House of Lords on 8 December 2010, contains the primary legislation of the new green deal proposal. Secondary legislation will allow the Government to implement and administer the requirements of the primary legislation and we intend to lay the secondary legislation before Parliament in March 2012 so that it will be in place to underpin the delivery of the green deal for October 2012. The timetable is naturally subject to the time taken for parliamentary scrutiny.

[Dr Huppert]

I thank the Secretary of State for his comments. What opportunities will the green deal provide for smaller, innovative and high-tech companies, and how many jobs will be available in that sector as a result of the green deal?

[Chris Huhne]

The green deal will, I think, be a real game changer. It will provide a framework that will enable billions of pounds of investment in retrofitting our homes and businesses across the country. Everywhere we have homes—that obviously means every part of the country—there will be new business opportunities. It is important to develop the supply chains in the energy saving industries, such as for solid wall insulation, and innovative products, as well as to reduce our dependence on imported energy. We are determined to ensure that small businesses can participate in the benefits that the green deal will bring.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

The Secretary of State will know that his Labour predecessors, of which I was one, developed a similar ambitious programme for domestic energy efficiency, but because of the complexity of financing such deals, we believed that pilot projects were necessary and set them up, involving 500 homes. What has he learned from those pilots?

[Chris Huhne]

I pay tribute to the work done under the previous Government. The fundamental principles of the green deal are cross-party and I welcome that because it provides comfort to investors that they know there will not be a sudden change in the framework. I welcome the Opposition’s input on this.

On finance, we have had many discussions and looked at the results of pilots, including the British Gas pilot. The business model that we are proposing is particularly interesting because the key thing is that if some of the bigger players can get the cost of a substantial number of green deals off their own balance sheets they will be able to securitise flows in the bond market, which will provide a regular flow of cheap finance for all the green deal providers.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

2. What steps he plans to take to ensure consumer confidence in the green deal scheme.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

Consumer confidence will be vital for the green deal. In developing secondary legislation, we will support this by ensuring consumer protection and redress mechanisms are in place. For example, our licensing arrangements will require providers to work to a green deal code, which will require they use only accredited assessors and installers.

[Catherine McKinnell]

I thank the Secretary of State for that answer. I recently met the National Federation of Roofing Contractors to discuss my Apprenticeships and Skills (Public Procurement Contracts) Bill and people raised concerns about potential loopholes in the green deal, ensuring the right measures are selected for installation, ensuring the quality of installations, and accountability for the work. Will the Secretary of State explain what he is doing to close the loopholes in order to ensure consumer confidence?

[Chris Huhne]

My officials are in contact with a wide range of interests and I am happy to meet, and to ensure that my officials meet, the people the hon. Lady has mentioned. We obviously want to ensure that there are no loopholes and we have done a lot. The licensing arrangement and the green deal code, as I have mentioned, will be important. The Consumer Credit Act 1974 will extend to the green deal, and the golden rule that forms part of the green deal ensures that the expected savings will always at least match the costs. The Energy Bill includes strong requirements to disclose the presence of a future charge to bill payers and the accreditation process will also allow guarantees for the work carried out, for example. We will establish an independent advice line that will also support customers seeking redress. The hon. Lady should remember that all that is in addition to the normal protections for consumers through, for example, the Consumer Protection from Unfair Trading Regulations 2008 and the Unfair Terms in Consumer Contracts Regulations 1999.

[Andrew George (St Ives) (LD)]

My right hon. Friend will be aware that a number of places in the country, including Cornwall, are particularly ambitious to forge ahead with the green deal. Other than the constraints on the capacity of assessors and fitters, will any other impediments be faced by those parts of the country that particularly want to embrace this great opportunity?

[Chris Huhne]

I am grateful for my hon. Friend’s question. We are working through literally every possible impediment, as we are in other areas of the economy in which my Department particularly wants to see a transition to a low-carbon economy, to understand best what the impediments might be and to remove them. I am absolutely confident that when it comes to the launch of the green deal in October 2012 there will be enormous opportunities for Cornwall. The only constraint is going to be making sure that there are enough people who are trained properly to accredit, assess and install the green deal. I am confident that the finance will be available and it is important that we make as much progress as we can.

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

Consumer confidence is vital to ensuring that the green deal is a success. We know that Ministers were discussing possible incentives at around the time of the Budget to encourage green deal take-up and the Chancellor alluded to that in his Budget speech, but no concrete announcements have yet been made. Will the Secretary of State give us any further details today about how home owners and tenants will be incentivised in order for the green deal to meet the Government’s ambitions?

[Chris Huhne]

Under the terms of the energy company obligation in the Energy Bill, there is capacity for the companies that are subject to the ECO to bring forward incentives. The Chancellor has, as the hon. Lady pointed out, rightly made a commitment to consider incentivisation. She will also be aware that we made announcements on the Energy Bill’s Second Reading to bring forward some quite important incentives for the private rental sector, particularly for F and G-rated properties. All those measures will get the scheme off to a flying start.

[Robert Halfon (Harlow) (Con)]

My hard-pressed constituents in Harlow will strongly welcome the green deal, but how will consumers be informed how to apply for it and how it will work?

[Chris Huhne]

I think we will have a lot of interest from consumers precisely because of the important golden rule that this will benefit consumers—that the energy savings as a result of the green deal will outstrip the assessed costs of the installation. I think there will be a lot of buzz around the green deal. A lot of potential suppliers, such as B&Q, are very interested. As people move house and go to B&Q and look at what they might do for their kitchen or bathroom, they might also, at that point, have the opportunity to sign up for a green deal. I think it will spread very quickly through word of mouth, and that is why it is so important to get consumer confidence.

[Nick Smith (Blaenau Gwent) (Lab)]

3. How much funding he expects to be made available to households in fuel poverty through the energy company obligation in its first year of operation.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The ECO is being designed specifically to tackle fuel poverty and hard-to-treat homes. Although it is too early to set exact numbers for the scheme ahead of our consultation on the ECO in autumn I fully expect a far greater level of resource to be brought to bear on the fuel-poor than was previously the case under the carbon emissions reduction target or Warm Front.

[Nick Smith]

I thank the Minister for his reply. Parts of Blaenau Gwent are 1,200 feet above sea level and it gets cold in winter. Given the established relationship between excess winter deaths and low indoor temperature, and given that the UK has a higher rate of such deaths than Scandinavian countries, will he ensure that the ECO prioritises a reduction in excess winter deaths?

[Gregory Barker]

The hon. Gentleman raises a very important point. As I also sit on the Cabinet Office’s Public Health Sub-Committee, I am very aware of the issue he raises. That is why we are absolutely clear that the ECO must be focused on the fuel-poor and hard-to-treat homes and why we must have an impact on exactly the statistic that he mentions in relation to his constituency.

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

We have just heard twice from the Minister that the ECO will be used specifically to tackle hard-to-treat homes and fuel poverty, but unfortunately this week we have heard worrying rumours that the ECO will not be used exclusively to tackle fuel poverty and hard-to-treat homes. Consumer Focus recently estimated that to tackle just over a third of non-cavity-wall homes in the UK would require an ECO investment of more than £7 billion. That underlines the scale of the challenge that the ECO needs to meet. Will the Minister guarantee today that the ECO will be used only to tackle fuel poverty and hard-to-treat homes and not to subsidise banks providing green deal finance?

[Gregory Barker]

I do not think I could be clearer than to say that the focus of this new measure, unlike the CERT programme brought in by the previous Government, which we had to reform considerably when we came to office, will be on fuel poverty and hard-to-treat homes. We are absolutely clear about that and the measure is going to be much more effective than any measure that the Labour party introduced.

[Stephen Mosley (City of Chester) (Con)]

4. What contribution he expects the renewable heat incentive to make to the Government’s targets for greenhouse gas emission reductions.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

We expect installations in industrial and commercial buildings to achieve cumulative carbon dioxide savings of 44 million tonnes of CO₂ by 2020. It is harder to forecast reductions for the domestic sector, but we hope to achieve a cumulative reduction of at least 2.5 million tonnes by 2020 also.

[Stephen Mosley]

I thank the Minister for his response, but I have one concern about the renewable heat incentive. We are proposing to introduce the premium payment scheme in July, which will run for 15 months until it is replaced by the green deal and the RHI tariff next October. Will he reassure people who are considering taking out the RHI premium payment scheme that they will automatically qualify for the RHI tariff when it is introduced next October?

[Gregory Barker]

I am extremely grateful to my hon. Friend for raising this important point, not least because we hope that more than 25,000 people will take advantage of the premium payments. Providing that they comply with the terms of the payment, they will certainly be able to qualify for the RHI tariff.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Minister will be aware that there is a sort of hiatus in the industry at the moment among consumers, as the previous question from the hon. Member for City of Chester (Stephen Mosley) indicated, because they do not know what the tariff will be and we do not have an absolute commitment that its introduction will coincide with that of the green deal next October. Can he confirm that the tariff will definitely come in and, in the interim, at least let us have details of what it will be in order to restore confidence, the lack of which is currently holding the whole scheme back?

[Gregory Barker]

I can certainly assure the hon. Gentleman that the tariffs will kick in alongside the green deal in autumn next year and that we will publish the rates of the tariffs this September. Premium payments are a really good way of ensuring that we dovetail strong consumer safeguards while priming new technologies.

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

5. What steps he plans to take to ensure that householders who participate in the green deal scheme have access to an appropriate redress scheme in respect of any inadequate work carried out.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I refer the hon. Gentleman to the answer I gave the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) some moments ago.

[Steve Rotheram]

I thank the Secretary of State for his response. Without proper consumer protections, the green deal will become a white elephant, so can he further outline how the Government will stop the scheme becoming a cowboys’ charter, with unscrupulous suppliers preying on the most vulnerable in society?

[Chris Huhne]

Mr Speaker, I think I tested your patience with the length of my previous answer to a similar question, so I will not go through the list again, but we have put in place a substantial set of measures that will allow redress, including an advice line and all the normal protections, such as the ability to go through the small claims court and to the energy ombudsman. All of those are available to consumers. I agree with the hon. Gentleman on one key point: consumer confidence in this scheme will be absolutely crucial. We do not want any repeat of the sorts of examples there were when the Labour Government in Australia introduced a similar scheme, which was indeed a cowboys’ charter.

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

What discussions has my right hon. Friend had with the Office of Fair Trading, which will regulate green deal providers, to ensure that credit is only offered responsibly?

[Chris Huhne]

The credit will be regulated under the Consumer Credit Act, but the provisions are very clear. I do not think that my officials have had direct contact with the OFT, but it of course has an important monitoring role to ensure that those rules are observed.

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

Why, oh why, can the Government not learn from past success, such as what happened in Huddersfield and Kirklees with Warm Zone, which was a highly successful scheme? Why can we not take the best elements of that and put them into the current legislation to get the best possible option?

[Chris Huhne]

We are absolutely determined to ensure that, where a local authority wants to lead from the front with neighbourhood schemes of the sort the hon. Gentleman has mentioned, they are enabled, quite rightly, to go ahead. They will have access to the finance available under the green deal and I very much hope that go-ahead local authorities, whether in his constituency, in Cornwall or anywhere else in the country, will lead this exercise, because there are enormous opportunities. That is good for residents, for energy saving across the country as a whole and for local jobs.

[Mr Robin Walker (Worcester) (Con)]

6. What assessment he has made of the likely effect on investment in green jobs and technologies of the green deal and renewable heat incentive schemes.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

We estimate that the green deal could drive up to £20 billion of investment by 2020 and support more than 125,000 jobs across the supply chain. In addition, by 2020 the renewable heat incentive scheme should lead to up to £7.5 billion of new capital investment in heat technologies and potentially support 150,000 manufacturing, supply chain and installer jobs, not least in Worcester Bosch in my hon. Friend’s constituency.

[Mr Walker]

Following the welcome decision of the regional growth fund to approve investments of almost £18 million in the Worcester technology park project, the one remaining hurdle for the creation of thousands of new green jobs in Worcester is the approval of the board of Bosch. What message would the Minister send to that board and to other overseas investors about Britain’s commitment to green growth and jobs?

[Gregory Barker]

My hon. Friend is a real champion of green growth, and I can tell him unequivocally that, although we have set an ambitious carbon budget, under this coalition decarbonisation must not mean deindustrialisation—far from it. We are committed to creating a framework for more advanced manufacturing jobs to power green growth and to make Britain once again a workshop of the world.

[Mr Iain Wright (Hartlepool) (Lab)]

Why in the past year has Britain slipped from third in the world to 13th in terms of investment in green industry?

[Gregory Barker]

I am afraid that it will be very difficult to shake a legacy of 13 years of Labour government, and the hon. Gentleman will know that we slipped massively down the table of world manufacturing during his party’s time in government. We are having to put this country on a different trajectory, and that means a slight hiatus while we change course, but when we have changed course and our new measures are in place we will be primed for success and will turn around the miserable failure of the Labour years.

[Pamela Nash (Airdrie and Shotts) (Lab)]

7. What plans he has for the future of carbon capture and storage; and if he will make a statement.

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

13. What plans he has for the future of carbon capture and storage.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

CCS has the potential to play a very significant role in our future energy mix. The Government are committed to public sector investment in CCS technology for four power stations, including both coal and gas. We aim to reach agreement on the first project and to launch the competition for projects 2 to 4 later this year. We will also publish a CCS road map this autumn.

[Pamela Nash]

I thank the Minister for that answer, but is he completely confident that the introduction of a carbon floor price will not result in the collapse of future investment in carbon capture and storage?

[Charles Hendry]

The hon. Lady raises an extremely important issue. We are actively discussing that with the companies involved in project 1, and we believe that we can find a way through it to ensure that those plants have a long-term viable future, but I hope she agrees that we are right to be making the future price of carbon clear.

[Chi Onwurah]

As the former managing director of a risk rating agency, the Secretary of State must be well aware of the corrosive effect of uncertainty on any business, yet he refuses to give green energy the clarity it needs on carbon capture and storage. After the photovoltaic fiasco, the “carbon four” coup and the building regulation bombshell, has he lost all credibility among the green industries?

[Charles Hendry]

That is a quite extraordinary question. The Secretary of State has shown real leadership on those issues. In the course of a year, £1 billion not previously available has been made available for carbon capture; we have set up an office of carbon capture and storage to drive forward that work; we have set up a development forum with the industry; we have put in place a regulator framework; and we are putting in place a road map in order to know what needs to happen. In place of the rhetoric and ambition under the previous Government, we are delivering action.

[Mr Andrew Turner (Isle of Wight) (Con)]

8. What recent assessment he has made of the Isle of Wight’s eco island initiative.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I recently visited my hon. Friend’s constituency and met several businesses and individuals involved in the Isle of Wight eco island initiative. I applaud the initiative, which is showing real leadership in bringing the local community and businesses together, in reducing carbon emissions and in helping to build a prosperous low-carbon economy.

[Mr Turner]

Will the Secretary of State join me in congratulating David Green on the way in which he is moving the eco island initiative forward, and will my right hon. Friend visit the island again to see for himself not only the eco island project, but other green technology companies?

[Chris Huhne]

I am grateful to my hon. Friend for that question. As he knows, I can see the island from my constituency, and I suspect that another visit is not going to be that far off, but I certainly do join him in congratulating David Green. The Department of Energy and Climate Change has been very pleased to support carbon reduction on the Isle of Wight with a £500,000 grant, for example, through the low-carbon communities challenge, which has been used to install renewable measures in a number of properties in the village of Chale Green. I am very impressed by the way in which the whole initiative is beginning to take off and to have a real local impact.

[Andrew Selous (South West Bedfordshire) (Con)]

9. What recent discussions he has had with the Chancellor of the Exchequer on any fiscal incentives to support achievement of the Committee on Climate Change’s target number of electric vehicles in 2020.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Fiscal incentives are a matter for the Treasury, but DECC has a strong interest in encouraging the take-up of electric vehicles. We work closely with the Department for Transport, which has lead responsibility for the policy, but we regularly meet companies leading the development and deployment of cutting-edge low-carbon vehicle technologies.

[Andrew Selous]

Electric cars will play an important part in reducing carbon emissions, they are an important part of green growth, and they can reduce the costs of motoring for our constituents. The Committee on Climate Change has called for 1.7 million electric cars by 2020—quite a lot fewer than Japan and Israel. How does my hon. Friend see us meeting that target?

[Gregory Barker]

My hon. Friend is a powerful advocate for this agenda and speaks with considerable authority. He will know that in the last comprehensive spending review we announced over £400 million of measures to promote the take-up of ultra low-carbon vehicles, in addition to exempting them from road tax, company car tax and the congestion charge, and now we have a consumer grant of up to £5,000 per vehicle and a £30 million investment in infrastructure. Then, on top of that, later this summer, in line with the coalition agreement commitment to mandate a national recharging network, we will be publishing a strategy for promoting the roll-out of charging infrastructure.

[Bill Esterson (Sefton Central) (Lab)]

I will resist the temptation to ask whether it is easier to stay within the speed limit in an electric car. Instead, I will ask what is the best way to make electric cars more efficient in their use of energy given that the electricity still has to be generated and that we still rely on burning fossil fuels for much of our energy.

[Gregory Barker]

Ultimately, it will be the decarbonisation of the energy sector that will ensure that electric cars become genuinely low or zero-carbon vehicles. With the publication of the fourth carbon budget, we now have the long-term trajectory in place to ensure that we reach our ambitious decarbonisation goals.

[Roger Williams (Brecon and Radnorshire) (LD)]

10. When he expects to receive the recommendations of the independent fuel poverty review.

[Mr David Amess (Southend West) (Con)]

14. When he expects to receive the recommendations of the independent fuel poverty review.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

My right hon. Friend the Secretary of State has asked Professor Hills of the London School of Economics to lead the independent fuel poverty review and to provide interim findings by this autumn and a final report by early 2012 at the latest.

[Roger Williams]

I thank the Minister for that reply. I understand that the author of the report has been asked to demonstrate how fuel poverty can be removed entirely within 15 years. Many constituents of mine live in homes that are off mains gas and are hard to heat. Will the green deal have enough capacity to meet that target and eliminate this scourge of rural areas?

[Gregory Barker]

Absolutely. The rural fuel-poor, who for many years have been overlooked by fuel poverty policies, and who suffer particularly from high heating-oil prices and from hard-to-heat homes, will particularly benefit from the green deal and from the renewable heat incentive. Under the coalition, it is a double win for the rural fuel-poor.

[Mr Amess]

As the promoter of the Warm Homes and Energy Conservation Act 2000, my hon. Friend will understand my disappointment that fuel poverty has not been eliminated. Will he take the opportunity, through the Committee and Report stage of the Energy Bill and through the green deal, to ensure that a clear delivery plan is enshrined in legislation to eliminate fuel poverty?

[Gregory Barker]

That piece of landmark legislation, which my hon. Friend got on to the statute book having had long experience in these matters, will be an important part of our strategy for delivering a green deal programme that will bear down on and eventually eliminate fuel poverty. I can assure him that unlike the Labour Government, who allowed the Home Energy Conservation Act 1995 to languish on the statute book and be frittered away, we will ensure that the legislation is used effectively and that there is far greater co-ordination and collaboration between local government and us at the centre.

[Caroline Lucas (Brighton, Pavilion) (Green)]

When the Warm Front scheme is closed down, it will be the first time in 30 years that there has not been a Treasury-funded scheme to tackle fuel poverty, which is a major problem in constituencies such as mine. Will the Minister do all he can to persuade the Treasury to take its fair share of the cost of cutting poverty so that the full funding burden is not regressively applied to energy bills, thus hitting the poorest hardest?

[Gregory Barker]

Sadly, we know that in the past Warm Front has not been effective. Let us face it, more than 90 Members from all sides of the House, including Labour Front Benchers, have written to me to complain about it. Were we to carry on relying on Warm Front alone, it would take more than 80 years to treat homes which, under the green deal, we expect to treat by 2030. I have to say to the hon. Lady that there is funding next year, the year after and the year after that for Warm Front, but the real driver for eliminating fuel poverty will be the green deal and the ECO that underpins it.

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

What action does the Minister propose to take to ensure that the energy company obligation does not put more people into fuel poverty, as a result of the effect that the imposition of the levy will have on their bills, than it takes out? Will he consider rising block tariffs as a method of imposing levies, rather than an imposition on standing charges, which would have a particular effect on those in fuel poverty?

[Gregory Barker]

The hon. Gentleman speaks with great authority on this subject and is recognised as an expert, but we have considered block tariffs and do not believe that they are effective. The warm home discount is available, however, which will be worth more than £1 billion to the fuel-poor over the spending period. We expect it to help up to 2 million households a year. His point about levies is well made, and we have paid particular attention to that issue. That is why, unlike under the Labour proposals, the RHI will be funded out of general taxation, which we believe will be more progressive.

[Mr Philip Hollobone (Kettering) (Con)]

11. If he will develop incentives to encourage the siting of wind farms offshore.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Offshore wind is currently supported under the renewables obligation, and we have brought forward the banding review to determine future support to realise the full potential of this vital sector. Through electricity market reform, we are working on more enduring support for low-carbon electricity generation and we will publish a White Paper before the summer recess. I chair the Offshore Wind Developers Forum, which is working to identify barriers that need to be addressed.

[Mr Hollobone]

According to the Government’s figures, by 2020 they expect there to be 14 GW of onshore wind capacity and 13 GW of offshore wind capacity. My constituents and, I suspect, many Members in this House would like there to be far more wind turbines offshore than onshore, because it is windier offshore and offshore wind turbines do not despoil the British countryside.

[Charles Hendry]

My hon. Friend has picked up on one of the five or six scenarios that we put forward on how we can meet our 2050 targets. I understand his concerns, but we also have to take account of cost. Offshore wind costs about twice as much as onshore wind. We need to be aware of the interests of consumers, who have to pay the bills.

[Kerry McCarthy (Bristol East) (Lab)]

The Committee on Climate Change has said that the Government should reduce by several gigawatts their target of a 13 GW capacity for offshore wind electricity generation by 2020, precisely because of that expense. Will the Minister assure the House that if that target is abandoned, he will do all he can to ensure that onshore wind farms are not blocked by nimbyism in Tory and Lib Dem-controlled councils?

[Charles Hendry]

The hon. Lady raises an issue that is of concern to Members from all parts of the House. There is a realisation about the impact of onshore wind farms. We want there to be more onshore wind farms, but we are determined to ensure that they are built in the most appropriate locations and that there is support for the communities that host them.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

My hon. Friend will be aware of the good news that the Danish company, Vestas, has announced its intention to set up a wind turbine factory in my constituency, which will create 2,000 much-needed jobs. However, the project is conditional on a number of factors, including the Government delivering stability in the market, and long-term political and regulatory certainty. What assurances can my hon. Friend give Vestas to help us seal the deal and turn that good news into very good news?

[Charles Hendry]

My hon. Friend highlights one of the investment opportunities that is coming through as a result of our approach of wanting a supply chain industry to develop for the offshore wind sector in this country. That news is very encouraging. I reassure Vestas that the area of Sheerness has a dedicated and able work force, an absolute champion in its Member of Parliament, and a supportive Government who want to see this matter move forward.

[Huw Irranca-Davies (Ogmore) (Lab)]

The Opposition share the Minister’s ambitions on offshore wind, which is no surprise given that it is our policy as well, and on renewables generally. How does he react to the news that renewables investment in the UK plummeted by 70% last year under the coalition Government; that we have dropped from third to 13th in the global rankings for renewables investment; and that a report on the coalition’s green promises shows little or no progress on three quarters of its promises? What now for the greenest Government ever?

[Charles Hendry]

The hon. Gentleman will be aware that the funding mechanism of renewables obligation certificates that we inherited has a cliff edge in 2013, and we have tried to give investors certainty beyond that point. It is clear that in the case of many renewable technologies, people have been unable to build structures because the system was to change in 2013. They did not know what the regime was going to be afterwards. That is why we have brought forward the banding review—to give investors long-term certainty and introduce market reform at the same time.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

12. What recent assessment he has made of the security of the UK’s gas supply; and if he will make a statement.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The statutory security of supply report, published in November, is a joint report of the Department of Energy and Climate Change and Ofgem. It gives a full account of the Government’s latest assessment of the availability of gas to meet the reasonable demands of United Kingdom consumers. It concludes that the outlook for gas supplies is broadly benign but not without risks. The Government keep security of supply under constant review and have proposed measures in the current Energy Bill to further enhance our gas security.

[Eric Ollerenshaw]

I thank the Minister and accept that the gas supply is a vital part of our future energy needs, but will he reassure me and, more importantly, my constituents that their concerns and their safety will remain paramount considerations in decisions on gas storage sites?

[Charles Hendry]

I can absolutely assure my hon. Friend that security and safety are priorities for the Government in developing gas storage facilities. We do need more such facilities; a number are under construction and a number more have been given consent. The planning process will ensure that safety issues are a priority in that work.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Does the Minister accept that the £2 billion robbery of taxation from the North sea oilfields is now threatening the gas supply from that area? Total has told me that it would not have invested in the west of Shetland area if it had known about that tax. The Treasury’s latest proposal to tax every flight that a person takes out into the North sea will further threaten supplies. Will he intervene with the Treasury to stop it robbing North sea oil?

[Charles Hendry]

The hon. Gentleman talks about a robbery. I assume that he is going around telling his constituents that he would rather the Chancellor had not reduced fuel duty and cancelled some of Labour’s planned rises. We are determined to ensure that there is ongoing investment, and there is discussion with the Treasury about field allowances. The helicopter issue that he mentions is in a consultation document, which will take its proper course.

[Damian Collins (Folkestone and Hythe) (Con)]

15. When he plans to publish the national policy statements on energy.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

As my right hon. Friend the Secretary of State said in his statement yesterday, we are carefully considering Dr Weightman’s interim report on the implications for the UK of events at Fukushima. Subject to that, we intend to lay the energy national policy statements before Parliament as soon as possible.

[Damian Collins]

In the extra time that the Minister probably now has available, will he consider giving greater consideration to the local economic benefits of nuclear power stations in the site-specific report, with particular regard to Dungeness and Romney Marsh in my constituency?

[Charles Hendry]

My hon. Friend is a doughty champion of the case for Dungeness. We have examined carefully the evidence that has come forward, and we will publish it when the relevant documents are republished very shortly. He will have to be patient for a little longer, but I assure him that we have given every attention to the evidence that has been presented to us.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Yesterday we heard the Secretary of State say that the national policy statements would be published shortly, and the Minister has repeated that today. With the stringent targets in the fourth carbon budget and the previous three, businesses need certainty if we are to meet our carbon reduction targets. Will the Minister be more precise and tell us exactly when the Department is planning to publish—not just “shortly”, but a date?

[Charles Hendry]

The hon. Lady will be aware that given the nature of the report provided by Dr Weightman yesterday, it would be wrong to make premature and rushed conclusions. We have to go through the right process. We are in the current situation because the national policy statements that the last Government published contained a massive flaw that required them to be consulted upon again. We have had to go through that process, which has involved extra time and delay. However, we will bring them forward for full parliamentary scrutiny in the next few weeks.

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

16. What his policy is on onshore wind energy.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Onshore wind energy is one of the most cost-effective renewable energy sources. The Government are committed to the growth of well-sited onshore wind in the UK as part of a diverse energy mix, but we will put greater emphasis on ensuring that investment goes where the resource is strongest and bringing more direct benefits to communities that host wind farms.

[Simon Hart]

The Localism Bill will allow communities in England to take a far greater part in the planning process. What assurance can the Minister give those of us in west Wales that the same opportunities will be open to us?

[Charles Hendry]

As my hon. Friend will be aware, that is a matter for the Welsh Assembly Government. I hope that they will look carefully at the detail of the Localism Bill to see our determination to bring real benefit to communities through the planning changes in England, and I hope that they will decide which of the measures in the Bill might be appropriate to bring similar benefits to people in Wales.

[Diana Johnson (Kingston upon Hull North) (Lab)]

17. What recent representations he has received on the level of consumer protection afforded by provisions of the Energy Bill.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Robust consumer protection is at the heart of the green deal, and will be enshrined in the Bill’s provisions. Further details will be spelt out in secondary legislation later this autumn.

[Diana Johnson]

I listened carefully to what the Minister said earlier about redress being open to individuals through, for example, the county court, but I am pleased to hear that he recognises the importance of good, strong consumer protection set out in regulations. I very much hope that the Government introduce that and provide robust protection for consumers.

[Gregory Barker]

The hon. Lady makes some very good points. I am pleased to say that although we will publish the details later in the year, before the Bill is in Committee, I shall place in the House of Commons Library a paper summarising our approach to regulation and send her a copy.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

18. If his Department will undertake an impact assessment of the effect of energy regulation on the competitiveness of energy-intensive industries.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The Government intend that UK-based energy-intensive industries will play a full part in, and benefit from, the transition to a low-carbon economy. My Department is working with the Department for Business, Innovation and Skills to develop measures to help to improve energy efficiency and reduce electricity costs for such important companies. As my right hon. Friend the Secretary of State announced on Tuesday, further announcements will be made by the end of the year.

[Tristram Hunt]

I thank the Minister for that reply, and may I also thank the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), who has responsibility for climate change, for the Government’s decision to support the ceramics sector in Brussels today?

Businesses in my constituency welcome the Department for Business, Innovation and Skills-Department of Energy and Climate Change working party on energy-intensive industries, but will the Minister ensure that it focuses on international competitiveness, because our energy-intensive businesses simply cannot pass on unilateral energy costs in a global marketplace?

[Charles Hendry]

I thank the hon. Gentleman for his question, and for the work that he is doing to raise those important issues in the House and in the new parliamentary Committee. Without any doubt, we are profoundly concerned about the risk of carbon leakage. It would be absolutely absurd for British companies to move overseas, taking jobs with them, only for us to continue to import those products and for carbon emissions to go unabated or even worse in other parts of the world. That is why there is such clear, joined-up thinking between DECC, the Treasury and BIS to ensure that we come up with a comprehensive range of measures to support those critical industries.

[Jessica Morden (Newport East) (Lab)]

19. What plans his Department has to generate tidal energy from the River Severn.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Following a two-year feasibility study, the Government concluded that there was not a strong case for public investment in a Severn tidal power scheme in the immediate term. However, that does not preclude a privately financed scheme coming forward in the meantime, and we are actively talking to developers about their plans for various tidal energy schemes in the Severn.

[Jessica Morden]

The Government have decided against the Severn barrage, but it is important that we do not lose the impetus to harness tidal power in the Severn. Will the Minister give more detail on any discussions he has had with the Welsh Assembly Government on alternative plans? How far advanced are they?

[Gregory Barker]

I cannot give details of commercially confidential discussions, but we are encouraging developers to come forward with a range of proposals and looking to be as helpful as we can. The primary barrier to the previous proposal was the £34 billion cost, which in the current circumstances just did not seem feasible. However, we are trying to create a constructive framework for other, private proposals, and I would be happy to discuss the matter in more detail with the hon. Lady.

[Christopher Pincher (Tamworth) (Con)]

20. By what date he expects proposed legislation to enact the green deal to enter into force.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

The Energy Bill, which was introduced to the House of Lords on 8 December 2010, contains the primary legislation for the new green deal proposal. Secondary legislation will allow the Government to implement and administer the requirements of the primary legislation. We intend to lay the secondary legislation before Parliament in March 2012, so it will be in place to underpin the delivery of the green deal for October 2012. That timetable is naturally subject to the time taken for parliamentary scrutiny.

If I may clarify the answer I gave to the hon. Member for North West Leicestershire (Andrew Bridgen), I am informed that some DECC officials have indeed spoken to the Office of Fair Trading about the provision of credit for the green deal, and we have an ongoing engagement.

[Christopher Pincher]

When the green deal is rolled out, will my right hon. Friend ensure that the green deal MOT on domestic properties focuses not only on insulation, but on smart metering and energy-efficient boilers, so that customers in my constituency and around the country get the most energy-efficient and bill-cutting green deal?

[Chris Huhne]

I am grateful to my hon. Friend for that question, because very substantial incentives to install renewable heat solutions are available under the renewable heat incentive, alongside the green deal. The green deal itself will deal with insulation, but I confidently expect that many of the providers will offer heat solutions alongside that, which is very important.

[Graham Jones (Hyndburn) (Lab)]

I am concerned about the delivery of the green deal, especially in the private rented sector. How does the Secretary of State expect compliance to happen in this sector, which seems to be quite evasive? For example, will he expect local authorities to keep a register of landlords in their area as part of the delivery mechanism?

[Chris Huhne]

We have announced that we intend to regulate the private rented sector so that there will be a clear prohibition on letting F and G-rated homes in the future, and that will provide a clear target for the private rented sector to go ahead. All of the normal means of enforcing this will be available through local authorities, but we will bring forward further measures in secondary legislation.

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

22. What his policy is on recognising national climate change legislation as a commitment under the United Nations framework convention on climate change.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Domestic legislation is desirable and demonstrates political commitment at country level. However, the UK Government believe that an international treaty is still the best and most credible way of promoting ambitious mitigation action at a global level.

[Mr Stuart]

I thank the Minister for his answer and agree with the point he makes, but does he agree with me that it is important to encourage and recognise national legislative action and that the global legislators’ organisation, GLOBE, should continue to bring legislators together to catalogue and push for greater action at national level in lieu of international agreement?

[Gregory Barker]

Absolutely, and in the absence of a global treaty, the work that GLOBE does—and my hon. Friend does very valuable work as vice-president of GLOBE International and president of GLOBE UK—including its recent study of global climate change legislation, is extremely valuable, and we certainly support it and would encourage it to go further.

[Tony Baldry (Banbury) (Con)]

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

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

My Department works to secure clean, affordable energy supplies and action on climate change. Last week, the Energy Bill received a Second Reading in this House. It contains provisions for the green deal, our flagship piece of legislation, which will deliver energy efficiency to homes and buildings across the land. On Tuesday, we announced the fourth carbon budget, setting an ambitious target for UK emissions reductions. We are now the first country in the world to publicly commit to cutting carbon well into the next decade, and I have today published the summary of conclusions of the Ofgem review.

[Tony Baldry]

Given the current drilling by Cuadrilla at Blackpool, is the Secretary of State confident that extracting shale gas in the UK will not lead to the contamination of water supplies?

[Chris Huhne]

I am grateful to my hon. Friend for that question. The UK has a robust regime and it is important to recognise that we intend to ensure that shale gas operations are carried out in a safe and environmentally sound manner. Shale gas exploration has been controversial, especially in the United States where regulation has not been well implemented, but here it is subject to a series of regulatory checks, including planning permission, health and safety checks, consultation with the Environment Agency and drilling consent from my Department. The Environment Agency in particular has scrutinised Cuadrilla’s plans thoroughly and does not consider that they pose a significant risk to the environment, including to water resources.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

In the last period, lending to small and medium enterprises dropped by 2%, so Project Merlin is not delivering—the Prime Minister has spoken on this. We know the importance of the green investment bank and of the need to get green businesses to grow—that is the subject of cross-party agreement. So why will the green investment bank not lend to small businesses?

[Chris Huhne]

The exact remit of the green investment bank has still to be announced and I urge the hon. Lady to wait for that. We have said that it will be built up and able to borrow and lend from April 2015. That will be the most significant point, because at that point it will be able to provide finance for some of the biggest investments in the renewable sector in particular. My Department is acutely aware of the importance of encouraging small businesses and we intend to do so.

[Meg Hillier]

Once again, we hear warm words from the Secretary of State but no action. Many small businesses will be out of business by 2015 and we will have lost that opportunity for technological development in the UK backed by the green investment bank.

On a wider point, we have heard rumours in the newspapers about what the green investment bank will be and the Secretary of State has just talked about a future announcement. Will he announce it to the House himself, or will he leave to the Deputy Prime Minister to make a speech in some other place about what will happen with the green investment bank?

[Chris Huhne]

I should point out to the hon. Lady that the lead Department on the green investment bank is the Department for Business, Innovation and Skills, so my right hon. Friend the Business Secretary will be making the formal announcements. That will happen in due course.

[Dr Julian Huppert (Cambridge) (LD)]

T2. Will the Secretary of State tell me a bit more about what he is doing to encourage and support the clean-tech industry, including the excellent companies around Cambridge, such as AlertMe, which monitors energy efficiency, Econovate, which is involved in sustainable construction, and Eight19, which is developing novel solar technologies?

[Chris Huhne]

Earlier this year, I visited the SmartLIFE centre in Cambridge and met almost a dozen clean-tech companies from my hon. Friend’s constituency. I was impressed not just by the pioneering technologies that one would expect from a city with Cambridge’s record on innovation, but by how these ideas are being turned into thriving businesses. I understand that the SmartLIFE low-carbon centre is expanding this year to provide the skills and training facilities needed for low-carbon qualifications. It is an exciting development.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

T3. Almost one in four households in the north-east is living in fuel poverty, which is the highest proportion in England. The Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) said earlier that the energy company obligation will rightly focus on fuel poverty. However, can the Secretary of State rule out its being used to subsidise banks providing green deal finance?

[Chris Huhne]

There is absolutely no intention, and nor would it be possible, to use the ECO to subsidise banks. I am confident about that because unlike the Warm Front scheme, which Labour championed, the green deal provisions enable residents, having had a survey, not merely to go to the provider that did the survey, but to take that survey and get one or more alternative quotations. The introduction of competition into the process will guarantee that the subsidy goes to where it is needed—towards a reduction in carbon emissions and improvements in energy efficiency—not to providers, be they people in the industry or the banks.

[Fiona Bruce (Congleton) (Con)]

T6. The Middlewich company, Convert2Green, in my constituency, recently won the East Cheshire chamber of commerce environmental company of the year award. It converts used cooking oil, which would otherwise go into drains or landfill, into biodiesel for use in vehicles and elsewhere. The 20p duty differential for biodiesel has helped it to develop its innovative processes. What assessment has the Department made of the contribution of the 20p duty differential to the UK’s renewable energy targets, and what are the Government’s future plans for the differential?

[Chris Huhne]

I join my hon. Friend in congratulating the company involved. The recent quarterly renewable transport fuel obligation report gives clear evidence on the effectiveness of the 20p duty differential for biodiesel derived from used cooking oil in assisting the Government to exceed their greenhouse gas savings target, and in increasing substantially the retrieval of waste cooking oil, which otherwise would literally be poured down the drain or go to landfill. The differential has therefore made a valuable contribution to the Government’s renewable energy targets and waste strategy, and to the growth of the low-carbon economy.

[Lilian Greenwood (Nottingham South) (Lab)]

T4. The Government’s announcement of a minimum energy efficiency standard for private rented homes is welcome, but the hundreds of tenants in Nottingham living in cold, damp F and G-rated homes should not have to wait until 2018 for it to be introduced. I heard the Secretary of State’s reply to my hon. Friend the Member for Hyndburn (Graham Jones), but would the legislation not be more effective if a register of landlords was introduced so that they can be informed about the new standard and directed to information about the green deal and other measures that might help them to improve their properties?

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The hon. Lady is right that we are taking action to ensure that the private rented sector enjoys the full benefits of the green deal, but she is wrong to assume that tenants will only learn about this from a council information leaflet or some regulated communication. The most powerful element in driving the green deal forward will be the market, the new competition, the big retailers and the new entrants into the market. That will create a huge wave of interest across the country in all sectors.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

T8. I am sure that my right hon. Friend would agree that in making the case for the green new deal, we must bring local communities with us. Onshore wind turbines are controversial in many rural communities. If we are not careful and if local authorities push ahead with wind turbines without considering other options, we run the risk of losing the support of some of our rural communities. Does he agree?

[Chris Huhne]

I am grateful to my hon. Friend for his question. As the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) pointed out earlier, onshore wind is the cheapest source of renewable energy, and we have to take account of affordability. I should also say that there are many local communities the length and breadth of this country that actually want to install onshore wind turbines. It is not always the case that they are unpopular. Indeed, the most attractive and regularly visited tourist feature in my constituency is the Bursledon windmill. It is, admittedly, slightly older than many wind turbines, but it works on exactly the same principle. Bursledon windmill is beautiful, and many of the wind turbines that we are installing are beautiful too.

[Ian Mearns (Gateshead) (Lab)]

T5. The Secretary of State will be aware that the Renewable Energy Association has described the proposed tariff changes for solar photovoltaic installations over 50 kW as an “horrendous strategic mistake”. If he goes ahead with the changes, how do the Government intend to support decentralised local community energy generation in future?

[Gregory Barker]

I am afraid that the horrendous strategic failure was made by the last Government, who failed to put any sensible financial controls on the feed-in tariff scheme. There is plenty of scope for new innovative community schemes to take shape. Indeed, I visited one only last week in the constituency of my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), and I look forward to visiting many more. We want a big push forward in decentralised energy schemes. Solar is a great technology, but it has to be affordable. We need proper controls that do not blow the budget, which is what would have happened had we not taken action.

[Jo Swinson (East Dunbartonshire) (LD)]

Most of the climate change debate tends to focus on mitigation and decarbonisation, but it is also important to work on adaption, such as how we respond to pressures on water supply. What plans are the Government putting in place at home and abroad to cope with the increasing pressure and also to promote new water filtration technologies, such as that promoted by FilterClear, an innovative company in my constituency that is creating green jobs and British exports, and promoting the more efficient use of water?

[Gregory Barker]

The hon. Lady is absolutely right. There are opportunities for green growth and innovation right across the economy, and a lot that we can do in the water sector in particular. However, that is a matter for the Department for Environment, Food and Rural Affairs, which is looking carefully at how we develop the green deal. Indeed, it is possible that we could see a similar programme offered in due course—perhaps a blue deal—to ensure that water-saving measures are funded in the same way. However, she is absolutely spot-on in realising the huge potential that exists.

[Katy Clark (North Ayrshire and Arran) (Lab)]

T7. Has there been any discussion about the geographic spread of carbon capture and storage demonstration projects? The Minister will be aware that there are a number of proposals in Scotland. Is it possible that two or even three of them might be allowed to go ahead?

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The hon. Lady raises an extremely interesting point. Clearly there is an interest in sharing infrastructure, rather than everybody rebuilding their own, for CCS to go forward. We are putting forward seven schemes to the European funding mechanism —the NER300—which is more than any other country in Europe. Some schemes are geographically close to each other and some are further apart. However, they will be chosen on their merit, and there is a lot of work being done to ensure that the infrastructure costs are shared wherever possible.

[Damian Hinds (East Hampshire) (Con)]

Ofgem’s retail market review finds that many consumers are not getting nearly as good an energy deal as they could, and that includes too many of the poorest and most vulnerable. We have a diverse and dynamic market. That is a good thing, but it also means complexity, with more than 300 different tariffs available, 50% more than a year ago. Does my right hon. Friend agree with Ofgem’s proposal to simplify things and make it easier for consumers to compare prices and get a better deal?

[Mr Speaker]

Order. The questions are becoming too long and they need to be shorter.

[Chris Huhne]

I am grateful to my hon. Friend, and I am extremely enthusiastic about the thrust of the question. I am delighted that Ofgem is looking at this issue, because as we have known ever since the middle ages—if not before—if a market is to work effectively, we need common weights and measures, so that people can compare prices in the marketplace properly, and that is exactly what tariff simplification would enable them to do.

[Mr Speaker]

I call John Robertson. Not here.

[Barry Gardiner (Brent North) (Lab)]

Fifty per cent more CO₂ emissions savings could be made in the transport sector by adopting Greener Journeys’ ONE Billion challenge for a modal shift. Will the Minister look into the efficacy of the scheme and discuss the proposal with his counterpart at the Department for Transport?

[Gregory Barker]

I am not familiar with the details of the scheme that the hon. Gentleman has mentioned, but I will certainly look into this and I would be happy to communicate with my colleagues at the Department for Transport.

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

Can the Secretary of State remind the House how much energy was contributed to the grid by onshore and offshore wind last December—one of the coldest periods of time on record?

[Chris Huhne]

I am grateful to my hon. Friend for that question. What he is really asking is: does wind help when it is not blowing? Any Energy Secretary has to deal with the nightmare possibility of six cold, still days in February when the wind is not blowing but we all still need electricity. It is important for him to remember, however, that the energy sector has always had to deal with variable demand. That is why plant is often built to back up other plant. An example of the enormous variation in demand is when we all go and put our kettles on during the advertising break in “Coronation Street”. At that point, we need to bring on massive amounts of electricity generation. That is exactly the same principle, so my hon. Friend’s point is by no means a killer criticism of wind. Wind has a very important contribution to make to the national grid, and we intend to ensure that it continues to do so.

[Ian Lavery (Wansbeck) (Lab)]

Compliance with environmental legislation places a huge burden on companies such as Rio Tinto Alcan in my constituency. It will wipe out profits in excess of £50 million, come 2013, and it could jeopardise 650 jobs. What measures are the Government putting in place to protect jobs in that type of industry?

[Chris Huhne]

The hon. Gentleman is absolutely right to raise this matter. It is crucial that we bring forward proper measures to deal with energy-intensive industries of the sort that he mentions. In fact, we have had contact with Rio Tinto Alcan, along with many other energy-intensive industries, on exactly these issues. As I announced earlier this week, we are committed to working jointly with the Department for Business, Innovation and Skills to bring forward a package of measures to ensure that energy-intensive industries have a thriving future in this country. There are a number of ways in which we can help, including free allocation under the emissions trading scheme or conversion to biomass, which is also an important option.

Wild Animals (Circuses)

Thursday 19th May 2011 Commons Chamber

11:32

[Mary Creagh (Wakefield) (Lab)]

(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs to explain her decision not to ban the use of wild animals in circuses.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I apologise for the absence of my right hon. Friend the Secretary of State, who is on ministerial business elsewhere. I am grateful to the hon. Member for Wakefield (Mary Creagh) for her question, because it allows me to draw the House’s attention to the written ministerial statement laid by my right hon. Friend at 9.30 this morning.

During oral questions last Thursday, and in the written ministerial statement on Friday, my right hon. Friend and I referred to a current case against the Austrian Government relating to their ban on circuses. However, we now understand that the initiation of court proceedings against the Austrian Government has been delayed, although a case is in preparation and proceedings are expected to commence shortly. On behalf of my right hon. Friend, I would be very happy to clarify the confusion that we might have caused. This does not, however, affect our policy to introduce a tough licensing regime. The very strong legal advice that we have received, which is consistent with the case being prepared against Austria, is that a total ban on wild animals in circuses might well be seen as disproportionate action under the European Union services directive and under our own Human Rights Act 1998—[Interruption.]

[Mr Speaker]

Order. We must hear the Minister’s response.

[Mr Paice]

We believe that to have pursued a ban in the light of that legal advice would have been irresponsible.

[Mary Creagh]

As the Minister has said, the Secretary of State told the House at DEFRA questions last Thursday that

“the Austrian Government have been taken to court by a German circus company because of a breach of the EU services directive.”—[Official Report, 12 May 2011; Vol. 527, c. 1347.]

Her written ministerial statement the following day repeated that allegation, yet today’s statement has confirmed that no legal challenge exists. The DEFRA big top is spinning out of control on these legal cases that do not exist, and hiding behind human rights legislation—

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Pathetic!

[Mary Creagh]

It is the Department that is pathetic.

Given that everything read on the internet should not be trusted, for the future avoidance of doubt will the Minister place in the Library the evidence and the legal advice he has received? The Austrian embassy in London confirms that there was a legal challenge against Austria by the Commission, but it was closed in 2005. The European ombudsman closed the case in 2010.

This House relies on Ministers giving us accurate and timely information, so will he take the opportunity to apologise for misleading the House and the British public and will he stop hiding behind some circus owners who, after six years of failed national and European legal challenges, might well bring another case? That provides no reason not to ban wild animals in British circuses.

There is a further point. The Minister wants councils to license circuses, but there is a problem: circuses move from place to place, so conditions might be adequate in one town, but not in another. Is he aware that the Secretary of State for Communities and Local Government proposes to remove the powers of local authorities to prosecute owners for animal cruelty as part of his so-called review of the “burdens” on local authorities. He is proposing a scheme that gives authorities the power to license, but no ability to prosecute owners if cases of animal cruelty are discovered.

This is another all-singing, all-dancing disaster from the worst-performing Department in government. The Secretary of State for Environment, Food and Rural Affairs briefed the Daily Express on 3 April that the Department wanted a ban; the Minister’s Back Benchers and the rest of the House want a ban: it is time for another DEFRA U-turn and a ban on wild animals in British circuses.

[Mr Paice]

I am afraid that the hon. Lady’s record of events is somewhat distorted. We have not claimed that the case brought by the European Commission was anything to do with our decision. I referred specifically to a case that we understand is being prepared, as I have explained, by the European Circus Association against the Austrian Government. I can assure her that my officials have spoken today to the lawyer acting for the European Circus Association to confirm the validity of that. As I have said, we also received advice from our lawyers that the ban could be inconsistent with the provisions of the EU services directive. The hon. Lady has to ask, first, if this is so critical, why did her own Government not do it; and, secondly, if she were a Minister, would she be prepared to override the advice of her own lawyers and risk being taken to court for it, and subsequently having to withdraw the legislation she introduced?

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

In 1997, the all-party animal welfare group, of which I was then the chairman, produced a report on performing animals in circuses. I handed the report personally to the responsible Labour Home Office Minister. In the ensuing years, the Labour Government took no action whatever, so I do not think we need to take any lessons from Labour Members on this subject. That said, there is no case for performing wild animals in circuses. Given this stay of execution, will my right hon. Friend revisit the issue with a view to a total ban?

[Mr Paice]

My hon. Friend rightly reminds us that the real issue is the welfare of animals in circuses. That is why our policy remains as it was clearly announced by my right hon. Friend the Secretary of State on Friday. A strict licensing regime has the potential to reduce or eliminate the use of wild animals in circuses if the owners cannot meet the tough standards that we will require, on which we will consult. That can be done quickly, whereas a ban would require primary legislation—and we are all well aware of the time scale that involves.

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

The Minister talks about human rights, but what about animal rights? Do this Government not care about the welfare of wild animals, which have no powers whatever to exert for their own welfare? Would not the best possible course of action be for the Government to impose a ban and cope with any complications if they arise later? What we want is action from the Government, not subordination to lawyers.

[Mr Paice]

It is a sad but important fact that although this House passes laws, as indeed does the European Union, it is for the courts to interpret those laws. If the advice of our lawyers is that the courts might well interpret a ban as unlawful, we must heed that advice. That is what we have done, and that is why we have produced just as tough a regime through the use of licences—which, as I have said, could well mean that animals do not stay in circuses if their owners cannot meet the standards required.

[Bob Russell (Colchester) (LD)]

I must tell the Minister that this is just not good enough. Hiding behind 13 years of Labour failure is not a justification for maintaining the present position.

Last Friday, DEFRA—the Department for error, failure and rotten administration—issued a statement that was not correct, and I am not prepared to go along with the clarification that attempted to involve Austria. Does the Minister not accept that this barbaric activity has no place in civilised society?

[Mr Paice]

I am more than happy to confirm my personal view that wild animals do not belong in circuses. The real point, however, is that we are taking action that we can take now and as a result of which, I suspect, few if any wild animals will remain in circuses. If people are really so opposed to the use of wild animals in circuses, I suggest that they do not go to the circus.

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

The hon. Member for North Thanet (Mr Gale) is wrong. In 2009, when I was Minister of State at DEFRA, we initiated a consultation, in response to which 94.5 % of people said that they wanted the use of wild animals in circuses to be banned. We gave a commitment that we would do that if we were returned to office. The Minister is also—[Interruption.] Will Members allow me to ask my question?

In 2005, the European circus proprietors took action against the Austrian Government at Commission level. When that action failed in 2007, they invoked the European ombudsman, who found in 2009 that the Commission had been correct. I have been told by the Born Free Foundation, Animal Defenders International and the RSPCA that the Austrian Government said yesterday that no legal action was pending. Will the Minister clarify the position?

[Mr Paice]

I can confirm that officials from my Department have spoken to the attorney acting for the European Circus Association, that it is developing a case, and that it expects to issue proceedings against the Austrian Government in the next few weeks.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I am delighted to report that my right hon. Friend the Secretary of State is currently visiting the Pickering “slowing the flow” project at the request of North Yorkshire county council.

Will my hon. Friend assure the House that there will not be a knee-jerk reaction banning all wild animals in circuses until we have taken the best possible legal advice? Is it not a little hypocritical of Parliament to receive, in the House of Commons, performers from circuses that use wild animals, and then to reject those very performers?

[Mr Paice]

I am sure that my hon. Friend is right. Any Government must take serious heed of the legal advice they are given. Any Ministers who wilfully ignore such advice and risk the Government’s being taken to court and losing are, in my view, neglecting their duty. We have made the right decision: we have taken swift action to deal with the issue of the welfare of circus animals, and I believe that that is the right course.

[Mr Dave Watts (St Helens North) (Lab)]

We are well aware that many Members on the Government Benches like torturing animals, but is the Government’s position that if someone in Europe challenges an issue, this Government—this Parliament—cannot act? I find it unbelievable that the Minister would take such a position.

[Mr Paice]

The fact is that we are part of the European Union, and we are obliged to comply with European Union law. If the hon. Gentleman does not like that, it is a matter for him. As I said earlier—to some ridicule from Opposition Members—our own Human Rights Act has an influence on the position, and it was passed by the Labour party, which ought to know what its legislation says.

[Mr Philip Hollobone (Kettering) (Con)]

I believe that a majority of my constituents would want a ban on wild animals in circuses. Will the Minister update the House on how many wild animals he estimates are in circuses, and whether the number has been increasing or decreasing in recent years?

[Mr Paice]

The latest estimate is that there are 39 such animals. Following the recent press exposure, there are now no elephants in our circuses. The last one, Nelly, who we saw being very badly treated, is now in a home.

[Mr John Spellar (Warley) (Lab)]

Last Thursday, the Minister clearly stated to the House:

“There have been recent press reports that the Austrian Government have been taken to court for their attempt to ban wild animals in circuses, so our Government can hardly recommend something that might not be legal.”—[Official Report, 12 May 2011; Vol. 527, c. 1344.]

There are only two possibilities: either the official gave him wrong advice, which I regret to say is not uncommon and in which case the official should go, or the Minister made the wrong judgment even though he had the facts, in which case the Minister should go. Which is it?

[Mr Paice]

What I said, as quoted by the right hon. Gentleman, is entirely correct. There were, or are—[Hon. Members: “Were!”] At that time, there were such newspaper reports, as I reported to the House, so that was a perfectly accurate statement. It now transpires that those newspaper reports, and therefore my comments, were incorrect. That is why I have come to the House to clarify the fact, which I have done.

[David Tredinnick (Bosworth) (Con)]

Will my right hon. Friend pay tribute to zoos in this country, which have steadily improved conditions for wild animals? For example, Twycross zoo in my constituency has wide open spaces for elephants, lions, tigers and giraffes.

[Mr Paice]

I endorse my hon. Friend’s comments about the measures taken by our zoos. If animals cease to be allowed in circuses, or if circuses are unable to meet the licensing conditions, I suspect many animals will move to zoos.

[Several hon. Members]

rose—

[Mr Speaker]

Order. While paying absolutely no disrespect to zoos, may I request that we return to the subject of circuses?

[Caroline Lucas (Brighton, Pavilion) (Green)]

I have to say that I think the Minister’s position is an extraordinarily cowardly one. May I remind him that there was legal advice against a seal ban—a ban on the import of seal products—yet the courage of member states led to that being overturned? There was also legal advice against the ban on the import of cat and dog fur, but, again, the courage of individual member states led to that being overturned. May we have a bit of spine from this Government, and will they respect the wishes of the vast majority of people in this country and ban now these wild animals in circuses?

[Mr Paice]

The hon. Lady needs to reflect on the proceedings she has just mentioned, because they are very different from that which is under discussion now. Those situations involved European member states taking action at European level, whereas this situation involves a single member state, and we believe that if we take this action we may well be infringing European law, to which we are committed.

[Andrew George (St Ives) (LD)]

A reference in Friday’s statement to the legal context of a ban is relevant only if the Department had been seriously considering a ban. Will the Minister therefore enlighten the House about that and tell us whether the Government would review the situation and consider an outright ban if the legal impediment could be overcome?

[Mr Paice]

I assure my hon. Friend that we considered all options, because we had the benefit of the consultation that the previous Government had initiated and the responses to it. Clearly, however, on the basis of the information and advice we received, we believed a ban was not the right way to proceed. We wanted to be able to act swiftly, and we can do that through a very strict licensing regime. I must repeat to the House that very tough standards will be imposed on how these animals can be kept, and it is possible that circus owners will not be able to meet those standards, in which case we will have achieved a ban without having to pass primary legislation.

[Helen Jones (Warrington North) (Lab)]

The people in my constituency who protested when the Bobby Roberts circus appeared there would be stunned by the pathetic defence the Minister has put up today. Quite apart from the fact that he got the name of the elephant wrong, can he tell us why we should rely on his defence when he cannot tell us which bit of the Human Rights Act enshrines the right to be cruel to animals?

[Mr Paice]

That question does not really deserve an answer. The hon. Lady knows full well that no bit of the Human Rights Act says that, but other bits of the Human Rights Act could be infringed by a ban on wild animals in circuses.

[Jo Swinson (East Dunbartonshire) (LD)]

I urge the Government to think again. A performing circus is simply no place for magnificent wild animals such as lions and tigers and the public overwhelmingly agree. The Minister mentions the possible obstacles of primary legislation and legal challenge. May I put it to him that if he took the bold step of proposing a total ban, he would find a great deal of cross-party agreement for that primary legislation? Indeed, were there to be subsequent legal challenges in the courts, he would also have the support of the House.

[Mr Paice]

I am grateful to the hon. Lady for her comments. Of course I appreciate, as does my right hon. Friend the Secretary of State, that there is very strong public support for a ban as well as support across the parties in this House, but Ministers must take all the issues into account, including the legal advice to which I have referred and on which we believe that we have acted.

[Nic Dakin (Scunthorpe) (Lab)]

If the Minister will not introduce a ban, will he at least consider extending the provisions of the Zoo Licensing Act 1981 so that circus animals have the same rights and protections as zoo animals?

[Mr Paice]

I am happy to agree to consider that. Circus animals are, of course, covered by the Animal Welfare Act 2006, which enshrined the five freedoms, but if further issues arise from the 1981 Act I am more than happy to consider them. While I am on the subject of licensing, Mr Speaker, may I say that although the hon. Member for Wakefield (Mary Creagh) referred to local government, this is not a local government issue? The inspectors would be DEFRA inspectors appointed by us.

[Duncan Hames (Chippenham) (LD)]

I hope that the Minister understands the frustration of Members and our constituents when it seems sometimes that the script of prevarication is written by officials and does not change, whoever is in government. Will the Minister at the very least publish the legal advice on which this decision rests?

[Mr Paice]

I am happy to discuss that with my right hon. Friend the Secretary of State, who must make that decision.

[Barry Gardiner (Brent North) (Lab)]

On whose authority did the official at DEFRA phone up the lawyer of the European Circus Association to find out whether there was a preparation in the pipeline to make a legal challenge? Will he confirm that if that challenge continues to be in the pipeline, his Department will continue to do nothing, which gives the association a perverse incentive to make it last as long as possible?

[Mr Paice]

The answer to the first question is that my noble Friend Lord Henley is responsible for this policy within the Department. The answer to the second question, which is completely fallacious, is that we are not doing nothing. We have already made it clear that we will introduce a tough licensing regime soon.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Minister not aware that advisers, including legal ones, advise and Ministers decide? In reaching this decision today, he appears weak-kneed. He has agreed to see one of his hon. Friends afterwards on the question of legal advice, but perhaps he could include an Opposition Member in that meeting. There can be nothing in the legal advice that is remotely binding on this issue and he is failing to respond to the feeling in the country and in the House, which goes way beyond the number of animals involved. It is a question of principle.

[Mr Paice]

I appreciate the hon. Gentleman’s point, and of course Ministers must make the final decision. We accept that responsibility. Advice to Ministers can sometimes be fairly evenly balanced and sometimes pretty heavily balanced in favour of one side or the other. The outcome of the ministerial decision is likely to depend on that.

[Ann Clwyd (Cynon Valley) (Lab)]

rose—

[Mr Speaker]

Order. It is usually a great pleasure to hear the right hon. Lady, but I fear that she was not in the Chamber at the start of these exchanges, so we will have to wait to hear her views on a subsequent occasion.

Business of the House

Thursday 19th May 2011 Commons Chamber

11:54

[Hilary Benn (Leeds Central) (Lab)]

Will the Leader of the House give us the forthcoming business?

[The Leader of the House of Commons (Sir George Young)]

The business for next week will be:

Monday 23 May—Opposition day (16th allotted day). There will be a debate on “Sentencing”, followed by a debate on “Policing and Crime”. Both debates will arise on an Opposition motion.

Tuesday 24 May—Motion relating to eurozone financial assistance, followed by a pre-recess Adjournment debate, the format of which has been specified by the Backbench Business Committee. The business for this day has been nominated by the Backbench Business Committee.

Colleagues will wish to be reminded that the House will meet at 11.30 am on this day.

The business for the week commencing 6 June will include:

Monday 6 June—The House will not be sitting.

Tuesday 7 June—Second Reading of the terrorism prevention and investigation measures Bill.

Wednesday 8 June—There will be a debate on an humble address relating to the Duke of Edinburgh’s 90th birthday, followed by Opposition day (17th allotted day) (half-day). There will be a half-day debate on an Opposition motion, subject to be announced.

Thursday 9 June—Consideration of Lords amendments to the Postal Services Bill, followed by a general debate on the Munro report and its implications for child protection.

Friday 10 June—Private Members’ Bills.

I should also like to inform the House that the business in Westminster Hall for Thursday 9 June 2011 will be:

Thursday 9 June—A debate on the Scottish Affairs Committee report on postal services in Scotland.

[Hilary Benn]

I am grateful to the Leader of the House for that reply. After the performance we have just witnessed from the Minister at the Dispatch Box it seems pretty clear that DEFRA is a Department in special measures. I begin by asking whether we may have a statement on the improvement plan that the Government plan to put in place to improve its performance?

On the terrorism prevention and investigation measures Bill, assuming that this is the Bill that will provide for an extension in the period for which people may be detained, will the Leader of the House assure us that the promise that there would be full consultation with the Opposition on the drawing up of the Bill has been kept?

On the date of the next Queen’s Speech, following our recent exchanges, will the Leader of the House at least assure us that it will not take place during purdah next April? I ask because it is now becoming increasingly clear that deciding on a date has difficulties for the Government, which might explain why the week before last the Leader of the House decided to answer a question about the date of the Easter recess that I had not asked.

Will the Leader of the House tell us when the Bill will be introduced to enshrine the commitment to give 0.7% of our national wealth in aid to those living in poverty, and will he explain why the Prime Minister has clearly failed to persuade his Defence Secretary that that is the right policy? Is it a sign of what the Tories really think about development? Will the Leader of the House also join me in condemning the remarks of the former head of the armed forces, Lord Guthrie, who was reported yesterday as calling for aid spending to be switched to defence, adding:

“We have not got time to muck about”.

Helping to save children’s lives is not mucking about.

We see that the other place will have a debate on the proposals for its reform published this week. Are the Government planning to have a debate in this House before the summer recess and in Government time?

May we have a debate on child poverty following the warning given this week that 300,000 children will be pushed below the poverty line in the next three years because of the Government’s spending cuts? The Institute for Fiscal Studies said that after falling to its lowest level in 25 years—that is the difference made by a Labour Government—child poverty is likely to rise sharply owing to the Chancellor’s decision to cut benefits and tax credits.

When will the Justice Secretary clarify the Government’s policy on rape and sentencing following the utter confusion of the past 24 hours? Having toured the TV and radio studios yesterday, offending more and more people with every interview he gave, should he not come to the House to apologise and explain what on earth is going on?

Yesterday, the Prime Minister categorically denied any link with Mark Britnell, the man who last weekend said that the national health service

“will be shown no mercy".

Will the Leader of the House therefore explain why it is reported that Mr Britnell was invited to attend a meeting of senior experts in Downing Street earlier this month by none other than the Prime Minister’s own special adviser on health?

May we have a statement from the Health Secretary following the comments made over the weekend by Professor Steve Field? He was asked by the Prime Minister to review the NHS plans—I take it that does make him an adviser—and his conclusion is damning. Professor Field told The Guardian that the Bill’s proposals are “destabilising”.

When will the Prime Minister clarify exactly who is now deciding the Government’s policy on the Health Bill? This week, the Deputy Prime Minister issued an ultimatum regarding his own Bill—that really is a first. He said that the responsibility of Monitor for competition will have to be dropped. Indeed, in a Lib Dem policy document that he has signed, the Deputy Prime Minister says that

“the decision to establish Monitor as an ‘economic regulator’ was clearly a misjudgement”.

That is extraordinary from someone who cleared the Bill, put his name to the Bill and voted for it on Second Reading. Meanwhile, the Health Secretary, who was apparently cheered to the rafters at last night’s meeting of the 1922 Committee, says the very opposite. He told the King’s Fund yesterday that

“real choice, means that providers will be…competing for patients.”

It is now clear that the longer the Government’s pause lasts, the more uncertainty there is about the future of the NHS. Nobody knows who is in charge or what is going on—it is a complete shambles. When is the Prime Minister going to get a grip?

[Sir George Young]

We are committed to legislating on the 0.7%—something that the right hon. Gentleman’s Government never did. We are the first Government in history—and, indeed in the G20—to set out clear, specific plans for achieving that 0.7% from 2013, and that commitment will be enshrined in law. That was the commitment we made and we propose to keep it. We are keeping our word and that has brought us respect throughout the world. I hope that we will have support from the Opposition when we introduce the Bill.

I think that the right hon. Gentleman has misunderstood which Bill we are introducing on our first day back. It is the Bill that replaces control orders with temporary terrorism prevention and investigation measures; it is not the Bill on the period of detention. Of course, we want to consult the Opposition on the Bill. The measure he referred to is in the Protection of Freedoms Bill, which is currently going through the House.

I am amazed that the right hon. Gentleman has raised the subject of the House of Lords. Labour was in office for 13 years but failed to deliver its manifesto commitments. Now that we are doing that, I hope that we will have Labour’s support. We will have a debate in Government time on the proposals and I very much hope that instead of sniping from the sidelines and making cheap political points, the Opposition will engage with the issue and help us to deliver not only our manifesto commitment but Labour’s.

On child poverty, I reject the assertions that the right hon. Gentleman has just made. There will be an opportunity when we debate the Welfare Reform Bill to have a longer discussion on that subject.

On the issue of rape, the right hon. Gentleman will know that his party has chosen the subject of sentencing for debate on Monday. Rape is a very serious crime with appalling consequences for victims. The Justice Secretary did not intend to give the impression otherwise and that is why he has written to the Radio 5 listener to apologise for his comments and to invite her to a meeting. We will set out in the debate on Monday the way in which we are determined to drive up the conviction rate for rapists and the support that we are giving to rape centres throughout the country with an extra grant of £3.5 million annually for the next three years, giving rape support centres the certainty that they need.

On health, I am surprised that the right hon. Gentleman chose to raise this subject in the week when a National Audit Office report has revealed the systematic waste of money on Labour’s disastrous NHS information technology projects in the previous Parliament—£6.4 billion with very little benefit to patients.

On the other issue of differences between the coalition parties, it is worth reminding the House of the vicious battles that were fought within the Labour party between the former Health Secretary, Alan Milburn, and the then Chancellor, which threatened to destabilise the entire Government and which left the then Health Secretary, according to the extraordinary testimony of one of his Cabinet colleagues, “annihilated”. From a party that annihilates its own Health Ministers, I am not minded to take any advice on the resolution of differences of policy.

Finally, there is growing concern about how comfortably the right hon. Gentleman has taken to the Opposition Benches. In a recent interview with The House Magazine, when he was asked what it was like not being a Minister, he replied:

“You learn to adapt very quickly. I’m not pining.”

Has Labour realised that there is little prospect of any return to office?

[Several hon. Members]

rose—

[Mr Speaker]

Order. As usual, a great many right hon. and hon. Members are seeking to catch my eye but I remind the House that there is pressure on time with a further statement to follow and two important and well-subscribed debates under the auspices of the Backbench Business Committee, so there is a premium on brevity.

[Philip Davies (Shipley) (Con)]

On Report of the Localism Bill this week, Back Benchers had about 40 minutes to debate the first group of amendments, in which there were eight new clauses and 156 amendments, and 25 minutes to debate the second group, which contained a similar number of measures. When we were in opposition my right hon. Friend was the first to criticise the Government for allowing such an appalling lack of time for debate on Report. What is he going to do to address the shameful amount of time being allocated to such debates?

[Sir George Young]

I remind my hon. Friend that in the last Session of the previous Parliament, not once did we get two days to debate the remaining stages of a Bill. The Government allocated two days for the remaining stages of the Localism Bill and we are going to do exactly the same with more Bills that are in the pipeline. We are determined to allow the House adequate time. I say to my hon. Friend that I understand that the Public Bill Committee had the opportunity to discuss all the amendments and new clauses and to conclude its deliberations slightly ahead of time.

[Natascha Engel (North East Derbyshire) (Lab)]

Until recently, Back Benchers have been allocated roughly one day a week of time in the Chamber, which has almost always been on a Thursday, but I will leave that for another day. In the past couple of months, for various reasons, we have had nothing like one day a week and as a result quite a long list of interesting debates is stacking up. I know that the Government will be as keen as we are to hold those debates on the Floor of the House, so will the Leader of the House tell us what allocation will be made available to Back Benchers for debates in the Chamber between now and the summer recess and how he plans to let us catch up a little on Back-Bench time in the Chamber?

[Sir George Young]

I am grateful to the hon. Lady for her question and for her work in chairing the Backbench Business Committee. I remind the House that the coalition Government introduced that Committee—something that the previous Government failed to do. I stand by the commitment we made to implement Wright in full and allow 35 days a Session, which works out at roughly one day a week. That remains my intention and that will apply to the longer Session, so there will continue to be roughly one day a week. There may be a few weeks of famine but there may then be a few weeks of flood to compensate. She mentioned Thursdays, but we have allocated her a Tuesday next week.

[Claire Perry (Devizes) (Con)]

May I urge the Leader of the House to ensure that Back-Bench time is not taken up by any more debates about MPs’ pay and expenses? However, I would welcome further clarification from him about the written statement he made today about Members’ pay. Will he urge the Independent Parliamentary Standards Authority to be mindful of the point that we have voted for a freeze in MPs pay to put us in line with millions of public sector workers across the country? That must be at the centre of any determination of discussions going forward.

[Sir George Young]

I am grateful to my hon. Friend. The background is that had we not had that debate back in March, we would automatically have received an increase. The House voted unanimously to reject that and to resolve that it should have no pay increase for the next two years. We have now implemented that part of the Constitutional Reform and Governance Act 2010 and have handed over responsibility to IPSA. I have no doubt that it will have in mind the strong view of the House that our pay should be frozen for two years.

[John McDonnell (Hayes and Harlington) (Lab)]

The finance director of AssetCo resigned on Tuesday, its share price has dropped by 90% to 5p and the general view is that it is going into administration. AssetCo owns the engines of the London fire service and is also part of the consortium bidding to train firefighters. What is happening could put fire safety in London at risk, so may we have a ministerial statement urgently to see what Government measures are being put in place to protect Londoners?

[Sir George Young]

The hon. Gentleman raises a serous issue that I will draw to the attention of my right hon. Friend the Secretary of State for Communities and Local Government. One of his top priorities, in relation to the London fire service, will be maintaining safety.

[Mark Lancaster (Milton Keynes North) (Con)]

May we have a debate on the Cultural Olympiad arts festival, which the brilliant IF festival in Milton Keynes is supposed to be part of? There are concerns that the Olympiad festival will be increasingly based in London. Does the Leader of the House not agree that such a festival should be open to the whole United Kingdom?

[Sir George Young]

My hon. Friend makes a forceful point and might like to apply for a debate in Westminster Hall or an Adjournment debate. I will draw his remarks to the attention of my right hon. Friend the Secretary of State for Culture, Media and Sport, who will respond to him.

[Kelvin Hopkins (Luton North) (Lab)]

It is reported this week that Sir Jeremy Greenstock, former adviser to Tony Blair during the Iraq war, has taken up an advisory consultancy post with the oil industry in Iraq. He was advised to delay doing so for six months but started work after three, in clear breach of the rules governing former civil servants taking up business interests. A number of former Ministers have also taken up lucrative jobs in industries for which they used to be responsible in government. May we have a full debate on the revolving door and how we can stop it revolving?

[Sir George Young]

On the hon. Gentleman’s second point, the ministerial code was tightened last May. Former Ministers are not allowed to lobby for two years and are bound to accept the advice of the Advisory Committee on Business Appointments. I will draw the attention of my right hon. Friend the Prime Minister to the remarks about Sir Jeremy Greenstock.

[Mr Marcus Jones (Nuneaton) (Con)]

Last night, with fellow Warwickshire MPs, I met members of the Coventry and Warwickshire chamber of commerce. One of the overriding issues discussed was business regulation and red tape. Although the business people were extremely heartened by the proposals put forward in the Budget to reduce regulation and red tape, they were dismayed by the current proposals to extend paternity rights. If we are to continue to drive new job creation through businesses, is it not time for tangible reductions in business regulation and red tape and will the Leader of the House consider a debate on reducing business regulation?

[Sir George Young]

On the question of paternity rights, there will be legislation in due course to change provision and my hon. Friend will have an opportunity to comment at that stage. We are reducing the stock of regulation through the red tape challenge. I was interested to hear about his meeting with the Coventry and Warwickshire chamber of commerce. We have an ambitious programme to reduce the flow of new regulation and are inviting the public to suggest existing regulations that could be scrapped or improved and then Government Departments will have to review their entire set of regulations.

[Tony Lloyd (Manchester Central) (Lab)]

Will the Leader of the House refer his colleagues in the Department of Health to the situation of Southern Cross Healthcare, a company that owns care homes for the elderly, as 30,000 elderly people now face a very uncertain future? The company is in a parlous financial condition. It would be intolerable to see 30,000 elderly people put out on the streets. We need to know that the Health Ministers know about this situation and have a plan B.

[Sir George Young]

I am grateful to the hon. Gentleman. The top priority must be the continuing welfare of the residents in the homes to which he refers. My right hon. Friend the Health Secretary and his Ministers are in contact with Southern Cross Healthcare. He will continue to keep in close touch with the situation and will work with local authorities, the Care Quality Commission and other providers to ensure an effective response that delivers protection to everyone involved. We know that the speculation in recent days has been stressful for those in the homes concerned and their relatives. We will do all we can to maintain the quality of care to which they are entitled.

[Mr David Nuttall (Bury North) (Con)]

I warmly welcome the confirmation from the Leader of House that the House will have a debate on the draft Bill on House of Lords reform. Given the Bill’s enormous constitutional importance, will he please confirm that when we come to debate it we will consider it in all its stages on the Floor of the House without any guillotine?

[Sir George Young]

It will certainly be constitutional legislation and it will certainly be taken on the Floor of the House, so I can give my hon. Friend that assurance. He has not been in the House quite as long as I have, but he will know that at times debate can be protracted and that on certain occasions it is necessary to curtail debate in order to make progress with the rest of a Bill, so I cannot guarantee that at no stage in the process of scrutiny of constitutional legislation will the House be invited to come to a decision. I rest on what I said in response to my hon. Friend the Member for Shipley (Philip Davies). We are determined that the House should have adequate time to consider serious legislation and believe that we are already performing far better than our predecessors in that respect.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Following two damning reports from the Welsh Affairs Committee and the Culture, Media and Sport Committee, may we have an urgent debate in Government time on the unsatisfactory situation facing S4C, the Welsh language TV broadcaster?

[Sir George Young]

The hon. Gentleman may have an opportunity to develop the argument further when considering the Public Bodies Bill. Debates on Select Committee reports are now the province of the hon. Member for North East Derbyshire (Natascha Engel), who chairs the Backbench Business Committee, so he may like to present himself at 1 o’clock on a Tuesday afternoon at her salon.

[Tessa Munt (Wells) (LD)]

Will the Leader of the House give time to discuss the important matter of the process of recruiting a new Clerk of the House of Commons? As a member of the Administration Committee, I received a copy of the advert for that post yesterday. At a time when the Government are bearing down so hard on salaries and bonuses in the public and private sectors, when there are job losses and when the Chancellor of the Exchequer has to approve all salaries in excess of that of the Prime Minister, I wonder whether the appropriate assessment has taken place of the roles involved in the Clerk’s job and whether, in fact, the residence, the uniform allowance and the £200,000 salary should be subject to some sort of discussion, along with an assessment of the criteria, rather than there being an automatic assumption about that.

[Sir George Young]

I am grateful to my hon. Friend. I have now seen the advertisement to which she refers, which I understand was approved by you, Mr Speaker. The salary of the Clerk of the House and chief executive is linked to judicial salaries and is in the permanent secretary band, which reflects the Clerk’s position as independent constitutional adviser to the Speaker and the House. The Clerk is appointed by the Crown, by Letters Patent, and is not an employee of the House of Commons Commission. However, it is right that all public bodies, including the House of Commons, should take robust decisions on their expenditure at the current time and I support any steps to do that.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Further to the earlier question on Backbench Business Committee debates, on 4 February the House stated clearly that it wanted the Government to consider action on legal loan sharking. On 14 February, 20 Members from across the House wrote to the Ministers responsible to ask for a meeting to make progress on the matter and to look at how we could clarify the intention. Despite repeated requests and letters, nearly three months later no response at all has been received from the Department responsible. I know that I cannot ask the Leader of the House for help to get Wonga-man to account for his actions or to get the Wellcome Trust to account for its actions in investing in this high-cost credit industry and the impact it has on my constituents in Walthamstow and those in communities across the country, but I hope I can ask him for a new debate on holding Ministers accountable for their behaviour towards MPs on such matters and their continued refusal to protect the poorest consumers in Britain.

[Sir George Young]

If the hon. Lady, along with other MPs, has asked for a meeting with a ministerial colleague, my view is that she is entitled to have it. I will convey that view to the ministerial colleague concerned, the identity of whom she very tactfully withheld.

[Mr Peter Bone (Wellingborough) (Con)]

We have a Prime Minister who is committed to the health service, a Health Secretary who is the most experienced Member of the House on health matters and a Bill before the House that has been approved by the Cabinet, yet we have Ministers who seem to be opposing what they originally supported. May we have a statement on collective responsibility and whether it applies only to Conservative Ministers?

[Sir George Young]

I am grateful to my hon. Friend for that very helpful question. In my response to the shadow Leader of the House I drew attention to discussions on a health Bill that took place within a one-party Government. I think that it is entirely legitimate when there is a coalition for the two parties to have a discussion. There is a pause in the legislation. The Bill will be going ahead on Report once that consultation is concluded. We will adhere to the broad principles set out in the coalition agreement on the future of the health legislation. I remind my hon. Friend that we have decided to put more money into the NHS—there are now 2,500 more doctors in the NHS—whereas the Labour party is cutting the NHS in Wales.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Further to the earlier question from the hon. Member for Shipley (Philip Davies) about the inadequate time made available on Report of the Localism Bill, may we have a debate in Government time about the financial cost and the implications for democracy of the Secretary of State’s appalling plans to impose a non-elected executive mayor on the people of Birmingham without a shred of evidence that they support such a form of dictatorship?

[Sir George Young]

That particular issue was debated on Report, so the hon. Gentleman has had an opportunity to discuss it.

[Chris White (Warwick and Leamington) (Con)]

Yesterday the associate parliamentary group on manufacturing held a discussion with the Skills Commission on how we can reduce the skills gap in the sector. In my constituency we have access to an excellent apprenticeship scheme through Warwickshire college, and we have two world-class universities nearby, Warwick and Coventry, but we need to do more, so will the Leader of the House provide Government time for a debate about how we can close the skills gap and encourage young people to take up careers in manufacturing in order to bring about sustainable economic growth?

[Sir George Young]

I am grateful to my hon. Friend and very encouraged to hear what is happening in his constituency. Manufacturing is vital to economic growth, and the Government are taking a number of steps to support that growth, including, for example, through apprenticeships, with 250,000 more available over the next few years. We are also funding an organisation called STEMNET, which provides resources for students, teachers and professionals. We are determined to rebalance the economy, to drive up the role of manufacturing and to build on the measures that we have already announced.

[Rosie Cooper (West Lancashire) (Lab)]

Professor Steve Field is carrying out an independent listening exercise on the NHS and reporting to the Prime Minister. The Health Committee, of which I am a member, would like Professor Field to come to give evidence, but I understand that that has been fiercely resisted if not vetoed by the Department of Health, so I should be grateful for the help of the Leader of the House in resolving the issue and answering the question of whether Professor Field acts independently and is therefore able to come to the Select Committee, or whether he is an agent of the Department—which then calls into question the independence of the listening exercise. We really need to get to the bottom of this.

[Sir George Young]

The normal routine is for Ministers to appear before Select Committees, because they are ultimately responsible for policy. There were certainly occasions when the previous Government asked Ministers to appear before a Committee despite the Committee asking for somebody else, but I will make some inquiries about the issue to which the hon. Lady refers, contact my right hon. Friend the Secretary of State for Health and draw her concern to his attention.

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

Following the tragic death of my constituent Ricky Burlton, aged 20, at the hands of a driver who had no legal right to be in the country and no driving licence, but who was able to procure insurance without the insurance company undertaking or being able to undertake any checks for a licence, will the Leader of the House please find time so that we can debate the matter and see what steps we can take to resolve this rather fatal flaw in process?

[Sir George Young]

I am sorry to hear about the loophole to which my hon. Friend refers and of the death of his constituent. I will draw my hon. Friend’s remarks to the attention of the Secretary of State for Transport and ask him to write to him. I cannot provide time for an immediate debate, but he may like to apply for a debate in Westminster Hall to explore the issue further.

[Valerie Vaz (Walsall South) (Lab)]

The Finucane family have spent the past 22 years in unbearable grief, not knowing why Pat Finucane was shot 14 times in front of them. Given the historic visit of the Queen to the Republic of Ireland, would it be possible for a statement to be made to the House on when there will be an independent inquiry into Pat Finucane’s murder?

[Sir George Young]

I am grateful to the hon. Lady and understand her concern. I will pass her question on to my right hon. Friend the Secretary of State for Northern Ireland and ask him to write to her.

[Sarah Newton (Truro and Falmouth) (Con)]

My right hon. Friend will be well aware of the widespread concern throughout the UK about the Maritime and Coastguard Agency’s proposals to modernise the coastguard service, and today we have seen a lot of speculation in the press. Will he invite the Secretary of State for Transport to come to the House to make a statement?

[Sir George Young]

I understand my hon. Friend’s concern and, indeed, other Members’ concern about the future of the coastguard service, something that has been debated on several occasions. The Transport Committee is currently visiting Stornoway, and my right hon. Friend the Secretary of State for Transport will want to reflect on its report. The review of the service started under the previous Administration, and the Government are understandably reluctant to comment on the speculation in the press. We will respond in due course, have another look at the reorganisation proposals and reveal our conclusions to the House before the summer recess.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

May we have a debate about this country’s ability to respond effectively in the event of a major terrorist incident? On Tuesday I called a debate in Westminster Hall about the future of Forensic Science Service, something the Leader of the House may remember me raising at previous business questions. MPs from all parts of the House who attended the debate raised many serious concerns about the Government’s plans to wind down the FSS, plans that I believe would leave the country without the capacity to deal effectively with the aftermath of a major terrorist incident and would weaken the fight against crime. The Government simply need to look again at the issue.

[Sir George Young]

The hon. Gentleman may have an opportunity on the first day back, when I have announced a debate on the Second Reading of a terrorism Bill, to raise his concerns, or he may be able to raise them in a debate on Monday dealing with police and crime. I hope that he will have an opportunity to share those concerns with the House quite soon.

[David Tredinnick (Bosworth) (Con)]

May I congratulate my right hon. Friend on his efforts to clear Parliament square? Is he aware that the lawn there is now completely clear of demonstrators for the first time in 10 years, so when does he expect the square to be open to the general public and what is happening about the pavement?

[Sir George Young]

I applaud my hon. Friend’s continuing concern about Parliament square. He will know that the Greater London authority was successful in clearing the green, which is now being restored, and that Westminster council is now taking action to remove the encampment along the pavement, which I hope produces some results. The real answer, however, is the Police Reform and Social Responsibility Bill, which is now in another place and provides for the necessary powers to achieve a better balance between freedom of expression on the one hand and the right to protect Parliament square on the other. I very much regret that it is becoming increasingly like a shanty town, and I hope it will not be too long before we can restore its iconic value.

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

Will the Leader of the House urgently consider more attention and debates on China? China has—many people think—a malign influence on the world economy, treats its citizens barbarically and locks up even artists. Is it not about time that we took China, and its implications for world order, seriously?

[Sir George Young]

The hon. Gentleman may have an opportunity at Foreign Office questions on 14 June to raise his concerns. The Government are concerned about the treatment of Weiwei: we think his detention without charge is unacceptable, and we have made representations through the Foreign Secretary. It is important that China observes the proper standards of human rights to which all civilised countries ought to be signed up.

[Gavin Barwell (Croydon Central) (Con)]

The Oasis Academy Shirley Park in my constituency is one of the most improved schools in the country. May we have a debate about the extension of the academies programme under this Government, in line with Tony Blair’s original vision, as it is improving the life chances of young people from deprived backgrounds in all our constituencies?

[Sir George Young]

I welcome the progress being made with the establishment of academies, following the legislation that we put on to the statute book. I should personally welcome such a debate, which I hope would have cross-party support, given that many people who were in the Labour party strongly support our academies programme. I hope also that all hon. Members will support those schools in their constituencies that are in the process of becoming academies.

[Chris Bryant (Rhondda) (Lab)]

May we have a debate in Government time about Government policy on singing “Jerusalem” at weddings? If a heterosexual couple get married in church, many clergy will refuse to allow it to be sung, because it is not a hymn addressed to God; if a straight couple get married in a civil wedding, they are point blank not allowed it, because it is a religious song; if, however, a gay couple have a civil partnership, under Government plans they will be allowed to sing it. So can we make sure that “Jerusalem” is not just reserved for homosexuals?

[Mr Speaker]

I want to hear the Leader’s reply!

[Sir George Young]

I think that “Jerusalem” should be sung on every possible occasion.

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

How do you follow that?

May we have a statement about the future of the NHS Blood and Transplant service in view of the campaign to suggest that the Government are looking to privatise it? As I suspect that this is yet another myth that is being pushed out about the NHS, it would be helpful to have a statement to put it firmly back in its box.

[Sir George Young]

My hon. Friend is right. This is a myth, as there are no plans to privatise the NHS Blood and Transplant service, which will remain in the public sector.

[Diana Johnson (Kingston upon Hull North) (Lab)]

McMillan nursery in Hull, which has been rated outstanding by Ofsted, will close on 10 June because of the cuts to children’s centres by the Lib Dems. Can we have a debate in Government time on the reality of the policy that the Government keep talking about—early investment in our young people and children—and what it is doing for our poorer communities around the country?

[Sir George Young]

The Government have put in enough money to maintain the network of Sure Start centres. I understand that the hon. Lady’s party is now in control of Hull city council, so perhaps she would like to address her remarks to that council.

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

May I ask the Leader of the House for a debate on the Olympic legacy? This week it was announced that the Olympic torch will travel through the country and stay in many cities and towns overnight. Alas, the county of Northamptonshire is missing from that list. We are feeling a bit sorry for ourselves because not too much of the Olympic legacy is flowing our way, and I would very much like to debate that in this place.

[Sir George Young]

I understand my hon. Friend’s disappointment that the proposed route does not go through his constituency or, apparently, his county. I will draw his remarks to the attention of the Olympic committee that is responsible for the route and see whether there is any chance, at this late stage, of amending it.

[Nic Dakin (Scunthorpe) (Lab)]

The regional development agencies provided an effective and timely response to sudden localised challenges in the economy. With the demise of the RDAs, will the Leader of the House arrange for a statement to spell out how the Government will respond to such challenges in future?

[Sir George Young]

We have debated on several occasions the Government’s plans to replace the RDAs with local enterprise partnerships, so there have been opportunities to have that discussion. I hope that the LEPs will respond with enthusiasm to projects in his constituency that deserve support and that they will be more nimble-minded and flexible bodies than the RDAs.

[Robert Halfon (Harlow) (Con)]

May we have a debate on falling unemployment? In Harlow in the past three months, 200 more jobs have been created and unemployment has fallen to 2,400 from a peak, under Labour, of well over 3,000. Does my right hon. Friend agree that the best way to bring jobs back to Harlow and elsewhere is by boosting apprenticeships and cutting taxes for businesses, rather than the policies of Labour Members?

[Sir George Young]

I agree. I am sure the whole House will welcome the drop in unemployment that was reported yesterday, and I am pleased to hear what is happening in Harlow. We have undertaken a number of measures to reduce youth unemployment, in particular. We have announced a new innovation fund with £10 million a year to fund organisations working with young people through social finance models and a package of additional support for 16 to 17-year-olds’ jobseeker’s allowance, including more adviser support, access to work clubs and work experience. I hope that we can build on these measures and make much more progress in Harlow and other constituencies.

[Mr John Spellar (Warley) (Lab)]

I should like to ask a further question regarding Baroness Warsi. Business before pleasure, however, and I must ask about the impact of compulsory water metering on gardeners—the water tax. Last Thursday, I asked the hapless Secretary of State for Environment, Food and Rural Affairs why she was even considering compulsory water metering, and her reply completely avoided the subject. Will the Leader of the House arrange for a statement next week—the week, incidentally, of the Chelsea flower show—in which the Secretary of State can categorically rule out compulsory domestic water metering?

[Sir George Young]

I will draw the right hon. Gentleman’s concern to my right hon. Friend’s attention and ask her to write to him about our policy on compulsory water metering. I am sure that he shares the concern of Members on both sides of the House about doing all we can to drive down water consumption and conserve water, and I hope that he will not rule out measures such as the one that he has touched on.

[Graham Evans (Weaver Vale) (Con)]

Last weekend, my youngest son went on his first cubs camp, and I went along as a helper. However, I was not able to stay at the camp overnight because I do not have an up-to-date Criminal Records Bureau check for the cubs. That is a pity, as I have helped out at the same Cheshire cubs branch, which my older son went to, for the past seven years. May we have a debate on the over-the-top CRB requirements that can be such a disincentive to volunteering?

[Sir George Young]

I would like to find time for such a debate, and perhaps the Backbench Business Committee could provide it. One of the unforeseen consequences of trying to protect children by introducing CRB checks is that fewer people are then able to help children through voluntary organisations such as the scouts. We have to try to get the right balance that gives children the protection to which they are entitled but does not discourage volunteers such as my hon. Friend from playing an active part in their activities.

[Barry Gardiner (Brent North) (Lab)]

If the Government are to help to make substantial progress at the United Nations framework convention on climate change in December, they will have to get their submissions in before the summer recess. May we have a debate in Government time on the Floor of the House before the recess to discuss the UK’s contribution to Durban?

[Sir George Young]

We have just had Energy and Climate Change questions; I do not know whether the hon. Gentleman had an opportunity to ask that question then. I will certainly undertake to ensure that any submission is made in good time, and I will pass on his concerns to my right hon. Friend the Secretary of State.

[Christopher Pincher (Tamworth) (Con)]

May we have a debate on the role of the private sector in job creation—an issue that goes to the heart of the Government’s strategy for sustainable growth? Given that the Office for National Statistics has announced 77,000 more jobs in the private sector, it seems a timely moment to discuss the progress being made to rebalance the economy.

[Sir George Young]

My hon. Friend raises an important issue. Private sector employment increased by 449,000 between December 2009-10, and public sector employment fell by 132,000, so that rebalancing is beginning to take shape. If my hon. Friend looks at the Office for Budget Responsibility report, he will see that it forecasts an increase of 900,000 jobs over the next four years, with 1.4 million in the private sector, which more than counterbalances the fall in employment in the public sector. Rebalancing is on its way.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

An answer to a recent parliamentary question highlighted the fact that more than 1,200 young people under the age of 18 serving in our armed forces had sustained some form of injury during a 12-month period. In the light of this and other concerns about the recruitment of under-18s, can we find time to have a debate on this, either in the context of the Armed Forces Bill or in another way?

[Sir George Young]

I did not announce the business for the rest of June, but I anticipate that we will take the remaining stages of the Armed Forces Bill, when there will be an opportunity for the hon. Lady to make her point.

[Julian Smith (Skipton and Ripon) (Con)]

Small parish councils remain very concerned about the decision by Her Majesty’s Revenue and Customs to force them to pay their parish clerks through the pay-as-you-earn system. May we have a debate about how we can exempt small parish councils from this legislation?

[Sir George Young]

Like my hon. Friend, I have a large number of small parish councils in my constituency. It is very important that they are not discouraged in any way by unnecessary bureaucracy. I will share his concern with the Financial Secretary to the Treasury and ask him to write to my hon. Friend outlining our policy on PAYE and parish clerks.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Leader of the House will be aware of the concern about the activities in protest groups of undercover police officers such as Mark Kennedy. A review is being carried out by Her Majesty’s inspectorate of constabulary. Will the Leader of the House ensure that there is a statement to the House once that report becomes available?

[Sir George Young]

I will give my right hon. Friend the Minister for Policing and Criminal Justice who is replying to Monday’s debate on the police notice that the hon. Lady has raised this issue and see whether we can deal with it in the opening or closing speeches.

[Bob Blackman (Harrow East) (Con)]

On Monday, the Government published the long-awaited report on the process of compensation for Equitable Life policyholders, thereby honouring another part of our pledge properly to compensate those people who were so scandalously treated by Labour. However, that weighty tome has given rise to several concerns among MPs in all parts of the House, and I wonder whether there will be an opportunity for a statement or a debate in the House so that the Minister can respond on the record to those concerns for the benefit of the wider public.

[Sir George Young]

I understand the concern of policyholders to which my hon. Friend refers. I cannot find time for a debate, but it strikes me that he could raise the issue at the next round of Treasury questions or put in for a debate in Westminster Hall, where there have been several debates on Equitable Life. I am sure that several other colleagues would like to attend such a debate.

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

Further to the right hon. Gentleman’s answer to the hon. Member for Truro and Falmouth (Sarah Newton) on the coastguard review, the consultation closed earlier this month, but was extended by the Secretary of State for Transport to allow the Transport Committee to carry out its investigation, which is very positive. However, it is clear from speculation in The Times this morning and from the reassuring statements in Westminster Hall from the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), who has responsibility for shipping, that the proposals will not proceed in the form in which they were consulted on. May we have an updated ministerial statement on what conclusions have already been drawn and an assurance that the original decision to report back to the House before the summer recess will be adhered to?

[Sir George Young]

I understand the hon. Gentleman’s concern. The Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), who has responsibility for the coastguard service, will be giving evidence to the Transport Committee in the relatively near future. That will be an opportunity for such questions to be answered.

[Mr Philip Hollobone (Kettering) (Con)]

Will Her Majesty’s Government table their amendments to the Armed Forces Bill in good time, and will the Leader of the House confirm that those amendments will enshrine the military covenant in law, as the Prime Minister wishes, and not simply beef up the report on the covenant, as the Ministry of Defence is seeking to do?

[Sir George Young]

We had a statement on that matter this week, and I am sure that my hon. Friend will have read that exchange. Of course the Government will want to table any necessary amendments in good time for the House to see them and, if necessary, for Members to table their own amendments.

[Mr Dave Watts (St Helens North) (Lab)]

Given the poor response to the Deputy Prime Minister’s puny reforms of the House of Lords, may we have a debate on whether it would be better to pass this matter to another Minister who can make more progress?

[Sir George Young]

No.

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

May we have an urgent debate on trends in employment, as it is clear from the latest figures that the overall situation is far more complex than the headlines might suggest? In my constituency of North West Leicestershire, there are currently 1,513 claimants, who make up 3.3% of the economically active population. There has been a welcome fall of 10% in that figure over the last year. It would be helpful if the debate compared the overall fall in unemployment in the quarter to March this year with the number of people on jobseeker’s allowance.

[Sir George Young]

My hon. Friend is right to say that one has to drill down into the figures to get a truer picture. The rise in JSA payments, to which he referred, was due in part to new measures to move single parents whose children are attending school off employment and support allowance and on to JSA. The important figures are the continuing fall in unemployment and the continuing rise in employment.

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

A 19-year-old constituent of mine, Paul Lawrence, has been on remand since February. He is autistic and has been diagnosed with Asperger’s. He has tried to hang himself and has taken an overdose while in prison, and yet he has been kept locked in his cell, until recently in isolation, and is only let out for meals. His mother is constantly worried about his safety. May we have a debate about how vulnerable people are treated while on remand?

[Sir George Young]

There will be a debate on sentencing on Monday, during which the hon. Lady may have an opportunity to debate that matter. Some of the decisions on whether somebody should be on remand are decisions for the courts, and it is important that they retain their independence.

[Mr Speaker]

I am grateful to the Leader of the House and colleagues for their co-operation.

McNulty Report and West Coast Rail

Thursday 19th May 2011 Commons Chamber

12:43

[The Secretary of State for Transport (Mr Philip Hammond)]

With permission, Mr Speaker, I would like to make a statement about the publication today of Sir Roy McNulty’s independent study into value for money in the rail industry, and to update the House about the west coast franchise process.

Sir Roy’s report notes that UK rail has enjoyed a revival in recent years, with strong and resilient growth in overall passenger numbers and in passenger satisfaction, and huge improvements in reliability and safety. The Government want Britain’s railways to continue to prosper and have demonstrated by their actions their commitment to them. Despite the difficult fiscal climate, we have allocated funding to complete Crossrail and Thameslink, and to support the upgrade of the London underground. We have announced electrification on the great western main line and in north-west England. We have resumed the intercity express programme to improve reliability, comfort and journey times on the east coast and Great Western main lines. We have given the go-ahead to the Ordsall chord project in Manchester and the Swindon to Kemble redoubling. We have confirmed the purchase of more than 2,000 new rail vehicles for Thameslink, Crossrail and other franchises, and the cascading of 100s more. Last but not least, we have begun the High Speed 2 consultation process.

But Sir Roy made another, less welcome, finding. Spending on the passenger railway has increased by 60% in real terms since 1996-97—that is more than £4 billion—and despite significant passenger growth, unit costs in 2009 were almost exactly the same in real terms as in 1996. Therefore, UK rail is now up to 40% more expensive per passenger mile than the railways of our European competitors. Allowing for unavoidable differences, Sir Roy estimates that UK rail costs are 20% to 30% higher than they should be, and that potential savings of between £740 million and £1.05 billion a year could be found by 2018-19 without any reduction in services. Those savings, added to the savings that Network Rail is committed to achieving up to 2014 and the savings that Sir Roy expects the regulator to seek from Network Rail over the period to 2019, should largely close the efficiency gap.

Many of Sir Roy’s recommendations are directed to the industry, and the open and inclusive process that the study adopted means that some of them are already being implemented. The industry has come together to form a rail delivery group to provide the leadership that Sir Roy noted was lacking in the past. Network Rail has announced its plans to devolve significant autonomy to route managers across the network, starting with the Wessex and Scottish regions.

Sir Roy’s remit, which was set by my predecessor and the Office of Rail Regulation which co-sponsored the study, was narrowly focused on the cost base of the railway. He makes a large number of recommendations. Over the coming months, the Government will consider the recommendations that are directed to them, and they will deliver their response later this year. Many of the recommendations on franchises reflect the changes that the Government have already announced. In addition, I can confirm today that my Department will accept Sir Roy’s recommendation that it should conduct a full review of fares policy, which will include addressing anomalies in the current system and the potential for much greater use of smart technology. In parallel, the Government are developing a wider rail strategy to ensure that we have an affordable, sustainable, safe and high-quality railway that delivers a better deal to taxpayers and fare payers. It will set out clearly the roles of central and local government, train operators and Network Rail in securing the future of the railway.

This is urgent and vital work. Let us be in no doubt that the excessive cost base that Sir Roy has identified is the reason that UK rail fares are the highest in Europe by some margin, even though our levels of taxpayer subsidy are also among the highest in Europe. Let us be clear about the potential prize. The successful delivery of cost reductions over the next few years on the scale set out by McNulty would enable us to reduce levels of taxpayer subsidy and, at the same time, put the era of inflation-busting fare increases behind us.

To achieve the challenging targets for cost reduction and industry-wide efficiency that Sir Roy has identified, all players in the industry will have to work together. The train operators, Network Rail, rolling stock companies, unions and the Government cannot avoid playing their part if we are to deliver a sustainable and affordable railway for the future.

Sir Roy makes it clear that the Department needs to step back from excessively detailed specification of train services and the micro-management of rail operations. I recognise that that will represent a major culture change, but it is one that I am determined to deliver. I would like to place on record my thanks to Sir Roy McNulty and his team for the excellent work they have done, and to welcome Sir Roy’s commitment to working with the industry on an ongoing basis.

I also wish to announce to the House the publication of the draft invitation to tender and stakeholder briefing document for the intercity west coast franchise, which lays out the train service specification that I am minded to procure for that route. As I have said, the Government have already adopted Sir Roy’s recommendation that franchise specifications should become less prescriptive. The proposed train service specification for intercity west coast represents a relaxation of the rigid timetable specifications of the past, while retaining obligations that protect the key elements of service such as principal first and last train services and minimum numbers of station stops per week and per day. That marks a significant shift from the micro-management under the current system that has prevented operators from maximising capacity and reacting to the changing demands of their passengers.

Among other proposed changes, we intend to replace the current cap and collar revenue-sharing system that has driven perverse behaviour by train operators with a gross domestic product-based risk-sharing arrangement and a profit-sharing mechanism that will ensure that the taxpayer benefits from any unexpected profits over the term of the franchise.

Because the relaxation of the full prescription of train services in line with Sir Roy’s recommendations was not signalled in the consultation document that we published on 19 January, I have decided that it is right and proper to consult on the proposals again, starting today and ending on 17 August. As a consequence of that decision, I can inform the House that the new franchise for the intercity west coast will now be awarded in August 2012, after a competitive process involving the four shortlisted train operators, and will commence operations on 9 December 2012. In making that decision, I have deliberately avoided a change of franchise immediately ahead of or during the Olympic period. I have also decided to take advantage of the short delay to complete the integration of the 106 new Pendolino carriages into the fleet prior to the commencement of the new franchise. The Department will seek to agree acceptable terms with the existing franchisee for a contract extension to 9 December 2012, but Directly Operated Railways Ltd, the Government-owned company that runs East Coast, will be ready to operate the franchise between April and December 2012 if necessary.

Copies of the rail value-for-money study and the draft invitation to tender for the west coast main line have been placed in the Libraries of both Houses and are available on the Department’s website. Our expectation is that future passenger franchises on UK rail will allow operators greater flexibility to meet passenger demand and pursue innovation, while protecting the key elements of service for passengers.

Longer franchises and a changed relationship with Network Rail will have a positive impact on the behaviour of train operators and their appetite for investment and risk taking. However, I want to send a clear message that the new culture of co-operation in the rail industry, and the focus on cost reduction, is here to stay and is mandatory, not optional. I can announce today that as a matter of policy for all future franchise competitions, a significant part of the assessment of bidders’ capability at the pre-qualification stage will be evidence of success in collaborative working and driving down costs.

The facts are clear: our railway costs too much, and in consequence fares are rising faster than inflation and taxpayer subsidy has reached unsustainable levels. To secure the future of the railway, we now have to tackle that problem after a decade of ignoring it and get costs into line with those of our European comparators, bringing relief to taxpayers and the prospect of an end to the era of above-inflation fare increases to passengers. I commend this statement to the House.

[Maria Eagle (Garston and Halewood) (Lab)]

I begin by thanking the Secretary of State for early sight of his statement. May I place on record the thanks of Labour Members to Sir Roy McNulty for the detailed and thorough work that he has carried out? As the right hon. Gentleman acknowledged, that work began under the previous Government.

I have said before that we would look seriously at the conclusions of the value-for-money review and support any sensible proposals to take costs out of the industry. I promise again today that we will study the details of Sir Roy’s report, and that it will inform our own transport policy review.

I agree with the Secretary of State that we should reduce the public subsidy to the rail industry, and we need to be clear about why much of that subsidy exists if we are to address it effectively. It is partly the result of the enormous structural fragmentation within the industry, and let us be clear that that fragmentation is the legacy of the botched privatisation carried out in the dying days of the last Conservative Government. The Secretary of State should have apologised today for the shambles of that privatisation and the staggering sums of money wasted as a result. Unlike him, I take our share of the responsibility for being too timid about addressing that fragmentation during our time in government.

Closer working between train operators and Network Rail makes sense, and I support the internal reorganisation that is going on at Network Rail and many of the proposals that have been made to ensure that costs are removed through greater partnership. I am pleased that the Secretary of State appears to have stepped back from his earlier plans for the wholesale breaking up of our rail infrastructure, which would have been a costly mistake and added yet more fragmentation to the industry. Can he confirm that he does not intend to proceed with an experiment of handing track over to train operating companies within any of the franchise areas? Previously there has been briefing that the East Anglia franchise would be used for that experiment. Can he reassure the House that that is no longer the plan?

I welcome the Secretary of State’s decision to establish a proper review of fares. Despite the efforts that we made, the current system is too complex and leaves passengers frustrated. However, does he understand why passengers will have very little faith that he does not intend to impose yet further hikes in ticket prices? At a time when families are feeling the squeeze on their household budgets, he has imposed fare rises of more than 30% over the next three years. I believe he was wrong to give back to train companies the right to average out the cap across their fares, rather than apply it to each fare individually as we insisted when we were in government. He was also wrong to increase the cap on regulated fares from 1% to 3% above inflation.

In opposition, the current Minister of State said that fare rises of such a level would

“price people off the railways”,

and the Under-Secretary of State, the hon. Member for Lewes (Norman Baker), promised below-inflation fare rises—more broken promises from the two Government parties. Will the Secretary of State reject proposals to give the train operating companies greater freedom to set the level of fares? Will he listen to his own consumer watchdog, Passenger Focus, which has today described the suggestion of reducing regulation on off-peak tickets as a “leap in the dark”? Does he share its concern, as I do, that if the plans go ahead, we might end up with affordable, flexible travel for longer journeys being confined to a brief window in the middle of the day?

Will the Secretary of State also reject the suggestion to remove any role for politicians in the setting of fares, which would effectively remove any public accountability for fares through the ballot box? The link between the fare box and the ballot box should not be broken.

May I urge the right hon. Gentleman to approach reform to staffing levels and pay and conditions within the rail industry in a spirit of partnership, not confrontation? That is something that we have not seen in the language and tone of briefings by his Department in recent days. I urge the trade unions to work with the Government as they look to carry out reforms within the industry, but will he ensure that he includes those who represent staff on the high-level group that he is establishing to take forward these reforms? As he considers staffing, will he understand the value that passengers place on staffed trains and open ticket offices, and the fact that women in particular feel safer in properly staffed stations, particularly late at night?

We have heard today the extent to which the right hon. Gentleman’s policy on rail franchising has descended into chaos and confusion, with his decision to delay the awarding of the west coast franchise. Can he confirm that First Group is to hand back its Great Western franchise three years ahead of schedule? Is the reason that it has given for that decision, as reported in the press, that it has calculated that it will make losses in the final years of its franchise period? Does he agree that that is unacceptable?

Will the Secretary of State confirm that there is a possibility that the east coast main line, the west coast main line and the Great Western franchises will all be run by the Government while he decides what his franchising policy is? Does that not make a mockery of the whole franchising system?

Does the Secretary of State understand why commuters in East Anglia are dismayed at the cost and chaos of his decision to award a contract for less than two years, risking three owners in as many years, with only the companies that supply the paint to redo the liveries benefiting? Are not the future of franchising, the massive public subsidies that go to the private train operating companies, and the vast sums that leave the industry in profits the big missing pieces of the work of looking at costs in the industry?

I welcome the Secretary of State’s decision to replace the current cap and collar revenue-sharing system, but does he agree that we will not get the costs of the industry under control until we look seriously at its structure and the future of franchising? The public want a simplified industry—one in which the driving force is less maximising profit and squeezing every last penny out of the fare payer and the taxpayer, and more the delivery of a world-class service. That is why I have committed Labour’s policy review to look at alternative models for the future of the rail industry, including not-for-profit models. I urge him to do the same.

Finally, the right hon. Gentleman’s statement was not the only announcement to be widely spun and briefed to the media in advance of his coming before the House. Several newspapers are reporting that he has abandoned his plans to close more than half the UK’s coastguard stations, yet the Opposition understand that far from abandoning the plans, he has simply put them on hold. Those plans were never agreed by Ministers in the previous Government, and I would not have approved them. Will he now take this opportunity to end the huge uncertainty facing coastguard stations and agree to abandon those reckless proposals?

[Mr Hammond]

I might get some guidance from you, Mr Deputy Speaker, on whether it is appropriate for me to respond to the hon. Lady’s comments on coastguards—I would be happy to do so if you indicate that that is in order.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. It is up to the Secretary of State which points he wishes to answer.

[Mr Hammond]

Thank you, Mr Deputy Speaker, for that very helpful guidance.

I am grateful for the hon. Lady’s comments about Sir Roy, who was of course appointed by my predecessor. I very much hope that we can take forward the rail reform agenda with a degree of cross-party consensus, which would be very helpful—realistically, it is asking a great deal to expect that we will agree on everything.

The hon. Lady blames “structural fragmentation” for the high cost of our railway. She obviously has not yet had a chance to read the full report, but when she does, she will see that Sir Roy identifies many causes. However, she seems to be displaying the famous Labour disease of collective amnesia. She might recall the inconvenient facts that her Government created Network Rail a decade ago, and that her Government spent 13 years in power doing nothing at all about the structural fragmentation of which she now complains.

The way forward that passengers and taxpayers would expect us to take for our railway is one of evolution rather than revolution, although that evolution must be rapid. I have taken a conscious decision, which I conveyed to Sir Roy, that I would like to see how far we can go within the existing railways legislative framework rather than spark an ultimately unproductive and, for passengers, entirely unhelpful political debate over the next couple of years on major railway legislation. The idea of Sir Roy McNulty’s agenda is to take forward significant reductions in costs in the railway within the existing legislative framework.

The hon. Lady asked about track-train integration. As she will know, Sir Roy has suggested that we pilot closer integration between train operators and the devolved Network Rail infrastructure operations on the different routes and regions. Sir Roy suggested that the railway is not homogeneous, and that we should go forward at different paces on different sections of our railway. I agree with that general principle. We will look very carefully at Sir Roy’s specific proposals and suggestions on track-train integration, and incorporate a response into the wider rail reform proposals with which I intend to return to the House before the end of this year.

The hon. Lady welcomed the fares review, and I am grateful to her for that. She asked whether the review is a cover or code word for increases in prices, but I say this to her: the Government want an end to the era in which fares rise faster than inflation, but we can do that only by delivering Sir Roy’s savings and by getting the costs of our railway back under control. That prize is within our grasp if we progress Sir Roy’s agenda. To reassure her, I have no intention of ending the system of regulated fares. That is not suggested by Sir Roy, and I know not where she got the idea that I was in favour of it.

The hon. Lady asked me to try to take a collaborative approach with the unions on labour productivity. I would be delighted to do so if an opportunity arises. I was slightly heartened by what I heard Bob Crow say on the radio this morning, although I may have heard only a part of the total interview. He said he was willing to look at proposals for more efficient working practices, which is at least better than his saying that he is not willing to look at such proposals. We must be clear that all players in the industry must change if we are to harvest those savings. The prize for the unions is also big. The railway is a growing industry—it is not in decline, as it was before privatisation, but growing rapidly and robustly—and huge increases in passenger numbers are projected. If we can deal with the problems of the cost base, we could have a hugely successful business for the benefit of British fare payers and taxpayers.

The hon. Lady has won me a small bet by referring to my strategy on west coast franchising as being in “chaos and confusion”, so I am grateful to her for that. In fact, I have today announced an example of open government. We could have progressed with the draft invitation to tender that I published today without further consultation, but I felt that because there has been a material change from the documents that we circulated at the time of the January consultation, it is right to consult again. That introduces a three-month delay, and I do not want the franchise changeover to come immediately before the Olympics, which necessarily means a delay until the latter part of next year, which gives us the opportunity to complete the integration of the Pendolino fleet. We have taken a set of careful and interlinked decisions on the timetable for that franchise, and I hope that, on reflection, she welcomes the approach that we have adopted.

The hon. Lady asked about First Great Western. It is of course true that First Great Western has decided to exercise the break clause that exists in its franchise, which allows it to surrender it in 2013 rather than in 2016. However, before she adopts too strident a tone, she should remember who let that franchise with that break clause in it. First Group has exercised the rights that her Government gave it in that franchise. She might also reflect on the fact that her Government let the GNER franchise and the NXEA franchise before she gets too strident about them as well.

The hon. Lady mentioned profit in the railway. I do not consider “profit” to be a dirty word. I consider that proper incentives and profit-making companies delivering efficient public services can be effective ways of delivering for the taxpayer and the passenger. This Government will introduce a profit-sharing arrangement in new franchises, the like of which does not appear in the current crop of franchises, which her Government let, and the like of which would have prevented situations such as the one on the Trans-Pennine franchise, where profits of 30% on revenue are being earned. We will ensure that the taxpayer gets a fair share of any unanticipated profits that are earned over the lifetime of the franchise. I hope that we all have the same objective—the delivery of a world-class railway service that is affordable for taxpayers and for fare payers. However, to deliver that, we have to drive out cost-effectively and, after Members and others have heard what I have had to say and what the hon. Lady has had to say, it will be for them to decide who will most effectively be able to achieve that objective.

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

Does my right hon. Friend accept that for many Swindon residents travelling to and from London to work during peak hours has resulted in eye-wateringly high fares for far too many years? What hope can he offer them for the future of peak-time rail fares?

[Mr Hammond]

There are two things that I can say to my hon. Friend. First, if we do not address the challenges that Sir Roy has set out, there will be only one direction of travel—worse services and higher prices. That is not acceptable to anybody in this House or in the country.

I want to make a point specifically about commuter fares and season tickets. At the moment, we have a very inflexible system of season tickets. People buy a season ticket which assumes that they will travel in peak hours every day. Increasingly, people have opportunities for flexible working patterns—indeed, the Government are committed to giving people greater opportunities for flexible working patterns. Smart ticketing technology will allow us to be able to start to recognise people who have a pattern of work that allows them to work at home one day a week or a fortnight, instead of their having to pay the rail fare even though they are not using the railway. That technology can help us to address some of the perverse incentives that season ticket holders currently have to use the railway in peak time when perhaps they do not always need to do so.

[Geraint Davies (Swansea West) (Lab/Co-op)]

On the issue of value for money and rail electrification, can the Secretary of State undertake to have a look at transnational transport funding from Europe to help to support the case for the Swansea to Cardiff electrification? It would complete the electrification from Paddington to Swansea and, with the ferry link to Ireland, provide access to significant European funding.

[Mr Hammond]

I have already made a statement to the House on the economics of the electrification from Cardiff to Swansea and I am afraid that those economics have not changed, but if the hon. Gentleman is raising the issue of trans-European network funding, I am not aware that there is any still available. However, I undertake to have a look at that potential source of funding.

[Dr Julian Huppert (Cambridge) (LD)]

I welcome this report and congratulate Sir Roy McNulty on it. Commuters and other travellers have suffered for far too long from high and complex fares and overcrowded trains. Can the Secretary of State assure me and all those who use the trains that the savings that must be made from the system will be returned to people in lower fares and better services?

[Mr Hammond]

I thank my hon. Friend for his question. I have to put it to him slightly differently: the savings will be returned to people in the form of lower taxpayer subsidy—which we have to deliver, because my Department, like every other Department, has to make its contribution to dealing with the fiscal mess that we inherited—and in due course, if they are successful, there will be lower pressure for upward real increases in fares. I would like to see a return to a world in which fares rise broadly in line with inflation, and a move away from the era of inflation-busting fare increase that we have faced over the last few years and, unfortunately, will have to face over the next three years.

[Ian Lavery (Wansbeck) (Lab)]

The McNulty report did not seriously consider the possibility of the reintegration of the rail system into public ownership. I mention that because many systems abroad are largely in public ownership. One of the reasons why our system is at least 30% more expensive is the billions of pounds siphoned off in profits and dividends. Will the Secretary of State explain why they did not look at that option and why it is not on the table at the moment?

[Mr Hammond]

A good old Labour contribution from below the gangway! Sir Roy McNulty did look at the options of greater integration, but the hon. Gentleman might not be aware that things have moved on a little in Europe since the last time he read the manual. European law on railways has evolved, and the separation of train operations from track operations is now mandated across the European Union. While much of the railway is still in public ownership, it is not integrated in the way that he may imagine.

Sir Roy’s clear conclusion was that a monolithic UK-wide system is not the direction of travel and that more devolution of responsibility and autonomy to route networks is the way forward.

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

Although I understand the reasons behind the delay in the decision on the west coast main line franchise, can my right hon. Friend reassure my constituents that the decision will include provision for the train operators to play a more active role in the future of stations, especially in their infrastructure and presentation to passengers?

[Mr Hammond]

Yes, I can give my hon. Friend that assurance. The proposal that we have put forward—as he will see when he has a chance to look at the invitation to tender—is that the train operators should be granted a peppercorn rent lease of the station for the duration of the franchise. We also propose a revised residual value mechanism, so that train operators have an incentive to invest capital in station infrastructure throughout their franchises with the confidence that they will be reimbursed a fair value for that investment at the end of the franchise.

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

Does Sir Roy’s report which, from what the Secretary of State has said, is very stimulating and interesting, mention the possibility of mutualisation or a co-operative form for Network Rail? We want a profitable, safe and effective service but if, as MP for Huddersfield, I look at the rolling stock that gets my constituents to Wakefield, Leeds and Manchester, I see that it leaves a great deal to be desired. Could we also see some changes on that front?

[Mr Hammond]

I am sure that the hon. Gentleman will have been pleased by the announcement that we made recently about additional rolling stock for the commuter services into Leeds. Sir Roy did not specifically address the question of any form of mutual structure. Network Rail is of course an independent company, and as Secretary of State I do not have any power to direct it. There are issues of the governance of Network Rail that need to be addressed, and I accept that, but I suggest that the urgent need is to look at its operational structure. The issues of governance and the rather theoretical question of ownership can be looked at on a longer time horizon. Right now we need to drive out cost.

[Mr Marcus Jones (Nuneaton) (Con)]

Following the work of the last Government, there are no fast off-peak services on the west coast main line to or from Nuneaton station. Many of the fast off-peak trains thunder through Nuneaton station half empty while there is a strong demand for off-peak services to and from that station. Will the west coast main line specification make it possible for franchisees to look, for example, at changing services so perhaps a fast train could stop at Nuneaton station every hour, trading off a small increase in end-to-end journey times for the possibility of maximising revenue on that service?

[Mr Philip Hammond]

I thought, at the beginning of my hon. Friend’s question, that perhaps he had missed what I said about less departmental micro-management, but I saw from how he ended that he had not missed it all. We will not mandate the new franchisee to do what he describes, but we will make it possible by relaxing the rigid timetabling and specification imposed in the past. We will also give operators an incentive to do so. By moving away from the cap and collar revenue-sharing regime, we will make operators much more responsive to the demands of passengers waiting on a platform and ready to pay good money to get on a train. In the past, that has not always been the case, because 80% of what passengers handed over went directly to the Government.

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

I note what the Secretary of State said about subsidies and fares—we will return to that later in the year—but will he give us a progress report on the Coventry Knuckle project, which I am sure he knows a lot about, because it would help Coventry’s economic situation?

[Mr Hammond]

As the hon. Gentleman knows, I had a productive meeting with him, some of his parliamentary colleagues and local councillors about the project. I think they took from that meeting clear guidance on what needs to be done to raise the project’s prospects of achieving local authority major scheme funding. I remain happy to engage with him and his colleagues in progressing that project.

[Amber Rudd (Hastings and Rye) (Con)]

Wages in Hastings have fallen dramatically against the rest of the south-east in the past 10 years, but wages of commuters are significantly higher. Does the Secretary of State agree that if we manage to redress the imbalance between the continually deteriorating service and higher wages, we would improve the regeneration of towns such as Hastings as well as the quality of life of commuters themselves?

[Mr Hammond]

My hon. Friend is right. High-quality rail services deliver major economic benefits to the towns they serve, which, of course, is one of the major rationales behind the Government’s enthusiasm for the high-speed rail project.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

What consideration has been given to a Welsh franchise based on a not-for-profit model operated by the Welsh Government? I believe that is the policy of at least two of the main parties in the National Assembly.

[Mr Hammond]

I am pleased to be able to tell the hon. Gentleman that franchising policy in Wales is a matter for the Welsh Assembly Government, so it will be for them to decide when the current Arriva Trains Wales franchise comes up for renewal, which—off the top of my head—is in 2016. However, I said something this morning that he will be interested in: I indicated that when we return to the House later this year with our proposals for broader rail reform, we will consider the greater devolution of regional railways and regional railway funding, both to the devolved Administrations and to local authorities and integrated transport authorities around the country. That will enable us to oversee the national strategic rail routes, but not manage the regional and local railways system, from the Department in London. That seems a sensible way of proceeding.

[Duncan Hames (Chippenham) (LD)]

I welcome the greater autonomy for Network Rail route managers in the Wessex area, because rail passengers in my constituency are endlessly frustrated by the pass-the-parcel attitude to responsibility for performance on the railways. In the light of First Great Western’s recent announcement, will the timing for the letting of the Great Western franchise enable the Government fully to embrace the McNulty report proposals in setting out the future of rail travel for my constituents?

[Mr Hammond]

Yes, of course. The fact that the Great Western franchise will be re-let in 2013 will enable us to bring forward to that date the incorporation of the benefits of McNulty’s work. However, I would re-emphasise that one of Sir Roy’s key conclusions—one that I strongly share—is that our railway is not the same in every area. What is right for the west coast main line might not be right for the East Anglia franchise. What is right for the northern franchise might not be right for the south-eastern franchise. We will consider each franchise individually, and look at different models appropriate to the type of railway involved. We will proceed on that basis, and we will learn as we go.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

The west coast main line has improved dramatically over the years in both capacity and reliability, because of the investment made. However, it is the victim of its own success. Use has risen exponentially and the trains are packed at peak times. Despite what the Secretary of State said about regulated fares, there is a widespread fear that the proposals he has announced will allow substantial increases in off-peak rail travel fares. If that is so, it will not only damage people travelling in off-peak periods, but remove the incentive to plan one’s travel and thus make the crush at peak times even worse. What can he say in response to those fears?

[Mr Hammond]

I can say that they are unfounded. By the way, the right hon. Gentleman made the case for High Speed 2 more eloquently than I could. It will deliver a massive increase in capacity on the west coast corridor and allow much more innovative and flexible services on the west coast main line, which is now operating at—or very close to—capacity. However, there is a serious point about pricing and cliff edges in the pricing system. Anyone who stands at Euston station on a Friday evening will see that nobody wants to board a train at 6.50 pm or 6.55 pm, because that means paying the peak fare. They are all trying to get on the train at 7.2 pm, to the extent that the British Transport police regularly have to deploy to physically keep people off the trains for safety’s sake. That is a barmy pricing system. We have to consider the anomalies of massive cliff edges and try to smooth them out, so that there is less of an incentive not to travel on a particular train. However, overall I would expect such a move to be revenue-neutral across regulated fares; this is about managing the system better, not raising more money.

[Mr Philip Hollobone (Kettering) (Con)]

One of the understandable grumbles of the Kettering rail users group is that for historical reasons the fare for a journey from Kettering to London is disproportionately higher than that for a journey to London of a similar length from other places. Will the fares policy review seek to iron out such anomalies?

[Mr Hammond]

I do not want to pre-empt the rail fares policy review, to which I am sure that my hon. Friend will make a submission, but I have recently enjoyed meeting the Northampton rail users group, and the Minister of State has just said that she would be happy to meet the Kettering rail users groups, so perhaps we can carry a dialogue forward.

[John McDonnell (Hayes and Harlington) (Lab)]

I refer to my entry in the Register of Members’ Financial Interests. On a constituency matter, with regard to First Great Western and the handing back of the franchise, I would welcome the Secretary of State or the Minister convening a meeting of the relevant MPs along that line to discuss the security of service provision. This looks like a creeping re-nationalisation of the railway service—but there we are! However, as the Secretary of State said, there is a big staffing agenda. All three rail unions have welcomed the opportunity to work with the Government on that agenda. However, it is crucial that they are represented at every level of the industry and in every forum discussing the staffing agenda. It is not conducive to good industrial relations to have statements about threats of further anti-trade union legislation at this time.

[Mr Hammond]

I will have to disappoint the hon. Gentleman on creeping re-nationalisation: there is not one, and I can assure him that so long as I am in this job, there will not be one. However, I am happy to meet MPs along that route to talk about the Great Western franchise. First Group will continue to operate the franchise until 2013, and it has assured us that it will operate it as normal and run the franchise properly during that period. It has every incentive to do so, because, as I just announced, our policy is that eligibility for participating in franchise competitions will depend on demonstrated ability to deliver co-operative working, and to bear down on cost pressures.

I am absolutely ready to meet the unions. In fact, I think my office is in the process of arranging a meeting with the rail unions through the TUC, which I hope can play a constructive role in this process—it is a process I think we all want—of making this a viable and affordable industry that has a bright future, and which will employ not fewer but more people as the railway expands on the trajectory of current projections.

[Jeremy Lefroy (Stafford) (Con)]

I welcome the Secretary of State’s approach to the west coast main line franchise. As has been said, overcrowding in standard class in particular is a problem on the west coast main line. I pay tribute to the quality and courtesy of the staff I encounter in difficult circumstances. However, first-class carriages are often under-utilised. Can he confirm whether the new franchise will include a duty to take all practical measures to ensure that people do not have to stand on trains that often travel at more than 120 mph?

[Mr Hammond]

As I said earlier, the intention is to be less prescriptive. Train operators already have the freedom to de-designate first-class carriages and reconfigure their trains if they want to, and all the new Pendolino cars that will be inserted in existing nine-car sets will be standard-class carriages. I do not want to talk about imposing a specific duty on operators, but they will have to deliver on targets to reduce overcrowding, and we have powers to force them to take action if they do not.

[Kelvin Hopkins (Luton North) (Lab)]

I had the pleasure of meeting Sir Roy McNulty on two occasions during his consultation. I put to him the points made by Tom Winsor, the former rail regulator, that British Rail worked miracles on a pittance and that when the railways were handed over to the privateers, they were handed over “in good order”—his words. Also, the Catalyst report recorded BR as having the highest productivity of all the railways in Europe. BR was desperately underfunded, with not enough investment, but it worked miracles on a pittance. I also put it to Sir Roy that the staggering rise in costs that has occurred since privatisation is a direct result of privatisation. I personally believe that it is pie in the sky to think that we will bring those costs down without public ownership again. When is the Secretary of State going to look at that again?

[Mr Hammond]

I am not. I think the hon. Gentleman suffers from the disease—which I have noticed is quite widespread—of taking a rose-tinted retrospective view of British Rail. People were quick enough to criticise and complain about British Rail’s performance when it was operating; now, at 15 years’ distance, that era suddenly appears to have been some halcyon period of British excellence. The hon. Gentleman is right that British Rail operated the railway on a shoestring at relatively low cost, but in doing so it built up a tremendous legacy of under-investment and disregard for safety risk, the terrible consequences of which we saw only too clearly in the late 1990s and the early years of this century.

[Graham Evans (Weaver Vale) (Con)]

I welcome this report and the associated cost reductions on the west coast main line. We can learn from this report, so will my right hon. Friend please ensure that the forecast build and running costs for High Speed 2 are not exaggerated?

[Mr Hammond]

Yes. The High Speed 2 business case and the build and running costs put forward in the consultation document incorporate the Treasury’s generous additional percentages for risk and optimism bias—with as much as 60% added to the basic costs in some cases—to address the very concern that my hon. Friend outlines.

[Jeremy Corbyn (Islington North) (Lab)]

In all this emphasis on devolving and transferring responsibility to train operating companies, does the Secretary of State not recognise that there is a danger of losing the whole principle of having an integrated rail service, with integrated timetabling and ticketing for those who make complicated journeys? Additionally, he did not say very much in his statement about reopening disused branch lines, which could well benefit by becoming a useful feeder service into the network, or about the east-west freight line, which is so important in increasing freight usage and using existing rail tracks more efficiently.

[Mr Hammond]

I am grateful for the hon. Gentleman’s question, which allows me to make an important point. Integration in the railway at the level of timetabling, planning and route network operation is important. The hon. Gentleman will not have had a chance to read the report yet, but Sir Roy makes that point clearly. Those things have to be done on an industry-wide basis; they cannot be fragmented when greater autonomy is devolved to network rail route managers or when train operators are given greater flexibility.

The hon. Gentleman also talks about reopening disused lines. I am afraid to tell him that work on the cost base has a little way to go before that becomes a practical reality. However, as I said earlier, I intend to look carefully at the case for devolving responsibility for commissioning services and the budgets with which to do that for regional and local railways later this year. I would expect decisions to reinstate any currently disused lines to be taken at that level.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate the Secretary of State on this encouraging report. What are the prospects for improved rolling stock on the Leeds-to-York line via Harrogate and Knaresborough? We have rapidly growing numbers of passengers on the route, but the rolling stock is some of the very worst that I have seen in the country.

[Mr Hammond]

I am grateful to my hon. Friend for his question. As I mentioned earlier, an announcement was made recently about additional rolling stock for services into Leeds. I had it in my mind that that covered the route in question, but he is testing the extreme edges of my memory now, so it would be better for me to write to him with the specific answer to that question.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Surely the Secretary of State must accept that fragmentation costs more. For example, I understand that Network Rail employs about 600 legal staff to negotiate with the train operating companies, and no doubt each operating company also employs significant numbers of such staff. Surely we should be looking at integration, as it will save us money.

[Mr Hammond]

The hon. Lady has obviously read the RMT press release from this morning. Of course there are additional frictional costs—interfaces—in the operation of the railway that we currently have, with franchisees and an overall network operator. However, there are also a lot of unnecessary costs that are caused by the adversarial relationship between Network Rail and the train operators. As I said earlier, I do not believe that the answer is some massive revolution that requires primary legislation and will take the rest of this Parliament to deliver. Instead, this is about getting people working together differently. Let us get to a railway that is different from the one that we have now. In the railway that we have now, the brightest and the best people in all train operating companies are the ones who spend their lives allocating responsibility for failure and collecting money from each other. Hundreds of people are literally spending their days trying to decide whether each delayed train is the responsibility of Network Rail or of this or that operator. That is not productive. Getting the industry to work together, looking at industry-wide costs and focusing on solving the problems, rather than allocating blame for them, is the way forward.

Points of Order

Thursday 19th May 2011 Commons Chamber

13:37

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

On a point of order, Mr Deputy Speaker. I wish to raise with you a matter relating to the rights of Members of this House. I have today received a notice about the restrictions being imposed on access to this House on the day of the visit by the President of the United States. I recognise entirely that it is essential to provide the President with maximum security. I recognise further that this will involve, and needs to involve, restrictions on access to this building by strangers—people who are not Members of this House. However, the notice includes a series of restrictions on access to this House by elected Members of this House. I regard that as unacceptable. It is also a violation of the Sessional Orders, which give every Member the right of access to this House in the service of his or her constituents. I would therefore ask you to have this matter re-examined urgently, so that while of course welcoming the President and providing him with security, we can at the same time maintain the right of Members of this House to come into this building whenever they need to.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

What I can say is that we do not discuss security issues in this Chamber, and quite rightly so, as Sir Gerald will know, given that he is a very senior Member of this House with great knowledge. I suggest that he meet with the Serjeant at Arms to discuss the issues. He has put them on the record for the rest of the House to consider, but the right way to proceed is to sit down with the Serjeant at Arms. I will, of course, also pass on his comments to Mr Speaker.

[Bill Esterson (Sefton Central) (Lab)]

On a point of order, Mr Deputy Speaker. I am glad that the Secretary of State for Transport is still in his place to hear my point of order. Have you had any indication from him that he intends to make a statement to the House to clear up the confusion caused by his comments on television and in The Times today? Coastguards at Crosby and across the country, and the public whom they serve, are extremely concerned about the proposed changes, as are Members of all parties across the House, and we would all appreciate some clarification in a statement from the Secretary of State.

[Mr Deputy Speaker]

That is not a matter for me, but the hon. Gentleman has placed his comments on record.

Backbench Business

Thursday 19th May 2011 Commons Chamber

[27th Allotted Day]

BBC World Service

Thursday 19th May 2011 Commons Chamber

[Relevant documents: The Second Special Report from the Foreign Affairs Committee, The Implications of Cuts to the BBC World Service, Responses from the Government and the BBC to the Committee’s Sixth Report of Session 2010-12, HC 1058; The Fourth Report from the Culture, Media and Sport Committee, on the BBC Licence Fee Settlement and Annual Report, HC 454.]

13:40

[Richard Ottaway (Croydon South) (Con)]

I beg to move,

That this House notes the Sixth Report from the Foreign Affairs Committee, The Implications of Cuts to the BBC World Service, HC 849; endorses the Committee’s support for the World Service’s invaluable work in providing a widely respected and trusted news service in combination with high-quality journalism to many countries; considers that the unfolding events in North Africa and the Middle East demonstrate the continuing importance of the soft power wielded through the World Service; believes that the value of the World Service far outweighs its relatively small cost; and invites the Government to review its decision to cut spending on the World Service by 16 per cent.

This is an historic moment for the House of Commons, because this is the first debate in the House by a departmental Select Committee on a substantive motion relating to a major issue of public concern since the introduction of the new arrangements for Back-Bench business. This is good for democracy and good for the reputation of Parliament.

Power falls into three categories: military power, economic power and soft power. It is the view of the Foreign Affairs Select Committee that the BBC World Service is a key component of Britain’s soft power. We recognise the economic constraints and the background to our report, but we believe that it is a mistake to implement the proposed heavy cuts to the World Service’s budget. This is a question of priorities. We live in a fast-moving world where the internet and the media have grown in reach, influence, power and authority faster than anyone could have dreamed. It might seem odd to quote no less a person than Osama bin Laden on the importance of soft power, but, talking about jihad, he said:

“The media war in this century is one of the strongest methods. It’s…90% of the total preparation for battles”.

He was talking about the power and influence of media communications—soft power.

Soft power is a rapidly growing way of achieving desired outcomes. In the cold war era, power was expressed in terms of nuclear missiles, industrial capacity, numbers of men under arms, and tanks lined up across the central plains of eastern Europe. Today, none of those factors confers power in quite the same way. The old structures are moving on. Cyber-attacks and the more subtle methods of the information age are the norm. Soft power—the power of Governments to influence behaviour through attraction rather than coercion—dominates. That point is not lost on the Foreign Office, high up on whose list of structural reform priorities—the reforms that it believes should have priority—is the

“use of ‘soft power’ to promote British values, advance development and prevent conflict”.

I can think of no better definition or illustration of the need for the World Service, and it is the opinion of our Committee that the cuts to its output are a false economy. If anything, it should be expanded to address the concerns of a changing world, just as the security services and the number of diplomats to key sensitive postings have been expanded.

The BBC World Service is a priceless institution. Its value dramatically exceeds its costs. It is a key national and global institution at the forefront of international broadcasting, operating to the highest standards. In evidence to the Select Committee, BECTU—the Broadcasting, Entertainment, Cinematograph and Theatre Union—said:

“The World Service is the world’s most recognised news service.”

The National Union of Journalists described it as a “force for good”. A Chinese journalist told us that it was the most “trusted and respected” news service. The Financial Times described it as

“one of Britain’s principal sources of soft power”.

Mark Thompson, the director-general of the BBC, described it as

“one of the most precious things the BBC does and a lifeline to many tens of millions of people around the world who don’t enjoy proper access to accurate, impartial, open media”.

A listener said that it

“punches far above its weight and brings a disproportionate amount of prestige and soft power to the United Kingdom”.

Another wrote to me saying that it would be

“better to cut the increase to the aid budget and bolster the World Service”.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

First, may I thank the Chairman of the Select Committee for the leadership that he has shown during the preparation of the report? I believe that we have managed to produce an enormously influential report under his chairmanship. He was talking about the value of the World Service, but I know he recognises that that is changing. Others are investing in this area. For example, at this time of the Arab spring, we are seeing al-Jazeera becoming increasingly powerful in the influence that it brings to bear. Our influence is in great danger of being completely eclipsed.

[Richard Ottaway]

I thank the right hon. Gentleman for that, and for the support that he gives me on the Committee. I also thank him for his contributions to the Committee, and the expertise that he brings from his previous career. He is absolutely right about the changing world that we live in. I think that the Foreign Office gets that point. I do not wish to be critical of it, and I think that it does understand this, but we are trying to emphasise that the World Service represents one of the best ways of communicating with this changing world. The right hon. Gentleman makes his point well.

The World Service enhances Britain’s credibility. I have heard a story that President Kikwete of Tanzania starts his day by rising at dawn and listening to the BBC World Service rather than the local Tanzanian media. Others record that Mikhail Gorbachev turned to the World Service for real information during the coup against him in 1991. It is no wonder that the Foreign Secretary said that

“the BBC World Service will remain of fundamental importance to this country’s presence in the world”.

The strategic defence review singled out the World Service, saying that it

“plays unique roles in promoting our values, culture and commitment to human rights and democracy”.

In the interest of balance, however, I should report to the House that one listener wrote to me to say that it was a complete waste of money for the World Service to be broadcasting cricket to northern Europe. I had to point out that that was on long wave, and not the World Service and, unfortunately for him, he would have to continue to listen to ball-by-ball commentary and detailed analysis of the LBW rule.

The Select Committee believes that the World Service is a jewel in the crown which promotes British values of truth and democracy across the globe. In our motion, we say that its value “far outweighs its relatively small cost”. As yet another Minister defects from Libya, the dramatic events in north Africa and the middle east show that soft power, properly deployed, is likely to bring even more benefit to the UK. In the fog of war and media spin, people everywhere trust the World Service to be fair, honest, courageous and decent. And so, by association, Britain is endowed with those same qualities. This is soft diplomacy, and it is valuable.

[Rory Stewart (Penrith and The Border) (Con)]

Does my hon. Friend agree that a key element in this is that the Government’s contribution to the World Service does not have to be a permanent one? The licence payer is going to take over the cost of the World Service in three years’ time. Were the Government to cut the World Service by the same amount as the rest of the Foreign Office, there would be a temporary imposition on the taxpayer, not a permanent one.

[Richard Ottaway]

My hon. Friend is absolutely right, and I shall come to that point in a moment. It is the disproportionate nature of the cuts that is of concern to so many people.

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

On behalf of the Committee, may I thank my hon. Friend for so eloquently putting the case set out in our report? A moment ago, my hon. Friend the Member for Penrith and The Border (Rory Stewart) mentioned the question of governance. Does my hon. Friend the Member for Croydon South (Richard Ottaway) share the anxiety felt by many of us that the financial responsibility for the World Service will be transferred to the BBC budget, which is subject to a six-year moratorium with regard to any increase in the licence fee? Is there not a risk that the World Service will find itself competing with other parts of the BBC family—entertainment, for example—so that the admirable Mr Robin Lustig might find himself competing for funds with the equally admirable Mr Bruce Forsyth?

[Richard Ottaway]

My right hon. and learned Friend is absolutely right. It is a key recommendation of our report that the future governance relationship between the BBC World Service and the Foreign Office is not defined clearly enough in the concordat. Our concern is that we might be told, “You want an Arabic service and you want a Mandarin service, but we don’t have enough funds for both, so you need to decide which one”. To be fair to the Foreign Office, it has taken that point into account in its reply. I am pleased that it is still looking at the issue.

The central recommendation of the report was that the decision to reduce spending on the World Service by 16% should be reversed, but that if the funding has to be reduced, it should be done in such a way as to minimise the damage. A wide range of services will either be closed altogether or have a reduced output. I have no quarrel with some of the planned changes. For example, radio audiences in Vietnam have fallen to 1% and it has only about 110,000 listeners. In the meantime, Vietnam is seeing an internet boom with some 400,000 users now accessing the World Service online. The decision to focus on online services is obvious and sensible. None the less, we highlight plans to cut three services, which we think should be reviewed: the Mandarin, the Hindi and the Arabic services. It is doubtful whether their reduced output is in the nation’s interest.

[Keith Vaz (Leicester East) (Lab)]

I join others in congratulating the hon. Gentleman on his leadership role and his Select Committee on its excellent report. On the Hindi service, does he share my concern to the extent that the Government have made it clear, from last year’s Queen’s Speech to this week’s statement by the Foreign Secretary, that India is a priority? We are sending more diplomats to India in order to improve our relationship with that very important country, so will cutting the Hindi service not send out the wrong message to a country with which we really want to do business?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

We must have shorter interventions, as we are rapidly running out of time.

[Richard Ottaway]

The right hon. Gentleman is right that India is of huge strategic importance to the United Kingdom. It is a rising power and a stated foreign policy priority. The World Service audience in India is some 11 million, which beats “EastEnders” any day. The estimated cost of reaching that audience is only £680,000 a year, which the producer of “EastEnders” would probably die for. I am not convinced, and I hope the House is not convinced, that losing that huge audience to save a bit over £0.5 million is worth it—and I am pleased that the Government agree in their reply to our report.

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

I accept that the Government say they are prepared to bring in some temporary measures whereby the World Service will provide limited hours in the Hindi service for a temporary period, but does the hon. Gentleman agree that the real solution is not temporary measures, but recognition that losing an audience of 10 million in India and a total loss of nearly 20 million to the World Service audience will reduce its share of the global audience so that it will no longer be the premier broadcaster internationally?

[Richard Ottaway]

I thank the hon. Gentleman for his work in the Select Committee in preparing the report. He makes exactly the point I am about to make. I hope that the Government will accept the motion—I have reason to believe that they may well do—and when they conduct the review, the hon. Gentleman’s point is exactly the one they should be looking at.

I shall move on from India to China. BBC China has been struggling with the jamming of shortwave radio signals by the Chinese authorities for more than a decade. As a result, its impact has been lost. Despite that, witnesses told us that they continued to hold the service in high regard. Sometimes it may be jammed in cities, but not in rural areas. After the Szechuan earthquake of 2008, the local community tuned in to BBC shortwave so that they could find out what was happening with the relief efforts. Chinese listeners tuned in to the Nobel peace prize ceremony, which the media was banned from reporting.

In response, the World Service is refocusing its online provision to China. However, let me express a word of caution about the move to online services. Internet services can be turned off at any time by totalitarian regimes. A good example was seen in Egypt during the Arab uprising when some 80 internet providers were cut off overnight. The Chinese Government have published a strategy paper asserting their rights to censor the internet inside their own borders.

It is the cuts to the Arabic services that have caused the greatest concern. No embarrassment should attach to the World Service or the Government over this decision, which was made last December before the Arab uprisings in January of this year. The value of BBC Arabic services is highlighted by photographs—colleagues may have seen them—of protesters on the streets of Syria carrying placards saying “Thank you, BBC”. Across north Africa, only two radio stations are listened to: al-Jazeera and the World Service. I mean no disrespect to al-Jazeera, but in my judgement, the far more independent and therefore respected service is the World Service.

This is a region that requires quality journalism and news coverage. The Foreign Office has responded to recent events in the Arab world by diverting considerable resources to the region. It has expressed its surprise over the reduction in World Service output—I hope that surprise will work its way into its review—and I welcome the fact that the Foreign Office is in discussion with the World Service to review the situation. What is needed, however, is a full reversal of the proposed cuts.

Let me deal with funding. Since its inauguration, the World Service has been funded by the Foreign Office. This will end in 2014 when responsibility will be transferred to the BBC. During the intervening four years, the budget is to be reduced from £241 million to £212 million a year. Taking into account inflation, that is a 16% real- terms cut. Last autumn’s spending review announced that the overall FCO budget would fall by 24%. However, a closer look shows that, once the World Service and the British Council are taken out of the equation, the actual cut in the Foreign Office budget is a shade under 10%.

In my judgement and in the opinion of the Select Committee, a 16% cut in the World Service budget, compared with 10% in the Foreign Office budget, is disproportionate. I sympathise with the director of the World Service who argued that the service had to some extent been singled out. In his defence, the Foreign Secretary told us that he did not regard the cuts to the World Service as being disproportionate. He argues that the World Service proportion of the FCO overall budget had been kept at its 2007-08 level through to 2013-14.

There seems to be some disagreement over the figures. The World Service tells us that, using the FCO’s baseline of 2007-08, when the World Service had 16% of the budget, it does not keep the same proportion, but declines to 15.6% in 2013-14. That 0.4% difference might not sound much, but it amounts to £6.6 million a year of the World Service budget, which would be enough to save a number of services.

In response, the Government say that they “do not recognise” the World Service calculations. So, in an effort to explain the difference and resolve the dispute between the World Service and the Foreign Office, I dug into the figures. I discovered that they were produced by the House of Commons Library. On digging a bit further, I found that the Library stands by the figures as they are based on the FCO’s own resource accounts and letters to the Committee from the Foreign Secretary and the permanent secretary. Quite how the FCO can say that it does not recognise the World Service figures is a bit of a mystery. Perhaps the Minister will explain the figures further in his reply.

Those are the problems. What are the solutions? I am advised that the additional funds required to retain the Mandarin, Hindi and Arabic services, about which the Foreign Affairs Committee expressed concern, amount to between £3 million and £4 million per annum, which is less than the discrepancy between the World Service figures and those of the Foreign Office. The Committee does not believe that there should be any cuts at all, but believes that if there are to be some cuts it would not be a stupid decision to focus on a small number of priority services, to allocate a relative pinprick in terms of public expenditure, and to reverse the decisions on Mandarin, Hindi and Arabic using the unallocated £6.6 million.

Many Members, and witnesses from outside the House, have suggested that the huge and growing DFID budget could be used to make up the shortfall in the World Service budget. That course is subject to two constraints. First, although it might have been permissible before the International Development Act 2002 came into effect, the Act states that any funding by DFID should be used for the reduction of poverty. Secondly, DFID funding must comply with OECD guidelines to become official development assistance. Therein lies the problem. There is a limit to exactly how much a broadcaster’s output can be described as official development assistance or as reducing poverty, and I understand that that limit has been reached.

Others have suggested that a way around the problem would be to slice a few million quid off the DFID budget and give the money to the Foreign Office for onward transmission to the World Service. That suggestion runs into the difficulty of meeting the United Nations target that 0.7% of GDP should be spent on international development. However, the House will welcome an announcement by the Secretary of State for International Development, who, following discussions between us, wrote to me on 13 May stating that he intended to make a grant to the World Service Trust and put his Department’s relationship with the trust on a more strategic basis. The trust is the charitable arm of the World Service, focusing on development. He believes that he can significantly expand its operations, increasing development outcomes and poverty reduction. That is an extremely helpful development. I congratulate the Secretary of State and his colleagues in the Department and thank him for his personal involvement, and I hope that the Foreign Office will be equally responsive.

Following the tabling and publishing of the motion last week the Government published a fairly emphatic rejection of our report, and it is with some surprise that I now learn that they intend to accept the motion, which calls on them to review the decision to cut the service by 16%. Several key Select Committee Chairmen, a former Foreign Secretary and other senior Members of Parliament support the motion because of the widespread concerns that I have raised.

In its report on the BBC, which was published today, the Culture, Media and Sport Committee strongly endorses the Foreign Affairs Committee’s report, which means that two Select Committee reports have unanimously expressed concern. I must tell the Minister that it would be a mistake to undertake a review and then to take no further action. If that does happen, the FAC will return to the subject.

The World Service is important. It is a national asset and a jewel in the crown, and it has an unrivalled reputation throughout the world. It is no surprise that Kofi Annan described it as

“perhaps Britain’s greatest gift to the world”.

In those circumstances, I urge the House to support the motion.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I must be honest with Members. We have very little time. I am sorry, but I must introduce a speaking time limit of eight minutes.

14:04

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

I will try to be brief, Mr Deputy Speaker.

It is a pleasure to follow the Chairman of the Foreign Affairs Committee, the hon. Member for Croydon South (Richard Ottaway), who introduced our report so ably. Let me underline what he said at the end of his speech. If the Government allow the motion to be passed this afternoon but prove to have had no intention of taking its wording seriously, the House will definitely revisit the issue—and in a different mood from the one it has adopted today.

I believe that there is virtual unanimity in this country about the importance of the BBC World Service. Where do people who live in totalitarian and authoritarian regimes and have no access to free media obtain the truth? If they mentioned two or three sources, one of them would be the BBC. The BBC provides the best possible image for this country, and I think it was very foolish of the Government to present proposals that would lead to reductions in the services of the World Service and in its audience share.

Reference has already been made to cuts in language services. Perhaps the Minister will clarify something that is puzzling me. The tone of the response to our report from the Foreign and Commonwealth Office implies some lack of convergence and consensus with the BBC World Service and its management in regard to facts and interpretation. It appears from the wording of the report and the responses to it that there is some tension and frustration within the FCO about some of the things that we have said and been told.

Let me ask a specific question. When the World Service was told that it must reduce its budget significantly—I understand that at one point it proposed to close up to 13 language services—what was the Government’s response? Is it true that they said that that was far too large a number and that a smaller number must be reduced, but with disproportionate cuts in those services? We now have the absurd situation of a 10 million loss of audience in India. We also have the absurd difficulties with BBC Arabic to which the Chairman of the Committee referred.

In recent years the World Service has introduced an Arabic television service, which is very popular, and a Persian television service, which is extremely popular and very important in a country that is as important to us as Iran. It has also developed a number of digital and online services, which cost much more than the radio services that are being slashed as a result of these disproportionate cuts. Both the present Government and their predecessor are committed to recognising the importance of those Arabic and Persian television services and the potential establishment of an Urdu television service, which we have discussed with Ministers in this and the last Government, and which might have a significant impact on a country as important to us as Pakistan. Is it not part of the wielding of our “soft power” and our promotion of this country’s values—is it not in our national interests?—not to cut the World Service’s radio services in order to finance that expansion, but to recognise that the World Service is a vital priority for British policy projection?

I am not arguing that the World Service should simply do what the Government want; one of its great benefits is its independence. However, I fear that we have created what is potentially the worst of both worlds. We are drastically reducing the World Service’s footprint globally. As the right hon. and learned Member for North East Fife (Sir Menzies Campbell) made clear in his intervention, in three or four years’ time one tabloid newspaper or another will ask why, for instance, we should be financing languages in Africa that no one in this country understands, rather than paying to have the best “X Factor”-style television programme—or some other style of programme—that is under threat.

In one of our Committee’s final recommendations, we expressed deep concern about whether the BBC World Service could rely on the BBC as a whole to protect it under the new arrangements. One of the consequences of the Foreign and Commonwealth Office’s relationship with the World Service is that there has been parliamentary accountability and scrutiny of the World Service. I was serving on the Foreign Affairs Committee in the 1990s when attempts were made under the John Birt regime to get the World Service under the control of the BBC. Those proposals were dropped because Parliament was not happy about the possibility of the values and ethos of the World Service being undermined, and I do not believe that we have the necessary assurances in place now on preserving the ethos and values of the World Service under the future arrangements.

I hope the House resoundingly supports this very important motion. The fact that it has broad support is a great tribute to the Chairman of our Committee—and to the other Select Committee Chairs who have put their names to it, as well as the rest of us who are signatories. The Government must listen and introduce a speedy review—not a review that will take a long time so that the cuts the World Service will have to introduce are irreversible. We must have a swift review with fast results, and we must assert that the World Service is the jewel in the crown and will remain so.

14:12

[Mr Robert Syms (Poole) (Con)]

I support the motion. The Foreign Affairs Committee has produced a good report. The Chairman’s arguments were right and were pitched extremely well. It is clear from all the information produced, especially the written documentation the Committee received, that many people hold the World Service in very high esteem, and I therefore think we would be foolish hastily to proceed in the direction in which we seem to be going. Even if we accept that there might be a degree of bleeding stumps in some of the worst case scenarios, it is time for the Government to reconsider this issue before any lasting damage is done.

Consideration of the comprehensive spending review and the licence fee negotiations were concluded fairly quickly and without a vast amount of consultation, yet the implications for the World Service are very substantial indeed. Therefore, if there is a right time to pause so that we can carefully consider how to proceed, that time is now.

The issue of soft power and the flow of information around the world has already been mentioned, and it is of great importance for this country’s influence globally. Any of us who travel abroad appreciate that there is a great appetite for information from the BBC, as well as enthusiasm for British Council centres, and even British newspapers and the rest of our media. It is important that information flows, but the specialised analysis of that information by British journalists and foreign journalists working for the World Service is also important. We have witnessed upheaval, revolution and the fog of war, and reference has been made to the Facebook revolution. Often the analysis of experienced journalists is needed to decipher what is actually happening and to impart an accurate view to the world.

I heard a discussion on, I think, Radio 4 between two history professors, one of whom said, “If we look back into history and substitute the word “crowd” for “mob”, we can totally change the way in which people view events.” Journalists who work for the World Service must be allowed to get on with the job and give their best analysis of what is happening so that people who do not share our privilege of living in a free society can receive that information.

[Rehman Chishti (Gillingham and Rainham) (Con)]

My hon. Friend rightly talks about the importance of such experienced journalists, and another advantage of the World Service is its independence and impartiality, which is crucial for empowering people to seek democracy in highly regulated states.

[Mr Syms]

Yes, and we could not buy that. As the Chairman of the Select Committee has said, where the BBC withdraws a service another organisation will fill that vacuum, perhaps with a less good service, and probably with a less accurate one.

Looking back at the events in my lifetime, it is clear that the flow of information and the use of technology can change worldwide events. One factor in the overthrow of the Shah of Iran was the fact that he modernised his telephone system so that plugs could not be pulled out, which allowed the Ayatollah to phone through the digital system and give instructions to his followers. The flow of information from western television channels telling people in East Germany that they could get out to the west through a neighbouring country led to the great events that resulted in the Berlin wall being torn down. It is also clear from what is happening in parts of north Africa and the rest of the world now that information is a vital commodity.

The investment over decades in the Reithian tradition of striving for truth is very important, and we should bear in mind the sums involved here. I think the figure for the Hindi service is £680,000, and that is very small in the grand scale of things. We therefore must pause to reflect, and it would be a good idea if thought was given to addressing the issue of the Department for International Development budget. Aid is one answer to the world’s problems, but good governance and truth is another. We can greatly improve the manner in which the developing and third world is governed by getting more truth and information into countries and getting much more openness, transparency and democracy. The World Service can, of course, play a role in that.

I therefore hope the Government will listen. I hope they reflect on this excellent Select Committee report, and that we do not, as it were, throw the baby out with the bath water and for the sake of a small sum of money lose the ability to project truth, honesty and transparency to the world, which is so valued by people who live abroad and do not share our advantages.

14:17

[Martin Horwood (Cheltenham) (LD)]

The Liberal Democrats welcome the debate and strongly support the motion. The Select Committee Chairman set out very well the terms of the debate and the contrast between soft and hard power. Hard power in military terms is certainly often appropriate, as in the cases of Libya and Afghanistan, but it is an expression of British power overseas that is often fraught with military, political and financial difficulties. Even in the gentler realm of diplomacy, we are rightly reviewing our diplomatic presence around the world—and, it is to be hoped, expanding it in many cases in light of a changing world—while also having to pay attention to the financial context at home.

Soft power and expressions such as “the BBC World Service” are extraordinarily cost-effective. They reach billions of people and are enormously positive with very few complications, including many of the negative complications of other expressions of British interest around the world. The World Service in particular has attracted extraordinary plaudits from the likes of Kofi Annan and even Nelson Mandela. It has been refreshing in recent months to see placards on the streets of Muslim countries calling not for death to Britain or anything like that but thanking the BBC. They are talking about the BBC World Service, of course. In that context, it is extraordinary that we are facing the prospect of cuts to the Arabic service in particular. So, it is right that Ministers should be reconsidering the matter.

The current funding relationship is somewhat uncomfortable. The Select Committee is cautious about the eventual transfer of World Service funding to the BBC and rightly says that safeguards should be

“put in place to prevent any risk of long-term erosion of the World Service’s funding and of Parliament’s right to oversee its work.”

The intervention by my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) was also well made. Provided that those safeguards can be put in place—the Select Committee suggested a formal concordat with the BBC Trust—there is one advantage to the transfer of funding, which is that it underlines the independence of the BBC World Service from political decisions about both funding and editorial content. That is an important reassurance for World Service listeners worldwide.

In the meantime, we have something of a problem in the period leading up to 2014. I welcome the Committee’s call for funding arrangements to be re-examined. We are happy to support it and I am glad that the Government are accepting the motion. I appreciate, however, that this is not as easy as it first looks. I understand, like others, that Ministers have thought about this very carefully and are aware of the issues involved. I am certainly very grateful for the time that Ministers and their advisers from both DFID and the FCO have spent answering my questions on this subject, as well as those of my right hon. and hon. Friends in this Chamber and in another place.

I particularly welcome the Secretary of State for International Development’s announcement about the prospect of a significant grant to the BBC World Service Trust. Many development issues can be addressed in World Service programming, from gender awareness, to global responsibilities for climate change, adaptation to it and how people can prepare for it, to health awareness, particularly about matters such as the HIV epidemic.

There are limitations, however. It is right that DFID’s funding should be restricted to matters that qualify as official development assistance and not all broadcasting can come within that remit. It would set a bad precedent if DFID was asked to fund areas that did not qualify as ODA under OECD rules and we would not want that precedent to be set. Nor would we want World Service programming to be skewed completely in the direction of development programming. The provision of information and a British perspective on world events is very important in many countries. The Hindi and Mandarin services spring to mind and the priority in those cases is not development but our economic, diplomatic, political and cultural presence, which is vital.

The BBC should have to examine its costs, its overheads and its back-up costs just like any other public spending. It is quite right that it should try to do that and if the hon. Member for Ilford South (Mike Gapes) is correct, there has clearly already been an iterative process between Ministers and the BBC on the exact nature and extent of these cuts and their impact on particular broadcast services. Even if that is true, following that iterative process we are still facing cuts in such vital services as Arabic, Hindi and Mandarin, so it is clear that we must reconsider the transitional arrangements between now and 2014. We should consider how we can protect those key services.

In the great scheme of things, the amounts of money involved are not huge. As has been pointed out by the Select Committee, they are a relatively small proportion of the increases in DFID’s budget. Even within wider Government and FCO spending, we are not talking about large amounts of money. As I said at the outset, the cost-effectiveness of the programming and influence of the World Service and the respect that it earns this country are of almost incalculable value. I urge Ministers enthusiastically to accept the motion and do whatever they can to protect this jewel in the crown of British broadcasting.

14:24

[Jeremy Lefroy (Stafford) (Con)]

I congratulate the Foreign Affairs Committee on its excellent report and I rise to speak in favour of the motion. I pay tribute to the excellent speeches of the Chairman of the Committee and other Members.

For 11 years, when I lived in Tanzania, the World Service was my main source of news. I learned of progress in the first Gulf war, the Bosnian conflict, the Rwandan genocide and two general elections from the BBC World Service. I valued its impartial, measured news and comment as a service for expatriates such as me, but more importantly it was the main source of information for many of my Tanzanian colleagues. I remember meeting one of them the day after the 1997 general election, which he had been following very closely on the BBC. He was amazed and impressed at how quickly we had changed our Government in this country, and he was even more impressed that the outgoing Prime Minister went to watch a game of cricket rather than finding himself on the wrong side of a jail door, having been locked up by the new Government. It is at such times that we realise that the World Service is indeed a gift to the world, as has been said. However, it is more than that. It is also important in presenting Britain and British values to the world. At a time when our political and economic future is bound up ever more closely with the developing world, where much of the World Service output is broadcast, its importance is growing, but it is also at this time that we are proposing to make cuts to that valuable service.

I want to distinguish between the financial cuts and the cuts to the service itself. I understand that the Foreign and Commonwealth Office cannot be exempt from the cuts being made elsewhere in government, and I understand that the World Service has to be part of that, but I believe that the cuts to the grant could be mitigated, if not entirely made up, in four ways. First, the Foreign and Commonwealth Office could revisit the cuts it is making. As has been said, we are talking about cuts of 16% compared with cuts of 10% across the rest of the FCO. Secondly, commercial activity could be expanded. World News TV is funded commercially; indeed, I understand that it made a profit last year.

Thirdly, as has been touched on, there could be greater use of development funding. As has been pointed out, if spending is to qualify, it must be undertaken by the official sector and it must have as its main objective the promotion of economic development and welfare and be made at concessional financial terms. Those are the rules that the OECD insists on for something to qualify as official development assistance. In this country, we go further because we make it quite clear that such spending must also be for the reduction of poverty. I still think, however, that we could look further at that approach. The media, and particularly the World Service, play a vital role in development in three ways—as a watchdog, in setting the agenda and by providing information that is necessary for development.

The BBC World Service helps Governments to develop policies that benefit the majority of their population and it is not driven by sectional or ethnic interest. There has been analysis of how World Service spending might be classified as ODA, and I accept that this is one of those issues that one might say is about as long as a piece of string, but I have seen analysis showing that up to 40% of spending—something like £100 million out of the total spending of £250 million, including capital—could be classified as ODA. I therefore welcome the Secretary of State’s letter to the Chairman of the Foreign Affairs Committee in which he stated that he would be prepared to support the relationship between the Department for International Development and the World Service Trust and that he would, in principle, be prepared to support it with an accountable grant.

Finally, the cuts could be mitigated through better use of BBC World’s own resources, perhaps by looking at some of the salaries at the higher end of the organisation.

On the cuts to the service itself, the Foreign Affairs Committee has rightly spoken about the Hindi service, BBC China and BBC Arabic, but I would like to draw attention to the Kiswahili, Kinyarwanda and Kirundi services, in which I have a special interest from my time in east Africa. Those short-‘wave and medium-wave services are accessible to people who cannot access pretty much any other services save those provided by their own broadcasting corporations. Those people are in remote areas, whereas internet and FM services tend to be available to people in urban areas. It is part of this Government’s policy to reach people, such as those in smallholder agriculture, for whom a service provided on short wave by the BBC might be the only such service that they can receive at certain times that is relevant to them. I therefore urge the Foreign Office to look in particular at such services.

In conclusion, the BBC World Service is a huge asset to the United Kingdom, but it is also of tremendous importance to tens of millions across the world. Where the BBC withdraws, as has been said, other less independent organisations will step in. Therefore, I support the motion.

14:30

[Mr Wayne David (Caerphilly) (Lab)]

We have had a short but truly excellent debate this afternoon. The hon. Member for Croydon South (Richard Ottaway) began the debate by speaking powerfully as Chair of the Foreign Affairs Committee. He reinforced and explained extremely well the main conclusions of his Committee’s report, which is first rate. He summarised the main concerns that Members have expressed today and in previous discussions and interventions in the House. He has put a significant question mark over the Foreign and Commonwealth Office’s financial calculations regarding the World Service.

We then heard a contribution from my hon. Friend the Member for Ilford South (Mike Gapes), who reiterated what the Chair of his Committee had said and stressed the fact that the World Service is seen as a jewel in the crown. We heard from the hon. Member for Poole (Mr Syms), who gave a number of practical examples of how the dissemination of objective information can help the development of democracy in a truly practical way. Similarly, we heard from the hon. Member for Cheltenham (Martin Horwood), who reinforced the case put by other Members and made it clear where his party stood on the matter. Finally, we heard from the hon. Member for Stafford (Jeremy Lefroy), who spoke with great insight about the importance of the World Service and referred to his experience in east Africa. It is only by understanding such concrete examples that we can really appreciate the value of the World Service.

As well as expressing concern about the short wave BBC China Mandarin service, which broadcasts in a country where democracy is in short supply, I would like to focus briefly on two areas. First, it was initially announced that the BBC Hindi short wave service was to close in March 2011. However, the Government announced a partial reprieve in March with the continuation of an hour of current affairs broadcasting, pending commercial funding being found. This concerns me greatly. We all know that India has enormous economic potential, and the Government are rightly strengthening their bilateral relations with that country. It is all the more worrying, I suggest, that the sword of Damocles still hangs over the BBC Hindi short wave service. That should not be the case.

The other huge concern I have relates to BBC Arabic. The events in north Africa and the middle east over the past few months have been truly momentous, and the process of change continues apace. It is therefore extremely worrying that the World Service has announced 60 job losses in its Arabic service. Surely the World Service should, if anything, be providing more resources to BBC Arabic, rather than less. I fully appreciate that many of the plans were drawn up before the incredible events of the past few months, but that is all the more reason for the Government to accept that reality and revisit the whole programme.

In addition to these concerns, I would like to give an example of how the World Service impacts in a positive way on one country in particular. Earlier this week I was in Serbia. I was there with the Labour party and the Westminster Foundation for Democracy. I undertook the political reconnaissance as part of an ongoing assessment of how democratic debate in that country can best be assisted. Serbia has made good progress over the past few years, but there is still much to be done. One of the crucial elements that has helped Serbia’s march to democracy, as a number of people made very clear to me, is the BBC World Service. It is no exaggeration to say that there is not a single democrat in Serbia who does not acknowledge the important role of the World Service. Equally, there is universal disappointment that Serbia is one of those countries that will lose World Service coverage.

One of the people I spoke to earlier this week was Sasa Mirkovic, the managing director of the radio and television company B92. He explained to me how the World Service has been a source of objective information, inspiration and hope to a whole generation in Serbia, and he deeply regretted the end of its broadcasting in Serbia, because, as he said to me, democracy in that country needs to be encouraged and continually reinforced.

What is true of Serbia is true of many other parts of the world. The Opposition have very real concerns about the Government’s plans, and this afternoon Members have underlined the conclusions of the Foreign Affairs Committee’s excellent report. As well as the loss of crucial influence in key countries and regions throughout the world, the cuts will mean a diminution in Britain’s global influence. There will be a drop of 30 million people—from 180 million to 150 million—in the service’s global audience, and such a cut is quite unprecedented.

There has to be an ongoing assessment of how finite resources can be best used, but such a reduction in grant-in-aid will greatly undermine the service and send a negative message around the globe—that Britain no longer sees high quality, objective and honest reporting as being particularly important. I hope that nothing is further from the truth.

In the order of things, the BBC World Service is a mere drop in the ocean of public expenditure, but the money invested in the service is a sound investment—an investment that effectively promotes the universal values of which all Members are justifiably proud.

I therefore ask the Government to think again, to take heed of what our friends throughout the world are saying to us, to recognise the worth of the World Service and not to engage in this false economy. I urge the Government to accept the motion before us, and, if they are inclined to accept it and agree to a review, I suggest that that review takes place as quickly as possible, and as a matter of urgency.

14:37

[The Minister for Europe (Mr David Lidington)]

I thank my hon. Friend the Member for Croydon South (Richard Ottaway) for introducing the debate, and for doing so in a characteristically courteous and thoughtful fashion; and I pay tribute to all members of the Foreign Affairs Committee for a comprehensive report on what all Members, whether in government or not, agree is a matter of great public significance and of significance to how we advance the interests of the United Kingdom.

My right hon. Friend the Foreign Secretary has said frequently in opposition and in government that he sees the World Service as, to use the words of my hon. Friend, a key element of British soft power. My right hon. Friend has also underlined frequently the central importance of the World Service and the British Council in giving this country an unrivalled platform from which to project our culture and to share our values.

The Government and, in particular, my right hon. Friend will clearly want to reflect carefully on what has been said during this debate, but I make it clear that there cannot be any avoidance of difficult financial decisions and hard choices for the Foreign Office or for the World Service, as for any part of the public sector. I hope that when I have concluded my speech hon. Members will recognise that the Government are committed to finding ways—within the terms of the existing settlement announced in October last year, and in discussions about possible additional sources of World Service revenue—in which the current and potential resources available to the World Service can be used to the greatest possible advantage. My hon. Friend the Member for Stafford (Jeremy Lefroy), in particular, listed a number ways in which that might be possible.

[Rehman Chishti]

Can the Minister confirm that in 2010 the chief executive of the BBC World Service earned £215,000 and five of his colleagues earned more than £200,000? Does he agree that chief executives and other senior officials should have had their salaries frozen or taken a reduction instead of cutting front-line services?

[Mr Lidington]

My hon. Friend makes an important point. I am not somebody who usually harps on about high salaries for people who hold important positions of responsibility, but it is fair to acknowledge that the BBC World Service board is responsible for a significantly smaller operation with a smaller budget than the Foreign and Commonwealth Office, and yet the World Service’s board is more numerous and significantly more expensive than the board that runs the FCO. I do not want to make too much of that, but my hon. Friend makes an emblematic point that I will come to later.

I am not trying to deny that hard choices are having to be made, but there is a need to say to the World Service, as to every other part of the public sector, that it needs to look rigorously at how to make finite budgets go further and try to reduce all unnecessary costs.

[Mel Stride (Central Devon) (Con)]

Does my right hon. Friend believe that the BBC World Service is doing enough to amortise the costs of news gathering and production among other services, including within the BBC family, before looking at a reduction in language services?

[Mr Lidington]

One of the challenges that the World Service management faces is to draw up what I hope will be very ambitious and detailed plans to deliver a reduction in administrative and other inessential costs that match commitments of the sort that Government Departments throughout Whitehall, including the FCO, are already having to make. The BBC World Service has announced that it is committed to a significant reduction. We have not seen details of that, nor are we entitled to do so. It is an independent organisation, quite properly so, although the National Audit Office and the Public Accounts Committee are of course free to investigate further.

I hope that the World Service will choose to make those plans public and will look to take advantage of the opportunities that will arise from the new arrangements for the relationship between the World Service and the BBC as a whole to merge and share costs where possible. For example, arrangements to combine studios for the World Service and other parts of the BBC would seem to be a sensible way forward. Indeed, the BBC has indicated that it is considering that in the context of the new arrangements.

[Mike Gapes]

Is the Minister aware that the BBC World Service spends proportionately less on human resources, finance and IT than the FCO? Is he also aware that there has been a reduction of about 32% in the management costs of the World Service since 2009?

[Mr Lidington]

The hon. Gentleman, perhaps uncharacteristically, is choosing to overlook the fact that the FCO is responsible for well over 100 operations in different countries overseas and that in those circumstances the requirements of currency operations and IT add up to quite a considerable overhead. I welcome the public commitment of the World Service to a significant reduction in its administrative costs, and I am sure that the House looks forward to seeing how it proposes to deliver that.

[Mr David]

rose—

[Mr Lidington]

I will give way to the hon. Gentleman, and then I will make progress, because I want to be fair to the many hon. Members who want to take part in the next debate.

[Mr David]

I hear what the Minister says, and of course we all want to see efficiency savings and economies. However, it is important to bear in mind that the cost of producing a message or sending out a programme is lower in the BBC World Service than in any other international broadcaster.

[Mr Lidington]

It is certainly important to bear such things in mind, but many parts of the public sector in this country can point to how their best practice matches that in other parts of the world. Nevertheless, the financial state in which this country finds itself as a consequence of the inheritance bequeathed to us by the Government of whom the hon. Gentleman was a member is so grave that we have no alternative but to ask every part of our public services, no matter how well and efficiently they perform, to drive those efficiencies further.

My hon. Friend the Member for Croydon South, and indeed the report, criticised the Government’s decision to reduce the budget of the World Service by 16% and argued that it was disproportionate. To set the matter in context, as the House knows the Government inherited a massive fiscal deficit when they came to power. We made it clear from the start that it would be the Government’s overriding priority to take swift and effective action to reduce that deficit. Every member of the Government has always made it clear that rebalancing the nation’s finances will not be without pain and that every taxpayer-funded organisations will have to play its part, as will the private sector. Frankly, if as a country we fail to deal with the overriding challenge of our deficit, all our hopes, whether for prosperity, improved public services or enhanced international influence for the United Kingdom, will come to naught.

The World Service was asked to reduce its budget by 16%. The Foreign Affairs Committee has argued that that is disproportionate. I say candidly, but politely, to my hon. Friend that I disagree with that verdict. At the beginning of the previous comprehensive spending round in 2007-08, the World Service budget was 13% of the Foreign and Commonwealth Office budget. By the end of 2014-15, its budget will be 14.4% of the FCO budget. The proportion of its budget at the end of this Government’s tenure will therefore be slightly higher than it was before. To respond to the particular case put to me by my hon. Friend, in 2007-08 the World Service received £222 million, and in 2013-14 it will again receive £222 million. However, the FCO budget will fall from £1.7 billion in 2007-08 to £1.55 billion in 2013-14. It is those figures that lie behind the percentages that I quoted.

[Richard Ottaway]

Is the Minister including the costs of conflict prevention in his figures?

[Mr Lidington]

I will take advice on that point and come back to my hon. Friend either later in the debate or in writing.

It is also fair to point out that the FCO has been more severely affected by the impact of foreign exchange losses than has the World Service. From 2007 to 2011, the loss of the mechanism that protected the FCO against foreign exchange risk accounted for a 17% loss to the FCO core budget, but only a 2% loss to the BBC World Service core budget. That discrepancy is explained by the fact that a much greater proportion of the FCO’s diplomatic effort is located overseas than is the case with the BBC World Service.

The Foreign Affairs Committee has made its case, and I hope that I have provided figures that back up the evidence my right hon. Friend the Secretary of State gave and that support our contention that although the settlement is indeed tough, it is fair when set alongside what has happened to the core FCO budget over the past few years.

The World Service undoubtedly provides a valuable service, but that is true of many other public bodies. The police, the military and the education system have all had to make savings, and so have the British Council and UK Trade & Investment. Some of those organisations have suffered cuts considerably larger than 16%. I am happy to stand at the Dispatch Box and say that all those institutions are vital assets of the UK. We do not take pleasure in what we have had to do, but the measures that we have taken are essential for the future well-being of our country. Much as I dislike having to support cuts to the budget of the BBC World Service, we cannot in good conscience say that we support cuts in general but resist all of them in particular.

Members will have heard the announcement by my right hon. Friend the Foreign Secretary on 11 May, in which he set out plans for the future of the Foreign Office’s diplomatic network. We will find £100 million a year in savings from our administration budgets, yet at the same time we are both widening and deepening our diplomatic network. We are opening more posts and strengthening existing ones in emerging economies of key importance to this country. The savings that we are having to find to finance that expansion are not easy, but they are essential if we are to develop within tough financial constraints.

When I go to British embassies overseas, I am left in no doubt about the seriousness of the choices that Ministers have to make. I regularly have meetings with our staff at our posts throughout Europe and the former Soviet Union, and at practically every meeting I meet staff who are worried about their jobs, some of whom have worked loyally for the FCO for a large number of years. The FCO is not immune from difficult decisions, and there is no pain-free way to make the choices necessary to provide a strong voice for Britain in the world. I do not think the World Service can be exempt from the need to make difficult choices.

The World Service originally approached the Foreign Secretary for authority to close 13 of its 31 language services—even more closures than were authorised by the Government of whom the hon. Member for Caerphilly (Mr David) was a member. When I heard him denounce the policies of the current Government, I worried about the selective amnesia that had come over him about his Government’s record on the World Service.

My right hon. Friend the Foreign Secretary was not prepared to support those suggested closures, and after frank discussion with the World Service and the BBC Trust he reluctantly agreed to the closure of five services. That was after he had received clear assurances that the closures would not cause major damage to the World Service’s overall services and audience share. The World Service also assured us that it would make strenuous efforts to find efficiency savings and drive down non-editorial costs to protect its front line. It has said that it will find savings of up to a third in finance, human resources, business development, strategy, marketing and other administrative operations.

I hope that the World Service will match that commitment with detailed plans, and that it will match the greater transparency of financial arrangements that the Government have undertaken to provide. The BBC is not obliged to do that under the current arrangements, but it would add to public confidence in the organisation, including the World Service, if it endorsed greater transparency so that taxpayers and licence fee payers could see where their money was being spent.

There are other changes in how World Service output is delivered, such as the closure of radio transmissions in Mandarin or the cessation of the Hindi shortwave service. Ministers have no power to veto such decisions. Some access to the World Service in those languages will remain, whether online or through FM or television, but those choices fall squarely within the responsibility of the World Service—the Government were not consulted in detail on those changes and we had no locus to intervene. The BBC believes that those decisions were soundly based, and we have seen its justification for those changes.

As a number of hon. Members mentioned, given recent events in the middle east and north Africa, the FCO chose to reprioritise in order to bolster our effort there. It is entirely sensible for the World Service to do likewise. However, even before the Arab spring, the decision to curtail Arabic broadcasting was somewhat surprising.

On potential sources of additional money for the World Service, first, there is the prospect of commercial income. We agreed with the World Service that it would increase its sources of commercial income, with an initial target of £3 million. It is important for it to adopt an entrepreneurial approach to developing that source of income.

Secondly, on funding from the Department for International Development, my hon. Friend the Member for Croydon South quite fairly pointed out that there are two genuine hurdles to be surmounted, the first of which is meeting the OECD kitemark for measures that count as official development assistance. The OECD requires that any activity that qualifies as ODA must have the

“promotion of the economic development and welfare of developing countries as its main objective”.

However, even if activity qualifies under OECD rules as ODA, it does not necessarily meet the second, stricter test, which is embodied in the International Development Act 2002. The Act gives the Secretary of State statutory authority to spend money when that allows for the relief of poverty—that is the prime measure. As my hon. Friend mentioned, my right hon. Friend the Secretary of State for International Development is looking at a new relationship with the World Service trust. In addition, the Government are approaching the OECD with a view to getting its agreement to classify a proportion of World Service spending as subject to ODA rules.

It is worth noting that the settlement included money to be used as the contribution of the World Service to the overall BBC pension deficit. The BBC says that its original estimate of that deficit has been revised down by about one third. We do not yet know the detailed figures for the World Service, but if, pro rata, it no longer needs a third of the money it has allocated for pensions—that would amount to about £4 million a year—it could choose to restore the five cut services and the Hindi service, or to restore the cuts to the Arabic, Hindi and Mandarin services that it previously announced.

Those choices are for the BBC. In a recent article in Ariel, the World Service controller of languages said that even if funding were reinstated, it would not necessarily restart services that it had stopped, but would instead look at new investment. Global shortwave audiences are falling dramatically—20 million listeners were lost from 2009-10 alone.

My right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) and my hon. Friend the Member for Cheltenham (Martin Horwood) asked about the place of the World Service in the proposed new arrangements with the BBC, which will take effect from 2014-15. As I have already said, these provide opportunities for things such as the combination of news rooms and studios, and for different arms of the BBC to share costs, which might help World Service funds to go further. But it is also true that the BBC, through its new chairman and director-general, has made it clear that it places a high value on the World Service and sees it continuing as a key element of BBC output. The new governance arrangements will be guaranteed by an amendment to the BBC agreement between the Secretary of State for Culture, Olympics, Media and Sport and the BBC. We are discussing with the BBC Trust a formal exchange of letters to confirm this. The BBC Trust is also considering an international trustee to represent the interests of the World Service.

Even after the cuts, the World Service will still receive funding from the British taxpayer of £733 million over the next three years. The settlement that we came to with the World Service was challenging, and we take seriously the points that have been made by the Select Committee and in the Chamber today and will reflect further on them. We will work with the World Service to find ways in which it can continue to fulfil its mission as an independent broadcasting voice that is at the same time a key element in the promotion of British culture and values.

15:01

[Richard Ottaway]

Time does not permit me to acknowledge in detail the speeches that have been made today. It has been a great debate, but the Minister must have felt a bit lonely. We have heard seven speeches today, six of which supported the thrust of the motion and the desperate need for a review of the service, and his own which was more defensive of the Government’s position. The Minister is a good friend of mine, in both the personal and political senses, but he has not quite got the point that everyone has made today.

We all recognise the economic pressures on the Government—indeed, everyone who spoke is a member of a party that supports the need to address the desperate financial situation the country is in. However, it is a question of priorities. When the facts change, so must the policies. The circumstances in Libya have meant that more resources have been diverted to that country. The international tensions of worldwide terrorism have meant that more money has been put into the security services. The extra need for diplomacy around the world was behind the statement last week about extra funding for diplomacy. What colleagues are saying today is that, with the changing world we live in and the desperate need for more soft power—

[Mr Lidington]

Will my hon. Friend give way?

[Richard Ottaway]

I am afraid you would never forgive me if I gave way, Mr Deputy Speaker.

There is a desperate need to address the changing world and to take soft power more seriously. I appreciate the fact that my right hon. Friend has agreed to a review. I hope that it will be a constructive review and that this is not brushed under the table saying, “That’s the House of Commons dealt with.” The House is serious about this and I hope the Foreign Office will be as well.

Question put and agreed to.

Resolved,

That this House notes the Sixth Report from the Foreign Affairs Committee, The Implications of Cuts to the BBC World Service, HC 849; endorses the Committee’s support for the World Service’s invaluable work in providing a widely respected and trusted news service in combination with high-quality journalism to many countries; considers that the unfolding events in North Africa and the Middle East demonstrate the continuing importance of the soft power wielded through the World Service; believes that the value of the World Service far outweighs its relatively small cost; and invites the Government to review its decision to cut spending on the World Service by 16 per cent.

Rural Broadband and Mobile Coverage

Thursday 19th May 2011 Commons Chamber

15:03

[Rory Stewart (Penrith and The Border) (Con)]

I beg to move,

That this House recognises that rural businesses and rural communities across the UK are isolated and undermined by slow broadband and the lack of mobile voice and mobile broadband coverage; urges Ofcom to increase the coverage obligation attached to the 800MHz spectrum licence to 98 per cent.; and calls upon the Government to fulfil its commitment to build both the best superfast broadband network in Europe and provide everyone in the UK with a minimum of 2 Mbps by 2015.

I am grateful for the opportunity to move this motion, which also bears the names of 100 other Members of Parliament. When I last saw Ed Richards, the head of Ofcom, he said that the most powerful argument he required was a political argument. He wanted to hear that Members of Parliament cared about broadband and mobile coverage. If that is all he requires, I might as well resume my seat now. I am not an expert on the constitutional history of this House, but as far as I know there have not been so many names on a motion on the Order Paper for debate on the Floor of the House in recent memory.

I wish to thank very much everybody who has supported this motion. I wish to thank first my hon. Friends from Cumbria, on both sides of the House, as well as the many Members who have put so much energy into mobile broadband over the last three to five years. That includes my hon. Friends the Members for Skipton and Ripon (Julian Smith), for Suffolk Coastal (Dr Coffey) and for Hereford and South Herefordshire (Jesse Norman), and of course many Members from other parties. From the Liberal Democrats, we have had contributions from the hon. Members for Caithness, Sutherland and Easter Ross (John Thurso), for Cambridge (Dr Huppert) and for Chippenham (Duncan Hames)—to roll out the Cs—and from the Labour side, we have had support from the hon. Member for Dagenham and Rainham (Jon Cruddas), and the right hon. Members for Coventry North East (Mr Ainsworth) and for Leicester East (Keith Vaz). We have also had support from the Scottish National party and Plaid Cymru.

What, though, is the motion facing us today? It has three parts. The first focuses on rural need, which I hope Members will address in their speeches. The second focuses on mobile coverage, and the third focuses on the Government’s commitment to super-fast broadband. All three are connected. In a sense, it is already outdated to separate them. It is increasingly clear that a separation between voice coverage and data coverage is a thing of the past; that an attempt to separate the rural areas from the urban areas is a thing of the past. The central fact about broadband and mobile coverage is that it is—not to be too pretentious—a single global universe. Nevertheless, I will hand over to other Members, who will talk about the first and third elements of the motion. I will focus exclusively on the second part—the mobile coverage obligation.

Enormous thanks are due not just to the many Members whom I have mentioned, but to the civil servants who have worked unbelievably hard in Broadband UK to make this happen. It is unfair to pick out names, but I would like, in particular, to thank Mike Kooley, Rob Sullivan and Jim Savage. I would also like to thank Ministers, including the Minister here today, the Secretary of State and all the communities that have been working so hard. I hope that others will develop that point, but again, although it is unfair to pick out names, I want to mention those extraordinary people in Eden—Libby Bateman, Miles Mandelson and others in the Leith-Lyvennet broadband group—who have been pushing ahead with their programme. However, that is not the subject of my speech today.

I am here to speak about mobile broadband coverage. I will take 30 seconds to explain the issue. This is the last chance for a generation to provide good mobile broadband coverage for 6 million people who will not otherwise get it. It is the last chance because, at the end of the month, the Ofcom consultation closes. That consultation will determine the coverage obligation imposed on mobile telephone companies for the 800 megahertz spectrum. This is a spectrum on which we all depend for our smartphones, our iPads and iPhones. It is also a spectrum that is ideal for rural areas. So why has Ofcom stated in its consultation that it has no intention of increasing the coverage from the current level, which, as hon. Members will know, is 95% of the population, 90% of the time? That equates to about 87% of the population.

[Mark Tami (Alyn and Deeside) (Lab)]

Does the hon. Gentleman accept that it is not even that level of coverage? The companies produce maps claiming that there is coverage, only for people to find—I am in this position at home—that it does not actually work.

[Rory Stewart]

That is an enormously good point. It is a matter of bewildering complexity. Ofcom is over-layering four different models dependent on masts, terrain, topography and thickness of walls, and the reality is, as the hon. Gentleman says, that 90% of the time for 95% of the people is probably an overestimate of what we are currently getting.

Nevertheless, Ofcom states in its consultation document that it can see no benefits from extending the coverage further. In fact, it states on page 67 that the costs would outweigh the benefits. Why? Because it is worried about losing money in the auction—nobody knows how much—and is worried that when it tries to sell the radio spectrum, which it owns, to the mobile telephone companies and asks them to increase their coverage obligation from 95% to 98% these companies might pay less in the auction. Indeed, they may. It stands to reason they would pay less, but probably not as much less as Ofcom fears.

[Duncan Hames (Chippenham) (LD)]

It may indeed stand to reason, but the evidence from past auctions of the spectrum does not show bidders producing bids while in any sense respecting the cost base of the project on which they are about to embark.

[Rory Stewart]

That is an excellent point. The reality of auctions is not that people operate on a fully rational basis, counting the number of their masts and then bidding exactly less than that. We have all participated in auctions. They are elaborate psychological procedures that are exactly designed to extract as much money as possible.

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

My hon. Friend is putting the point so eloquently that this is a once-in-a-lifetime opportunity to cover the sorts of constituents that he and I represent, along with many others in the House. Does he agree that there is a risk that Ofcom is being penny wise, pound foolish, and that in future it could become very expensive for this country to have truly mobile broadband?

[Rory Stewart]

My hon. Friend makes exactly the right point, and much better than I could. “Penny wise, pound foolish” is exactly right. To put it bluntly, it is a no-brainer. This is the time to act. If we are going to do it, we should do it now. There is some fantasy out there that if we get it wrong, we can go back to the mobile telephone companies in two or three years’ time and say, “We’re very sorry, we didn’t impose an obligation on you, but would you mind awfully providing 98% coverage?” However, by that time they will already have begun to lay out their infrastructure and will have made their decisions. Acting then will be more expensive, the mobile telephone companies will be under no obligation to do so, and we will have to pay them. At that point their interests will not be aligned with ours.

If we impose an obligation at the right moment and say, “You’ve got the licence; now provide 98% coverage,” their interests will be to provide it as cheaply and efficiently as possible. If, on the other hand, we approach the mobile telephone companies in three years’ time as a contractor, we should remember that there will then be an additional problem. As my hon. Friend suggests, if we do it now, there is no cost to the taxpayer. The money would not come from raising taxes from people or stealing it from another Department. All that we would be doing is taking the risk that we would make slightly less in the auction. That would not be the case in three years’ time. If in three years’ time we suddenly wanted to spend £215 million on building masts, we would have to tax people or move money from other Departments; and we absolutely know that people who say, “Give me that bird in your hand, because I can promise you those two in the bush in three years’ time,” are almost certainly misleading us. This is the time to do it.

[George Freeman (Mid Norfolk) (Con)]

While my hon. Friend is on the subject of investment in broadband paying for itself, does he agree that part of the significance of the measure—the Government are to be congratulated on the investment—is that every pound that we spend on rural broadband will pay back UK plc in spades? In my constituency, where coverage is extremely poor, communities are waiting for the opportunity to start businesses back in villages and drive a model of sustainable development. The investment will pay for itself; we merely need to think about how we recoup that benefit and use it to invest in infrastructure.

[Rory Stewart]

That is a fantastic point. I will come to growth in a second, but perhaps, rather than taking any more interventions, I could now make some progress and accelerate through my speech so that everyone can get in.

There is only one question—the fundamental question—that we need to ask Ofcom: does mobile broadband technology matter? Will this thing that I have in my pocket—this mobile device—and that everyone else has in their pocket matter in five years’ time? Will people be using iPads and iPhones then? If we have reason to believe that the technology is important, why are we proposing to leave between 6 million and 9 million in this country on the current figures excluded from using these machines? For the sake of what? Why exactly are we being told that those people should not be able to use the technology?

I hardly need explain to the people in the Chamber why this technology matters or what its uses are. Others will develop that far more, but to run through them quickly, the fantastic comment made by my hon. Friend the Member for Mid Norfolk (George Freeman) was absolutely right. Our economy is driven by these devices. Growth comes from productivity, and the biggest, simplest contribution that we can make to productivity in this country is through broadband and mobile coverage, which is particularly true for rural areas, as the many people in the Chamber from such areas know. Why? Because the biggest contribution to economic growth through mobile and broadband technology is made by small and medium-sized enterprises. What do we have predominantly in rural areas? Small and medium-sized enterprises. My constituency is an example. The national average is that SMEs occupy 50% of the private sector, but in Penrith and The Border, SMEs with fewer than 10 employees employ 92% of our work force. Furthermore, because we are almost starting from scratch in rural areas, we are not talking about a slight increase in speed from 2 megabits to 3 megabits; we are talking about a step change in economic productivity for rural areas.

We are also talking about making a real difference in public services. As we all know, more and more public services are being driven online. In Cumbria, for example, the justification for the Cumbria police closing police stations is that they want policemen to be on the streets more, using their tablets to transmit data straight back to the police station. Nurses and doctors visiting people in their homes rely on being able to transmit data in real time back to a hospital from the home. Education is being transformed by online learning. In the United States, 40% of post-secondary school students are taking a course online. Recent research by Carnegie Mellon university suggests that mixed online and classroom learning can increase the speed at which children learn by 100%. And I do not need to talk about Twitter, Facebook and all the other things that everyone in London, and every child in those parts of the country with mobile coverage, take for granted, except to ask why everyone else should be excluded.

[Matthew Hancock (West Suffolk) (Con)]

My hon. Friend is making an extremely powerful and eloquent speech. In rural areas, we spend more time travelling from place to place, because the distances are greater. The coverage figures that he has given are those for static people when they are at home, but in fact, we spend far more time travelling from A to B, and our communication is often broken further when we do so.

[Rory Stewart]

My hon. Friend makes a very good point.

My argument is about mobile broadband coverage. What is the argument against extending it in the way that I have suggested? It is cost. Ofcom’s only argument is that it is worried that it might make a little less in the auction. Let us say that, based on the Swedish and German models, the auction is going to generate about £3.215 billion. Ofcom is worried that it might make only £3 billion. For a number of reasons, that is probably an underestimate. That £215 million represents an absolute worst-case scenario. Let us look this directly in the eye: £215 million is less than we spend in three weeks on our operations in Afghanistan. In fact, mobile coverage is one of the smartest, cheapest forms of infrastructure investment that we can make. It is far cheaper than fixed telephone lines, and far cheaper than ports or roads. As far as infrastructure investment that would create real productive growth in the British economy is concerned, £215 million is a small sum of money.

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

Could the hon. Gentleman give me some clarification on the figure of £215 million in lost revenue through a change in the coverage? What is the basis for that estimate, and have the providers supported it?

[Rory Stewart]

It is a very basic estimate predicated on the assumption that, to increase from 95% to 98% coverage, we would need to build approximately 1,500 masts, and that the average cost of a mast hovers at just under £150,000. So the figure of £215 million represents a worst-case scenario. The assumption is that the mobile phone companies will cover some of the costs of the masts anyway, because they will get increased revenue as a result of installing them. The Government should not have to pay for all those masts. Furthermore, companies such as Three already have the infrastructure in place, and were those companies to win that chunk in the auction, they would not have to pay to install new masts. The £215 million is a worst-case projection for getting up to 1,500 extra masts and pushing through to 98% coverage.

Are we prepared to turn around in 2015 and say to people in this country and people in our constituencies, “No, everybody else in the world can have this thing, but you can’t have it. In every other part of Britain, if you happen to live in central London, you will be able by 2015 to attach a device to your heart, which can monitor your vital signs, transmit in real time to a hospital, regulate your drug intake and help you stay at home. I am sorry, though, but you live in Northumbria and you are not going to be allowed to have it”?

Are we prepared to turn around to students and say, “Everywhere else in this country, if you happen to live in Chelsea or the centre of Manchester, you can do online learning, you can learn the harp, you can study German or Russian. In fact, you can study anything you want from anyone you want at any time you want, but unfortunately you live in Suffolk, so you are not going to be able to do those things.”?

By 2015 it will not be just data-rich businesses or internet-rich businesses, but the basic small and medium-sized enterprises that will be dependent on these devices to cut their transaction costs, increase their reach to market, drop their advertising costs and so on. Are we prepared to turn round to every one of those businesses and say, “Of course it is extremely beneficial for a business to have these services—in fact, it is the only way a business can compete and survive—but because you don’t happen to be located in the very centre of London, you are not going to be able to work in that way.” ?

Are we to say to a farmer, “Through this technology, you might be able to use special identification tags and make some use of the astonishing bureaucracy being imposed on you, but only if you happen to be farming in Chelsea. If you are farming in the uplands of Cumbria, you might as well forget about it.”?

We are looking for a positive narrative. We are looking for a narrative around growth. We are looking for growth, which is not effectively saying, “Oh, we are just going to get 90% of the country going”. We are looking for growth that is saying, “We want 100% of this country going.” Growth is about productivity; productivity is about the internet. If we are looking for a positive narrative, let it be this: at the moment, our best mobile next-generation coverage is worse than that of Uzbekistan. I know something about Uzbekistan. I would not be surprised if someone were to stand up and say to me, “In Uzbekistan, there are more political prisoners in jail than there are in Britain”. However, I am not just surprised, but horrified to learn that in Uzbekistan, the mobile next-generation coverage is better than it is in the United Kingdom.

Let us stand behind this motion. Let us push Ofcom with all our might to take that small risk to reach that 98% of coverage. Let us not allow the clever arguments of narrow economists who are blind to technology and obsessed with making their auction feature in a particular fashion allow Britain to miss the chance to get what it needs for its economy, for its society, for its health, for its education and for its communities by signing up to the best superfast mobile and broadband coverage in Europe.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

I am introducing a 10-minute limit on Back-Bench contributions, with the usual injury time for interventions.

15:23

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

I congratulate the Backbench Business Committee on securing this important debate. I know personally how difficult it can be to interest hon. Members in technical subjects. It is to the credit of the hon. Member for Penrith and The Border (Rory Stewart) that he has been so successful in communicating the critical nature of our broadband infrastructure and the importance of the coming spectrum auction.

I declare an interest: before being elected I worked for the telecommunications regulator, Ofcom. [Hon. Members: “Hear, hear”.] I thank hon. Members for that! Before that, I worked for 17 years in telecommunications in the private sector. I was personally most grateful for the rise of the internet because it finally enabled me to explain what I did for a living when I was working on an “integrated services digital network private branch exchange”, which was double Dutch to most people. Being able to say that I was helping to build the internet meant that my friends and family could finally have confidence that I had a legitimate occupation.

Of course, we have far more important reasons to be grateful to the internet, some of which were mentioned by the hon. Member for Penrith and The Border; others will doubtless be raised during the debate. The internet is well on the way to becoming a necessity rather than something that it is nice to have. For some, the transition has already taken place. According to the Federation of Small Businesses, 90% of its members use the internet in running their businesses, and a third of those think that the broadband speed is reducing their productivity. That is a real indictment of the current level of broadband provision. If broadband is such a necessity, why have the Government delayed the provision of universal access until 2015?

I welcome the motion’s emphasis on the importance of broadband, but I want to focus on the part that calls for the mobile auction coverage requirement to be extended from 95% to 98%. I could talk for a long time about the strengths and importance of broadband, but I want to focus on that specific technical area, because it is in that regard that I fear that the objectives of many Government Members may not be realised

Ofcom is not primarily concerned with raising revenue, as the hon. Member for Penrith and The Border suggested. Its primary aim, generally and as set out in the directive, is to maximise competition. If pressure is being placed on Ofcom to consider the amount of revenue raised, that pressure is coming from the Government. Ofcom is consulting on a 95% coverage requirement because that is the coverage that mobile operators feel they can achieve without significant additional investment. It is about putting equipment on existing base stations rather than building new ones. Considerable costs will still be incurred, because the equipment is costly, but Ofcom has judged that the cost will not prove prohibitive to the private sector business case. I am sure that Members on both sides of the House recognise the importance of a valid business case to investments in the private sector. However, extending coverage to 98% would increase the cost considerably. I was interested in the estimate of £250 million from the hon. Member for Penrith and The Border. I note that the Ofcom consultation specifically avoids giving an estimate, on the basis that the modelling is too complex and time-consuming to undertake at present.

One thing that should be emphasised is the importance of getting the spectrum out there as quickly as possible. We do not want to spend too much time on network economic modelling. However, we must also recognise that adding a line to a licence requirement will not get that equipment out into the field; nor will it get mobile broadband into Members’ constituencies. We need to ensure that private sector companies are properly incentivised.

Increasing the mobile coverage requirement may well reduce the Treasury’s income. I agree with the hon. Member for Penrith and The Border that that would be a reasonable price to pay if we could be sure of the results, but there are two main concerns. The coverage requirement is for 2017. That might seem a long time to wait—indeed, to small businesses painfully watching the hated Microsoft hourglass turn it must seem an eternity—but it is worth noting that the 3G coverage requirement, which was for only 80%, was not met until seven years after the auction. Can the rural small businesses of this country really wait so long? The Government have apparently committed themselves to providing universal broadband by 2015, but that leaves us still four years away from a decent broadband service for all.

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

I hate to break up the cosy consensus, but I am going to anyway. I understand that the Opposition are claiming in the media that they could deliver broadband roll-out both faster and at considerably lower expense than proposed by the coalition Government—indeed, £200 million less. Can the hon. Lady tell the House of any project at all that the Labour Government delivered both on time and on budget, let alone in reduced time and at reduced budget?

[Chi Onwurah]

The previous Government committed to providing universal broadband access at 2 megabits by 2012, whereas it is my understanding that the current Government have made a commitment to the best broadband—there is some doubt as to the exact definition of that term—by 2015. Our project was to be implemented not by the Government, but by the private sector, and with the right incentives. It was not only fully planned, but fully costed, and had the support of the vast majority of the telecommunications industry, who agreed that it was feasible. The current proposal to deliver superfast broadband by 2015 is, however, not fully costed, as I am sure broadband companies would set out in detail.

The coverage obligations do not match private sector business cases, and, unfortunately, are a very crude and ineffective way of correcting what is, effectively, market failure. There will be a cost to the public purse, but unlike in a directed programme, we will not have any say as to how that money is spent; so the Treasury will lose money, but we will have no guarantee or say as to how it is invested.

[Rory Stewart]

What does the hon. Lady think of the simple proposal to set out the number of additional masts required? If Stephen Temple were to propose that there should simply be, let us say, 1,500 additional long- term evolution masts, rather than setting a 98% coverage target, that would be much simpler to measure, there would be no debates about how exactly the plan would be modelled, and costs would be much more straightforward.

[Chi Onwurah]

I am delighted that the hon. Gentleman has launched himself so deeply into the detail of network infrastructure roll-out. I hope the vast majority of Members on the Government Benches would agree with me that we do not want to specify to private companies exactly how they must roll-out their infrastructure, the number of masts they will need to put in place, the equipment they should use, or the technology choices they should make. I would not therefore support specifying the number of masts, although that is an interesting proposal.

Specifying the coverage is a useful way of trying to ensure efficient roll-out, but my concern is that if the coverage that is specified does not accord with the good and effective business case, there will be unintended, and potentially perverse, consequences.

[Duncan Hames]

One consequence would be a cross-subsidy from those—perhaps in urban areas—who enjoy low-cost services to those of us in other parts of the country who might not, but who would therefore be able to share in the network. Given that we support such consequences in respect of the Royal Mail universal service obligation, why should we not support them in the context of broadband or mobile coverage?

[Chi Onwurah]

My party is known for supporting redistribution in many areas and we would certainly support cross-subsidy, which is effectively the result, if that were the only consequence. When I speak of unintended consequences, I am suggesting we might not, perhaps, get the optimum mobile coverage within three years or one year because the coverage requirement is for 2017, which might concentrate the minds of the mobile operators on that date.

[Rory Stewart]

Will the hon. Lady clarify what she proposes to do to ensure that an additional 3 million people get coverage?

[Chi Onwurah]

I thank the hon. Gentleman for asking that; I have very little time left, so I shall race to that point. The most effective way for a Government to intervene in a market is to direct subsidy in the most effective way possible to incentivise network coverage in the areas it is required. I suggest to hon. Members that rather than hiding behind indirect intervention through the regulator and blaming the regulator’s short-sightedness, we should clearly set out that we want universal access to standard broadband for all by 2012 and we should ensure that we have the means to achieve it.

15:36

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart), who has pressed this issue on our behalf and who has got us to this stage. His enthusiasm and eloquence is being listened to by the Government. I do not call myself a technical expert, unlike my hon. Friend and the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). I want to focus, following on from what the hon. Lady said, on the law of unintended consequences, but regarding general strictures about what has happened over the past 13 years.

I, as a new Member of Parliament, and all of us have fought in our areas on behalf of the rural sector of our constituencies. We might have fought on behalf of the local pub, of the last remaining village shop or of the last remaining small village school. As my hon. Friend said, this is a once in a lifetime chance to get things right and to reverse what is happening across the country and in all our constituencies. Villages and hamlets are either becoming distant dormitory suburbs of a town or a museum piece showing a long-lost England. In fact, historically speaking, they were the centres of business and enterprise, and for many of us the internet provided many people in those villages with a huge opportunity to restore something to village life. If we miss it, as hon. Members have said, we have missed it for a generation.

Let me give an example from my constituency. A community group came up with its own idea to revive the area, right in the hills of deepest rural Lancashire. The group got the whole community together with a programme that covered a number of villages. The plan was to cover Over Wyresdale and Quernmore with an extension through the small hamlets of Littledale and Roeburndale to the distant villages of Wray, Melling and Wennington. Only 1,000 properties were going to be provided with high-speed optic fibre. The group applied for a £750,000 grant from the rural development programme—that was all. As everyone knows, optic fibre is costly and the community planned to get over the cost by digging the ducts. The farmers gave permission because it was a community enterprise.

The people involved, who lead busy working lives, went through the whole process because they saw farmers in the hills of Lancashire having to travel miles every month to find the nearest internet access to fill in the Rural Payments Agency’s licence and registration forms for every sheep and every cow. Children travelled miles to find the nearest internet access because the homework for certain courses required internet access, which was not available in the hill-top villages. For all those reasons, the whole community got together and made some progress on the project for just £750,000—not a great deal compared with the sums that have gone missing over the past 13 years. Then, for the best of reasons the Northwest Regional Development Agency decided in its dying days this year to give the county council £20 million for broadband access across the whole of Lancashire. One might say that was an absolute positive, but what happened to our £750,000 programme? It somehow got trapped in the bureaucracy and it has been swept up into the £20 million. For the best of reasons, the county council, which has more than my area to deal with as areas all around want broadband, has to put the contract out to tender to commercial companies. The people who have worked hard on this—I pay tribute to two people in particular in my area, Barry Forde and Chris Conder, who have worked tirelessly—have estimated that if commercial companies come in, it will cost more because they will not get free access across fields. After all, why should a farmer grant free access to BT, Vodafone or whoever? They would have to charge them and the cost would be about £5,000 to £10,000 per property. Given the 1,000 properties I have mentioned, the cost for my small area alone would be £10 million, so where is the £20 million going to go?

To be fair to the county, it has the best of intentions and I give credit to the coalition Government for trying to drive this through. I know that Ministers, especially the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey), understand both this issue and the urban-rural divide. However, in my area we are possibly going to lose a whole big society project. Rural communities, who have always felt isolated and separated, have almost got to the point of accepting that this is how things are—that the towns get everything. They think that the towns are where their children will move when they grow up and that perhaps one or two of them will come back to retire; that is how we end up with the dormitory villages that so many of us recognise. The big society project in my area has been swept away along with all it had brought in terms of community and social contact across the hills and valleys and between hamlets. There is also a possibility that because of the cost local people will not get the superfast broadband they need for the next generation.

[Graham Jones (Hyndburn) (Lab)]

I must declare an interest because I am still a Lancashire county councillor. As such I have quite an interest in the hon. Gentleman’s comments. The BT contract that has been struck by the Conservative administration is taking a very top-down approach and it has been criticised for that. I understand why he is speaking out for his constituents, but it is within his party’s hands to do something about this issue, as it is the top-down approach of Lancashire county council that is being criticised.

[Eric Ollerenshaw]

It is a pity that the hon. Gentleman has to reduce this matter to party politics given that there has been a genuine attempt across parties to get it right. I remind him that for 13 years nothing at all happened except the decline of those villages. I said that those involved had the best intentions and were trying to get the best results, as are the Government, and many of us are still working to do that.

We might lose our big society project but, more importantly, although the broadband that will come to the hills of Lancashire will be great and will mean that children and farmers in my area will finally be able to get on to the internet, it is estimated that most of that will be down copper wires or by satellite, so when the next stage comes, as the technical experts my hon. Friend the Member for Penrith and The Border and the hon. Member for Newcastle upon Tyne Central understand far better than I do, we will end up, yet again, with the same divide between rural and urban England.

[Ian Lucas (Wrexham) (Lab)]

Will the hon. Gentleman clarify something? I understand that Lancashire county council is probably the first local authority to put such provision out to tender. Has it tendered on the basis of coverage being provided by one operator for the whole county or has it left open the possibility of different operators providing services in different parts of the county?

[Eric Ollerenshaw]

My understanding is that it is one operator, but I stand to be corrected on that. It is also my understanding that it is attempting to take into account my concerns and those of the villages in my constituency.

Everyone in this arena is trying to get this done. We all understand what the issue is and that it needs to be dealt with now. All I am trying to do is explain the examples from my constituency. We may well get something in rural Lancashire, but it might be something that in a couple of years’ time prevents us from getting to the next stage. I hope that we do not miss that bus and end up with yet another division between rural and urban areas. I hope that the Government will understand that as they plot to achieve the 98% coverage that my hon. Friend the Member for Penrith and The Border wants to see. We must take into account the communities and the fact that they themselves want to contribute to achieve something. If we get that right, we will get it right for more than a generation.

15:44

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

I congratulate the Backbench Business Committee on securing the debate and, of course, the hon. Member for Penrith and The Border (Rory Stewart), my Cumbrian neighbour, on leading it. He made a superb speech that touched incredibly well on many issues, particularly the need for a narrative and action on growth and the means to deliver it. There is always space for him on the Opposition Benches—quite a lot of space at the moment. He made the point that, “Of course we can spend money on X; look at how much we spend everyday on all these terrible wars”, which would chime very well with what some of my colleagues say; I was surprised to hear it from the Conservative Benches. I have worked with him on the need for faster broadband in Cumbria and will say more about that in a moment.

It was good to follow the very well-made speech by the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw). He said that nothing had been done over the past 13 years, and obviously I wish that in many areas we had gone faster. We now need to accelerate progress, but I do not remember being able in 1997 to sit in my room in Barrow—it is upstairs, admittedly—and flick through the 3G and wi-fi on my iPhone, so things have really improved. The regulatory framework put in place by the previous Government has been part of that, and the Minister has experience of that. We should recognise that much has been done and that much more needs to be done.

I should also say that I have written to Mr Speaker to ask to be excused from the winding-up speeches, as I am travelling to Scotland this evening for the funeral of David Cairns tomorrow. I hope that the Minister and other Members will excuse me.

In the brief time available, I want to stress the economic importance of faster broadband networks in my constituency and across Cumbria. We of course want faster roll-out and see the urgency of that. I am happy to support the motion tabled by the hon. Member for Penrith and The Border, but we need to do this as fast as possible, and 2015 is still a significant way off. There is a need for greater action from the Government and from broadband providers, which we must not forget.

I want to mention the example of Kates Skates in Barrow. Barrow is an urban area, but urban areas within larger rural counties experience these problems cheek by jowl with people and companies that would more readily be associated with rural surroundings, as the hon. Member for Lancaster and Fleetwood noted. In 1996, Chris and Catherine Palmen thought that it would be a good idea to construct an indoor ice rink in the centre of Barrow. It actually turned out to be a bad idea, which did not get anywhere at all, but their story is testament to our extraordinary entrepreneurial spirit in Furness and throughout the country, because unperturbed by the mammoth flop of that business the Palmens decided to go into retail.

Kates Skates started with ice skates and quickly expanded to the point now where it has possibly Europe’s largest range of skates, skateboards, snowboards—if any Government Members are skater boys or girls, they can help me out—and scooters. The company has a really tremendous range, ships upwards of 250 orders a day from its small store and employs about 20 people, with 5% of its orders coming from the shop in Furness and 95% from online orders from the rest of the UK and, increasingly, Europe.

That is exactly the kind of business that we need to promote to ensure that such concerns can prosper anywhere in the UK, but the Palmens tell me of their enormous frustration at their slow broadband connection, which really hampers their internal processes. They spent quite a lot of money developing 3D images of their products, but having reached that stage they realised that they could not put them online because their broadband link was too slow to sustain them. We have to be able to do something about that. Companies such as Kates Skates say, “We started up in the area where we are from, we want to stay there, we love the quality of life in Barrow and the access to elsewhere in the Lake district, and we don’t want to move to a larger city.” The Palmens are in an increasingly difficult situation, however, because of the slow broadband with which they are forced to contend.

Many people have raised this problem with me, and I am sure that we will hear further examples throughout the day. CGP Books in Broughton, a great company producing textbooks, has itself shelled out for a faster link, but the increasing costs are obviously affecting its bottom line. Furness Internet, which provides services throughout the area, has frustrated customers who want to do more but cannot because of a single point of failure: the data cable that it purchased at great expense. The company says that the cable is relatively reliable at the moment, but if it goes down, all the customers of Furness Internet will be up the swanny, and that is really worrying for people who are looking to locate to the area. I spoke to the head of Cumbria’s chamber of commerce today, who stressed how absolutely essential it is for us to sort out the problem if we are to drive wider progress in the county.

[George Freeman]

I believe that in a previous existence the hon. Gentleman used to advise the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) when he was Prime Minister, and I was wondering how much of the £20 billion-odd that the former Government raised through the sale of 3G licences was reinvested in the rural broadband network. If a little of that money had been invested, would we not be in a better position today?

[John Woodcock]

It is interesting that the hon. Gentleman mentions my former boss, the former Prime Minister, and mobile phones. His robust, old-school Nokia survived many trials and tribulations, during even my time working for him. Those rumours are not true, by the way—just to be clear.

Look, investment was made. There are real questions about whether there was enough investment, and about whether progress moved fast enough, but there has been very fast progress. Does it need to be faster in future? Unquestionably, yes, and that is what we are here to discuss.

[Rory Stewart]

I hesitate to invite the hon. Gentleman to come and join us on the Government Benches, but could he explain why this country rates lower than Romania in terms of the download speeds on our mobile broadband networks?

[John Woodcock]

This is not only an issue for the Government but for the private sector and for individuals. There was a collective failure to anticipate the rate of growth across the world and how critical it would become to people going about their business and to the operation of businesses and public services. It is now absolutely right to put in place steps to ensure that we can grow, right across the country, to the extent that we need to.

The Government need to put in place a more robust framework. We made that case strongly before the election and continue to do so. There is also a role for the big providers, which need to do more than they are doing at present. I am pleased that BT has sustained work at its call centre in Barrow, which was earmarked for closure. After a robust campaign by me and by workers and the Communication Workers Union, BT thought again and is now talking about increasing the level of work in that call centre. One of the reasons it initially gave for the difficulty in bringing work into the area was that it did not have the broadband speed that some places in India had. That is a very alarming fact that shows the clear business need to speed up the level of service.

I would say to BT and other companies that competitions such as Race to Infinity, which I imagine a lot of areas represented here took part in, must not merely be a data capture exercise in which the top five win and the companies end up with massive numbers of people to write to about products in future. It is important to reflect the clear business need that exists in these areas and the business case for putting in superfast broadband. It is vital to strengthen the framework, but we also need more action from the private companies in doing the right thing by the many individuals who rely on superfast broadband and by the businesses that are crying out for it so that they can grow.

15:58

[Andrew Griffiths (Burton) (Con)]

It is perhaps apt that I follow the hon. Member for Barrow and Furness (John Woodcock), because he and I both know what it is like to feel pain. We have suffered together. Last week, he and I, and other hon. Members, including my hon. Friends the Members for High Peak (Andrew Bingham) and for Carmarthen West and South Pembrokeshire (Simon Hart), went off to the Falkland Islands, where we endured a 3G desert. There is no 3G mobile service in the Falkland Islands. If, Mr Deputy Speaker, you see an elected Member of Parliament wrenched from his BlackBerry—or CrackBerry, as it is known—and unable to tweet for a whole seven days, you will understand what real pain is like.

Having endured the indignity of not having 3G for a week, I rather understand the terrible situation that many of my constituents and constituents of other hon. Members suffer not just for a week but on a regular basis, and the impact on their quality of life and ability to do their jobs and keep in touch with friends and family. It has a massive effect, and we should not underestimate it.

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

Does my hon. Friend agree that the frustration in certain constituencies is added to when wonderful maps are produced by Ofcom that suggest that they have coverage, whereas the practical reality for many constituents is that they simply do not have that coverage? That rather adds insult to injury.

[Andrew Griffiths]

I absolutely agree with my hon. Friend. In fact, the situation is worse than that. All Members have constituents who pay for broadband services that they do not receive. Some of my constituents in Burton pay for what they are assured is 8-megabit broadband, but receive 0.9-megabit broadband. The frustration of buying a product that one does not receive is massive. I therefore share his concerns.

As we speak, there are people in my constituency of Burton who are desperate to stream Parliament TV live, but who are unable to do so because of their inability to access fast broadband. One of the issues that appears most consistently, week upon week, in my postbag as a constituency MP, if one excludes automated campaigns on issues such as forests, is access to broadband. It is incumbent on us, as politicians, to represent that frustration, which we have heard about, and to get something done about it. On that point, I pay tribute to my hon. Friend the Member for Penrith and The Border (Rory Stewart) for giving one of the most interesting, informative and motivational speeches that I have heard in this Chamber for a long time. He is a credit to those who campaign for faster broadband and we are delighted to have him leading the charge.

I would like to pay tribute to the efforts of certain people in my constituency. The first is Ian Page, who is evangelical, bordering on obsessive, about getting faster broadband for Burton and the outlying areas. Many hon. Members will know that my constituency is an interesting mix of urban areas—Burton is a brewing town—and outlying villages, many of which are incredibly rural. Ian has run a campaign over many months and years, and has put in a great amount of his own time. He runs street stalls, starts petitions and has a website. We are very lucky to have him in our constituency, because he does a great deal of work. I also pay tribute to my local newspaper, the Burton Mail, which has consistently run a campaign to force BT, kicking and screaming, to improve broadband access in my constituency.

The reason for those campaigns is that the current broadband service is stopping growth and jobs in my constituency. I know of at least three businesses that were looking to relocate in the Burton constituency, but decided not to simply because of the poor quality of the broadband access. One was a printer, who needed broadband access to download graphics and large files for his business. He had no choice but to move elsewhere in Derbyshire, where the broadband access is better. It is frustrating as a constituency MP, desperate as I am to bring new jobs and employment to my area, to see that hampered by BT’s inability to provide the internet access that is needed.

[Eric Joyce (Falkirk) (Lab)]

The hon. Gentleman mentioned quality. Does he agree that although we talk about roll-out and the percentage of coverage, we do not talk much about capacity? Of course it is important to talk about rural areas. However, in every constituency across the country, even in much more urban areas, there are people who technically have coverage, but the quality and limited capacity of the access mean that it cannot be used commercially. I hope that the 4G spectrum will deliver that increased capacity, but it remains to be seen whether it will.

[Andrew Griffiths]

I absolutely agree. There are examples in my constituency, particularly in outlying villages, where one person gets a decent broadband service and their next-door neighbour gets sporadic access, if any. The inconsistency of provision is a major problem for a large number of people not just in my constituency but, I am sure, across the country.

[Dr Julian Lewis (New Forest East) (Con)]

Even in Hampshire, where the county council has invested heavily in its public services network, it is calculated that by 2015, 20% of people and businesses will still be unable to get access that is anything other than very slow, if they can get it at all. We are talking about 25,000 businesses and 112,000 people.

[Andrew Griffiths]

My hon. Friend is exactly right, and at a time when we have a global economy and the internet provides access to employment, contracts and business, it is simply unacceptable for people to be denied that facility. I know that the Minister is passionate about the subject, but we desperately need to see some movement forward.

In opening the debate, my hon. Friend the Member for Penrith and The Border talked about the trade-off between the auction price and the cost to UK plc as a trading organisation. If we asked people in my constituency about that trade-off, I think they would say, “Give us faster broadband now”. I hope that the Minister is receiving that message loud and clear.

We talk about rural broadband, but in my constituency there are villages such as Anslow and Tatenhill that are only 1 mile or 1½ miles outside the central Burton area but whose internet access is incredibly sporadic or in many cases non-existent.

[Chi Onwurah]

The hon. Gentleman has spoken eloquently about the impact of slow broadband on his constituents. If he asked them, would they say they wanted universal broadband coverage by 2012 as the Labour Government proposed?

[Andrew Griffiths]

The hon. Lady asks an interesting question. I think they would say, “We want faster broadband, and we want it now”. We all understand that feeling.

It is incumbent on BT in particular to focus on what it can do to extend coverage to people who are at the end of the line. Villages such as those that I mentioned, which are tantalisingly close to the exchange, should get better broadband provision.

Has the Minister considered whether the legislation on the unbundling of the local loop needs revisiting? Should we not say that if BT cannot provide a service from exchange to cabinet and cabinet to home, we should open it up to competition and allow other providers to do it? I do not think my constituents care who provides the line; they just want access. Is there a case for considering whether other providers could do that faster and more effectively? That is not to criticise BT, because I know it is doing its level best, but the current situation is hampering the UK economy and having an impact on people’s quality of life.

Once again, I congratulate the Backbench Business Committee and my hon. Friend the Member for Penrith and The Border on bringing forward such an important debate.

16:04

[Tim Farron (Westmorland and Lonsdale) (LD)]

I start by paying tribute to my neighbours and friends in Cumbria and other Members for excellent speeches. This is a tremendously important debate, and I will restrict my comments mostly to the third part of the motion, which refers to target broadband speeds. My neighbour, the hon. Member for Barrow and Furness (John Woodcock), talked about the impact on business, but I wish to mention the impact of broadband coverage—or, in the case of south Cumbria, the lack of adequate broadband coverage—on social equality and social justice.

Let us look at the wider picture. The biggest issue facing folks in the Lake district and the dales, and in the areas that are so beautiful that they are not in either national park in south Cumbria, is the mismatch between average incomes and average house prices. The average house price in my patch is more than £250,000, but the average income is significantly less than £20,000. One in three young people leaves our area and never comes back.

My hon. Friend the Member for Burton (Andrew Griffiths) spoke about the loss of businesses from his area because of the lack of broadband coverage. Many people who employ four or five members of staff will shift their business out of the south lakes because of a lack of business space, but they also move away because of the lack of access to decent broadband coverage.

Superfast broadband is a way of equalising opportunities in rural areas, where wealth and poverty are cheek by jowl. Why would people not live in a staggeringly beautiful place such as the Lake district or south Cumbria if they could afford to do so and if they could make a living there? People move into our area to retire—they are extremely welcome if they have the wherewithal to do so. Others buy second homes and visit occasionally, which is okay. However, many are effectively displaced, because they cannot earn a living there. Adequate—or, I hope, more than adequate—access to superfast broadband would give people the opportunity to set up or work for businesses and to make a decent living.

[Tessa Munt (Wells) (LD)]

The same problem exists in Somerset, and it affects not only those who are seeking to retire but those who are seeking jobs. In my area, jobcentres are few and far between, and people seeking jobs must be online to apply for jobs that are advertised in jobcentres, so their opportunities are incredibly limited when they cannot get broadband.

[Tim Farron]

My hon. Friend makes an excellent point. The need for such communications is greater for people in rural areas than for people in urban areas.

The current situation in my constituency is that many areas have access to pathetically slow broadband speeds. I pay tribute to Colin Barr and the team from Colton parish council, whose study showed that 45% of people in the High Furness local area could access no more than 0.5 megabits per second. Our communities and their MPs will not tolerate that. That is why I am so proud that our communities in Cumbria, and South Lakeland especially, are choosing to make their own luck. I pay tribute to the folks in Colton, Hutton Roof, Grasmere, Beetham, Kirkby Lonsdale and Upper Kent, and to the team from Fibre GarDen who ensure that we can deliver superfast broadband to Garsdale and Dent. They show a vision that UK plc—I am not aiming criticism in any specific direction—has so far not matched. This debate is about demonstrating that the House of Commons stands behind them in solidarity.

We must show ambition. The ambition that saw the development of the railways, canals and so on is lacking so far in that critical aspect of our infrastructure needs. The target of 2 megabits per second, as I am sure most hon. Members know, is staggeringly unambitious. Next year, Norway will roll out to 98% of its inhabitants 100 megabits per second, and the EU digital agenda is for 30 megabits per second by 2020. I admit that Singapore is not entirely rural—[Interruption.] It has bits of rain forest—I checked on Google Maps and once upon a time spent six weeks there. Singapore has access to 1 gigabit per second, for pity’s sake, which is what we are competing with. The reality is that we are behind. That will matter.

When I studied at university in the constituency of the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) in 1990—I would barely touch a word processor at that time, never mind anything else—I read an article about mobile phone usage. People were asked, “Can you see yourself needing a mobile phone in the next 10 years, or would you want one?” but only one in five answered yes. My hon. Friend the Member for Burton was asked how many of his constituents want access immediately. I am sure that many do, but I am also sure that many of his constituents, like many of mine, do not realise that they want it, or that they should want it.

There is a need for evangelism to sell the need for access to superfast broadband. We will need something like 100 megabits per second, and we will need it soon. For example, those places in Cumbria that are most remote from hospitals and the most likely to benefit from telemedicine are the least likely to have the chance to access that technology. World leaders such as Gilkes in Kendal, which is providing hydroturbines in south, central and north America, need to be able to upload incredibly complex graphic designs. Kendal now has 20 megabits per second and that is wonderful, but even that will not be enough for very long. Rural farmers need to be able to complete their Rural Payments Agency forms. The £2 billion Cumbrian tourism industry needs to be able to punch above its weight as it fights the city break market. To do that it needs more than the 2 megabits per second that we are talking about today.

I am proud to be part of the campaign across Cumbria with the county council and BDUK—Broadband Delivery UK—to roll out the broadband pilot in South Lakelands. I am also proud of the broadband pioneers and the hub co-ordinators we have in the area. I welcome what is happening in Cumbria, but I am frustrated by the speed of the project and the speed of the target. I am concerned that the infrastructure as it is built across Britain must be future-proof, but it is not even now-proof. We have to build a network that is in the interests of our communities and businesses, and—dare I say?—not in the interests of one or two large telecommunications companies. That is the great fear I have about our county project. We have heard that fear about Lancashire and I suspect that it is shared across the country.

We need to state that copper is not the answer and that fibre to the cabinet is not a future-proof answer. It might suit certain companies, but it is not future-proof and fibre to the home and business is the answer. Mobile and satellite solutions also play a huge role, and I endorse everything that my hon. Friend the Member for Penrith and The Border (Rory Stewart) said about mobile networks. Costs should not be higher for users in rural areas than they are for users in cities, and that is another important issue.

Andrew Fleck, the chairman of Fibre GarDen—the team trying to bring fibre-optic, superfast broadband to Garsdale and Dentdale, said in his e-mail to me a couple of days ago:

“The cost of nationwide implementation is prohibitive in the current economic climate, but the economic penalty for delay will be greater still.”

He is absolutely right. Tonight I will get on the train to Oxenholme and travel on a rail network that was built by visionaries 150 years ago. That is the sort of vision and ambition that we need today.

[Chi Onwurah]

I congratulate the hon. Gentleman on setting out in such visionary terms the superfast future that we all hope to have, but it is worth noting that the vast majority of the companies that built the railways went bankrupt and it was public subsidy that enabled the uneconomic areas to be reached.

[Tim Farron]

The hon. Lady makes a correct observation, and I would make one in return—and it is not meant as a dig at my hon. Friends from another party. Let us reflect on how Norway is able to have 98% access to 100 megabits per second next year: it is because it still owns its telecommunications company and it can make it so.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Many hon. Members still wish to speak, so I am reducing the time limit to eight minutes. If hon. Members could tend more towards six minutes, everybody will get a chance.

16:19

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on securing this debate this afternoon and on his passionate and eloquent speech. I strongly support this motion. Mobile phone connection and access to the internet at a decent, workable speed are things that much of urban Britain can take for granted, but those vital connections are often absent entirely in rural Britain.

I will focus on one part of the motion, which is the impact that poor access to the internet and lack of broadband have on local communities. In parts of north Yorkshire and my constituency, broadband coverage is desperate. North Yorkshire has among the poorest provision in the country, with 30% of the county being classed as a low-speed area. The impact of this weakness is seen in many ways. For one, it holds back our local economy and has a detrimental impact on jobs and growth. For example, one of the biggest employers in my constituency is a company that forms part of a large international group, but it cannot operate its group’s international systems simply because the internet platform is so poor.

[Andrea Leadsom (South Northamptonshire) (Con)]

I agree entirely that superfast broadband would be enormously beneficial to our economy. Does my hon. Friend agree that the £20 billion that we might be spending on high-speed rail will do less to improve the north-south divide than would superfast broadband, which would benefit all parts of our economy?

[Andrew Jones]

That is tempting but difficult territory. I will resist the temptation because I have long campaigned vigorously for better rail connections for my constituency, particularly for better trains to Leeds and York and direct services to and from London. By the way—a small plug—the first direct service to Harrogate from London starts on Monday.

[Julian Smith (Skipton and Ripon) (Con)]

What time?

[Andrew Jones]

About half-past 5, I think my hon. Friend will find. I hope to be there to see it off, like the Fat Controller, and then dash back to comply with the whipping arrangements later that evening. I think that high-speed rail is a good idea for certain parts of the country, so I am upfront about supporting it. My only complaint is that delivery is so slow that I will be well over 70 by the time it reaches Yorkshire—thank goodness that feels a little way off!

I was making the point about businesses in my constituency requiring a better internet platform. Many of our small and medium-sized enterprises, often in the agricultural and tourism sectors, are being held back. They need a good internet presence to reach out to their customers and win business. However, the lack of broadband is not purely a commercial matter. It has held back access to education, as was expressed so eloquently earlier. It also holds back the provision of public services. I saw that first hand as a member of Harrogate borough council while seeking to improve services across a wide but poorly connected area. I do not want the people of north Yorkshire to be unable to take advantage of developments in health care. I have seen and discussed with health care professionals from Airedale NHS Foundation Trust how its telemedicine work can help people in remote communities, particularly those with long-term conditions.

Then there are the straight social and community benefits. Communities that can communicate are stronger. It is easy to do the diagnosis, but harder to tackle the issue. I have to say to the Minister, however, that I think the Government get that and understand rural communities. I was pleased to see the high level of investment that the Government have found for this area, despite these being very difficult financial times. We have worked hard in north Yorkshire to be one of the pilot areas for the roll-out of superfast broadband, and I pay particular tribute to my hon. Friend the Member for Skipton and Ripon (Julian Smith), who is here today. As a team of north Yorkshire MPs, we have worked to put the case for our area’s inclusion in the Government pilots, which we secured—I am grateful to the Minister for that. Although we work as a Yorkshire team in many areas, teams need leaders and on this particular issue my hon. Friend has done a great job of leading the way.

The progress that we are making in north Yorkshire is very encouraging. Many groups have been working together, including the county council, the district council, the voluntary sector, local communities and business groups. This issue has been identified by the new York and North Yorkshire local enterprise partnership as one of its priorities. We also have a good local delivery vehicle in NYnet. The provision of excellent broadband services is critical to our country, but especially critical in rural areas of long distances and low-population densities, where we have seen the danger of communities falling behind. The Government have responded positively to this challenge, and in north Yorkshire we are taking up the challenge from them to make our pilot as successful as possible. I am happy to support this motion.

16:25

[Andrew Stephenson (Pendle) (Con)]

I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on securing this important debate. Much of what I was going to say has already been covered by previous speakers. However, I would like to cite a few examples from Pendle of the urgent need for better broadband access in our rural areas.

Earlier this year I was contacted by Robin Yerkess from Fence, whose broadband speed was only 0.3 megabits. After BT was contacted and an engineer sent out to see my constituent, that increased to 1.4 megabits, which is an improvement, but can hardly be described as good. Neil Hodgson, a resident from Blacko, tells me that broadband speeds in the area are only 0.5 megabits, while Ian Smith, another Blacko resident, says the same, although his broadband speed recently peaked at 2 megabits following some work on the exchange. As many hon. Members have said, broadband for such constituents is not a luxury; it is absolutely essential. Mr Smith works from home for a company based overseas. Without extending broadband coverage to our rural areas, it would simply not be possible to perform jobs such as his.

In Higham, Arthur Stuttard says that the maximum speed at his property is 1.2 megabits and constantly dropping. The connection was once down for six weeks because of corroded lines. The same is reported by Bernard Ingham—[Laughter]—indeed—the chairman of Higham parish council, who says that he typically gets just 1.25 megabits to 1.75 megabits. I have had similar reports from many Pendleside villages. Brian Nelson from Roughlee tells me that he has never achieved more than 1 megabit, while Bill Mayor from Goldshaw Booth says that Newchurch may be unique in the whole country for suffering poor connection “when it rains”.

Broadband coverage in the centre of Colne, where I live, is relatively good. However, as soon as one gets away from the town centre, things deteriorate rapidly. Raymond Rushton from Trawden told me that his broadband speed varies from 0.58 megabits on some days to 2.8 megabits on others. Kris Stevens from Laneshaw Bridge has said that speeds of up to 3.7 megabits can be achieved between 10 pm and 3 pm, but during peak hours that is reduced to 0.7 megabits, making packages such as Sky Player completely unusable. I share the same fate as my hon. Friend the Member for Burton (Andrew Griffiths). Unfortunately, none of my constituents has complained that they have not been able to get BBC Parliament streamed live quickly enough, although I am sure that many of them are paying close attention to what goes on in this place.

Those are just a few of the constituents who have e-mailed me or contacted me via Facebook or Twitter in advance of this debate—people who are becoming increasingly frustrated by the inadequate broadband coverage in Pendle. Unless rural broadband improves, people will no longer be able to move into those villages or other rural areas, killing our local economies and leaving those still living in those communities with restricted access to jobs, information and public services. It is about time that our rural areas enjoyed the same access to broadband that so many businesses and individuals in our larger cities have been used to for so long, particularly given the importance of fast, reliable broadband in creating small and medium-sized enterprises and driving employment growth.

[Richard Graham (Gloucester) (Con)]

The important motion before us refers to rural broadband, but does my hon. Friend agree that it is also remarkable how many small areas on the edges of cities are affected? For example, Quedgeley in my constituency is served by the Hardwicke exchange in Stroud, which is a rural area, with 100 businesses there affected by slow broadband. Does he agree that the Minister should also consider that aspect of this important motion put forward by my hon. Friend the Member for Penrith and The Border (Rory Stewart)?

[Andrew Stephenson]

My hon. Friend makes a valid point. What is surprising about his constituency and mine is that many of the properties that suffer from slow speeds are short distances from the exchanges that serve them. However, the technology used is so old, archaic and lacking in investment that such problems continue year in, year out.

I applaud what the Government have announced so far, particularly the initiative announced last October, which earmarked four rural areas—unfortunately not including Lancashire—for a pilot scheme for the next generation of high-speed broadband, in addition to setting aside £50 million for investment in the second wave of internet test projects. But the £830 million that the Government have pledged to create the best broadband network in Europe by 2015 will be spent in vain unless those living in more remote areas—

[Ian Lucas]

On a point of information, I think that the hon. Gentleman will find that the figure is £530 million. The Minister will correct me if I am wrong.

[Andrew Stephenson]

I am happy to agree with the hon. Gentleman on that figure. My key point is that that money will have been spent in vain unless it benefits those in rural areas as well as those in urban areas across the country.

Owing to the rural, coastal and sparsely populated nature of Lancashire, there is a real fear that our county could be left behind. A pan-Lancashire proposal endorsed by the local enterprise partnership has been drawn up. It is supported by Blackburn with Darwen borough council, Blackpool council and Lancashire county council. It estimates that, under current proposals, only 66% of premises will have superfast broadband by 2015, leaving 34% without. Needless to say, the 34% will predominantly be in the kind of rural communities that hon. Members have been describing today.

The pan-Lancashire proposal seeks to address that shortfall, and the outline proposal for £15 million of funding from the European regional development fund, which my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) mentioned earlier, has now been submitted. Lancashire has also submitted a funding proposal for £13 million from the £530 million that the Government are investing through Broadband Delivery UK. I commend that proposal to the Minister and urge him to do even more to connect our rural communities. As many of my constituents in rural communities whose broadband speed is currently less than 1 megabit have said, the adverts for services offering 100 megabit broadband are simply a bad joke.

16:31

[Dr Phillip Lee (Bracknell) (Con)]

In the spirit of the motion, I will be as superfast as possible. First, I must draw Members’ attention to my entry in the Register of Members’ Interests. I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on securing this debate. I want to talk about the local position, concentrating on rural need and on superfast broadband need in particular. I then want to talk about the potential for satellite broadband to provide a solution for those remote homes and businesses that many hon. Members represent.

To be honest, I wonder what I am doing here today. I represent Bracknell, which is part of the Thames valley, where 10% of the world’s information technology businesses are based. It is part of the golden triangle of Newbury, Reading and Bracknell. We have Oracle, Microsoft, Hewlett Packard, Dell and Fujitsu Siemens. We have so many IT companies that I do not have time to list them all. And yet, until very recently, part of my constituency only six or seven miles away still had dial-up internet. I wonder why that is.

There are many Members here today, and I imagine that their mailbags are as full of complaints about this as mine is. A village in the west of my constituency, Finchampstead, is packed with people who work in the IT sector. I knock on their doors and ask for their support, and they say, “Yes, fair enough, but how come I cannot get fast broadband? I work for an IT company, yet I come home and I cannot get a decent internet link.” I have absolutely no answer for them. I have heard Opposition Members suggesting that we could not predict what was going to happen. Well, yes we could, and some of us did. The direction of travel was pretty obvious, not only for the internet but for mobile phone usage. We can argue that the capacity we need was not predicted, but we all knew that it was going to grow.

I have been convening meetings, and BT has kindly come in to see me. I am sure that all hon. Members have received BT’s briefing today on its fibre optic outlay. It assured me that it is going to hit various target dates for its fibre optic plans, but those dates have now been pushed back. My constituency is in Berkshire, not in some gloriously remote part of the countryside in Cumbria or the Yorkshire dales. I am in Berkshire, and I do not have a decent internet service. Indeed, in my own home in a semi-rural area in Berkshire, I cannot really get the internet—it is utterly pointless. I have inquired about the problem and tried to work out the solution, as I am not convinced that fibre optic will be there for people.

That is why I shall now move on to deal with satellite broadband. This may seem remarkable, but it is possible to get a decent broadband service throughout the country via satellite. Every constituent that Members represent can secure broadband access at a minimum of 2 megabits a second via satellite. I am told that speeds can reach upwards of 10 or 12 megabits; there is a significant cost, but it is possible. That seems to me to be an ideal solution. It is arguably cheaper and quicker, and it is undeniably greener because it uses less energy to provide the service for sending around the data. It is from the same sort of satellite, I might add, that the information for our BlackBerrys and mobile phones comes. It also relies on the space industry.

[Alun Cairns (Vale of Glamorgan) (Con)]

Would my hon. Friend acknowledge that satellite broadband is not as reliable as mobile broadband or fixed-line links?

[Dr Lee]

I accept that, although there has been an improvement, as I know from having had the privilege of seeing one of the new Ka-band satellites launched before Christmas. There is room for improvement in the efficiency and effectiveness of satellites, but the space industry has plenty of experience and evidence of those developments. By the end of this Parliament, about 300,000 links will be possible for broadband via satellite. That is quite a few, and I am sure that it covers quite a few of the homes and businesses that my hon. Friends represent. Broadband Delivery UK estimates that about 2 million businesses and homes do not have good enough broadband. I am one of them and so are many people living in the west of my constituency and elsewhere.

My final point about the space industry is that it is successful—a £7.5 billion industry annually, employing more than 80,000 people. The companies that provide the broadband service do so not only here, but sell their services abroad. They sell these services, some of them to 50 or 60 countries abroad, bringing income into this country. In the process of providing a broadband service that we all know is needed for this country, we will also be able to export, which is fantastic in itself.

As my hon. Friend the Member for Penrith and The Border said, this is a no-brainer. There will be a combination of solutions to provide broadband for everybody. It will include wireless and mobile, and fibre optic, but I suggest that for the difficult-to-reach places, space provides the solution. We are fantastic at space. We are already providing solutions for broadband in that way, so let us provide some more.

Ultimately, infrastructure matters. Reference has been made to the visionaries of the Victorian age who brought us trains. However, one mistake was made during that period. If my British social and economic history serves me well, we decided to go with Stephenson’s gauge for rail, instead of Brunel’s. Unfortunately, my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) has now left the Chamber, but an analogy can be drawn here: Brunel had a wider gauge, so we could have gone faster with our trains. We are now struggling to provide even faster trains; if we had gone with Brunel, we would have had them. I suggest that we adopt exactly the same approach to broadband. Let us not have a narrow vision, but a broad one. Let us have a system that provides the very best broadband for all our constituents.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

If everybody sticks to about five minutes, everybody should be able to contribute to the debate.

16:39

[Andrew Bingham (High Peak) (Con)]

I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on securing this debate, which elicits considerable interest. I shall speak mainly about rural needs. My constituency is more rural than most, with the possible exception of those in Cumbria. My residents include people such as Andrew Byford who lives over the Snake pass—those who have been through High Peak will know the area—and whose internet connection is so poor that it is not worth having. He shares that problem with many hill farmers in High Peak. Mention has already been made of the number of forms that farmers must fill in, and they have to fill them in online. Hill farmers are having a tough time at the moment, and that is making it tougher. We could argue another time about the number of forms that they are having to fill in, but the point I am making now is that they are trying to do it using internet connections that are completely unworkable. They are having to drive dozens of miles to find a connection that will enable them to fill in their forms.

I know from my experience many years ago, when we set up our business, that locating a business is governed by various criteria. Thirty years ago, one of them was the STD code. I risk being intervened on at this point, but I used to have a very good knowledge of STD codes throughout the country, because I knew where companies were. The hon. Member for Barrow and Furness (John Woodcock) has left the Chamber, but I happen to know that the code for that area is 01229. [Hon. Members: “Trainspotter!”] I am, yes.

People setting up businesses took STD codes into account because they knew that their customers would look at the code and say, “I know where that is: it is local.” Now, however, one of the most important factors for such people—and, for many of those running new-style businesses, the most important—is the speed of their internet connections. If the connection in an area is not good, they will not locate their businesses there. As a result, new businesses will be set up in urban rather than rural locations, which will widen the urban-rural divide.

It is harder for the existing rural businesses to compete when they are competing against urban businesses with faster internet connections. That is not only discouraging those starting new businesses from entering rural areas but is making it harder for those who are already in such areas to survive, and making it more likely that they will move out. We all have our difficulties in rural towns and villages, such as the closing of shops, and if people move out, that rolls on. It is the law of unintended consequences.

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

I do not know whether the hon. Gentleman experiences the same as I do in Northumberland, where one of the best sources of growth for rural areas is the setting up of small businesses in relatively remote locations, but where those who set up businesses in the hope of being able to use the internet are now being out-competed by people with faster internet services.

[Andrew Bingham]

I could not agree more. Small businesses are my bag. I would describe them as the engine room of the country. New businesses can be set up anywhere now because the STD code does not matter any more, but we are hampering them by the lack of internet connection and the slow, unreliable broadband. My constituency contains a huge number of quarries. When limestone cannot be dug in Miles Platting, it has to be dug in Derbyshire, in High Peak. The quarrying companies are struggling because of the internet connection, but they cannot move. We need to help those businesses, which employ a great many people.

Some local companies might wish to adopt a more internet-based marketing strategy, but the lack of connection restricts them from selling online. That is another reason for them to move to urban areas. If businesses move to urban areas, will the people who live locally move? They are more likely to commute, which will increase travel on the roads and rails and hence increase carbon emissions. The knock-on effects will go on and on.

[Duncan Hames]

I am delighted that the hon. Gentleman has mentioned the reduction in carbon reductions that results from a decent internet infrastructure. Earlier in the week, he may have heard Transport Ministers say in the House that one of the few reasons we are able to cope with the present capacity constraints on our transport infrastructure is the fact that more people work from home, thus reducing their dependence on travel. The internet enables them to do their work at home rather than incurring huge amounts of time, cost and indeed pollution by travelling.

[Andrew Bingham]

That is true. Good internet connections increase the ability to work from home, thus reducing travel requirements and carbon emissions.

Access to public services is increasingly online, which also disadvantages rural residents. When I send out my electronic MP’s e-mail shot, I have to upload low-resolution pictures because I know that it will take local people a long time to download a high-resolution picture. I do not want the people of High Peak to wait for a long time to see a full picture of me.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

It will look better in low resolution.

[Andrew Bingham]

That might be true, but I prefer to give people the option of seeing it in high resolution.

Research has also been done on the education of our children. The GCSE exam results of children who are digitally included—I think that is the phrase that is used—are 25% better than the results of those who are not. The people in the remote villages of High Peak and similar rural areas do not have that advantage, so that is a further disadvantage they face. I cannot over-emphasise the importance of this subject to the future of the country, our children and our businesses.

I welcome the Government’s stated intention and the money they are putting into this endeavour, and I refer the Minister to the letter I wrote to him on 25 March regarding Derbyshire county council’s bid for the next wave of funding for digital roll-out. I hope he will acknowledge that, and I also hope the bid is successful. He has momentarily moved from his place. [Interruption.] Yes, I am sure he is right behind me, in every sense of that term.

Previously when people set up businesses, they had to install things called utilities: gas, electricity and water. In the 21st century, there are four utilities, because, in my view, broadband is the fourth utility as it is vital that businesses have it. That is why we need to roll it out to rural areas such as High Peak and Cumbria, in order to give our communities a chance to survive in what is a difficult world and to help people remain in their villages and to build and sustain their communities emotionally, socially and economically.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

(Mr Nigel Evans): Order. To enable as many Members as possible to contribute, I am now reducing the time limit to five minutes.

16:46

Julian Smith (Skipton and Ripon) (Con): I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on securing the debate. We represent two of the largest constituencies in England. Mine covers 900 square miles, and his is about twice as large, I think. As many Members have said, my hon. Friend is leading the way on this issue, and I would also like briefly to pay tribute to his office staff—to Louis Mosley and the other members of the team—who are assisting him in leading the way.

Like my hon. Friend’s constituency, my constituency has become the test bed for one of the superfast broadband pilots, which is fantastic news. The procurement process began last week, and we hope that many major telecommunications companies will come forward and start bidding so that we can deliver on this project over the next couple of years. The aim is to address the major issue for north Yorkshire, which is the need to sort out, once and for all, the digital gap that is damaging businesses and communities throughout our county. As my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) mentioned, 30% of the county is classed as having low-speed broadband, which is having a massive effect on individuals, businesses and communities.

Copying my hon. Friend the Member for Penrith and The Border, my Yorkshire colleagues and I recently held a conference. Talking of copying, I advise anyone who is interested in this issue to copy all my hon. Friend’s initiatives, as he has done some great stuff. We copied his conference idea in north Yorkshire, and hundreds of people from all walks of life came along and talked about the problems they are facing.

The biggest problem is an economic one. Unless we address that through market intervention, there will be a downward economic spiral in rural areas, because businesses will begin to move out and there will be no incentive for them to move back in again. The north Yorkshire pilot cannot come early enough, therefore.

The issue is not just to do with businesses, however. As we have heard, there is general frustration in all walks of life: there is huge frustration about housing becoming less marketable because of “not spots” and low speeds, and about whole communities of people, and their schools and other organisations, getting fewer deals online. Apparently, people lose out by £500 or £600 a year if they cannot get online to take advantage of the internet shopping bargains.

For all the Government have done for us on this issue, communities and villages must play their parts. As many Members have said, communities throughout England are coming together, and in Skipton and Ripon we have seen some great examples. In Darley, a beautiful village in Nidderdale, many people have come together and shown that there is demand, showing those who hope to invest in our procurement process that there is money to be made—Sue Welch and David Holland deserve mention. Across the Pennines, in Appletreewick, Adrian Precious did something similar. They got their communities together and showed that if we link the communities, that presents a real proposition for the private sector.

The £500 million fund and the Government’s universal broadband commitment are grabbing the attention of my constituents and of North Yorkshire. Although I am very positive about the work the Government have done, there is a slight question mark over mobile provision. The forthcoming auction of the 800 MHz spectrum is equally key for our rural communities and if we consider the poor auction process for 3G and what happened then, we can see that there is a tremendous amount to learn.

I have a number of questions for the Minister, but I have only 10 seconds left. Will he consider some different ways of taxing—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I call Mr David Nuttall.

16:51

[Mr David Nuttall (Bury North) (Con)]

Saved by the bell there, Minister.

People could be forgiven for thinking that a constituency such as mine in Bury North, which ostensibly lies within the Greater Manchester conurbation, would not be affected in any way by the problems that are the subject of the debate. When people think of Manchester, they inevitably think of the vibrant city centre or perhaps of the two football teams that were so much in the media and the spotlight at the weekend. Greater Manchester, however, is much more than just a city. It is made up of 10 local authority areas, of which Bury is one, and Bury North lies on the very northern edge of the Greater Manchester conurbation. It is in reality in parts much more rural Lancashire than the city of Manchester and I want briefly to highlight the effect of that dichotomy this afternoon.

In addition to the principal town of Bury, there are several rural villages in the constituency. Although I readily accept that they are not quite as far from an urban centre as some of the villages in, let us say, the constituency of my hon. Friend the Member for Penrith and The Border (Rory Stewart), whom I warmly congratulate on securing this timely debate, when it comes to the problem of having a workable broadband connection they might as well be. It is a case of so near, yet so far.

I am greatly indebted to the Bury rural inequalities forum for its work in providing me with concrete examples of the problems that face individuals and businesses in those small rural villages. For example, in Nangreaves, the broadband speed is, on average, 500 kilobits per second, which is typical, provided by a BT line some 5 miles from an exchange. The same applies to all the villages, such as Holcombe and Hawkshaw.

Let me give one example in particular. Affetside is a small village with fewer than 250 residents located on the edge of the west Pennine moors. It lies on the old Roman road that ran north between Manchester and Ribchester. The village has only one telephone infrastructure provider, British Telecom, and because of its relatively isolated nature no other telephone service providers have sought to provide any coverage in the area. The lack of competition unsurprisingly results in higher costs than would be expected elsewhere. I am informed that the existing aluminium cable is believed to have been installed 40 years ago, in the 1970s, when high copper prices forced the switch to aluminium. Whatever the cable, current broadband speeds are typically in the region of just 0.7 to 1 megabit per second, but speeds vary greatly and reliability is a major problem. I should add that rather than improving, the problem is getting worse as more and more people are forced to do business online and access services online. The demand on that decades-old cable is increasing and the quality of people’s internet connections is gradually reducing.

The Government’s commitment to providing everyone with broadband access at a speed of 2 megabits per second by the end of this Parliament is to be welcomed, but it is only a start and will not solve the problem. By 2015, the rest of the world will have moved on and the digital divide that exists between town and country will continue. The answer is not to solve today’s problem tomorrow with today’s solution, but to look to the future and ensure that when lines are upgraded they are fully future-proofed. Otherwise, I fear that by the time anything actually happens to help my constituents, it will be too late and they will continue to be stuck in the slow lane of broadband internet access.

16:56

[Mr Mark Williams (Ceredigion) (LD)]

It is a privilege to speak in this afternoon’s debate, but I arrived with a tinge of anxiety as I suddenly realised that I had not signed the motion tabled by the hon. Member for Penrith and The Border (Rory Stewart). I think the point has been illustrated that many outside the Chamber are totally in agreement with what he is trying to achieve this afternoon, particularly in relation to the auction.

In Ceredigion, we have 600 family farms, 147 villages and hamlets and one of the highest proportions of small businesses per head of population anywhere in the United Kingdom. This sounds a little like a maiden speech and I have said these things before but the principles of entitlement are the same for those communities as they are for communities anywhere else. In Ceredigion 20 years ago the debate was about retaining a railway line from Shrewsbury to Aberystwyth, but today the issue is about broadband, mobile coverage and people’s entitlement. We are past the point at which people in rural communities will stoically make do and now need to make arrangements to have access to broadband; there is an entitlement to have that in those communities.

I want to associate myself with a point that has been made by many hon. Members this afternoon—the sense of frustration felt by constituents who hear debate in England and other parts of the UK about superfast broadband when they lack any access whatever. I think of the farmer with a haulage company in the village of Trefenter on the edge of the Cambrian mountains who was desperate to expand his business but had to rely on incredibly slow dial-up. We were able to involve a satellite company and ensure that a pilot satellite scheme helped him out in order to nurture and grow his business. As has been pointed out many times in this debate, this is about economic growth and building a vibrant—Welsh, in our case—economy. That is why this debate is so important.

This is also about bridging gaps between people. In the last Parliament, when the Select Committee on Welsh Affairs, of which I was and am a member, looked at broadband, we also looked at the social and age divides between people. When a rural bank closes, those who are elderly and who are not switched on or who do not have the motivation to access broadband will be severely disadvantaged in a way that, perhaps, younger people in urban areas have not been, but we lack the basic infrastructure to bridge that gap.

The National Farmers Union of Wales, NFU Cymru, has talked about the importance of broadband to farming businesses—a point that the hon. Member for High Peak (Andrew Bingham) has made. It is important for supporting business-to-customer, business-to-business and business-to-government communications, as well as for providing farmers with opportunities to market their products. There are also the added expectations from the previous Government, and in some cases the current Government, for business to be conducted online. The Government’s announcement in 2010 of the compulsory electronic completion of VAT returns for farm businesses with a turnover of more than £100,000 was greeted with great anger in parts of rural Britain because that objective is simply impossible to achieve. Now there is the roll-out of online completion of single application forms by 2016. That cannot be realised until these targets on broadband coverage are met.

Mobile reception is another critical issue in my constituency. I cannot travel from Aberystwyth in the north of Ceredigion to Cardigan in the south and have a phone call at the same time—it would be a lengthy call, as it is a 40-mile route on a bad road—because it is impossible to have a conversation without numerous stops and starts. That is something that we in rural areas have to put up with, while people elsewhere take mobile reception for granted. My constituents cannot ring their MP on his mobile phone and expect an answer if he is in his house—I can receive a phone call on my mobile only if I am standing in the middle of the road outside my house. Those are the frustrations that many people experience.

There has been good progress in Wales. There were good attempts by the Welsh Assembly Government, who were of a different political party, to identify pilot schemes. Two communities in Ceredigion—Cilcennin and Beulah—have benefited from such a pilot scheme. Although I am frustrated that Wales is not included in the pilots that the Government have announced for superfast broadband, I take comfort from the fact that some of the areas identified for the pilots, such as Herefordshire and the highlands and islands, are rural, which I hope will allow Wales to learn from the experiences. For me, this debate is simply about entitlement. It is a costly debate about entitlement, but it is an entitlement that we must not forget.

17:01

[Alun Cairns (Vale of Glamorgan) (Con)]

It is a pleasure to follow the hon. Member for Ceredigion (Mr Williams). I want to pay particular tribute to my hon. Friend the Member for Penrith and The Border (Rory Stewart) for the work he has done in preparing for the debate and encouraging Members to become fully involved. Many Members have highlighted the problems caused by the lack of broadband in their communities. I also think that there is an obligation on us to offer some solutions and encourage the Minister in his negotiations with the Treasury. I will move on to that later and how we can come up with some answers to the problems.

I am very pleased that broadband has been considered in the debate both as mobile broadband and as fixed-line broadband, because a short time ago fixed-line was the only way we considered it when discussing it. Ofcom recently reported that there had been a 2,200% increase in mobile data traffic in 2009, and I suspect that there has been a significant increase since then, with new technology being used both commercially and as a result of lifestyle changes.

There is great variance in the availability across the constituencies we have heard about today, particularly in rural areas but also in some urban areas. In my constituency, for example, much of Barry has the benefit of superfast broadband, which runs exceptionally well, but there are pockets within that urban environment that do not. However, some rural communities, such as Colwinston and Ystradowen, have almost no coverage at all. That is a tragedy for the people living in those communities and for the young people as they grow up.

Many points have already been made about sustainability, prosperity and the fact that home working and flexible working are a way of life for many people these days. Many people would like to make them a way of life but cannot do so because of the lack of broadband in their communities. There is also a social cost that we must recognise, as some Members have mentioned.

With regard to mobile broadband, 3G is the method that most of us would use. We need to recognise the differences between England and Wales in that respect. We do not have data for my constituency, but I can offer data on the differences between England and Wales. For example, there is 79% coverage in Wales for 3G, but 98% in England. For 2G, there is 89% coverage in Wales, but 99% coverage in England. Although people might assume that the technology has moved on, 2G is still exceptionally important, because last January Ofcom decided to lift the restrictions on the use of 3G services on the 2G network. That decision favours only two operators, and I think that the solution to many of these problems must be competition. Unless there is fair competition for all the operators, we will obviously not get the swift solutions that we would like. I hope that when the Minister responds he will say what he wants to do to correct that imbalance.

Much of the solution to the problem will be the 2012 auction. The 800 MHz spectrum will be important, because it will travel so much further, and the £530 million that the Minister and the Government are making available to try to close the “not spots” is welcome, but we need to recognise that there will be limits on what that £530 million can achieve. Bearing in mind the tight financial climate, I have no doubt that there were tough negotiations with the Treasury to secure that money in order to try to deliver a universal service obligation by 2015. I have no doubt also that the Treasury will have one eye—if not one eye and one hand—on the 2012 auction, so we need to support the Minister to ensure that in his discussions with the Treasury his hand is as strong as it can be.

I remember debating eight years ago the luxury of 256 kilobits, and if anyone had 512 kilobits that was absolutely extraordinary. The universal service of 2 megabits is welcome, but let us not forget that this is a fast-moving dynamic.

17:06

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

I, too, congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart), but I want to go a little further and talk about the Government’s moral and social obligations, aside from their economic ones, in this context.

I hesitate to mention the big society so early in my speech, but it was invented in rural Britain, and rural Britain is finding it increasingly difficult to deliver and sustain the big society as it falls behind the rest of the country and, indeed, the rest of the world when it comes to broadband and mobile coverage.

I want to restrict my comments to mobile phone coverage, as far as we can distinguish it from the rest of the debate. We have heard from a number of people how the UK is not where it should be, and from the previous two hon. Members how Wales is not where it could be. It is interesting to hear examples from Norway, France, the United States and recent ones from Port Stanley of people’s ability to communicate with one another by mobile phone, because I in my office in Whitland in Carmarthenshire could not communicate with the hon. Member for Ceredigion (Mr Williams) just up the road, were we to wish to speak and were he to seek my advice on the coalition’s performance, thus denying us both a golden opportunity to advance our careers. There is, however, a serious social and economic problem.

We have already been told, quite rightly, about the effect on small and medium-sized businesses in rural Britain, but we have not touched on the plight of the elderly in the more lonely parts of our rural communities; on the work of the charities and carers who look after the elderly and vulnerable in those areas, in often hostile geographic and climatic conditions; or on the plight of young people in rural areas, who simply want to be young people in rural areas in a 21st-century context. It is a great source of gloom to me that the babysitting community of Lampeter Velfrey has discovered that there is no mobile phone coverage in the Hart household, the consequence of which is that I do not go out anything like as much as I used to because my babysitters cannot text their friends when they are in my house. If there is a more serious reason for the Minister to address the matter urgently, I am not sure what it is.

To be serious for a moment, however, I want to focus on the impact of the problem on the police and, in particular, on Dyfed Powys police and the mobile ID project known as Lantern, involving the piece of kit they carry around which enables them to take fingerprints while in remote areas, and which relies on the mobile phone network. In our area, the police were subject to two carriers but that was insufficient, so the system did not work as well for our police force as it might have, through no fault of their own. They were able to expand the number of carriers and thus improve the coverage, but unfortunately the Metropolitan police have led a tender process resulting in a UK-wide contract and the tender being awarded to the company that Dyfed Powys rejected on the basis that its system did not work in our area.

We have to be a bit careful about a one-size-fits-all solution based on so-called supreme technological solutions which do not necessarily apply to the wilder and more lonely parts of the country, particularly west Wales. This has an effect on the police’s ability to deliver on its obligations to the community, which is very relevant given the challenges that forces are facing, and that in turn leads to a compromised confidence on the part of the rural community as regards its personal safety and its ability to trust the police to deliver a first-class service, as I know they do.

I welcome the combination of effort by Ofcom and the Welsh Assembly Government. I think we are now instructed to call them the Welsh Government, but for the purposes of clarity they will remain the Welsh Assembly Government, certainly in my house. There is much to be cheerful about because, as other hon. Members have said, this is a golden opportunity—perhaps the only golden opportunity—for the Government to show their commitment to rural communities: not only their economic but social and moral commitment. We have heard for many years—and we believe it, I would suggest—that this commitment is real. There is no greater opportunity than now for them to cement that commitment and to prove to rural Britain that they believe it is a force for good.

17:11

[Mel Stride (Central Devon) (Con)]

Like all speakers, I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on securing this debate, which is extremely important, particularly for our rural communities. Many hon. Members have stressed the massive growth in the importance of the internet. Indeed, broadband was introduced in this country as recently as 1990, and yet we have seen a huge expansion in its impact on how we interact with each other, how we transact business, and our ability to interface with public services, and it has spawned new markets and changed existing markets beyond recognition. As the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) put it, it has gone from being peripheral to our day-to-day existence to being absolutely essential. Despite its importance, however, as the hon. Member for Chippenham (Duncan Hames) pointed out, there never has been, and still is not, a universal right to any particular level of service. By contrast, that is something that we see in the context of our postal service in regard to the universal service obligation.

The hon. Member for Barrow and Furness (John Woodcock) defended the previous Government’s record on rolling out internet coverage. The situation has been very poor. Internationally, we are not starting from a good position. In a study by Oxford university sponsored by Cisco Systems, published as recently as October 2010, we were ranked 18th in the world in terms of broadband service, behind countries such as South Korea, Japan, Sweden and Denmark. Being 18th may sound about average or fair to middling, but it should not disguise the fact that there is a huge chasm between what we are achieving at 18th and what the top group of countries are achieving. The report states that the UK is “comfortably enjoying today’s applications”

but the top 14 are

“ready for the online applications of tomorrow.”

That is the point. The general quality of internet coverage is improving worldwide, and we have a lot of catching up to do, particularly in our rural areas, where, too often, we are disconnected not only in terms of the digital economy but our physical infrastructure.

I have several villages in my rural constituency where people are very concerned about the coverage that they are receiving. Exminster is a village close to Exeter where the parish council has undertaken extensive surveys of the kinds of broadband speeds that are being achieved locally, which are very ineffective. As many Members have said, the speeds that are achieved are often significantly below the advertised speeds. In one area of Exminster, BT advertises a download speed of 7.5 Mbps, but 25% of residents are achieving less than 2 Mbps. That is hardly surprising given that the Commission for Rural Communities tells us that, as at April 2010, about 60% of households in urban areas have cable whereas the figure is as low as just 1.5% in our villages and hamlets. According to the Library, 33% of my constituents have low broadband speeds. That compares to just 1.8% in Hammersmith in London.

We know that the problem is the cost of reaching rural consumers. The answer must be to encourage unrestricted competition, but to recognise the vital disconnection between what maximises supplier profits and what delivers the optimum social and economic benefits to our communities and the country as a whole. That is why I strongly welcome the motion.

It is important that the Minister and the Government consider as many innovative ways of delivering internet as they can. Virgin Media has looked at using telegraph poles to loop cable through. An important village in the west of my constituency, Northlew, has done a sterling job in using microwave WiMax broadband. We need to look at the sharing of utilities between utility companies, such as BT’s ducts and poles. I know that the Department for Business, Innovation and Skills has been in discussions with business about that. I would like an update on that from the Minister in his winding-up speech. I echo the comments of my hon. Friend the Member for Bracknell (Dr Lee) about wireless satellite broadband. We need to have a patchwork of solutions, and that can be achieved only by doing things locally. That is why I hope that the local enterprise partnership bid in my area for £40 million is taken seriously. It will send just the right signal that rural communities in my area are not forgotten.

17:16

[Caroline Nokes (Romsey and Southampton North) (Con)]

I, too, congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart).

Several Members have mentioned an urban-rural divide. It may surprise people that I want to contribute on this subject given that I come from Romsey and Southampton North. I do not see this as an urban-rural divide. Parts of our cities have very slow broadband speeds. There is also a rural-rural divide. I was contacted shortly after last year’s general election by a constituent who lives in the same village as me. I thought that we were enjoying good broadband speeds, only to be informed that he was suffering from download speeds of less than 2 megabits per second. A couple of weeks later, I visited a business in the village and was astonished to hear the familiar binging and bonging of dial-up, which is still being used in the 21st century. That was literally four or five miles from the end of the M27 and just outside Southampton.

I argue that it is the sheer inconsistency of coverage that causes some of the greatest frustration. Neighbours on different sides of the street get inconsistent coverage. Part of the village in which I live gets its connection from the constituency of my hon. Friend the Member for New Forest East (Dr Lewis), who was here earlier, but those who get it from the Wellow exchange get a much faster service.

The Prime Minister referred to this matter recently and indicated that he regards rural broadband as vital. There are many reasons why it is vital. I would like to highlight the increase in working from home and of flexible working. We have heard about the environmental benefits for people who can access decent download speeds and work comfortably and conveniently from home. There are also educational benefits. I was fortunate to attend the launch of a wonderful new IT suite at Wherwell primary school in the very north of my constituency, which had fantastic facilities. However, during the local election campaign a few weeks later, I encountered a child from that school who was laughing at me for trying to use a smartphone in the village, because it was ridiculous that any grown-up could possibly think that that would ever be possible.

I am disappointed to learn that Britain is only 26th in the world for average connection speeds and that our average speeds are slower than in Romania and Latvia. That is an embarrassment and we must address it urgently. As fuel prices have increased, we have all been contacted by myriad constituents who are concerned about the increase in fuel prices. Many of them want the convenience of being able to work from home and want to do their shopping from home. It is cheaper for people to have Mr Tesco deliver their shopping and pay him a fiver for the privilege than to drive to the local supermarket. In many rural areas, the local supermarket really is not that convenient. Of course, there is also online banking.

I will briefly draw on my experience of working for a small charitable organisation in Hampshire. It was not in rural Hampshire, but in a town. We were keen to deliver more online services to our members and donors, and to those who wished to support the work of the charity. One of our biggest frustrations was that when we wanted to use our banking services, the connection, even in a town, was far too slow. It was very difficult for the website to cope with people’s membership subscriptions.

I am sure the Minister will be relieved to hear that I do not believe the solution lies solely in the hands of the Government. We have to call upon every part of the industry, upon other organisations and upon local government to facilitate what is needed. Hampshire county council has carried out an enormous survey with Ipsos MORI to find out what demand there is for high-speed broadband in the county. Through its bid to Broadband Delivery UK, it is seeking to open up the public services network and co-operate with a wide range of internet service providers, to improve the availability and speed of connection across the county dramatically.

I know that now is the not the time to provide an advertisement to the Minister for the unique selling point of Hampshire’s bid, although some of my colleagues have given such advertisements. Suffice it to say that it is very good, and I hope he will look upon it favourably. Its objectives are straightforward. It brings real hope to my constituents who want nothing more radical than to be able to do their shopping or banking online from home or Skype their grandchildren in Australia. In a 21st century Hampshire village, that really did not ought to be impossible.

17:21

[Anne Marie Morris (Newton Abbot) (Con)]

I am conscious of the time, so I will endeavour to keep my contribution short.

I do not think Ofcom or the Minister can be in any doubt about how passionate we all feel about the advent of superfast broadband. I pay tribute to my hon. Friend the Member for Penrith and The Border (Rory Stewart), as well as to my hon. Friend the Member for Skipton and Ripon (Julian Smith), with whom I work closely on this and a number of other projects. They both have energy about a vision that we all share.

The Government deserve some praise, although they have taken a bit of a beating today, because they have committed £530 million, a not insignificant figure. I am pleased to see that it is not just the Government who are involved, because I understand that the BBC has committed £150 million for four consecutive years. That shows its conviction that superfast broadband is the future.

I wish to follow on from the comments of my hon. Friend the Member for Central Devon (Mel Stride) about the importance of Devon. It is the largest county in the country by size, and 20% of our community live in very poor rural areas. Rural broadband is therefore critical for us. To compound our problem, we have a very weak strategic road and rail infrastructure. The M5 ends at Exeter and our A roads are not great, and the concept of having electrified railway lines any time soon is sadly a dream, not a reality. Our fight is to get diesel rolling stock.

Many people in our communities live in an isolated environment, and we have the highest number of people in receipt of the state old-age pension of any region. For them, communication and access to any form of entertainment is extremely difficult without broadband. Two thirds of our businesses have fewer than five employees and a turnover of less than £250,000, and broadband is crucial for them. Home working and the ability to communicate with clients and customers are key, and that cannot be done effectively without some form of mobile or internet connectivity. As was pointed out earlier, Government compliance, such as VAT returns, increasingly has to be carried out online. If we are really committed to improving the economy in rural areas, that must be a reason for having broadband.

I am pleased that there are two of us in the Chamber supporting the Heart of the South West local enterprise partnership’s bid for the second wave of pilots. It would be nice to think that the weight of numbers might help us to persuade the Minister and others that we have a comprehensive bid that is well supported across Devon and Somerset, and that it will make a huge difference to people living in both counties.

The challenge for the Government is to maximise, dare I say it, the bang they get for their buck. We have to make the best use of our infrastructure to maximise choice. Rural infrastructure is expensive. As my hon. Friend the Member for Central Devon explained, BT provides access through poles and ducts, and Ofcom has said that that must be on fair and reasonable terms. As I understand it, what is being offered at the moment is not entirely in accordance with that. Ofcom is going to take up the cudgels, and I hope it does so sooner rather than later. Otherwise, implementation will be a challenge.

As has also been mentioned, innovative partnerships with other utility companies are clearly important—we should not focus only on what BT and other internet and telecoms providers can offer. We need to think more broadly about what we do. Government can assist with that by simplifying the regulatory regime, particularly on planning.

Earlier, we heard a plea for the Government to consider satellite. I agree, because this debate should be about not only where we are now, but the future. I suspect that one reason the Government have a target of only 2 megabits per second is that the world moves on. By 2015, we could see a very different number. We need research on that, and it would be great if the Government provided tax support by increasing R and D credits—I am pleased with what we are doing on the corporation tax front.

Finally, I support the concept of increasing the requirement in the bid of more than 95% coverage for mobile technology, but could we add a requirement for rural or landmass coverage, rather than a requirement for population coverage? That would help the rural community. Good on the Government! Let us see broadband fly! We can do it!

17:26

[Tessa Munt (Wells) (LD)]

I should like to make just a few points and to speak for the Somerset half of that Somerset and Devon bid, which would make such a fantastic difference. Many hon. Members have made points about farmers, young people and old people, but, in my area, many who have retired to Somerset because it is such a beautiful place can stay in their town centre homes and, using broadband, can access facilities and services such as shopping deliveries.

Rural post offices also benefit from broadband. Businesses use the internet in my towns, and individuals use eBay and Amazon to sell and buy goods. In my post office, there are queues of people who want to send small parcels and envelopes containing things that people have bought, which props up our post office system.

I thank the Minister for meeting me on Monday to discuss broadband in Somerset. I pointed out to him that I am running, with the Administration Committee, an iPad trial. The iPad is fantastic when I am here in London, and completely useless when I am in Somerset, where I cannot access anything because the broadband service is so poor.

Where it works, broadband is the most fantastic thing. One area of my constituency that has a good service is Burnham and Highbridge. Burnham-on-Sea has a website—burnhamonsea.com. Some 7,000 or 8,000 people live in Burnham, but that website gets 15,000 unique visitor hits per day, and 50,000 pages are downloaded every day. That rate goes up during the summer tourist season, which is critical, because 26,000 people are employed in tourism in Somerset alone. They depend on people coming to Somerset for their holidays and knowing what they can do and what facilities they can access.

I thank the Minister for the trouble he has taken to listen to the Somerset and Devon bid, and I hope, as it is bound to do, that it brings success to our counties in business and every other sense, particularly for residents.

17:28

[Ian Lucas (Wrexham) (Lab)]

I congratulate the hon. Member for Penrith and The Border (Rory Stewart) on securing this enjoyable debate, and for putting together a formidable array of talent to present the case for their areas around the UK—we heard a brief intervention earlier from a Member from Scotland. The hon. Gentleman has established himself as an assiduous and powerful advocate of the construction of a viable broadband service because of the nature of his beautiful constituency and other rural constituencies. It was good to hear a Government Member giving high praise in the Chamber to a Mandelson, for which I am sure he is very grateful.

There is, of course, a lot of common ground in this debate. We all believe in the importance of a broadband network. The Countryside Alliance has presented evidence that a broadband network is essential to the viability of a living countryside. Development in communications is a massive opportunity for the countryside, provided that a viable broadband network is constructed.

We all accept that there is a market failure in the broadband sphere. Most accept that two thirds of the country will not be adequately provided for by the market alone and that Government action is needed to remedy that market failure. It is important to talk about some definitions if we are to make progress on the common ground that exists between the political parties. We have to be clear what we are talking about and the terminology that we are using. The first important phrase is “universal broadband”. By this I mean that all should have access to broadband services. The previous Labour Government had a commitment to introduce universal broadband services, up to a speed of 2 megabits by 2012.

Until last week, the Government had assiduously avoided using the word “universal”, as far as I could detect. Instead, they continued to use the formula that their aim was to introduce the best high-speed broadband in Europe by 2015. They avoided defining exactly what that would be. But last week we made some progress, because the Government made it clear—for the first time, as far as I am aware—that their target was to provide universal broadband by 2015. That is a three-year delay in the costed target introduced by the previous Labour Government. If hon. Members get complaints from constituents with no broadband provision, they should blame the Government.

That delay is very bad news, because universal broadband is hugely important. First, it is important to the private sector. Competitive businesses in our modern economy, wherever they are, must have access to the broadband network. Without it, they will be at a substantial competitive disadvantage, and that will be bad news especially for businesses in rural areas.

[Duncan Hames]

I note the hon. Gentleman’s comments about the changed timetable. Will he tell us whether the previous Government, as recently as 12 months ago, were on track to meet that 2012 deadline?

[Ian Lucas]

We were on track to meet that deadline. It was costed, and the £200 million that would have been used to do that would have been taken from the same money that the current Government are using in connection with their broadband commitment. For the outside world—although not for this Government—a year is a very long time. I am not aware of any questioning by the industry of the commitment made by the Labour Government. The position was deliverable, but this Government have decided to put back that universal broadband target by three years.

[Chi Onwurah]

Is it not true to say that we have little or no information on the progress that has been made by this Government towards meeting their unclear and undefined target of the best broadband by 2015?

[Ian Lucas]

Absolutely. The Minister is always very polite in his answers to parliamentary questions, but he is also very good at drafting uninformative replies, something that I worked very hard to achieve when I was a Minister. I was not quite as good at it as he is.

The provision of universal broadband services is also very important to the public sector. Online services are a massive opportunity for government at all levels to provide better services more quickly and more efficiently. However, the Government can move in that direction only if they provide those services to everyone across the country. For example, I understand that the Government intend to move to the compulsory online registration of new companies. As the former responsible Minister, I understand the reasons—costs and efficiency—for this decision, but one can justify such a move only if there is universal broadband provision across the UK. A company with no access to the internet cannot be required by the Government to use it.

If we are to have universal broadband by 2015, what will it cost? Through parliamentary questions, I have established—I did get some information—that the cost of providing universal fibre-to-the-premises provision would be £29 billion, and that more realistically universal fibre-to-the-cabinet provision would cost £5 billion. We agree that there is a market failure and that the Government have sought to address it by setting aside the £530 million by 2015 mentioned several times today. However, we all accept that that is not enough, so we must look to the private sector for the necessary investment to bridge that investment gap.

On definitions, the Government are not just committing themselves to universal broadband; they are committing themselves to the best high-speed broadband in Europe by 2015. It will be helpful if the Minister tells us today what speed he regards as high speed for these purposes. If we are to work together for the benefit of our constituents to achieve that target, we must know what it means.

We know that insufficient public money is available to achieve the Government’s goals by 2015, so let us consider the position for private investment. How is that going? Here, I regret to say, there is a problem that was referred to by a couple of Government Members, including the hon. Member for Newton Abbot (Anne Marie Morris). On 1 April the Minister received correspondence—no coincidence perhaps—in which senior executives of leading communications companies, including Fujitsu, Virgin Media, TalkTalk, Geo and Vtesse Networks, wrote that “urgent intervention” was needed to require BT to revise the pricing for the use of its infrastructure. The companies also stated that without such intervention the Broadband Delivery UK process risked a lack of vigorous competition, and as a result would fail to deliver the investment, quality, speed of roll-out, innovation and value for money that the industry was capable of delivering, and which taxpayers deserved. That is a major problem for the necessary private investment.

The communications network under Labour was extremely competitive. For example, in the past three years, competition has seen the cost of mobile broadband fall from £50 per gigabyte to less than £10 per gigabyte.

[Alun Cairns]

If the network was so competitive under the former Administration, why are we ranked only 26th in the world for average broadband speed?

[Ian Lucas]

The previous Government made massive advances in the provision of broadband services and internet services over a very long period. I am proud of our record. Had the Government stuck to the same targets, we would have achieved much more progress than has been achieved to date. I now hear from providers, and the Minister has been told in correspondence from them that without urgent intervention there will be a lack of vigorous competition in the marketplace, so what action is he taking in response to these representations?

I wish to raise one more concern with the Minister. It is now clear that responsibility for the delivery of broadband services in particular geographical areas in England is to be the responsibility of local authorities, which might create a patchwork of provision across England. Different local authorities will attach different priorities to the advancement of the network. We heard from the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) about the issues affecting Lancashire. I was pleased to hear that the tendering process in the North Yorkshire pilot area seems to have begun, even though the pilots were announced as long ago as last October. There are particular issues when it comes to the provision of services and tender documents by local authorities. What steps will the Minister take to ensure that each local authority makes the progress needed to achieve the targets he has outlined?

I was interested to hear that Somerset and Devon are working together on their pilot project in the south-west. One of the drivers for that is the superior provision in Cornwall, which has been assisted by European funding that is unavailable in Devon. Hon. Members from Wales may be interested to know that the provision of broadband in Wales and Scotland has de facto—if not de jure—been assigned to the Welsh Assembly Government and the Scottish Government respectively. Responsibility for delivering services in Wales and Scotland will essentially be dealt with at the Assembly or Scottish Parliament level. A patchwork is already developing across the UK. It is important not to lose sight of the need for a national network. We do not need a lot of small “railways” running in individual areas without their being linked together. Although having small, big society projects set up networks is appealing, there is a danger of the networks not working effectively together. There are tensions between the small and larger projects. It is important that we maintain a competitive network.

I am sorry that I have not been able to deal with the numerous contributions made today. However, I am sure that the Minister has heard the strength of feeling from Government and Opposition Members, and that he will use the video in his negotiations with the Treasury, because there will come a time when some of the bids being made now will be turned down, and that is when government starts to get difficult. Saying yes is easy; saying no is always more challenging.

17:43

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

I am grateful for the chance to respond to this debate, which was called on behalf of the Backbench Business Committee by my hon. Friend the Member for Penrith and The Border (Rory Stewart). He has been showered with enough praise in this debate, but let me add to the oleaginous tone with which we all approach him. For one so young and so new to this House, his ability to gauge the issues that concern the House is second to none. His relentless focus on mobile broadband is also severely disrupting my life. I have gone up to Penrith and The Border for a superfast broadband summit that even had members of the United States Administration attending. This is the second broadband debate that my hon. Friend has called, forcing me—I know that hon. Members will share my disappointment at this—to decline my invitation to the European Commission’s Culture Council in Brussels today.

I do not necessarily want to respond to every speech today; suffice to say that almost 20 Back Benchers contributed to this debate, all very effectively, raising issues and concerns specific to their constituencies. I thought that the shrewdest of all was my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), who pointed out that the lack of superfast mobile broadband was preventing him from hiring babysitters.

My right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport announced in his speech at the national digital conference last week that our ambition was to see superfast broadband coverage of 90% of the population in all areas of the country. To respond to the excellent speech by the hon. Member for Wrexham (Ian Lucas), I must say that that is why last week I announced my ambition of universal superfast broadband in this country, starting with the clear aim of making sure that 90% of the UK can get at least 25 megabits per second by 2015. I have now thrown down a bone for the hon. Gentleman, so that he can table a series of parliamentary questions to elicit further details on that. In defence of the Government’s position, we mentioned our commitment to the universal service of 2 megabits by 2015 in our excellent publication “Britain’s superfast broadband future”, which was published in December. Specifically, it was mentioned in paragraph 8.

When my hon. Friend the Member for Penrith and The Border started speaking, it felt like an Oscar acceptance speech because he had so many people to thank. The only people he did not thank were his family, which I was surprised about. I am pleased to see that his own team of officials is watching from the Gallery. I know that the whole House thanks them for their hard work. It will come as no surprise to learn that one of them is a constituent of mine, which is why she is so talented and able to undertake this very complicated work.

[Ian Mearns (Gateshead) (Lab)]

The Minister mentioned superfast broadband and 2 megabits. What is the relationship between 2 megabits and superfast broadband?

[Mr Vaizey]

The reference to 2 megabits relates to the universal commitment. The reference to superfast broadband relates to providing as many as 90% of the population with superfast broadband by 2015.

[Alun Cairns]

Will the Minister give way?

[Mr Vaizey]

If the hon. Lady will wait for one second, I want to use this opportunity—[Laughter.] I want to echo my hon. Friend the Member for Penrith and The Border—it is quite clear that most hon. Members want to be like him—by thanking my own officials, Mark Swarbrick and Simon Towler, who have done an astonishing amount of work on this issue. Such is their dedication that they even took the photographs for the superfast broadband document that we published in December.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) will be interested to hear that I want to pay tribute not only to the work of Broadband Delivery UK, which was set up by the previous Government and comprises an excellent team of dedicated officials from the private and public sectors, but to the telecoms regulator, Ofcom. I know that we will be discussing the auction in a matter of moments. Ofcom is very ably led by Ed Richards, who also has a fine team. I have embarrassed the hon. Lady on many occasions, but the fact that she could say, “I’m from Ofcom” was a stamp of great quality, and she now brings adornment to the House. Anyway, I seem to have persuaded her not to intervene on me.

On the 25-megabit target, our target of having the best superfast broadband in Europe is of course dependent on a range of measures, including choice, coverage, speed and take-up. Competition is also very important. It is all very well for an hon. Member to mention that Uzbekistan has better coverage than the UK—that sounds like a bit of a slight to Uzbekistan, although I am sure that that was unintended—but it is worth remembering that Uzbekistan has a population of 5 million people, and effectively one mobile broadband provider. If we want to encourage competition, which will encourage choice, innovation and low cost, we will also have to acknowledge that the Government cannot direct and demand how broadband is rolled out.

The hon. Member for Wrexham pointed out that we expect two thirds of the country to be covered by private sector investment, with BT and Virgin clearly in the lead, along with some small network operators. As so many hon. Members were keen to praise far-flung places all over the world for their broadband, let me be the champion of British business and British broadband providers. Every three months, BT puts down a fibre network equivalent to that of Singapore. BT, a British company, is rolling out broadband at twice the pace of Deutsche Telekom, twice the pace of AT&T and twice the pace of Verizon. That is something that we should be very proud of. BT recently announced that it expects to offer an 80 megabit service next year, while Virgin already offers a 100 megabit service. I do not want to sound too patriotic because we also welcome the intervention of Fujitsu, which has plans to bring fibre connections to 5 million rural homes.

The key to this debate is supporting those areas where the market will not deliver. We have already announced four pilot areas, including the one represented by my hon. Friend the Member for Penrith and The Border—it was more than life was worth not to have his constituency as one of the pilot areas, although it was, of course, I emphasise, an independent decision—along with North Yorkshire, Herefordshire and the highlands and islands. [Interruption.] Well, we all know about the discussion of Herefordshire and Wales that took place in the House a few months ago.

We will announce the next wave of pilots next week. As the hon. Member for Wrexham pointed out, this is indeed where government gets difficult, because we will have to say no to a few. Let me offer a crumb of comfort to those who may get bad news next week. From now on, we shall be working on a first-come, first-served basis. We will not announce a third and fourth wave; any local authority whose bid is not accepted can sit down with Broadband Delivery UK, work through the bid to find out where the gaps are and then come forward again when it is ready. It will be a rolling process. We also recently announced the creation of a rural community broadband fund, which is expected to be worth up to an additional £20 million—above and beyond the £530 million we have made available.

I am conscious of time and I am anxious to talk about mobile voice and mobile broadband. I understand the issue. In rural Oxfordshire, in the village close to Wantage where I live, I have to stand in the middle of the road to get mobile coverage. When I was candidate before the 2005 election, simply getting my constituents connected to the internet was a high priority for me. I pay tribute to the work of community broadband groups, which many hon. Members have mentioned, as their ability to galvanise enthusiasm and put forward solutions is important, encouraging other operators to take an interest and see that provision of rural broadband can be profitable.

Broadband Delivery UK is taking a technologically neutral approach to solutions; mobile broadband is a potential solution for hard-to-reach areas. We want to see partnerships between fixed, mobile, wireless and satellite operators to compete for the available funds. I emphasise that there is no one-size-fits-all solution. A couple of my hon. Friends mentioned the benefits of satellite technology. I am lucky enough to have the National Space Centre in my constituency, so I would be more than happy to see a satellite solution. We have to be realistic, however, about what satellites can deliver. They will be a complementary technology, but they certainly do not provide a one-size-fits-all solution.

The key issue—and, I think, the key reason why my hon. Friend the Member for Penrith and The Border called this debate—is the auction that is about to take place for the 800 MHz and 2.6 GHz spectrum, and the coverage obligations put forward in Ofcom’s initial outline of how the auction will take place. I remind hon. Members that this is being consulted on; it is not fixed in stone. This debate will be important not just for the Treasury to watch, but for Ofcom, which will give serious consideration to any representations, along with appropriate evidence, on whether to increase the coverage obligation attached to the 800 MHz licence. It is important that robust evidence is made available.

Let me make it absolutely clear to hon. Members that the auctioning of spectrum is not a money-raising exercise. In fact, under European rules, it is not appropriate to auction spectrum simply to raise the maximum revenue possible. Ofcom has to take into account a whole range of different factors, including the investment capacity of operators. It must also undertake a cost-benefit analysis of whether the coverage obligations are inappropriately expensive.

It is important that Ofcom’s consultation is seen to be open, transparent and robust. One thing that I have learned in government is that the constituency of mobile and telecoms operators with which I deal comprises not only some of the most fantastic British companies, but some of the most litigious. If my hon. Friend the Member for Penrith and The Border could have done any additional work in marshalling his forces for this evening’s debate, it would have involved conveying to the chief executive of each company, in no uncertain terms, his and his colleagues’ view that we must get on with the auction, and that any attempt to disrupt it through litigation could set back the auction and therefore the roll-out of spectrum.

I have deliberately avoided being partisan in my speech, but I must express disappointment about the interventionist approach that I consider the last Government to have taken in regard to the spectrum auction. I believe that if they had simply left it to Ofcom, we would have reached the end of the process before the present Government had even come to office.

We should bear in mind the changes that are taking place in the UK mobile market and in technology. I had the privilege of visiting Alcatel-Lucent recently to observe the technology that it is developing in Swindon. It is good to see inward investment taking place there. Technologies such as femtocells—which, essentially, provide small base stations in the home or office—will radically improve indoor coverage, and will give users better coverage.

The hon. Member for Wrexham made a valid point in his critique of the Government’s policy in regard to local authority bids. I think that local authorities are best placed to lead the bids, but it is important to remember that Broadband Delivery UK sits behind the bidding process,. It is able to advise local authorities on procurement, and assesses bids partly on the basis of the capacity of a local authority to deliver in terms of its personnel and expertise. The more such bids are made and the more individual local authorities engage in procurement exercises, the more other local authorities will have an opportunity to learn from the process.

Let me end by reminding the House that Rome was not built in a day. We must bear in mind the capacity of the private operators and companies that will deliver superfast broadband. I believe that we have adequate sums to support it, but I take the concerns expressed by Members on both sides of the House very seriously. We are working as hard as we can, given the constraints within which we operate, to deliver good superfast broadband to as many people as possible by 2015.

17:58

[Rory Stewart]

I thank all Members who took part in the debate. It is extraordinary that on a Thursday afternoon 20 Members should speak on a motion tabled by 100. I also echo the thanks expressed to Louis Mosley.

The fibre issue remains central to the debate, and I am sorry that I did not say more about it. The connection of fibre through backhaul to mobile telephone masts needs to be addressed. However, it is on mobile broadband that we should really be focusing because of the consultation this evening.

Extraordinary changes have been made. By 2015, 7.1 billion people will have mobile telephones. That is more than the current population of the world. Whatever we do, whether it involves £215 million, 1,500 masts or a 98% coverage obligation, let us use the debate to pass the message to Ofcom that it must extend the coverage obligation.

Question put and agreed to.

Resolved,

That this House recognises that rural businesses and rural communities across the UK are isolated and undermined by slow broadband and the lack of mobile voice and mobile broadband coverage; urges Ofcom to increase the coverage obligation attached to the 800MHz spectrum licence to 98 per cent.; and calls upon the Government to fulfil its commitment to build both the best superfast broadband network in Europe and provide everyone in the UK with a minimum of 2 Mbps by 2015.

Business without Debate

Thursday 19th May 2011 Commons Chamber

Business of the House

Ordered,

That, at the sitting on Wednesday 8 June, notwithstanding paragraph (2)(c)(i) of Standing Order No. 14 (Arrangement of public business), opposition business may be proceeded with for three hours; proceedings shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Mr Dunne.)

East Coast Main Line Call Centre

Thursday 19th May 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Dunne.)

17:59

[Ian Mearns (Gateshead) (Lab)]

It is timely that on the day Sir Roy McNulty’s report on why Britain’s railways cost more than other European railways is published, and on the day he recommends yet further fragmentation of our rail network and fails to consider seriously the benefits of reintegrating the railways under public ownership or why billions of pounds are drained from the industry in profits to the train operating companies, we have this opportunity to consider East Coast’s decision to threaten the future of 180 jobs on Tyneside by transferring an important customer service part of its operation to Mumbai in India.

As Members will be aware, the east coast main line service is wholly owned by Directly Operated Railways Ltd, trading under the name East Coast. DOR Ltd is, in turn, wholly owned by Her Majesty’s Government in the guise of the Secretary of State for Transport. I know the Minister will argue that it is not appropriate for the Government to seek to intervene in operational matters of this type that are properly for East Coast to address, but I am a little incredulous about that.

The Minister will probably argue that as the east coast main line service is owned by DOR Ltd and not the Government, the Government have no right to intervene. However, I listened very carefully to the Secretary of State’s statement today, during which he said: “The Government want Britain’s railways to continue to prosper and have demonstrated by their actions their commitment to them. Despite the difficult fiscal climate, we have allocated funding to complete Crossrail and Thameslink, and to support the upgrade of the London underground. We have announced electrification on the great western main line and in north-west England. We have resumed the intercity express programme to improve reliability, comfort and journey times on the east coast and Great Western main lines.” The Secretary of State therefore plainly takes credit for investment in the railways that, we hope, will improve the service, but he will probably in due course deny any responsibility for, influence over, or right to interfere in the affairs of, East Coast and its decision to close a call centre in Tyneside. The use of the term “we” in the statement followed by a list of all the actions taken proves that the Government can intervene. That leads me to raise the issue of Ministers taking the practice of using smoke and mirrors to evade responsibility to new heights.

The purpose of this debate is absolutely clear. I want to ensure that the Secretary for State cannot evade responsibility on this issue. I want to defend 180 local jobs in Tyneside, where unemployment is already well above national averages. I want to highlight the ridiculous scenario whereby a state-owned company—supported by millions of pounds of taxpayer subsidy—is pursuing a policy of exporting jobs to exploit cheaper labour market conditions abroad and throwing local people on to the dole in an unemployment black spot. I want to highlight the false economy savings for both the railway and the United Kingdom Exchequer. I want to highlight that this is simply the latest train franchise cut, in order to make it more attractive to potential bidders when it is put up for re-privatisation. Finally, I want to highlight the context of Sir Roy McNulty’s report and the east coast main line’s place in the chaotic structure of the public and privatised railways.

East Coast intends, via a re-tendering process, to move the work currently undertaken at the customer contact centre in Baron house in Newcastle upon Tyne away from the north-east to Mumbai in India, Plymouth and Wolverhampton—but mostly to Mumbai in India. The following jobs are currently performed at Baron house: customer contact centre and associated services; inquiry and booking services for telesales, group travel, assisted travel and business travel; ticket fulfilment; web support; and customer relations activities. This action will culminate in the loss of 180 jobs on Tyneside, which will be a bitter blow for the people in a region that is already reeling from the impact of this Government’s economic policy, where between 28% and 32% of the work force depend on the public sector for employment, and which is already braced for the disproportionate impact of the Government cuts, especially in local authority expenditure. The work will now be undertaken outside the north-east of England and a high proportion of it will be undertaken outside the UK, in Mumbai.

The following operations will now take place in the following locations: group and assisted travel and ticket fulfilment will go to Plymouth; public telesales will go to Mumbai; web support and ticket fulfilment will go to Wolverhampton; business travel services will cease as a telephone service and will be online only, supported in Wolverhampton; East Coast customer relations will go to Intelenet in Plymouth; delay repay, processing only, will go to Intelenet in Mumbai; and lost property will go to Plymouth.

[Ian Lavery (Wansbeck) (Lab)]

Does my hon. Friend remember the Prime Minister suggesting, before the election, that the north-east would be hit hardest and first? Does my hon. Friend agree that this is just another case—a shining example—of an attack on decent hard-working people in the north-east and that that should not be tolerated any more?

[Ian Mearns]

I am grateful to my hon. Friend for raising that issue. Members from the north-east of England have mentioned on numerous occasions how the cuts imposed by the Department for Communities and Local Government in particular have disproportionately hit the north-east of England. Councils in our region have lost four times the measure of public finance from the central Government grant than those in the south-east outside London. The impact is disproportionate on an area that is already struggling in this economic climate.

Staff have been advised that they will lose the benefits that would normally accrue to people working in the rail industry and that their rail travel facilities will be retained only until 31 December. The transfer of work is being phased and will begin on American Independence day, 4 July, with the last shift work to be done on 23 July. Over those three weeks, the work will gradually be moved from Baron house in Newcastle.

Surely it is totally unacceptable for a state-owned company such as East Coast, supported by taxpayers’ money, to export jobs abroad.

[Mr Kevan Jones (North Durham) (Lab)]

My hon. Friend says that the company is supported by taxpayers, but does he agree that it has also been supported under GNER and now as a state-owned company by many people in the north-east who have loyally given their custom to the railway? Does he think that because of these moves they should perhaps consider alternative forms of travel?

[Ian Mearns]

I am grateful to my hon. Friend for that comment. I have been in discussions with people from East Coast about a range of problems on the east coast main line service. Normally, by this time on a Thursday evening, we are travelling on the east coast main line on our way home. We are very familiar with the levels of service and the investment—

[Mr Jones]

And with how bad it’s got.

[Ian Mearns]

Exactly—and with how bad it has become.

Next week will see the implementation of a new timetable, but it will also see the downgrading of a number of services that East Coast has been supporting. People in the north-east are asking why we should support East Coast when there might well be better alternatives for travel across the country. That is not good from an environmental perspective.

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

I thank my hon. Friend for giving way and for obtaining this Adjournment debate on an important issue. The centre at Baron house is in my constituency and it is true that the people of the north-east have always given significant support to the east coast rail service. Has there been any criticism of the work at Baron house? Is it not the case that it has always been performed well and that its performance is not the reason for moving the contract?

[Ian Mearns]

My hon. Friend is absolutely right. The call centre at Baron house has provided an excellent level of customer service. Nationally, people regard the north-eastern accent as reliable—

[Mr Jones]

Trustworthy, too.

[Ian Mearns]

The accent is regarded as reliable and trustworthy when it comes to providing call centre services, and that is why the north-east has become a centre for call centre operations. Conversely, it is sad to reflect that unfortunately British customers are averse to call centres based offshore.

[Grahame M. Morris (Easington) (Lab)]

I, too, compliment my hon. Friend on securing a debate on this issue, which is important to the north-east and has some national significance. In view of today’s statement on the McNulty report and the arguments being made by Ministers about needing to reduce the public subsidy to the rail industry, is this not another example of false economy if the method of reducing the subsidy is to transfer overseas UK jobs that support the economy, particularly in areas such as the north-east?

[Ian Mearns]

My hon. Friend makes a very good point. At a time when the Government claim that supporting growth in the UK economy is their priority, surely exporting good quality jobs from the north-east to India cannot be defended. There is also the issue of the public’s perception of the level of service they will get as a result.

The Secretary of State denies responsibility for this while passing on millions in public subsidy. The company received £40 million in direct funding from the taxpayer in the nine months to 31 March 2010 by way of a working capital loan facility agreed with the Secretary of State. Given the investment from the UK taxpayer, surely there must be a moral obligation for a state-owned company to retain jobs in the UK. There should at least be some consideration given to those jobs being taken in-house by the operator. That work is not going to go away. It is a much-needed, public-facing aspect of the train service operation and there is no evidence that the transfer will improve the service afforded to the public.

The Government’s stance could be regarded as hypocritical. They declare their commitment to growth and rebalancing the economy, and day after day they preach to private business about the need to help the economy to recover by creating new jobs, but in the case of East Coast—a company that we fully own—they sit back and permit the export of jobs from a company that belongs to the taxpayer. Let me be clear: my primary concern is for the people whose lives are affected by this, but equally important is the impact on industry of exporting real jobs, particularly customer contact jobs, to another country, which represents a retrograde step away from an integrated transport policy. Despite the McNulty report’s failure seriously to consider the benefits of reintegrating the railways under public ownership, many in the House are convinced that the evidence demonstrates that the reason why railways in Europe are cheaper for the taxpayer and the fare payer is that on the whole they are in public ownership and are less fragmented.

There is a wealth of evidence to show that overseas call centres are not the answer for companies that are looking to cut costs. In May 2004, a Department of Trade and Industry study found that work force costs that had not been fully factored into business evaluations of offshoring included the additional costs of employing local law specialists, consultants and accountants, as well as the cost of redundancies, redeployment and reskilling displaced UK workers. It revealed that staff turnover at Indian call centres in particular was about 25% compared with about 15% in the UK, with an average job tenure of about 12 months compared with three years in the UK. Higher attrition rates surely cannot be beneficial to good-quality customer service.

In July 2009, there was a huge outcry when the Association of Train Operating Companies moved 200 National Rail inquiries jobs from the UK to India. Subsequently, it was widely believed that the quality of service to the British travelling public had decreased. At the same time, BT decided to move 2,000 call-centre jobs back from India to the UK as part of a long-term strategy to cut costs by £1 billion and to reduce dependency on third parties. In 2005, the Select Committee on Trade and Industry reported that customer satisfaction surveys found that UK consumers did not like businesses they believed had offshored their services, preferring to deal with call centres in the UK.

In subcontracting jobs abroad, the company has made a narrow, short-term financial decision. No account has been taken of the impact that the loss of skills and jobs will have on the north-east region, its community and the local economy. Nor has any account been taken of the obvious cost to the UK in benefits of whose who will be made redundant as a result or of the reduction in tax revenue for the Exchequer. The McNulty report states that value for money is not just about pounds and pence, but about how the railway realises its wider benefits to society. Through fragmentation and privatisation, those benefits will be lost.

The industry’s most valuable asset is its work force. These redundancies mark a wasteful loss of knowledge and skills that have been honed through years of experience. They damage the shared commitment to the overall service that a proper public service ethos can bring. They impose a hidden cost of increased interfaces in the industry, blur transparency and accountability and de-clarify lines of responsibility, which would be the hallmark of a more efficient railway.

The blow to the economy of the north-east cannot be overestimated. The loss of these jobs to the region is yet another blow to the local economy and to our local communities. Tyneside already suffers a level of unemployment above the national average. The growth in call centre work has been an important factor in providing new employment in the north-east after the decline of manufacturing and, in particular, heavy industry, which arguably was caused mainly by a previous Government of the same nature.

As we all know, the Government are determined to reduce workers’ rights in the UK. They call it removing red tape and are strongly tempted to try to remove the rights of workers through Transfer of Undertakings (Protection of Employment) Regulations. However, TUPE has been rendered irrelevant in this situation. A worker having the right to follow their work to the new company is simply not a realistic or viable option for those at Baron house, who now face the complete closure of their workplace, with a move for a few possibly to Plymouth or the bulk to India of course being impractical.

The awarding of this customer contact centre contract to a company with operations in Mumbai should not be seen in isolation. It is the next stage in trying to make the company more attractive to potential bidders in preparation for the eventual re-privatisation of the franchise in 2013. Already this week we have witnessed the end of a buffet car service on the east coast main line and the direct service from London to Glasgow has already been greatly reduced. Clearly the aim of the game is not customer service, or even value for money.

Despite the overwhelming social, environmental and economic benefits of retaining services from London King’s Cross to Glasgow, the direct services have been dramatically scaled back from 13 trains a day to just two, one in each direction—the 6.50 am service from Glasgow to King’s Cross and the 3 pm service heading in the opposite direction.

In the context of the McNulty report, clearly the east coast main line has a troubled history. I will not go into that now, but it is important that we think about the Government’s responsibility to manage that franchise. They do have a responsibility and they can change this decision.

18:17

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I congratulate the hon. Member for Gateshead (Ian Mearns) on securing the debate and on his speech. I completely understand the concerns of those working at the Baron house call centre. It is clear that job losses are a very harsh blow to the people concerned. That is one of the reasons why the coalition Government are working so hard to try to create the right conditions for growth and the creation of new jobs.

[Mr Kevan Jones]

In the north-east?

[Mrs Villiers]

Absolutely, in the north-east and right across the country.

Before responding to the hon. Member’s questions, I must first clarify and reiterate the relationship between the Government and the east coast main line operator. East Coast Main Line Ltd is wholly owned by Directly Operated Railways Ltd, which is, as he pointed out, owned by the Government. East Coast and DOR are companies registered under the Companies Act and operate in accordance with their own articles of association and governance. This provides a framework for the operation of the franchise as a free-standing entity in readiness for the return of the franchise to the private sector, a return that was envisaged by the previous Government as well as the current one.

[Grahame M. Morris]

I am slightly perplexed by that explanation and tempted to think of the situation with the banks. The Chancellor and the Prime Minister have told us that influence is being exerted on the state-owned banks to ensure that they lend to small and medium-sized enterprises. Is the Minister suggesting that such influence cannot be applied on this company with regard to jobs?

[Mrs Villiers]

I will explain the relationship between East Coast and the Secretary of State. The aim is for that relationship to replicate the arrangements for franchises elsewhere on the network in order to ensure that the principles of private sector operation are embraced and maintained. The reason for that approach is so that the Secretary of State is able to protect the value of the franchise and the taxpayer gets value for money when the franchise returns to the private sector.

If the Department or my right hon. Friend the Secretary of State were to start intervening in the way the operator runs East Coast, for example by overturning decisions based on commercial considerations, they might well have to answer for their decisions in front of the Public Accounts Committee. I am afraid that we do not believe it a viable option to intervene on the basis of political or non-commercial considerations, even if the Secretary of State were minded to do so.

[Mr Kevan Jones]

On the threat that the Public Accounts Committee is going to question what the Minister does, may I just say as a former Minister that it can question anything a Minister does? So, that argument is a complete nonsense.

[Mrs Villiers]

The Secretary of State is under a duty to safeguard the assets vested in the Department for Transport. The East Coast operation happens to be one of those assets, so it would be irresponsible to intervene and overturn the operator’s commercial decisions.

[Chi Onwurah]

I share the consternation and concern of my hon. Friend the Member for North Durham (Mr Jones) at the approach that the Minister has outlined. East Coast clearly does not have shareholders, as the other franchises do, but a shareholder could and, we hope, would respond to public pressure and outrage if decisions were made that went so against corporate responsibility, so it is only just that the Secretary of State should play a similar role.

[Mrs Villiers]

As I have made clear, the coalition Government’s adopted approach, which the previous Labour Government espoused, is that the franchise should be operated on a commercial basis by East Coast Ltd. It should not be the subject of political direction from the Secretary of State.

[Grahame M. Morris]

That is a crucial point if we are arguing about commercial decisions. As my hon. Friend the Member for Gateshead (Ian Mearns) said in an excellent speech, is there not a weight of evidence from banks, insurance companies and various private sector companies that overseas call centres are becoming less and less popular, including with customers, and that therefore any move would damage the potential to sell the franchise to the private sector? Is there not an argument that it would be beneficial to the future sale of the company to keep the call centre at least in the UK, but certainly in the north-east, where it is?

[Mrs Villiers]

The people best placed to make the decision about what is best for the East Coast operation are the specialist practitioners who run East Coast Ltd, not Ministers, not Members. Those practitioners are the best people to make the best decision about what is in the interests of fare payers and taxpayers. East Coast is confident that the new arrangements will deliver better services for passengers and far better value for money.

[Mr Kevan Jones]

Will the Minister give way?

[Mrs Villiers]

As I will outline, should I get the opportunity, the options were fully explored in relation to continuing the relationship between the Baron house call centre and the East Coast operation, but it was found not to be viable in terms of value for money. If East Coast were to ignore value-for-money considerations, not only would the taxpayer suffer, but the fare payer would as well.

[Mr Jones]

Has the right hon. Lady, as a Minister, looked at the case in detail, taking into account not only the value for money for East Coast, but the cost to the taxpayer in terms of redundancy payments directly from the company and the unemployment benefit that will have to be paid in the north-east of England? Has she actually looked at the case in detail?

[Mrs Villiers]

I can assure the hon. Gentleman that East Coast has looked in detail at the viable option for the operation of the franchise.

[Mr Jones]

But have you?

[Mrs Villiers]

I think that we have covered the issue with some clarity.

[Ian Mearns]

The Minister is saying that the people best placed to make those decisions are the people in charge of the commercial considerations at East Coast—the very people who have overseen the running-down of the service and the provision of a very poor service along the east coast main line.

[Mrs Villiers]

Of course I am well aware of the performance issues on the east coast route at the moment. However, I draw the hon. Gentleman’s attention to the improving performance of the train operator. The bulk of the problems that are currently being experienced are the result of problems with the infrastructure, over which East Coast has no control. I hope that in future, with the McNulty-style reforms, we will see shared incentives and improved performance from Network Rail. It is a mistake for the hon. Gentleman to blame those running the East Coast operation for the current performance problems. They bear a share of the responsibility, but the bulk of it, I am afraid, is Network Rail’s.

Turning to the facts of the case, National Express Services Ltd, or NXSL, was providing call centre services to National Express East Coast—NXEC—before its franchise terminated in 2009. NXSL is a separate commercial entity from NXEC and therefore was not taken over by Directly Operated Railways—DOR—at the handover. To ensure business continuity, contact centre services continued to be provided from Baron house to East Coast Ltd on a temporary basis, but two major problems stood in the way of this arrangement continuing on a longer term basis: first, the cost base of the Newcastle call centre; and secondly, the fact that telesales volumes have been falling rapidly across the rail network as customers switch to internet buying.

[Ian Lavery]

rose—

[Mrs Villiers]

I am going to continue for a moment.

In 2006, 11% of East Coast ticket sales were made over the telephone—today, that figure has fallen to just 1.9%—and 50% of East Coast advance ticket sales are now made via the internet.

Following the failure of the NXEC franchise, the services provided by the customer contact centre were reviewed by East Coast and by National Express. That review concluded that it was not commercially viable for the call centre to continue to provide telesales services to the new east coast operator.

[Ian Lavery]

Will the Minister give way?

[Mrs Villiers]

No, I have been very generous.

Greater flexibility was sought to enable a better response to sudden peaks in demand for call centre services—for example, as occurred over the winter. A priority for East Coast Ltd was to ensure a stable future for its contact centre services. Due diligence was conducted to establish if it was feasible for DOR to purchase NXSL and the contact centre and operate it as a subsidiary. However, this proposition was not viable because of the significant liabilities associated with the call centre. A working capital injection of approximately £2 million would have been required, plus further investment to turn around a loss-making business.

East Coast worked with National Express to see whether the Newcastle operation could be sold to a third-party expert in call centre services. Bids were received, but they faced the same purchase problems identified by East Coast and fell through when it proved impossible to agree a price. East Coast also considered whether some of the services could be provided in-house, but it is not a telephone contact centre specialist, and it concluded that it did not have the capacity or expertise to provide in-house services to the high standards that its customers wanted and that it was possible to get from a third-party supplier.

Having exhausted all possible options, East Coast concluded that the only viable way forward was to seek a new specialist supplier to provide call centre services. In parallel with National Express’s efforts to secure a third-party purchaser, East Coast initiated an Official Journal of the European Union procurement process to invite bidders to provide contact centre services. The legal requirements of that process meant that East Coast was not permitted to specify the location from which these services were to be provided. The Utilities Contracts Regulations 2006 prevent this unless a particular location is essential for the provision of the service. As the hon. Gentleman said, the outcome of the process was a contract with Intelenet UK for public telesales, group and assisted travel, ticket fulfilment and customer relations, and a further contract with Atos Origin for web support and web ticket fulfilment.

I appreciate that this process has a downside and is a real blow for those working at the National Express call centre, but there is an upside for passengers. I am advised that East Coast believes that the new contract—

18:30

House adjourned without Question put (Standing Order No. 9(7)).