House of Commons

Thursday 9th June 2011 Commons Chamber

Thursday 9 June 2011

The House met at half-past Ten o’clock

Prayers

Thursday 9th June 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 9th June 2011 Commons Chamber

The Secretary of State was asked—

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

1. What steps he plans to take to encourage young people to take up careers in engineering and manufacturing.

[Gordon Birtwistle (Burnley) (LD)]

8. What steps he plans to take to encourage young people to take up careers in engineering and manufacturing.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

We are funding STEMNET, a programme that encourages young people to look at the possibilities offered by science, technology, engineering and mathematics—STEM—study and employment; we are providing a £180 million package that will see 50,000 new higher apprenticeships in sectors including STEM-related industries; and, of course, the main incentive is good manufacturing jobs, which is why I welcome the announcements yesterday and today from Nissan and BMW of large new investments in British manufacturing industry.

[Simon Hughes]

I obviously welcome my right hon. Friend’s interest in both areas and the interest of organisations such as Engineering UK, which has a fantastic route map on its website, showing exactly what one has to do to get from school into engineering. May I encourage Ministers, however, to work with the Department for Education to ensure that, as part of the engagement between employers and schools, we also have one-to-one and face-to-face careers advice for school leavers, so that they receive personalised support in the choices that they make?

[Vince Cable]

Yes, my colleague is absolutely right. Indeed, I was at the Royal Academy of Engineering during the week, talking about how we strengthen that interface between education and the engineering industry, and as regards the careers service my colleague the Minister for Further Education, Skills and Lifelong Learning has already written to schools, reminding them of their statutory responsibilities under the new careers service as it develops.

[Gordon Birtwistle]

Does the Secretary of State agree that careers advice should start at age 12, be delivered by experienced professional and independent advisers, and be available throughout every year of education?

[Vince Cable]

Again, my colleague is absolutely right. The careers service is fundamentally important. My Department and, in particular, my colleague the Minister for Further Education, Skills and Lifelong Learning are talking to careers professionals about how to roll out a properly accredited system of careers advice and, indeed, about co-locating careers advice with the Department for Work and Pensions and Jobcentre Plus in order to ensure that the service is properly integrated.

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

Does the Secretary of State agree that Members should set an example to young people with an interest in manufacturing, and will he encourage all Members from all parts to join the campaign Made by Britain, whereby we find innovative, imaginative and new products in every constituency in the country and put them in a virtual Crystal Palace to show that we can still do manufacturing in this country?

[Vince Cable]

The hon. Gentleman has already described his scheme to me, and it sounds an exciting project. I have identified several potential candidates in my constituency, and it sits alongside many other very good initiatives that are taking place, including for example the engineering prize, which is being launched with the support of leading UK companies.

[Ian Lucas (Wrexham) (Lab)]

I join the Secretary of State in welcoming the tremendous news this week of the excellent investment from BMW Mini and Nissan. That of course builds on the initiatives of the Automotive Council, which has been so successful and was set up by the previous Labour Government. Also set up by the previous Labour Government was Manufacturing Insight, an organisation dedicated to bringing young people into engineering and manufacturing, which this Government have scrapped unfortunately. Why did the Secretary of State make that decision?

[Vince Cable]

I am not sure I should take lectures on manufacturing industry from a representative of the party that presided over the biggest decline in manufacturing of any major country, but none the less the hon. Gentleman is right that there are some good legacies. One of them is the Automotive Council, which works extremely well and contributes very positively to the supply chain. I welcome that.

[David T. C. Davies (Monmouth) (Con)]

2. What steps he is taking to reduce the burden of administration on employers offering to take on apprentices.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

George Sand said:

“Simplicity is the most difficult thing to secure in this world”.

Nevertheless we are working with employers and their representatives to challenge the requirements and processes imposed on employers taking on apprentices. We have identified a number of areas where we will streamline or remove unnecessary bureaucratic processes, demonstrating that the Government are absolutely committed to beating bureaucracy and to breaking down barriers wherever we find them.

[David T. C. Davies]

I thank the Minister very much for that. Does he agree that, to many people, high-quality vocational courses will offer a far better route to gainful employment than a meaningless degree somewhere?

[Mr Hayes]

For too long we have assumed that the only route to accomplishment is through academic prowess. I believe that practical, technical and vocational competence not only serves economic need, but instils the purposeful pride that enriches lives, cements communities and builds a better Britain.

[Valerie Vaz (Walsall South) (Lab)]

A director of Sirus Automotive who lives in my constituency would like to take on apprentices, but he has had his grant of £129,000 from Advantage West Midlands cut. Will the Secretary of State look into that to see why, as this is committed spending, his grant cannot be paid to him so that he can take on more apprentices?

[Mr Hayes]

I will be more than happy to look into that matter on behalf of the Secretary of State. It is absolutely right that that where there are barriers of the kind that I mentioned a moment ago, we identify and overcome them. I would be happy to talk to the hon. Lady on that basis.

[Simon Kirby (Brighton, Kemptown) (Con)]

3. How many jobs in low-carbon industries he expects to be created by the actions of the green investment bank.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The green investment bank will be a key element in financing investment in the green economy. It is not possible to estimate the number of green jobs it will help to create, but this sector in the UK is already substantial and employed around 910,000 people in 2008-09. A total of £3 billion of funding has been made available to the green investment bank from 2012 and could mobilise an additional £15 billion in private sector investment.

[Simon Kirby]

I thank my right hon. Friend for his answer. Will he consider locating the green investment bank in the most excellent city of Brighton and Hove?

[Vince Cable]

I thank my hon. Friend for his question. I know from other interventions of his deep and genuine interest in environmental issues. We already have quite a long bidding list for cities that wish to attract the green investment bank, and I am very happy to add Brighton to it.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The answer to the last question is no.

The potential for low-carbon industries comes not only from the green investment bank, important though that is, but from the skills base and getting businesses ready to take this opportunity. What are the Government doing to ensure that throughout the UK the skills base will be there and business will be able to take advantage of the potential of the green investment bank—particularly, of course, when it is situated in Edinburgh?

[Vince Cable]

I know that the hon. Gentleman too has a long-standing and active involvement in environmental issues. He is right to say that it is not simply a question of investment but of skills. That is why, as part of the expanded apprenticeship programme, we have specifically set aside resources for those working in the green economy, particularly regarding the skills that are required to implement the green deal.

[Alun Cairns (Vale of Glamorgan) (Con)]

4. What steps he is taking to ensure that employment law supports business competitiveness, job creation and sustainable economic growth.

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

11. What steps he is taking to ensure that employment law supports business competitiveness, job creation and sustainable economic growth.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

My Department is leading a comprehensive review of employment-related laws across Government to remove burdens from employers and ensure that our labour market operates effectively. Our consultation on resolving workplace disputes, for example, closed on 20 April, and we will be coming forward with our proposals in the autumn.

[Alun Cairns]

Does the Minister agree that there is a need to reduce employment regulation following Lord Young’s excellent report which talked about businesses operating within a climate of fear; and what progress is he making in reducing red tape in general?

[Mr Davey]

I am grateful for my hon. Friend’s question. I met Lord Young to discuss his views, and he explained that in his meetings with business people they talked about the reality and the perception of red tape, particularly in relation to employment law. We are therefore tackling both aspects with our proposals to reform employment tribunals, our moratorium for micros, and the review of sickness absence and compliance and enforcement regimes. We also published the employers charter to show that the legal position is not as frightening as some employment lawyers would have firms believe.

[Julian Smith]

Are other Departments fully engaged with the employment law review? Which Minister is leading this across Departments? Does the Minister agree that in order to address this issue fully we need all Departments, not just BIS, to be engaged with it?

[Mr Davey]

I agree with my hon. Friend. We have written to other Departments that are going to work with us on this. It is very important that it is a cross-Whitehall review, and it will last the whole Parliament long because we are determined to make a real difference.

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

On a day when BMW announces £500 million of investment in Britain, safeguarding 6,000 jobs—the result of co-operation between the union Unite and a world-class company—is it not time for the Secretary of State to stand up to his backwoodsman Back Benchers, who would seek to demonise workers, and instead to celebrate modern trade unionism as a force for good?

[Mr Davey]

I think the hon. Gentleman is referring to press reports of the speech by my right hon. Friend the Secretary of State to the GMB. I am afraid that if he reads that speech he will see that my right hon. Friend repeated the Government’s line, which has been the case since we were elected, that we wish to engage positively with trade unions. That engagement is paying dividends.

[Kerry McCarthy (Bristol East) (Lab)]

Does the Minister accept that it is counter-productive to create the impression that things such as maternity rights, employment protection, the minimum wage and health and safety laws are burdens on business and not essential to ensuring that companies operate in the best interests not just of their balance sheet but of their workers?

[Mr Davey]

I refer the hon. Lady to the consultation that we published just last month on modern workplaces. We wish to reform maternity and paternity law, which we believe will be a win-win for employees and employers. It will produce better rights for families than the previous Government provided, and provide more flexibility for employees and employers so that they can have adult conversations about how such leave should be taken.

[Nigel Mills (Amber Valley) (Con)]

5. What recent assessment he has made of the level of lending by banks to small businesses.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

Figures published in May by the Bank of England show that the UK’s five largest banks lent £16.8 billion to UK small and medium-sized enterprises in the first quarter. That fails to meet the targets in the Merlin agreement and is obviously disappointing. We will continue to monitor lending closely over the year. We reserve the right to revisit the agreement if banks continue to miss the targets.

[Nigel Mills]

Many small businesses in my constituency complain that when they ask banks about funding, they are told not to bother applying because it would only attract interest in their existing facilities and that those may well be withdrawn instead. What can the Government do to stop banks doing that and then claiming that they cannot meet the targets they have agreed to because of a lack of applications?

[Vince Cable]

There is a lot of evidence that some banks are genuinely trying to change their culture of lending. I referred to that point in a productive exchange in the Business, Innovation and Skills Committee yesterday. The banks have come forward with a new code of practice to be operated through the British Bankers Association, which allows, for example, for a banking ombudsman to deal with complaints of the kind to which the hon. Gentleman rightly referred.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

There is a genuinely difficult problem of trying to get highly over-extended banks to lend to small and medium-sized businesses. The Secretary of State was very critical of the previous Government’s performance on this issue. He said that the banks ran rings around that Government. Given that the first indications on Project Merlin show a £2.2 billion shortfall between what the banks are doing and what the Government agreed they would do, how would he describe the performance of his Government on bank lending?

[Vince Cable]

Of the leading Merlin banks, two have met their targets, which demonstrates that the demand is there for banks that are able and willing to change their culture of lending. Of course, we have taken the previous Government’s arrangements further by bringing private banks that are not owned wholly or partly by the taxpayer into the agreement. They are undoubtedly taking it seriously, and we are making it absolutely clear that we expect the agreement to be delivered and that the volume of lending to SMEs will increase.

[Michael Fallon (Sevenoaks) (Con)]

Will my right hon. Friend reassure us that he is ready to do a little more than just monitor this situation? In particular, he should not allow banks to get away with the excuse that the demand is not there, when it is the price of the loan and the terms attached to it that are so often too difficult for struggling small businesses who need the credit.

[Vince Cable]

My hon. Friend is right that there is a problem of discouraged demand. We have just launched a major survey to drill down a little further into the complex facts of bank lending and to find out how serious the problem of discouraged demand actually is. However, this is not just a question of monitoring the situation. A key element of the Merlin agreement is that senior executives in the banks will have their remuneration linked to their performance on small business lending. I am currently insisting that they provide more information about how those incentives work.

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

The Secretary of State must realise that the Merlin agreement is a busted flush and that no good is coming from it. The continuing failure of the banking sector to meet the minimum targets, meaning that there continues to be no new net lending, is really not acceptable. As the hon. Member for Sevenoaks (Michael Fallon) has just said, the terms and conditions for the loans that are being made are often very penal. Can the Secretary of State get into that? There is no point in monitoring it; we want him to examine what is going on and to come forward with concrete proposals to improve the situation.

[Vince Cable]

That is exactly what I am doing, as I explained to the right hon. Member for Wolverhampton South East (Mr McFadden). Before the hon. Member for Coventry North West (Mr Robinson) writes off what we are doing, he should consider the undoubted benefits that have already flowed from it. The banks have put £2.5 billion into the business growth fund to provide equity, which is the kind of issue that he was exercised about when he was a Treasury Minister. That problem has now been dealt with.

[Lorely Burt (Solihull) (LD)]

The Forum of Private Business is calling for a return to the traditional bank manager model, and some banks are in fact now doing that. What can we do to encourage banks to give small businesses individual attention, increase the autonomy of bank managers to make decisions and get rid of the culture of “computer says no”?

[Vince Cable]

My colleague puts the point extremely well. What we are dealing with is not a short-term problem but the long-term issue of how to change the culture of banks. One bank in particular, Lloyds, which I think I mentioned yesterday, already has SME lending on its monthly board meeting agendas, and the system of incentives is being changed to create more of that type of relationship management. Crucially, there are new banks entering the market that have exactly the focus that she describes. Competition, ultimately, will help to solve the problem in a major way.

[Mr Chuka Umunna (Streatham) (Lab)]

We were told that monitoring would be carried out with the assistance of the Bank of England, yet the Governor himself said in March:

“We’re not monitoring. What we are doing is putting up on our website the data that banks submit after a fairly cursory plausibility check.”

The Secretary of State also mentioned CEO pay, which we were told would be linked to the lending targets, yet he failed to check how that would be delivered before he finalised Merlin. Is it any wonder that the banks are already failing to meet their obligations, when the Secretary of State waved through an agreement without teeth?

[Vince Cable]

First, I congratulate the hon. Gentleman on his new role on the Front Bench. He is a very articulate commentator on economic matters, and I look forward to exchanging views with him.

The Bank of England plays an important role in the monitoring process. Of course the banks’ data are aggregated, but the Bank provides an independent assessment of progress under the agreement, which is important to the credibility of that agreement. Of course, it has pointed out that there has been a failure of lending in the first quarter.

On the wider question of meeting lending objectives, we were assured when the Merlin agreement was signed that senior executives’ incentives would mean that their remuneration was significantly greater than the share of small business lending on their balance sheets. We are now trying to establish in detail exactly what that means for individuals, and we have insisted that more lending be forthcoming.

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

6. What steps he plans to take to provide relevant skills to offenders to enable them to find work when they leave prison.

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

16. What steps he plans to take to provide offenders with relevant skills and training in order to help them find work when they leave prison.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

On 18 May, to great acclaim, I launched “Making prisons work: skills for rehabilitation”, the report on offender learning that I commissioned last summer. It sets out a substantial programme of reform to increase the positive impact of offender learning on reoffending rates and on former prisoners’ capacity to reintegrate successfully into civil society.

[Mr Burrowes]

The Minister will be aware of the good work of National Grid in providing work opportunities to offenders upon release. Does he recognise the common complaint that too many offenders have not been trained with the right work skills to make them employable on release? What are the Government going to do about that?

[Mr Hayes]

Yes, I do recognise that, which was why, in the review that I published, we put the emphasis on employability skills. For someone to leave the life of crime, another life must pay for them, which means getting and keeping a job. I met National Grid this week, actually, to discuss skills issues, and I congratulate it on its work and my hon. Friend on championing the issue.

[Mr Nuttall]

Does my hon. Friend agree that the longer the period for which an offender is able to benefit from training programmes, the more likely it is that they can acquire the skills necessary to find work when they leave custody?

[Mr Hayes]

I learned early on never to stray outside my purview or pitch above my pay grade. Suffice it to say that progression is critical, so what people learn in prison must be progressive. They must be able to take up and complete their studies when they leave, so that they can get qualified, get a job and get on.

[Graham Stringer (Blackley and Broughton) (Lab)]

In Strangeways, in my constituency, which I have no reason to think atypical, 80% of prisoners are illiterate. Would not the biggest impact that this or any other Government could make be to have an intensive literacy programme for prisoners? That is the best way to get them back into work.

[Mr Hayes]

Yes, I agree. If the hon. Gentleman studies my report, he will see that prior attainment tests, which ensure that what we do in prisons matches real need, and the concentration on core skills that he describes, are critical in ensuring value for money, but also in ensuring that people get value from what we spend. I agree that core skills are critical, and they will form an important part of what we do from now on.

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

Citizens advice bureaux have successfully piloted financial capability projects to aid the rehabilitation process. What plans does the Minister have to roll out that provision, because it could play a vital role in reducing reoffending rates?

[Mr Hayes]

I suspect that the hon. Gentleman has studied that matter rather closely. If he would like to come and speak to me and my colleagues about that particular aspect of offender learning, I would be happy for him to do so. He is right that those life skills, as well as the core skills and the employability skills that we have described in this short discussion, enable people to reintegrate into civil society in a way that is good for them, but also good for all of us because we must tackle recidivism.

[John Mann (Bassetlaw) (Lab)]

7. What discussions he has had with representatives of banks on the performance of banks in lending to businesses (a) in Retford and (b) nationally.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

I regularly have discussions with senior representatives from all the major banks, as well as smaller and specialised lenders, at which we discuss their lending to small businesses, but sadly, not yet in Retford.

[John Mann]

As the Secretary of State knows, Retford is the barometer of his Government’s success or failure with the economy and the news is not good, because small businesses are being bled dry by the banks, which are failing to lend. When they do lend, they do so at excessive costs, including the excessive use of invoice financing. It will be too late for small businesses if the Secretary of State does not wake up and do something about that as they will go out of business. What will he do?

[Vince Cable]

The hon. Gentleman’s constituency may well be a barometer of Government performance, but he has obviously overlooked the fact that in it, 19 businesses were offered loans, backed by the enterprise finance guarantee, totalling almost £2 million. That is help in a purely practical sense.

The hon. Gentleman makes a specific point on types of financing. Because of the difficulties of lending against property, the emergence of forms of lending against assets or future transactions is actually a positive diversification of finance.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

9. What assessment he has made of the potential effect on economic growth of green investment; and if he will make a statement.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The green economy will make a major contribution in the longer term to economic growth, because of the stimulus it provides to demand in green activities. However, energy-intensive industries are also an important part of our economy.

[Tom Greatrex]

The Secretary of State referred in his answer to the contribution that traditional heavy industries such as the Clydebridge steelworks in my constituency, which manufactures significant components of offshore wind turbines, can make to green investment. However, given his comments, what reassurances can he give to the House that the introduction of measures such as the carbon floor price will not disadvantage energy-intensive industries, which could have a significant effect on green growth in the economy?

[Vince Cable]

The hon. Gentleman is absolutely right to draw attention to that problem. I have had extensive discussions with the steel industry, and also with the ceramics and chemicals industries, which can be affected by precisely that problem. My colleague the Secretary of State for Energy and Climate Change made it clear in his recent statement that we are looking at a package of measures, in consultation with industry, that will hopefully help it to deal with the higher costs of electricity.

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

The Secretary of State recently announced the green investment bank, but obviously the capitalisation amounts are very small. Will he assure the House that small companies in Thirsk, Malton and elsewhere will qualify for capital loans from the green investment bank?

[Vince Cable]

I would not regard £3 billion as a small capitalisation—it is very substantial, and hopefully it will mobilise an additional £15 billion in this Parliament from the private sector. There is a question over how we develop the capacity of that bank, but the hon. Lady is right that we must take account of the ability of small companies to participate in the supply chains of the big bids that will undoubtedly be made under the GIB proposals.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Our embryonic solar power industry has huge concerns about the Government’s current policy on feed-in tariffs. If the Minister cannot assure me that he has consulted industry representatives, will he consult them?

[Vince Cable]

I have had consultations with the industry, although of course the primary responsibility rests with my colleagues in the Department of Energy and Climate Change. There is a particular problem with the large-scale solar power suppliers because of the subsidy element and the ability of Government to continue to support it, but certainly small-scale solar providers are helped under the feed-in tariff arrangements and we are looking at the wider implications for the industry.

[Ian Swales (Redcar) (LD)]

Does the Secretary of State share my concern that the large-scale bioethanol plant in my constituency has been taken offline for a number of months, and will he do everything that he can to support the anti-dumping action being taken by the bioethanol industry? Will he also ensure that the Department for Transport does not repeat the mistakes of the previous Government in dragging its feet on implementing renewable fuel obligations?

[Vince Cable]

My colleague has been assiduous in supporting this important activity in his constituency. I am well aware of the problem, which is low-cost ethanol coming from the United States and apparent dumping practices—although that remains to be established. I have made representations to the European Union, which of course deals with trade policy matters, to ensure that this is properly dealt with under our trade policy instruments.

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

10. What progress has been made on the second round of allocations from the regional growth fund; and if he will make a statement.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The second round of the regional growth fund is worth just under £1 billion and bids must be received before 1 July 2011. Applicants are able to attend a series of road shows, which offer specific advice and support to prospective bidders. These road shows have been well subscribed with some 1,100 people already having applied.

[Emma Reynolds]

I thank the Minister for that answer. The black country did not receive a single penny from the first round of the regional growth fund, and smaller regional development agency grants have been withdrawn. Can he reassure me that the needs of local businesses in the black country will be taken into account in the second round?

[Mr Prisk]

I cannot pre-empt the panel’s decisions, because they must be based on merit, but I am sure that some excellent bids will come from the black country area. I encourage the hon. Lady and applicants from the area to speak to the RGF team to enable them to hone their applications and ensure that they have a strong chance in the second round.

[Andrew Bingham (High Peak) (Con)]

Despite backing from the local enterprise company, a bid submitted by CP Holdings, the Sir Trevor Osborne property group, to the first round of the regional growth fund, supported by Derbyshire county council and High Peak borough council, was rejected—in my view incorrectly. What support and help are available now as the group bids in the second round to restore The Crescent, which is a grade I listed building in Buxton, and turn it into what would be Britain’s first and only genuine spa hotel, creating employment and wider economic benefits across the area?

[Mr Prisk]

My private office might be less than happy if I suggest I should visit, so I probably should not, but I can say that it sounds like an important bid. It also sounds as if improvements were needed for the second round, and I encourage the applicants—perhaps accompanied by my hon. Friend—to talk to the RGF team so that they can hone their bid and the spa can be successful in the future.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Has not the regional growth fund story so far been one of too far, too fast, with the RDAs scrapped and funding shredded by two thirds? Now it is too little, too late, as local enterprise companies have been denied RDA assets or proper bid resources, in whole areas of England small businesses have been excluded from a 10-times oversubscribed first round, and no extra money has been put in the budget—we would have given £200 million more from a bankers’ bonus tax. The rejection letter that nine out of 10 RGF applicants received from the Department told them that they could

“request limited feedback on your unsuccessful bid”.

What new limited feedback will the Minister’s officials have for those missing out this time?

[Mr Prisk]

I have already spelled out to the House the opportunity for prospective bidders to make applications to renew their bids, and they are doing that now. I am sorry that the hon. Gentleman thinks that that does not have any merit. It is fascinating to be criticised by the Opposition for going too fast. The first round was successful, and we levered in some £2.5 billion of private sector investment—a 5:1 ratio on public investment. If the Labour party is not happy with that, it needs to re-examine its priorities.

[Chris Skidmore (Kingswood) (Con)]

12. What steps he is taking to support British manufacturers.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The coalition Government passionately believe that modern manufacturing is vital if we are to grow and rebalance the economy. That is why, for example, we are investing more than £50 million in the manufacturing advisory service; substantially expanding the number of apprenticeships, as the Secretary of State pointed out; and actively backing manufacturing research and development through our £200 million programme of technology innovation centres.

[Chris Skidmore]

Next week marks the topping-out ceremony for the first building at the Bristol and Bath science park, which is a £300 million high-value manufacturing centre in my constituency that will generate more than 5,000 new jobs. Will the Minister congratulate the science park on its current progress? What assurances can the Government give the park that we are absolutely committed to high-value manufacturing?

[Mr Prisk]

I am delighted to be able to do that. In fact, I was able to do so earlier this week, when the Department launched a new showcasing of composite technology. The national composites centre based at the science park in my hon. Friend’s constituency is an excellent example of UK technological excellence. We have invested £16 million in that centre, and it has our full support and encouragement.

[Jim Shannon (Strangford) (DUP)]

There are clearly changing economic times right across the United Kingdom. What help is there for the British manufacturing industry to take advantage of new green opportunities? Harland and Wolff in Belfast has invested £17 billion in marine wind turbines. Can the Minister assure us that what has happened at Harland and Wolff can happen across the United Kingdom?

[Mr Prisk]

Absolutely. The point is that we are not only seeking to invest through technology innovation centres but ensuring that our investment in, as it were, the software—the staff, the apprenticeships and the skills—is brought together. That combination of work on the technological side and in skills is crucial. Harland and Wolff is a good example.

[Nic Dakin (Scunthorpe) (Lab)]

13. What steps he plans to take to support those affected by job losses at the Tata plant in Scunthorpe.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

Of course, we were very disappointed to hear the news. It will be a worrying time for the workers affected, but I reassure the hon. Gentleman that the Jobcentre Plus rapid response service and the Skills Funding Agency are working with Tata Steel to support workers at the Scunthorpe plant.

[Nic Dakin]

I thank the Minister for his response. It would be good if he or the Secretary of State could come to Scunthorpe to see the situation first hand. Will the Government be bidding for European globalisation adjustment funds, for which the situation in Scunthorpe is eligible?

[Mr Davey]

I pay tribute to the hon. Gentleman for his efforts. He has met the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), and I am sure that he welcomed the announcement by my right hon. Friend the Secretary of State of the taskforce, on which the hon. Gentleman is serving. It is for the taskforce to come up with ideas not just for the regional growth fund but for European funding. If the taskforce can put together a bid, I am sure that it will get the Department’s support.

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

Members of Parliament across north Lincolnshire are working together closely on this important issue, which affects all of our constituents. Does it not demonstrate that the creation of a pan-Humber local enterprise partnership, which was recently agreed, is a positive step forward? We now need to send in our application and hopefully get Government approval for this pan-Humber LEP in order to support the renewables industry.

[Mr Davey]

We were delighted to be able to announce yesterday the decision on a new Humber estuary local enterprise partnership, which I am sure will play a positive role. I am sure that my hon. Friend would not expect me to say whether the enterprise zone will be awarded, but clearly the taskforce and the LEP are in a good position to represent that area.

[Brandon Lewis (Great Yarmouth) (Con)]

14. What steps he is taking to help young unemployed people find apprenticeship places.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

In the Budget, we announced a further 40,000 apprenticeship places targeted at young unemployed people. That will be the catalyst for sustained joint working by the National Apprenticeship Service and Jobcentre Plus to maximise apprenticeship opportunities through contact with employers and client referral.

[Brandon Lewis (Great Yarmouth) (Con)]

With business organisations and colleges in Great Yarmouth and Norwich doing their best for people in Norfolk and Great Yarmouth, what can the Minister do to ensure that the most disadvantaged people there continue to have good access to community learning?

[Mr Hayes]

I am pleased to be able to tell my hon. Friend in the House that the National Apprenticeship Service will be delivering training on apprenticeships to Jobcentre Plus staff in Great Yarmouth on 22 June. I would like to invite him to be there on that occasion to see just how we can make available to people the kind of opportunities that he has championed with such vehemence.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

What is the Minister’s strategy for getting more girls into apprenticeships in science, engineering and technology, where they are woefully under-represented?

[Mr Hayes]

I share the hon. Lady’s concern about that, and I have met the National Apprenticeship Service specifically to discuss opportunities for girls in such subjects. She will know that the wage return on apprenticeships in those areas tends to be higher than in other areas, so there is an added disadvantage to the fact that young women tend not to go into STEM subjects—science, technology, engineering and maths. I am working on that, and will report back to the House further on progress.

[Bill Esterson (Sefton Central) (Lab)]

15. What assessment he has made of the potential effect on economic growth of the provision of apprenticeship places; and if he will make a statement.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

Our research suggests that completed intermediate and advanced apprenticeships both deliver net economic benefits in excess of £100,000 over the learner’s lifetime. The 170,000 apprentices who started in 2008-09 will therefore generate an additional £13 billion for the economy over their working lives.

[Bill Esterson]

The National Foundation for Educational Research has shown that the young apprenticeships scheme has been highly successful when it comes to GCSE results and progress into further education, training and, crucially, apprenticeships. If the Minister agrees that apprenticeships are such an important part of economic growth, will he reconsider the Government’s decision to scrap the highly successfully young apprenticeships scheme, which is good for young people and the economy?

[Mr Hayes]

The hon. Gentleman is a diligent member of the Select Committee on Education, and he will have heard me say to that Committee just yesterday that I am keen to ensure that the best of what we had in the young apprenticeships scheme is carried forward in ongoing work. There were cost-effectiveness issues, as I am sure he would acknowledge, but employers, learners and parents say that there was good value in some of what the scheme did. We will take note of that and move forward on that basis.

[Mr Peter Bone (Wellingborough) (Con)]

The issue of apprenticeships is important for the whole House, and for that reason the Backbench Business Committee has at short notice scheduled a debate on apprenticeships this afternoon. Does the Minister welcome the fact that the issue will be debated this afternoon?

[Mr Hayes]

Any opportunity that this House provides me to champion the cause of apprenticeships is to be celebrated, and celebrated this afternoon it will be.

[Mr Speaker]

We are all delighted to bring a bit of joy into the Minister’s life.

[Bob Blackman (Harrow East) (Con)]

17. What steps he plans to take to target adult learning provision on those who most need support.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It is a joy to answer successive questions, Mr Speaker.

Support for those in greatest need is the key priority for this Government and our skills strategy. We have protected funding for basic skills and provision for the unemployed, we have targeted entitlements to help those in most need, and we are reforming adult and community learning to engage better with disadvantaged people.

[Bob Blackman]

I thank my hon. Friend for his answer. One of the most disadvantaged groups of people in society are those who were failed by the academic system in their youth. This Government have set their stall out to ensure greater social mobility. What will my hon. Friend do to ensure that those in that group fulfil their potential under his plans for the future?

[Mr Hayes]

This Government, against all expectations and in the most difficult financial circumstances, protected the budget for adult and community learning. It is no wonder that Alan Tuckett of the National Institute of Adult Continuing Education said:

“The adult and community learning safeguard is a key platform on which the Big Society can be built.”

This Government, true to their word, defended adult learning—the people’s policy, the people’s Minister, and the people’s party.

[Heidi Alexander (Lewisham East) (Lab)]

The Minister has said that it is a key priority for this Government to provide support to those most in need. Sadly, the changes to funding for ESOL—English for speakers of other languages—will take support away from those most in need. The Government have promised an equality impact assessment. When will we see it, and if it is as bad as many of us fear, will he delay the proposed changes?

[Mr Hayes]

The hon. Lady highlighted these matters in an Adjournment debate, as the whole House will know, and she has made a consistent case on the subject. I did indeed ask for a further impact assessment, because I want to be sure that what we are doing is fair as well as cost-effective. We will bring the results of that assessment to the House before the summer.

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

19. By how much on average he expects fees for part-time university courses to change between 2011-12 and 2012-13.

[The Minister for Universities and Science (Mr David Willetts)]

The majority of institutions have not yet set their fees for part-time courses for 2012-13, so it is too early to tell what average fees will be. From September 2012, eligible new part-time students will have access to loans to cover the cost of their tuition—extra support for part-time students that has been widely welcomed.

[Kate Green]

I welcome the introduction of loans for part-time students, but for lone parents that often means the loss of income support as a result. Moreover, they will be required to begin repaying those loans before they have completed their academic studies. Will the Minister look again at the proposals, to ensure that no lone parent is financially disadvantaged and put in the position of being unable to complete their course?

[Mr Willetts]

Our proposal has been widely welcomed. We believe that the number of people who will benefit from support while they are engaged in part-time study will increase from 60,000 to 175,000. Of course, people will repay their loans only when they are earning more than £21,000 a year.

[Mr Rob Wilson (Reading East) (Con)]

Can my right hon. Friend tell the House whether the Office for Fair Access has the power to block fee levels set by universities if they do not agree to access targets?

[Mr Willetts]

The Office for Fair Access has the power to refuse to permit fees higher than £6,000 if it believes that a university is not doing everything possible to broaden access and if it is not satisfied with its access agreement.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Fees for part-time students are set to rise significantly, and there is growing concern that the quality of higher education in our universities will suffer as Government cuts begin to bite. The Public Accounts Committee has confirmed this week that the Government’s sums no longer add up, and a considerable number of would-be students are likely to be turned away from university this summer because of Government cuts in student places. The Government are chaotic, incoherent and incompetent. Are we not now watching “Fawlty Towers” in Whitehall, with the Minister and his boss the Basil and Manuel of the Government?

[Mr Willetts]

Let us be clear: the previous Government were planning cuts in higher education support. Under our plans, there will be extra cash going into universities by the end of the public spending period, compared with the amount going in now, and it will be going into the universities based on the choices of students and the courses that they wish to study. That is the right way for money to reach the universities. The hon. Gentleman should recognise the importance of a vision of universities that provides extra cash and respects student choice and the autonomy of the universities.

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

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

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My Department has a key role in supporting the rebalancing of the economy and business to deliver growth while increasing skills and learning.

[Jack Dromey]

The Government are forcing Advantage West Midlands to engage in a fire sale of £108 million-worth of assets. They are blocking councils from gaining those assets and barring local enterprise partnerships from retaining them, yet they have seen fit to gift Boris Johnson with London Development Agency assets. Why can they not do the same for high-need, high-unemployment Birmingham?

[Vince Cable]

There is no fire sale of regional development agency assets. There was always a process of disposal of those assets by the RDAs themselves, and roughly 20% of their assets are likely to be sold. The others are being passed on through the different channels, which the hon. Gentleman knows about.

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

T2. The Minister will be aware of the outstanding Truro and Penwith college, which is based in my constituency. In recognising the new opportunities to expand its provision of higher education, he will also be aware of the constraints on the ability of further education colleges to award degrees. At the moment, they need a university partner. What support can he offer to excellent FE colleges to enable them to award high-quality degrees?

[The Minister for Universities and Science (Mr David Willetts)]

I support the excellent work of FE colleges in providing higher education in Cornwall and elsewhere. I am concerned, as is the Secretary of State, by reports that some universities might be threatening to end their partnerships with FE colleges without good reason, but I reassure my hon. Friend that FE colleges are indeed eligible to apply for their own degree-awarding powers. In addition, our White Paper will propose making it easier for FE colleges to access a wider range of external degrees.

[Mr John Denham (Southampton, Itchen) (Lab)]

I welcome the good news from Nissan and BMW, which, despite the Secretary of State’s curmudgeonly response, built on Labour’s support for those companies’ investment in the UK. In 2006, he was very clear when he said:

“The DTI, and its army of Sir Humphreys, should be scrapped.”

Then he was offered the job of running it, and said that it would be the Department for growth. How is the Department for growth getting on?

[Vince Cable]

The Department for growth is getting on extremely well. The right hon. Gentleman seems to have forgotten that a change took place after 2006, and that my Department was amalgamated with the one that he used to run. He might want to speculate as to why we took it under our wing. Certainly, growth is taking place. There is rapid growth now beginning to take place in manufacturing and exports. That is a consequence of this Government’s determination simultaneously to get on top of the fiscal deficit and to rebalance the economy, and that is happening.

[Mr Denham]

Actually, the old DTI was merged with my Department. The truth is that in the past year the Office for Budget Responsibility has lowered its growth forecast three times, long-term unemployment has been at its highest since 1997, retail sales are down, construction is in the doldrums and consumer confidence has been at record lows. Is it not the truth that the Business Secretary has wrecked support for the regions, cut consumer protection when prices are rising ahead of wages, talked tough and delivered nothing on bank lending, bungled higher education and produced a growth plan so unconvincing that it is being rewritten as we speak? The Business Secretary is wrong, is he not, to think that his Department cannot make a difference. It could. It is not just the Chancellor who needs a plan B, is it?

[Vince Cable]

The right hon. Gentleman has a short memory. He does not seem to appreciate that the failed model of growth that we inherited was not simply a question of the budget deficit, as we had a massive problem with consumer debt, which inhibits consumption; we had a massive property bubble, which collapsed; and we had a banking system, the largest in the developed world, that collapsed on us—and we are having to dig our way out. A major rebalancing of the economy is having to take place. It is difficult, it is painful, but as I said in response to the earlier question, that rebalancing is now occurring through the growth of manufacturing and exports and through business investment, which is where it needs to be.

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

T4. Small businesses are the engine of growth and jobs for our economy, and all the time that owners and managers spend dealing with red tape is time taken away from expanding their businesses, so what have the Government done to reduce regulation on small businesses?

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

I assure the hon. Gentleman that we are spending a huge amount of time on tackling red tape through the red tape challenge, and I can report to the House a little victory. On bank holiday Monday, I attended the EU Competitiveness Council to argue for an exemption for micro-entities from various accounting rules under an EU directive. I am sure that the House will be pleased to know that that exemption passed the Council.

[Nic Dakin (Scunthorpe) (Lab)]

T3. According to the Office of Fair Trading, self-regulation of debt management companies is not working. Does the Minister agree that it is time for the Government to act to protect vulnerable consumers?

[Mr Davey]

The hon. Gentleman is quite right. He knows that I met him and other members of the all-party group on debt and personal finance to discuss that very issue. He will know of my concern about it, which was shared across the meeting. When we respond to the call for evidence on consumer debt and personal solvency, we will have a lot to say about that very issue.

[Gavin Williamson (South Staffordshire) (Con)]

T5. We all welcome the fantastic news from Nissan and BMW, but we want to see automotive investment in the west midlands. Will the Minister assure the House that he and his officials are doing all that they can to attract automotive investment into the west midlands?

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

I am delighted to be able to give my hon. Friend that assurance. He is an assiduous campaigner for the automotive industry in the sector. I am meeting him and other Members in a week or so to discuss the issue. It is important to remember that we have seen improvements in the investment for Jaguar Land Rover, that discussions are going further forward and that investment in 1,500 skilled engineering jobs has taken place. What matters in that context is remembering that under the last Labour Government, 1.7 million people came out of the manufacturing work force—a change that we need to bear in mind when we hear criticism from Opposition Members.

[Nick Smith (Blaenau Gwent) (Lab)]

T6. Given the public outrage at the “quick buck” strategy at Southern Cross, the Financial Times says that the future of 31,000 elderly people is in jeopardy. Will the Secretary of State investigate the conduct of the directors and consider whether regulation should be extended to ensure the financial stability of companies that care for our parents and our relatives?

[Vince Cable]

My colleague the Secretary of State for Health has made it absolutely clear that no resident, whether publicly funded or self-funding, will be left homeless or without care. In other words, the residents will be given priority and the Government have taken the responsibility to ensure that they are protected. As to the company itself, it had a long-standing failed business model. The Minister of State, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) has been in touch with the banks to ensure that the credit is properly managed in this critical period so that it happens in an orderly way. There is no way in which we can bail out the company, but I have asked my officials to look carefully at the business models of companies that provide public services to ensure that they are stable and that the responsible sector regulators are able to act appropriately.

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

T10. Can my hon. Friend update the House on the agreement reached about Institute for Learning membership fees?

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

As the House knows, this was a contentious issue, but I was able to bring together all the parties involved and they acted with professionalism, goodwill and good faith. This week the Institute for Learning announced that, with the support of the trade unions and the employers—the colleges—a settlement has been reached. I know what you are thinking, Mr Speaker: “Blessed are the peacemakers.”

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

T7. Is the Minister aware that many thousands of jobs in Scotland depend on defence contracts? What steps is he taking to ensure that the present constitutional uncertainty in Scotland does not undermine the ability of Scottish firms to bid for Ministry of Defence work?

[Mr Prisk]

Both my Department and the MOD are mindful of the importance of the long-term contracts to which the hon. Gentleman refers. We are working hard on that, and we have no intention of being distracted.

[Andrew George (St Ives) (LD)]

Every day by which the creation of a groceries code adjudicator is delayed is a further day on which farmers, growers and food producers in this country and in the developing world go to the wall. What reassurance can Ministers give me and, indeed, the House that they will make every effort to ensure that a proposal which has cross-party support is implemented as quickly as possible?

[Mr Davey]

My hon. Friend, who has campaigned so vigorously and successfully on this issue, will be delighted to know that we published the draft Groceries Code Adjudicator Bill just before the recent recess. We hope that it will be scrutinised by the Select Committee and will attract interest across the House, and we hope to introduce the formal Bill on the basis of that scrutiny.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

T8. May I return the Minister to the issue of regional development agency asset sales, about which there is considerable concern in my constituency and throughout the north-west? Can he answer the question put to him earlier by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey)? If assets can be gifted to Boris Johnson and London, why can they not be gifted to the rest of the country?

[Mr Prisk]

Let me clarify the position. The London Development Agency had already been merged into the Greater London Authority, so the process position was very different from that involving the RDAs. We have ensured that we are able to represent that. I understand the concern, but we are working with local enterprise partnerships, local authorities and local businesses to ensure that they are involved in the regenerations. I have discussed the issue with a number of the hon. Gentleman’s hon. Friends who have constituency interests in it, and I continue to listen to and work closely with them.

[Mrs Anne Main (St Albans) (Con)]

May I ask the Secretary of State to look into the Edexcel science modules taken by young pupils? Some of those modules are seriously flawed, which may put people off studying science and technology for life.

[Mr Willetts]

I will undertake to discuss the matter with my right hon. Friend the Secretary of State for Education, because my hon. Friend is absolutely right. We do wish to encourage young people to study science at school, college and university.

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

Growth, which was mentioned earlier, does not seem to be happening in the north-east of England. Workers at the H A Interiors factory in my constituency have not been paid for nine weeks— although I understand that they were paid their April wages yesterday; I will have to check that. Can the Minister help the company in any way? At least under Labour the workers got their pay.

[Mr Prisk]

I have already corresponded with the hon. Gentleman on the matter. He is right: we should be concerned first and foremost with the welfare of the workers and their families. I strongly emphasise the need to ensure that ACAS continues to be involved in the process. I hope that my letter to the hon. Gentleman and the news that some of the first payments have apparently been made will prove encouraging, but let us keep the dialogue going.

[Richard Fuller (Bedford) (Con)]

I draw Members’ attention to my registered interest in small businesses.

The enterprise investment scheme, which was introduced by the last Government and has been greatly enhanced by the present Government, has increased investment in our early-stage businesses, largely because it provided tax relief for equity investors. Will Ministers consider discussing with Treasury officials whether similar tax incentives can be provided for debt investment in venture capital and early-stage businesses?

[Mr Prisk]

We have made important reforms to the EIS. The technical reform to which my hon. Friend has referred has been and continues to be examined, but no decisions have been made.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

We have heard from the Secretary of State’s own mouth that Project Merlin has fallen at the first hurdle. We also now know that one of the promoters of the business growth fund, Santander, has withdrawn from the fund. What impact will that have on Project Merlin, on the business growth fund, and on growth and investment in the United Kingdom?

[Vince Cable]

The business growth fund is an extremely promising initiative, filling a gap in capital markets that has been left empty pretty much since the 1920s: the provision of equity for rapid growth mid-cap funds. The £2.5 billion fund is committed to by the main banks, and Santander wishes to pursue its own initiative, which is additional to the fund. The business growth fund is a great success. It was launched in Birmingham—I was there a few weeks ago—and it will achieve a lot for British industry.

[Duncan Hames (Chippenham) (LD)]

I noted the Business Secretary’s earlier answer citing the STEMNET project. I hope he is also aware of the work of I’mascientist.org.uk, whose events reach over 10,000 students, with funding of less than £9 per student drawn from charitable and business sponsors. Will he learn from the success of this initiative as a model for the online engagement of students with the futures they could realise through science, technology, engineering and maths?

[Mr Willetts]

That is a very imaginative suggestion which I certainly undertake to pursue—and will, perhaps, discuss at the Cheltenham science festival this weekend.

[Alison McGovern (Wirral South) (Lab)]

One in 10 people in the north-west of England works in manufacturing, whereas just 3% in London work in manufacturing. The sharp fall in the purchasing managers index last month showed that all may not be well with UK manufacturing. Will the Secretary of State or the Minister therefore confirm that UK Trade & Investment will publish annually the regional impact of its work, so that we can be sure that Government policy works for all economies in Britain?

[Mr Prisk]

We will go further than that: we are making sure that UKTI is focused like a laser on small businesses in the manufacturing sector. That is why we are changing the budget and the structure, and making sure that in the regions outside the south-east there is a strong network—a strong set of roots—so that we can support manufacturing more effectively than the Labour party did in 12 years in office.

[Mr Marcus Jones (Nuneaton) (Con)]

I recently met business leaders from the Coventry and Warwickshire chamber of commerce. They are extremely heartened by the current review of regulation and red tape, but they are keen to know when there will be tangible changes. Will the Minister therefore tell the businesses in my constituency when they can expect to see tangible progress from this welcome review?

[Mr Prisk]

I will be delighted to do so. Not only have we got the moratorium exempting small businesses from future regulation, but we have cut by 70% down to 46 the 157 proposals, many of them legacies from the past Government, and only 11 of them will cost business anything at all. We are ending the gold-plating of e-regulations, and we are changing the approach so that we sunset regulation in the future. Each of those steps will make a difference, and I will make sure that we report back to the House each and every year.

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

Back in February, the House debated the problems caused by high-cost credit and agreed to consider a cap on the cost of credit. Following that, 15 MPs from across the House wrote to the Minister responsible asking for a meeting to discuss how we might take that decision forward. Five months later, during the recess, he responded, stating that he was too busy to meet us. As the number of people borrowing from these companies rises in all our constituencies every month, will the Secretary of State show some respect for the House and respond to this legitimate issue by agreeing to meet us?

[Mr Davey]

May I congratulate the hon. Lady on being the Member of Parliament who wants to meet me more frequently than any other? She omitted to tell the House not only that I have met her twice and that she failed to provide the evidence backing up her arguments for which I asked, but that I have met other Members of the House from the coalition parties who are campaigning on this issue, such as my hon. Friend the Member for Chippenham (Duncan Hames) and the hon. Member for North Swindon (Justin Tomlinson).

Business of the House

Thursday 9th June 2011 Commons Chamber

11:33

[Hilary Benn (Leeds Central) (Lab)]

Will the Leader of the House give us the business for next week?

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

The business for next week is as follows:

Monday 13 June—Remaining stages of the Welfare Reform Bill (Day 1).

Tuesday 14 June—Consideration in Committee of the Armed Forces Bill.

Wednesday 15 June—Remaining stages of the Welfare Reform Bill (Day 2).

Thursday 16 June—Remaining stages of the Armed Forces Bill.

Friday 17 June—Private Members’ Bills.

The provisional business for the week commencing 20 June will include:

Monday 20 June—Second Reading of the Pensions Bill [Lords].

Tuesday 21 June—Remaining stages of the Scotland Bill.

Wednesday 22 June—Opposition day (18th allotted day). There will be a debate on an Opposition motion. Subject to be announced.

Thursday 23 June—Business nominated by the Backbench Business Committee.

I should also like to inform the House that the business in Westminster Hall for Thursday 16 and 23 June 2011 will be:

Thursday 16 June—A debate on student visas.

Thursday 23 June—A debate on the private finance initiative.

[Hilary Benn]

I am grateful to the Leader of the House for that reply. Given his reputation as a reformer, I was surprised, and I am sure that view is shared by the Procedure Committee, by the Government’s rather dismissive response to its report on ministerial statements. Never mind, because the Backbench Business Committee can come to the rescue by giving the House the chance to vote on the proposals, so will the Leader of the House join me in encouraging the Committee to find time for that to happen?

I come now to the forthcoming business and, in particular, next week’s remaining stages of the Welfare Reform Bill. On 24 March, I asked the Leader of the House for an assurance that the regulations would appear in good time. He said in reply that

“we will seek to publish the appropriate regulations well in advance so that the House has an opportunity to reflect on them.”—[Official Report, 24 March 2011; Vol. 525, c. 1100.]

We are now two working days away from Report and we still have no policy and no regulations on how the costs of child care are going to be covered within the universal credit. What does the Leader of the House intend to do about this?

Following Lord Freud’s comments this week that spare bedrooms for people in social housing are a luxury, can we have a statement from the Work and Pensions Secretary so that he can confirm that a widow who has lived in the same two-bedroom house all her life now faces having her housing benefit cut, and may therefore be forced to move? If that is the case, where will she be expected to move to? The National Housing Federation says that while 180,000 social tenants in England are “under-occupying” two-bedroom homes, only 68,000 one-bedroom social homes become available for letting each year.

Following Tuesday’s written statement on the crisis at Southern Cross, it was reported yesterday that 3,000 jobs are to go there. May we have an oral statement so that the large number of elderly people who depend on these homes for their care can be reassured that they will be looked after come what may?

When will we have an oral statement on the changes to the Health and Social Care Bill that the Prime Minister saw fit to announce this week at Ealing hospital, rather than to the House? Can the Leader of the House give us a very simple assurance? Can he tell us that the Bill will be sent back to Committee in this House, so that we can consider the proposals in detail? It would be unacceptable to do anything else.

Given the extensive briefing from No. 10 this week on sentencing policy, when will the Justice Secretary come to the House to confirm that he has now been overruled by the Prime Minister and that his plans for a 50% reduction in sentence length for all those who plead guilty early, including to sexual offences and violent crime, have been scrapped? When he does come here, can he try to explain why the Prime Minister thought this was a good idea in the first place?

Now that the Public Accounts Committee has confirmed that the Government have made a complete mess of university funding, in particular with their gross underestimation of what universities would charge, when are we going to have a statement from the Minister for Universities and Science about what he proposes to do ? When he gives his statement, perhaps he could explain why the long-promised White Paper has now taken longer to gestate than a donkey, which takes 365 days, on average, and almost as long as a camel, which takes 400 days? It is no wonder that the academics of Oxford have no confidence in the Minister.

Talking of shy and overdue White Papers, back in February the Prime Minister proclaimed:

“We will soon publish a White Paper setting out our approach to public service reform...that will signal the decisive end of the old-fashioned, top-down…model.”

Bold words those, “soon” and “decisive”. What has happened? Nothing. First, this was put off until May and now we hear that it has been delayed until July because of another coalition split. One Lib Dem official has very helpfully said:

“Nick does not want there to be any sense that the public sector can’t be a provider of good quality public services”.

I think we can all feel another pause coming on.

Finally, Baroness Thatcher famously possessed no reverse gear, but this Prime Minister has a car stuffed full of them and a pause gear as well, as we have seen on school sport, forests, the NHS and now sentencing. But it does make us wonder what exactly goes on inside No. 10 when the Prime Minister approves all these policies in the first place only to reverse in the opposite direction, scattering his Cabinet colleagues along the way, when his pollsters tell them just how unpopular they are. So after yet another week of chaos from this coalition, is it any wonder that the Archbishop of Canterbury is now on his knees in despair?

[Sir George Young]

May I commend the shadow Leader of the House for a much better performance at the Dispatch Box than the leader of his party yesterday? On the Procedure Committee’s report on statements, the Government have, as he said, responded. I will not be going personally to the salon to bid for a debate but I would welcome a debate on statements. We have made more statements to the House than the previous Government—about 30% more on average—we have been very open with ministerial statements and we have responded with enthusiasm to urgent questions.

I will share with my right hon. Friend the Secretary of State for Work and Pensions the point that the right hon. Gentleman raised about the regulations. I anticipated that the bulk of them would have been tabled, but if some have not been I shall take that up with my right hon. Friend straight away.

On the point about housing benefit and the changes, I have announced two days’ debate on welfare reform in which there may be an opportunity to debate those, but there are transitional funds available to help people in situations such as the right hon. Gentleman described who might otherwise be caught by the proposed cap.

On Southern Cross, we have been working very closely with the Local Government Association and the Association of Directors of Adult Social Services to ensure that arrangements are in place in the event of any need. The National Health Service and Community Care Act 1990 gives local authorities all the powers they need to intervene if necessary. Whatever the outcome, no one will find themselves homeless or without care.

On the Health and Social Care Bill, it makes sense to await the outcome of the Field review and the Government’s response to it before we take a decision about whether the Bill should be recommitted. However, I say to the shadow Leader of the House that we spent more time in Public Bill Committee on that Bill than on any Bill since 2002. Whatever the outcome—whether recommittal or Report—I am determined that the House will have adequate time to debate the Bill’s remaining stages.

On higher education, I have seen the report of the Public Administration Committee and we plan to have the same numbers going to universities in 2012-13 as the numbers we inherited from the outgoing Government.

Let me address another issue that the shadow Leader of the House raised—that of the archbishop. I have not seen the full text of what the archbishop said but I hope that he has found time to balance any criticism of the coalition with commendation for some of the things we have done, such as the commitment to spend 0.7% of gross national income on overseas aid to ensure that the poorest people in the world do not bear the burden of solving our problems. I hope that the archbishop also finds time to commend our actions on the pupil premium, on giving more resources to the NHS and on taking lower-income people out of tax. He said that the coalition was rushing through things that nobody had voted for, but one could turn the coin over and say that in a Parliament in which no one party has a majority, there is much less likelihood of that happening.

[Mr Greg Knight (East Yorkshire) (Con)]

Does the Leader of the House agree that the Procedure Committee’s report on the use of hand-held devices in Parliament is a matter that should be debated sooner rather than later? Does he also agree that such a debate should not depend on the vagaries of the amount of time available to the Backbench Business Committee and that if necessary, the Government should provide time to enable the House to reach an early decision?

[Sir George Young]

I understand my right hon. Friend’s anxiety and that the gun has been jumped on the use of hand-held devices in the Chamber in advance of any decision, in that certain Members have already made use of that facility. Having implemented the Wright Committee’s recommendations and having allocated to the Backbench Business Committee time that would otherwise have been available to the Government, I am very reluctant to then find more time for Select Committee reports out of the finite time left to the Government, which we want to spend giving adequate time for Reports, Second Readings and other Government legislation.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

The Select Committee on Communities and Local Government has concluded that the Government’s localism plans are “incoherent” and that their most serious flaw is the accountability gaps. Sir Gus O’Donnell and Sir Bob Kerslake were supposed to be looking into that issue. Given the importance of this issue to local government, will the Leader of the House make time for a debate and may we have an update on those important accountability issues?

[Sir George Young]

I understand the Select Committee report and, of course, the Government will respond in due course. The Government are committed to what we call “double devolution”—enfranchising not only local government, but people beneath local government—and that is at the heart of the debate between us and those who take a different view. I cannot promise time to consider the report, but no doubt the Chair of the Backbench Business Committee will have heard the hon. Lady’s question.

[Jane Ellison (Battersea) (Con)]

The Government’s decision to establish the Backbench Business Committee was more than justified by this week’s vibrant sitting in which we heard many excellent bids for time. I understand the timetabling pressure on the Government, but while we received bids for 28 hours of Chamber time, we know of only one day that we can allocate. May I simply request on behalf of the Committee that we know about further time that we can allocate so that we can facilitate the many excellent bids that we receive?

[Sir George Young]

I understand my hon. Friend’s anxiety, and I remind the House that this Government established the Backbench Business Committee. We are committed to allocating 35 days in a normal Session, which is roughly one day a week. We will adhere to that commitment, and given that this Session will be slightly longer than normal, we will extend those 35 days by an appropriate proportion. I understand that no such day is allocated for the next two weeks, but we will of course catch up between now and the end of the Session.

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

May we have an urgent statement on the situation faced in my constituency by an 84-year-old widow with a limited income and hardly any savings? She looks after her 60-year-old disabled son, as she has done all his life, but because community care services are being provided on a limited scale, Walsall council has asked my constituent to pay £4,789 this year, starting with an instalment of some £400. That is quite disgraceful. Why are the most vulnerable in our society, such as the constituent whom I have cited—I have heard about other cases in the past few days—being targeted by this Tory Government and Tory councils?

[Sir George Young]

I reject the hon. Gentleman’s assertion that we have targeted the most vulnerable. On the contrary, we have allocated an extra £2 billion for social care through the NHS and local government that is aimed precisely at the sorts of cases to which he refers.

[John Hemming (Birmingham, Yardley) (LD)]

Further to the question asked by the hon. Member for Battersea (Jane Ellison), it is inevitable that the Backbench Business Committee cannot satisfy everyone’s concerns about time. However, members of the Procedure Committee are worried that whereas the time that was available to debate its reports used to come out of Government time, it now comes out of Back-Bench time. What proposals do the Government have to introduce a House business committee that will allow all these things to be balanced in an accountable manner?

[Sir George Young]

The Wright Committee proposed that we should have a House business committee. Although that proposition was rejected by the outgoing Labour Government, we have accepted it and said that within the first three years of the Government, we will move towards a House business committee that will merge the responsibilities of the Backbench Business Committee and of the Leader of the House for deciding the future conduct of business.

[Mr David Hanson (Delyn) (Lab)]

May we have an early debate on the Government’s disastrous decision today regarding the feed-in tariff regime for solar energy? More than 80% of those who responded to the consultation disagreed with today’s outcome. The Solar Trade Association says that today’s announcement “effectively kills” the solar industry, and companies such as Kingspan and Sharp in my part of the world of north Wales will be shattered by this decision to end solar manufacturing.

[Sir George Young]

The Government are committed to providing more energy through alternative sources such as solar energy, and we have taken several steps to increase the supply. I cannot promise a debate in Government time, but I think that we will next have Energy and Climate Change questions on 7 July. Alternatively, the right hon. Gentleman could bid for an Adjournment debate on this important subject.

[Neil Carmichael (Stroud) (Con)]

Throughout Business, Innovation and Skills questions, we heard of a strong and determined interest in manufacturing and engineering. May the House have a proper debate about the importance of that sector to highlight the necessity of encouraging young people to think about it as one in which they can have an exciting and rewarding career so that we can march forward for growth?

[Sir George Young]

I agree with my hon. Friend. There will be 250,000 more apprenticeships and I hope that many will end up in the manufacturing industry. We want to rebalance the economy, and a resurgent industrial sector will enable us to have a much more resilient model of long-term growth. I welcome some of the encouraging signs in manufacturing that we have seen over the past 12 months.

[Ian Murray (Edinburgh South) (Lab)]

There is little doubt that Scotland could survive as an independent country, but the critical question is whether it would be a more prosperous and fairer country. May we have an urgent debate in the House on the positive contribution of the Union to Scotland and the Scottish people and the positive contribution of Scotland and the Scottish people to the Union?

[Sir George Young]

The answer is yes, because the Scotland Bill will be returning to the Floor of the House within the next two weeks, when the hon. Gentleman will have an opportunity to make a speech. We will reassert our commitment to a United Kingdom and to Scotland remaining an integral part of it.

[Kwasi Kwarteng (Spelthorne) (Con)]

Given the housing need and shortage in constituencies in the south-east such as mine, will the Leader of the House allow us to have a debate on housing?

[Sir George Young]

My hon. Friend will welcome the announcement on Wednesday that 100,000 acres of publicly owned Government land will be made available for housing, providing not only much needed housing, but 25,000 jobs in the building sector. We are very anxious to increase the supply of housing and I hope that the initiative we announced yesterday will do exactly that.

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

Civitas produced a report last month indicating that, because of carbon floor pricing policy, more than 600,000 chemical workers’ jobs could be lost in the UK. The Institution of Mechanical Engineers recently published a report that surveyed 1,000 companies, only 12% of which indicated that they thought the Government’s programme to rebalance the economy was working. May we have a debate in the House on how the Government are rebalancing the economy?

[Sir George Young]

We have just had Business, Innovation and Skills questions, when those exact issues could have been raised with the Secretary of State. I do not know whether the hon. Gentleman was in his place at the time and sought to raise them, but if he was he will have heard about the Government’s initiatives to help the manufacturing sector of the economy and drive up employment, and I am sure that reference was made to initiatives such as the regional growth fund.

[Bob Blackman (Harrow East) (Con)]

My right hon. Friend will be aware of the excellent campaign being run by the Evening Standard to promote reading across London. It is somewhat ironic that large numbers of Labour-led local authorities are closing libraries across London. May we have a debate on how to combat this cultural vandalism inflicted by members of the Labour party?

[Sir George Young]

I hope that when local authorities take the necessary decisions to balance the books they will not take easy decisions and close libraries without exploring all the alternatives. My hon. Friend will know that there is a provision in the legislation whereby the Secretary of State has a role in the closing of libraries, so he might like to keep that at the back of his mind.

[Joan Walley (Stoke-on-Trent North) (Lab)]

May I return to the Health and Social Care Bill? Given the real confusion and uncertainty surrounding the future of the NHS, it is absolutely essential that we have a debate in the House following the Field review and before we go to recommital of the Bill. The founding principles of the NHS are now at risk and the legal duty to secure the provision of health care will be abolished unless the House looks at that in detail.

[Sir George Young]

The founding principles of the NHS are not at risk, and I refer the hon. Lady to the speech that the Prime Minister made earlier this week. I am determined that there should be adequate time to debate the Health and Social Care Bill. As I said, it makes sense to await the outcome of the Field review and see what amendments to the Bill the Government propose to table before deciding whether it should be recommitted or dealt with on Report. I am determined that the House should have adequate time to consider the Bill’s important remaining stages.

[Mr Matthew Offord (Hendon) (Con)]

May we have a statement on the citizenship status of suspected war criminals who now reside in the UK? I have been seeking information from the Home Office on the number of people who were actively involved in the Trawniki concentration camp in Poland. In March, I received a written response from the Minister for Immigration, who said he would undertake to take away citizenship from people who were engaged in these activities, but since then I have heard nothing and no more information has emerged.

[Sir George Young]

It should be absolutely clear that the UK will not be a safe haven for those fleeing from international justice. I do not have the details of the case to which my hon. Friend refers, but I will refer it to the Home Secretary. The UK Border Agency refers appropriate cases to the Metropolitan police for investigation and the decision on whether to prosecute lies with them. Cases will be referred where there has been an admission or allegation of an offence where the UK has jurisdiction to prosecute.

[Mr Tom Harris (Glasgow South) (Lab)]

I doubt that I am the only Member whose constituents have been targeted in a new internet scam whereby they are cold-called at home, told that their computer has a virus and asked for their internet protocol address over the phone. Clearly the IP address would be used to access their computers remotely for less than honest reasons. Will the Leader of the House invite the Minister responsible to the House so that we can debate how the Government can contribute to protecting people’s home computers and privacy?

[Sir George Young]

I am grateful to the hon. Gentleman for using the air time available to him to warn people of that risk. There will be an opportunity next Thursday during Culture, Media and Sport questions to raise it further. In the meantime, I will see whether the appropriate authorities can take further action to alert people to this dangerous scam.

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

May we please have a debate on the BBC’s news and Parliament channels? The BBC Trust is currently conducting one of its regular reviews on those two important channels and a debate would allow Members to contribute to the consultation process that is part of the review.

[Sir George Young]

I understand the anxiety about the coverage of the BBC’s news and Parliament channels. It is a matter for the BBC, and the Government should not become directly involved. I would welcome such a debate and hope that my hon. Friend will make an appropriate bid. The period of the current charter runs until the end of 2016 and there will be a full review as that time draws near, although no date or remit have been set.

[Mrs Jenny Chapman (Darlington) (Lab)]

I am one of 15 Members who wrote to the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), who is responsible for consumer affairs, with a request for a meeting to discuss high-cost lending, which was declined following five months waiting for a response. Will the Leader of the House investigate the Minister’s work load and establish whether a meeting would be possible?

[Sir George Young]

I caught the end of BIS questions and heard the hon. Member for Walthamstow (Stella Creasy) press the Minister for a further meeting on that issue. I will also press for a further meeting on the issue and report the bid of the hon. Member for Darlington (Mrs Chapman) to my hon. Friend the Minister, but I assure her that he, like every Minister in the Government, is very busy on governmental business all the time.

[Priti Patel (Witham) (Con)]

My constituent Marie Heath has been left devastated by the brutal murder of her son Lee in Frankfurt in April. Will the Leader of the House give her an assurance that the Government will fully support her family during this most difficult time and, importantly, press the German authorities to bring her son’s murderers to justice?

[Sir George Young]

I extend my condolences to Marie Heath on the recent tragic death of her son Lee. The consular service of the Foreign and Commonwealth Office should of course continue to provide all assistance necessary to Mrs Heath and her family and maintain contact with her, as it did when she went to Germany following the attack. I understand that it has also arranged for the family to receive assistance from Victim Support’s national homicide service. I will also ensure that the FCO is aware of my hon. Friend’s interest in the case.

[Fiona Mactaggart (Slough) (Lab)]

In Business, Innovation and Skills questions earlier today the House heard that the Minister for Further Education, Skills and Lifelong Learning plans to produce an equality impact assessment of the proposed increases in charges for English for speakers of other languages courses before the House rises for the summer recess. If that shows, as my experience in my constituency does, that the changes in ESOL fees will bear unfairly on women—seven in every 10 students affected in Slough are women—will the Leader of the House ensure that we have time before the House rises to change the policy on behalf of those women?

[Sir George Young]

The hon. Lady is making an assumption that the document to which she refers will indeed confirm her suspicions. I think it makes sense to await the outcome of the impact review, but I will share her concern with the Minister and ensure that there is an opportunity to take what she says on board if it turns out that there is an adverse impact.

[Bob Russell (Colchester) (LD)]

The fog of war is one thing, but the fog of confusion at the Ministry of Defence is quite another. There are reports that soldiers in 16 Air Assault Brigade face a pay cut of about £2,000 a year. On Tuesday, the brigade, which recently returned from Helmand province, had a welcome home parade in Colchester, and yesterday at St Edmundsbury cathedral there was a service of thanksgiving, remembrance and hope. Does the Leader of the House agree that a wage cut of £2,000 is not the reward they should receive, and if he cannot arrange for a Minister to come to the House to clarify what is going on, will he at least arrange for a Minister to clarify in the armed forces debate precisely what the position is?

[Sir George Young]

My hon. Friend knows that there will be two days next week to debate the Armed Forces Bill, when there may be an opportunity to raise the matter. I heard his point of order earlier this week at a relatively late hour, and my right hon. Friend the Defence Secretary has made it clear that all service personnel who have a current qualification to parachute and are in a post where we might ask them to use that skill on behalf of this country must continue to receive specialist parachute pay in recognition of that. I recognise that this is a sensitive and emotive subject, and I hope that what I have said is of some help.

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

I am sure that you, Mr Speaker, and the Leader of the House will want to join me in congratulating Swansea City on their recent promotion to the premier league, but in addition will the Leader of the House provide time for an urgent debate on the further electrification of the railway line out of Paddington from Cardiff to Swansea in the light of the increased traffic due to that promotion, plus the extra convergence funding that might be available to subsidise the cost, and in the light of the Prime Minister’s statement in April in Swansea, when he said that the Government would look at the further extension of electrification to Swansea?

[Sir George Young]

As a former supporter of Reading football club, I was less than pleased at the outcome of that match. The hon. Gentleman has raised the question of electrification several times, but we would not save any time if we made the change that he outlines. It has been raised several times at Transport questions, and despite the heroic work of his local football club I would be misleading him if I said that it would generate enough traffic to alter substantially the arithmetic on which that decision was based.

[Mr Rob Wilson (Reading East) (Con)]

Following information from whistleblowers, I recently raised the case of The Manchester college and its highly questionable activities in relation to the delivery of taxpayer-funded training contracts at prisons such as Reading. May we therefore have a debate on the illegal and inefficient spending of taxpayers’ money, in which I would be able, for example, to call for a thorough audit of all the taxpayer money that has gone to The Manchester college?

[Sir George Young]

I share my hon. Friend’s concern if there has been any misuse of taxpayers’ funds. I shall draw his remarks to the attention of the appropriate Minister and ask him to write to my hon. Friend, reassuring him either that there has been no misuse or that appropriate action is being taken to ensure that any misuse is put right.

[Anas Sarwar (Glasgow Central) (Lab)]

Scottish Power this week announced that it will increase its energy prices by 19%, and other energy companies are likely to follow suit. May we have an urgent statement from the Government outlining what discussions they have had with energy companies and what measures they will take to ensure that we support families, who already have very tight budgets?

[Sir George Young]

I understand the hon. Gentleman’s concern at the recent announcement of fuel price increases, and we are committed to doing all we can to ensure that vulnerable older people can keep their homes warm in the winter. We have protected the winter fuel payments and permanently increased cold weather payments from £8.50 to £25 per week. We have also announced the triple guarantee for more generous state pension provision, so that vulnerable people do not have to choose between food and heating their homes, but I will share his concern with my right hon. Friends.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

The Safe and Sustainable review that is out to consultation implies that Oxford’s child heart surgery unit will close. Clinicians in Oxford and Southampton, however, have developed a partnership proposal that offers the quality assurance that the Government seek while retaining the accessibility that patients and clinicians fear losing. As Safe and Sustainable, an inherited review, runs the risk of being seen as an imposed reorganisation from above, that proposal seems exactly the kind of innovative local solution that we want to encourage. May we therefore have a debate on child heart surgery partnerships between trusts in order to assist those making a decision on the Safe and Sustainable recommendations and to encourage such solutions in other parts of the country?

[Sir George Young]

I am grateful to my hon. Friend, who will know that the consultation is under way and concludes at the end of the month. I have an interest, because Southampton general hospital serves a number of my constituents, and I was interested to hear her float the idea of a partnership between the relevant hospitals in Oxford and Southampton. The future of cardiac paediatric surgery has been a matter of some debate since the problems in Bristol, and we inherited a review, which my hon. Friend knows about, to try to get a better and safer balance of services, but I will certainly see that the committee that looks at the review when it is completed takes on board her suggestion of a partnership between the two hospitals.

[Paul Flynn (Newport West) (Lab)]

May we debate the almost certain link between the tragic deaths of six of our gallant soldiers in the past two weeks and the escape eight weeks ago of 500 members of the Taliban, probably because of the incompetence or, possibly, collaboration of their jailers? Should we not examine whether the Government’s over-optimistic trust in the Afghan police and army is having lethal consequences for our soldiers?

[Sir George Young]

I understand the hon. Gentleman’s concern. He will know that the Government make regular statements on the position in Afghanistan and in Iraq, and we will continue to do so. When we make those statements, he will have an opportunity to share his concern about the prisoners who escaped and their possible impact on the soldiers who have lost their lives. I cannot promise a debate about the issue, but perhaps Foreign Office questions would be a good opportunity for him to press Ministers on it.

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

May we have a debate about economic growth and confidence? I was surprised to see, in assessing macro-economic policy, the views of a very small, left-wing bunch of economists being given so much weight, when I know that credible economists back the Government.

[Sir George Young]

I am grateful to my hon. Friend for that helpful and supportive point, and he makes it in the week when the IMF said:

“Aided by the implementation of a wide-ranging policy program, the post-crisis repair of the UK economy is underway.”

That view is endorsed by the European Commission, the CBI and many others, and most people will accept their interpretation of what is happening, rather than that of the outgoing Labour Administration, who got us into this mess.

[Albert Owen (Ynys Môn) (Lab)]

Further to what my hon. Friend the Member for Glasgow Central (Anas Sarwar) said about the huge increases in domestic energy prices, may we have an immediate and urgent debate on the subject, in which we could also look at the role of the regulator to ensure that it protects not just vulnerable customers but all consumers of gas and electricity, both on and off the grid?

[Sir George Young]

I cannot promise an immediate debate, but it strikes me as an issue that the Energy and Climate Change Committee might like to look at, as it involves both the regulator and the increase in fuel prices. There will be an opportunity, however, to press Ministers from the Department of Energy and Climate Change at the next question time.

[Andrew Stephenson (Pendle) (Con)]

Will the Leader of the House grant us a debate about Government plans for the natural environment? This week the Government published on the subject a crucial White Paper, which will be hugely beneficial in safeguarding and enhancing the natural environment, and I feel that a debate on those welcome proposals would be appropriate.

[Sir George Young]

I hope that my hon. Friend will go to the Backbench Business Committee and bid for such a debate. We launched the White Paper a few days ago—the first White Paper for some 20 years, looking ahead for the next 50 years, proposing measures to safeguard and enhance our natural environment and setting out a programme of action for some of the damage that has been done. I should welcome such a debate if chosen by the Backbench Business Committee.

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

Does the Leader of the House agree that it is difficult if not impossible to become a full citizen of our country without speaking English? Is he aware that other countries, such as the Netherlands, link the payment of benefits to new entrants to their country to training in and learning of the language? Is it not about time that we put extra effort into the whole concept of citizenship and the necessity to teach people English in order to access it?

[Sir George Young]

I agree with the hon. Gentleman’s first sentence. I was under the impression that there was indeed an English language test as part of the citizenship test before one became a citizen, but if that is not the case I will ask my hon. Friend the Minister for Immigration to write to the hon. Gentleman setting out what the position is.

[Robert Halfon (Harlow) (Con)]

Will the Leader of the House find time for an urgent statement on the E. coli outbreak in Europe and the UK cucumber industry? Despite British produce being perfectly safe, many farmers in my constituency have seen a fall in sales of between 30% and 50%, and some are already on their way to bankruptcy. Will he ask the Government to redouble their efforts for fair access to the €150 million of EU compensation and to persuade Russia to lift its unfair ban on UK cucumbers?

[Sir George Young]

My hon. Friend said at the beginning of his remarks that there is no evidence of any contamination in the UK food chain from the E. coli disease that has broken out in Germany, and I share his concern about UK cucumber producers, because all the evidence shows that their product is perfectly safe to eat. The Food Standards Agency reminds consumers of the importance of basic food hygiene when preparing food, but I will certainly raise with my right hon. Friends the question that my hon. Friend raises about compensation for those who have lost their livelihood as a result of the outbreak.

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

The Leader of the House is well aware of my concern about the Government’s secret plans to try to privatise my local hospital trust. I am now informed that the trust has expressed concern that if it has to implement the cuts that the Government want, patient safety will be put at risk. The trust has refused to publish those documents. May we have a debate on the secrecy that now surrounds the NHS?

[Sir George Young]

Legislation put on to the statute book by the hon. Gentleman’s own party when in government makes it absolutely clear that it is impossible to privatise an NHS trust. As we have said in earlier exchanges, there will be an opportunity to debate this issue in the context of the Health and Social Care Bill. He has written to me and to the relevant Health Minister several times. If there are any outstanding issues, I will ask the Minister to write to him yet again.

[Karl MᶜCartney (Lincoln) (Con)]

With continued disquiet across the House regarding the ongoing role of the Independent Parliamentary Standards Authority, and following the recent debate instigated by my hon. Friend the Member for Windsor (Adam Afriyie), would my right hon. Friend care to update us on any meetings or discussions that he has had about that?

[Sir George Young]

As a result of the debate that the House had before the recess, we agreed to set up a Committee of the House to look at some specific issues that the House referred to it. That is the body to which my hon. Friend should address his attention when we set it up, which will be in the near future. In the meantime, we have a liaison committee between the House and IPSA, with six or eight Members on it, and he might like to make contact with them. If he has any issues that need to be addressed urgently, I would be happy to use what influence I have to sort them out.

[Kevin Brennan (Cardiff West) (Lab)]

May we have a statement on the Olympic tickets debacle and, in particular, how it is possible that the Olympic organising committee could devise a system whereby 1 million people did not get any tickets at all in the first ballot, which means that they will have to do what I did this week—register on a French website in order to get some sensible way of trying to purchase them? Should not Ministers be calling in members of the committee, showing them the instruments of torture, and getting them to sort this out?

[Sir George Young]

The fact is that there were many more bids for tickets than there were tickets available, so inevitably there had to be a rationing system. My own view is that the system that the committee introduced was a fair one. A week from today, the hon. Gentleman will have an opportunity to press Ministers at Culture, Media and Sport questions, and I will give them due warning that he is on the warpath.

[Gordon Birtwistle (Burnley) (LD)]

Will the Leader of the House consider granting a debate on defence and transport procurement policies to enable British companies to operate on a level playing field, which could also deliver increased export potential as British manufacturers could sell their goods across the world?

[Sir George Young]

We are keen on level playing fields. One of the obligations of being a member of the European Union is that there should be no non-tariff barriers to trade. There may be an opportunity for my hon. Friend to raise his concerns about defence equipment in next week’s debates on the Armed Forces Bill. If he is concerned about any specific contract, I would be happy to take that up with the Ministry of Defence.

[Mrs Madeleine Moon (Bridgend) (Lab)]

In 2004, the King and Government of Malaysia awarded the Pingat Jasa Malaysia medal to soldiers who fought in the Malaysian jungle between 1957 and 1966. That medal was initially refused to veterans by the British Government. It has now been accepted, but veterans are not allowed to wear it in public. According to a written answer from the Ministry of Defence of 26 April, the review was currently with the Prime Minister and Deputy Prime Minister and it was hoped that a decision would be made after Easter. It is now long after Easter, and we are still waiting. On behalf of people such as Ted Williams, who is national secretary of the National Malaya and Borneo Veterans Association, may we have a statement as soon as possible so that as we approach armed forces week they can wear their medal publicly, with pride, in memory of the 340 troops who died fighting bravely in those jungles?

[Sir George Young]

This is a long-standing campaign that has a lot of support on both sides of the House, and I commend the hon. Lady for raising it. I will raise with the Prime Minister and the Deputy Prime Minister exactly what she has said. If it is indeed the case that a decision rests with them, I will use what influence I have to try to get a decision before the summer recess.

[Mrs Anne Main (St Albans) (Con)]

Further to the remarks by my hon. Friend the Member for Harlow (Robert Halfon) about British cucumbers being decimated, may we have a debate on why some ill-judged remarks by an EU Minister from Germany are leading to enormous financial implications and bills for our country?

[Sir George Young]

As I made clear earlier, there is no evidence at all of any contamination in the UK food chain that emanates from the problems of the E. coli outbreak in Germany. I say again to my hon. Friend that the public should be reassured that there is no reason at all why cucumbers in this country should not be consumed. If there have been unhelpful remarks from people overseas, of course I will pursue that through the Foreign and Commonwealth Office.

[Ian Mearns (Gateshead) (Lab)]

As a member of the Backbench Business Committee, may I associate myself with the comments of the hon. Members for Battersea (Jane Ellison) and for Birmingham, Yardley (John Hemming) with regard to the work of the Committee, where work is piling up? Members across the House are becoming concerned at the little time so far allocated by the Government to its duties.

May I also ask the Leader of the House about Southern Cross? There is significant concern about Southern Cross, not only because of the current self-induced financial crisis but because of significant shortcomings in levels of care in several homes around the country before the crisis was confirmed.

[Sir George Young]

On the latter point, it would be for the Care Quality Commission to pursue any failings in care and to take that up with the home directly and, if necessary, with the appropriate social services departments.

In response to what the hon. Gentleman said about time pressures, there is enormous pressure on the Government in that we are asked for more time for Report stages and for debates on important issues. Unless he is suggesting that the House should sit into the end of July and August, I am afraid that the Backbench Business Committee and the Government will both have to make difficult decisions on timing.

[Several hon. Members]

rose—

[Mr Speaker]

Order. May I gently remind the House that questions to the Leader of the House at business questions should specifically seek either a debate or a statement?

[Christopher Pincher (Tamworth) (Con)]

Will the Leader of the House make time for a debate on NHS funding? Constituents of mine have highlighted to me the importance of mental health services provision, so a debate on the £3 billion of further investment that this Government are putting into the NHS this year would be timely and welcome.

[Sir George Young]

I am grateful to my hon. Friend. There will be time for a debate on the NHS when the Health and Social Care Bill returns to the Floor of the House. He reminds the House that an extra £3 billion is being invested in the NHS this year—an investment that Labour would have denied it.

[Chris Bryant (Rhondda) (Lab)]

A constituent of mine is particularly worried about the Government’s plans for the NHS in England because her daughter has a rare condition that can be treated only in hospital in London. She will therefore be interested to know that the Government are talking about recommitting the Health and Social Care Bill to Committee. However, will there not be a real problem for members of that Committee, who may have to vote for exactly the opposite of what they voted for only a few months ago? Will the Leader of the House make sure that if there is to be a recommittal, the Committee has a new set of Government Back Benchers so that the original members do not have to lose any integrity or credibility?

[Sir George Young]

A nice try! If the Bill is recommitted, there will have to be a fresh Committee of Selection to appoint a new Committee. I have every confidence that Back-Bench Members of my party and of the Liberal Democrat party will use their best judgment on that Committee and continue to work with the Government to drive up standards in the NHS so that we have a world-beating health service in this country.

[Brandon Lewis (Great Yarmouth) (Con)]

In order potentially to give some support to whatever position the FA may take, may we have a debate on the appalling situation in FIFA that is bringing our beautiful game into such disrepute?

[Sir George Young]

There will be an opportunity to raise that at DCMS questions next week. I thought that the FA did the right thing in arguing strongly for a postponement of the election, but it was not successful. It is now up to Sepp Blatter to reform FIFA and make it a much more accountable and transparent organisation than it is at the moment.

[Nick Smith (Blaenau Gwent) (Lab)]

May I, too, press for a debate on the future of regulation of our care homes? Southern Cross has 750 homes across the country that are in trouble with rental payments, and yesterday we learned that 3,000 staff are being laid off. Many Members across the House will want a debate to ensure that the Government have a grip on the situation.

[Sir George Young]

I understand the concern about this. I hope that before long it will be possible to offer time to the Backbench Business Committee for which it might consider a serious bid from both sides of the House for a debate on care. The Dilnot report will come out early next month. I am sure that the House will want to debate it, because its recommendations are closely linked to the problems in which Southern Cross and other care home providers now find themselves.

[Mr Peter Bone (Wellingborough) (Con)]

Many Members have made the point that there has been not been enough time for the Backbench Business Committee. The Chairman of the Committee would have made that point today, but unfortunately cannot be here for understandable reasons. There was a solution. The Wright report recommended that Back-Bench business should be scheduled every Wednesday with Thursdays once again becoming a main day for debate on Government legislation and other matters. Will the Leader of the House make a statement next week to say whether that can be done or whether the forces of darkness are preventing it?

[Sir George Young]

There are no forces of darkness in my life. I will reflect on my hon. Friend’s point. It is not the case that the Backbench Business Committee has been offered only Thursdays. I think that the last day it was offered was a Tuesday. The Government have to balance the demands on time for Government Bills with the demands of the Backbench Business Committee. This will all be resolved in three years when we have a House business committee that can take a co-ordinated view. I commend my hon. Friend for his role in never letting us forget that we have a Backbench Business Committee.

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

Diolch yn fawr, Mr Speaker. During the recess, The Observer reported a seemingly rolling commitment by the British military mission in Saudi Arabia. May we have an urgent statement from the Government on the exact nature of the role of the BMM in training the Saudi national guard? It would seem slightly duplicitous to support pro-democracy movements in the middle east, while training the jack-boot forces that are quashing protests in the region.

[Sir George Young]

I understand the hon. Gentleman’s concern. There will be an opportunity next Tuesday at Foreign Office questions either to table a substantive question such as the one he has asked, or to ask a topical question. I will alert Foreign Office Ministers that such a question might be on the way.

[Gavin Williamson (South Staffordshire) (Con)]

I very much hope that we can have a debate on intellectual property. I am sure that my right hon. Friend is aware of the great sporting event that is to take place in this country next year: the Wombourne olympics in south Staffordshire. The event’s organisers are very concerned that the Olympic authorities might prosecute them for using the word “olympics”. I am sure that a debate would clarify the matter.

[Sir George Young]

I very much hope that the matter can be clarified without the need for a debate. I will alert the appropriate Minister to the dilemma that confronts my hon. Friend’s constituents, and see whether we can find a way through.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

May we have a debate on the progress of the Department for Work and Pensions in implementing the recommendations of the Harrington review into work capability assessments? My constituent, Barry Haney, who has a brain tumour with multiple side-effects, was judged fit to work after a four-minute assessment. He won his appeal. Surely it would save a lot of heartache, time and public money if the assessments were got right in the first place. Perhaps we could debate that on a cross-party basis in the House.

[Sir George Young]

There will be Work and Pensions questions on Monday. Of course we should try to get these matters right at the initial assessment so that they do not have to go to appeal. The hon. Gentleman reminds the House that there is an opportunity to appeal to an independent body. I will certainly raise the issue with the DWP and ensure that the quality control is such that the need to appeal in such cases is minimised.

[David Mowat (Warrington South) (Con)]

An important decision to be made in the next few months is the location of the green investment bank. It is important that the criteria for that decision are transparent and open to scrutiny. May we have a statement on what the criteria will be, and an assurance that the process will be transparent, open and fair, in which case I am sure the bank will end up in Warrington?

[Sir George Young]

I fear that my hon. Friend may have opened a bidding war with his question. All parts of the country will be considered. The location for the green investment bank will be chosen to enable it best to deliver its mission. We will consider a number of criteria, including the ability to fulfil the GIB’s mission, ease of access to the talent pool, and commercial costs. I am sure that Warrington will be considered.

[Valerie Vaz (Walsall South) (Lab)]

Will the Leader of the House conduct a review and make a statement to the House on the way in which the Government respond to questions from Members? On Tuesday, I asked the Secretary of State for Health about the cost of the listening exercise. He has twice been unable to answer that question and wants to write to me. Some estimates have put the cost at up to £1 billion. If the pause, listening and reflecting had been done at the White Paper stage, none of these costs would have been incurred.

[Sir George Young]

If my right hon. Friend said that he would write to the hon. Lady with an answer, I am sure that that is exactly what he will do. I think that the pause for the listening exercise has been widely welcomed. If it enables us to improve the provisions of the Health and Social Care Bill, I am sure that the whole House will welcome that outcome.

[Jim Shannon (Strangford) (DUP)]

Will the Leader of the House agree to a debate on awarding a posthumous Victoria cross to Blair Mayne, the legendary member and officer of the Special Air Service, for his courageous and heroic endeavours in the desert campaign of the second world war? He was a native of Newtownards in my constituency. To use an Ulster Scots colloquialism, he was yin o’ oor ain folk. Ards borough council and the Northern Ireland Assembly support the campaign. In the last Parliament, a number of Members signed an early-day motion asking for him to be recognised with the VC. How better to ensure that their war hero is recognised? A debate in this House would allow public opinion to be reflected and enable hon. Members to indicate their support for—

[Mr Speaker]

Order. I apologise, but the hon. Gentleman’s question is very long. He must try to make his questions shorter in future.

[Sir George Young]

The hon. Gentleman has spoken of someone who was clearly a very brave man. I will certainly pass his bid on to the Secretary of State for Defence.

[Nic Dakin (Scunthorpe) (Lab)]

The Government have relied for their evidence base for scrapping education maintenance allowance on a piece of research by the National Foundation for Educational Research. Dr Thomas Spielhofer, who led that research, made it very clear in evidence to the Education Committee yesterday that there is no evidence base in the research to say that EMA is a dead-weight. In view of that, will the Secretary of State for Education come to the House to explain the evidence base on which he makes his decisions?

[Sir George Young]

If the Select Committee is doing an investigation into the subject, it would seem sensible for the Committee to summon the Secretary of State to respond to that evidence, rather than have him summoned to the Floor of the House.

Dr David Kelly

Thursday 9th June 2011 Commons Chamber

12:26

[The Attorney-General (Mr Dominic Grieve)]

With permission, Mr Speaker, I would like to make a statement about the death of Dr David Kelly and whether an application should be made by me to the High Court for an inquest to be held into his death.

As a Law Officer of the Crown, I am routinely asked to consider such applications as part of my public interest role. It is in that role that I make this statement. I would not normally present the result of my considerations so publicly, but given the interest that this case has attracted from Members of the House and in the media, I think it is right that this House has the chance to consider my conclusions and to ask questions.

The House will be aware that Dr Kelly was a distinguished Government scientist, who became one of the chief weapons inspectors in Iraq on behalf of the United Nations Special Commission and who, from 1991 onwards, was deeply involved in investigating the biological warfare programme of the Iraqi regime. Dr Kelly built up a high reputation as a weapons inspector, not only in the United Kingdom but internationally.

Against a background of allegations of information having been leaked to the media, on Thursday 10 July 2003 both the Foreign Affairs Committee and the Intelligence and Security Committee requested that Dr Kelly appear before them to give evidence. He gave evidence to the Foreign Affairs Committee in a hearing televised to the public on 15 July, and he gave evidence to the Intelligence and Security Committee in a private hearing on 16 July.

In the afternoon of the following day, Dr Kelly left his home to take a walk. By the late evening, he had not returned and his family contacted the police. A search was commenced that resulted in his body being found in the morning of 18 July in woodland on Harrowdown hill in Oxfordshire. It appeared that Dr Kelly had taken his own life by cutting his wrist. Thames Valley police nevertheless commenced an investigation into the case as a potential homicide.

That day, the then Lord Chancellor, Lord Falconer, set up an inquiry chaired by Lord Hutton to investigate the circumstances surrounding the death of Dr Kelly. The Oxfordshire coroner also opened an inquest into the death as he was obliged to do. In August, the Lord Chancellor exercised his powers under the Coroners Act 1988 to transfer the functions of the inquest to the inquiry. The inquest was adjourned on 14 August, after sending the registrar a certificate of death in which the causes were stated to be, first, haemorrhage and incised wounds to the left wrist and, secondly, co-praxomol ingestion and coronary artery atherosclerosis. When the Hutton inquiry reported in January 2004, it confirmed the causes of death as they appeared in the death certificate. Thereafter, on 16 March 2004, the coroner indicated that there was no basis or need to resume the inquest, and that his functions were accordingly at an end.

Because of the interest in the political issues that formed the backdrop to Dr Kelly’s death, a significant number of people have raised concerns about his death and the process used to investigate it, and have called for a new inquest to be set up. At this stage, only the High Court can order an inquest, and then only on an application made by me or by another with my consent. I was asked last year to make such an application and have since been provided with a large amount of information that is said to support the case for an inquest. I am grateful to all those who have taken the time and trouble to put that information together.

As Attorney-General, I had then to exercise a non-political role as guardian of the public interest and consider whether any proper grounds existed for such an application to be made. Recognising the importance of the matter, I have sought the help of independent experts to review the evidence and the new information supplied to me. That has involved help from Dr Richard Shepherd, a leading forensic pathologist, and Professor Robert Flanagan, a distinguished toxicologist. I also sought and received the considered views of Lord Hutton; Mr Nicholas Gardiner, the Oxfordshire coroner; Dr Nicholas Hunt, the pathologist who carried out the original post-mortem; and others in response to the allegations made against their handling of the matter originally. I have also been greatly assisted by officers of the Thames Valley police. I wish to record my thanks to all who have helped me in considering this matter, and in particular to the legal staff at the Attorney-General’s office who have helped me.

Having given the most careful consideration to all the material that has been sent to me, I have concluded that the evidence that Dr Kelly took his own life is overwhelmingly strong. Further, nothing that I have seen supports any allegation that Dr Kelly was murdered or that his death was the subject of any kind of conspiracy or cover-up. In my view, no purpose would be served by my making an application to the High Court for an inquest, and indeed I have no reasonable basis for doing so. There is no possibility that, at an inquest, a verdict other than suicide would be returned.

It is not possible in the short time that I have now to explain in detail the reasoning behind my conclusions. In order to inform the House, I have placed in the Libraries of both Houses today a more detailed statement of my reasons, copies of the independent reports that I commissioned, the responses of Lord Hutton and others, some additional material and a schedule—a 60-page list that I hope covers most, if not all, the arguments that have been put to me and my response to each and every such argument based on all the evidence available.

May I just say, in broad terms, that the suggestion that Dr Kelly did not take his own life is based not on positive evidence as such but on a criticism of the findings of the investigation and inquiry? It began with the views of a number of doctors, undoubtedly expert in their own areas of practice but not qualified as forensic pathologists, that Dr Kelly could not have died from loss of blood from the wounds described. To be fair to those who make such a claim, they did not have access to the material on which those conclusions had been reached in making their own reasoned arguments.

Once such a doubt had been created, those who believed that Dr Kelly was murdered looked for contradictions in the evidence given to Lord Hutton, for matters that were apparently not followed up by the police and for any other issues that might be considered suspicious. Much has been made, for example, of the position in which Dr Kelly’s body was found. Although all the witnesses bar two gave evidence to the inquiry that Dr Kelly was found lying on his back with, as the photographs show, his head very close to the trunk of a tree, the two witnesses who found the body stated that it was propped against a tree. Lord Hutton, who had considerable experience as a trial judge, recognised that honest witnesses, in genuinely seeking to explain what they saw, can and sometimes will none the less recall the same scene differently. Any Member who has any experience of the trial process will say the same. That is underlined by the fact that one of those two witnesses, in the statement that he made to the police closer to the time of the event, actually described the body as being on its back and not propped. That is not a criticism of that witness, but from that minor contradiction came the view that the body must have been moved.

If the body had been moved, then why, by whom and for what purpose? The issue has proven a fertile ground for imaginative speculation to take over. In fact, all the evidence provided by the very careful forensic examination of the scene at the time and the detailed review that, exceptionally, I have undertaken, supports the view that Dr Kelly died where he was found and from the causes determined. There is no evidence that I have seen that would suggest any other explanation, or that suggests any cover up or conspiracy whatever.

I wish to emphasise that my conclusions and decision are, as they must be, entirely my own and based on my assessment of the evidence. I have received no representations of any kind from the Prime Minister or any other ministerial colleague on this decision.

The material is in the Library for all to consider. I believe that anyone approaching this matter with an open mind, whatever their previous misgivings, will find it convincing. I would add only that I offer to the Kelly family my sincere sympathy, not simply for their loss, great though that undoubtedly is, but for having to bear that loss in the glare of intrusive publicity over such a long period. They have borne that load with great fortitude and dignity. Although I realise that it will always be impossible to satisfy everyone, I would hope for their sake that a line can now be drawn under this matter.

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

I thank the right hon. and learned Gentleman for early sight of both his statement and the detailed reasons for his decision not to apply to the High Court for an inquest into the death of Dr David Kelly.

Having been afforded the opportunity to read and examine the documentation relating to the Attorney-General’s inquiries, in so far as time has permitted, the shadow Law Officers are grateful for the opportunity to review the documents, from which we derive confidence that the Attorney-General has addressed himself fully to the issues involved. We have been reassured by the comprehensive nature of the inquiry and the quality of the reports produced. The allegations made have clearly been taken seriously and inquired into, and I should like to commend the thorough and extremely transparent way in which he has handled the issue. I hope that that will give Members of the House and members of the public the reassurance that he was seeking to provide.

The Attorney-General’s findings corroborate those of the right hon. Lord Hutton, who concluded in his 2004 report into the circumstances surrounding the death of Dr Kelly that he was

“satisfied that Dr Kelly took his own life”

and

“further satisfied that no other person was involved in the death of Dr Kelly.”

The Attorney-General’s decision also substantiates the findings of the post-mortem and the toxicology reports conducted following Dr Kelly’s death and published by the Ministry of Justice last October

“in the interests of maintaining public confidence in the inquiry into how Dr Kelly came by his death.”

The Opposition therefore accept the Attorney-General’s decision today, on the basis that he has very carefully and clearly outlined his detailed reasons for not applying to the High Court to request an inquest into Dr Kelly’s death, due to the lack of new, compelling evidence that Dr Kelly did not commit suicide.

We are grateful to the Attorney-General for the written statement and related documents that he has placed in the Libraries of both Houses, which will assist Members and the public in understanding the basis of his announcement today. None the less, I am aware that few in this House will yet have had the advantage of perusing the documents. I therefore wonder whether he will provide for Members of the House, and for members of the public, who may listen to this statement but not peruse the documents in the Library, a brief outline of the legal basis of his decision not to apply to the High Court for a new inquest; confirmation that he is satisfied that, as has been extensively raised in media reports, the evidential burden of proof beyond reasonable doubt as to the cause of Dr Kelly’s death has been met, thereby dispelling concerns that a coroner’s inquest would return a different verdict; and a statement of whether he believes that his decision today would not rule out a future inquest should any new and compelling evidence about the circumstances surrounding Dr Kelly’s death come to light.

Finally, I also wish to extend my sincere sympathy to the Kelly family for both their tragic loss and the undoubted difficulty that the extensive publicity surrounding the matter has caused.

[The Attorney-General]

I am most grateful to the hon. Lady for her kind words. I appreciate them and I have no doubt that they will be appreciated by all those who have been involved in reviewing this case.

The hon. Lady raises a number of important points, which I shall do my best to answer. First, I very much hope for the sake of all concerned that this will produce finality, but it is absolutely right that if some new and compelling evidence were to come to light at some point in future that suggests that there might be something wrong in the original inquiry findings, it would of course be possible for the matter to be looked at again, as in the case of any inquest or inquiry. In that sense, there is no bar as a result of the statement that I have made today.

Secondly, the hon. Lady asked me to explain my legal powers a little. The background is that the inquest process was replaced originally by a decision of Lord Falconer to have an inquiry, pursuant to section 17A of the Coroners Act 1988. That decision was never challenged at the time—somebody could have done so if they had wanted to, and there is no reason whatever to suppose that there was anything improper about the decision. Indeed, as I understood it, the decision marked the seriousness with which Lord Falconer took the matter at that time, and it marked his desire to have an inquiry that would be capable of going further in its scope than an inquest, particularly in respect of looking at some of the surrounding circumstances, which an inquest would not be particularly well placed to do.

Lord Hutton did indeed look at those surrounding circumstances, but they were not really the subject of this review. The review arose from the representations of the memorialist doctors who indicated that they thought that the lack of certainty specifically as to the cause of death was such that I ought to exercise my powers under section 13 of the 1988 Act to make an application to the High Court for the inquest to take place—we may have to face up to the fact that no inquest took place, because it adjourned without being completed.

I do not wish to get involved in legal technicalities, but those powers are of a slightly technical nature. However, I approached the matter on the basis that if there was an evidential basis for calling into question the inquiry’s findings on the cause of death, I would make such an application, whatever the technical difficulties might be, because of my view that in such circumstances, the Court would be minded at least to find a way to allow the matter to be reinvestigated. That was the basis on which I operated. That we have taken some time and, I must say, a lot of trouble, to look at this matter very carefully is a reflection of the seriousness, in my view, of the allegations that were being made, and of the fact that the allegations were being made by apparently sensible and reasonable people. I am grateful to them for bringing those problems forward.

That is the basis on which I operated, but having operated in that way and having reviewed all the evidence—the hon. Lady has seen the schedule, which I hope will be helpful to hon. Members who go to the Library to look at it—I decided that the evidence was overwhelming that this was a tragic case of suicide, and that suicide caused Dr Kelly’s death for the medical reasons that were correctly identified at the time that the death certificate was made out.

[Richard Ottaway (Croydon South) (Con)]

As a member of the Select Committee on Foreign Affairs that took evidence from David Kelly in 2003, I have never doubted that he committed suicide. I have always believed that Lord Hutton was right on that, even though his conclusions on the war have subsequently been challenged.

I have known the Attorney-General for many years, and I know that he will have done a perfectly thorough and diligent job. Will he accept that the evidence is clear, and that it is time to bring closure to this matter and move on?

[The Attorney-General]

I certainly think that the evidence is clear, and indeed that there is no evidence to the contrary—that point will be quite clear to anybody who looks at the schedule—in the sense that I could see perfectly satisfactory answers to every question that was raised with me, all of which led inexorably to the suicide verdict.

I agree with my hon. Friend. I hope that this will enable us finally to draw a line under the matter. It was clearly a matter of huge and legitimate public concern for a variety of reasons, and everything took place in a very difficult political environment. However, I believe that my review and its findings are very clear-cut. This was not a question of my having to make a balancing decision and coming down on one side or the other. I reviewed all the material, and the outcome is that it is quite clear to me that the original inquiry’s findings were correct.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

May I congratulate the Attorney-General on the clarity of his statement and on his decision, which on the basis of the scientific evidence that I have read is quite right? Will he confirm that the detailed scientific reports are included in the bundle of papers that he has placed in the Library, including those from Richard Shepherd and Robert Flanagan, to which he referred? Will he ensure that an interpretation for lay people of what the scientists wrote is included, so that the conspiracy theories do not develop again?

[The Attorney-General]

The hon. Gentleman will be the best judge of that. Professor Flanagan’s and Dr Shepherd’s reports will both be in the Library. I think they are written in pretty plain English. Clearly, they are also medically based, which is inevitable. In the schedule, I have used that material and other material to seek to set out each matter in slightly plainer terms. I think it is readily comprehensible, and I hope it will help to inform the public as well as Members of the House.

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

Will the Attorney-General note that when, along with my Intelligence and Security Committee colleagues, I questioned Dr Kelly two days before he died, I formed the view that a very distinguished public servant was deeply distressed by the situation in which he had placed himself? Although I am wholly unpersuaded by any of the theories that have been put forward as an alternative to suicide, will the Attorney-General spell out what he thinks will be lost by allowing the process of inquiry to be completed by an inquest?

[The Attorney-General]

The first problem is that there is no basis on which the High Court could possibly order an inquest. In my judgment, if I were to go to the Court and make such an application, it would be dismissed, and dismissed with—I assume, on the basis of my reasoning—a certain amount of irritation, because such an application must be made on an evidential basis.

We have also held an inquiry. I make the point in the schedule that the suggestion that the inquiry was in some way inferior to an inquest, in the sense that it was unable to look at some of the things that an inquest could have looked at, really does not bear any reasoned—either logical or legal—examination. Therefore, in practical terms, the inquest—or something tantamount or equivalent to it—has already taken place. On top of that, a review has been carried out in the knowledge of public anxiety by eminent professionals, who have looked specifically at the anxieties that have been raised, either by the memorialists or others. In each case, they have said that the original findings were correct.

I should just make the point that there was one exception: the timing of death was reviewed, because the conclusion was reached that the tables that were used by the pathologist at the time—through no fault of that pathologist—were in fact not accurate. That is a question of the development of medical science. With that exception, nothing calls into question any of the detailed findings or comments that were made originally.

[Mr Tom Harris (Glasgow South) (Lab)]

May I warmly welcome the Attorney-General’s statement? He will of course know that this will do nothing to discourage the paranoid conspiracy theorists, but on the other hand they would not change their minds just because of the existence of evidence even if an inquiry went ahead.

Speaking of paranoid conspiracy theorists, where is the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker)? When only last year he told the media that the Hutton inquiry had cut corners, was he speaking on behalf of the Government?

[The Attorney-General]

I am quite sure that he was not speaking on behalf of the Government. In any case, the Government do not have a position on the matter. I have a position on the matter, based on my review, and I am sure that many Members across the spectrum have individual views on the subject, and that is their entitlement—as it is of anybody in this country.

[Karl MᶜCartney (Lincoln) (Con)]

I listened intently to my right hon. and learned Friend’s statement, particularly the part where he mentioned that he had not received any representations from ministerial colleagues. Will he clarify whether he consulted the Prime Minister in advance of coming to the House to make this statement?

[The Attorney-General]

I most certainly did not, and it would not have been proper for me to do so. Nobody has spoken to me about it, and that applies to all my ministerial colleagues.

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

As a member of the Foreign Affairs Committee when it took evidence from Dr David Kelly—as was my hon. Friend the Member for Leeds North East (Fabian Hamilton)—I have followed these proceedings probably more closely than other hon. Members. I thank the Attorney-General for his statement and ask him to remind those who remain unsatisfied that they also have a responsibility to the family of Dr David Kelly and, unless they can really substantiate their claims, they should look at the evidence in front of them and be satisfied.

[The Attorney-General]

The evidence is there in the Library to see, and it will be available to the public as well. I hope that those who have concerns will take the time to look at the material. Of course, the background to this is a human tragedy of great pain for the family, and that is why I hope that people will be convinced that this matter should now be laid to rest.

[Sir Peter Bottomley (Worthing West) (Con)]

What in my view distinguishes this case from the sad case of Jay Abatan, who died on 29 January 1999—an inquest was held 10 years later, at which new evidence came forward—is that in this case there were no new witnesses or evidence. In relying on the work of Lord Hutton’s team and others, I hope that my right hon. and learned Friend will accept that those of us who believe that Lord Hutton came to the wrong conclusion on the main parts of the inquiry can maintain that belief. If he had come to a different conclusion and used a gentler form of words than “sexed up”—or whatever the expression was—we would have had a near perfect ending to what was a very bad episode in which the previous Government behaved appallingly.

[The Attorney-General]

I understand the point that my hon. Friend makes. The review that I carried out was focused on the cause of death, because it was the calling into question of the inquiry’s findings and of the signing of the death certificate that started the spiral of speculation that has grown from that. I focused on that issue and my conclusions are directed to it. I appreciate that there are wider issues that Lord Hutton tried to address, but they are not matters that I have sought to reopen. I know that those matters remain controversial to many.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend the Member for Glasgow South (Mr Harris), who is no longer in his place, referred in passing to the book written by the hon. Member for Lewes (Norman Baker), who is now a Minister. Did the Attorney-General respond specifically in his judgment to some of the points made in that book and would he care to say briefly what he thought of it?

[The Attorney-General]

I have looked at the book on several occasions. It is partly a critique of the evidential process of the inquiry and partly a speculation—I do not think it has ever been suggested that it is anything more than speculation—about alternative possibilities for what might have happened to Dr Kelly. Having focused on the evidence, I have come to conclusions on the evidence. I hope that, as a result, my hon. Friend the Member for Lewes (Norman Baker)—quite apart from anyone else—may conclude that this was in fact a case of suicide.

[Patrick Mercer (Newark) (Con)]

May I thank the Attorney-General for the clarity that has been shed on this subject? However, there is no doubt that certain bodies will now ask for a judicial review of his decision. Would the Government care to undertake not to order costs to be raised against them in the event of that application being unsuccessful?

[The Attorney-General]

I have to say to my hon. Friend that that is a hypothetical question. It is obviously open to individuals to apply for judicial review of my reasoning and decisions. At the moment, I simply express the hope that they will not feel the need to do so.

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

Will the Attorney-General say whether he would be content if one of his ministerial colleagues were to publicly dissent from his decision, given his quasi-judicial role?

[The Attorney-General]

I am not aware of any ministerial colleague having expressed any view that dissents from my decision.

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

Does the Attorney-General understand why, given that key witnesses were not called during the Hutton inquiry, that the inquiry did not have legal standing and that further evidence has come to light since, some—including Dr Stephen Frost—consider that inquiry to have been inadequate? Does the Attorney-General also understand why doubts will remain about the process followed, if not necessarily about the cause of death?

[The Attorney-General]

I am aware that doubts were expressed about the process. I have reviewed the process, but above all I have reviewed the evidential conclusions based on the process and the evidence. The conclusion that I have reached is that the process came to the correct conclusion. On that basis, it seems to me that it achieved what it set out to do and did it properly.

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

I came to this statement prepared to be dissatisfied with what I would hear because I have spoken to one of the country’s leading cardiovascular surgeons who has received evidence—admittedly second-hand and not directly—and who has said to me on several occasions that Dr Kelly could not have died from a slit to the wrist, because that would not have caused death. However, that surgeon did not of course consider in that judgment what chemicals or drugs Dr Kelly might have taken. So I commend my right hon. and learned Friend. From what I have heard today, he has conducted a thorough and impartial inquiry. I reserve judgment because I wish to read the material he has placed in the Library, but unless new evidence comes to light, I think a line should now be drawn under this matter to allow the family to put it behind them.

[The Attorney-General]

I am most grateful to my hon. Friend. I listed in my statement the causes of death as they were found and put in the death certificate, and that has been reviewed in great detail. The unequivocal view of Dr Shepherd and Professor Flanagan is that those causes of death are entirely correct, and that the combination of factors as listed was what caused the death of Dr Kelly. Of course, the primary cause was the fact that he slit his wrists and took an overdose.

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

As someone who also harboured doubts about the quality of the process before the Attorney-General’s review, may I welcome the clarity of his statement? Does it amount to this—in focusing on the function of a coroner’s inquiry, which is to look into nothing more or less than the cause of death and to reach a verdict from a range of options available as a matter of law, is he telling the House that any inquest would have been driven to a verdict of suicide?

[The Attorney-General]

Yes, indeed. There is no evidence that I have seen, including the material that has been produced on the review, that could lead to an inquest coming to any other conclusion.

[Bob Stewart (Beckenham) (Con)]

Does the Attorney-General agree that his statement today should put to bed some of the outrageous and fallacious speculations that members of our security forces might have murdered Dr Kelly?

[The Attorney-General]

I entirely agree with my hon. Friend. I have to say that those suggestions have always struck me as being at the rather far-fetched end of the spectrum. The evidence overwhelmingly shows that Dr Kelly committed suicide: he was not killed by anyone.

[Mr Peter Bone (Wellingborough) (Con)]

The Attorney-General has done the House a great favour by coming here and making such a full statement. It should be an example to other Ministers. He said in his statement that he is routinely asked to apply to the High Court for inquests. For the House’s information, will he say how many times he has actually gone to the High Court?

[The Attorney-General]

Generally speaking, I do not have to do it myself, but give permission for it to be done. I did that very recently in a case where a body had been found and never identified. Some considerable time afterwards identification became possible, so the inquest had to be reopened for the purpose of identifying that the person who had died and had been long buried was, in fact, the person concerned. That is an example. It is part of my functions to do it. I have to review each such case, but generally speaking, I give my permission to others to do it, and do not have to take that role myself.

[Robert Halfon (Harlow) (Con)]

I commend my right hon. and learned Friend on his statement, and hope very much that it will draw a line under all these conspiracy theories. Does he agree that these theories came about because of the previous Government’s mishandling of the case for the Iraq war, particularly the 45-minute claim about an attack on British targets?

[The Attorney-General]

My hon. Friend asks me to stray from the role that brought me to the Dispatch Box as the guardian of the public interest and into the realm of politics. I shall restrain myself from doing so.

[Madam Deputy Speaker (Dawn Primarolo)]

Attorney-General, thank you very much. I know that the whole House appreciates the detailed answers and your statement today. It is widely appreciated.



Postal Services Bill (Programme) (No. 2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Postal Services Bill for the purpose of supplementing the Order of 27 October 2010 (Postal Services Bill (Programme)):

Consideration of Lords Amendments

1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at today’s sitting.

Subsequent stages

2. Any further Message from the Lords may be considered forthwith without any Question being put.

3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mr Dunne.)

Postal Services Bill

Thursday 9th June 2011 Commons Chamber

Consideration of Lords amendments

Clause 2

Report on decision to dispose of shares in a Royal Mail company etc

13:02

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

I beg to move, That this House agrees with Lords amendment 1.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to consider Lords amendments 2 to 11.

[Mr Davey]

I would like briefly to take hon. Members back to the Bill’s Third Reading in this House, when I marked the passing of the Bill into the capable hands of the other place by saying that the coalition Government’s decision to take on this difficult issue showed them at their strongest and most radical. As we welcome the Bill back, I would like to add to that and say that the Lords amendments before us today also show government at its most open-minded and collaborative, because they represent the constructive and collective efforts of both sides of the other place to improve and strengthen the Bill. The amendments in this group concern part 1 of the Bill and the provisions for the ownership of Royal Mail and the Post Office. I am clear that when it comes to undertaking a sale of shares in Royal Mail, the Government must have the flexibility to negotiate the right deal at the right time.

I know that hon. Members have been anxious to hear more about the next steps in our plans for Royal Mail, so with your indulgence, Madam Deputy Speaker, and in the interests of transparency, I would like to set out briefly the next two crucial steps that need to be taken to secure the future of Royal Mail. As my noble Friend Baroness Wilcox said on Third Reading in the other place, the Government intend to take on Royal Mail’s historical pension deficit with effect from March 2012 as part of the preparations for the sale of the company. I am sure that hon. Members will appreciate what a relief it will be to the 435,000 members of the Royal Mail pension plan to know that their accrued pension rights will be protected sooner rather than later.

The key concern of people up and down the country is that the universal service must be protected. To do that, Royal Mail needs to be on a sustainable commercial footing. The company currently has about £1.7 billion of debt facilities with the Government. We need to restructure the company’s balance sheet in due course, and in order to put Royal Mail on that sustainable commercial footing, we will need to reduce significantly that level of debt. Of course, we will need approval from the European Commission to provide this financial support, and we have already begun informal discussions with the Commission. The Government will submit a formal stated notification in the next few days, and I hope that the process will be completed by March 2012.

We will discuss amendments to part 3 of the Bill, which deal with the new regulatory regime, later on, but of course implementing that regime will be another crucial step towards securing the future of the universal service. I would like to assure hon. Members that the work to establish this is already under way. In particular, Ofcom, the new regulator, will launch a consultation in the autumn with a view to establishing the new regulatory framework in the spring of 2012. I hope that that update is helpful.

I begin my main remarks on this group of amendments by commending Opposition Members on pushing us on whether, given our commitment to transparent government, more could and should be done to offer more information to Parliament. Amendment 1 is a direct response to that. Clause 2 already commits the Government to report to Parliament when a decision to dispose of shares has been made. Amendment 1 adds three new requirements for that report: first, that it must include the objective for the sale; secondly, that it must include details of the expected commercial relationship between Royal Mail and Post Office Ltd following the disposal of shares; and thirdly, that where the proposed disposal would result in shares being placed into the employee share scheme for the first time, the report must include details of that scheme. As I previously said to the Public Bill Committee, I will ensure that shares are placed in the employee share scheme from the time of the very first sale of shares in Royal Mail.

The second of the new requirements—to provide information on the expected commercial relationship between Post Office Ltd and Royal Mail after the sale of shares—will work together with amendment 9 to address a key concern that I know is held by many in the House. After much debate in the House and elsewhere, I can still see no reason why the strong commercial relationship between Post Office Ltd and Royal Mail should weaken after the two companies have been separated. More importantly, the senior management at Royal Mail has been clear that this relationship will continue. That is why the chairman of Royal Mail, Donald Brydon, felt able to say to the Bill Committee that prior to a sale of shares in Royal Mail, the two companies would put in place a new contract for the longest time legally permissible. I have gone on the record—and I am happy to do so again today—as saying that the Government, as sole shareholder, will ensure that the two companies fulfil this commitment.

The negotiation of that contract is, rightly, a commercial matter for the two companies, and not for the Government or this legislation. However, Lords amendment 1 will ensure that, prior to a sale of shares in Royal Mail, Parliament has a snapshot of the expected commercial relationship following the sale, and Lords amendment 9 would make it clear that the annual report on the post office network must include information every year on the postal services provided as part of that relationship. Lords amendment 10 is a technical amendment to clarify the enforcement powers that apply to the annual report on the post office network.

There can be no doubt that the future of this iconic British institution is of enormous interest to Members of this House and in the other place. I believe that a mutual Post Office is a radical and exciting proposal, and one that is supported by all parties. However, I acknowledge that our position—that mutualisation must be a bottom-up process that engages sub-postmasters, customers and management—means that we cannot be as explicit now about what that mutual will look like. Co-operatives UK has now published its report on the options for a mutual, and that report will form the basis for the Government’s full public consultation in due course. Until the conclusion of that process, the Government remain open to all views. We will not dictate the form that mutualisation will take.

To give both Houses more oversight of what an eventual Post Office mutual might look like, we have tabled Lords amendments 2 to 8, which would introduce the affirmative procedure to the powers to mutualise Post Office Ltd. Furthermore, those amendments would ensure that the report on mutualisation provided for under clause 5 must be laid prior to the vote, so that hon. Members have full and detailed information on the mutualisation plans before they debate and vote on them. Let me be clear, however, that the plans, as I have said before, will be developed from the bottom up and in full consultation with all of the Post Office’s major stakeholders.

The last amendment in this group—Lords amendment 11 —addresses an issue that I know is close to the hearts of many hon. Members. When my right hon. Friend the Business Secretary opened the debate on the Bill on Second Reading, he talked of this country being a pioneer of postal services in the 19th century. It is that proud and rich postal history that Lords amendment 11 seeks to protect, by requiring Royal Mail to report annually on its activities in relation to the British postal museum and archive. Having visited the British postal museum and archive, I can say that it provides a wonderful and fascinating record of our postal heritage, and is absolutely deserving of the protection that Lords amendment 11 seeks to provide. I would be quite keen to share with the House the benefit of my visit and some of the lessons that I learnt—for example, that the first post boxes were green, before moving to chocolate brown and then ending up one of the shades of red that we see across our country—but I am sure that you would bring me to order if I did, Madam Deputy Speaker.

In conclusion, the amendments in this group respond to a number of concerns raised in both this House and the other place. They seek to offer more information on the implications of the sale of shares, more parliamentary control over Post Office mutualisation and greater transparency of Royal Mail’s heritage activities. I believe that the objectives that they seek to achieve are truly cross-party objectives, so I would urge the House to agree to them.

[Nia Griffith (Llanelli) (Lab)]

It is indeed our intention to be a constructive Opposition and to welcome amendments that improve the Bill. However, even though we welcome some of the amendments this afternoon—particularly where they reflect to some degree the position that we have taken on aspects of the Bill—we remain totally opposed to the main purpose of the Bill, which is to sell off Royal Mail 100% to private enterprise. That is completely different from our proposal, which was to keep Royal Mail in majority public ownership. Selling off Royal Mail into 100% private ownership means that only through the regulatory regime will the Government and the taxpayers of this country have any influence on the service provided.

[Lorely Burt (Solihull) (LD)]

Will the hon. Lady give way on that point?

[Nia Griffith]

I shall take your advice on the matter, Madam Deputy Speaker; I believe that the hon. Lady should stick to the amendments on the Order Paper.

This first group of amendments concerns the sell-off of Royal Mail and the splitting up of the Royal Mail Group into a privately owned postal service and a publicly owned network of post office counters. It is against that background that we should consider Lords amendment 1, which requires that when the Secretary of State lays before Parliament a report on the disposal of a Royal Mail company, it should include

“information about the expected commercial relationship…between the Royal Mail company in question and any Post Office company”.

We genuinely welcome the inclusion of such information in the report, but no one should be under any illusion that this in any way constitutes an inter-business agreement between Royal Mail and the post office network. Hooper recommended in his report that there should be a long-term agreement between Royal Mail and Post Office Ltd, and the National Federation of SubPostmasters has asked for an IBA of a minimum of 10 years. We have repeatedly called on the Government, at all stages of the Bill, to include an inter-business agreement in the legislation, and have tabled amendments to that effect.

One third of Post Office Ltd’s revenue comes from Royal Mail. Without that revenue, Post Office Ltd would be unable to keep many post offices open. With the greatest of respect to Moya Greene, the current chief executive officer of Royal Mail, who has talked about a privatised Royal Mail continuing to use the post office network, it is no good simply having fine words. Those fine words need to be translated into a proper bankable contract—a proper agreement. Other countries manage to put agreements into their legislation, but the real difficulty in this case is an intense obstinacy on the part of the Government, who have set themselves against enshrining any protection for the post office network in legislation.

A profit-hungry privatised Royal Mail will be looking to cut costs and maximise profits. That could result in Royal Mail drawing up an agreement for part or even all of its services with providers other than the post office network, such as a supermarket chain or a high street store. A privatised Royal Mail may well wish to continue to have some sort of agreement with Post Office Ltd, but that agreement could be for a much reduced service from that which the Post Office currently provides. It could involve just a small proportion of the current network of Post Office branches. That could give rise to the surreal spectacle of some post offices being places where people could hand over their parcels or register their letters, with other post offices not offering postal services. It sounds a bit like a children’s riddle—“When is a post office not a post office?”—but it would be no joking matter for our post office network or for the public, who want easy access to postal services, if such services were available at only some of the current post office branches.

13:15

Any decision by a privatised Royal Mail to reduce the number of branches that it uses would have a catastrophic effect on the income of the post office network, and threaten the viability and very existence of any branches that Royal Mail chose not to use. It is therefore regrettable that the Government have refused to include a clause in the Bill requiring an inter-business agreement and that Lords amendment 1, which requires a report on such an agreement, is the nearest that they are prepared to get. The amendment does, nevertheless, mean that the report that the Secretary of State lays before Parliament must include some mention of the expected commercial relationship between Royal Mail company and any Post Office company, and for that reason we welcome it.

Let me turn to the part of Lords amendment 1 that deals with shares. We accept the principle of employee shares, and appreciate the benefits that such schemes can bring, but in this instance employees will need to know a lot more about exactly how any scheme would work. We have pressed for greater detail about the scheme, so we welcome the proposal in the amendment that a report be laid before Parliament setting out the detail of a proposed employee share scheme before the disposal of Royal Mail takes place. In Committee, we pointed out that the Bill as it stands requires employee shares to be offered only when the last Crown share in Royal Mail has been sold. We argued the case for a trigger that kicks in when the first shares are sold. The Minister for postal services has suggested that, despite the wording of the Bill, the Government would, in fact, make available some employee shares when the first disposal is made. I very much welcome his confirmation of that point today, so that employees will not have to wait until the last Crown share is sold before being able to apply for any employee shares.

There remain, however, a number of unanswered questions, on which I hope the Minister can give us some guidance today. Would shares be held on an equal basis, with equal voting rights for each shareholder and an equal distribution of dividends, or would some shareholders be more equal than others? In Committee, we made the case for more than 10% of the shares to be in the employee share scheme; we have suggested up to 20%. That case is backed by specialist bodies that gave evidence to the Public Bill Committee, including the Employee Ownership Association and ifs ProShare. Is there any chance that the Government might consider that?

We would also like greater certainty about the eligibility criteria. Who would be entitled to shares or share options, and what would that mean in practice? Would employees be able to act to influence the strategic direction of the company to some extent, albeit from a minority position? In particular, what is to prevent shares from going to employees one day and being sold within a year or two? We all know of previous examples of where that has happened, with shares being rapidly sold on to big institutions. What mechanisms are the Government considering to prevent that from happening? We hope to hear from the Minister the extent of the detail that the Government intend to report and how much time they will provide for Parliament to consider the report.

We welcome Lords amendments 2 to 8, which give Parliament increased control over the mutualisation of a Post Office company. The effect of amendments 2 to 4 would be to subject the disposal of the Crown’s interest in a Post Office company to a relevant mutual to the affirmative resolution procedure. That would require the Secretary of State to lay a draft order before Parliament and for it to be approved by both Houses before it could be made. Lords Amendments 5 to 8 require the Secretary of State to lay a report before Parliament before an order directing the issue or transfer of shares or share rights in a Post Office company to a relevant mutual is made. That is an improvement on the original requirement, which was to lay a report after any direction for the disposal of the Crown’s interest in a Post Office company to a relevant mutual had been made.

These amendments strengthen the opportunity for Parliament to scrutinise any proposals for the mutualisation of the Post Office. This is important because considerable challenges must be faced before any such mutualisation can take place. We welcome the work on mutualisation detailed in the recently produced report by Co-operatives UK, which includes information on various mutual options, and on the ownership and governance of a potential mutual, but we recognise that the real challenge is to make the post office network viable. For all the Government’s fine rhetoric, we are concerned about their failure to guarantee business for the post office network. For mutualisation to be a success, we need to see a serious, viable business plan for our post office network. We are fully aware of the Government’s plans to spend money on the network, but their accompanying document “Securing the post office network in the digital age” does not address the issue of how to generate new streams of business for the network.

Post office income can be divided into three main categories—Royal Mail business, Government business and other commercial business—and the Government have failed to provide guarantees of business in any of them. I have just explained how the lack of an inter-business agreement between a privatised Royal Mail and the post office network could result in the loss of all or a substantial part of Royal Mail business from the post office. As for the Department for Business, Innovation and Skills’ claim to be making the Post Office a front office for Government business, that message does not seem to be getting across to other Government Departments.

For example, we have just seen the Department for Work and Pensions award the contract for benefit cheques, the so-called green giros, to a rival organisation. Apart from a couple of pilot projects, there has been little progress on the proposals for more Government business made in a letter from the National Federation of SubPostmasters to the Secretary of State for Work and Pensions dated 23 September last year. At the moment, the post bank promised in the Liberal Democrat manifesto and mentioned in the coalition agreement looks like just another broken promise and missed opportunity, especially after Labour had laid the foundations for it before we left government. Nor is there any sign of any other substantial new commercial business for the post office network.

This complete failure to introduce new streams of business calls into question the wisdom of the way in which the £1.34 billion of taxpayers’ money allocated to the Post Office is being used, with the subsidy for running the Post Office and the provision of a few new counters seemingly accounting for the lion’s share of the funds. This also raises the question of what will happen when the subsidy runs out in 2015. The Government have stated that they wish to reduce their subsidy, but if there are no new streams of Government business to make the network more viable, the post office network will be in serious trouble. However, the fact that Lords amendments 2 to 8 improve the opportunity for parliamentary scrutiny means that we will support them.

We welcome Lords amendments 9 and 10, which clarify that in the Post Office company’s annual report to the Secretary of State on the post office network, details of postal services provided under arrangements between a Post Office company and a universal service provider must be included. We welcome any amendments that improve clarity and increase the opportunity for parliamentary scrutiny.

Lords amendment 11 would require Royal Mail to report annually to the Secretary of State on its activities in relation to the British Postal Museum collection and the Royal Mail archive. The proposal would also require the Secretary of State to lay the report before Parliament. In Committee, we sought amendments to ensure that the work of the British Postal Museum and Archive—the BPMA—would continue following the passage of the Bill, and that the heritage cared for by the curators of the museum would be protected. That protection needs to be strengthened, because the Bill moves us away from a situation in which one Government-owned company, Royal Mail, is clearly responsible for supporting and safeguarding our postal heritage, to one in which there will be at least two companies with different ownership models. There will also be the potential for a privatised Royal Mail company to be taken over, perhaps by foreign postal administrations or other companies with no interest in supporting Britain’s postal heritage.

I do not feel that the Lords amendment is as strong as the one that we originally proposed. Nevertheless, anything that we can do to protect our heritage is to be welcomed. The BPMA is the leading resource for British postal heritage. It cares for visual, physical and written records dating back more than 400 years, including stamps, poster design, photography, staff records and vehicles. The BPMA is the custodian of two internationally significant collections—the Royal Mail archive and the collection of the former national postal museum. Together, the museum and archive collections form a unique record of a national institution, and offer a fascinating perspective on the history of British society, design and industry. We want the strongest possible protection for the British Postal Museum collection and the Royal Mail archive, and although we were looking for stronger protection, we are of course pleased to lend our support to that amendment.

[Lorely Burt]

I welcome the Lords amendments that we are considering today. They are an indication of the way in which the Government and the Opposition can work together, because the Government have obviously listened to the constructive suggestions made by Members on both sides of the House. There is a great deal of consensus; I believe that the amendments went through the other place without a Division. That goes to show just how well things can work when everyone is minded to make that happen.

On the subject of shares going to employees, when I wrongly tried to intervene on the hon. Member for Llanelli (Nia Griffith), I was going to point out that it is not 100% of the company that is being sold off to private interests: it is actually 90%, and 10% will go to the employees. The benefits to those employees will be huge. The Bill recognises the importance of the work of the conscientious postman or woman who keeps the post coming through the letterbox six days a week, come rain or shine, and the importance of the work force to the success of the company. The proposals will offer real benefits to the employees.

I greatly welcome the fact that the pension plan members will be protected and that the subsuming of the pension plan is being brought forward. That will give tremendous reassurance to prospective pensioners in Royal Mail. Perhaps most importantly, and despite the disagreement of the Opposition, we are securing the future of the company. The worst thing would be for the Government to do nothing, which would allow Royal Mail to decline and fall. It is an unfortunate fact that, under the previous Government, 65,000 Royal Mail employees lost their jobs and 7,000 post offices were closed. The future of the post office network is now secure. I also greatly welcome the proposal for a vote before mutualisation. That will put in place important protections.

I should like to ask my hon. Friend the Minister a few questions. Does he think that I have understated the benefits for employees? Can he think of any others? Can he give me an assurance that the universal service obligation will be properly protected? Has he had any discussions with representatives of the Communication Workers Union, and, if so, what do they think about the proposals?

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

It is important that, when we come to the House, we should reflect the feelings of our constituents. I should therefore like to tell two stories. First, just before Christmas, I visited the local postal sorting office at Sutton New road. I spoke to each of the excellent men and women there. They told me how they had worked there for 10, 15 or 20 years. Some had worked there for 25 years. They work in all weathers to provide an outstanding service to the people of north Birmingham. They felt bitter about what they regard as a betrayal of their loyal service to the country.

Secondly, I want to tell a story not so much about a local post office as about a local entrepreneur who wants to reopen a post office. We have in Perry Common a community well served by the Witton Lodge community association. That community has backed an individual who now runs the local grocery shop—it used to be a sub-post office—and he wants to reopen that post office. Through me, he has approached both the Post Office and the Government for support, only to have it declined. If I may, I will return to that matter at the conclusion of my remarks.

13:30

The Lords amendments focus on local post offices, among other things, and the evidence is clear that they are finding it increasingly hard to survive. By some estimates, only 4,000 of the UK’s 11,905 post offices are economically viable. Despite assurances from the Government that there will be no further programme of post office closures, the evidence shows that branches are closing every day of the week. More than 150 offices are closed on a long-term “temporary” basis and there is no guarantee that these will re-open; many are likely to stay closed indefinitely. As Consumer Focus stated in a press release,

“we have continued to see a dwindling in the overall number of branches.”

Nationwide, 900 post offices are up for sale. That is why the Post Office cannot afford to lose any more revenue. The post office network is already loss making and depends on an annual Government subsidy to remain afloat. In 2009-10, the Post Office made an operating loss of £80 million before Government subsidy and its financial position continues to weaken. Its target this year, excluding subsidy, is for a £120 million loss.

The Government have pushed through this unwelcome Bill, allowing the privatisation of Royal Mail with scant regard for the consequences for the post office network or the universal service of a six-day delivery at a uniform, affordable price across the whole of the UK. As the Labour Front-Bench team has made absolutely clear, we continue to oppose the wholesale privatisation of the Royal Mail. We called on the Government for a guarantee of an inter-business agreement between Royal Mail and Post Office Ltd. The Government have refused to listen to that, including in these amendments, so they are abrogating their responsibilities to the post office network.

I have to say that Conservative and Liberal Democrat MPs are quick to use the Post Office in their localities for their own political ends, but not as quick to stand up in this place for their local post offices in their time of need. I also have to say that the Government’s approach calls into question the logic of allocating £1.3 billion of taxpayers’ money for subsidy and refurbishment of post offices when the Government are not prepared to put a clause in the Bill to guarantee the future of Royal Mail business to the Post Office.

The Minister referred to history, and this remarkable institution of the Post Office certainly has a remarkable history. We have seen over the last 50 to 100 years how it has developed ground-breaking initiatives that make no profit but serve the community—ranging from free delivery of articles for the blind to answering letters written to Santa free of charge.

Returning to the issue of the Post Office—

[Madam Deputy Speaker (Dawn Primarolo)]

I might be anticipating what the hon. Gentleman is going to do, but may I remind him that these Lords amendments are quite specific, so he needs to focus his remarks on them? Perhaps he was just about to do so.

[Jack Dromey]

I was just about to do so, Madam Deputy Speaker, but like the Minister, I embarked on some historical anecdotes, as the Post Office is very proud of its history.

There is a simple inescapable reality, which is that the Post Office is dependent on Royal Mail’s business. A third of its revenue—£334 million—and a third of sub-postmasters’ pay—£240 million—is generated by selling Royal Mail products and services. The Bill does not safeguard on a continuing basis the inter-business agreement. The Government will not undertake to extend the current five-year guarantee to 10 years. Key stakeholders recognise the importance of making a longer commitment on the IBA. Let me cite what Consumer Focus said in its evidence to the other place:

“There are few safeguards to keep that contract for the long term. It’s entirely conceivable—though it seems an odd thing to suggest—but several years down the line you could have a post office network where you cannot undertake mail transactions. It would be for Royal Mail to determine which operator—whether it was Post Office Ltd or Tesco or whomever—to offer mail services and there would be no requirement for stamps or parcels.”

It continued:

“You could see a scenario where Royal Mail looked to cherry pick so Tesco, say, could meet its requirements in urban areas and the Post Office would pick up the slack in rural areas where there isn’t anybody else. And that has very serious implications in terms of the viability and integrity of the network because urban areas typically make money.”

Consumer Focus went on to argue that the number of post offices could fall by 37% as a consequence of these measures—from the current level of 11,900 to the minimum number consistent with the Government’s access criteria of 7,500. In Birmingham alone, seven post offices face closure.

The National Federation of SubPostmasters has added its call to the need for action. It also argues for a minimum 10-year IBA. Let me quote what it says:

“The NFSP believes that in order to avoid further post office closures, existing levels of Royal Mail work at post offices must be maintained with a minimum 10 year IBA between the two companies following separation.”

The Government’s stance is clear, albeit sad. They have rejected a number of opportunities to make the commitments that have been called for.

[Fiona O'Donnell (East Lothian) (Lab)]

Is my hon. Friend aware of the recommendation in the Select Committee on Scottish Affairs report that the Government should be doing more to remove the barriers to local post offices providing services in relation to devolved and local government?

[Jack Dromey]

To develop our post office network, it is necessary to be imaginative and creative. Sadly, we are moving in the opposite direction.

The Government’s stance could not be clearer. They have rejected a number of opportunities to make the commitment firm in this important legislation. They have declined to accept a statutory commitment, as exists in countries such as Germany and the Netherlands, to a figure of 11,500. They have rejected the embedding in the Bill of the access criteria on how near people’s local post office will be. Post offices locally cannot live on warm words alone; good intentions and high hopes mean naught if we cannot have guarantees for the future.

[Lorely Burt]

Will the hon. Gentleman refresh my memory on how many new post offices were created under the Labour Government? Was there not a net decline, or managed decline, of the Post Office amounting to 7,000 post offices. Why does he decry the fact that this coalition Government are doing all they can to preserve and enhance the post office service that we have inherited?

[Jack Dromey]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We are supposed to be discussing amendments that have come from the House of Lords and deal with commercial relationships, the interaction between various bodies and the issue of an employee share scheme. I would be grateful—no, I insist that Members stick to the amendments before us on these important issues.

[Jack Dromey]

In that case, I must regretfully resist the temptation to respond to the hon. Member for Solihull (Lorely Burt), much as I should like to do so.

Let me make a point that goes to the heart of what you have just said, Madam Deputy Speaker. We have been given few assurances about the method by which Royal Mail may be sold in a way that guarantees value for money for the taxpayer, and we have no idea who its new owner might be. We have no assurance that employee shares will be held in trust and could not simply be sold on in a short period, which would defeat the objective of employee involvement. We do not know for sure that access pricing for Royal Mail competitors will be fair. An IBA should have been included in the Bill, on a continuing basis. What will happen to the post office network after 2015, when the comprehensive spending review money runs out but the Bill’s provisions do not, and when, sadly, we then embark on the path towards privatisation of Royal Mail?

Let me return to the two constituency stories that I related earlier. Few jobs in Britain have been immortalised in children’s books, but Postman Pat reflects the high regard that exists for the postmen and postwomen in Birmingham and Britain, and they feel badly let down by the Bill. Will the Minister accept my invitation to visit Perry Common and meet Tarnjhit Dhesi, members of the Witton Lodge community association, and representatives of local care homes and tenants’ organisations? Will he sit down and listen to the case that they have put for the reopening of their post office in a small high street that some entrepreneurs are trying to regenerate, at the heart of which is an admirable man who wants to provide a service for the community?

That man said this to me: “Jack, I don’t understand why I read all these stories about the commitment to the post office network. The post office here closed a couple of years ago. We want to reopen, but the door has been shut in our faces.” Will the Minister translate his commitment to local post offices into action by coming to hear the voice of local people who want a local post office?

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

Following the speech by the hon. Member for Birmingham, Erdington (Jack Dromey), I wish to raise a few points relating to the inter-business agreement and the post office network.

The network should be under some obligation to adapt itself to the framework established by the Government. The creation of the post office local format, which allows limited services to be provided through other retail businesses, is an example of that at work. The location in his constituency that the hon. Gentleman cited may well be the type of location in which the post office can adapt its service to conform with the local retail environment and, in doing so, begin to thrive. I also agree with the Government that mutualisation should be partly a bottom-up process and not entirely driven from the top.

At the end of last year, I met in my constituency representatives of Action with Communities in Rural Kent. Unfortunately, the Bill had already completed its passage through the House of Commons. That organisation does excellent work, with some public support. When a post office closes—not as a result of any decision by the Government or a Minister, but because the person who owned the business has either passed on or retired—the organisation actively seeks a new location for it. In the village where I live, a post office moved from stand-alone premises to the local pub. The mutualisation for which the Bill provides can support such work, and should be welcomed.

The Post Office’s own initiatives in developing the post office local format can support the trend as well. As the hon. Gentleman pointed out, the Government’s financial guarantee will expire in 2015. The Post Office should be using the intervening period to establish how it can adapt its activity to ensure that its business platform is as sustainable as possible in the future.

The inter-business agreement is a two-way street. In terms of access for British consumers, the post office network is unrivalled by any other retail business. Its footprint is much larger than those of all the supermarket chains put together, and it is very unlikely that Royal Mail could find another commercial provider which could match that. The IBA provides the possibility of an interesting two-way negotiation between the Post Office and Royal Mail. To what extent would Royal Mail like the Post Office to offer mail services from competing companies when it is given the freedom to do so? There is also the possibility that Royal Mail could establish a better relationship with the post office network. The Bill provides the opportunity for a more equal relationship than that which, at present, is skewed in Royal Mail’s favour.

There is much to be welcomed in the Bill from a business point of view. The Post Office should see it as an opportunity to embrace mutualisation and a different type of relationship with Royal Mail which will enable it to provide a better service for its customers.

13:45

[Mr Mike Weir (Angus) (SNP)]

I have expressed opposition to post office closures for 10 years in the House, and my view is unchanged. My colleagues and I do not think that the Post Office should be privatised, but the Bill is going through. I would laugh if it were not so sad to hear Labour Members slagging off the Government, given the number of post offices that their party closed, but I had better confine my remarks to the amendments so that you do not call me to order, Madam Deputy Speaker.

Although I welcome Lords amendment 1 to an extent because it would improve the report, it does not provide a guarantee of business. That remains a difficulty: there is considerable uncertainty in local post offices about future business, and I fear that many more will close if it is not dealt with. Many are closing now, not just because of the Post Office side of the business but because of the general state of the economy. At the risk of opening up another front of argument between the two sides, I will cite Ferryden in my constituency. During the closure programme it was agreed that Ferryden’s post office was needed, but the post office was in the local shop, which recently closed. The reason was not to do with the post office itself—and I appreciate that it is not within the Government’s immediate control—but the fact that the small shop, the last in the village, was considered to be no longer economic. When the shop went, the post office went as well.

The same difficulty exists in rural areas throughout the country. With respect to the hon. Member for Birmingham, Erdington (Jack Dromey), post offices will not take up the slack in rural areas, because they are closing there as well. It is a simple case of economics. It is unlikely that the Ferryden post office will go to another business, because it does not exist. The chances are that it will end up as an outreach programme and a restricted service to the village. The important thing is to try to keep some postal services in that village. I should have preferred an inter-business agreement that provided certainty about the future level of business. I appreciate the difficulties, but the continued uncertainty does not help.

My main point about the Lords amendment relates to new section (3A)(b), which concerns the proposed share scheme. I wanted to raise the issue at an earlier stage, but unfortunately we ran out of time. The amendment states that when shares are sold for the first time, details of the employee share scheme will be given. However, we do not know what the structure of the scheme will be. Clause 3(2) states that when the Crown no longer owns any part of Royal Mail, the share held by or on behalf of the employee share scheme must be at least 10%. I know that the Minister said that on the first sale of shares the share scheme details would be given, but the 10% is vitally important, because the Bill otherwise allows the sale of 90% of the company to one other entity, such as another postal operator. Leaving aside the argument put by the hon. Member for Llanelli (Nia Griffith) on behalf of the Opposition about whether 10% is an appropriate figure, the choice of this level does present a potential difficulty, depending on how the shareholding is held. In Committee, the Minister was pressed on whether the shareholding would be held in a trust for the benefit of the employees—the so-called John Lewis model—or whether it would be given in individual shares to the workers. We did not receive an answer to that question.

[Fiona O'Donnell]

Has the hon. Gentleman’s party had any discussions with the Government about the future of Royal Mail in an independent Scotland?

[Mr Weir]

The hon. Lady has taken her chances by asking that question, but it goes beyond the scope of the amendments before us. The Post Office is very important to rural areas of Scotland, and I will merely note that the Scottish Government have done much more than the UK Government to help rural post offices in the future—such as through the diversification and rates rebate schemes. That illustrates what we would do in an independent Scotland.

To return to the point I was making before being led down this interesting side road, the lack of detail about the structure presents a dilemma because, depending on what method is chosen, there could be unintended consequences in the future. If the John Lewis method is pursued, there may well be no problem, in that it will be a trust holding and will, in all likelihood, be held at or above the 10% level. However, if the shares are distributed to individual employees, we could have a very different scenario. Experience of previous privatisations suggests that a number of employees would immediately sell their shareholdings, and others would be likely to sell at some future date, either when they retire or, perhaps, by their executors on death. There is absolutely nothing wrong with that; they would be their shares so they can dispose of them as they see fit. Such actions could, however, have a serious consequence for the continuation of a workers’ shareholding within the company, because of the operation of our current company law, and especially as Ministers have made it absolutely clear that they would be relaxed about Royal Mail being bought either by one of the major foreign postal operators or by private equity companies up to the remaining 90% figure.

I remind the House that in cases where private equity companies have bought listed companies, they have on occasion de-listed the company and operated it as a private company. I particularly draw Members’ attention to the terms of section 429 of the Companies Act 1985, which gives provision in respect of implementation of the EU directive on takeover bids. One of the purposes of the directive was to deal with the problems of, and for, residual minority shareholders following a successful takeover bid, processes known as “squeeze out” and “sell out”. The provisions in question provide that following a takeover offer:

“If the offeror has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire—

(a) not less than nine-tenths in value of the shares to which the offer relates, and

(b) in a case where the shares to which the offer relates are voting shares, not less than nine-tenths of the voting rights carried by those shares,

he may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he desires to acquire those shares.”

In effect, therefore, anyone who acquires 90% of the shareholding in a company can force the sale of the shares of the remaining small shareholders and become sole owner of the company. If the Government were to sell 90% of Royal Mail to, say, Deutsche Post, there could clearly be a potential difficulty in regard to the workers’ shareholding in the future if that is held individually by Post Office workers. If at any time the individual shares held by the work force were to fall below 10%, there is the potential for the owner of the remaining 90% to force a sale and therefore wipe out the shareholdings of the workers.

I am sure the Minister will, in his usual inimitable manner, tell me that I am constructing a theoretical problem that would not occur in the real world, but I wanted to propose an amendment on this point because of a real case of this kind involving constituents of mine. My constituents, who are pensioners, were shareholders in Dana Petroleum, and had been for a large number of years. The company was not paying dividends, but the shareholding did increase in value and my constituents regarded it as a nest egg for the future. Unfortunately, Dana Petroleum was subject to a hostile takeover by the Korean National Oil Corporation, which I believe is state-owned—I believe it is part of a sovereign wealth fund. That company purchased the majority of shares, although my constituents did not wish to accept its offer. The new owners decided to de-list the company, with the effect that my constituents were forced to sell their shareholdings, in their case causing a capital gains tax liability.

Unless the Government give us details of the form the shareholding will take, there is a genuine danger that we could face that situation within Royal Mail in the future. If the Minister will stand up and say, “It will be the John Lewis model; it will be a share trust of at least 10% of the shares for all the employees in the company”, I do not think there will be a problem. Alternatively, however, we might go down the same road as with previous utility sales, where individual shares were given to the workers and that shareholding within the companies has been reduced over the years. It is interesting to note that many of the former utilities are now offering special deals to get small shareholders to sell out their remaining shares because they do not want the small shareholders. Although this idea of worker participation is a good one, I would rather the company was not privatised. If that does happen, however, the bigger the workers’ shareholding within it, the better, and the shareholders would, it is to be hoped, have real rights.

As there is a lack of detail on this point, there is a danger that we will end up with nothing for the workers and the company wholly in the hands of one, possibly foreign, postal service or private equity company. The recent experience of private equity companies buying out limited companies is not a good one; we need only look at the current problems with Southern Cross to see that. I ask the Minister to reflect on this issue, and give us an assurance on it, or at least more information as to how the shareholding is to be held.

[Jim Shannon (Strangford) (DUP)]

I am aware that you have asked us to focus on the amendments, Madam Deputy Speaker, and I intend to do just that. I want to focus my comments on Lords amendment 9 to clause 11, referring in particular to the universal service provider. While some level of provision is given, I am not entirely convinced that we will have a better service. That is my opinion, and it is informed by the views of the people I represent, because they are telling me the same thing. It is being said not only by Post Office personnel, and among them it is stated by both those who own post offices—postmistresses and postmasters—and the Postman Pats of this world who do the hard graft out on the streets. Some Members have spoken about the business plan that post offices need in order to make them sustainable. Can the Minister convince me and other Members—and, through the Hansard report of the debate, convince my constituents—that the service will continue to deliver in the large rural community I represent that stretches from Portaferry to Ballynahinch?

For many of my constituents, post offices are a crucial part of their community. They are the front office of government. I am unconvinced that the revenues of sub-post offices will not decline, and that could lead to some of them closing. We need the Minister to respond to that point.

Some Members have spoken about the continuity of contracts beyond five years, and that is essential. The postmistresses and postmasters of the rural post offices in the areas I represent have told me that they are under absolutely no illusion about how things will progress, and I say on behalf of them that we need to ensure that they have such continuity.

Under the new law, the universal service for six days a week with one price sending post anywhere could be downgraded in just four years, and it is feared that the everyday post office user will experience price hikes and have to pay for the privatisation. The unions have pointed out the possible consequences of privatisation in respect of postal services, and I look forward to hearing the Minister comment on that point. This has already happened in the Netherlands and Germany, where the rural service has been reduced to three days a week, and the costs have risen.

13:59

We might find examples where what is being proposed here has not worked out elsewhere, so what lessons have the Government taken to ensure that the same does not happen in this process?

I am keen and anxious to discover whether the Government have taken full account of the views of sub-postmasters. I understand that some 92% of them have said that they feel that the Post Office is “very unlikely” or “unlikely” to survive without the mail business provided by Royal Mail. As so many people are saying that, it would be unwise of the Government to ignore it.

As we all know the statistics on this, I do not intend to go into them. What consideration have the Government given to the crucial role of post offices in the community? I believe that we all agree that our post offices are more than just post offices; they are a social meeting point for a great many people. I know that that does not come into the economics of a post office, but it must be part of the process in deciding which post offices can remain open. Finance will be the driver in that, but post offices provide an opportunity for people to mix and mingle and the staff have clear contacts with the people in the community. Most of the hon. Members who are going to speak today will probably speak from a rural community background. The National Consumer Council has shown that the Post Office was thought to be more accessible than banks, and we cannot ignore that. When we decide what is going to happen with the Post Office today and what could happen in five or 10 years’ time, we have to ensure that we will get things right. Only 4% of villages have a bank, whereas 60% of them have a post office, so we should ask communities such as mine about this. It would be remiss of me not to make that point in the House today and not to ask the Government to tell us exactly what assurances we will be given. It is the essentials provided on a week-to-week basis that the banks do not do, because they are not in these places but the post offices are.

What consideration has been given to the view of businesses in rural communities that are near to the post offices? They say that some 15% of their revenue is created in the post offices, so has full consideration been given to that? What assurance do we have that that will continue to happen in the post offices? The fact that the service provision is universal is a crucial factor in what happens and what we take forward.

I raise the following point because I was asked it by the Royal National Institute of Blind People and other hon. Members have alluded to it. If closures go ahead, they will hit the blind and partially sighted particularly hard, leaving them even more socially and financially excluded than they have ever been before. They will no longer be able to use their local post office to help with the mountain of forms pushed on them by civil servants.

So the role of the post offices in rural communities and in urban centres is a crucial factor in terms of how people can respond to any changes that will take place. Worryingly, as I said in my introduction—I will say it again and I look forward to hearing the response—I do not believe that the Government have convinced the general public that the changes that are coming are changes for the better. I am not convinced of that, neither are the people who speak to me, the postmasters and postmistresses, or Royal Mail staff. Most importantly, the general public, who we have a duty and responsibility to look after, are not convinced of it either.

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

Despite all these amendments, which have been won by clear arguments put by Labour Members in the House of Lords and the Cross Benchers who supported them, I am still concerned about having a Bill that is fit for purpose.

Lords amendment 1 provides a new requirement that the report made by the Secretary of State will make clear the

“objective intended to be achieved”

by the disposal of shares in Royal Mail. I have followed this issue very closely so I know that everything else falls on that. As you know, Madam Deputy Speaker, I am the secretary of the Communication Workers Union liaison group of MPs in this House and have been so for more than a decade. Despite all the Minister’s warm words, it is not clear what this is meant to achieve that can be achievable under this privatisation model as structured.

Does the “objective intended” include maintaining Royal Mail as an organisation able to deliver to all parts of the UK for a single charge or two varying charges? The Bill and the amendments provide no guarantees that that is the case. Will that be covered in the report given each year by the Secretary of State to the House in order to show just how far the failure has been progressed, and how far my concerns and those of other Opposition Members have been realised? If we were to fragment Royal Mail—it is entirely possible that that will happen as there is nothing to prevent it under the Government’s privatisation model—a Scottish regional mail delivery service could be given responsibility for meeting that objective under this model. That provider might then find that that particular part of the United Kingdom—the same could happen in places such as Cornwall and elsewhere in the south-west—the sparsity of the population and the diversity of the communities mean that it is not possible to make a profit. This process is about a privatisation and about giving organisations the right to run Royal Mail as an organisation that must make a profit. The Bill would allow them to come back to ask the Secretary of State to allow them to get rid of that universal service obligation.

[Mr Davey]

Will the hon. Gentleman tell the House which part of the Bill he is worried about? Which part will cause the fragmentation he is describing?

[Michael Connarty]

The part of the Bill I am talking about—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We are not discussing the entire Bill. We are having a time-limited debate about specific amendments. The Minister knows that as well as every other Member of this House, so I am sure that he does not want to tempt the hon. Member for Linlithgow and East Falkirk (Michael Connarty) down that path. Perhaps the hon. Gentleman can focus specifically on these amendments so that the Minister will not be troubled.

[Michael Connarty]

I was talking about the amendments; the new requirement in Lords amendment 1 is that the report must include the

“objective intended to be achieved”

by the disposal of shares. That is a specific Lords amendment and I am questioning what will be put before the House as a result. Will it be a report on the progress of fragmentation and of these parts in trying to achieve the Minister’s stated aim for his sale of these shares?

The Minister has spoken repeatedly about finding some way of saving the post office network. I know that great steps have been made on the Bill through the amendments won by the diligent efforts of Labour Members and Cross Benchers in the Lords. There will be some sort of inter-business agreement and it will be extended. I know that the Minister is not trying to pull the wool over our eyes, because he is telling us about his aspirations. However, when I hear him talk, I am unsure what his benchmarks for achievement under these amendments will be if it turns out that his idea of having a full network of post offices and post office “locals” does not work, the “locals” fade away and—I believe this will happen—we begin to lose post offices at a faster rate than would have happened under the previous Government’s plans to stop the flood by taking out a number of post offices and hoping to leave enough business for those that remained.

I did not agree with that approach, but I recognised what the previous Government were trying to do. I do not understand how the Secretary of State will report on these matters as a result of these amendments. If the report were honest, it might suggest that we have to do something different. I want the Minister to tell us what he feels his duties now are as a result of these amendments or what he feels the duties will be of whoever succeeds him, should there ever be a change of Minister. I do not wish such a change upon him, because he deserves to come back to apologise for everything he is now bringing about.

Is this about return to the Exchequer? Let us look at the attempts of previous Governments to sell shares and at the way in which they sold those shares. The sale of the first tranche of British Telecom shares achieved a 90% profit in one day for those who bought them, because it was an attempt to get quick money into the Exchequer—or was it just to get British Telecom into the private sector? If it was to get money into the Exchequer, the then Government appear to have greatly short-changed themselves and the country. A better example, also in telecoms, is provided by the sale of level 3 broadband, in which we made a substantial profit for the Exchequer because of the way in which we auctioned it off, although that did not please people in the industry.

I would like the Minister to tell us how these things are going to work. Will the judgment be based on return to the Exchequer? I know that the Government will, if they get their way, want to balance that against their willingness to take on any deficit in the pension fund that comes with taking on the pension assets. These matters have to be clearly spelt out by the Secretary of State so that people can judge what he is going to do in the Bill. That is what is accepted in the amendment. People want more clarity because we have not been given a clear understanding of the benchmarks and targets that the Government hope to achieve. We have had warm words and aspirations, but given the backdrop—the person who has given those assurances has previously given assurances that they were against full privatisation of the Post Office—we would like to see something a bit more solid on the ground. Perhaps the Minister could say something about what the intentions are.

The amendment also asks for more information about the purpose and structure of the mutualisation. It has been suggested to the Government that it might be useful to set up a task force immediately, but I do not think they have taken that idea up. The idea is to give share options to the members of a work force who have seen 55,000 of their members thrown out the door already and who have heard from the chief executive in the past few days that another 40,000 are about to go behind them, so there is hardly going to be an atmosphere in which anything can be done mutually unless a lot of hard work is done.

I agree with the points made my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) about the hard work and dedication of long-term Post Office employees. We know that people go and work there in the short term and realise that it is a difficult job with unbelievably hard hours and that they often have to work in the most inclement weather to get the mail through. However, many of the people who have been there for a long time want the company to succeed and want its work force to be secured and modernised. A task force would be useful, and it would be useful if the Minister would spell out exactly what will be the benchmark for mutualisation so that the amendments have some value when they are in the Bill.

[Mr Weir]

The proposal is for the mutualisation not of Royal Mail but of Post Office Ltd, so the average postie does not come into this. They are the ones who will be subject to whoever takes over. Mutualisation will apply only to Post Office Ltd after it is demerged from Royal Mail some time in the future.

[Michael Connarty]

That is even more frightening. People at that end of the business are facing the same problems from the same management. If the management model has changed, I would like to think that the Minister would put that forward.

Those are my concerns about the amendments, which have been hard won and which came with a promise from the Government that there would be real changes that would make a difference to the Bill. I wonder therefore whether the Minister, if he speaks on this again, will give some idea of what is going on to give us an infrastructure for these matters.

My final point is about the sale of shares to employees. The record is exactly as the hon. Member for Angus (Mr Weir) said. Shares are slowly but surely bought up by large organisations. The famous case is the one with Sid and the idea that Sid had some power, but Sid’s shares are probably now owned by several multinational hedge funds or equity funds or perhaps by insurance companies or a pension fund or two. There is this idea that members of the work force will get shares that will give them some sense of ownership, and I remember the first debates in which this was talked about by Ministers. This is one of the myths that the Liberals like to push—that if someone is given a few shares, that will make them a part of the ownership of the business. It does not do that unless those shares come with some powers. As we have seen from many of the banks’ recent annual general meetings, even having large amounts of shares does not give one any power over bonuses, performance or the behaviour of the people who run the companies. What will come with the deal apart from a few stocks and shares that will be stuck in the bank until they are sold to fund a holiday?

14:15

[Lorely Burt]

The hon. Gentleman says that having large numbers of shares does not necessarily help, but being a small shareholder can be extremely helpful in large companies in which even small shareholders have a say and a voice.

[Michael Connarty]

I only wish that that were true. I assure the hon. Lady that although small shareholders can go along and make a protest and trumpet what they have to say, the bonuses, the sale of companies and the redundancies will still be voted through regardless of small the shareholders’ shouting. I am not in the business of standing on the fringe and shouting. I would much prefer the Bill to be rejected out of hand. I am against the privatisation of Royal Mail and I believe that the pension fund deficit was caused by the holidays taken by Royal Mail and Post Office Ltd, which were allowed by previous Governments of both hues. I would rather be standing here opposing what the Government are about to do to Royal Mail because I think that all the assurances we have been given, hard-won though they are, will not make a difference.

Capitalism will work as capitalism works and will do what is to the advantage of the people who hold the majority of the shares for the bottom line of their dividends. That will mean that people will lose their jobs and the Post Office will not be sustained using Royal Mail, which will not continue to provide a universal service at one price. The amendments will have to come with a lot more specific targets, which I do not see in the Bill or in any of the schedules to the Bill. Although I welcome the smaller amendments that have been made in this part of the Bill, I do not believe they will make a major difference to the outcome for Royal Mail or Post Office Ltd.

[Mr Davey]

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) finished where the hon. Member for Llanelli (Nia Griffith) started—in total opposition to the Bill. I have to tell the Opposition that they are ignoring the economic and financial reality of Royal Mail. As a result of the reduction in letter volumes because of technology such as e-mail, the internet, text messaging and social networking, it is losing a huge amount of money. The reduction in letter volumes—its core business—is predicted to fall again and again, but it is not only Royal Mail that is affected. Every postal administration around the world is seeing letter volumes and revenues go down. That means that those administrations are leaching money and something has to be done. The previous Government failed to do anything, although I should pay tribute to Lord Mandelson, who had the decency, on Second Reading in the other place, to recognise that we were on the right track with this Bill. The fact that Labour Front Benchers are unable to recognise that today is testament to Labour’s unwillingness to face up to the reality of the challenges.

[Nia Griffith]

I am sorry to stray away from the amendment, Madam Deputy Speaker, but I think it needs to be put on the record that our Bill, as it stood as Lord Mandelson was taking it through the other place, would clearly have kept Royal Mail in majority public ownership. That was written into the Bill, but it is not in the current Bill. We are talking about a totally different Bill that goes for 100% privatisation. They are two completely different scenarios and the amendments in the Bill arise largely from some of the situations created by that difference.

[Madam Deputy Speaker (Dawn Primarolo)]

Perhaps we could return to the amendments. We are debating the Lords amendments to the Bill—this is not Third Reading. The Minister is experienced and knows that. He has made his opening remarks. Will he answer the debate please?

[Mr Davey]

I am looking forward to doing that, Madam Deputy Speaker. The hon. Member for Llanelli welcomed Lords amendment 1 but felt that it did not go far enough. Despite all the arguments we have had in this place, she still believes that an inter-business agreement should be in the Bill, as do a number of her party’s members.

I do not wish to rehearse the long speeches that were made on Report, when our debate on this particular point lasted for about three hours, but let me repeat that putting provisions in the Bill in the way in which the hon. Lady suggests would create a significant risk of legal challenge owing to incompatibility with competition law. In addition, such an approach would almost certainly face a state aid challenge. I would have thought that she would have realised that, because it has been accepted by many who have examined the situation in detail.

The hon. Lady says that the absence of such provisions means that there is no protection for post offices, but the whole point is that the detail set out in our policy statement will enable them to be more profitable. It is real business that will save the post office network, not legal provisions in the Bill, so I disagree with her point.

The hon. Lady spent some time talking about employee shares. The Lords amendments will require the Secretary of State’s report to Parliament at the time of first sale of shares to include details about the employee share scheme. I would have thought that she would have supported that welcome development.

We would certainly want to report on such things as the terms by which shares would transfer to the employee share scheme and the design of the scheme. Such detail might include questions of whether there would be a trust model or individual shares, or a mixture of the two. There would also be consideration of the percentages to be transferred and the governance arrangements.

The hon. Lady asked how the shares will be allocated, but clearly that is a point for later discussion. Such a point might be addressed in the report. We can imagine allocating shares to employees on many bases, such as length of service, grade and salary. The Government would certainly not object to a proposal that shares and their benefits should be allocated evenly across employees to ensure that there is equal entitlement regardless of grade, salary or length of service. We have been clear that the scheme is for all employees of Royal Mail, not just the management, so I hope that people will not run away with the wrong idea.

Several Opposition Members asked what would stop employees selling shares immediately. Again, we are not making premature decisions about the scheme’s design, but we have always said, as I have repeated several times, that we are designing the scheme with longevity in mind—there are many attractions to a trust model for that very reason. However, it is not true that individual employees’ shares are always sold off by those employees. People arguing that point try to pray in aid the BT example, but the Public Bill Committee heard evidence that 66% of BT employees held on to their shares after the share plan had matured, so there is longevity in share ownership, even with the individual model. A lot of myths are cited by those who oppose employee share ownership, which was no doubt why the Labour party did not include employee shares in its 2009 Bill.

[Mr Weir]

The Minister says that 66% of those employees held on to their shares, but if they were 66% of a proportion of 10%, they would still be well below the threshold, so there could be a forced sale by the majority owner of the shares.

[Mr Davey]

I listened carefully to that interesting point in the hon. Gentleman’s speech, and the way in which he eloquently described the situation and referred to the Companies Act 2006 showed that we need to ensure that we design the scheme carefully. We will do so, because we want to deliver on employee share ownership, which is an objective of the Liberal Democrats, the coalition Government and the Bill.

The hon. Member for Llanelli was generally supportive of the proposals on mutualisation, but she spent a lot of time—do tell me if I stray out of order, Madam Deputy Speaker—saying that Government front-office services had not been delivered. We are turning around the decline under which the previous Administration took away more than £300 million of Government services from post offices. Our policy statement and the things that we are delivering show that there is a real future for the front office of government.

[Nia Griffith]

rose—

[Mr Davey]

The hon. Lady is in no position to criticise the Government about this, but I am happy to allow her to intervene—I hope that she will be able to remain in order.

[Nia Griffith]

We are talking about the mutualisation of the Post Office, but that can take place only if it is viable. Will the Minister tell us what new streams of Government business have been given to the Post Office in the past year?

[Mr Davey]

The hon. Lady is right—and we have been clear about this—that the network must be viable before going to mutualisation. The problem is that we inherited a post office network that was so badly managed that we had to turn it round. She asks for specific details, but she knows that several were set out in our November policy statement. She ought to know that the National Federation of SubPostmasters welcomed the start of the pilot scheme offering document verification for pension applications in 106 post offices in the north-east. She should also know that that is only the first of three planned pilots with the Department for Work and Pensions; the other two involve national insurance applications and testing the impact of requiring jobseekers who sign on by post to attend their local post office instead. I would have thought that she would have welcomed such pilots.

[Fiona O'Donnell]

I note that the Minister missed the green giro off that list. The position not only puts the post office network in my constituency at risk, but means that people who cannot access a PayPoint in their villages must travel to cash their cheques.

[Mr Davey]

I expressed my disappointment that Post Office Ltd did not win that contract from the Department for Work and Pensions, but I have described three pilots on which the DWP is working with Post Office Ltd. I could also have talked about the proposals on credit unions that we hope will go forward, or the fact that Post Office Ltd has won a contract with the London boroughs so that local authority staff can have an authentication service at the local post office. If that scheme develops, it might have applications throughout the country. Such developments have been welcomed by the National Federation of SubPostmasters, but of course we want to go further, which is why we are so pleased to have persuaded the Royal Bank of Scotland to enable its customers to access their bank accounts through the post office network, which we believe will start to happen from September. I would have thought that the hon. Lady would welcome such developments.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

If such developments arrive in the future they will be welcome, but will the Minister return to the point about the green giro? Do we have joined-up government? This was an opportunity to boost the Post Office, so why did the Government not do something about it? Surely the Minister, as a Liberal, will not just blame European regulations.

[Mr Davey]

I certainly would not—but when Labour Members make such points they really have a cheek, because their Government removed more than £300 million of Government services from the post office network. We are working hard across the Government to ensure that we can position Post Office Ltd in a place from which it can win contracts from Government Departments in Whitehall and local authorities to deliver the front office of government. I can tell the hon. Gentleman that a huge amount of work is being done on this, and he needs to be a little patient.

The problem is that when we came into government and developed the strategy, the cupboard was bare because the previous Government had done almost nothing. They had allowed the post office network and the process for developing new business to wither on the vine because they were so busy closing 7,000 post offices. I have to tell Opposition Members that the tender for the green giro began under the previous Government, so they really ought to be careful. We have had to deal with the tender that Labour Ministers wrote.

[Fiona O'Donnell]

The Minister will no doubt want to read the piece of paper that has just arrived in front of him, but perhaps I should read him what the National Federation of SubPostmasters actually said:

“The government’s decision not to award the new contract for benefit cheques to the Post Office does not bode well.”

It seems to me that competence in the Government is not as high as he—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Will the Minister, in answering, return to the question of viability and the links with mutuality in the context of the amendments we are discussing?

14:30

[Mr Davey]

I agree that we should focus on the long-term viability of the post office network. I recently attended the annual conference of the National Federation of SubPostmasters in Torbay, where we discussed the sorts of thing we are proposing and they were able to look at the new machines that Post Office Ltd is developing to position itself to win Government contracts, such as the application, enrolment and identity machine, which is already being used for contracts from the Driver and Vehicle Licensing Agency. They already have a portable one, which could be used across the network, and a number of other machines. The sub-postmasters were absolutely delighted. I wish that Opposition Members who have spoken today had been there, because the sub-postmasters showed greater confidence in the future of their post offices and their businesses than they do.

I will respond to some of the comments made by other hon. Members who have spoken. I thank my hon. Friend the Member for Solihull (Lorely Burt) for her comments. She mentioned the benefits to employees that will result from the proposals on employee shares set out in the amendments, and she mentioned pensions, which we will come to later. She specifically asked what discussions we have had with the Communication Workers Union on some of the amendments. It is interesting that on 13 April the CWU issued a press release in which it said that it welcomed the amendments to the Bill. Its general secretary, Mr Billy Hayes, said:

“We warmly welcome these amendments…We are pleased that Government has taken on board some of our concerns”.

I have met the CWU, and it has noticed the progress that we have made.

The hon. Member for Birmingham, Erdington (Jack Dromey) complained that post offices in his constituency would close as a result of the amendments, but I hope that he tells his constituents that four post offices closed in his constituency under the previous Government. All Members across the House will have discussed post office closures with many people in many communities. What we are offering in these amendments and in the Bill is hope that the Post Office will not see a repeat of those closure programmes, which have devastated so many people.

The hon. Gentleman asked what would happen after the spending review. The modernisation that the Bill and the amendments will enable us to undertake with the £1.34 billion will allow us to go further and continue the transformation. I believe that what we have with the funding package and the proposals is a radical change, but one that will lead to a sustainable network. He knows, because I wrote to him on 9 February, that the post office in Perry Common closed under the previous Government. Reopening it would lead to business migrating away from nearby offices at College road and Hawthorn road, which could jeopardise all three offices, which I am sure is not what he wants.

[Jack Dromey]

The Minister speaks of hope, and the same word was used when the Bill was launched. Seven post offices in Birmingham now face closure, one of which is in the Yardley constituency of a Liberal Democrat Member. Will the Minister agree to meet the community of Perry Common, which has signed a 1,000-strong petition asking for the reopening of a flexible post office in their locality? Earlier this week another Minister went to Perry Common and held it up as an excellent example of a community that has rebuilt its environment. It now wants to rebuild its high street, and it wants a sub-post office on it. Will the Minister meet the community and Mr Tarnjhit Dhesi, who is driving that proposal?

[Mr Davey]

I say to the hon. Gentleman and his constituents that they should look at the economics of the post office network in the area, because there are other post offices nearby, and talk with Post Office Ltd about the “locals” model that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) mentioned.

The “locals” model holds real prospects for dealing with some of the post office network’s cost problems, and for helping to revive shops on our high streets by bringing them and post offices together. In our pilots, not only have postal operators liked the model that we are developing, but so have post office customers and local communities. Having seen the evidence, some communities that were sceptical have been delighted by the service quality that Post Office “locals” have delivered. That is the future, and my hon. Friend was quite right to turn to it.

[Jack Dromey]

I am sorry to press the point, but my local community has looked at the pilots, is inspired by the prospect of flexible provision and wants to engage, but it has had the door closed in its face. Ministers say that they are offering hope and are prepared to listen, so will the Minister meet a delegation from Perry Common and Mr Dhesi?

[Mr Davey]

The reason why I am not agreeing to the hon. Gentleman’s kind invitation is that, under legislation that has been on the statute books for many years, and based on the practice of the previous Government, Post Office Ltd decides where Post Office “locals” open, so if that is his request he needs to address it to Post Office Ltd managers.

[Jim Shannon]

Hon. Members have referred to the pilots, but has there been a UK-wide pilot, or any in Scotland or Northern Ireland? If there has, could we have some idea of the feedback from them?

[Mr Davey]

There have been Post Office “locals” pilots in all parts of the country. We are up to 80 local schemes, and Post Office Ltd has tried to pilot them in urban, rural, suburban and urban-deprived areas. It is trying to test them out over time, taking account of seasonality and cash flow, so we are learning an awful lot of lessons from them. The recent analysis of the “locals” project by Consumer Focus is publicly available, and although it has some concerns about privacy it was able to show that on issues such as access, longer opening hours and reduced queues, people have found the projects to be a beneficial step forward.

The hon. Member for Strangford (Jim Shannon) said that he was concerned about the universal service obligation and worried that the Bill would undermine it. Far from it: one of the Bill’s main objectives is to secure the universal service, and Opposition Members have failed to realise that clause 30 includes stronger protections for the universal service than was previously the case.

The hon. Member for Angus (Mr Weir) made a very informed speech. He was a distinguished member of the Public Bill Committee, who failed to attend only on the few occasions when the weather prevented him from flying down to London, but in looking at the amendments before us I have to say that he has made the mistake of calling for guaranteed business for the post office network and, almost, of wanting to keep things in aspic.

On the train down to the annual meeting of the National Federation of SubPostmasters, I read the federation’s account of its 100-year history, which mentions the concerns that existed when telegrams were being phased out, and when postal orders were used. In other words, the business and services that have gone through our post office network have changed hugely, and we have had to develop them and move on, so setting things in aspic—putting things in the Bill, as some Members want—would not help.

[Mr Weir]

With respect to the Minister, this is not about setting things in aspic. The problem is that there is a great deal of uncertainty, because Royal Mail is up for privatisation, the link between Royal Mail and Post Office Ltd now relies on the good will of whoever runs Royal Mail, and with no guarantee of business it is difficult for those trying to sell post offices to find people to take them on, as they are uncertain of what business there will be in one or two years’ time.

[Mr Davey]

We are in danger of going over old ground. The hon. Gentleman will know, because we have had this debate many times, that it is my view that post offices are in a very strong position in this negotiation, because the idea that Royal Mail is going to absent itself from the post office network and allow its competitors to go in there is, frankly, nonsense. As for the particular issue that he has been raising with Post Office Ltd—the closure of Ferryden post office—he will know that that closed not because of any action of the Government or Post Office Ltd but following the resignation of the sub-postmaster. Post Office Ltd is looking at all available options to keep that service in his constituency open.

[Mr Weir]

If the Minister reads my remarks, he will see that that is what I said. I understand that the closure at Ferryden is not the Government’s responsibility. I have been in touch with the Post Office and it is trying to get an alternative, but it looks as though it will be an outreach service rather than anything else. That is a reduction in service to that community.

[Mr Davey]

I am sure that the hon. Gentleman will be engaging in that debate with Post Office Ltd.

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) asked, in the context of the report, what objectives we have for Royal Mail and the Post Office. We have made it very clear that securing the universal service obligation is our top objective. Getting a good deal for Royal Mail and for the taxpayer is essential. There is no objective of fragmenting Royal Mail as he described. When he suggested that employee shares were not a good thing for employees, I began to despair. The only correct thing that he said was that employee share ownership—ownership of the company in which one is working—needs to be combined with involvement in worker participation.

We should look at what is happening in Royal Mail at the moment. Someone who goes to sorting offices such as Gatwick, Greenford or Cardiff, as I have done, sees a world-class mail system and the rolling out of a programme of modernisation that involves the workers directly and has as one of its key objectives the health and safety of those workers. Sorting offices are being made not only more productive but safer. There is great employee involvement. If we link that with employee share ownership, this business will have a real future. I hope that the House will welcome this group of amendments from the other place, and give them its approval.

Lords amendment 1 agreed to.

Lords amendments 2 to 11 agreed to.



Clause 21

Restriction on power to transfer assets

[Mr Davey]

I beg to move, That this House agrees with Lords amendment 12.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to take Lords amendments 13, 14, 23, 24 and 26 to 28.

[Mr Davey]

The amendments in this group are either minor or technical—or, indeed, both. However, they make some important improvements to the Bill that I hope all hon. Members will feel able to support.

Lords amendments 12 to 14 concern the pensions provisions. Lords amendment 12 is, I must confess, not the easiest technical amendment that hon. Members will have had the pleasure of scrutinising, but I will attempt to explain it as clearly as possible. The amendment concerns the transfer of assets from the Royal Mail pension plan—RMPP—to the Government and is designed to deal with the fact that we expect the assets to transfer in two tranches. An estimated amount of the assets will transfer when Government takes on the historical liabilities of the RMPP. However, there will be a time lag between this point and the point when the necessary actuarial valuations are finalised. We will need a second transfer to take place when the scheme valuation has been completed: a corrective, or “mop-up”, transfer. The amendment ensures that this two-stage transfer is possible and that any adjustments applied to the second transfer are disregarded so that the funding level test to protect RMPP funding levels works as intended. This funding level test, assessed at the effective date of the transfers, should not be affected by any market movement in the assets that transfer later.

In supporting Lords amendment 12, I would like to be clear on one broader point. The Bill provides a safeguard in clause 21 so that the ratio of assets to liabilities in the RMPP must be no worse after assets transfer to the Government than before. However, we intend to go beyond that minimum and leave the RMPP fully funded after transfer, subject to state aid approval.

14:45

Lords amendment 13 will put in place a legal framework for the sharing of information between the new public scheme, the trustees of the Royal Mail pension plan and relevant employers. In her evidence to the Public Bill Committee, the chair of the Royal Mail pension plan trustees, Jane Newell, stressed the importance of ensuring a seamless service for pension plan members who will find themselves with accrued rights in two schemes, rather than one. That is exactly what Lords amendment 13 seeks to do. It will, for example, facilitate the provision to members of a single benefit statement, rather than two.

Lords amendment 14, which is the final amendment to the pensions provisions, will simply allow secondary legislation made under the pensions provisions to be commenced on a day specified by the Secretary of State through a commencement order. That might be necessary to synchronise the various elements of the pensions solution.

Lords amendments 23 and 27 will give effect to the recommendations of the Delegated Powers and Regulatory Reform Committee in the other place. The Government listen carefully to the views of that wise and respected Committee, as is reflected by the fact that we have accepted the two recommendations of its report on the Bill.

Lords amendment 23 concerns the appeals regime in part 3. Clause 58 allows the Secretary of State to apply, with or without modifications, certain provisions of the Enterprise Act 2002 to appeals made under the Bill. The Delegated Powers and Regulatory Reform Committee recommended that the provision be modified to prevent it from being broad enough to allow increases in civil or criminal penalties beyond the levels set out in the Enterprise Act 2002. Lords amendment 23 will do just that.

The second recommendation of the Delegated Powers and Regulatory Reform Committee concerns the Secretary of State’s power to amend Ofcom’s universal postal service order in a special administration scenario. Although the Committee accepted the need for that power and recognised that it would apply only in very limited circumstances, it recommended that the power be subject to the negative procedure. Lords amendment 27 will give effect to that recommendation.

Lords amendment 24 simply clarifies that directions made by the Secretary of State under part 3 must be in writing, and may be varied or revoked by a further direction. Lords amendment 26 will remove a reference to that procedure in clause 60 as it will be superseded by Lords amendment 24.

Finally, Lords amendment 28 is a consequence of this year’s referendum on the powers of the Welsh Assembly. The Bill sought to make a consequential amendment to schedule 5 to the Government of Wales Act 2006. However, the yes vote in the referendum resulted in that schedule ceasing to have effect. Lords amendment 28 simply deletes what is now a redundant reference in the Bill.

As I said, the amendments are technical and perhaps not of the most interest to the House. However, I hope hon. Members agree that they represent small but important improvements to the Bill and feel able to support them.

[Nia Griffith]

This is a group of technical amendments. We all want legislation to be as clear, precise and effective as possible. We will therefore support them.

Lords amendments 12 to 14 will form an important part of the Bill. The transfer of the Royal Mail pension plan and the fact that the Government will take responsibility for it are aspects of the Bill with which all parties agree. Any amendments that offer further clarity and security in respect of the handling of workers’ hard-earned pensions are to be welcomed. We had a thorough discussion of the pensions issues in Committee, so I simply reiterate our support for those amendments. I also confirm our support for Lords amendments 24 and 26.

Lords amendments 23 and 27 give effect to recommendations of the House of Lords Delegated Powers and Regulatory Reform Committee. Lords amendment 27 strengthens parliamentary scrutiny by introducing the negative resolution procedure into the Secretary of State’s power to amend the universal service order in a special administration scenario. As it strengthens the opportunity for parliamentary scrutiny, we shall support it.

Lords amendment 28 is purely technical and has been made to reflect the new situation with regard to Wales, following the result of the referendum held on 3 March in which the people of Wales voted yes to additional powers for the Welsh Assembly Government. We campaigned for and welcomed that referendum result, as it will help to streamline procedures, cut out wasteful duplication and ensure that the Assembly has the appropriate legislative powers in the areas for which it already has spending responsibility. We accept the clear need for the amendment and will support it.

[Mr Davey]

I thank the hon. Lady for welcoming the amendments, and I hope that the rest of the House will support them.

Lords amendment 12 agreed to.

Lords amendments 13 and 14 agreed to.

Clause 27

General authorisation to provide postal services

[Mr Davey]

I beg to move, That this House agrees with Lords amendment 15.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to take Lords amendments 16 to 22 and 25.

[Mr Davey]

As has been made clear at every possible opportunity, the Government are absolutely committed to the long-term security of the universal postal service. As Royal Mail is the provider of that universal service, and the only possible provider of it for the foreseeable future, its viability is clearly of huge importance to achieving that goal. The Lords amendments to the regulatory provisions of the Bill respond to points raised in both Houses and by Members of all parties, and will help to ensure that the Bill meets our primary objective of securing the universal service.

Lords amendment 17, on Ofcom’s duties, will ensure that Royal Mail has the opportunity to earn a reasonable commercial rate of return on all expenditure incurred in providing the universal postal service, and on any regulated access services in so far as they make use of the universal postal service network. Although it is obviously not within the gift of the regulator to determine precisely what returns Royal Mail can make—that should depend on the market and the company’s performance—it is essential that the regulatory framework should provide incentives for Royal Mail to be successful and make the necessary efficiency improvements, and allow for good performance to be rewarded without regulation eroding the effect of increased efficiency. The amendment will ensure just that.

Lords amendments 16 and 18 further amend Ofcom’s duties, to specify that the requirement for efficiency should apply

“before the end of a reasonable period”,

to give Royal Mail time to continue its vital modernisation. That is an important change. Clearly, the delivery of the universal postal service needs to become more efficient, and neither those amendments nor the ones to which I have already spoken will undermine that. However, we do think that it is important to give Royal Mail a reasonable period of time in which to modernise and achieve efficiency.

As part of that ongoing modernisation, Royal Mail will need to invest in new machinery and technology. Before making long-term investments, boards and shareholders look for certainty. Lords amendment 22 will give Royal Mail certainty that for a significant length of time—10 years—it will be able to remain the universal service provider throughout the whole of the United Kingdom. As previously drafted, the Bill could have given rise to doubts about the certainty of Royal Mail’s designation as the universal service provider in the short to medium term, as it effectively provided for a three-year moratorium period before there could be a procurement determination. Although it was not the Government’s intention, the risk of Royal Mail losing part or all of its designation after three years via a procurement determination could clearly have discouraged the company from making otherwise rational and important long-term investments in its infrastructure. That is why Lords amendment 22 gives Royal Mail a 10-year period of certainty.

However, although we need Royal Mail to have that certainty, we also need to keep up the pressure on it to press ahead with modernisation. We must recognise that the threat of a compensation fund means increased uncertainty for its competitors. It is therefore not unreasonable to seek to delay the possible introduction of a compensation fund until necessary modernisation has taken place.

We have looked again at the moratorium period before Ofcom can initiate an unfair burden review and concluded that a period of five years is appropriate. Lords amendment 21 gives effect to that.

During the passage of the Bill, many hon. Members have raised concerns about the prospect of other operators cherry-picking profitable elements of Royal Mail’s delivery business and, as a result, putting the security of the universal service at risk. The Government have reflected on those concerns, and during the Bill’s passage through the other place engaged in constructive discussion with Opposition Front Benchers there, as well as with Royal Mail and the Communication Workers Union.

Although we are confident that Ofcom has the necessary tools to ensure fair and effective competition in the market, it is our belief that on occasion it will need to build in greater time to inform its use of those tools. Lords amendments 15, 20 and 25 address that by giving Ofcom the power to require operators to pre-notify them of the planned commencement or expansion of a letters business on a specified scale. We have left the precise scale for later definition—it will depend on the market at the time—but our clear intention is that that should apply only to a significant letter delivery operation that could have a damaging impact on the provision of the universal service. That notification mechanism will ensure that Ofcom has the necessary time to evaluate the potential impact on the universal service of such an operation before the operation has commenced and, critically, before any potential damage has been done to the security of the universal service.

I stress that the notification condition is aimed at avoiding damaging cherry-picking that would put in jeopardy the long-term security of the universal service. As such, our clear view is that the condition should apply only to those operators seeking to commence or expand a significant letter delivery service, but it will not impose any additional burden on, for example, current access competitors, courier services or parcel delivery businesses.

Finally, Lords amendment 19 addresses concerns, which were again raised in both Houses, about access to postal services. The central concern of hon. Members who have raised this issue is how we can ensure that people right across the country and from all walks of life continue to have access to the high standard of postal service on which they depend. The Bill already specifies that Ofcom’s duties include ensuring that there is provision of sufficient access points to meet the reasonable needs of users. In determining those, Ofcom will conduct thorough research and analysis, and consult users to take their views into account. Importantly—this was often misunderstood in our previous debates—Ofcom will also be bound by its broader duties, as set out in the Communications Act 2003, to have regard to, among other things, the needs of persons with disabilities, the elderly, those on low incomes and those living in rural areas.

I am confident that that will mean that Ofcom’s requirements on the distribution of access points across the country will ensure that all users can continue to post their letters, packets and parcels in a convenient way. However, although we are clear that the reasonable needs of users is the right test, it is conceivable that in some cases the Government will wish to apply different considerations. For example, the Government may have wider public policy objectives to consider, perhaps in relation to rural policy or small business support.

Such broader public policy goals are rightly a matter for the Government and not for an independent sector regulator. Therefore, amendment 19 allows the Secretary of State to step in and require Ofcom to ensure sufficient access points throughout the United Kingdom to meet the interests of the public. That is not a power that we would ever expect to use—its inclusion simply serves as a fail-safe to address the legitimate, albeit unlikely, concerns expressed by hon. Members on both sides of the House and by colleagues in the other place.

I hope that this package of regulatory amendments demonstrates that we have listened to the concerns of hon. Members and those in the other place. The amendments constitute a real strengthening of protection for the universal service—an objective that I believe all hon. Members share—and as such, I hope they are warmly welcomed.

14:59

[Nia Griffith]

Lords amendment 17 requires that, when having regard to the requirement for a postal service to be financially viable, Ofcom should include the need for a reasonable commercial rate of return for the universal postal service. We argued this very determinedly in Committee. The provision of the universal postal service constitutes a considerable financial burden and we have seen how, in recent times, the opening up of opportunities for competitors to come in and cherry-pick some invitingly profitable parts of the postal delivery service, leaving Royal Mail to provide the universal postal service, has led to some considerable controversy about the price charged for the final mile. Royal Mail feels that the price set by Postcomm is too low, while the competitor providers would quite naturally always want the price kept as low as possible.

We welcome the fact that—as is made clear elsewhere in the Bill—Royal Mail will continue to be the provider for 10 years after privatisation, not just three. This will provide some much needed stability for the service and make it worth Royal Mail investing sufficiently in the necessary infrastructure. But crucial to the success and stability of the service is the need for the postal service to be financially viable. It would be immensely disruptive and damaging if a privatised Royal Mail got into difficulties and had to be bailed out. That is one reason it is essential that the regulator, Ofcom, should understand the need for a reasonable commercial rate of return for the universal postal service and make its judgements and interventions accordingly. This is common sense, so we shall support this amendment.

Lords amendments 16 and 18 provide clarity that the requirement for efficiency would apply after a reasonable amount of time and provide a definition of that reasonable period as a period beginning on the day that the provisions of the Bill come into force and which Ofcom considers to be reasonable. These amendments also help to improve the Bill and we shall support them.

Lords amendment 19 is an extremely important amendment. In Committee, we tried very hard to persuade the Government to amend the Bill to ensure that the post office network was used to provide the network of access points, and we were very disappointed that the Minister chose to turn down the opportunity to show any real commitment to the post office network and refused to accept our amendment on using the post office network to provide the access points to the postal service.

This Lords amendment does not safeguard the post office network. It does, however, provide some protection for the public, and some reassurance that the Secretary of State may direct Ofcom to take action to ensure that sufficient access points are provided to meet the interests of the public. It is not, however, anything like as specific or forceful as we would have liked. It does not specify, as legislation in some other countries does, the number of access points or their geographical distribution. This is done elsewhere either by specifying a precise number of outlets, as in the German model, or by insisting on specific access criteria, as in the Australian model.

This amendment is much more subjective and leaves it as a matter of opinion for the Secretary of State to decide what is meant by sufficient access points to meet the interests of the public. Will the Minister clarify the thinking behind this, and specify the number of access points? We understand that the access criteria, as laid down in the document “Securing the post office network in a digital age”, could be met by a network of some 7,000 or 8,000 post offices. When we were in government we put in money to keep open a network of 11,900 post offices, and the present Government are doing likewise. What number of access points is the Secretary of State likely to designate as sufficient to meet the interests of the public? Will it be as many as the current network of post offices, or will it be fewer? If it is the latter, some post offices could cease to be access points for postal services and not only would they lose the third of their income that comes from the Royal Mail work that they do but they would stand to lose a lot more income, as they would lose footfall.

Access points would not, of course, have to be post offices. We have already seen some very adverse public reaction when post offices have been moved into the upstairs of some high street chains, making them difficult to find and time-consuming to access. Will the Minister clarify the number of access points he envisages meeting the interests of the public, and whether the Secretary of State might also have criteria for the accessibility of access points so that we do not end up with access points that are hard to access?

Access points does not just mean counter services, but can also include post boxes. Will the Minister give us any indication of what number of post boxes the Secretary of State would consider sufficient to meet the interests of the public? Would it be the same number as now, or are we likely to see post boxes removed or boarded up? I say that as someone who has only recently had to fight for Royal Mail to restore a post box at Brynteg in my constituency, and I can well envisage that a profit-hungry privatised Royal Mail would look to reduce the number of post boxes in order to cut down on collection costs. That could mean people losing their local post box and no longer having one within walking distance of their homes. We welcome the amendment because it could improve the chances of a better service to the public, but we would have liked a much stronger amendment to give a stronger guarantee of a comprehensive network of access points.

We welcome Lords amendment 20 and the consequential amendments 15 and 25, because they enable Ofcom to impose a notification condition on any person providing, or intending to provide, a service within the scope of the universal postal service. Again, this is important for the rational management of the universal postal service, and we should support it. Lords amendment 21 makes a significant change to Ofcom’s review of the costs of the universal service obligation. Whereas previously the Bill specified that Ofcom would have to wait three years from when the Bill came into force before it could carry out a review of the costs of the universal service obligation, the amendment increases the period to five years, unless the Secretary of State intervenes and directs Ofcom to carry out a review. We have not sought amendment 21. Will the Minister clarify under what circumstances the Secretary of State might intervene before the five-year period is up?

On Lords amendment 22, we have consistently pointed out that the universal service provider incurs very large costs and needs to have as much certainty as possible about its future obligations so that it can plan long term and make the necessary investment in the latest technology. We therefore welcome the amendment, which means that Royal Mail will continue to be the universal service provider for the next 10 years, rather than just the next three years. This is a significant improvement. We know that significant modernisation has taken place within Royal Mail over the past few years. In the evidence sessions, the chief executive, Moya Greene, expressed her pride and delight in the world-class facilities that Royal Mail has in some of its depots, but she also pointed out that there are still areas awaiting modernisation. If Royal Mail is to continue to invest, the certainty of knowing that it will remain the provider of the universal service for the next 10 years will provide a much better basis for doing so than a mere three years. This is very important to create the necessary stability and justify the necessary investment. We therefore welcome the amendment.

[Lorely Burt]

This final string of amendments is another testimony to how the Government have listened to colleagues on both sides of the House. I greatly welcome a number of the amendments, particularly those that make the duties of Ofcom stronger than under Postcomm. I want to ask the Minister about amendment 19, which specifies that the Secretary of State can override the regulator on access points. We need to be wary about setting up an independent body but saying, “Never mind, the Secretary of State can override it”. We want to be sure that that could be done only to the benefit of the consumer. Bringing politics into the matter concerns me a little, so will my hon. Friend confirm that he cannot envisage any circumstances in which the Secretary of State could intervene, perhaps to specify that we do not need as many access points as now?

I particularly welcome amendment 17. Royal Mail has found it difficult to make a profit given the constraints under which it has had to work. The previous situation was impossible, so I am delighted with the amendment. We had to address the appalling decline in profitability, which was due to the ceiling imposed by the previous Government, who were unwise in their overzealous interpretation of the European legislation. If we can do it now, why could we not have created a more competitive environment for Royal Mail in the past? No one can make a profit with one hand tied behind their back. I particularly welcome Lords amendment 22, which guarantees that Royal Mail will remain a USP for 10 years, thereby removing any lurking uncertainty, which is particularly helpful.

Finally, Lords amendments 20, 15 and 25 require pre-notification to Ofcom of the planned commencement or expansion of a letters business on a specified scale. That will allow Ofcom to evaluate the potential impact beforehand, not after the stable door is opened and the horse has bolted. I wonder whether the Minister could say a little more about the circumstances in which he would envisage the provisions applying. Opposition Members have rightly raised the spectre of lots of other organisations wanting to come in and expand their letter delivery services, so how will the provisions work to ensure that Royal Mail’s commercial interests remain viable?

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

I would like to press the Minister on Lords amendments 16 to 19, to clause 28. He has rightly spoken of the need for Royal Mail to continue to modernise, and I hope to give a simple example of why this is so important.

The House will recall the severe snow that affected large parts of Scotland last winter, including West Fife in my constituency. Fife was particularly badly hit because of the incompetence of Fife council, which failed to clear the roads and keep traffic moving. That had a huge knock-on effect for Royal Mail. If residents are stuck in villages or large parts of Dunfermline and cannot get out, it would quite obviously be unreasonable to expect Royal Mail to be able to deliver a regular service, because for genuine health and safety reasons it is vital that posties are not exposed to unnecessary risk. However, Royal Mail failed to provide a robust contingency programme to deal with the huge backlog that quickly built up.

It will probably not surprise the House to know that mid-December is a particularly busy time for Royal Mail, as there is a substantial increase in the volume of packages and cards. Unfortunately, business continues in the build-up to Christmas for many of my constituents. I was approached by a number of small businesses and local law firms that were waiting desperately for important documents—in some cases legal documents—and that were simply unable to get them delivered by Royal Mail. Many of my constituents showed some initiative and went to the Dunfermline sorting office to see whether they could simply collect their post. However, Royal Mail had no plan in place even to allow local businesses or my constituents to do so, which is a sign of poor planning by Royal Mail management. I would be grateful if the Minister outlined what discussions he has had with Royal Mail about that lack of strategic or, some might argue, tactical thinking, which should be happening at the local and regional levels.

The backlog was such that many of my constituents did not receive the parcels and cards that friends and relatives had sent them until the middle of January, which is clearly a most unsatisfactory circumstance. To be fair, after I met Royal Mail in the build-up to the new year, it took a number of steps, including putting on Sunday deliveries, drafting in additional staff from other sorting offices and putting on extra deliveries. But, with the best will in the world, I hope that the Minister will agree that it should not have been necessary for us to reach a state of chaos before Royal Mail took proactive steps to tackle the problem.

15:15

I would be grateful if the Minister outlined the specific issues he has raised with Royal Mail relating to the modernisation of its procedures. Has he discussed how its policies might become more robust? Has it given him any indication of whether it has learned the lessons, not only from Fife but from across Scotland, in time for next winter? I fear that we might otherwise face a rather challenging set of conditions.

[Richard Fuller (Bedford) (Con)]

I should like to echo the comments of my hon. Friend the Member for Solihull (Lorely Burt). This is a listening Government who are seeking to improve legislation at all stages and in every way, and that is evident from the Lords amendments before us today.

I should like to speak particularly to Lords amendments 17, 20 and 22. They represent a significant shift in the terms offered to Royal Mail, to the advantage of the Royal Mail group. In Committee and again today, we have heard justified praise for the present management of the group. Moya Greene is an exceptional leader of the group and she is bringing her depth of experience to the provision of Royal Mail services in the United Kingdom. It was not always thus, however. The group has at times had a poverty of good management. Indeed, its management has at times been weak. Many times during our discussions of the Bill, we have recognised that the people who best knew how to run the Royal Mail group were the postal workers themselves and their representatives in the Communication Workers Union. The amendments demonstrate our faith that the management and the unions will use the new advantages to the best effect and in the long-term interest of the people who use Royal Mail services.

We are extending for 10 years Royal Mail’s ability to be the sole universal service provider. As hon. Members on both sides of the House have pointed out, that is a sensible and welcome change, because it will enable difficult investment decisions to be made with more certainty about market conditions. We are also providing that, after five years, the other operators will be able to receive a charge for any inefficiencies or burdens resulting from universal service provisions not being made. I hope that the Minister will be able to assure me that sufficient incentives will exist for the management of the Royal Mail group to continue to make the improvements that he rightly identifies as necessary over the next five years. Perhaps he will also be able to update the House and give us assurances on progress with the unions in relation to these advantages.

These measures demonstrate that we are placing additional trust in responsible management and responsible unions in our Royal Mail group. We are making significant changes in the Bill, to the benefit of the people who work for the postal service. They will move it forward, and they represent a welcome step. However, we shall require the recent excellence in the provision of services to continue. We do not want to have to look back in five years’ time and say, “We gave you those chances, but you didn’t take the necessary steps to modernise. Now we are going to have to burden other people because you didn’t take up all the advantages that we provided.” These are good amendments, and I fully support them.

[Michael Connarty]

The hon. Member for Bedford (Richard Fuller) referred to the trade unions in a way that sounded as though he did not accept the hard work they have done over the past decade and a half to try to get a good relationship with the management. The amendments were driven by the work of the Communication Workers Union, working alongside the Labour Lords and reasonable people on the Cross Benches, and they have now been taken up by the Government. Only one of the amendments before us today did not come through the debates in the Lords as a result of the work with the CWU. The unions have always been responsible. I can assure the hon. Gentleman that, over the decade in which I have been the secretary of the CWU parliamentary liaison group, the management have been horrendous in the running of Royal Mail and the Post Office.

[Richard Fuller]

I appreciate the opportunity to reassure the hon. Gentleman that he must have misheard what I said. I said precisely what he has just said—that the people who have provided leadership in the Royal Mail group and who have provided a consistency of belief in the ethos of public service provision have been the workers themselves, and that they have been let down by the management over a number of years. I said that the CWU, with the business agreement it put in place, showed that it had learned that it needed to be constructive and positive, and that it provided great leadership. My hope was that, with Moya Greene in place, we have a solid partnership of management, workers and the unions that can move forward. The hon. Gentleman was not always present in Committee; if he had been, he would have heard more clearly that I am strong supporter of the CWU. I am glad to have the opportunity to clarify that.

[Michael Connarty]

I am grateful, and I am glad that we have a solid platform on which to continue the debate.

It is remarkable that not just myself, but not a single Labour member of the CWU parliamentary liaison group, which worked together with the CWU and the Post Office, was asked to participate in the Committee considering this Bill. I might ask the Minister some detailed questions that he could have answered before if I had been granted access to his knowledge and aspirations in Committee. That position will have to be explained by the business managers—not by me, as it has never been explained to me.

I wish to focus on amendments 21 and 22. Let me provide some background. The 10-year period in amendment 22 for the universal service provider—currently, Royal Mail—is welcome, but the phrasing of the provision amounts to a get-out clause. Lords amendment 22, as it says in the explanatory notes,

“would prevent Ofcom from making a procurement determination within 10 years from the day that Part 3 of the Bill comes into force, unless the universal service provider agrees.”

Thus we have a privatised Royal Mail with a universal service obligation; it has all the burdens, which are not going to be shared properly with others in the business. Others have already cherry-picked much of the provision—TNT, to name just one, and many others come through our door, delivered in the last mailbag by Royal Mail employees. As far as I can see, none of the burden is going to be shared with Royal Mail for providing that universal service; it all falls on the universal service provider.

By using deductive logic, people can see that the privatisation of the universal service provider, Royal Mail, should not be continued. We would like Ofcom to look at splitting up the obligation and sharing some of the burden by allowing some other regional post office or mail provider to come in and take on some of it. It is possible that in a privatised scenario, the interests of Royal Mail—at the moment, the public service provider—will not be the same. As I say, there is a get-out clause.

Clause 33(5) will permit the Secretary of State to amend the minimum requirements of the universal service postal provision in clause 30—a mail service for six days a week, provided at an affordable and uniform price throughout the UK. Under clause 33(7), an affirmative resolution is required before the Secretary of State can make amendments, but a coalition Government with a majority can easily achieve that. This is predicated on good will, in a sense. On a more negative view, we see these provisions as being nothing but wallpaper for public consumption, which will not help us to face up to the financial problems of a privatised Royal Mail operating in a privatised environment. In that context, it might not be sustainable.

I am concerned when the amendments can be interpreted in two different ways. I have not had the benefit of interrogating the Minister in Committee, of hearing the Committee debates or of participating in the debates in the House of Lords that led to these amendments being brought forward.

Lords amendment 21 increases the three-year period in clause 42—which provides for Ofcom to review the extent to which the universal service provider is bearing a financial burden—to five years. If that extension is such a good thing, why is this a Government amendment? Why was it not tabled, here or in the House of Lords, on behalf of the work force, via the Communication Workers Union? What is the reason for the extension?

The provision of a universal service is one of the great burdens on Royal Mail. Delivering post in parts of the constituency of the hon. Member for Angus (Mr Weir) or a constituency in Somerset is much more burdensome than delivering it within the square mile of the City of London. The last Government, who allowed commercialisation, were immediately accused of allowing some companies to cherry-pick the deliveries. That is why TNT made so much money: it is much more interested in cities and large conurbations than in the universal service obligation, which covers all the sparsely populated and difficult parts of the country. The capital and work force required by the universal service provider cannot be utilised at its optimum level because of the unevenness of the urban density and geography of the country. Some areas are more profitable than others, but the burden of delivery must still be carried.

Clause 43 provides for the regulator to consider mechanisms for a burden-sharing arrangement if Ofcom finds that such a burden exists. I welcome that proposal. Ofcom could take three possible courses. It could review the minimum requirements of the universal service under clause 33, which means downgrading the service. The Minister said earlier that that was not one of the Government’s aims. There could be an industry or users’ levy, which has been hotly resisted by the privatised cherry-picking companies which have made a killing from the commercialisation of Royal Mail delivery in the past decade. There could be a “procurement determination”, allowing the universal service provider’s obligation to be changed under clause 43. No one knows what course Ofcom will choose, but we do know that if there is to be any logic and justice in a levy across the industry to help with universal service provision, the Lords amendment will not allow it to happen for five years.

This is a negative amendment. It leaves Royal Mail with a burden that it cannot shift, cannot share with others, and cannot ask Ofcom to share with others for five rather than three years. Perhaps the Government want that to happen. If that is what they are up to, let them tell us. I know that the extension to five years has been welcomed by those who are currently making a nice killing by cherry-picking certain kinds of mail, but a real problem will face whoever bears the universal service obligation under privatisation. No subsidies will be offered; the provider will have to stand on its own two feet and make a profit. It will have to seek a change.

The extension to 10 years proposed in Lords amendment 22 is all right as long as the procurement trigger is not used by the universal service provider, but I think that the two proposals are heading in the same direction. Following privatisation, there will be pressure on the universal service provider—currently Royal Mail—to offload some of its universal service obligation. It could do that by means of a change in the number of deliveries. There have already been some changes: there is now only one delivery per day, and letters are not collected from mail boxes between lunchtime on Saturday and 5 pm on Monday. All those adjustments were made under the pressure of commercialisation, but there will be other pressures.

What worries me particularly is the possibility that regions to which a provider does not want to deliver will be offloaded on to another provider. That provider will then go to the Secretary of State or Ofcom and say, “We cannot make a profit on this.” My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) was asking about this point earlier. The provider will say, “It is not viable, so we want to be able to change the arrangement either by cutting the number of deliveries or pick-ups or by altering the price of the delivery.”

15:30

All those options are available under these amendments. It may not be the intention but if it is the intention, the Minister and those who drafted the amendments are being Machiavellian in their approach to Royal Mail. I do not think they are Machiavellian, however. Frankly, I do not believe they are sufficiently smart; I think they are just blundering along, putting together groups of clauses and amendments that will have unintended consequences.

I am worried because the Bill, with these amendments, is deeply flawed. There are even flaws in the amendments that we are welcoming now. We are providing for 10-year terms, but it is still possible to get out of that by going to Ofcom and saying, “We can’t make it. We can’t cut the mustard here. We can’t make a profit. Either we give up as a universal service provider and sell out the lot, or you let us break up the franchise.” I think that is what will happen. I have serious reservations, therefore.

Also, why does the Minister want to extend the time period for Ofcom to be able to review the situation from three years to five years, under amendment 21? Is it to protect those who at present do not want to pay a levy, or to stop the burden sharing being properly looked at, or is it because he wants to save the minimum requirements of the service order? We are not sure. Will he address those concerns to give me the confidence so that I do not choose to press amendment 21 to a Division?

[Mr Davey]

I am grateful to the hon. Member for Llanelli (Nia Griffith) for her general welcome for many of our amendments. I began my remarks by saying that a degree of consensus had emerged in the other place.

The hon. Lady spent most of her time talking about access points and amendment 19. We must be clear about what an access point is. It comes from the directive; the definition of an access point and the requirement to provide them flow from the universal postal service directive, and we then define it in this Bill. It would be wrong for us to state that it could only ever be post offices, and to enshrine that in the Bill, because, for instance, some rural communities might need access points in a form that the post office network is unable to provide. I hope that the hon. Lady recognises that it is therefore important to have some flexibility.

The hon. Lady was concerned about some post offices not being accessible, and gave the example that some of them might be upstairs. In addressing the access points issue, Ofcom will be required to look at the needs of users, and its obligations, under the Communications Act 2003, are much stronger than those of Postcomm, and they include taking account of the needs of disabled people. I hope, therefore, that the hon. Lady will understand that the accessibility requirements have been improved. On access points more generally, the hon. Lady did not give the Government credit for the fact that in the—signed and legally binding—agreement we have reached with Post Office Ltd providing the £1.34 billion, Post Office Ltd has to secure a network of at least 11,500 post offices. That is the clearest and strongest way to ensure that the network is delivered.

The hon. Lady had some concerns about amendment 21, and asked why the Secretary of State would intervene before the five years was up. It is sensible to maintain the Secretary of State’s ability to intervene and direct Ofcom to conduct an unfair burden review. That measure adds some flexibility to the Bill. If all the evidence pointed towards there being a need for an unfair burden review, a process to allow a review to be conducted would clearly be beneficial. We wanted that extra flexibility in the Bill.

[Nia Griffith]

I am not against the idea of Ministers intervening, because it is very important to have that opportunity for a review. I was just wondering whether there were any particular circumstances in which the Secretary of State might be proactive, because of the damage that could be caused if the review was left for five years rather than three. I am all for the Secretary of State having that additional power, but are there any circumstances that would precipitate an instant review?

[Mr Davey]

We need to have flexibility in the legislation to ensure that if the circumstances are so bad for Royal Mail because technology is having a worse effect than we had expected on its letter flows, we can still provide the universal service. That is what this Bill is about. This extra flexibility ensures that if an unforeseen circumstance arises requiring an unfair burden review before the five years is up, that flexibility is in place. I am glad that the hon. Lady welcomes that.

I was grateful for the comments made by my hon. Friend the Member for Solihull (Lorely Burt), who acknowledged that these amendments show that the Government have listened. She was concerned that amendment 19 would give the Secretary of State an override. May I assure her that we think it very unlikely that the power would be used? We need to make it clear that the first step is for Ofcom to assess the needs of users, and it will consult the public. We would not expect to use the power, and it is highly unlikely that we would interpret the “interests of the public” as being less important than the “needs of the public”. The words in the amendment should reassure her. The amendment is intended as a broader test to capture elements that the “needs of the public” do not, and that Ofcom is not allowed to consider. I hope that she will be reassured by that.

My hon. Friend also asked about the notification scheme. I assure her that it is designed to enable Ofcom to act to prevent harmful cherry-picking, which would damage the universal service. Again, this is another tightening up of part 3 and the regulations, to ensure that we can deliver the universal service through this Bill.

The hon. Member for Dunfermline and West Fife (Thomas Docherty) talked about what happened in his constituency following the bad weather just before Christmas, and asked me whether I talked to Royal Mail about it. Of course I regularly meet the management of Royal Mail, and they are committed to providing an excellent service. I think we all accept that the conditions last winter were exceptional and did create lots of problems. Royal Mail took exceptional measures to try to deal with them, including investing £20 million of extra resources to ensure that deliveries could be maintained. Although the details of Royal Mail’s operations are, of course, a matter for Royal Mail, it is worth pointing out that in areas of Scotland, including his constituency, the private companies had much greater problems in delivering. Royal Mail acted strongly, made the investment and was able to deliver. As the universal service provider, it showed its strength.

[Mr Davidson]

Does the Minister believe that that additional expenditure—that enormous cross-subsidy to the highlands and other isolated areas of Scotland—would have happened in an independent Scotland?

[Mr Davey]

Mr Deputy Speaker, I would love to speculate on such a matter, but Madam Deputy Speaker has made it very clear that she would not wish us to do so. All I can suggest to the hon. Gentleman is that he might wish to debate that later with the hon. Member for Angus (Mr Weir) in order to get an answer to his question. He should not believe everything he hears.

[Thomas Docherty]

Let me take the Minister back to the point about some of the other providers, such as City Link, which he is absolutely right to say did not provide any service at all. That affected quite a lot of packages; for example, Amazon uses a non-Royal Mail provider. Will he give a cast-iron guarantee that if one of those companies tried to become the USP, it would be expected to make the same provision as Royal Mail does, and that we would not get the kind of cowboy operations that handle some deliveries now?

[Mr Davey]

That is the whole point of the Bill’s ensuring that the universal provision is there for us. It will be maintained, because the regulator, Ofcom, will ensure that the universal service provider meets the minimum requirements, including on performance. If a company took over the management of Royal Mail and became the USP, it would be subject to that very tough regulatory regime.

My hon. Friend the Member for Bedford (Richard Fuller) rightly praised the management of Royal Mail, led by the chairman Donald Brydon and the chief executive Moya Greene, who have made a real difference in their time at the helm; the Government have huge confidence in them. My hon. Friend asked what the incentives for management were. Having met the chairman and chief executive and having attended a board meeting recently, I assure him that its management is really seized of the need to modernise Royal Mail. Look at the way in which we have set the regime up: the Bill makes it clear that Ofcom must, when regulating, have regard to the need for the USP to become, and to remain, efficient, so there will be a regulatory framework to bear down on management—but there also are other incentives for management. He was right to make that point.

My hon. Friend also asked about the role of the unions. Royal Mail’s management and I have engaged very constructively with the Communication Workers Union, and I have already welcomed its very strong support for the amendments we are discussing today, which it recognises as strengthening the protection of the universal service that its members provide. There are, however, some difficulties. I was disappointed by the CWU’s decision to ballot for strikes in London about modernisation and I hope that the ongoing talks will prevent a strike from going ahead, as industrial action would only damage the very universal service that we are all acting to protect.

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) went very wide in his remarks on the regulation. I know that he is secretary of the CWU parliamentary liaison group, and I wish that he had been on the Bill Committee, as that would have spiced things up. We had a great time on the Committee. I remember fondly the days of Red Bull amendments, Gordian knot amendments and clause 3 amendments and all the rest that we heard from the Labour party. No doubt we would also have had the Linlithgow and East Falkirk amendment if the hon. Gentleman had been on the Committee. He is particularly concerned about Lords amendment 22, on which he spent a lot of time, about the procurement determination. As I said in my opening remarks, that change has been welcomed by Royal Mail and the CWU because it provides greater certainty. I also said that people had interpreted the option of procurement decision, if there were a decision that the USO represented an unfair burden on the USP, in ways that we had not expected. We believe it is a useful tool in the regulator’s armoury to make sure that the universal service will be provided throughout the country. It is not an attack on the USP, as some people had expected. The measure is designed to ensure that the legislation is future-proofed and to make sure that the regulator has all the necessary tools at its disposal.

Let me bring my remarks to a close—

[Michael Connarty]

The Minister has missed out Lords amendment 21, which came from the Government side and has not been discussed or pushed for by anyone else. That amendment changes from three years to five the time after which the issue of levy and burden-sharing will be set aside. That has been welcomed by the people who are making lots of money out of cherry-picking in relation to Royal Mail at the moment.

15:44

[Mr Davey]

I apologise to the hon. Gentleman. I thought that I had dealt with that when I responded to the remarks made by my hon. Friend the Member for Bedford, who also raised that point, albeit from a slightly different perspective. We need to ensure that Royal Mail management have incentives to deliver. On reflection, I was concerned that the three-year period before which an unfair burden review could result in compensation was too short. Five years is the right length of time, because we need to put pressure on Royal Mail management—I think that they willingly accept that—to drive forward modernisation, because that is the only way in which the company will survive in the context of a universal service provider, and we will deliver the universal service.

I put on record my thanks to the hon. Member for Llanelli for her sterling work in scrutinising the Bill, both as a member of the Public Bill Committee and in the Chamber. I also thank her former Front-Bench colleague, the hon. Member for Ochil and South Perthshire (Gordon Banks), who brought a great deal of wisdom to the Opposition Front-Bench team, which I am sure it will be sad to lose. I welcome the hon. Member for Streatham (Mr Umunna), although he is not in the Chamber, to his new role. I also thank all other members of the Public Bill Committee, especially the hon. Member for Angus, who was with us when he was able to beat the weather.

I am sure that all Members of this House and the other place would wish to join me in thanking Richard Hooper, whose two excellent and comprehensive reports formed the backdrop to the Bill. He has been incredibly generous with his time, and the Bill would not be as strong without his contribution.

It is worth pausing for a moment to reflect on what a historic occasion this is. For more than 20 years successive Governments have grappled with this problem, ranging from the work in the mid-90s by Lord Heseltine to the more recent attempt at legislation led by Lord Mandelson, right through to the present day. If Royal Mail’s problems were stark 20 years ago they are considerably worse today, because of the advent of e-mail, social networking and mobile communications. I am thankful that rather than having to face the problem with a blank sheet of paper, I have been able to draw on a large body of previous policy thinking and evidence.

The Bill is a culmination not just of the present Government’s efforts, but of more than 20 years’ work by successive Governments to tackle the problems faced by Royal Mail. By enacting it, we will finally be taking the action that successive Governments have recognised as necessary and, most importantly, giving Royal Mail the best chance of a successful future. Only with a successful Royal Mail can we all be confident that our constituents and businesses will continue to benefit from the universal postal service on which so many rely. This is a momentous achievement in which both sides of the House can share.

Lords amendment 15 agreed to.

Lords amendments 16 to 28 agreed to.

Munro Report

Thursday 9th June 2011 Commons Chamber

15:47

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

I beg to move,

That this House has considered the Munro Report and its implications for child protection.

I am delighted to have the opportunity to lead the debate, as well as by the number of hon. Members who wish to speak in it. I would like to set out my stall, and although I am supposed to make a winding-up speech, I am keen that we hear from Back Benchers, so I shall keep that to a minimum.

Today is significant for two reasons. First, this is the only Government-led debate on child protection in Government time that I can recall in my 14 years in the House. The debate is therefore long overdue and it reflects the importance that I and my fellow Ministers attach to child protection. It is an enormous privilege to lead the debate and I look forward to what I am sure will be a constructive discussion, as I know that hon. Members on both sides of the House hold passionate and well-informed views about the subject.

The second significance is that this week is the first anniversary of the launch of the Munro review of child protection. Hon. Members will remember that this was the first review that was established by the Department for Education. It was launched on 10 June 2010, and that underlined the fact that getting child protection right is an enormous priority for the Government. I know we all share that as a priority, so let me pass on my thanks to all hon. Members, leading organisations in the sector, the child protection work force and the wider public, including children and young people themselves, who contributed in some way to Professor Munro’s report. Their experience, insights and expertise have helped make it a well-informed and widely welcomed report.

We should not forget that the vast majority of our children enjoy a safe and happy childhood, but even now too many still do not. Some of their names are sadly familiar—Victoria Climbié, Peter Connelly and Khyra Ishaq—but many more are not. Whether we hear about a case in the media or it goes unnoticed by the public, there is always an individual tragedy at its centre. It is those individual tragedies that have so often been the triggers for different reviews and inquiries on child protection over many years. Every one of those reviews has resulted in calls for action, and in response legislation has been passed, rulebooks have been expanded, more procedures and processes have been introduced and structures have been restructured.

However, the fundamental problems have not gone away. Despite the very best of intentions, our hard-working, dedicated social workers, foster carers and other front-line professionals are too often still unable to make the difference that they want and need to make for vulnerable children and families. Day in, day out, they are up against a system that too often simply does not help them to do their best for children.

From the start we wanted the Munro review of child protection to be different. That is why, unlike its predecessors, it was commissioned not as a knee-jerk response to a specific tragedy that had hit the headlines; that is why it is recommending that regulation and prescription are reduced rather than increased—it is not just another case of adding a few hundred more pages to the “Working Together” guidance; and, most importantly, that is why the review has focused on the child rather than the system. Professor Munro’s final report, “A child centred-system”, is wide ranging. It looks not only at the problems, but at the underlying environment that allows, and sometimes inadvertently encourages, such problems to occur. The review takes an holistic approach to child protection and bases its proposals on evidence and experience.

The report has been widely welcomed, as I said. The College of Social Work welcomed it as a “huge step forward”. Nushra Mansuri of the British Association of Social Workers described it as

“Music to the profession’s ears”.

The Children’s Commissioner praised its emphasis on the child’s right to protection. I am delighted that it has been welcomed as a breath of fresh air for all those hard-working professionals involved in child protection.

For that success, I have first and foremost to thank Professor Eileen Munro for her expert insight and analysis and the open and collaborative approach she has taken to the review over the past 12 months. I also pay tribute to the reference group that supported her so closely: Melanie Adegbite, District Judge Nick Crichton, Marion Davis, Avril Head, Professor Corinne May-Chahal, Lucy Sofocleous, Dr Sheila Shribman, Daniel Defoe, Professor Sue White, Martin Narey and the great many officials from the Department for Education and beyond who worked tirelessly over the past 12 months. I know that Professor Munro has hugely valued the support, expertise and different perspectives of all members of the reference group.

The report builds on previous reforms and the work of eminent experts such as Lord Laming, and I pay tribute also to the enormous contribution he has made in this area over so many years. This really is not about criticising previous, well-intentioned efforts to improve the system, but about making the time and space to understand why those efforts did not always work as well as they were intended to and should have done, learning from that to bring about long-term, sustainable reform in the future.

Eleven years, three months and 17 days since the tragic death of Victoria Climbié I still find myself asking whether the ever more complex systems that were created have actually made children safer now than they were then. Has the enormous additional amount of legislation, regulation and guidance made that much of a difference where it really matters? I fear that the answer may be no. Has, in fact, the child protection system in this country become rather more about protecting the system than about protecting the children whom the professionals went into their professions to protect? That is why it is now of the utmost importance that we restore public confidence in child protection, and restore confidence in the social worker profession and others—not least through those professions themselves.

The Munro review report seeks to do exactly that. Its fundamental analysis is that the system has become too focused on compliance and procedures and has lost its focus on the needs and experience of children themselves. That interest has occurred not just since the election, however; we started the process when, in opposition, I chaired a commission on children’s social workers and we produced the “No More Blame Game” report back in 2007, with contributions from all parties, followed by our policy paper “Back to the Front Line”, produced before last year’s election.

Professor Munro makes 15 recommendations for reform. She makes it clear—and I agree—that they need to be looked at in the round, because they are interrelated and impact on the system as a whole. I shall go through them briefly, and in doing so I start by noting that this is an excellent report with which I find little to disagree.

The first recommendation is to revise the statutory guidance “Working Together to Safeguard Children”, and the framework for the assessment of children in need and their families to distinguish essential rules from guidance that informs professional judgment, because, although we need rules it is important that they are the right ones.

The second recommendation is that the inspection framework examines the effectiveness of the contributions of all local services—including health, education, police, probation and the justice system—to the protection of children.

The third recommendation is that the inspection framework examines the child’s journey from needing to receiving help, explores how the rights, wishes, feelings and experiences of children and young people inform and shape the provision of services, and looks at the effectiveness of the help provided to children, young people and their families. Too often, do we not hear that, actually, nobody really listened to the child at the centre of a case? We need inspection to look across all the relevant agencies and to focus on the things that really matter: outcomes for children and young people.

The fourth recommendation is that local authorities and their partners use a combination of nationally collected and locally published performance information to help benchmark performance, to facilitate improvement and to promote accountability. It is crucial that performance information is not treated as an unambiguous measure of good or bad performance, as performance indicators tend to be, because it is important that performance data are used intelligently to drive improvement in practice.

The fifth recommendation is that the existing statutory requirement for local safeguarding children boards to produce and publish an annual report for the local children’s trust board are amended to require its submission instead to the chief executive and the leader of the council.

The sixth recommendation is that “Working Together to Safeguard Children” is amended to state that, when monitoring and evaluating local arrangements, LSCBs should, taking account of local need, include an assessment of the effectiveness of the help being provided to children and families, and the effectiveness of multi-agency training to safeguard and promote the welfare of children and young people. Local safeguarding children boards play a vital role, and I see a much enhanced future for them as the linchpin of how we get this right.

The seventh recommendation is that local authorities give due consideration to protecting the discrete roles and responsibilities of a director of children’s services and a lead member for children’s services before allocating any additional functions to individuals occupying such roles. We know that that is an important concern, and it has come up in the House recently.

The eighth recommendation is that the Government work jointly with the Royal College of Paediatrics and Child Health, the Royal College of General Practitioners, local authorities and others to research the impact of health reorganisation on effective partnership arrangements and the ability to provide effective help for children who are suffering, or likely to suffer, significant harm. I shall discuss that point further, but the implementation board, which will put forward these reforms, is heavily weighted—over-weighted in fact—towards health, and it is important that it should be.

The ninth recommendation is that LSCBs use systems methodology when undertaking serious case reviews with accredited, skilled and independent reviewers and have a stronger focus on disseminating learning nationally. Ofsted’s evaluation of SCRs should end, because serious case reviews need to be about learning rather than about processes or the story of a case; they need to be about supporting analysis, beyond identifying what happened, in order to explain why it happened. They should not be all about blaming people, because blaming individuals for errors and mistakes is unhelpful and counter-productive. Rather than having a blame culture where people try to conceal mistakes, surely it is better for people to work together to identify errors early so that they can be managed or minimised, often through the redesign of local systems. That is not to say that people should go without any repercussions when things have gone wrong, but simply wagging the finger of blame has clouded our judgment too much in the past. The name of the report that we produced in 2007—“No More Blame Game”—is as appropriate now as it was then.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

I feel that I should apologise for interrupting the Minister, because he is giving a very good exposition of what is in the report. However, will he deal at this point with the issue of Ofsted not looking at serious case reviews in future? I find that slightly puzzling, and I do not understand the basis for it. In my view, Ofsted’s role is not allocating blame but assessing whether it is an adequate case review that properly describes what went on.

[Tim Loughton]

The hon. Lady makes a good point. I have had reservations for some time about the way in which serious case reviews are produced, read and inspected. This area was clearly highlighted in the report, and the implementation group will need to do a lot more work to see how we get to where we want to be. Ofsted itself will say that evaluating serious case reviews is not the best use of its time and resources.

In the past, we have seen questionable gradings of some serious case reviews. We should be using serious case reviews as serious learning tools. Before the baby Peter case, I did not realise that serious case reviews were not available in their full form to every other director of children’s services and other such relevant people around the country so that they could read what had happened in a certain case in a certain authority, say, “Gosh, hold on a minute—could that happen here?”, and be alert to the problems that had happened elsewhere to see whether they needed to do things locally to ensure that they did not happen there. However, serious case reviews in their full form are available only to a very small number of people.

There have been question marks over the consistency of the quality of serious case reviews, who is commissioned to carry them out, who is controlling the quality of the people producing them, and, above all, who is bringing together the learning expertise and learning points to see whether they have generic applications for people up and down the country. That is not happening as a result of the way in which Ofsted does it, with the very best of intentions. We need to get to a place where a serious case review is not about learning from things that went wrong in a particular case but learning from things that went wrong in the system and applying that to the system elsewhere. We also need to ensure that the people producing serious case reviews produce things of a sufficiently high quality. We have a lot of work to do because the current situation is not sustainable and serious case reviews are not producing what we need them to produce.

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

Does the Minister accept that we have a media who are obsessed with the blame game? They will attack social workers for not intervening soon enough, and perhaps the following day attack them for wrecking families and breaking up family units.

[Tim Loughton]

The hon. Gentleman is absolutely right. He might have heard me say on many previous occasions that social workers, and other professionals, are damned if they do and damned if they don’t. Certain newspapers will carry headlines saying, “Those terrible, incompetent social workers were to blame—they should have intervened earlier and taken that child into care.” Two weeks later, they are saying that those terrible, incompetent social workers are too busy snatching children from good, decent, middle-class families and should be ashamed of it. Social workers cannot win. To get a better system we have to restore the confidence of the public in our child protection system. A key part of that is to get the media to understand more what the job of child protection is all about, and not to be so swift to wag the finger of blame but to help in the explanation and understanding of what went wrong and look to want to bring about solutions jointly, because that is in all our best interests. We are not in that position yet. Things are improving, but we have a long way to go.

[Toby Perkins (Chesterfield) (Lab)]

In the report, Professor Munro expresses how concerned people in the profession are about the Minister’s decision to make overviews of serious case reviews available, rather than simply the executive summaries. Many people feel that that reduces the capacity of such reviews to aid learning because it makes people more defensive. It seems that the priority is wrong. I will expand on my views with regard to Ofsted later. Does the Minister accept the concerns of Professor Munro and others who fed into the review about the negative consequences of making the overviews of serious case reviews widely known?

[Tim Loughton]

I do not think that the hon. Gentleman is entirely right. Actually, Professor Munro supports the publication of full serious case reviews. She would much rather support the publication of a better form of serious case review, which is what we need to get to.

Professor Munro made the right decision to make serious case reviews open and accessible subject to three criteria: first, that the anonymity of the characters involved is maintained; secondly, that there is appropriate redaction where information would intrude on private details; and, thirdly, that it will not go ahead if a case can be made that publication in full would be detrimental to the welfare of a surviving child or sibling. With those considerations, I think it is absolutely right that we should all have access to those reports as a learning exercise.

If the hon. Gentleman is saying, as others have, that people might be less prepared to co-operate with such reviews, he is wrong, because it is in all our interests to ensure that the fullest information possible is in the public domain so that it can be assessed and the lessons learned. The people who will benefit most from the publication in full of serious case review overview reports are social workers, for the very reason set out by the hon. Member for Alyn and Deeside (Mark Tami), who is no longer here: when there is a tragic incident, it is always the social workers what done it. When one reads the full details, one finds that in some cases the police were not too clever or perhaps there were serious shortcomings with the GP, the school or various other agencies. However, it is always social workers who are on the front line. It is only by seeing the full picture that one can get an understanding of what was the weak link in the chain or where the co-operation between agencies that is needed did not happen properly. I do not agree with the hon. Gentleman’s analysis.

Already, a lot of learning has come from the serious case reviews that have been published in full in Haringey and on the Khyra Ishaq case in Birmingham. All serious case reviews published after 10 June 2010—we have not had one yet—are obliged to follow the new publication process.

[Mrs Helen Grant (Maidstone and The Weald) (Con)]

rose—

[Jim Shannon (Strangford) (DUP)]

rose—

[Tim Loughton]

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

[Mrs Grant]

In addition to stopping the blame, does the Minister agree that more credit should be given for the hideously difficult job that social workers have to do?

[Tim Loughton]

My hon. Friend has great expertise in family law and in this matter, and she is absolutely right. Serious case reviews should reveal not just the failures and the bad things, but good practice so that we can learn from where things went right. Of course, we only ever read about the stories that go wrong in the papers. The media are not interested in the plane that lands safely. People do not really understand social work. It is easily caricatured, and that happens even in the soap operas that we see on our screens. Our report in 2007 made the not entirely flippant suggestion that there should be a soap based on social workers to give the public a better understanding of the exceedingly complicated job that they do. Day in and day out, they have to exercise the judgment of Solomon in deciding whether children should be taken into care or left with the family.

[Jim Shannon]

May I remind the Minister that these are devolved matters in Wales, Northern Ireland and Scotland? Learning, experience and good value have been mentioned. Does he intend to make the devolved Administrations in the Assemblies in Wales and Northern Ireland and the Parliament in Scotland aware of the 15 recommendations in the Munro report? I think it is good to exchange information for the benefit of parts of the United Kingdom that might not have experienced what has happened in England and Wales.

[Tim Loughton]

The hon. Gentleman is absolutely right. There has been some correspondence between Professor Munro and the devolved Assemblies, and I have been trying for some time to meet my counterpart in Northern Ireland to go through such matters with him or her, whoever it was on either side of the elections. I am keen to go and hold conversations with our counterparts in Scotland, Wales and Northern Ireland so that they can hear what we are doing, but also so that I can hear what they are doing. There are different ways of working in those areas.

[Jeremy Corbyn (Islington North) (Lab)]

Like the Minister, and I think everyone here, I welcome the Munro report. The hon. Member for Maidstone and The Weald (Mrs Grant) made a point about the status of social workers, how they appear in public and how the newspapers denigrate them. There is also the problem of young social workers who are just out of university and newly trained and qualified having enormous difficulty in getting their first job, because they lack experience. Particularly in areas of inner-city Britain such as the one that I represent, there is great difficulty in retaining social workers because of housing difficulties and because of the enormous pressure and case loads that they face in fast-changing, high-turnover communities. It is not surprising that many do not stay on. I am sure the Minister is well aware that that turnover debilitates the entire service.

[Tim Loughton]

I agree, and we could have a debate just about the list of matters that the hon. Gentleman mentions, most of which are covered in the Munro report. The social work profession in this country has an awful lot of good people who do not get recognised and some poor people who need to be weeded out. In the past, people have felt frustrated and undermined, and the media onslaught against them has been completely demoralising. They have therefore left their jobs or taken early retirement, because the pressure has been too much for them. Who would want to go into a job like that, after all the publicity about baby P and other cases? Who would want to put themselves in the firing line by taking a job in which they try to do their best, but blame is pointed at them because they happen to be a social worker, even though they might be doing a good job?

We have problems at both ends. We need to retain and encourage good social workers and ensure that they can do their job as efficiently as possible, and we also need to ensure that the people coming into the profession—there has been a big rise in applications for social work degrees recently—are the right people. They need to have the necessary calibre and dedication and be there for the right reasons, and we need them to stay the course. That is part of the work that the Social Work Reform Board is doing and part of the reason why the College of Social Work is so important. Having a chief social worker, which is the 15th recommendation in the report, will help to raise the game. It will raise the profile and status of the profession, and it will give people in it the feeling of being valued. Those are important matters.

[Jim Shannon]

rose—

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

rose—

[Tim Loughton]

I will give way to the hon. Member for Strangford (Jim Shannon) and then to my hon. Friend the Member for Beverley and Holderness (Mr Stuart), but after that I would quite like to make some progress; otherwise nobody else will get in.

[Jim Shannon]

The Minister will be glad to know that the new Minister in Northern Ireland is a colleague from my party, and that the new Northern Ireland Ministers have hit the ground running. I assume the situation is the same in Scotland and Wales. I am sure that he will find an open door from the Minister in Northern Ireland, and probably from those elsewhere in the UK.

[Tim Loughton]

I am grateful. I am planning a visit to Belfast next month, and if the hon. Gentleman’s colleague would like to meet me, I would be delighted.

[Mr Graham Stuart]

When the Select Committee on Children, Schools and Families looked into the training of social workers in the last Parliament, it found that they could find themselves dealing with the most acute and difficult children’s cases having had placements in their training that did not involve children’s social work at all. They went from having no experience at all to the front line. Has the Minister been able to do anything about that yet, and if not will he tell the House what he will do about it?

[Tim Loughton]

The Chairman of the Select Committee on Education again makes a very good point and he has a good deal of expertise in this matter. It is completely self-defeating for newly recruited social workers to be turfed in at the deep end on tier 3 or 4 cases—serious cases—with little experience or expertise. How demoralising is that, let alone the danger it poses for the vulnerable children who need to have the appropriate level of support?

A number of things need to be done and they are being done. We need to ensure that we have the right calibre of people coming out of universities with degrees in social work. In the first year after their qualification, they should be given on-the-job guidance and training, preferably by people with great expertise. They should be eased into jobs at an appropriate rate in appropriate circumstances. My hon. Friend raises a very important point. Virtually every week I speak to social workers and visit children’s services departments—I make a point of seeing social workers on the front line—but I have met too many who are given challenges for which they are not appropriately equipped at that stage.

I should like to make progress now because I am keen for other hon. Members to contribute and I have a few more points to make. I got up to recommendation 10—I do not know why recommendation 9 brought about the pause that it did. Recommendation 10 is that the Government should place a duty on local authorities and statutory partners to secure the sufficient provision of local early help services for children, young people and families. That is very appropriate to the early intervention work that the hon. Member for Nottingham North (Mr Allen) has been doing for the Department.

Recommendation 11 is that the social work reform board’s professional capabilities framework should incorporate the capabilities necessary for child and family social work. That is precisely the point that the Chairman of the Education Committee just raised. That framework should explicitly inform social work qualification training, postgraduate professional development and performance appraisal.

Recommendation 12 is that employers and higher education institutions should work together so that social work students are prepared for the challenges of child protection work, including through better quality placements.

Recommendation 13 is that local authorities and their partners should start an ongoing process to review and redesign the ways in which child and family social work is delivered.

Recommendation 14—I am almost there without taking another intervention—is that local authorities should designate a principal child and family social worker who can report the views and experiences of the front line to all levels of management. I have too often seen good social workers, who have built up good reputations and who are really good hands-on, get promoted, become managers and get stuck behind a desk. In that way, we lose front-line expertise. Some models, such as the one in Hackney, mean that people can gain seniority within their profession but not lose contact with people at the sharp end and the families that they entered the profession to help.

The 15th and final recommendation is that a chief social worker should be created to advise the Government and to bring the voice of the profession to policy. That was discussed recently in relation to the Health and Social Care Bill, and it was a recommendation of my report back in 2007.

[Mrs Grant]

Does the Minister agree that to safeguard children—in addition to that very comprehensive list—much more needs to be done generally to strengthen families?

[Tim Loughton]

The hon. Lady is absolutely right. The first priority—this is the most desirable outcome for any family who find themselves on the child protection radar of a children’s services department, and who become a social worker’s focus of attention—is keeping that family together. We should ensure that where possible, the child can be kept with that family. The phrase “fostering a family”, which has been used before, means ensuring that parents have the parenting skills and that it is safe for the child to stay with them. Only when leaving a child with a family is deemed unsafe should we consider taking them into care. Of course, the work done in the Department for Education and the Department for Work and Pensions—the projects that deal with families with multiple problems—aims to ensure that parents have the tools and the confidence to parent properly. In too many families in this country, there is a serious problem with the standard of parenting. The right hon. Member for Birkenhead (Mr Field) made that point very clearly in the report that he produced for the Department for Education.

[Bill Esterson (Sefton Central) (Lab)]

Will the Minister give way?

[Tim Loughton]

As the hon. Gentleman is new, I shall give way one last time.

[Bill Esterson]

I apologise for being late—I was on the Finance (No. 3) Bill Committee, which has just finished.

The Minister’s last point—on whether a family should be kept together and at what stage a child is taken into care—gets to the nub of child protection issues. I hope he agrees that the threshold for making, and the timing of, such decisions bears constant review and analysis.

[Tim Loughton]

The hon. Gentleman is right. An understandable result of what happened with baby P is that social workers have become more risk averse. If it is a marginal decision, they might take the child into care just in case, whereas if they have the time, space and appropriate tools and applications to deal with that family, it might be possible to keep it together rather than break it up.

I have set out Professor Munro’s recommendations for reform. Rightly, they address every aspect of the system. Rightly, they place the child at the centre. And rightly, they have as a basic principle the importance of placing trust in skilled professionals at the front line. It is of course the case that there are vulnerable children outside the immediate child protection system, and we need to improve radically how they are supported and make sure that they have a voice.

One of the main groups of such vulnerable children, for which I have responsibility, is of course children in care. With more than 64,000 children in care at the moment, we need to improve all aspects of their lives, including placement stability, education, health and the transition to adulthood, which are all priorities for Government and the wider sector. If we get Munro’s proposals right, there will be benefits for all those involved in children’s social care, not just those at the acute end of child protection.

From 1 April, we introduced a new statutory framework for looked-after children, which is far more streamlined, coherent and clear about the “must dos” for local authorities. In particular, we have brought together the care planning regulations and guidance into one volume, which should ultimately help councils put together better care plans. Less is often more. We have also strengthened the role of independent reviewing officers so they can challenge poor care plans, and make sure children’s voices are at the heart of all reviews. We have given clear steers in the revised fostering guidance about how local authorities should support foster carers and children better. The revised transition guidance makes it clear that young people should leave care only when they are ready and have a strong support package in place.

I have also written to every local authority about foster carers being encouraged to treat foster children in their care no differently from their own children. In March, I launched the foster carers’ charter, which sets out clear principles for the support that should be available, what foster carers can expect and what foster children can expect of their carers.

I also launched earlier this year the Tell Tim website so that carers and, in particular, children and young people in care can let me—as the Minister responsible—know directly what they think is working well, what improvements they think need to be made or what is going wrong. I have also set up reference groups so that I can hear from foster children, care leavers, adopted children and children living in residential homes. Just this week, I met my regular group of young people who have left the care system, who recount their often moving and relevant experiences of what is going wrong in the system. We could all learn a lot if we spent more time with the children who are still being failed because, through no fault of their own, they have become part of the care system.

As hon. Members will be aware, some children and young people—including young runaways—become victims of sexual exploitation. The report published by Barnardo’s in January, “Puppet on a String”, highlighted the scale and severity of this horrific abuse. I pay tribute to Barnardo’s work and expertise in this area and I especially congratulate Anne Marie Carrie for hitting the ground running in her first few months at the helm of Barnardo’s.

The Government are determined to do everything possible to stamp out this abuse and safeguard vulnerable children and young people. Recent events brought to light in the midlands through Operation Retriever and the other ongoing police investigations underline the extent of this insidious abuse. As the lead Minister in this area, I have been urgently considering, with my colleagues at the Home Office, Barnardo’s and other national and local partners, what further action should be taken. The Government are now committed to working with partners to develop over the summer an action plan to safeguard children and young people from sexual exploitation. This will build on existing guidance and our developing understanding of this dreadful abuse, including through local agencies’ work around the country. It will include work on effective prevention strategies, identifying those at risk of sexual exploitation, supporting victims, and taking robust action against perpetrators.

Another area where excessive central prescription has had unintended consequences, leading to risk aversion rather than risk management, is in vetting and barring. The Government believe that children will be better protected if we move away from unnecessary and top-down bureaucracy towards more responsible decision making at a local level. It is vital to balance the need to protect the vulnerable against the need to respect individuals’ freedoms, and not to create a system that imposes unnecessary burdens on individuals or organisations. That is why the Government undertook a review of the barring and criminal records regimes in order to scale them back to common-sense levels. We need to get away from a system that has unintentionally driven a further wedge between children growing up and well-meaning adults who come forward genuinely to offer their time to volunteer and to work with young people. They have been deterred from doing so by all the regulation.

I spoke earlier about the action we were taking to improve the lives and prospects of children in care. For many of those children, adoption will be the most appropriate outcome, which is why in February I issued new guidance with a call to arms to local authorities to re-energise their efforts on adoption and improve front-line practice. This refreshed and improved statutory guidance will be an important element in the Government’s programme of reform aimed at supporting adoption agencies in removing barriers to adoption, reducing delay and continually improving their adoption services.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does my hon. Friend agree that it is essential, when adoption is the best answer, for it to take place before the baby is two in order to give that child the greatest chance of bonding with the new family?

[Tim Loughton]

My hon. Friend, who has great expertise particularly in dealing with young children and in the whole area of attachment, knows how important it is that a child growing up is able from an early age to bond with, and develop an attachment to, parents or carers. We know from all the statistics that young children who are unable to grow up safely with their own parents benefit from adoption, where appropriate, at an early stage. If we can find them an appropriate adoptive placement, their chances of growing up as normally and conventionally as if they were with their own parents are greatly heightened, and they will have a better chance of catching up with their peers who are lucky enough to be able to grow up with their parents, so she is absolutely right.

[Meg Munn]

I welcome the tone that the Minister is taking in this debate. On adoption, may I ask him equally to adopt another approach—if that is not too many adoptions? It is enormously difficult to make the decision to place a child for adoption. It is a lifelong decision, and it is as important not to rush into it inappropriately as it is to make the decision to go for adoption. In reality, some of the biggest problems derive from other matters in the process, whether decision making in local authorities or decision making in the courts. I urge the Minister to consider those issues as well.

[Tim Loughton]

The hon. Lady is right and will know that we have been doing a lot of work on adoption. I have set up a ministerial advisory group with all sorts of people, and we have issued new guidance, as I said earlier. We need to balance timeliness with appropriateness to ensure that where it is clear—it is not always so—that an adoptive placement is the best way forward and in the best interests of the child, we get on with it.

There are, I have to say, some people who, usually because of excessive addiction to drugs and alcohol and a complete failure to rehabilitate, will never be able safely to bring up children in their care. I have sat in family courts and seen parents—usually single mothers— have their ninth, 10th or 11th child taken into the care system. If that parent’s situation has not improved, can we be sure that it will ever improve? Need we take that risk, and wait years while a child is kept in an abusive situation? Again, those decisions require the judgment of Solomon, which is why I will shortly be holding a round-table meeting with a group of judges from the family court, directors of children services and chairmen of adoption panels to consider how we can make the adoption process better, more efficient, more robust and fairer; to ensure that we are making the right decisions for the too many children who are left in the system and could benefit from adoption; and to ensure that we are not taking into adoption children for whom it is not appropriate. I know that there are concerns there as well.

Finally, we need to remember in our policies the particular needs of vulnerable young people and the fact that they have the same right to enjoy the rich experiences of growing up, the transition to adulthood and becoming valuable members of society as those lucky enough to be part of safe, loving and stable birth families of their own. I recognise that it is vital for the sensible policy put forward by Professor Munro to be backed up by proper investment. As my hon. Friends will be aware, the Government have already announced some funding to support work force development, but the real cost is the cost of failure. The current system needs fixing. Because it needs fixing, huge amounts of resource are wasted. One local authority that has been working with Professor Munro and the review team as a “journey authority” calculated that around 50% of its children’s social care workers’ time is wasted in nugatory activity that does not add to the quality of service or outcomes, which is something that the authority is now starting to recoup—a resounding endorsement of the need to eliminate unnecessary red tape if ever there was one.

Few things are more important than helping and protecting vulnerable children and young people. In our first year in government, we have shown in the wide range of actions that we have taken—on child protection, children in care, adoption, fostering and dealing with the sexual exploitation of children—that we are deeply committed to tackling these issues, and I am determined to ensure that we make progress. Sadly, we need to recognise that despite Government reforms and the hard work of professionals, tragedies will still happen. There are individuals who will harm children. We cannot eliminate that risk, but we can all work to help to reduce and manage it—indeed, we all have a duty to do so. Society is right to expect professionals to take responsibility and make the best judgments that they can in the best interests of children. Those judgments will not always be the right ones, but they need to have been made for the right reasons and on the best possible evidence.

This Government believe that we need to move towards a child protection system with less central prescription and interference, and in which we place greater trust and responsibility in skilled professionals on the front line. Professor Munro has provided us with a thorough analysis of the issues. It is now for the Government, working with the sector, to help to bring about sustainable reform. That is why I have established an implementation working group, drawing in expertise from local authority children’s services, the social work profession, education, police and the health service, to work with the Government to develop a response to Professor Munro’s recommendations by the summer recess. We are today publishing on the Department for Education website the first account of the group’s deliberations, which started at the end of last month.

[Mr Graham Stuart]

Will my hon. Friend give way?

[Tim Loughton]

Before I reach the final line of my speech, I will give way to my hon. Friend.

[Mr Stuart]

I am delighted to hear that those other agencies are represented on the implementation group. Will my hon. Friend say a little more about the group’s remit and how we can ensure that other Departments integrate with it, so that it is not just the social work profession that looks to respond to the Munro review?

[Tim Loughton]

The Chairman of the Select Committee on Education makes a good point. The people serving on the group, whose names are published on the website, have been chosen not because they are the great and the good—although I am sure many of them are great and some of them are good—but because they are experienced practitioners with expertise in their particular areas. For example, we have on the group the chief safeguarding expert from the Royal College of Paediatrics and Child Health, and a safeguarding expert from the NHS Confederation. We also have the Under-Secretary of State for Health, my hon. Friend the Member for Guildford (Anne Milton), who is the Minister responsible for public health, a senior headmistress of a secondary school, a senior headmistress of a primary school, a senior police officer with a long record in child protection, a real social worker from the front line, along with a Labour councillor from an authority with a good track record in child protection, and so on.

This is absolutely about getting all the right parts of the jigsaw together and trying to produce a system that, by working together from the same song sheet and with the same priorities and the Government’s backing, produces an environment that ensures that we can keep more of our children safer. Today’s debate—even though I have taken up rather too much of it, and more than I had intended—will help to inform the implementation group’s response. I very much look forward to my hon. Friends’ contributions this afternoon.

16:34

[Toby Perkins (Chesterfield) (Lab)]

I echo the Minister’s welcome for the work of Professor Munro, and thank her and everyone involved in the production of the report. I also give the Government credit for commissioning this important piece of work. Unlike many other reports on social work, this review has not been produced in the immediate aftermath of a specific, much-publicised tragedy. It takes a holistic view of how we could protect the most vulnerable children in our society better. I also echo my hon. Friend the Member for Sheffield, Heeley (Meg Munn) in welcoming the tone of the Minister’s remarks today. We look forward to working constructively with the Government to take forward Professor Munro’s recommendations.

Protecting our most vulnerable children is crucial, difficult and emotionally charged work. Providing the most resilient environment in which to protect children is a responsibility that has challenged and exercised Governments of every hue for many years. I pay tribute to the many hundreds of social workers who, through their hard work, commitment and professionalism, literally save lives. Social workers know that theirs is often a thankless task. When they perform at the top of their game to improve lives for the better, safeguarding children from harm and assisting families to get back on to the right path, they rarely get bouquets or thanks. They do not expect to get even a mention in the local free paper. Their own satisfaction at having made a difference has to suffice. But they also know that should any of the multitude of their borderline decisions be proved, with the benefit of hindsight, to have been wrong, and should a tragedy then occur, they will be on the front page of every newspaper in the land and held to account for their decisions.

It is in that context that Professor Munro produced her report, and that the previous Government took many significant steps to support the social work profession and our children. It is also in that context that we all have a duty to speak up for the importance of the work that social workers do, and to recognise the knife-edge nature of much of their decision making in an imperfect world.

I shall also follow the Minister’s lead in thanking foster carers across the country for their invaluable work. I know from personal experience how vital their role is. I also welcome the measures to make the route to adoption a quicker one. As an adoptive parent myself, I know the importance of children being taken on by a new family as early as possible, once they have been identified as suitable for adoption.

This is not the first report on protecting children to call for a change in society’s attitudes towards and expectations of the social work profession. Nor is it the first to call for an approach that puts children at the heart of our thinking on this subject, but it is no less valuable or right to call for these things just because they have been spoken of before. We recognise that in this vital area, progress is always more easily made when there is a sense that all the parties involved are working together constructively and positively, and there is a great deal in the report that we are happy to support enthusiastically. It builds on many of the reforms that the previous Government embarked on, and endorses many of the structures that they implemented. It also builds on the work of the social work taskforce and the social work reform board, whose contribution the review warmly endorses.

I shall turn now to the specific recommendations in the review. In calling for a child-centred approach, it recognises that the needs and rights of the child, and the child’s involvement in and ownership of a process that might be happening at a confusing and frightening time in their lives, must be paramount. We absolutely support that idea, and recognise that children must feel that the interventions and decisions being made about their future should involve them and not just be a process that happens to them. We are pleased that the review recognises that we all owe a debt of gratitude to the firm foundations of reform laid down by the social work taskforce. Among many other reforms introduced by the Labour Government, the report recommends the protection of, and specifically cautions against the dilution of, the role of directors of children’s services. I shall return to that point later. The report also endorses the vital role of the College of Social Work in lifting standards and representing the profession internally within local authorities and more broadly across all parts of our society.

The report gives further support to local safeguarding children boards, and to the 10 principles of the assessment framework. We hope that, as recommended in the review, the position of chief social worker will be able to play a key role in promoting the interests of children through the improvement of the profile and professionalism of social work, and through influencing Government policy on behalf of children and the profession.

We will support any efforts that will improve the standing of social work. This includes its profile within the media and among the wider public. It includes helping to make social work a career of choice for talented graduates, helping to build the self-esteem of the social work profession and, within the House, recognising the debt we all owe to the profession for the work it does on behalf of our most vulnerable children and families.

[Jeremy Corbyn]

My hon. Friend will have heard my earlier intervention on the Minister about the status of social workers, and I am sure he will have agreed with me. Does he also agree how important it is to have some sort of steer or directive for local government to take on newly qualified social workers and to provide them with the relevant training and entry into the profession? I observe huge cuts taking place in local government all over the country, as a result of which there are fewer new job opportunities for qualified social workers—and therein lies a problem 10, 15 or 20 years down the line.

[Toby Perkins]

My hon. Friend is absolutely right. The problem is not just 10 or 15 years down the line; it is more immediate. When we know that there are social work vacancies around the country, it seems bizarre that newly qualified people in this sector are finding it difficult to find work. Professor Munro’s recommendations on practice and assessment years at the early stages will make a significant difference—at least, I hope they will. My hon. Friend is absolutely right about the considerable anecdotal evidence that newly qualified social workers are finding it difficult to find work. I hope that the proposed measures in the report will be followed through, as it is vital that people should choose to work in this area. As the Minister has said, we want to make social work an attractive career option for talented people leaving university, but if those people find it hard to find work as a social worker, that is going to become more difficult.

[Andrea Leadsom]

Does the hon. Gentleman agree that one way to support new young social workers freshly out of university would be to provide a better end-to-end network of support, taking into account what is already available in children’s centres and other therapeutic services that could be available in a package, which could help to provide the network of support that social workers desperately need?

[Toby Perkins]

The hon. Lady makes a valuable point. The Munro review recognises the significant steps made in the direction of partnership working and some of the challenges, particularly in difficult financial circumstances. The report also deals with other innovations that might be needed to help achieve the hon. Lady’s suggestion in her valuable point.

The report’s recommendations on the education, training and continuous professional development of social workers are an important step forward. We entirely endorse the review’s commitment to the highest standards and consistency of education, the importance of the highest quality of practice placements and the new supported and assessed first year in practice, acting as the final stage of becoming a fully practising social worker. We recognise that more must be done to strengthen the quality of social work in this country, and a real commitment to improving education and recruitment will be very welcome.

We also believe that the recommendation for local authorities to appoint a principal children’s and family social worker could play an important role in ensuring that the voice of those who safeguard our most vulnerable children is heard loud and clear in every town hall in the land.

We particularly welcome the further support for early intervention to identify and work on problems as soon as they are presented. Professor Munro particularly identifies the importance of early intervention whenever it occurs in a child’s life, and we entirely agree with her on that. Although many families that require the help of social services might appear likely to head down the wrong path in life from an early stage, changing circumstances can mean that children and families hit problems and need support at any time in the childhood journey—and the earlier those problems are identified and the more broadly all parties work together, the better the chance that families can be kept together and problems averted before they become impossible to deal with.

The review also focuses at length on the importance of partnership working, extolling the virtues of the existing networks in early years practice and the importance of a constructive relationship with the police, mental health services, adult social services and health professionals. The review expresses the fear that widespread changes and the desperate financial position in which some public services find themselves could lead to a fracturing of the partnerships. Indeed, we are already seeing evidence of that.

We know from the Secretary of State’s letter to Professor Munro, the choice of Professor Munro to head the review team, and the press releases that have emanated from the Department for Education that the need to cut paperwork and bureaucracy in order to enable social workers to do what they should be doing is intended to be a prominent theme, but anyone who focused solely on that element of the report would greatly undermine its quality and depth. I hope that no one will again attempt such a paraphrase, because the quality of the research and the importance of the issue deserve better. I am thankful that the Minister went far beyond that in his speech today.

We welcome the recognition of the importance of administrative support for social workers so that they can spend more time in the field. It is sad, however, that that comes at a time when Unison is reporting that many of its members with administrative roles are among the first to be laid off in councils. Administration and record-keeping vital: they can save social workers’ time, and are invaluable to the quality of their intervention. No one in this House wants to prevent social workers from spending as much time as possible working with children and families, and we all know that social workers themselves do not go into the profession with the dream of sitting at a wooden desk typing away.

There is no doubt that the review team considered at length the amount of central prescription and the amount of time spent on administration—matters that have also concerned the profession and its representative bodies and unions. We support the pilot schemes that are taking place in four authorities with the aim of relaxing time scales. They are at an early stage, but we look forward to the outcome. We urge the Minister to ensure that the additional quality assurance measures referred to in appendix D and implemented in Hackney are tightly observed while those trials are being completed, and that before anything is done to make the changes widespread, the full implications of those changes are understood.

[Mr Graham Stuart]

The hon. Gentleman touched on the subject of bureaucracy, but he did not make his views clear. Does he accept that there was too much prescription from the centre, does he accept that it was getting in the way of effective social work, and will he give an undertaking that a future Labour Government would not seek to reverse sensible, practical and common-sense attempts to reduce bureaucracy and ensure that the priority is given to the front line?

[Toby Perkins]

I shall deal with that point in some detail later. However, I can say that we support the trials that are taking place. If the professionals feel that some measures can safely be dispensed with, that is acceptable as long as safeguards are established, as they have been in Hackney, to prevent slippage of cases. We do not want social workers to lose sight of the importance of some cases along with the paperwork.

The report is evidence based, and Professor Munro identifies both excitement and anxiety in the profession about the steps to be taken. Throughout its time in government Labour took advice from experts seriously, as the present Government are doing.

[Meg Munn]

In the report, Professor Munro observes that

“most bureaucracy which limits practitioners’ capacity and ability to practise effectively, is generated and maintained at a local level.”

We should consider that carefully. Headlines that blame people for bureaucracy are not helpful. We need to identify where the bureaucracy is coming from, and tackle it properly.

[Toby Perkins]

My hon. Friend speaks on the basis of tremendous experience as a result of the work that she did before entering the House—and, of course, since doing so—and she is absolutely right. Trade unions, social workers and others in the profession want us to proceed as carefully as possible. I reiterate that there is nothing that we want more than social workers who are enabled to spend the maximum amount of time with the children and families with whom they are working.

We support the pilot scheme in four authorities, and we urge the Minister to ensure that the additional quality assurance measures referred to in the report are followed so that the full implications of the changes are understood before any measures are taken to make the scheme more widespread. The proposed changes are important and offer advances, but they must not be rushed. The Ofsted report detailing children’s experiences before entering care demonstrates the importance of social workers spending time in face-to-face, one-to-one meetings with the children and families in their care, but the research also shows how varied the quality of practice is, and with that in mind, and in advance of the improved education and training—and also in the context of the difficult financial settlement facing local authorities—it must be stressed that it is vital that every care is taken.

The National Society for the Prevention of Cruelty to Children echoes this view. It states:

“The Government should not move too quickly to rapid deregulation. It needs to invest heavily in building the skills, confidence and experience of all professionals working with children. Controls which safeguard against poor practice must stay in place while professionalism is built. Otherwise, children’s lives could be put at risk.”

We entirely support those comments.

We have concerns about the portability of documentation if each local authority has a different common assessment framework. The whole point of having a common piece of documentation was that it would only need completing once. Perhaps it could be slimmed down and used by all partner agencies, wherever they are. If that documentation needs to be re-done every time a child moves from one authority area to another, the intention of cutting back on paperwork may be undermined.

We also have concerns about the recommendation and current direction of travel with regard to serious case reviews. The review rightly identifies the importance of learning lessons from SCRs. Alongside learning lessons, however, they must also perform the task of building public confidence in the profession and illustrate that there is no cover-up, no attempt to hide from the truth and no sense of the ranks being closed. There is a delicate balance to strike.

Local safeguarding children boards are not forced to be independent and are inevitably seen by some as internal partners, having a relationship with the practitioners providing the service. In some cases, they are chaired by the director of children’s services. The independent evaluation of the work of LSCBs on SCRs offers an important neutral balance to ensure that the correct lessons have been learned.

Professor Munro identifies LSCBs’ unhappiness at the role of Ofsted, but I wonder whether the independent assessments analysing the quality of the SCRs might check on how successfully lessons are learned. It does not seem to me that the fact of an evaluation in itself prevents a culture change towards a more learning-based approach. Whoever does independent inspections in future can be directed by the Minister in whichever way he wants, but simply to abandon any sort of independent review until a new body is in place in the next year or so is unsatisfactory.

We also feel that the decision to publish the entire overview of SCRs is having, and will have, very negative consequences. When in government, Labour increased the transparency of executive summaries of SCRs, but we feel that the balance is now leading to a less helpful situation. Professor Munro highlights on page 61 of the review the unhappiness felt by many in the profession about this move. It can hamper the attempt to make learning the principal aim of SCRs, and it inevitably restricts the enthusiasm of some practitioners to be frank about what they may have got wrong. We need to see the culture change before there is a move towards publishing the entire overview of the SCR. This also inevitably makes it highly unlikely that the better reporting of social work practice by the media that the Munro review cries out for will happen. It is also apparent that other partners are stepping back from getting involved in SCRs because of the full reporting of them. The Minister was right to say that if people are refusing to get involved in SCRs, that is wrong, and it is important that we learn those lessons. We are worried that publishing the full overview of them is having that effect, however, regardless of whether that should be done in the best interests of our children.

There is also anecdotal evidence, which we will be investigating further, that the threshold for serious case reviews is being lifted by authorities and that they are deciding that they are less likely to do them. Again, that will have a negative impact on our capacity to learn from past mistakes. It seems an odd set of priorities to remove the independent evaluator of serious case reviews at the same time as we are opening them up to wider public and media scrutiny. That suggests a “kangaroo court” approach, which is totally out of keeping with this review, and it could be a seriously retrograde step.

I mentioned that the review had identified, as had our own work with local authorities, that the role of the director of children’s services to be a purely child-centred position was under threat. That is hardly surprising, given that the Secretary of State for Communities and Local Government is positively encouraging this sort of change to local government practice, with managers merging roles and councils becoming a little bit cheaper and quite a bit worse. That seems to be the Pickles recipe for local government. We urge this Minister to stand up for children against the right hon. Member for Brentwood and Ongar (Mr Pickles) and we urge councils to protect the role of director of children’s services.

[Jessica Lee (Erewash) (Con)]

Does the hon. Gentleman not accept that the flip side of his argument about serious case reviews is compelling? We must be transparent at this point and we need to assist all professionals working in child protection. Everybody needs all that information if we are going to learn the lessons, not only from where things have gone wrong, but from good practice. We need to have full transparency, and serious case reviews must be published in full.

[Toby Perkins]

As I said, we take advice from specialists in the profession and many people within the social work field are deeply concerned about that issue; page 61 of Professor Munro’s report alludes to those concerns. Of course transparency is important, and it is precisely for that reason that we would like an organisation that is seen as independent continuing the evaluation of serious case reviews. However, alongside that important transparency, we need to deal with key issues relating to the protection of anonymity of both professionals and people within the families. It has been relatively easy for people in local areas to identify who has been alluded to in many of the serious case reviews. In one example that I was told about by a social work professional, a serious case review referred to a relative of a soldier serving on the front line. If that review had been published in full, a difficult situation could have been caused for someone who was already in a difficult position. Although I share the hon. Lady’s idea that transparency is important, and it is for precisely that reason that an independent review of the evaluation must remain a part of the system, I question whether this approach will aid learning and will instead reduce people’s willingness to get involved.

Much of this review is dedicated to the importance of improving the quality of social work training and the continuous professional development journey that social workers go on, yet worrying signs are already emerging about councils reacting to the savage cuts forced on them by cutting back on CPD and training. We also share Professor Munro’s alarm about the evidence of cuts to early years provision. Some 25% of Children England member organisations are experiencing cuts of more than a quarter of their income—for them it seems as if the big society is rapidly shrinking. The Minister needs to stand up for early years funding if the measures on sharing responsibility for early help set out in this report are to be more than warm words. Continued denial about the scale or fact of the cuts will simply suggest that the Government are not serious. It is particularly worrying that areas with the highest level of deprivation and the highest demands on social services are the very ones that have seen the largest Government cuts.

[Andrea Leadsom]

rose—

[Toby Perkins]

I will just make this point and then I will be happy to allow the hon. Lady to intervene.

I have referred to the survey that we sent to every director of children’s services in England on the state of safeguarding services. We had an excellent response from a significant proportion of local authorities and a number of patterns emerged. Local authorities are trying desperately hard to protect spending on safeguarding, and we salute them for that. However, despite that commitment, 36% of local authorities expected case loads to increase this year and only 10% expected them to fall. One assistant director of children’s services explained the paradox of statutory guidance.

Before I move on any further, I will allow the hon. Lady to intervene. I was trying to find a natural pause, but the words just flowed so wonderfully that I could not stop.

[Andrea Leadsom]

I am very grateful. In this time of financial austerity, is it not more important than ever to get good value for money by focusing on prevention rather than having the massive costs, further down the line, of taking children into care?

[Toby Perkins]

Absolutely. This is a matter on which there is clearly consensus across the House, but there is a difficulty when it comes to the reality on the ground, for example in Sure Start centres and with early intervention. People are seeing that the—for want of a better word—rhetoric around early years is not being supported by funding, and there is a danger that the massive cuts to local authorities mean that they might not be able to follow through on worthy intentions such as those that the hon. Lady mentioned, which are shared by Members across the House.

One assistant director of children’s services said that statutory guidance was extremely important to ensure that she could stand up to councillors who look to her services for cuts, as it meant she could say, “This is stuff that we have to do.” She warned that the more freedom local authorities were given to drop safeguards, the more likely councils would be to cut back on safeguarding. That is not an argument for keeping in place regulation that we can do without, but it is a possible unintended consequence of which the Minister should be wary.

Our survey also showed that directors of children’s services are almost unanimous about the impact of cuts on police, mental health and primary care services, saying that it will reduce their ability to safeguard children in their care. That is the voice from the ground and no one can run away from it.

On the subject of local authorities’ identifying which models of best practice they want to follow, we are again in support of the principle, but I am interested to know what drivers of best practice the Minister feels he has at his disposal to improve standards. Is he worried that if each council is radically different in the way that it provides services, the transition for social workers who move from one authority to another will be more difficult? Will it increase the postcode lottery? Will there be even greater variation in the quality of service provision from one authority to another?

As I have said, our greatest reservations about the direction of travel proposed in the report are not about Professor Munro’s suggestions, but about whether the Government will put legislative and financial muscle behind the changes that she suggests. An exciting opportunity to build on past progress has been presented, and the Government, having commissioned this report, now need to act on it fully, with the relatively minor exceptions that I have described.

We worry that the dogma of cutting back on the state could overpower the genuine desire to do the best for our most vulnerable children. The Minister and the Government can rely on us to support them on these reforms if they actually provide the resources needed. This is not an opportunity for cherry-picking, but it is a time for boldness. The Minister and the Government have an opportunity to act and we hope that they seize it because our children deserve nothing less.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This was always going to be a short debate for Back Benchers, but it has been made somewhat shorter, so I am introducing a six-minute limit to ensure that as many Back Benchers as possible get in.

17:03

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

Thank you, Mr Deputy Speaker, for giving me the opportunity to contribute to this significant, serious and now rather too short debate on this extremely important issue. Only a few months ago, I was granted an Adjournment debate on how we can improve outcomes for children in care and I am pleased that many of the arguments I raised with the Minister, together with recommendations on how to reform and strengthen the care system, particularly around child protection, are very much at the heart of the Munro report. I must declare an interest as a non-practising family law barrister specialising in care cases as well as being the son of foster carers who have fostered 90 children over the past 30 years.

The reaction to the Munro review has been almost universal in its praise. I have read the responses of the National Society for the Prevention of Cruelty to Children, the Association of Directors of Children’s Services, Action for Children, Home-Start, the British Association of Social Workers and the British Association for Adoption and Fostering, among others, and they all agree that the report is an important opportunity to create a high-quality child protection system. This prompts me to ask why these changes have not already happened. It is not as though previous reviews and reports have not drilled down and exposed the inherent flaws in the system.

In his second report of March 2009, Lord Laming lamented the

“over-complicated, lengthy and tick-box assessment and recording system”

that has developed since the Climbié report in 2003. Of course, he is right, but despite his exasperated pleas the tick-box culture has continued to spread its tentacles across social work and to sap the morale and professional judgment of the work force. Children in need do not require reams of paper produced by case reviews and do not benefit from a social worker who spends half their time strapped to their desk and sat in front of a computer. They also do not need social workers who sit in endless meetings.

Social workers do not want that either. As part of her social work taskforce report, Moira Gibb asked social workers to identify the factors that would most improve their professional lives and, by implication, their ability to do a professional child-focused job. They indentified: first, fewer targets; secondly, smaller case loads; thirdly, the abandonment of the integrated children’s system; and, fourthly, more experienced social workers in their teams. Of course inspection, accountability and good record keeping are important, but it has been clear for too long that, as the ADCS says, social workers are

“hindered by the restrictions and regulations concerning assessment, risk management and performance indicators that do not focus on the best outcomes for the children and young people involved.”

The social work taskforce found that those engaged in child protection work spent only a quarter of their time with the children they were there to protect. In short, the system has become too preoccupied with compliance, bureaucracy and defensiveness. As a consequence, we have a demoralised child protection work force who are depressed by negative media attention but without the confidence to break free and get on with doing what motivated them to take on such an admirable vocation in the first place. As one BASW member said:

“I feel exhausted and stressed for the majority of the time. I have only been in the child protection team for 3 months and have already decided that the work is too stressful and too risky—I am now actively looking for another job.”

High staff turnover, high levels of sick leave, a high percentage of agency workers—the figure is as high as 50% in some children’s services departments—and an increase in long-service leavers are all signs of a failing organisation. More worryingly, however, that puts the children who need protecting at a greater risk of harm. The culture needs to change once and for all.

In their response to the report on looked-after children that was produced during the previous Parliament by the Children, Schools and Families Committee, the Government clearly identified those problems and endorsed the report’s view that high staff turnover, heavy work loads and administrative burdens lead to relationships that cannot flourish and social workers who do not feel empowered. They went on to express their commitment to changing the system so that social workers have

“more freedom to make decisions, more support and understanding, and less prescription and censure.”

It was extremely gratifying that the Minister re-emphasised that the Government take those important issues seriously. I do not doubt their determination, but given that people have asked why that is yet to happen, there is a worry that if we are not careful the critical state of some children’s services departments could lead to another round of regulations that result in even more prescription and red tape, which, as history has shown, would only make matters worse.

Eileen Munro is right that we need to reduce radically the amount of central prescription so that we help professionals to move from a compliance culture to a learning culture. We need to focus on the essential rules for effective multi-agency working that have been so successful in places such as Hackney and Ealing, as well as on the principles that underpin good practice elsewhere in our child protection system. We also need to focus on the quality of the help that is given by paying close attention to the views and experiences of those who receive the services and the professionals who help them. We will never completely eradicate the risks of harm to children, but by building a system with the child at its centre, rather than one that is driven by process, we can be in a much stronger position to anticipate, flush out and deal more effectively with the risks that still remain.

17:08

[Ann Coffey (Stockport) (Lab)]

I, too, welcome the publication of the review of the child protection system by Professor Eileen Munro. Her excellent report is thoughtful, well researched and based on extensive consultation. She makes the strong point that the responses to the terrible deaths of children in recent years have shaped the existing child protection system. She identifies four driving forces and says:

“These forces have come together to create a defensive system that puts so much emphasis on procedures and recording that insufficient attention is given to developing and supporting the expertise to work effectively with children, young people and families.”

I agree with her conclusion that there should be a move from doing the right thing procedurally to doing the right thing for the child.

Professor Munro points out that her recommendations are not a quick fix but should be seen in the context of changing the system while putting in place the knowledge, skills and professional expertise to enable professionals confidently to exercise their judgment to do the right thing. Judging whether a child should be removed from their family because there is an unacceptable risk to their life or well-being might be necessary in a very complex family situation. It might follow months of concern, intervention and meetings with parents and other agencies. Assessing the risk to a child relies on many agencies working together to do the right thing. I absolutely agree that over-reliance on procedures does not help make such decision making effective. As she says, procedures can be followed in a way that is technically correct but so inexpert that the desired result is not achieved.

What is the right thing for the child? In my early years as a social worker I supervised a family—a single mother who was an alcoholic and who had a seven-year-old child. The bond was close. The problem was that the mother’s drinking took the form of drinking bouts, often resulting in blackouts, during which she was unable to supervise the child in the home. The child had taken to wandering outside the house at night and his attendance at school was suffering, but there was no question of his suffering any direct harm from the mother. When sober, she provided good parenting and the child responded to it, but no amount of intervention or exhortation could stop her drinking and instead she retreated into a tissue of lies to hide the extent of her problem. I use that example to illustrate the complexity of judging what is the right thing to do, as levels of risk are not easy to assess and must be balanced against positives for the child in an existing relationship and the outcomes of any actions on their long-term welfare.

I was particularly interested in the report’s chapter on sharing responsibility for the provision of early help, particularly early in the emergence of a problem. I entirely agree with Professor Munro that preventive services will do more to reduce abuse and neglect than reactive services and that the co-ordination of services is important to maximise efficiency.

As chair of the all-party group on runaway and missing children and adults, I would like to offer some comments on the child protection system in relation to children who are vulnerable to abuse and exploitation while missing from home or care. Sadly, many children and young people go missing from children’s homes. For them, it has already been decided that they cannot be safeguarded and protected at home. We are their corporate parents and they are in our care, and I was pleased that the Minister referred in particular to our responsibilities as corporate parents.

More than 100,000 children run away overnight each year. Readers of the Manchester Evening News were stunned to read recently that there were 11,819 police reports of children going missing in Greater Manchester last year. Of those, 2,281 cases related to youngsters aged 11 or younger. Another shocking figure is that half of those cases related to children living in care, with more children disappearing from the 43 children’s homes in Stockport than in the rest of Greater Manchester put together. We know that running away is an important indicator that things are not right in a child’s life. One in five children who run away will be harmed and many will become involved in the things that worry parents and society the most—drugs, alcohol and falling prey to sexual predators. I pay tribute to the recent Barnardo’s report, “Puppet on a String”, which highlights those issues.

I welcome the Government’s recent announcement of an action plan to tackle child sexual exploitation and think it is important that it focuses on both running away and child sexual exploitation, as all the research shows that the two issues go hand in hand. I will be interested to hear the results of the Child Exploitation and Online Protection Centre’s current investigations on recent cases of sexual grooming. One of the problems is the collection and analysis of data and assessing the risk to children individually and in the wider community. I hope that the work being undertaken by CEOP will help to develop a risk assessment framework for incidents of children going missing that could form the basis of effective inter-agency work. Local safeguarding boards have an important role because they are in a unique position to monitor how effective local agencies are in addressing the problem.

When the Minister considers recommendation 6 in Professor Munro’s report, I would like him to take on board the child protection issues in relation to runaway children. I firmly believe that if we can reduce the massive number of children and young people running away and going missing, we can reduce the number at risk from violence, drugs, alcohol, sexual exploitation and grooming.

17:15

[Craig Whittaker (Calder Valley) (Con)]

Thank you, Mr Deputy Speaker, for giving me the opportunity to contribute to the debate on this excellent review.

Strikingly, we knew as far back as 2009 that some social workers spent more than 80% of their time in front of paperwork, rather than out on the front line, face to face with children and families. Cameron’s quotation:

“Not everything that can be counted counts, and not everything that counts can be counted,”

published in 1963, has never been more apt than it is to our over-bureaucratic and compliance-ridden system. The focus on early intervention, also highlighted in the Allen, Field and Dame Clare Tickell reviews, shows the long-term benefits to the enrichment of families on the whole, as well as the massivly reduced burden in the cost to the state, and it can only highlight the need to turn that huge supertanker in a different direction.

It is time that we put social workers on the professional platform that they deserve. We need to develop a system in which child protection truly is a multi-agency business involving not only social workers but schools, police and health workers all finally working together—a system that removes constraints on local innovation and professional judgment. But let us not be under any illusions about the time that it will take to change mindsets and to implement the changes needed. The system has been so burdened for far too long.

I will home in on the role of the lead member for children’s services in local authorities, a position that Professor Munro says should not be undermined. Having spent three years as lead member for children’s services on Calderdale council, I believe that the lead member role needs to be looked at and enhanced through further guidance. I know only too well how brilliant a lead member is and how brilliant they are considered when they are out there batting for that extra £1 million in the budget, but the moment they start asking tricky or challenging questions they can almost see and feel the shutters closing down around them.

One good thing that the previous Government did introduce, just over two years ago, was the lead member’s membership of the local safeguarding children’s board, albeit on a limited basis as a participant observer. With that privilege, I could at least challenge partner agencies, and had it been introduced earlier I might have been able to use it as a tool to deep-dive issues even further.

Generally, however, partner agencies were not the only problem, because they chose to work traditionally in silos; it was also down to our directorate. The problem started at the top in Calderdale, which, like most authorities in the UK, has an educationist as its director of children’s services. Educationists also take up most head of service roles. Educationists and social workers generally lack the professional knowledge and understanding of each other’s roles, and without question there is professional snobbery between the two.

Just imagine, then, how it was for a lead member with only 30 years’ retail and people management experience going into that lion’s den. As one head of service once said to me, “With all due respect, you are only a shopkeeper.” A tongue-in-cheek comment, I know, but the battle line was drawn.

The lead member is also generally part time and often from a totally different sector. They are the only councillor with legal responsibilities, but when things do not go as well as they should, as was the case for me in Calderdale, gaining access to information can be hugely cumbersome. The information is often non-existent, and frankly the lead member can hear those shutters going down around them.

Interestingly, Professor Munro mentions Klein’s view on intuition, and with my managerial experience and intuition it became evident to me early on that we had a head of service who was not fit for purpose, an information service that was wholly inadequate, a children’s service base budget that was under-resourced to the tune of £1.5 million, a work force with low morale and a high proportion of agency staff, core and initial assessments woefully behind on time scales, two serious case reviews in the pipeline and a children’s trust in name only—and all that was just the headline stuff. When I challenged those responsible for the day-to-day running of CYP services, there were always reasoned responses and excuses, but that is often exactly what they were—excuses. It took three heads of service, three serious case reviews and more than two years before the appointment of a new director of children’s services, who agreed to an independent review by PricewaterhouseCoopers, before we managed to get a truthful picture of how bad things were in Calderdale regarding safeguarding.

Professor Munro mentions the role of the lead member staying the same. I would like the Government to consider four key points, if I can get them in very quickly. First, the lead member, who is currently a participant observer, should be a full-time member of the local safeguarding children board. Secondly, I would like the Minister to consider the fact that there is no mandatory training for the lead member role. Training of sorts is available, but it is difficult to accommodate if they have a full-time job. Thirdly, will the Minister consider guidance on making the lead member role a four-year term for the sake of continuity? Calderdale is now on its fourth in three years.

Finally, may I ask the Minister to look at the leadership—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Three out of four is not bad.

17:20

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

If the hon. Member for Calder Valley (Craig Whittaker) wants to intervene on me at an appropriate point, perhaps he can get his fourth point in.

I welcome this debate and this report. Child protection is an important issue that has been given too little attention, generally having periods of intense focus following the death or serious injury of a child or children. No one could disagree with the aims set out by Professor Munro, but I want to look at some issues that are perhaps more nuanced than the Minister set out in his speech.

Looking back, we have had investment in the past. From 1998, we had the Quality Protects programme, which made a big difference to social services; I speak from personal experience. More recent work done by the previous Government should be built on. Indeed, Professor Munro identifies the need to build on the firm foundations of reform created by the Social Work Taskforce and the Social Work Reform Board. Let us not reinvent the wheel where we do not need to.

Importantly, Professor Munro recognises the multi-agency nature of this field. There is a danger of other Government policies making child protection more difficult. I am concerned not only about the cuts but about the proposals for how things are to be done. The all-party child protection group, which I chair, and of which many members are present, will be carrying out an inquiry into the proposals on vetting and barring, and I hope that that is helpful. The next session is on Monday—a little advert there—and I hope to see many Members attending to look at this in detail.

We need to be aware of the importance of child protection for children in all settings. Looked-after children have been mentioned, and the residential sector is important. On health, what is going to happen as a result of the abolition of primary care trusts? The PCTs have played an essential role in local safeguarding because they can give an overview and they are able to get involved in the wider issues of what is happening in their local area. I fear that the proposals do not deal with ensuring proper, effective child protection policies for the future. I also have worries about the role of the police.

I have great concerns about education. I will not go into those in detail now, as I have raised them with the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), who was here earlier. Certain aspects of the Education Bill put children at risk, and the Government need to deal with that.

I am also concerned about the localism agenda. The recommendations in chapter 4 on accountability lead us to believe that there are clear tensions in this respect. We should be able to specify what needs to be done, and there should be ways of following best practice while ensuring some local flexibility. The Government need to address that properly.

I want to speak briefly about the recording of information and time scales. That debate has been conducted in a one-dimensional way. Poor IT systems have made life difficult. However, it is significant that every major inquiry into child deaths has identified two things at fault: poor information-sharing between different professions in contact with children and poor recording of information. Not only is good recording essential to enable effective continuity of support for children, sometimes over years or when somebody is on leave, but it is part of the process that social workers need to go through to reflect on a family’s situation. The idea that the only work of a social worker is direct face-to-face contact is false.

I echo the concerns of my hon. Friend the Member for Chesterfield (Toby Perkins) about moving to the use of all localised forms. Frankly, that would take us back round the circle. Thirty years ago when I started in social work, every local authority used a different form and a different process. Not only did that involve lots of people writing those forms and producing guidance, but it meant that when people moved authorities, it took even experienced staff a long time to understand the systems and procedures. I know that the Minister is genuinely committed to this agenda, and I commend him for that, but I urge him to consider a middle way.

I also urge the Minister to consider a middle way for serious case reviews. He and I have disagreed on the publication of serious case reviews in full, and I will not rehearse those arguments now because I do not have time. However, I think that he should have held back, carried out a review, and put in place a new system. In my experience, not only are full case reviews poor learning tools, but sometimes their publication means that people do not come forward. There was a well-publicised case in Sheffield only a year ago of serious intergenerational abuse. The people in that family would not have come forward if they had thought that their information would be put into the public domain.

This is an important review in many ways, and we need to go into it in more detail. I ask the Minister to give more detail on how a wider group of people beyond his implementation group can have an input into the recommendations to ensure that we get the best possible things out of the review for the benefit of children, social workers and all who work in this important area.

17:26

[John Hemming (Birmingham, Yardley) (LD)]

We now have about three minutes if we are to get everybody in. When do we have until? Is it not until 6? [Interruption.] Okay, I will keep going and stick to time. If I have six minutes, I will be quite happy. I want everybody to have the opportunity to speak in such an important debate. I do not mind shortening my speech to make sure that other hon. Members can speak, but there are certain things that I must say.

I disagree with the Government’s objective of increasing the number of adoptions. Already in England, roughly twice as many children under five who leave care are adopted than return to their parents. In fact, the number returning to their parents went down last year. Of the 4,700 under-fives who left care in the year to 31 March 2010, 880 went to their parents and 2,000 were adopted. In Scotland, the reverse is true and the majority return to their parents. I define care as compulsory care and do not include all the section 20 children who go into care voluntarily. It is important to consider those issues.

Checks and balances are critical. I very much support the Munro report and think that the approach of being less bureaucratic is important. Sadly, I do not support the family justice review. The difficulty is that if one is to look at the process of dealing with a child who goes into the care system, one must consider all the aspects. Even if one considers just the local authority costs and the Children and Family Court Advisory and Support Service costs for a child who is taken into care at birth and then adopted, one sees that half the costs are for foster care and half are legal costs, fees for experts and such things. If one is to look at how that process can be managed to work effectively, one has to consider both the judicial processes with its checks and balances and the decision making in the first instance. The Munro inquiry is about the process by which decisions are made and the process by which those decisions are given quality control. In my view, it is the quality control on the decisions that fails. That is why there are a lot of odd decisions and some very strange outcomes.

I thank the Minister for the efforts of his statisticians in producing a detailed analysis of the SSDA903 return. I have a copy here and anybody is welcome to see it. Obviously it is available under freedom of information. That analysis demonstrates what is happening to the children. Our priority should be what happens to the children and what is best for the children.

The problem when we get something substantially wrong, as I think we are, and when the practice is substantially wrong for a number of years, is that people continue to practice in the same way. Only many years later when the children grow up and wonder, “Why was that done to me?”, do things get reviewed. That happened in respect of the children who were sent around the world, for instance to Canada and Australia. That decision is now recognised as wrong, but at the time it was thought to be right. A similar situation is occurring in respect of about 1,000 children a year—that figure looks right when the figures in England are compared with those in Scotland—in cases of forced adoptions in which consent is dispensed with. That problem is of a reasonable order of magnitude and, in the end, it comes down to the need for individual case studies.

Another area in which the Government are missing out is in studying what happens to children who are adopted. In many cases the adoption is disrupted, so about a quarter of those children return to the care system and some are then adopted again, causing them additional trauma. If we are to assess the effect of adoption decisions, we have to include the effect on children who come back into care because they have had reactive attachment disorder, perhaps as a result of being taken into care too early and by overloaded foster carers. A lot of issues are not being looked at, and we need longitudinal studies of individual cases.

Many Members want to speak, and I have emphasised the points about adoptions that I keep making. The figures are there, and I thank the Minister for getting them, but he should take them into account.

17:31

[Bill Esterson (Sefton Central) (Lab)]

I add my welcome for the work of Professor Munro and the recommendations in her report. The huge challenge for Ministers is how to put them into practice. I welcome the Minister’s announcement of the group that will be set up, and the expertise of the people who will be on it. I ask him to consider including a member of the Opposition in that group—other than a Labour councillor. He knows what I mean by that.

I want to speak about my concerns about the speed of intervention and the impact of neglect that does not hit the headlines through serious case reviews. I should mention one of my interests in the matter—I am an adoptive parent. When I trained as an adoptive parent, we were presented with evidence that over an extended period, neglect is often, although not always, far more damaging to a child or young person than physical or sexual abuse. That is why it is so important to consider neglect.

I will quote the comments of a senior NHS professional, who writes:

“Child protection’s preventative role in protecting vulnerable children/young people from neglectful behaviours is hindered and hampered by a lack of clarity and legislative support to recognise the impact of neglect on a child or young person until it reaches a threshold for ‘significant harm’. This results in an inability to respond in a timely manner until it is too late to prevent harm from occurring.

Practitioner tools and chronologies to identify and recognise these neglectful behaviours do not provide the requisite evidence base to support care proceedings or child in need packages that put the child in focus.”

She continues:

“Legislation needs to provide clarity of definition and recognise the impact of neglectful behaviours. The practitioners need to be provided with definitions which are not retrospective; in other words the legal system needs to recognise neglectful behaviours as significant before ‘significant harm’ has been caused to a child or young person, by which time it is too late.”

The Minister spoke about the importance of trying to keep families together and used the phrase “fostering families”. It is important that that is given every chance, but I am aware—this is the point made by that health professional—that in far too many cases, the balance is skewed too far in that direction. It can take too long, and evidence of potential neglect is ignored. Early recognition, and action on it, is essential. The evidence that I have seen, of which other Members will be well aware, shows that the long-term damage of extended neglect is incredibly bad for people psychologically and for their mental health long into adulthood.

To come back to the comments that one or two hon. Members have made, those in foster care are not universally treated as one of the family, because there are too many barriers. Too many rules prevent foster carers from getting close to children for that to happen meaningfully in reality.

I welcome the Minister’s comments on learning from care leavers—that needs to continue. On the issue of neglect, my hon. Friend the Member for Sheffield, Heeley (Meg Munn) said that striking the right balance between protecting the vulnerable child and the rights of the individual is incredibly important. From the experience of constituents who have spoken to me, far too often the rights of the individual parent are given greater prominence than the needs and rights of the child.

Because I am an adoptive parent, I shall speak briefly in the time I have left about adoption. I welcome the comments in the report on reducing the delay in getting children through to adoption, but there are serious blockages in finding families. Measures for finding good families in adoption and fostering are very important, as is providing long-term support. There is a lack of support for foster carers and a lack of long-term support for adopters. I hope that the Minister will take that point on board.

The delays in the courts cause great concern to professionals and families. The courts are still far too slow. I am aware of a case in which some children from a large family were adopted and some went into long-term foster care. One child ended up back with the mother because the court refused to look at the evidence from social services, which had originally issued the order for the family to go into care. The system is quite unworkable, because the neglect remained after the child returned.

I welcome the report. This is a long-term project, and I hope that Members on both sides of the House come together to support it.

17:37

[Jessica Lee (Erewash) (Con)]

I am pleased to speak in this extremely important debate on child protection. I find it quite startling that this is the first debate on child protection that has been instigated by a Government, as the Minister told us in his opening remarks. Given the difficulties and concerns over child protection, which have been ongoing for many years, I find that worrying. This might be the first such debate instigated by a Government, but I hope that it will not be the last.

I should declare an interest, because I worked as a family lawyer for about 10 years, specialising in child protection and adoption. I should also say at the outset that I welcome the conclusions in Professor Munro’s report. The point has already been made, but it is a quality report. It is extremely well set out and contains many helpful conclusions. I hope the Government implement many of its recommendations.

Over my years of working for and representing parties in care proceedings—that includes social workers and parents, or children, through their guardians—I have seen dozens or even hundreds of extremely dedicated, hard-working social workers, who try their best in very difficult circumstances to protect children. In my view, that is front-line work. It can be a dangerous job. Social workers must sometimes go into people’s homes when they do not know what is on the other side of the front door. They could find a parent under the influence of alcohol or find themselves in a violent situation. Children might need to be removed.

I bear that in mind, which is why I hope that following the conclusions of the Munro report, we focus on empowering those social workers to exercise their professional judgment as best they can, without being hampered by other pressures in their day-to-day jobs. I would not like to make those decisions—they can be life-changing decisions—on whether a child should be removed, whether one should undertake a further assessment of a parent, or whether all has been done but it is time to draw a line and look for an adoptive placement for a family.

The Centre for Social Justice has produced some figures that remind us that although care leavers form only 1% of the population, they are four to five times more likely to have mental health issues; a third of homeless people have been care leavers; 30% of children in custody and 23% of the adult prison population have been in care; and more than 20% of women who leave care between the ages of 16 and 19 become mothers within a year, compared to just 5% of the general population. These are troubling figures and, as we seek to support social workers, we must remember that they are trying to achieve improved outcomes for all the young people in their care. I know that all hon. Members will be committed to improving those figures.

I pay tribute to the contribution by the hon. Member for Sefton Central (Bill Esterson), who mentioned the important issue of neglect. There are different sorts of abuse that children can suffer—physical, sexual and emotional, as well as neglect—and more than 19,300 children are under child protection plans for neglect. That is a very high figure, and that kind of abuse can have long-term effects that are just as damaging as other forms of abuse. That is why the attempt to support early intervention work is so important. It is just those families in which neglect persists for several years, and who perhaps fall in and out of the attention of social work departments, who need our help to be able to move on.

Over the years I have represented local authorities, children and parents in some very upsetting cases. I do not wish to be over-dramatic, but some children arrive in foster care so thirsty that they drink out of the lavatory bowl. Some hide food in their room in case the food never appears again. Some have been shaken so badly that they are brain-damaged for life. I give these examples as a reminder of the pressures and challenges that social work teams have to face every day. Those examples are not from a Dickensian story set more than 100 years ago: they are happening in our country in 2011. We must all work harder to stop such abuse taking place.

Time is against me, but I shall conclude with my key point. We must take this opportunity to try to move forward with the Munro conclusions, empower social workers to make their professional judgments, and reduce bureaucracy.

17:43

[Andrea Leadsom (South Northamptonshire) (Con)]

The greatest risk of dying a violent death is when you are less than one year old. And the greatest risk comes not from strangers, but from those who are closest to you in your own home—those who should love you and take care of you. Social workers are in the front line of the battle to protect babies and children. The importance of caring, motivated and well-trained social workers just cannot be overestimated. Frankly, if we do not recognise the massive potential of a good social worker to turn around life chances for babies and children in vulnerable families, we shall get the society we deserve.

I congratulate Professor Munro on her comprehensive report on what is generally recognised to be a difficult and troubled area. I want to focus today on recommendations 10 to 13 of that report, because I have spent the last 10 years of my life developing a passion for and a detailed understanding of why she may have made those points.

Recommendation 10 states:

“Government should place a duty on local authorities and statutory partners to provide sufficient early intervention services for those children and young people who do not meet child protection thresholds”.

That, to me, is the key recommendation, and I can encapsulate why in the shortest of slogans: prevention is kinder and cheaper than cure. Supporting vulnerable families and enabling them to form a secure bond with their babies in the first two years of life has profound consequences for society. Can anyone here imagine what the relationship is like between a mother and her baby if she would allow her boyfriend to stub out cigarettes on her little boy, as happened in the case of baby Peter? No, none of us can quite get our heads around what on earth possessed a mother to so violate the nurturing role of parent and carer as to allow her own need for a boyfriend to overrule the tigerish instinct of a mother. For my own part, I am quite sure I would kill rather than let anyone harm my children like that.

What makes one mother or parent neglect, abuse or even kill her own child, while another would kill to protect her child, is simple: the quality of the attachment between the carer and the child. This attachment begins during pregnancy, and its development is most critical during the first two years of a baby’s life. We could call it the Harry Potter syndrome. Harry was loved and nurtured by his parents until Lord Voldemort murdered them when Harry was two years old. He then suffered unspeakable cruelty and neglect at the hands of his uncle, aunt and cousin, but through it all he kept his unshakable sense of self-worth, personal resilience and his ability to make friends and form strong relationships. Those qualities are the reward for secure early attachment between baby and adult carer.

That is not just an entertaining story; the scientific evidence is overwhelming. When a baby is born his brain is significantly underdeveloped, but between six months and 18 months, as a result of the stimulation of a loving relationship, of peek-a-boo games and silly baby-language chatter with mum, the brain puts on a massive growth spurt and the central frontal cortex—the part of the brain that enables empathy and deals with social interaction—starts to develop at an astonishing rate. Conversely, the baby who is neglected, abused or treated inconsistently by uncaring adults will fail to develop a healthy frontal cortex. His ability in later life to form strong relationships with friends, a partner, work colleagues and so on will be severely impaired—and for a girl baby who does not form a secure bond, the incredible tragedy is that without help, she will struggle to form a bond with her own babies in later life, and so the cycle of misery is perpetuated through the generations.

It is at the critical end of the spectrum of poor attachment that the social worker is the key to the outcome for the child and the family. Where a baby is severely neglected or abused, the development of the frontal cortex may simply never happen. Babies left to scream for hours at a time suffer other problems as a result of having constantly raised levels of the stress hormone. Those babies develop a tendency towards high-risk-taking behaviour, drugs, violence and self-harming. Our prisons, streets and psychiatric hospitals are full of the evidence of poor early attachment. It is in these cases—the most difficult to resolve—that social workers often represent the only chance of survival for the family. However, their challenges are manifold. How can they identify those particular cases? How can they tell if the problems are temporary or life-threatening, and how can they be supported in what is an almost impossible task?

I put it to my hon. Friend the Minister that providing parent-infant psychotherapy will dramatically change the work load of social workers and the amount of support available for these vulnerable families before those problems happen. I wanted to give you a perfect case study, Mr Deputy Speaker, but time does not permit, so you will have to take my word for it that the Oxford Parent Infant Project, a charity that I have chaired for the past 10 years, provides an enormous amount of life-saving support for families in Oxfordshire by working with social workers to reduce their work load, to provide them with the support they need and to help these vulnerable children. OXPIP also provides training in the crucial understanding of parent-infant relationships. What is so sad, to my mind, is that for many of those who attend, it is a “road to Damascus” moment. Previously they had no understanding of brain development, the critical importance of early attachment and the possible interventions.

I would like to leave my hon. Friend with these two thoughts: first, we need to provide parent-infant psychotherapy across children’s centres in the UK, and secondly, we need to improve significantly the quality of education not just for social workers but for everyone who works with babies.

17:49

[Mark Pawsey (Rugby) (Con)]

I want to make just one brief but important point that has arisen as a consequence of representations made to me by constituents about the regulation of the social work profession.

The regulator of social work has been the General Social Care Council, which is charged with issuing and enforcing standards of professional conduct and practice. For the past few years the council has been located in my constituency of Rugby, having relocated from London. However, last July the council learnt that it was on the list of non-departmental bodies to be disbanded by the Government. Understandably, the Government wish to reduce the cost of bureaucracy and regulation. Early advice from the Department of Health was that there was no compelling reason to retain the council, with a potentially significant benefit arising from social workers being placed on a footing similar to that of professional workers and regulation being transferred to the Health Professions Council, a body that will regulate all professionals, including those more generally involved in the delivery of health care. There will therefore be a transfer of functions between the bodies.

One consequence of that is that offices in Rugby will be closed, involving a certain number of redundancies, although the date is not certain. Since the announcement, I have met both management and members of staff at the General Social Care Council. Staff have concerns, principally that there will no longer be a body specifically dedicated to the regulation of professionals in the sector, and that the focus that currently exists may be lost. The Munro report draws attention to the important role of the social work profession in ensuring that all children are safe. Specifically, recommendations 11 and 12 reiterate the need for the robust supervision and training of social workers, supported nationally by a regulator. It is therefore crucial that the HPC should continue to monitor the ongoing professional development of social workers.

We have heard much in today’s debate about the value and importance of the role played by the social work profession in child protection. I hope that in summing up, the Minister can provide assurances that, in the interests of all the vulnerable people whom they support, there will continue to be proper and effective regulation of social work professionals.

17:52

[Mr Aidan Burley (Cannock Chase) (Con)]

Like the previous speaker, I do not intend to make a long speech. I rise to make just one point to the Minister before allowing him the time he needs to sum up the debate.

I welcome the Munro report and its recommendations. Everybody, on both sides of the House, would agree that it is important for the best interests of the child to be paramount in all child protection decisions. However, a number of constituents have raised concerns with me about the term “emotional abuse”, and how it is defined and interpreted by social services. I note that none of the recommendations of the Munro report relates to the term “emotional abuse” or its definition. We would all agree with the need for children to be taken away from such abuse, but some parents who have come to my surgeries are concerned that in some cases social services are being over-zealous or taking quite extreme action based on a rather loose interpretation of the term “emotional abuse”. In one case highlighted to me, social services removed a child from her parents because they felt that she had not been made aware of her father, the evidence for this being that there were no photos in the house. That seems to be based on a loose definition of “emotional abuse”. As part of the Minister’s review of child protection services, will he consider looking again at the definition of the term, to ensure that it is applied correctly and accurately?

17:53

[Tim Loughton]

I did not expect there to be time for a proper summing up, but as there is, I will make the most of it.

This has been an excellent debate—well measured and exceedingly well informed—with the House at its best, and certainly its most earnest. Indeed, the implementation working group on the Munro report could have been formed of the hon. Members in the Chamber who have contributed today. We have two adoptive fathers who revealed themselves as such in their contributions. We also have two family law barristers, one of whom—my hon. Friend the Member for Crewe and Nantwich (Mr Timpson)—grew up with 90 foster children, because of the amazing contribution of his parents, as well as having adopted siblings.

We have two former social workers, who also happen to be the chairs of the all-party parliamentary groups on runaway and missing children and adults, and on child protection. They have always brought enormous expertise to the House on those matters. We have crossed swords, and also often agreed, in many Committees on many pieces of legislation over the years. We also have one former lead member for children’s services in a council, even if he was “only a shopkeeper”. Of course, Churchill said that we were a nation of shopkeepers, so my hon. Friend should not undersell himself in that way. My only regret is that we will never hear his fourth point. We know about the missing fourth man—

[Craig Whittaker]

Will the Minister give way?

[Tim Loughton]

I would be delighted to hear my hon. Friend’s fourth point.

[Craig Whittaker]

My fourth point was about the chairmanship of the local safeguarding children boards. There are still 23 authorities in the UK that have the director of children’s services as the chair of their board. Will the Minister ensure that in future the role of the chair is independent?

[Tim Loughton]

What an excellent fourth point that was! It was well worth waiting for. When we were in opposition we said that the chairs of local safeguarding children boards should be independent. I think that the boards should include lead members and perhaps directors of children’s services, in whatever role, but they should be independently chaired. If LSCBs are to make progress and have more teeth and more importance, that will be an even more important factor in the future. I am glad that my hon. Friend managed to get his fourth point in.

So, we have one shopkeeper turned lead member of children’s services. We also have one head of a very successful children’s charity who has enormous expertise in attachment. We have a Member who I think used his first Adjournment debate to discuss adoption, including some cases in his constituency. We have another new Member who has taken up the cudgels on behalf of constituents who are concerned about abuses of adoption. And we have one conspiracy theorist. I pay tribute to my hon. Friend the Member for Birmingham, Yardley (John Hemming); we disagree on many aspects of this issue, but he is assiduous and he rightly acknowledged that we had given him as much information as possible. We disagree on the interpretation of that information and we will continue to do so, but he has certainly got his teeth into this subject.

We have had an excellent debate. I do not have time to refer to every point that has been raised, but the personal experience that has been brought to bear today does the House credit. There has been overwhelming support for the principle, the thrust and the exhaustive nature of the Munro review. The hon. Member for Stockport (Ann Coffey) said that it was well researched and the result of extensive consultation. She also said that too much of what social workers have to do may be technically correct but inexpert in its findings.

The hon. Member for Chesterfield (Toby Perkins) made some excellent points. I thank him for his welcome for the report, and we look forward to working with Members on both sides of the House on carrying forward its recommendations. This is an evidence-based review, and I want to see Government policy guided by evidence, and by things that work and actually improve the outcomes for children at the sharp end. My hon. Friend the Member for Crewe and Nantwich pointed out that this is not rocket science, and asked why it had not been done before.

The hon. Member for Sheffield, Heeley (Meg Munn) mentioned the very good work of the social work taskforce and the social work reform board. We acknowledge that that work was undertaken under the previous Government. When we set up the Munro review, the first thing I said was that it was not intended to take the place of or to rubbish the work that had gone before; it was to complement that work. The first person Eileen Munro went to see was Moira Gibb, the head of the reform board. Members of the reform board have worked on the review and are now working in the implementation group.

The hon. Member for Sefton Central (Bill Esterson) mentioned the mixed destinations of siblings who are taken into adoption or care. That is a really important point, and I want to do a lot more work on it. I have heard too many horrific stories of families being broken up. At a time when they cannot rely on the stability and familiarity of their birth parents, it is crucial that they should have the familiarity of contact with their siblings when they desperately need some kind of anchor. My hon. Friend the Member for Erewash (Jessica Lee) has had great experience of children in the care system, and she told the House that the incidence of mental health issues and homelessness was absolutely appalling.

I thank everyone in the Chamber for an excellent debate. We are absolutely determined to carry forward the recommendations of the Munro review. Today’s debate will help to inform our response, and I look forward to receiving the help of all hon. Members to ensure that we get this right. I am up for that challenge, as are the House and the Government, and we are going to make this work.

Question put and agreed to.

Resolved,

That this House has considered the Munro Report and its implications for child protection.

Cannabis and Psychosis (Young People)

Thursday 9th June 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(James Duddridge.)

18:00

[Mr Charles Walker (Broxbourne) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in this evening’s Adjournment debate. It is appropriate that my debate follows an informative debate on child protection.

Up and down the country, too many families are suffering the torture of watching their children squander their futures—bright children who have so much to live for ending up with so little. All too often, that is brought about by an addiction to skunk cannabis—a drug that is ruining young lives.

I am not a clinician or a scientist, so I am not going to give a hugely exhaustive overview of the chemical content of skunk cannabis. All I would say is that the THC— Tetrahydrocannabinol—content of skunk cannabis is now six times higher than it was in the cannabis of the ’70s and ’80s: 18% compared to 3%. The CBD—Cannabidiol— content of skunk cannabis, which is the bit of the chemical that counteracted the psychotic effects of THC, has now been removed from the drug. What we see is young people suffering as a consequence.

It is believed that skunk cannabis works by releasing dopamine into the brain, which creates a sense of euphoria, but it also has many side-effects—hallucinations, delusions, paranoia, attention impairment and emotional impairment. The problem is that young brains do not properly form in adolescence; they do not do so until they are in their early 20s. What the drug does in its simplest form is to open up gates in the brain that may never close again, or, if they do close, only partially.

If a youngster smokes skunk cannabis, at best their academic performance will be retarded. So many teachers have told me about young, bright children getting to a certain age and then their academic performance just goes backwards—not slowly, but rapidly, as they go from being at the top of the class, to the middle, to the bottom and to not turning up in class at all. That is a tragedy; a young mind is a terrible thing to waste.

Too many young people suffer severe psychotic effects linked to skunk cannabis. One in four of us carry a faulty gene for dopamine transmission. If a youngster has that gene and smokes skunk cannabis, they are six times more likely to get a psychotic illness than the average youngster out there. If both parents give them two of these genes, they are 10 times more likely to suffer a psychotic incident and suffer long-term brain damage.

With your indulgence, Mr Deputy Speaker, I would like to read a few tragic stories. In a sense, I am a voice for all those parents who cannot be here tonight. Here is the first:

“Our son was a normal, bright, outgoing, sociable boy and good at sports. He started taking cannabis at about 15 years old. He experienced a dramatic change in personality at 23, which resulted in a major psychotic episode. In recent years, he has been under psychiatric care and on antipsychotic medication, and has not been able to keep down a steady job. He has been sectioned twice and remains under a community treatment order. His continuous use of cannabis has destroyed a fine young man who now has no ambition or awareness of responsibility. However, he is beginning to accept that the cannabis habit will lead to more severe mental health problems. It is hugely distressing to watch this lovely boy turn into a complete stranger.”

Another parent wrote:

“George was our only son to turn to drugs. His addictions began early—tobacco in junior school, cannabis in senior. At first we were in the dark but George’s hand was forced by events and we were informed. He was warned. However, nothing stopped him. His life and 2 marriages were ruined. The French wife aborted their 2 babies—she could not cope with George in tow—the dangers, the poverty, the filth, the dark, loving, violent, mesmeric personality he had become. George asked me to drive him to the clinic and wept all the way in the car. I tried to comfort him but I ached for my unborn grandchildren. He knocked me down a few times—he always apologised—George was such a gentleman. He spent 2 years in a mental hospital. He was very schizophrenic by now.”

Sadly, George is now dead.

Let me read just two more stories to the House. Here is the first:

“Michael became noticeably unwell aged 16 in February 2003 whilst on a family holiday. I found some cannabis in his room. This was a shock as Michael didn’t even drink alcohol as far as I was aware. His mood changes were almost immediate. Laughing one minute, crying the next. He spent all day in bed and had no energy, no motivation. By December 2003, Michael was sectioned under the Mental Health Act. It was the worst day of my life—he cried for his parents and had to be held down. He just screamed—it was heart-rending. After being there for 3 months, he was discharged. I thought this was the end, it was unfortunately the beginning of a road that I would not wish on my worst enemy. It is like Russian Roulette who becomes psychotic.”

Nine years later, the torture continues for that family.

Here is the final story:

“We were a normal, happy, busy family with four children until our second child, 16 ½ became involved with a new group of friends and started taking cannabis. Within a very short space of time, our happy, funny, healthy son turned into a screaming, paranoid, unhappy young man. He refused to go to college, worked only occasionally, and became a violent thug. When confronted, he would turn on us both physically and verbally, on one occasion breaking his father’s ribs because his father had intervened when he was threatening me. He would kick doors in, smash glass panels, destroy washing baskets, crockery, ornaments, etc. Our lives became a living hell. He has been clean from cannabis for a year now and is gradually rebuilding his life. He still has flashes of paranoia, has no qualifications and will always have to fight to overcome his criminal convictions.”

Those are harrowing stories, and they have been repeated thousands of times across the country. Child and adolescent mental health services across the country are dealing with thousands of youngsters and adolescents who are suffering from severe psychotic illnesses, and there is a causal link with skunk cannabis.

For the past decade we have talked about harm reduction, and we have an organisation called FRANK that leads the educational process on drugs, but harm reduction is not enough. There is no safe amount of skunk cannabis that a youngster can smoke. I do not condone drinking, but a youngster can have a glass of wine or a bottle of beer and suffer little ill effect, although I would not recommend that young people do it. Taking skunk cannabis is like holding a loaded revolver to your head and playing Russian roulette. You do not know whether you have the gene, and you do not know when the gun will fire the bullet. Some people who become addicted to skunk cannabis end up with such severe psychoses that they take their own lives. It would be interesting to know from coroners how many young people who have committed suicide recently were addicted to skunk cannabis.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for raising a matter that could well justify a full debate here or in Westminster Hall. In Northern Ireland, we have seen a rash of suicides as a result of this very drug. Does the hon. Gentleman believe that the laws on drugs should be tightened? I ask because what is happening in his constituency is happening in mine, and throughout the United Kingdom.

[Mr Walker]

I am very interested by what the hon. Gentleman says, but this evening’s debate is not about classification. A Health Minister will respond to it. However, classification might be a subject for another debate here, and if the hon. Gentleman tables a motion for such a debate I shall certainly support him.

For many young people, smoking skunk cannabis is like holding a loaded gun to their heads. It might not kill them—they may continue to have a life—but if they suffer from severe psychosis or schizophrenia, it will not be much of a life. It might be just an existence.

The Government need to get to grips with this, but the problem is that law makers and the clinicians who advise them view cannabis through the prism of their own experiences in the 1970s and 1980s, and, as I said earlier, things have moved on since then. The drug with which we are dealing now is highly toxic and highly dangerous. We must talk not about harm reduction, but about harm prevention.

We are responsible adults. I have had enough of the current trend of everyone trying to make adults children’s best friends. I am not my children’s best friend; I am their parent—I am their father and I must guide them and have their interests at heart. That is the duty of adults. We must not abrogate responsibility. We have to make young people aware of the risks they run if they smoke skunk cannabis.

I have an admission to make here tonight. I was the beneficiary of very good drugs education at the age of 14 and 15. I was educated in the mid-’80s. I have not lived a blameless life. There are things I have done in my past that I am ashamed of and I wish I had not done, but, as the Prime Minister said, everyone is entitled to a past. There were many drugs, but the one drug I really did not touch was LSD, because I was told that if we take LSD just once, we can have a bad trip and that can be the end; we may never return from that experience—the gate in our brain that opens up may never close. If we are lucky enough in our youth to survive using it intact as a whole person, we might in our mid-40s—as I am now—be driving our children back from football practice and suddenly start hallucinating again. That terrified me. The idea that I could lose my brain and my future terrified me, and ensured that at a time when LSD was rife in London I never—ever—touched it.

Drug education works, but we need to educate the educators. They need to be aware of the research that shows a strong causal link between skunk cannabis, psychosis and schizophrenia. As I have said, our health trusts are full of young people suffering the consequences. Families are being destroyed.

I will conclude by saying just a few more words. In an ideal world—let us have lofty ambition and strive for an ideal world—I do not want any youngster to take drugs. It is not a good thing to do; it is not good for their health, their future or their prospects. I will just say this, however: it is a lot easier to repair a septum in one’s nose than to repair a brain. Once our brain is gone, often the best pharmaceutical drugs in the world will not bring it back again—that is it. I have talked to dozens of parents across the country who are facing up to the fact that their children—the children they love, and brought into the world and nurtured—now have no future but simply an existence to look forward to. I do not think that is good enough, and I do not want to settle for it.

So here is my call to action for the Government: please take this matter seriously. Skunk cannabis has changed over the past 30 years. It is a major public health risk. It is robbing thousands of people of an opportunity to live fulfilled lives. I have worked with the Minister, and she has been fabulous up to this point, and I am sure she will continue her efforts to get this topic higher up the Department’s agenda.

Finally, I want to pay tribute to my enormously good friend Mary Brett, a former teacher who has worked for decades in the interests of young people and their welfare.

18:14

[The Parliamentary Under-Secretary of State for Health (Anne Milton)]

I am grateful to my hon. Friend the Member for Broxbourne (Mr Walker) for raising an issue that is not only important, but seems to be attracting more attention in recent years. It was a pleasure to meet him and representatives of Cannabis Skunk Support, Mary Brett and Jeremy Edwards. In part, this greater attention is down to my hon. Friend’s work and that of the all-party groups on cannabis and children and on mental health.

I pay particular tribute to my hon. Friend because although he is always passionate, his passion for this issue shone through in his eloquent and, at times, moving speech. This issue affects us all. We have been young ourselves and he was very open about his personal experience. Many of us are parents and our children are growing up in an increasingly complicated world, and the problem cannot be ignored.

Cannabis is the most commonly used drug in England today, and its use is particularly common among younger people. One of the big problems is that of perception. Many people see cannabis as benign, harmless, a throwback to the ’60s—I am showing my age—’70s or ’80s, or a source of artistic inspiration, particularly when compared with other, harder drugs. That is a very dangerous misconception these days. For a start, when people talk about the cannabis smoked 50 years ago, they are referring to something very different from that which we see on the streets today.

As my hon. Friend mentioned, the most common form of cannabis used today is skunk, which is, on average, about four times stronger than herbal cannabis, the type with which some in this House might be familiar. It does not take a leap of faith to understand that regularly using cannabis of this strength could be very harmful indeed. It could result in dependence, for example, or in the development of serious mental health side effects. Those can be both short and long term, and can be devastating for anyone, including children and young people, causing a host of problems, including family breakdown and debt, and the sort of tragic stories that we heard about from my hon. Friend.

Questions still do exist about just how strong the link is between cannabis use and mental health problems, but there is without doubt a link—that much is certain. Using cannabis can lead to serious problems, such as psychotic episodes and other mental health issues. In the case of young people, whose brains are still growing and developing, that is a particular cause for concern. Any damage caused then could affect them for the rest of their lives. The fact is that the best way to prevent damage like that is to avoid cannabis in the first place, but we are not stupid and we know that many people, both young and old, will be put in situations where cannabis is offered to them, so we need to take some very clear action.

The drug strategy that we published in December 2010 outlined action that we will take to prevent and reduce the demand for drugs, by establishing a “whole life” approach to the problem. That involves breaking the intergenerational paths to dependency by supporting vulnerable families; providing good quality education and advice so that young people and their parents are provided with credible information actively to resist substance misuse; and, of course, intervening early with young people and young adults. My hon. Friend mentioned the need to educate the educators, and it is important that those giving support get continued support in their work.

The latest data show that almost 9% of 11 to 15-year-olds reported taking cannabis in the past year. Although that is a long-term decrease, it is still too many. Those data show us two things: that the situation is improving and that drug use is by no means normal behaviour among young people. That is an important fact for young people to take on board. The Department for Education is taking action to maintain that decline. A review is going on into personal, social, health and economic education, which includes drug education, to determine how schools can be better supported. Of course, schools are not the only setting in which we can undertake this sort of educational programme. I will also be meeting the Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather) to discuss these issues soon.

My hon. Friend the Member for Broxbourne also mentioned FRANK. Our drug strategy highlights the important role that FRANK has to play in providing information and advice, both to young people and to their parents or guardians. A review of how FRANK is used showed that the vast majority of young people preferred accessing FRANK online. Based on that review, as I recently discussed with my hon. Friend, we are in the process of improving the FRANK service, making it easier to use the website. We are also updating the tone and style of its language, so that it is more relevant to young people and provides them with the information and advice they need in a way that is accessible and provides clear messages.

We are also taking other steps to help people who already have a problem. In March, the National Institute for Health and Clinical Excellence produced guidance on the assessment and management of people with psychosis and co-existing substance misuse. It will help providers and commissioners to ensure that services are appropriate for young people with psychosis and substance misuse problems. We recently published a mental health strategy to improve services for those who are affected by mental health problems. The strategy focuses on the importance of improving the quality and productivity of services and on making efficiency savings that can be reinvested back into the service to improve it still further.

Over the next five years, we will be putting around £400 million into psychological therapies in all parts of England for young people who are dependent on drugs. Those therapies will include talking therapies, supported where appropriate by family interventions. This issue affects not only individuals but whole families. The strategy will also address issues such as mental ill health and homelessness. Currently, 24,000 young people access specialist support for drug or alcohol misuse and the figures are good—97% of them are seen within three weeks of referral. However, we have to ensure that the quality of support stays high, so that every young person who needs help is given what they need. We will continue to improve the quality of that support and to make sure that it responds to the right people at the right time.

The letters my hon. Friend read out were moving and evocative. They demonstrate the human story behind this problem. Child and adolescent mental health services have a part to play, but we need to do a great deal more. We need to get the prevention right and we need to get support in when those preventive measures have not helped. He talked about moving from harm reduction to harm prevention and I could not agree more. We need to ensure that young people grow up with the skills they need to make what are sometimes difficult decisions about the choices they face. Addressing legalisation is not enough; we all know about the legal highs. What we need is for young people to make good decisions about the choices they face. I commend my hon. Friend and those who have written to him on sharing those experiences with us today.

Our position on cannabis use is clear: we will continue to focus on young people because if they are protected right from the start, they will be safer throughout their lives. Not only will their mental health be safeguarded, but their exam results and social development will benefit, their future options will remain open and their chances will remain bright. It is terrible to hear about young people who are struck down by poor decisions that are often made through ignorance. I am sure that position is shared by my hon. Friend and all hon. Members present. Let me assure him that his call for action is being answered in full. I was pleased to hear his complimentary remarks about me so far—I noticed the slight equivocation—and I assure him that I do not think he will be disappointed in the future. I will do all I can in my position to ensure that we do everything possible to protect the health of young people.

Question put and agreed to.

18:23

House adjourned.

Ministerial Correction

Thursday 9th June 2011 Ministerial Corrections

Thursday 9 June 2011

Communities and Local Government

Thursday 9th June 2011 Ministerial Corrections

Home Ownership

The following is the answer given by the Minister for Housing and Local Government, the right hon. Member for Welwyn Hatfield (Grant Shapps), to a question from the hon. Member for Plymouth, Moor View (Alison Seabeck) during Communities and Local Government Question Time on 4 April 2011.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I make my usual declaration of an indirect interest in the entry in the register for my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford).

HomeBuy Direct was a good scheme, and considering that the Minister called it an “expensive flop” I am delighted that the Government have seen fit, albeit somewhat late in the day, to enhance it further and, in many ways, to replicate it. Can he confirm that, as the Financial Times reported, this is nothing more than his admitting that he cannot fix the mortgage market? Has he not, as my hon. Friend the Member for Chesterfield (Toby Perkins) said, just wasted a vital 10 months, leaving hundreds of thousands of first-time buyers—not tens of thousands, given the sort of scheme we are describing—with no hope under this Government of securing their own homes?

[Grant Shapps]

I am grateful to the hon. Lady for allowing me to clear up one thing. It is worth knowing that when I said that the HomeBuy Direct scheme had been an expensive flop, it had been launched 10 months earlier and had helped just five people to secure a home. It is true that the scheme has developed over a period of time and has helped people in between times, but as I said in my previous answer—I appreciate that it was given after she had written her question, but none the less it is useful to connect the two—the previous scheme does not end until 2012. We are in 2011, and we have already announced a new scheme.

[Official Report, 4 April 2011, Vol. 526, c. 730-31.]

Letter of correction from Mr Grant Shapps:

An error has been identified in an oral answer given on 4 April 2011. The correct answer should have been:

[Grant Shapps]

I am grateful to the hon. Lady for allowing me to clear up one thing. It is worth knowing that when I said that the HomeBuy Direct scheme had been an expensive flop, there had been only five households assisted nearly eight months after the scheme was announced. It is true that the scheme has developed over a period of time and has helped people in between times, but as I said in my previous answer—I appreciate that it was given after she had written her question, but none the less it is useful to connect the two—the previous scheme does not end until 2012. We are in 2011, and we have already announced a new scheme.

Westminster Hall

Thursday 9th June 2011 Westminster Hall

Thursday 9 June 2011

[Philip Davies in the Chair]

Backbench Business

Thursday 9th June 2011 Westminster Hall

Apprenticeships (Small Businesses)

Thursday 9th June 2011 Westminster Hall

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

14:29

[Richard Graham (Gloucester) (Con)]

It is a pleasure to be here under your chairmanship for the first time, Mr Davies.

I am delighted that my hon. Friend the Minister has been able to find time at short notice to join us for this debate on a subject that lies at the heart of two of the greatest challenges for the coalition Government: first, how to increase growth in our economy and, secondly, how to reduce unemployment and, in particular, youth unemployment. Today’s debate on the take-up of apprenticeships by small businesses is therefore critical. During the next few minutes, I will lay out the structure of the debate in which I hope that as many hon. Members as are here today—there are many—will participate.

First, I intend to touch on the present Government’s approach to apprenticeships in general. Secondly, I will consider how successful that has been overall in the first year of the new coalition Government. Thirdly, I will examine the relative take-up of apprenticeships by large, medium-sized and small businesses. I hope that in today’s debate we will all focus to a large extent on businesses that are often described as micro-businesses—those employing 12 people or fewer. Of course, it is relevant that all of us in Parliament are in effect small businesses ourselves, employing typically between three and five people. I will come on to that aspect of the issue towards the end of my speech. Thereafter, I want to consider the obstacles to small businesses in taking up apprenticeships, how we might overcome them, what the challenges to overcoming them will be and what aspects of Government policy would help the process. Finally, I will bring all that together in specific recommendations.

The first question is the present Government’s approach to apprenticeships. The Government’s announcement immediately after the election last year that they would provide 50,000 additional apprenticeships, followed up later by a further 75,000, making a total of 150,000 new apprenticeships, was warmly welcomed by all of us who want to see business growth. That announcement sent a powerful message, especially to our manufacturing sectors, that this Government are determined not only to talk about rebalancing the economy, but to deliver by doing something practical to help that to come about.

Of course, apprenticeships today are not only about manufacturing. They are not the cliché of, on the one hand, hairdressing for women and, on the other hand, blokes in dirty overalls. They are about a much wider selection of opportunities. One of the things that I hope will come out of today’s debate is the breadth of opportunity—the breadth of training providers and sectors that offer apprenticeships. All my hon. Friends are seeing that in their own constituencies and of course have the possibility of taking on apprentices themselves.

There was a firm commitment right at the beginning of this Government to providing significant funding —hundreds of millions of pounds—for additional apprenticeships. That has been widened further. There have been significant efforts, led by the Minister, who has been a champion of vocational employment—[Hon. Members: “Hear, hear!”] That has been warmly welcomed, as you can tell by the response from everyone here, Mr Davies.

Let me run through some of the detailed figures. Nationally, there are many more apprenticeships now than there were in previous years. Locally, as far as Gloucestershire and my own constituency of Gloucester are concerned, we have seen a significant take-up of apprenticeships; there were about 30% more apprenticeships in 2010 than there were in 2008. The general picture is therefore very encouraging. Of course, that is complemented by Government programmes to create, for example, 100,000 work experience placements and additional commitments to help 10,000 vulnerable young people, which I am sure all of us welcome.

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

I pay tribute to my hon. Friend for securing the debate. Does he agree that in addition to the number of apprenticeships increasing, the type of apprenticeships available has shifted under the present Government? The previous Government left thousands and thousands of people in the classroom; the present Government are committed to the provision of work-based apprenticeships. Does my hon. Friend agree that that is much better for young and older people who are undertaking an apprenticeship?

[Richard Graham]

My hon. Friend is absolutely right in what he says, although at some point in the debate we should touch on the removal from employers offering apprenticeships of the freedom to have the training element provided in the workplace. The new rules require 30% of the time to be spent away from the workplace, which for some employers is not necessarily practical. My hon. Friend and others may wish to comment on that as the debate continues.

The National Apprenticeship Service has provided the key facts. There are now more than 85,000 employers nationally offering apprenticeships in more than 130,000 locations, with almost 200 frameworks. That is highly encouraging. The statistics about employers who take on apprentices finding that it is a worthwhile thing to do are even more encouraging, with 80% agreeing that apprentices make their workplace more productive, which of course is ultimately the test in terms of the business growth element of the equation. Some 83% of employers who employ apprentices rely on those apprenticeship programmes to provide the skilled workers whom they need for the future.

The question for this debate is whether the take-up of apprenticeships by small businesses is quite so encouraging. I do not have the range of national statistics to argue the case as strongly as I would like to today, but I am sure that the Minister will share with us some of the Department’s research. I know that the Federation of Small Businesses has estimated that take-up by small businesses is only 8%. Anecdotally, in my own constituency and my own county, it is true that it is much harder to persuade a small business with fewer than 12 employees to take on an apprentice than it is to persuade, say, a company with 100 employees.

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

My hon. Friend is making a very important point. One of the things that I have been trying to do in Halesowen in my constituency is to work with the further education college to develop specific engagement programmes for small business to overcome the barrier that my hon. Friend has correctly identified. I still see a very important role for FE colleges in reaching out to the small business community in local areas.

[Richard Graham]

Yes. My hon. Friend is absolutely right to say that FE colleges have a critical role to play, as do some of the smaller, specialist training providers. A question for us all to consider—I am sure that my hon. Friend has done this in his own constituency—is the extent to which courses offered by further education colleges can be effectively tailored to the requirements of small businesses. Quite often, some of the courses—this is where the questions of the framework structure and the sector skills bodies come in—are fairly specific and technical, and small businesses often require an apprentice to take elements of a business administration course, elements of a marketing course and elements of other courses. So there is a question about whether there is an adequate structure of training to cater for small businesses, but I absolutely agree with my hon. Friend that further education colleges have a crucial role to play.

Moving away from apprenticeships in general and their take-up nationally, and coming on to the small businesses sector specifically, I believe that there are just less than 5 million small businesses in the UK, of which more than 3.5 million have sole proprietors. An astonishing statistic is that 97% of UK companies employ fewer than 20 people, and 95% of them employ fewer than five people. That shows us that one of the key drivers in all our constituency economies is the extent to which small companies that employ fewer than five people feel able to take on an additional person.

[Justin Tomlinson (North Swindon) (Con)]

As a former small business owner myself, I recognise the challenges. For nine years, I wanted to get an apprentice, but I did not understand how to do so. The Government can play a proactive role in providing information to explain just how easy it is to recruit an apprentice. My suggestion, which I have raised on a number of occasions, is doing it through the annual business rates bill. All the information can be provided at a relatively low cost.

[Richard Graham]

That is an interesting suggestion, and one that I am sure the Minister will want to respond to in due course. The idea of using the annual business rates bill as an opportunity to explain how simple it is to take on apprenticeships would, I think, be widely appreciated. My hon. Friend the Member for North Swindon (Justin Tomlinson) is right, and I was just about to come on to the question of education and information. There is undoubtedly a gap that needs to be filled.

[Esther McVey (Wirral West) (Con)]

I want to add some personal knowledge as someone who has had an apprentice since last October and as the owner of a small business. It is the cost that concerns small businesses. What can the Government do to incentivise them to take on apprentices? We need to look at the cost to employ one and the payroll costs.

[Richard Graham]

My hon. Friend is absolutely right to raise those points. The incentives—the carrots—to encourage more small businesses are a crucial part of the argument, which I will come on to. May I take the opportunity to congratulate her? She has helped a number of us to take on our own apprentices, demonstrating the local and national leadership that she is renowned for in her constituency.

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

rose—

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

rose—

[Richard Graham]

I will give way in a moment, if I may. It is interesting that so many hon. Members from the coalition side of the House are here today. They are firmly focused on the importance of apprenticeships, are leading by example and have their own experience as small business men and women. It is disappointing to see the complete absence of any representation from the Opposition, apart from the shadow Minister, the hon. Member for Blackpool South (Mr Marsden).

[Chris White]

I recently met the Warwick and Leamington branch of the Federation of Small Businesses. Skills were an important issue that was touched on, but the issue that caused most concern was the lack of information. Although I am sure that my hon. Friend agrees that it would be good to have extra funding, the Government can do more to promote the apprenticeship training agencies, as proposed by the FSB, so that businesses can be more aware of the help that they could receive and the benefits for both themselves and the community at large.

[Richard Graham]

My hon. Friend is absolutely right. The situation in his part of Warwickshire is not dissimilar to that in my own neighbouring county of Gloucestershire. The small businesses in the world of the bear and ragged staff have similar issues, which we will certainly come on to.

[Mr Hayes]

I would not normally interrupt my hon. Friend’s peroration, but he made a comment about the number of colleagues across the House who are taking on apprentices. Does he agree that it may be appropriate to hold some kind of reception when we feel that we have reached a critical number, so that we can celebrate that, use it as a way of advertising the apprenticeship brand and send out a message that we are leading, as he has described, by example?

[Richard Graham]

I am grateful for the Minister’s remarks. He has brilliantly anticipated the climax of my speech, which was to come a few minutes down the line. The part of my speech that he may not necessarily have anticipated, or will necessarily appreciate, is about the funding of the great celebration that I have in mind, which he has so kindly already agreed to host. He is quite right to mention our own involvement in apprenticeships. I will come round to that, because a number of hon. Members present will want to make their own points and contribute with their own work in the field.

Returning to the question of small businesses and their contribution to both our local economies and collectively the national economy, I mentioned earlier small businesses that employ fewer than five people and their contribution to the UK economy. Small and medium-sized enterprises account for, astonishingly, almost 99% of all enterprises and almost half the country’s private sector turnover. Therefore, the essential argument that I want to start with today is that we cannot underestimate the extent to which small businesses will be the drivers of growth—or of stagnation, should the economy falter, which we all fervently hope it will not, and believe it will not. The question that we have to debate is how we can stimulate, encourage and exhort small businesses to think that taking on an apprentice is the right way forward.

[Dr Julian Huppert (Cambridge) (LD)]

Will my hon. Friend give way?

[Richard Graham]

I will give way with pleasure to my hon. Friend the Member for Cambridge (Dr Huppert), now with his royal duke.

[Dr Huppert]

I am afraid that the duke is not able to be here for various reasons. Does my hon. Friend agree that small companies now, particularly within the rapid growth sectors, such as many of the high-tech industries in my constituency, are the bigger companies of the future? Is he aware that many small companies in my constituency, which receive support from the excellent Cambridge Regional college, say that their biggest problem is not about finding excellent scientists and people to work at that level, but about finding technicians who can do things? Is he also aware that a good apprenticeship scheme at a high level is exactly what small businesses need to grow and become the large companies of the future?

[Richard Graham]

My hon. Friend is, as so often, exactly on the money with his observations about small businesses. It is quite true—the cliché of acorns growing into oak trees is exactly what businesses are all about. He and I, and others here today, can give strong examples of businesses that started with virtually nothing and no one and have grown into great economic successes for our country. To use one illustration from my constituency, we have a successful hairdressing business that has now expanded into other constituencies in Gloucestershire, and which I believe is advancing on Worcestershire as well. Blushes is now a company with a multi-million pound turnover and multiple sites, and it is driven by the recruitment and mentoring of successful apprentices. Small businesses are undoubtedly, as I am sure all hon. Members present will agree, the foundations of tomorrow’s businesses. The purpose of taking on apprentices for small businesses is precisely to help businesses achieve growth.

[Dr Huppert]

My hon. Friend’s acorn-to-oak-tree analogy was so good that I should highlight that one of the companies that I was thinking of was Acorn, which was a company set up in Cambridge. It grew not into an oak tree, but into ARM, which is a massive designer of computer chips. There are now more ARM chips in the world than human arms, and it is a huge success, growing from a small, garage-type company into a FTSE 100 company that is transforming the world.

[Richard Graham]

There can be no better illustration of the acorn-to-oak analogy than the one given by my hon. Friend. We all agree that small businesses are the future, that large businesses dominate the opportunity for growth in the private sector and that that is an area on which we should therefore all focus.

The Federation of Small Businesses data show that only 8% of small businesses have taken on an apprentice in the past year, and that is an area on which we need to focus.

[Mark Pawsey (Rugby) (Con)]

Like my hon. Friend the Member for North Swindon (Justin Tomlinson), I ran a small business for 25 years. At no stage during that time did it even cross my mind to take on an apprentice; we just had this notion of bureaucracy and cost. The critical thing is to get the message out to the 92% of businesses that have not taken on an apprentice and to pass on the information from the 8% that have done so successfully. That is the Government’s biggest challenge. Those businesses that have taken on an apprentice recognise the great value of doing so.

[Richard Graham]

My hon. Friend is absolutely right. He, too, has brilliantly anticipated some of the themes that I want to bring up. He is right to focus on two key elements, one of which is administration and the second of which is cost, which also brings in the crucial factor of value. Let us delve deeper into the question of bureaucracy or administration. There are perceptions out there that taking on an apprentice is a time-consuming business; those of us who have done so know that it is not.

[Stephen Lloyd (Eastbourne) (LD)]

I commend my hon. Friend for his tremendous generosity in giving way so often. It shows the passion and support that there is in the Chamber for this debate. I also congratulate him on calling the debate.

Before I ask my question, I thought that I would give my hon. Friend some good news. Many of us are making a real difference in the area of apprenticeships within our own constituencies. Two weeks ago, with the support of the NAS, I launched an Eastbourne initiative to recruit 100 apprenticeships in 100 days. That was 17 days ago. I got a call yesterday from the training providers to say that we have hit 103. I am now going back to Eastbourne to say that I want 200 apprentices in 100 days. That demonstrates the real hunger that is out there for apprentices from both small and large businesses.

My hon. Friend used to be a colleague of mine on the Work and Pensions Committee until he was promoted to grander things. He will know that the Work programme, which was launched by the Department for Work and Pensions, is an enormous, costly and laudable effort to help people into work, but it appears somewhat disconnected from the Department for Business, Innovation and Skills, which runs the excellent apprenticeship programme. Does my hon. Friend agree that it would make sense for both programmes to link up, so that we can improve job opportunities for everyone?

[Philip Davies (in the Chair)]

Order. May I advise Members that interventions should be brief?

[Richard Graham]

I am grateful for your remarks, Mr Davies, not least because my capacity to absorb all the points at such rapid fire is limited. My hon. Friend has rightly congratulated his local paper in Eastbourne for promoting the “100 apprentices in 100 days” campaign, which was first started in my own constituency by Gloucestershire Media. The citizen who originally launched the scheme in 2010 is now involved in a second one, which is similar to the one that my hon. Friend mentioned. The third scheme, which is not time-capped, involves 100 apprentices being taken on by companies that have never taken on apprentices before. Other Members, including my hon. Friend the Member for Worcester (Mr Walker), who have had similar successes may wish to comment on other such schemes.

[Mr Robin Walker (Worcester) (Con)]

I congratulate Worcester News on its “100 apprentices in 100 days” campaign and volunteer to sign up one of the apprentices, because all hon. Members should play a role in supporting such positive campaigns. Does my hon. Friend believe that the media has an important role in promoting the breadth of apprentices, and does he think that we should urge other hon. Members to use the media in promoting the jobs that are available for apprenticeships?

[Richard Graham]

My hon. Friend and near neighbour is absolutely right to congratulate the media in Worcester for taking forward the scheme. I congratulate him on making his commitment to take on an apprentice himself. When I outline the target that I have set for Members of Parliament, the Minister should note that we may be able to achieve it in fewer than 100 days, but I will deal with that towards the end of my speech.

My hon. Friend is right to say that the media has an important role to play. I should also stress that local radio can be extremely helpful, too. About six months ago, I held the Gloucestershire apprenticeships fair, jointly with the NAS, which is admirably represented in Gloucestershire by my friend Gina Johnson whom I was hoping to see here today. We had terrific support from Gloucestershire Media, which is something that could be replicated in Worcester, Eastbourne and elsewhere, and from Radio Gloucestershire. I strongly recommend my colleagues in the House to organise an annual apprenticeship fair; the national apprenticeship week is in February, which would be quite a good time to do so if they want to tie it in with national themes.

My hon. Friend the Member for Eastbourne also mentioned the co-operation between DWP and BIS. That is an inter-departmental question on which I will leave the Minister to comment in due course.

[Julian Smith]

Inter-departmental issues are coming up in the Government’s review of employment law at the moment. May I ask my hon. Friend to urge the Minister to ensure that all Departments focus on how we can create jobs and take on people, whether through apprenticeships or full-time employment?

[Richard Graham]

I am grateful for that intervention, and I am sure that the Minister will have noted that point and will come back on it in due course.

Developing the themes of our debate today, we now have to consider the obstacles that small businesses face in taking on apprentices. I have touched on the two key areas of bureaucracy and cost. On bureaucracy, the challenge for those of us who want to promote apprenticeships is that there are so many different ways of taking on apprentices. For example, it is generally the case that the training costs for 16 to 18-year-olds are entirely funded by the Government and those for 19 to 24-year-olds are half-funded by the Government. Members will find in their own constituencies that we have training providers who will provide certain training courses for 19 to 24-year-olds entirely free of charge. On the one hand, that gives the 19 to 24-year-olds a competitive advantage, and on the other, it offers to small businesses the opportunity to take on a slightly more experienced individual at a lower cost than might be the case normally.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman mentioned two schemes—I think that one of them was for 16 to 24-year-olds and that the other was for 24 to 27-year-olds—but some people lose their jobs and have to retrain. Does he not think that opportunities should be given to those who want to diversify into other jobs? Should they not be given apprenticeships as well, even if they are past those ages?

[Richard Graham]

The hon. Gentleman raises an interesting point about the ways in which we can get people back into work. The Work programme is starting this week. I am sure that he is already in touch with both the contractors and sub-contractors in his own constituency. Working closely with those who are rolling out the Work programme offers the best chances of getting older people back into the workplace. What we are really talking about today is apprenticeships that are focused specifically on the 16-to-24 age group. I acknowledge the hon. Gentleman’s general point, but I think that it ranges wider than today’s debate, although the Minister might want to comment on that.

I will return to the obstacles for small businesses and quote from the NAS in Gloucestershire, which works with hundreds of SMEs on a daily basis. We know that the definition of an SME can include businesses that, on a constituency basis, are really quite large. Companies employing 250 employees are big employers as far as I am concerned, but they are categorised as SMEs. One of the challenges for the NAS, which is resourced by one representative per county, is to engage with the small businesses that we are discussing today, which would technically be called micro-businesses. I do not use the term “micro” because I do not think that companies enjoy being called “micro”—they do not relate to that word. We are talking today predominantly about companies with fewer than 12 employees.

The NAS in Gloucestershire has spoken to more than 15,000 small businesses in the past five months. That is an astonishing achievement, and I pay tribute to its hard work in spreading its tentacles so widely among small businesses in our county. Its experience has shown that it has been able to spread the word about apprenticeships and their role.

As hon. Members have said, the role of the media and further education colleges has also been critical in spreading the word, but it can be very difficult to reach businesses of the size that we are discussing today. Many people

“simply don’t have the time to come out of their businesses”

to attend events. Such companies—often one man, one woman or a family working together—do not have the sort of people who typically sit on the committees of their local Federation of Small Businesses. We are fortunate if we can persuade them to come to an event, a lunch or a supper to discuss topical issues.

There are some breakfast clubs for very small businesses—I have certainly been to them, as have other hon. Members. They are quite good at doing business-to-business with each other, but the process of filling in forms, searching on websites, discussing with training providers and working out whether to go to the further education college or a more specialist training provider is quite time-consuming for people who are dealing with customers minute by minute in their shops.

To try to ensure that very small businesses get the opportunities to incorporate apprenticeships into their companies, the Department and the NAS are therefore supporting projects among group training associations and apprenticeship training agencies. In response to a letter that I wrote him, the Minister highlighted that

“recently, Group Training Association and Apprenticeship Training Agency models have been proving successful in making it easier for small business to take on apprentices.”

I hope that the Minister will share some examples of those successes with us, whether they are geographical or sectoral, and share with us how we can help him to promote GTA and ATA models in our own constituencies, as a way of helping small businesses to overcome the apparent obstacle of administration.

It is true, for example, that the South West Apprenticeship Company in my own constituency is able to provide the legal ownership of apprentices taken on by small businesses should there be future employment law concerns with an apprentice who has not worked out. Many of us will know that the business of finding the right apprentice is the single most important thing and often a very hard thing for a small company to do. As far as employment law is concerned, ownership of the apprenticeship is with the training provider, which can be enormously helpful to small businesses.

The next stage covers what sort of carrots might be offered to very small businesses as part of the incentive to take on an apprentice. I start from the presumption that if we were all able to persuade half the small companies in our constituencies to take on one apprentice each, we would have solved the youth unemployment problem in this country by that step alone. The opportunity, if we were able to seize it, would be enormous. The goal would be considerable, so how can we get closer to achieving it? We could consider two or three things, the first of which is to provide a financial incentive. In March 2010, there was an apprenticeship grant for employer scheme—AGE—which gave a straightforward cash amount of £2,500 to employers taking on their first apprentice. As a result of that incentive, which was offered for a limited period of three months, 5,000 unemployed 16 to 17-year-olds were taken on during that time.

It is right to ask ourselves whether that incentive was entirely motivated by a long-term solution for youth unemployment or by a short-term concern to keep teenagers off the unemployment statistics in the run-up to a general election. It is also right to ask whether cash incentives for taking on a first apprentice, without necessarily a time commitment on how long that apprentice will work, will always generate good long-term results, or whether that is a very short-term way to enhance small business profitability without necessarily leading on to career opportunities for 16 to 17-year-olds, but it is something on which perhaps the Minister might comment today.

A slightly different thought offered to me by the chairman of the FSB in Gloucester was to look at ways to subsidise apprentices over a three-year period. For example, when a company takes on an apprentice for the first time, a percentage of the amount paid by the employer could be reimbursed by the Government at the end of the first year. A smaller amount would be reimbursed in the second year, and in the third year all the cost would be absorbed by the company. That is a slightly different and more interesting model to look at, were the Government able to offer financial compensation for some of the employment costs of taking on new apprentices for small businesses.

Other ways to help small businesses to take on apprentices could be considered. One of them could be to rationalise the training costs for 18 to 24-year-olds as well as 16 to 18-year-olds. The Government have previously differentiated between the two age groups on the basis that getting people started is the most important thing and that, by the time people are 19 to 24, they should have more experience and more maturity to offer employers. But we know that that is not always the case. Some 19-year-olds and older people might still need considerable investment of time and effort by very small businesses to bring them to a stage where they can contribute to the growth of that company. The cost of that investment in time is as important to the smallest companies as the financial cost of paying apprentices for however many hours a week they are employed.

[Esther McVey]

I totally agree. If there is one thing that small companies have told me about the hurdles to taking on apprentices and about why they want incentivising to do so, it is that the hidden cost of spending time with a person, bringing them on, encouraging them and making them work-ready cannot be underestimated.

[Richard Graham]

I am grateful to my hon. Friend for making that point. She has direct experience of these things, as do so many Members here today. It is absolutely true that the smallest companies’ greatest fear on the administrative or bureaucratic side relates not necessarily to the paperwork involved in filling in an application form or designing an advert, but to the fact that a huge amount of time and effort may be required, hour by hour and day by day, to manage the apprentice. The worry is that the investment that will need to be made over a year or two before the apprentice can make a significant contribution to the business may not be rewarded at the end of that time because the apprentice might leave, might be recruited by somebody else or might not be able to deliver the return that the small business is looking for on its investment.

I want now to raise a few of the points that the FSB has raised with me, which it believes are relevant to the promotion of apprenticeships in the smallest businesses. On the promotion of ATAs to help small business, one advantage of such agencies is that they would employ the apprentice in the same way that the training company I mentioned in my constituency does. The ATA would deal with issues such as employer compulsory liability insurance, and help of that kind with modern administrative requirements would be useful.

On skill recognition, GTAs could provide an effective route for solving the problem I raised in answer to the point about tailoring the training of apprentices to companies’ requirements. GTAs might well be able to help design new training programmes for specific companies to meet their requirements. Component manufacturers in the engineering sector, for example, which are an important employer in my constituency, may have more concerns and requirements regarding training than we realise. There might be small businesses out there that need something like a GTA to help them design the appropriate training course.

Perhaps I can bring that point alive with an anecdote. In my constituency, we have two makers of high-quality shirts; in fact, when I made my maiden speech in the House last year, I was delighted to be wearing a shirt made in Gloucester. Their shirts are made from high-quality English cotton and sometimes cotton from abroad. They are made in England, but one of the firms is increasingly taking on workers from Poland, where there is a high-quality sewing qualification. People arriving here with that qualification can immediately be put on the factory floor to contribute to the making of high-quality English shirts. It appears that this country does not yet have a similar qualification, which could easily provide the basis for a new form of apprenticeship with shirt manufacturers in my constituency and elsewhere.

I have also touched base with the British Chambers of Commerce, and it is important to recognise its remarks on the take-up of apprentices among small businesses. It believes that there is a case for better marketing to businesses of the resources that are available to them and of the benefits of apprenticeships. If we follow the suggestion of my hon. Friend the Member for North Swindon (Justin Tomlinson), such issues could be covered in what would, effectively, be a marketing flyer. Indeed, it could be designed by the company that he used to run in Swindon. That could be done at very low cost—possibly even pro bono—and the Department could distribute the details with information on business rates.

The British Chambers of Commerce also wants to place greater emphasis on the relevant agency sifting through candidates to find the right ones, rather than simply box-ticking. It says that small businesses have

“a greater fear than larger companies of the wrong candidate”.

From my own experience, I know that finding the right candidate and spending time taking them through an induction programme before offering them a job, which is difficult for a small business, will be increasingly relevant.

Two weeks ago, I presented certificates to people on an apprenticeship course in a large distribution company in my constituency. I asked the gentleman in charge of recruiting apprentices how he did it. He explained that he took all the people who applied, and who had not been ruled out because of a criminal background, on a one-day induction course in his warehousing company. He made a point of having an escorted walk through the company, which was led by a manager who explained the business as the group went through the various parts of the company. A lot of candidates were ruled out early on because they simply were not paying attention or contributing. When the group sat down later for a PowerPoint presentation on the business and what it was trying to achieve, some of those at the back of the room were texting on their mobiles or BlackBerries—something, Mr Davies, I am sure would never happen in this Chamber. In effect, there was a series of soft hurdles, which, by the end of the day, had reduced the number of candidates from about 40 to 15.

The vast majority of our teenagers do not realise how important such things are and what an impact they will have on their job opportunities. There is therefore a duty on us all as constituency MPs, and possibly on the National Apprenticeship Service, to ask employers to lay out in schools, before teenagers leave after their GCSEs or A-levels, exactly what is involved in getting a job, because it is not just about writing a CV. The NAS and the Department for Education could do something on that. The Minister wears the hats of two Departments, and he might want to comment on the way in which the Department for Education could co-operate more with employers to promote apprenticeships for businesses and, indeed, for small businesses that decide to take them up, so that school leavers really understand the challenges ahead.

[Mr Hayes]

Given the interest in the subject, it might be helpful if I dealt with that point now. Yesterday, in the Select Committee on Education, I was able to advertise the fact that, given my responsibilities in the Department for Education, I want to work with Lord Hill and others to encourage much greater engagement between the world of work and the world of learning by bringing employers into schools and letting people know about the employment opportunities available to them. My hon. Friend can rest assured that we are on the case.

[Richard Graham]

I am grateful to the Minister; it is extremely helpful to be aware of that. He will have heard me say before—others may wish to comment on this in due course—that I ask every apprentice I meet in my constituency how much help they got from their schools in winning their apprenticeship, and nine and a half times out of 10, the answer is nil, so we have a long way to go on that front.

Let me bring together some of the threads in the debate. We have covered the Government’s welcome commitment to see a vastly increased number of apprenticeships, and the Minister will confirm the figure of 150,000 additional apprenticeships, with 450,000 overall during the lifetime of this Government. We also touched briefly on the greater take-up of apprentices, particularly by large and medium-sized companies across the land in a variety of sectors, and the welcome pick-up in manufacturing, which has certainly driven forward the number of apprenticeships, for example in the crucial engineering sector. I am delighted that the Gloucestershire Training Group, a specialist engineering organisation in my constituency, is now overbooked with new apprentices for next year. I am working with the group to try to achieve new and larger premises to cater for that demand.

We also covered the take-up of apprentices by small businesses. Both the statistical and anecdotal evidence is that it is a great challenge for this, or indeed any, Government. We have looked at some of the factors that could encourage and incentivise the smallest businesses to take on apprentices: administrative and bureaucratic questions, cash incentives, and cost reductions, possibly through wider training funding for older apprentices. We touched briefly on the role of GTAs and ATAs, and I am sure that the Minister will want to say more about that. We have looked at the role of local media and at the feelings of the FSB, the BCC and some Members’ constituents.

The last part of my speech is about what we as MPs can do. I talked about how we can be champions of apprenticeships, both in general and more specifically for smaller businesses. I mentioned the role of apprenticeship fairs and having a specific sectoral focus. I have organised a job fair, which will have a large apprenticeships element, for the black and minority ethnic community in Gloucester in 10 days’ time, and there will be something similar for those with disabilities in due course. There is a large amount we can do, but there is also one specific thing. There are 650 of us in Parliament, and if we each took on an apprentice, that would be 650 additional apprenticeships. Some of my hon. Friends here today have already done so or, like my hon. Friend the Member for Worcester (Mr Walker), are committed to doing so.

If 100 MPs took on apprentices, it should be celebrated in Parliament with a reception, perhaps generously funded by BIS, with a welcoming speech to all the apprentices by the Minister who champions their cause so doughtily in Parliament and elsewhere. That would send a message across the land that we are not only talking the talk, but walking the walk in finding our own apprentices and, as small business people with fewer than 12 employees, promoting apprenticeships. That is an exhortation to my colleagues, but it is also an advance call on the Minister’s funding, to which I hope he will respond warmly.

I hope that today we send a message around the country that the Government are committed not only to increasing the number of apprenticeships, important though that is, and to highlighting their value in driving forward the future growth prospects for our businesses, vital though that is, but also to stimulating the smallest businesses in the land each to take on an apprentice, because that will both help their growth and serve their community by helping to reduce youth unemployment.

15:24

[Gordon Birtwistle (Burnley) (LD)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this important debate for Westminster Hall today. He has covered most of what I was going to say, but I would like to make a few comments about my experience in the manufacturing industry and with apprenticeships.

When I was 15 years old, with no O-levels and without even passing the 11-plus, I left secondary school to become an apprentice craft engineer. I studied at night school for three nights a week until I was 25, and finished up with two higher national certificates. Those are the type of jobs that we need now. We have stacks of young people leaving university with higher qualifications but in engineering we do not have the people coming through to make the products that the academics and the people from university design.

[Justin Tomlinson]

I commend my hon. Friend for making that point, because the statistics show that those from apprenticeship schemes have a much better chance of securing full-time permanent employment than graduates.

[Gordon Birtwistle]

My hon. Friend is correct. Anyone who has a skill in running, programming and setting computer-controlled machinery will never be out of work. In fact, in Lancashire, there is a big demand for such people, and some companies are paying golden hellos to steal operators from other companies.

In Burnley, on 20 June we are having a manufacturing summit at the brand new £100 million college, which is linked to a university that is also involved in advanced manufacturing—that is a small advert for what we hope to do. I am pleased to say that the Secretary of State for Business, Innovation and Skills will be there, as will the managing director of Boeing UK, the chairman of AgustaWestland and many other big manufacturers, along with smaller manufacturers from north-east Lancashire. The event is about getting big and small manufacturers to come along to listen to the Secretary of State, but we have also asked local schools to give presentations and to bring students to listen to people in the industry, with a view to taking up apprenticeships.

At Business, Innovation and Skills questions this morning I asked about careers. It is vital that we instil in young people long before they reach 15 or 16 what the prospects in the work force are. Careers officers talking to young people at 12, 13 or 14 is important, because once they get to 15 and 16 it is too late for them to change their mind about becoming a doctor, vet, solicitor or barrister. They cannot have some careers because they do not have the qualifications, and cannot move into the subjects that might interest them in becoming apprentice engineers or entering manufacturing.

Burnley is one of the best places in the country for job vacancies. I spoke to the regional director of Jobcentre Plus, who told me that Burnley is one of the country’s brighter lights because vacancies have gone up by more than 30% since this time last year. That is a great result, but the vast majority of vacancies are for skilled manual workers, and the big problem is that we do not have a pool of out-of-work skilled manual workers. My son, who owns an engineering company, tells me that if a skilled worker is out of work now, he is no good and he will not be taken on. That is the situation, so we need people to replace those who are retiring. It is critical that apprentices come through to do the craft jobs, and work on machines for the products that go into advanced manufactured items such as jet engines and components for the nuclear and oil industries, where we are world leaders and sell across the world.

[Mr Marcus Jones (Nuneaton) (Con)]

It is a matter of concern, particularly when I visit manufacturing businesses in my constituency, that the employees have an average age between 45 and 60. Is that not a worry?

[Gordon Birtwistle]

I agree. That was to be my next point. A company in Burnley called Aircelle makes thrust reversers for the Trent jet engine. Three years ago the company employed 350 people; it now employs 800 people and has work for 15 years. Aircelle has been offered work from Boeing and other aircraft manufacturers, but has to turn it away because it does not have the skills.

I used to work for the company when it was called Lucas Aerospace, which was a long, long while ago. I walked around the place, and I said to the managing director, “I look at some of the people here and I remember them working here when I did, and I’ve been retired for three years. Some of these guys must be coming up for retirement.” He replied, “The age profile is a big concern because more than 80% of the work force is 40-plus.”

Another big problem for the company is that young people coming into the industry want to be designers and technicians, working on computers on the other side, and the guys who put the aircraft engine parts together are in short supply. It is a problem getting skilled fitters and process workers to come and do the job. The company is now a world leader in composites, but it is very difficult to get people to come and work on composite design and manufacture. Fortunately, it is using a lot of young ladies to do that now; because of the dexterity of their fingers, they are able to mould things in carbon fibre. I agree entirely that this is an issue that the Government must pick up. We must ensure not only that we train people to do the real top jobs but that we train young people to come in and do the jobs that involve physically making things.

As I said, at Burnley college we are having a manufacturing summit on 20 June. The council there has worked with the college. We spent £100,000 from the working neighbourhoods fund, and three years ago the college put in a further £100,000 to buy three Mazak advanced machine tools. The hon. Member for Worcester (Mr Walker) will know of Mazak because the company is based in his constituency. The college ran an engineering course but could not get anyone to go on it, but as soon as we put in the Mazak machine tools the course was overwhelmed, because young people see that they can work in an office and a workshop and design a product, go on a computer and feed the design into the machine, and then make the product on the new CNC—computer numerical control—machine. They can see that it is a great job for the future. The days of what I call the garage on “Coronation Street” with engineers in blue overalls with oily rags in their pockets have long gone.

[Jim Shannon]

They are all on three days a week.

[Gordon Birtwistle]

Are they? They are very fortunate to be on three days. In some of the big companies that make advanced products, food could be eaten off the floor because it is so clean, and young people see that.

An apprentice is an investment. Companies think nothing of spending thousands of pounds on a machine but will then worry about spending a few thousand on training someone to run it. It is important that companies think of apprentices as an investment for the future, because without them they will not have any staff for the future to make their product of the future, and the profits of the future will disappear.

The Government need to carry on with what they are doing. Like my hon. Friend the Member for Gloucester, I am extremely disappointed that we have not seen anyone from the Opposition here today. That is a big disappointment because this is a big issue. They often go on about it in the House, yet when we have a debate like this they cannot be bothered to turn up. Having said that, I hope that the coalition Government will get on with it and complete the course.

15:29

[Mr Marcus Jones (Nuneaton) (Con)]

Thank you, Mr Davies, for allowing me to make what I hope will be a short but important contribution.

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this extremely important debate. He has made a positive, well-thought-out and comprehensive contribution, which goes to show just how much he cares—as, it seems, do a number of Government Members—about this extremely important subject.

I also want to take this opportunity—I do not often do this in my contributions to debates—to congratulate the Government, and particularly the Minister, on grasping the nettle and backing apprenticeships in this country. It will be an absolute honour to welcome him next week to the excellent North Warwickshire and Hinckley college in Nuneaton, where I am sure he will promote apprenticeships with the same vigour and enthusiasm with which he promotes them in the House. I am proud of that.

I am proud to support apprenticeships, because it is apparent that they are extremely important. Some 80% of people who employ apprentices say that the workplace is a more productive place as a consequence, and 81% of consumers favour using a company that employs apprentices. People of all ages understand the concept of an apprenticeship and, importantly, it is an excellent vehicle for getting young people into a proper career.

Bearing in mind the importance of tackling the huge problem of youth unemployment in our country at the moment, I will focus my comments on younger people. It is a real pity that that problem was not properly recognised by the previous Government, who presided over a huge increase in youth unemployment and a huge increase in the influx of foreign labour, which filled the skills void that we had when the economy was in better shape, leaving thousands of our young people on the scrap heap. I commend the shadow Minister for his attendance here today, but it is a damning indictment of the lack of seriousness and enthusiasm on the part of Opposition Members that none of them, apart from him, is here today.

While extolling the virtues of apprenticeships we must also acknowledge that not all is totally well in the proverbial rose garden. A large rump of employers in our country consider apprenticeships inappropriate for their organisations. I have been looking into that and, according to the Chartered Institute of Personnel and Development, 68% of companies say that that is the case. In some instances, those companies may be correct, and there are a number of situations in which it is wholly inappropriate for businesses to employ apprentices. However, I suspect that in many others instances that is not the case, and that there are many situations in which apprentices could be taken on. Employers and business people view most things on the basis of risk, and they take a view looking at the particular risks of taking on younger people and at the barriers to employing apprentices and to developing their talent.

I want to highlight two issues in relation to risk. First, employers see a risk in taking on a young person who is untried and untested in the workplace. As Members of this House, we need to acknowledge that although many young people take to the working environment like a duck to water, many do not, as my hon. Friend the Member for Gloucester has mentioned.

[James Morris]

My hon. Friend is making a series of powerful points. On young people not being ready to take up apprenticeships in small businesses, it is important that we consider the potential role of the voluntary sector. For example, the YMCA and other organisations enable young people to develop skills before they take up apprenticeships, which is an important part of the mix.

[Mr Jones]

As usual, my hon. Friend has made a pertinent comment, which brings me on to my next point. Useful work experience can be obtained in voluntary organisations. Similarly, I am a firm believer in part-time work, in which I was active in my younger days, particularly when I was at school and college. Part-time work is invaluable to young people in developing soft skills—my hon. Friend the Member for Gloucester mentioned that earlier—and in relation to integrating into and learning about the workplace environment, which, to be perfectly frank, is completely different from a school or college environment. Young people going into a workplace are not dealing with teachers or their peers; all of a sudden, they are working with people who have been involved in the industry for many years and are not accustomed to somebody fresh and green from a school environment.

We must acknowledge that opportunities for part-time work for our young people, although important, are extremely limited. Although I acknowledge that we must do all that we can to keep our young people safe and ensure that they are not exploited in any way, we must consider the regulations that many employers face when employing youngsters part-time, which go far beyond health and safety. I received a useful briefing on employing children from the House of Commons Library, and I was astounded by the number of regulations that it contained. I would be surprised if many employers knew those regulations. If they did, it would frighten them to death to take on any young person part-time.

For example, the document states that young people may not deliver milk or work in a butcher shop. When I was that age, many of my peers did such work. I delivered milk with the Co-op milkman—I am not sure whether the milkman should have allowed me to deliver milk with him, but I went out and delivered it all the same. Many of my peers at school used to work for one of the local butchers part-time, and they gained invaluable experience. If we are to enable our youngsters to gain such invaluable experience now, we must ensure that we look carefully at the regulations to ensure that we put barriers in the way only when absolutely necessary. We must also consider removing a great deal of the bureaucracy, including what appears to be a draconian reporting culture, that employers must undertake. Does the Minister think that it is a healthy position effectively to bar youngsters from taking on many part-time jobs? Does he not agree that we should free up regulations in a sensible way?

[Gordon Birtwistle]

I had occasion a couple of years ago to question some young people about what they wanted to do when they finished school. One of them said that he wanted to be a benefit claimant. Does the hon. Gentleman think that working part-time for somebody might take that idea out of that boy’s head and help him change his view, so that he wanted to go into work rather than being a benefit claimant for the rest of his life?

[Mr Jones]

I totally agree. That is part of the problem, which my hon. Friend has highlighted. There is a culture in certain parts of this country in which work is frowned upon. I am glad to say that we now have a Government who want to get this country and our young people working and create a culture of work, rather than one in which being kept—staying at home and collecting benefits—is a job choice, not a safety net.

That brings me to the other risk that employers in my constituency tell me about, which concerns employee retention after several years have been spent training a young apprentice. Obviously, the costs of that training are borne by the Government, in the main, but there are also costs to the employer in training people on the job. Employers are concerned that a young person will come in, serve an apprenticeship and leave. In certain trades, including the craft trades such as bricklaying, plumbing and so on, people can quickly set up as self-employed workers, and employers are concerned that they will invest their time and money in training young people who will either get a job elsewhere or set up on their own. We must address that, whether through an incentive scheme for employers or by other means. We must do all that we can to encourage employers to take people on and overcome those risks.

We need to consider the barriers to career progression that make things more difficult for employers, particularly those who have younger employees. That was highlighted to me on a visit to MES Systems in my constituency, which has two fantastic young apprentices whom I met. One of the apprentices had just finished his time and had qualified as an installer of security equipment, but unfortunately that young man will have to spend this coming year working for somebody else, not because he cannot do the job independently but because the company could not get insurance on the van that he needed to drive to get around independently. That is a major impediment not only for the young person who is not getting the experience of working independently but for the employer, who knows that additional work is available but is hamstrung by the fact that that he cannot send a person out to do that work, allowing him to take on another apprentice. That is the type of barrier that we need to think carefully about.

To touch on another constituency scenario, I spoke to the principal of a firm of accountants several weeks ago. The Minister will be glad to hear that he is looking to take on four apprentices as trainee accountants, but I am sad to report that to date, he cannot fill those vacancies, which is a sad indictment of careers advice and the link between employers, schools and FE colleges. It is important for the Government to tackle that issue. I hope that the all-age careers service will help with the quality of advice that our young people get, so that they can have proper careers and receive independent advice based on getting a job rather than on trying to meet exam targets or school or college league table targets. To many youngsters, that is important, but to some it is not as important as getting straight into employment.

[Mark Pawsey]

There has been pressure on young people in recent years to go to university. I have teenage boys who are very motivated to go to university, because that is what their peer group does and that is what they have seen happen. It is the entire emphasis of our education system. Those with practical application who are willing to get their hands dirty are discouraged or looked down on as not doing so well in life. Will my hon. Friend comment on how the Government can deal with that, and how a change in attitude might go some way to stimulating more apprenticeships?

[Mr Jones]

My hon. Friend has highlighted the flawed ethos of the Labour Government and their target culture of wanting to get 50% of our youngsters into university. Although that has been useful for many of our young people, and we should certainly not decry the importance of a university degree, it has led, as he has said, to a culture where people frown on youngsters who have not gone to university, which has left those youngsters feeling dejected and undervalued. That is a poor position to put ourselves in.

To refer back to the comments made by my hon. Friend the Member for Burnley (Gordon Birtwistle), we need to fill the gap in the skills sector, and there are many younger people who would be better off taking the skills route rather than going to university and perhaps doing a degree that is not necessarily recognised by employers or that is not relevant to getting into the labour market.

[Richard Graham]

My hon. Friend is developing a powerful case for the role of apprenticeships in general. Does he agree that the statistic that 15% of employment in the private sector is provided by sole proprietorships shows that if we were to persuade sole proprietors to take on a single apprentice each, it would make an enormous difference to take-up in the country as a whole?

[Mr Jones]

I agree with my hon. Friend’s important point. Another point is that many people who have traditionally taken the skilled route and come from small businesses have ended up as the entrepreneurs of the next generation. They are the ones who have taken forward their work for an engineering business, for example, started their own business and employed a number of others. It is important that youngsters get a good grounding, whether that be by getting a good degree at a good university or by going straight into employment and getting the right skills with an employer, through an apprenticeship, which will give them not just a meaningful career, but, potentially, a business through which they can support the economy by employing a number of other people.

In conclusion, I urge the Minister to consider how we can give our small businesses far more confidence to employ apprentices and break down some of the prohibitive barriers that I have mentioned. I am absolutely sure that, if he does that, it will add great value and complement the sterling work that he is undoubtedly doing to give our youngsters the skills to drive our economy not only for today, but for the future.

15:51

[Mark Garnier (Wyre Forest) (Con)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this important and useful debate. We have already heard a great deal about the issue, and I thank him for the huge amount of detail he has given on the statistics associated with this important topic. I will not try to reinforce any of those points.

I agree with everyone else present that apprenticeships are important, and I want to look at three particular reasons why they are important. First, they provide an opportunity for school leavers to get into the jobs market. As we have heard, the Government—the Chancellor announced this in the Budget—have presented an opportunity for 250,000 more apprentices to gain relevant specific training over the next four years. That applies to youngsters who might otherwise struggle or be tempted to go to university. This point was developed earlier, and I think that it is the case that the random target of getting 50% of school leavers to go to university is based on no fact whatsoever. It has led to the emergence of a market among universities, whereby they sell degree courses for things that, frankly, might be better served by apprenticeships. To a certain extent, it is our job in Parliament to highlight the fact that, if someone wants to be a photographer, there is no point taking a degree in photography when more photography graduates leave university each year than there are jobs for photographers in the whole of the European Union. It would be better to get an apprenticeship as a photographer’s assistant and learn the trade on the job.

Secondly, apprenticeships are also an important opportunity for local businesses and small and medium-sized enterprises, as we have heard. There is no doubt that small businesses that are looking to further expand or to ensure their employee succession process will benefit from apprentices who come in at the bottom end of their businesses. Apprentices can work from the bottom and grow to understand the business so that, as they develop into managers of that business, they know it from a shop-floor level.

It is also important that a district can generate a local skills set that meets the expectations of future employers. I am delighted that Wyre Forest—specifically southern Kidderminster—has been selected by the Worcestershire local enterprise partnership as the preferred bid for the LEP business expansion zone. That is incredibly important for my constituency. My constituency once had 20,000 people working in the carpet industry, which brought on many apprentices but now employs about 1,700 or 1,800 people—it is a much diminished area. In the district, 4.6% of local people are on jobseeker’s allowance, which is higher than in Worcestershire, and the area will benefit from having a business expansion zone. Although it is important that, if we are to attract businesses to Wyre Forest, we do so partly through the business expansion zone, it is just as important that we have a local skills set that meets the expectations of incoming businesses. It is incumbent on us locally to deliver those workers and apprentices, in order to meet the expectations of those incoming businesses.

I was recently asked to open a new apprentice training academy in Bewdley, one of my local towns. The TDM Wyre training academy offers a range of information and communication technology training for apprentices in the local community, either by taking on apprentices from local businesses that already employ apprentices but want to give them more specific training, or by taking on students and finding them apprenticeship places. My hon. Friend will be delighted to hear that I am already talking to the academy to find out how my office can best take advantage of that opportunity and employ an ICT apprentice who, even though he is an apprentice, will no doubt be able to teach me a few things about information technology, which I am a bit of a muggins at. This is an organisation that recognises the Government’s ambition and has reacted, as so many do, to market demand. It and others have not only identified the need for training, but, as I have said, are increasing the local skills set in my constituency, which is absolutely vital if we are to attract new businesses.

The Government-run NAS has recently started the 100 in 100 campaign, which, as we have heard, aims to generate 100 apprenticeship placements in local businesses within 100 days. The NAS is looking for business leaders, training providers and local media to work in partnership to influence the local business community to drive up the number of apprenticeship opportunities locally.

I am delighted that the Wyre Forest community housing group has become an ambassador for the campaign in Wyre Forest. The group has 35 placements for youngsters and claims a high number of apprentices who achieve nationally recognised qualifications and who stay on in permanent employment in the group after their apprenticeships have ended. Indeed, to demonstrate its commitment, the group is using apprentice bricklayers, carpenters, plumbers and electricians alongside qualified teams on all its new builds in Kidderminster. The community housing group scheme is important, because it draws its apprentices from a particularly challenging area in southern Kidderminster. The area has about double the district average for jobseeker’s allowance claimants and about 40% of residents are economically inactive. I hope that the Minister will take back to his Department that further reason for looking favourably at the application for the Kidderminster business enterprise zone.

Thirdly, it is important to remember that businesses are also at the forefront of new technology. We have talked about small and medium-sized businesses, but I now turn to big business in order to illustrate the importance of this issue. In my capacity as the vice-chairman of the all-party group on space, I visited Astrium at the company’s factory in Stevenage. Astrium is a global leader in the manufacture of satellites, and in addition to a tour of its Stevenage assembly plant, we were invited to the award ceremony for its apprenticeship scheme. The company is about as high tech as it gets. It manufactures satellites that are at the cutting edge of technology—indeed, one imagines that all space activities are at the cutting edge of technology. At any given time, it employs about 40 apprentices. They are youngsters who are bright kids, but in some cases they may have low aspirations. In a few instances, the company finds its candidate apprentices working in less than exciting jobs, with, frankly, limited prospects of career progression. Astrium takes them on, trains them up, gives them higher education if they want it and gives them a career path and a future. Some 50% of their apprentices go to university and half of those get first-class degrees. Many end up with high office within the company and typically they stay for an average of 25 years with this one company.

Astrium and other high-tech companies take on apprentices for a couple of key reasons. First, companies at the cutting edge of high technology have a unique and focused skills requirement that they simply cannot fill with resources off the shelf. They have to train their staff in specific ways. Secondly, they draw their apprentices locally, which provides not only a benefit to the local community, but a labour source that is loyal to the local area. That reinforces the reason why they are so keen to stay with the same company for such a long time. That is important for career progression and for resource progression, so that we know where the managers of the future are coming from. With 95% of apprentices staying on for a significant time, that is a very important point.

I shall end on a slightly more sober note. I was recently at a meeting of the Worcestershire Association of Secondary Heads with, among others, my hon. Friend the Member for Worcester (Mr Walker). Of course, we talked a great deal about education and what the Government are doing on that and, obviously, we presented a very good argument for the Government’s sterling work, as I am sure hon. Members can imagine. However, at the end of the meeting, one of the heads asked the following sobering question: how can the Government demonstrate that this generation of school leavers will not become a lost generation. My reply to him—this has been reinforced in my regular column in The Kidderminster Shuttle—is that, far from being a lost generation, this generation of schools leavers are at the cornerstone of our country’s future. Their success will determine our success as a country and as an economy.

Apprenticeships and the Government’s apprenticeship programme are a good example of how this Government are delivering on that message. The Government recognise the importance of our future generation of skilled workers, and they are absolutely committed to supporting them, because, at the end of the day, business and skills are at the heart of the economic recovery.

16:01

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

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing the debate and thank him for enabling us to discuss this important subject.

My father left school at 14. He benefited from an additional year at school, but he had very little in the way of qualifications and he served an apprenticeship for seven years before becoming a master plumber. I suppose that I served a kind of apprenticeship when I was articled as an accountant. Apprenticeships have almost disappeared from the industrial scene. The value of them coming back can be found not only in the many things that we have discussed today, but in the concept of a young person’s commitment to achieving something specific and focused over an extended period. Of course, a business or an organisation must also show commitment to sticking with an individual and seeing them through.

[Mr Marcus Jones]

My hon. Friend talks very powerfully about apprenticeships. He has mentioned some of the history of apprenticeships and the apprenticeship that he went through, which was not unusual a number of years ago. Does he think that we need to change the culture, so that apprenticeships are far more valued? Should we perhaps return to some of the older values and have freemen of towns and cities and passing out ceremonies, where apprentices go along to the city hall or town hall and receive their papers from the mayor or lord mayor?

[Mr Ward]

There is a lot in that idea because the concept of working towards and developing a skill—in the old days, a craft—and a profession has been lost. The idea of sticking with something and staying with it until a body of knowledge has been achieved or a degree of experience or skill has been acquired has been lost over the years. I remember very clearly my father’s small card showing that he was a master plumber. The importance of both an organisation’s and a young person’s commitment perhaps ought to be recognised more formally.

We all welcome the Government’s drive to increase the number of apprenticeship places, particularly in areas of unacceptably high youth unemployment—for example, Bradford. In a couple of the wards in my constituency, one in eight young people are not in education, employment or training, and they are desperately in need of some sort of future. It is perhaps unfashionable in some quarters to defend one of the schemes that is still in operation but on its last legs: the future jobs fund. However, I want to talk about the importance of what has been described by others as getting people ready for apprenticeships and making sure that young people are employable in the view of those who wish to take on apprentices.

We need to be very careful not to throw away the baby with the bathwater. The future jobs fund in Bradford got off to a poor, bureaucratic and frustratingly slow start, but it did become a success, particularly with categories of young people who struggled to get into apprenticeships. It was successful both in getting young people into work and in giving them the skills and the work experience that it was hoped would help to them into employment long into the future. More than half of young people on future jobs fund placements in Bradford did not return to benefits after 28 weeks. They found some sort of career progression after, in many cases, pretty difficult young lives. A major criticism of the future jobs fund has been that a high proportion of jobs were created in the public sector but, in Bradford, around 75% of the placements were in the voluntary or community sector. That is big society at its very best.

I should like to mention the Thorpe Edge project. As you will know, Mr Davies, that is a community furniture project that had 13 future jobs fund placements over a period of years. It was apparent that, for some of the young people on that project, getting out of bed before lunch was an achievement, let alone having an apprenticeship where they were expected to arrive at half-past 8 and work through until the leaving time that night for five days a week. The people on that project were fortunate because those who were responsible for running it had experience of dealing with young people in a difficult area. If someone on an apprenticeship did not turn up at 8.30 am and perhaps came in at 10 am, they would have probably lost their job. However, through their knowledge of the young person concerned, Thorpe Edge project supervisors knew that the young person concerned probably came from a background where there was a lone parent or the person concerned was on drugs or suffered from alcohol abuse. In such circumstances, simply getting into work at all was an achievement. By providing intensive support and help for some of those young people, the programme allowed them to get into college or employment.

The focus of my comments is on those people who simply will not get those apprenticeships, however many placements we manage to generate and however many placements the Government are willing to fund. Additional apprenticeships certainly offer a good alternative to the future jobs fund or schemes of that kind in many cases, but there is space for both types of programme. We need schemes that benefit people who are employable and who will do well out of placements and people who would struggle to get on to apprenticeships at all.

There is clearly a supply-side problem in many economies. I hope that the Minister will set out some of the measures that can be used to address the shortage of apprenticeship placements. A scheme in Bradford with the local social housing provider in communities recently received more than 600 applications for just seven apprenticeship places. Evidently, demand is massively outstripping supply.

Other hon. Members have raised all sorts of issues about the barriers and why businesses are not willing to take on apprenticeships, whether because of bureaucracy and red tape—we have mentioned some of those issues—or because of a lack of awareness of apprenticeships, as hon. Members said earlier. Many people who have been in business for years might never even have considered offering an apprenticeship. We need to consider what is happening in the schools and through the careers advice service. We also need to recognise that in some communities, certainly for small businesses, cost is an issue. We need to bear that in mind.

The Federation of Small Businesses has been quoted a lot with regard to the implications for small businesses. I understand that the Government have decided not to extend an apprenticeship grant for employers that provided some time-limited financial support for businesses. We still need to consider that as necessary for certain businesses, particularly small businesses, and in certain economies with high unemployment and a small number of available opportunities.

Let us not forget that although businesses receive 50% for post-19 and a full 100% for pre-19—I understand that that might be extended in some cases—they still have to pay for the young person. For many small businesses in particular, that is identified as being the most important cost. An FSB survey identified that it is simply too costly to take on. Of all the reasons why they were not taking on apprentices, the fact that it was just too costly came out top.

An FSB survey on skills identified that 66% of businesses said that, with the right measures in place, they would take on an apprentice. Those measures include a financial incentive for taking on an apprentice, greater clarity in terms of Government contributions to wage and training costs, and a separate body, interestingly, to manage the payroll costs. That has to be a way forward for many of our young people.

For 20-odd years, I worked in a university. We have heard some comments about university today. I agree that it was wrong to specify a 50% target. For many young people, the message was that if they do not get to university they have failed, and that closed up a lot of options. I also have tell hon. Members that, as someone who worked in a university for nearly 25 years in total, many young people, especially towards the end, were there because they did not know where else to be. They were there to find themselves and to delay a decision. They were there to gain something—a qualification, which they hoped would be useful—but also to defer a judgment on what they should do with their lives.

[Laura Sandys (South Thanet) (Con)]

Does the hon. Gentleman think that those young people found themselves after the three years they were under his stewardship? The fundamental issue, brought up by many hon. Members, is that we do not start to talk about the world of work early enough. Many hon. Members have said that there is an issue about education and schools. I have never been impressed by the careers system and careers officers across the board, either in my era or now. Does the hon. Gentleman have any greater sense of confidence in the careers system that mentors our young people?

[Mr Ward]

There are measures to improve the system. It has failed in many instances. On getting information through to young people, I would add that the most important individuals for many young people as they go through their education—a blinding flash of the obvious—are the teachers, not the careers advisers. How many teachers have any experience of life outside of a school, whether in manufacturing, engineering or not being a teacher?

I am concerned that we miss a trick if we focus on developing the careers advisory service, recognising that it is a weak area that we could develop, without looking at the crucial issue of the experiences of the most influential characters in our young people’s education—the teachers themselves. Perhaps the Minister has something on that—it may not be his remit, I do not know—but exchanges between business and schools are important. When young people consider what they want to do with their lives, they should be surrounded by people who have experience of something other than going to university or being in another educational setting.

[Gordon Birtwistle]

In Burnley, we have got the big local companies involved with mentoring students in schools for the future. Is that something that the Minister will pick up, run with and expand across the country not only with big companies, but with smaller companies?

[Mr Ward]

I should like to conclude by coming back to the focus of my comments. I think that the figure of 8% was mentioned as the number of businesses who take on apprentices. If we look at that figure, however, the vast majority are small businesses. Those are the statistics. We know that the vast majority of businesses are small businesses—the butcher, the baker, the candlestick maker and so on. We want to fill the supply side gap. Yes, we want to get the big companies involved and that in some ways that is relatively easy. If we are to provide at a practical local level experience and apprenticeships in small businesses, we need to consider some element of wage subsidy.

[Richard Graham]

The figures back the hon. Gentleman up. Some 3.3 million businesses have sole proprietors; that is, 3.5 million people. That is 16% of all people in business. One apprentice for a third of those would take a million people into employment.

[Mr Ward]

I thank the hon. Gentleman for those comments, and for giving me time to look at my own notes.

The FSB has pointed out that two thirds of apprenticeships are offered by small businesses. Of that 8%, the vast majority are in small businesses, so we have a problem. Small businesses, certainly in areas of high youth unemployment, have been the main provider. However, small businesses in those economies are struggling the most and can ill-afford the cost associated with apprenticeships. I would argue that there may be a case for businesses—small businesses in particular, in areas of high unemployment, particularly high youth unemployment—to consider some element of wage subsidy to enable those who will simply not otherwise get into apprenticeships to be taken on by those businesses and partly fill the gap that has been left by the withdrawal of the future jobs scheme.

16:18

[Mr Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Davies. I begin by congratulating, and not just in the customary way, the hon. Member for Gloucester (Richard Graham) on bringing an extraordinarily important subject to the Chamber today. His speech had depth and breadth; it was extremely expansive and dealt with many of the most important points. It is inevitable that the general approach we take to apprenticeships is concentrated on the challenge we face in dealing with apprenticeships in small and medium-sized businesses. Whether we call them micro-businesses, sole traders or people who are starting out on their own, the issue is magnified in that area. The hon. Gentleman has therefore done the House and the Chamber a service by the breadth of his remarks.

The hon. Gentleman talked about apprenticeships not being to do with manufacturing alone, which is true, and under the previous Government that diversification of apprenticeships, which is continuing, was important. The current Government have inherited that rising curve in apprenticeships, taken by the previous Labour Government from a base of 65,000 in 1997. The occasion is not one for trading loads of statistics or being partisan, but it is incumbent on Members to remember that the abolition of Train to Gain released to the present Government a significant amount of money, some of which they have chosen to use in the expansion of apprenticeships, which we welcome. The challenge for all of us, in whatever position, is to ensure that the expansion of apprenticeships is a success and continues.

It is important to look at the elements of policy continuity and, in particular, I pay tribute to the Minister for how he and his colleagues have continued to support Unionlearn. The routes into apprenticeship are many and varied, and we have heard today about some of those ways and how some can be improved. Undoubtedly, one of the best ways of persuading people into apprenticeships or taking up skills at whatever age is the support, endorsement and encouragement of their peers. In that respect, the work of Unionlearn has a great deal to teach us, whether or not we are talking about unionised environments. In the same way, many of the contributions this afternoon, in particular the last one, have stressed the need for such a process to be understood across the board.

The challenge we face is the one given to us by the Federation of Small Businesses, with figures on numbers and take-up that people have quoted in some detail today. Small businesses are crucial to growth. The hon. Member for Gloucester talked about that, and about the importance of taking on GTAs. He and other Government Members were somewhat sceptical about the former future jobs fund, but although we live in a three-minute universe, they ought to remember that their own Chancellor announced in the Budget earlier this year what some of us might regard as a pale imitation of the future jobs fund. We wait to see how that carries through. The hon. Gentleman made a valuable point at the end of his speech about incentives. I was particularly interested in the idea of the graduation of incentives over a three-year period, which many of us are familiar with from commercial practice, not least in hiring builders, and there is a lot to be said for that.

I congratulate other Members who spoke this afternoon. The hon. Member for Burnley (Gordon Birtwistle) talked about the importance of peer endorsement in apprenticeships and about the problem with skilled manual workers. Again, that is not a new problem but one flagged up by successive Select Committees, and it was a key issue in the Leitch report, to which all parties subscribed.

The hon. Member for Nuneaton (Mr Jones) raised issues about the careers service and the exposure of young people to the working environment, which is also important. Again, it is not a new issue. Some years ago, when I was a member of the Education and Skills Committee, we went to two places in the United States to look at training in schools, in Boston and North Carolina, which had good examples of training in units in a secondary school. In such a unit in North Carolina, most of the young people—very much from a blue-collar background—subsequently got jobs with the Bell Telephone Co., which had sponsored the unit. There are some lessons for us in that, with interesting echoes in such ideas of recent years as studio schools or the university technical colleges, of which Lord Baker has been such a strong advocate.

I was delighted to hear the contributions of the hon. Members for Wyre Forest (Mark Garnier) and for Bradford East (Mr Ward). The hon. Member for Wyre Forest was particularly interesting and illuminating on his experience with the space company, which, in terms of where apprenticeships can take someone, I have found replicated in my own neck of the woods; a large number of people in Blackpool work for British Aerospace in one capacity or another. His reminder that it is a good idea not to make a false comparator—either apprenticeships or universities—was valuable. Whatever the value of higher level apprenticeships in their own right, we ought to be putting far more emphasis on ensuring that universities accept and look at vocational qualifications, and take themselves through to that level.

It is always a great pleasure to hear the hon. Member for Bradford East, who is extremely knowledgeable and passionate in this area. I was glad to hear what he had to say about his experience of the future jobs fund. It is true that in many areas it was not simply public sector-led. The statistics for my area of Blackpool mirrored those given by the hon. Gentleman. I vividly remember visiting Blackpool football club where six young people had been taken on under the future jobs fund, giving a similar success story.

I make one more point lightly and in not too partisan a fashion: I hope that hon. Members will see that the previous Government never made a commitment to or objective of 50% of young people under the age of 30 going into university education. If we look at the detail, we see that it was about some form of training or further or higher education. I make that point and pass on, but I am proud of the work that the previous Labour Government did to bolster apprenticeships and the apprenticeship system, making them an attractive option for businesses of all sizes. As I said, the results speak for themselves.

We set up the National Apprenticeship Service in 2009, as a national body playing a key role in overseeing the apprenticeship programme, providing information to potential apprentices and helping to match them with employers. We also introduced national apprenticeship week. It is a pleasure to hear today from so many Members that they have taken advantage of the hook of that week—throughout the rest of the year as well—to promote apprenticeships in their own constituencies. It is a good opportunity for doing that.

In my constituency, in February this year, my local Blackpool newspaper, The Gazette, sponsored an apprenticeship drive across the Fylde. I spoke at the launch of the drive and supported it, and it reached the sort of target figures of 100 to 150 apprenticeships, to which reference has been made. In my work as a Member of Parliament, I have seen the success of apprenticeships not only for very large companies such as BAE Systems, but also for small and local organisations. The Blackpool Pleasure Beach has taken on a number of apprentices successfully, as have many construction firms, or the dental practice in my constituency that I visited this year, which has just taken on two apprentices.

Sometimes it is not easy for a Government of any hue to persuade small and medium-sized businesses to look at apprenticeships. I know that from my own experience of running a small business with eight employees for 12 years before I came into this place. I know, as no doubt do many hon. Members who have spoken, about the multiplicity of factors and pressures on small businesses when they are trying to decide what to do: cash flow, marketing, promotion, lease arrangements. The list gets longer every year.

Of course there must be a receptive environment for small businesses to take on apprentices, and they must believe that it is worth expending the time, but that raises big issues about the structure of apprenticeships, and whether they are sufficiently structured to be useful to and easily accessible by small and medium-sized businesses. I do not want to be misunderstood. I am not suggesting that we abandon the traditional apprenticeship structures to which the hon. Member for Bradford East rightly referred.

My father undertook a traditional apprenticeship for a large company, Crossley Brothers, which is sadly now less well known than it was. It was a major factor in the engineering world certainly into the 1960s, and to the present day. Such apprenticeships have their value, but we must also consider the new type of apprenticeship. There are big decisions to be made and discussions to have about the value or otherwise of a modular approach, about delivery of apprenticeships on the job rather than outside at a further education college, and so on. Such matters must be taken into account when considering what benefits will encourage small businesses to take on apprentices.

Despite the Government’s announced additional investment in apprenticeships, many businesses still believe that there are major deterrents. A City and Guilds survey—I was at its launch during national apprenticeship week earlier this year—showed that 80% of employers still believe that there are barriers to hiring apprentices, and one in five believe that the current economic climate makes it too risky to take on an apprentice. A couple of other statistics are relevant to what hon. Members have said today. Just under half of employers would be encouraged to have an apprentice if more Government funding were available per apprentice—whether that would be a deciding factor, of course, is always the key question—and 26% wanted the recruitment process to become simpler and less time-consuming.

Those statistics are interesting, and have been supplemented recently by a major survey of 500 employers across the board, not just SMEs, by the Chartered Institute of Personnel and Development. Its findings are interesting and specific, and slightly contradict what City and Guilds said, because they showed that two thirds of those not offering apprenticeships reported that it was inappropriate for their organisation. Again, the point about how to market apprenticeships and present them to companies comes to mind. One in six said that they were not offering apprenticeships because of a recruitment freeze, budget restraints or the economic climate. Interestingly—I am not saying that one side or the other has the last word—less than 5% said that they were put off by too much associated bureaucracy or insufficient public funding.

Whatever the case, major challenges must be overcome. It may be relevant to the example about the value of soft skills—I do not like referring to soft skills because that may suggest that they are not important; I prefer to call them enabling skills, but that is a matter of nomenclature—that the CIPD survey showed that apprentices were rated highly for enthusiasm, work ethic and presentation, but that their creativity, innovation, initiative and customer service skills were less impressive. There may be some messages there about the school system.

The statistics from the Federation of Small Businesses, as many hon. Members have said, are worrying for the reasons that have been described. It is particularly valuable that the FSB not only provides such data, but regularly monitors attitudes and feedback from its membership. I understand that the latest report is due out tomorrow, and it will be particularly interesting given the current fluid nature and uncertain prospects for growth. Similar statistics came from the CBI/EDI educational skills survey, which was published last month. It showed that apprenticeship growth is increasingly concentrated in large companies.

That is on a par with the Government’s need urgently to consider tailoring apprenticeships better towards the need of SMEs. It is a two-way process, which the Government must take on board and, with the National Apprenticeship Service, be alert to the changes and modifications that employers report. They must allow employees to complete the course-based elements of their apprenticeships. I do not exempt further education colleges from that process because, certainly in my neck of the woods, it is important, particularly when bringing in people who must do a lot of juggling with their work-life balance, that delivery of off-job apprenticeship course work is as close to their work or living place as possible.

[Laura Sandys]

I was pleased to welcome the Minister to my local further education college, Thanet college, which has been extremely helpful and important to me in the recruitment of an apprentice I have just taken on. FE colleges are embedded in their communities, and play an important role as ambassadors for the apprentice system. They support employers who may not understand the system effectively. Does the hon. Gentleman agree?

[Mr Marsden]

I absolutely agree. In my neck of the woods, Blackpool and The Fylde college has done sterling work in that area. There is sometimes an issue about colleges understanding the need to deliver some of their training closer to the workplace if possible and closer to the living space if possible of the people they are trying to reach.

[Mr Hayes]

indicated assent.

[Mr Marsden]

I see the Minister nodding, and I suspect that as he represents a rural constituency he understands such issues.

The process is a two-way one, but the Government must consider the unintended consequences of their decisions elsewhere. In their hasty abolition of the regional development agencies, many of the bodies that oversaw local skills and employment policies were swept away. The new local enterprise partnerships have no powers in those areas, as skills policy remains under central control from Whitehall.

The Federation of Small Businesses and other business organisations have been critical of the Government’s failure to give local enterprise partnerships the tools to do the job. Included in that is the concern of the Federation of Small Businesses that there are not enough representatives from small and medium-sized businesses on local enterprise partnership boards. Allowing them to have a greater voice is important in terms of real input in tailoring and structuring skills policy locally, and that includes apprenticeships. Indeed, by their nature, small businesses understand the life-changing impact of apprenticeships, and how that must be balanced against day-to-day needs. We must remember that although much has been said, rightly, about the challenge of youth unemployment, we also face the challenges of demographic shift in the next 10 to 15 years, the projections in the Leitch report, and the particular needs of work-life trade-off if we are to attract older people to become involved with apprenticeships. That includes women in particular. There are impressive models from organisations such as B&Q and British Gas, but we need to see how those good practices can be replicated to their counterparts in small business.

Finally, I want to look at pre-apprenticeship preparation, which has been mentioned by one or two hon. Members, and in particular by the hon. Member for Bradford East in the context of the first job agreement—the FJA. Information, advice and guidance is crucial to inform people about the opportunities provided by apprenticeships, and if young people do not get such advice, SMEs may be deprived of many suitable candidates. It is vital that the Government have a framework that can deliver quality information, advice and guidance. In truth, however, there are still real problems with the new all-age careers service.

I know that the Minister has done his best to take forward such issues in the Department for Business, Innovation and Skills. Nevertheless, to echo earlier remarks, the Department for Education remains singularly unfocused on the need for financial support and for the necessary information, advice and guidance to be provided face to face. I urge the Minister to press his colleagues further on that.

What proposals does the Minister have to monitor completion rates more effectively? What conversations are his officials having with organisations responsible for qualifications about the balance between modular and more traditional structures for apprenticeships? Such things will be key in determining the attitudes of small businesses when taking on apprentices. We all agree that apprenticeships have a very real worth for businesses and apprentices, but the Government must recognise that one size does not fit all. If SMEs are to help lead sustainable economic growth and recovery, they must have the tools to achieve it. We must ensure that apprenticeship frameworks and mechanisms are accessible to all the small businesses that hon. Members have quite rightly praised today, and not only to the big companies that have the money and resources to take on apprentices.

16:41

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It is an immense pleasure to serve under your chairmanship, Mr Davies, and it is always a pleasure to speak opposite the hon. Member for Blackpool South (Mr Marsden), who presents his case with typical flair and fairness.

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this debate. Over the past year, he and I have had a number of discussions about apprenticeships, and whenever we have done so, he has shown a commendable interest in and enthusiasm for the subject. He has also brought to my attention a series of ideas, reflected in his opening remarks today, about how we can further our policy to expand the number of apprenticeships available. I had the pleasure of visiting Gloucester rugby club with him and taking part in an apprenticeship fair that he had helped organise. It was a splendid occasion, and I know that he plans to take that forward with a number of similar events in his constituency that will be targeted at under-represented groups. Such work is highly commendable.

I am grateful to all hon. Members who have contributed to the debate. As the hon. Member for Blackpool South said, many interesting points have been raised, and I shall try to address as many of them as I can in the time available—I have rather more time today than Ministers usually have when responding to such debates, which is welcome.

To place my remarks in context, let me stress to hon. Members that—make no mistake—apprenticeships are a flagship policy for the Government. It is true that the previous Government made progress on apprenticeships, and I shall say more about that in a moment. It is equally true, however, that apprenticeships have never been more central to public policy than they are today. The programme to build more apprenticeships in Britain than ever seen before in our history is supported by the Prime Minister, the Chancellor and all Ministers with responsibility in the area. That is not merely rhetoric—though I have nothing against rhetoric—and it is illustrated by the fact that, despite financial constraints that were, it is fair to say, unusual in their severity, over the current spending period the Government have dramatically increased the funding available for apprenticeships.

The hon. Member for Blackpool South was kind enough to acknowledge that one of the first things that I did on entering the Government was to transfer £150 million of deadweight Train to Gain funding into apprenticeships to fund an additional 50,000 places.

[Mr Marsden]

But what happened to the rest of it?

[Mr Hayes]

I will come to that in a few moments. When I announce the details of the statistical first release to the House at the end of the month, I am confident that they will show substantial progress and achievement. As hon. Members will know, provisional data already in the public domain suggest that we have made remarkable progress, despite the difficult economic circumstances in which, as has been said, some firms might not usually be expected to consider training or employing new staff.

The commitment that I have articulated was confirmed in the Budget, when the Chancellor announced a further £180 million of funding for apprenticeships. That will enable us to create 40,000 places for young unemployed people, taking them from disengagement to re-engagement, and an additional 10,000 places for advanced and higher level apprenticeships that are focused on SMEs.

The work that I am doing with the Department for Work and Pensions has been mentioned. To an unprecedented degree, I am working with my colleagues to ensure that the welfare reforms being introduced, and particularly the Work programme, marry with the work we are doing on training, skills and apprenticeships. It is important that the 100,000 additional work placements that have been secured have a close relationship with subsequent training and that the system is progressive. The experiences that people gain as they move from disengagement to re-engagement should lead to further learning and training and ultimately to work.

[Mr Marcus Jones]

Under the previous Government, there was a shocking drop-out rate in the number of apprenticeships started and those completed. In 2009-10 alone, nearly 280,000 apprenticeships were started but only 171,500 were completed. That is shocking. Will the Minister assure me that the Government will pay far more attention to that issue? Although we cannot guarantee that every apprenticeship will be completed, we should ensure that we get a far better rate of completion than in the past.

[Mr Hayes]

Even a Minister as confident as I am would not wish to disagree with my hon. Friend, because he is so highly regarded both in his constituency and in the House. None the less, I must say in fairness that the previous Government made progress on completions—I do not like to say things in the House that I cannot say with candour. Although it is true that completions, both under the previous Government and this Government have posed a challenge—as described by the hon. Member for Blackpool South—considerable progress was made by the previous Government. Furthermore, to be ever more generous and even more self-deprecating, let me say that it will be a challenge for us to maintain completion levels as we expand the programme. One risk of a rapid expansion in apprenticeships is that we will need to be careful about starts and completions. As more people are drawn into the system by the energy that we invest and the resources we provide, unless we are careful, there is a risk that the number of completions will suffer. As has been suggested, I am working closely with my officials and we must monitor the situation through the NAS and look at what measures we can put into place to ensure completions.

I do not want to move too far from the main thrust of my argument, but one such measure might be to look at outcome payments for large apprenticeship providers—in other words, to work with those large providers and ensure that payment is made on completion. I am in discussion with a number of major national companies that are extremely interested in engaging in such a system, and we will pilot such a scheme with a number of significant apprenticeship providers. That is one of the things that we can do with regard to completions, but my hon. Friend the Member for Nuneaton was right to draw that issue to hon. Members’ attention, as was the shadow Minister, the hon. Member for Blackpool South.

The difficulty for me in all this is that I have invested a considerable amount of my political reputation on the basis that we will indeed create such numbers of apprenticeships. That might be described as a bold move. The shadow Minister and possibly others would be disappointed if I was not poetic at some time in this speech—I was going to say “performance”, but I do not want to undersell myself—and it was Ezra Pound who said:

“If a man isn’t willing to take some risk for his opinions, either his opinions are no good or he’s no good.”

The risk that I have taken in respect of my opinions is indeed the risk about our endeavours to grow apprenticeship numbers dramatically, but we have to take such risks if we believe that something is right, as Pound suggested, and I do believe that this is right for reasons that I shall detail as I respond to the debate.

[Mr Marsden]

Will the Minister give way?

[Mr Hayes]

I will happily give way. Is the hon. Gentleman going to quote Pound?

[Mr Marsden]

The Minister will be relieved, possibly, or disappointed to hear that I have no intention of swapping literary quotes with him. Before we lost the thread of the previous useful exchange with the hon. Member for Nuneaton (Mr Jones), I wanted to ask the Minister whether part of the consultations or part of the consideration of how we make progress on completions will cover whether certain structures of apprenticeship cause more problems between start and completion.

[Mr Hayes]

Yes, I think that there will be consideration not only of structures, but of whether there are sector-specific problems, whether there are problems with certain kinds of apprenticeship and frameworks and whether there is an issue about different ages of apprentices. The hon. Gentleman will know—indeed, the whole House knows—that we are focusing, as I described earlier, on apprenticeships as a means of re-engaging people who are disengaged. The hon. Member for Bradford East (Mr Ward) described the length—and I might say the difficulty—of the journey that some people make to re-engagement. It is a tough set of challenges for people who were failed by the system first time round. Sometimes, the path to the destination that they seek and we seek for them will be relatively stony. Small bite-sized chunks of learning, delivered in a way that is highly flexible and accessible, are often the way of dealing with that, and we may well need to consider structure in that context.

The hon. Member for Blackpool South will also know that I will announce in the autumn progress on our access to apprenticeships policy. We recognise that many young people in particular do not have the prior attainments necessary to begin even a level 2 apprenticeship. We need to create a ladder for those young people, so that they can acquire the core skills necessary for them to progress subsequently to further training and employment. He is right to say in that context that the form, character and pace of learning need to be appropriate to the circumstances of those learners.

The net effect of the commitments that have been given by the Government is, I believe, that we will create more apprenticeships than ever before in this country. To put that in firmer terms, as the Prime Minister himself has said, we expect to create 250,000 more apprenticeships during the lifetime of the spending period. That will constitute extraordinary growth in the number, compared with what Labour projected. We expect to exceed the previous Government’s target by 250,000. That is extraordinary, unprecedented growth in the number of apprenticeships.

There has never been that kind of growth in this country. However, there are precedents elsewhere. Meeting my French counterpart some time ago, I was interested to learn that the apprenticeship system in France has metamorphosed in the last 20 or so years. The French apprenticeship system was in the doldrums 25 years ago, but the concentration, investment and commitment of successive French Governments have meant that France, like Britain now, sees apprenticeships as critical to delivering the skills necessary to build a competitive economy. Therefore, we know that that can be done with political will and determination, backed by resource.

I have said on many occasions that practical skills and those who learn them remain scandalously undervalued in our society. It has been said in the debate that many people, including some employers, still view apprenticeships as somehow not quite good enough. That is partly about careers advice and guidance and the perception of the routes available, particularly to young people. The matter was raised by the shadow Minister and others, including my hon. Friend the Member for South Thanet (Laura Sandys). By the way, I was delighted to join her in her constituency when I visited Thanet college. I will take this opportunity to say that the work that that college is doing with Canterbury Christ Church university is extraordinarily important in developing a practical route to higher learning for many of the constituents whom my hon. Friend so competently represents.

The advice and guidance that people receive will shape their choices about the learning and employment routes that they take. One should not underestimate the influence that that advice has, particularly on young people, as I said. The truth is that people such as us are particularly advantaged in those terms, or at least our children are. The familial networks and social contacts that my children enjoy will mean that they get pretty good advice about the options available to them at school, college and university and in work. That is not true of the very large number of people who do not enjoy those familial and social contacts. Professional advice and guidance are very important in rebalancing the quality of the advice that is available to those who are most under-represented in higher education—those who start with the most disadvantages.

On that basis, I am determined to develop an all-ages careers service, as hon. Members know. That service will bring together careers professionals to a degree that has not been known previously, with a common set of professional standards and training and consequent accreditation, to deliver high-quality, independent and empirical advice and guidance, including advice and guidance on vocational learning options and practical and technical jobs.

It has been said in the debate—I think that it was said by the hon. Member for Bradford East, my hon. Friend the Member for South Thanet and other hon. Members—that the advice given in schools is often inadequate. It is fair to say that it is patchy. Some schools do this rather well; many do it less well. However, what characterises the advice is that it is usually prejudiced by the academic experience of the person offering it. It is a big ask of teachers to be excellent pedagogues and also experts on every kind of career option. It seems to me to be much better for schools to secure independent advice. That is why the Government are putting a Bill through the House—it is progressing from the Commons to the Lords as we speak—that will put a statutory duty on schools to secure just such advice. There will also be unprecedented professional competence.

I am pleased to say, as I hinted teasingly at Question Time in the House earlier today—actually, it was the Secretary of State who revealed it—that we will be working with the Department for Work and Pensions to co-locate the national careers service in Jobcentre Plus from this autumn. We will pilot that process and then have a speedy roll-out. The national careers service, with separate branding, will be available to people in Jobcentre Plus, offering the very kind of empirical advice that I have described. In addition, I will hold discussions with representatives of colleges to consider co-location in our network of further education colleges.

As well as that, I am considering how funding can be provided in a way that incentivises professionals in the careers industry to be bolder and to reach out with a new commercial zeal—of course, the independent advisers are businesses, too—to provide quality advice. That will make so much difference, particularly for those who do not usually get good advice from elsewhere.

I shall say a little more about the perception of apprenticeships and practical learning. We too often undervalue vocational competence. Practical skills and craftsmanship remain objects of admiration for most Britons, but not so among the chi-chi class, the glitterati and the chatterati, who see practical skills as somehow beyond their scope or their understanding.

The Government’s will reflects the people’s will in this, and I am determined, not merely because it is essential for economic purpose but because it is right socially and culturally, to ignore the overtures and shrill complaints of what I might call the haute bourgeoisie liberal establishment—I do not mean the Liberal Democrats, of course; in this context it is liberal with a small l—and make the case for practical vocation and technical learning and practical vocational and technical competency. We must once again value craft. We must elevate the practical.

Part of this concerns the aesthetics of apprenticeships. During adult learners week, I was able to announce a range of measures designed to raise not only the status of apprentices but their self-esteem and the worth that apprenticeships confer. Those measures include the introduction of graduation ceremonies to give public recognition of apprentices’ successes and the creation of alumni networks to allow former apprentices to stay in contact and continue to exchange ideas and experiences.

My hon. Friend the Member for Harlow (Robert Halfon) made a convincing case for a society of apprentices, and we shall look closely at that. I very much welcome my hon. Friend the Member for Gloucester’s acknowledgement of the importance of celebrating apprentices and their achievements, and that was reflected in the comments of the hon. Member for Burnley (Gordon Birtwistle). Hon. Members will be glad that, later this month, the national apprenticeship awards, which I shall attend, will celebrate the achievements of apprentices and employers from all over the country.

I turn now to some of the specific raised by my hon. Friend the Member for Gloucester. He said that small and micro-businesses take on apprentices not only to drive up growth but to drive down youth unemployment. He is right. Apprenticeships are good not only for growth but for re-engagement in the economy and for social mobility, social cohesion and social justice. You know as well as any Member, Mr Davies, that social justice, in the spirit of Disraeli, lies at the very heart of Conservatism.

My hon. Friend asked for recognition of the fact that, for many reasons, including business confidence, recruiting apprentices is a challenge for small businesses. I recognise that, and I assure him that I am in no way complacent about the work that must be done to meet that challenge. That is why I have asked the NAS to report to me regularly on the progress that it is making, particularly in that field. We are constantly pushing to do more.

My hon. Friend sought a commitment that we would consider ways to increase small business take-up, possibly through group training associations and apprenticeships training agencies. The Growth and Innovation Fund will allow the development of more GTAs and ATAs. I cannot say too much about that, because the bids have not been considered yet and the results have not been announced. However, my hon. Friend will be pleased to know that a large number of applications relate to the areas that he has mentioned. I am a keen supporter of the GTA model, and I am carefully considering how, and in what circumstances, we might see further role-outs of that model to reduce the burden on small employers of taking on an apprentice.

My hon. Friend spoke about providing some form of incentive to small employers to take on an apprentice that have not done so before. He will be aware that he echoes the observations that Alison Wolf made in her report to the Department for Education on vocational education. She recommended that targeted subsidies should be issued to some employers in some circumstances. Although I cannot confirm any details today, I am not unsympathetic to that view. That will not come as a surprise given that it was in the Conservative manifesto, which I wrote before the election—I must say that I wrote that part, not the whole of it.

Had economic circumstances been different, and given that the coalition partners share a view on the matter, we might well have put measures of that sort into place, but we live in tough times, and it is not possible to do all that we might have done or might have wanted to do. Nevertheless, Alison Wolf’s proposals shed fresh light, and we will be considering them in detail, mindful of the deadweight costs that are always associated with financial support for employers.

My hon. Friend mentioned bureaucracy, transparency and flexibility in the system, and he asked for my assurances on those matters. My officials are working on plans greatly to simplify the apprenticeships system, and to make it as easy as possible for employers of all shapes and sizes to take on an apprentice. Indeed, a taskforce led by major employers has just reported to my officials on the subject. It will use the recommendations of real employers with relevant experience to make such changes a reality. As I have said, we are piloting outcome payments for large employers and developing a toolkit for smaller employers to guide them through the process. Smaller employers often say, as my hon. Friend will acknowledge, that the process is confusing; they are not sure where to turn, or which steps they need to take and when. Bringing the information together in a highly accessible form will counter some of those doubts and answer some of those questions.

My hon. Friend knows that I wrote to all Members during national apprenticeship week in February, urging as many as possible to take on apprentice in their offices. An apprentice works alongside me in my ministerial office—I was with him today—and my Parliamentary Private Secretary, my hon. Friend the Member for Bromsgrove (Sajid Javid), has just taken on an apprentice—he is a model of all that is best about the 2010 intake of Members, and I urge all hon. Members to do the same. I would, of course, be delighted to host a reception for Members from across the House with their apprentices not only to celebrate their commitment to the programme but, more importantly, to advertise the apprenticeship brand. If we take steps forward in that regard, we can reasonably ask others to do the same.

As for funding, I will refer that matter to my right hon. Friend the Chancellor of the Exchequer who will no doubt respond to my hon. Friend personally. [Laughter.] I jest, Mr Davies. I will of course look at whether my Department can fund such a reception, but the hon. Gentleman cannot expect me to give a detailed commitment at this stage. Certainly, in November, we will be hosting a parliamentary reception in partnership with the NAS for exemplar apprentices, apprenticeship employers, a number of other key partners and a selection of employers who wish to recruit apprentices.

An important factor in raising the status of and demand for apprenticeships is the perception among prospective apprentices and their employers of where an apprenticeship can lead and what an apprentice can become by engaging in an apprenticeship. That is about not only advice, guidance and the aesthetics around apprenticeships, but the promotion of apprenticeships. The kind of fair that my hon. Friend ran in Gloucester and that other hon. Members are now running in their constituencies are immensely important in raising the profile of the brand and in countering some of the mis-assumptions about apprenticeships that might prevail among employers or learners.

I warmly support the 100 apprenticeships in 100 days initiatives that have been run across the country. We will look at other ways in which to promote apprenticeships. We are always keen to be innovative, creative and imaginative, and I assure hon. Members that the NAS is considering a range of ways in which to advertise the virtues of apprenticeships in every way.

Last year, we published in the national press the names of all those people who had achieved higher apprenticeships in the same way in which we publish the names of people who achieve degrees and postgraduate qualifications. That is the kind of thing that I mean when I discuss new ways in which we can celebrate success. Such ambitions have been broadly welcomed by employers as steps in the right direction. In the final analysis, the impact of an expanded and improved apprenticeships system on learners’ lives and on our collective prospects for economic growth depend most of all on employers’ willingness to take on apprentices. Government can only do so much. We celebrate the 85,000 employers who currently take on apprentices, and we should recognise their commitment to those people—their willingness to invest in individual futures.

Many larger employers appreciate just what a boost apprentices can give to a company. During the course of this year, we have seen a welcome number of larger businesses pledging to create or expand apprenticeship programmes. My hon. Friend is right to point out that smaller employers can face particular problems in that regard. It has been said by a number of hon. Members, including my hon. Friend the Member for Nuneaton, that small businesses are critical to the success of this project, and that is because they are critical to the success of our economy more generally. They are the very backbone of the British economy. Working with very small businesses to help them to deal with some of the burdens and hurdles associated with apprenticeships is a priority for the Government.

Research has shown that SMEs tend to be less aware of apprenticeships and their benefits than larger firms. I pay tribute to those SMEs that take on apprentices, which form the majority of apprenticeships. None the less, we must go further. The remedy for some of the difficulties lies with my Department and the NAS, and we are working determinedly together to reduce to a minimum, consistent with quality assurance, the bureaucratic pressures associated with training an apprentice. We have already acted to provide special help for the increasing number of SMEs, such as those in advanced manufacturing and digital industries, which require high-level skills. The 10,000 additional high-level apprenticeships will be focused largely in SMEs. We are also offering new grant funding and will support businesses coming together as consortia to build advanced and higher-level apprenticeship schemes to address skills gaps. That could include setting up new training frameworks and delivering joint apprenticeship training.

My hon. Friend the Member for Wyre Forest (Mark Garnier) made a bold bid on behalf of the Kidderminster business enterprise zone. Although I cannot comment on the detail of that, I acknowledge his well-known commitment to his constituency.

The shadow Minister spoke about the structure of schemes. There is an argument for a modular approach. We will consider that, because it is particularly relevant to micro-businesses, the virtues of which have been advertised by many Members.

It is important to recognise that employing an apprentice might not always be possible for every small business. As my hon. Friend the Member for Gloucester has pointed out, that is one good reason to look seriously at GTAs and ATAs. Such measures will help to ensure not only that we provide more apprenticeships, but that apprenticeships are available in a wider range of companies and a larger number of specialisms than ever before. That is important for rural communities. My constituents simply cannot travel long distances to large companies to do apprenticeships, which they might be able to do more easily in an urban area. Therefore, the roll-out to more companies, especially small companies, has disproportionate significance in those kinds of constituencies.

The commitment that the Government have made to apprenticeships is unequivocal and unabated. That is good news for the people and businesses of Gloucester and for people up and down the country. Apprenticeships embody everything that this Government and I personally stand for. Politics is about ideas, but ideas stripped of feeling and heartfelt sentiment are cold, arid and sorry things. My heart-felt commitment to apprenticeships is not something for which I apologise. Benjamin Disraeli said:

“Never apologise for showing feeling. When you do so, you apologise for the truth.”

The truth is that apprenticeships deliver both for our economy and for a wider social purpose. By extending apprenticeship opportunities, we will feed social mobility. This ladder of opportunity will enable the most disadvantaged to climb to highly skilled, highly paid and respected employment.

However, in the end, what we earn is less significant than what we do and what we are. The worth and purposeful pride that people gain from an apprenticeship and from acquiring a competence that has economic value are immensely important in building a society that works. Every business can play a vital part in fulfilling this vision, and I will work to ensure that the barriers in their way are pulled down. Together we can create a society where all feel valued because each is valued. I am talking about a bolder, better and bigger nation—a British future as glorious as Britain’s past.

17:18

[Richard Graham]

I am grateful to you, Mr Davies, for chairing this debate and to all the hon. Members who have participated. I am grateful to the shadow Minister, the hon. Member for Blackpool South, for his contribution and to the Minister, who believes so strongly in the cause to which all of us are so committed, for delivering his response to my debate. He has reassured us about the future of apprenticeships overall. There is a renewed focus on tackling the smallest businesses and making apprenticeships accessible to them, which can only provide reassurance to the young unemployed who are seeking opportunities from the Government.

Question put and agreed to.

17:19

Sitting adjourned.

Written Ministerial Statements

Thursday 9th June 2011 Written Statements

Thursday 9 June 2011

Tax Consultations

Thursday 9th June 2011 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

Since the June Budget 2010, the Government have taken a number of steps to improve tax policy making, with consultation on policy and scrutiny of legislation as the cornerstones.

Budget 2011 announced a number of tax policy changes and longer-term tax reforms that will be subject to consultation. These are summarised in the tax consultation tracker, which is available on the HM Treasury website at:

http://www.hm-treasury.gov.uk/tax_updates.htm.

HM Revenue and Customs and HM Treasury will tomorrow publish the following consultation documents:

A new incentive for charitable legacies—A consultation to inform policy detail on how best to implement a lower rate of inheritance tax when leaving 10% or more of an estate to charity.

Consultation on the patent box—A consultation on how to implement a reduced 10% rate of corporation tax for profits arising from patents.

Research and development tax credits: response and consultation —A response to the November 2010 consultation and detail of further proposed changes to the research and development tax reliefs.

Updates to dates for some consultations planned for June and July have been made to the tax consultation tracker.

Affordable Homes Programme

Thursday 9th June 2011 Written Statements

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

Further to the written statement of 14 February 2011, Official Report, column 36WS from my right hon. Friend the Minister for Housing and Local Government, I am today announcing the publication of the technical revision to annex B of planning policy statement 3, to make clear that affordable rent falls within the definition of affordable housing for planning purposes. Also published today is a document summarising the responses that were received to the consultation paper, planning policy statement 3: “Planning for Housing Technical Change to Annex B, Affordable Housing Definition”, published on 14 February 2011; and an “Affordable Rent Impact Assessment”.

Planning policy statement 3, with a revised annex B can be found at: www.communities.gov.uk/publications/planningandbuilding/pps3housing.

The summary of responses is at: www.communities. gov.uk/publications/planningandbuilding/pps3annexsummary.

The affordable rent impact assessment at: http://www.communities.gov.uk/publications/housing/rentimpactassessment.

The above documents have been placed in the Library of the House.

Education and Youth Council

Thursday 9th June 2011 Written Statements

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

Education Council

I represented the UK at the Education Council. The Council was preceded by a ministerial breakfast on the subject of adult learning. During this I set out UK policy on our skills strategy, reforms to the national careers service, and the forthcoming Government consultation on informal adult learning.

Early school leaving

The Council agreed a recommendation on policies to reduce early school leaving by qualified majority. The UK voted against the recommendation as it was inconsistent with our national approach. While we understand and accept the importance of reducing early school leaving in the context of the Europe 2020 strategy, we have concerns with the policy approach suggested in the recommendation. For example, some of the language on “modularisation of courses” and “individualised learning approaches” sits uncomfortably with our strong belief that it is for teachers to decide the educational styles that best suit their students’ needs. Commissioner Vassiliou later noted that

“in response to the UK points, Early School leaving cannot be solved by education alone”.

A ministerial debate on this subject focused on prevention policies to combat early school leaving with particular emphasis on children from a socio-economically disadvantaged background, including the Roma. Member states were asked about national mechanisms for evaluating these policies, and the role of the EU in this area. I and a number of other member states noted that quality education, literacy and high attainment were key to combating early school leaving. I also noted that teachers had a key role to play and that pupil attainment was central to this issue, alongside clear measures of accountability. The presidency stated that a summary of this discussion would be presented to the June European Council.

Early childhood education and care

The Council adopted conclusions on early childhood education and care. The conclusions invite member states to analyse and evaluate existing early childhood services in terms of availability, affordability and quality. They also invite the Commission to support member states in exchanging good policies and practices and to broaden the evidence base in this field.

Promoting the educational mobility of young people

A Council recommendation on promoting the educational mobility of young people was also agreed. The recommendation suggests a number of measures including: improving information and guidance on educational mobility opportunities, improving language teaching and exchanges between schools, reducing administrative burdens linked to organising educational experiences abroad, and improving procedures for validation and recognition of educational outcomes following the period abroad.

Italy abstained in the vote to agree the recommendation over concerns about referring to a monitoring system proposed by the Commission, known as the “mobility scoreboard”. A study into the feasibility of such a scoreboard is yet to be carried out.

Youth Council

The UK deputy permanent representative Andy Lebrecht represented the UK at the Youth Council.

Effective participation of young people in democratic life

The Council adopted a resolution on encouraging new and effective forms of participation of all young people in democratic life. The UK is strongly in favour of youth participation and I will host a representative young people’s advisory group that will scrutinise and provide feedback on emerging policy proposals.

Structured dialogue with young people on youth employment

The Council adopted a resolution on structured dialogue with young people and the EU Institutions on youth employment. The resolution recommends various changes to the structured dialogue with young people. This includes political follow-up of the results, greater participation by disadvantaged youth and improved working methods that provide a meaningful process for young people.

Voluntary activities

Ministers also debated voluntary activities of young people and their contribution to the development of local communities. National initiatives mentioned included subsidies for youth organisations and national citizenship programmes (in Italy, France, and the UK, where national citizen service will have its pilot this summer).

Feed-in Tariffs

Thursday 9th June 2011 Written Statements

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

On 18 March I announced the start of a consultation on proposals to change feed-in tariffs (FITs) for solar photovoltaic (PV) installations larger than 50 kilowatts and farm-scale anaerobic digestion (AD) of up to 500 kilowatts.

Having carefully considered the responses received, of which there were more than 500, I can now confirm the outcome of that consultation and the fast-track review of FITS.

It is clear from all the evidence received as part of the consultation that the demand for feed-in tariff subsidy has grown so substantially that it now significantly exceeds the amount of funding available during this spending review period. Without urgent intervention, the scheme would have been completely overwhelmed within a very short period of time. That is why it is so important for us to act now: it is vital that we protect the integrity of the scheme and can continue to support the ambitious roll-out of new green decentralised energy technologies in homes, communities and small business.

With that aim in mind, the coalition has decided to proceed with the proposed tariff reductions for solar photovoltaic (PV) installations larger than 50 kilowatts and all stand-alone installations, and increases for farm-scale AD as set out in the consultation document. The detail of this decision and the analysis underpinning it are set out in “Feed-in Tariffs Scheme: Summary of Responses to the Fast Track Consultation and Government Response” which the Government are publishing today and will be available at: www.decc.gov.uk/FITs.

I recognise that this decision will be unwelcome to some, including those involved in large solar PV projects who disagreed with the proposals relating to PV. I can assure the House that it is not a decision that has been taken lightly. All the concerns raised by respondents, together with alternative approaches suggested, have been carefully considered, analysed and taken into account.

However, these concerns have to be balanced against the need for a responsible approach to public subsidies like FITs, to ensure value-for-money for consumers and ensure scheme longevity. The fact remains that under the current tariffs, large-scale solar PV projects are securing much higher returns on investment than the scheme intended. This is reflected in the unanticipated number of such projects now in the pipeline.

Put simply, the FITs scheme has a vital role in building a more decentralised energy economy, but if we do not act now to control short-term expenditure on solar PV more closely in line with the forecasts that we inherited from the last Government, the negative impacts on the scheme will be considerable and the amount of funding for other technologies and smaller, domestic-scale solar PV will be severely constrained.

To give effect to these tariff changes, today a set of licence modifications to amend the standard licence conditions of electricity supply licences in Parliament. Subject to any necessary state aid clearance and the parliamentary process required by the Energy Act 2008, the generation tariffs changes will apply from 1 August 2011.

The Government will not act retrospectively and these changes to generation tariffs will only affect new entrants into the FITs scheme from 1 August 2011. Installations which are already accredited for FITs at the time will not be affected.

Immigration

Thursday 9th June 2011 Written Statements

[The Minister for Immigration (Damian Green)]

The Home Office is today publishing a consultation on employment-related settlement, tier 5 of the points-based system and overseas domestic workers. A copy will be placed in the Library of the House.

Immigration has enriched our culture and strengthened our economy, but it must be controlled so that people have confidence in the system. This Government have already introduced a limit on non-EU economic migrants entering the UK; reshaped tiers 1 and 2 of the points-based system to increase selectivity and skills requirements; and announced changes to tier 4, the student visa system. These policies will result in a downward trend in net migration and a reduction in abuse, but we need to take further action to ensure we reach sustainable levels.

This consultation is the next stage in our immigration reforms. We intend to break the automatic link between coming to the UK to work and settling here permanently. In 1997, there were fewer than 10,000 employment-related grants of settlement; by 2010, that number had risen to over 84,000. We need to be more selective about who we allow to stay. The consultation considers how we do that. Its starting point is that we need to be clearer in our labelling of temporary and permanent migration routes to enable migrants and the public to better understand the immigration system. We propose to reposition tier 2 as a temporary route, predominantly a means of filling short-term skills shortages in the UK labour market. Most tier 2 migrants should expect to leave the UK after a maximum of five years in the UK. In future, only a tightly controlled minority will be permitted to stay permanently, where it is in the interests of the UK to do so. We are seeking views on how to achieve this in a way which enables the best outcomes for the economy. Alongside the public consultation, the Home Secretary is also commissioning advice from the Migration Advisory Committee on the economic effects of removing or restricting settlement rights, and on criteria for identifying the most economically important migrants for settlement. We have already announced reforms to the tier 1 investor and entrepreneur categories, including the possibility of accelerated settlement for these high-value migrants. We will be consulting, however, on whether tier 1 exceptional-talent migrants should have an automatic route to settlement and whether we should remove the ability of all tier 1 migrants to apply for further leave to remain after five years in the UK. To aid integration and social cohesion, we are also considering the introduction of an English language requirement for the dependants of economic migrants who signal their intention to apply for settlement.

The consultation also sets out proposals for reform of tier 5 of the points-based system and the overseas domestic worker routes.

The Government do not plan any reforms to the tier 5 (youth mobility) category. We do, however, want to consider restricting leave under the tier 5 (temporary worker) categories to 12 months, to reinforce the temporary nature of the route, which is intended to be primarily for non-economic purposes, such as scientific exchange and artistic and cultural activities. The consultation asks whether it is right that migrants in these categories should be able to be accompanied by dependants and whether those dependants should have open access to the UK labour market. We will also consider raising the threshold for entry to the Government-authorised exchange sub-category of tier 5 so that the skills requirement is at graduate level, bringing it into line with the revised tier 2 arrangements. Our intention is that the UK ancestry route should remain unchanged.

Finally, the consultation considers the two routes by which overseas domestic workers may enter the UK to accompany or join their employer’s household. Currently, there are two routes: one for domestic workers in private households and one for private servants working in diplomatic households. Both allow for extended periods of temporary leave (five years and six years respectively) and both enable the domestic worker to apply for settlement after five years. This is exceptionally generous, and sits ill with an immigration system focused on meeting identified skill shortages and securing the brightest and best migrants. We are also conscious that overseas domestic workers may be vulnerable to abuse and exploitation. The national referral mechanism provides an effective means of protection and support for victims but we are considering tackling the problem at source. So as well as seeking views on restricting leave to a maximum of six or 12 months, which would allow domestic workers to accompany their employer for a short period only, and removing the right to bring dependants, we also want to consider whether we should close the private households route altogether. This would oblige those wanting domestic workers to recruit instead from the UK labour market, with the rights and protections that affords.

Details of the public consultation can be found on the Home Office website and copies will also be placed in the Library of the House.

The consultation will run for three months, until 9 September and we will announce our firm plans in due course. As the Home Secretary announced in February, we intend the settlement reforms will affect those workers who entered economic migration routes under the immigration rules in force from 6 April this year and who, under the current system, could have expected to apply for settlement in 2016. The timing of reforms to tier 5 and the overseas domestic worker routes will depend on the outcome of consultation, but we would anticipate them taking effect during 2012.

A further consultation document will be published later this year, considering the rules applying to those who come to the UK for family reasons such as marriage.

Police (Firearms)

Thursday 9th June 2011 Written Statements

[The Minister for Policing and Criminal Justice (Nick Herbert)]

The latest figures on police use of firearms in England and Wales from 1 April 2009 to 31 March 2010 show that:

The number of police operations in which firearms were authorised was 18,556—a decrease of 1,395 (7%) on the previous year.

The number of authorised firearms officers (AFO’s) was 6,979—an increase of 111 (1.6%) officers overall on the previous year.

The number of operations involving armed response vehicles was 14,089—a decrease of 2,475 (15%) on the previous year.

The police discharged a conventional firearm in six incidents (up from five incidents in 2008-09).

Full details are set out in the tables below:

No. 32 (The Royal) Squadron

Thursday 9th June 2011 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

As the House will be aware, work was carried out by the royal household in 2008 to consider the option for procuring a small aircraft for official travel within the UK. This work concluded that such an acquisition could not at that time be justified on the grounds of value-for-money.

The royal household therefore continue to make use of chartered air services and the scheduled market and, where irreducible spare capacity exists, will continue to make use of No. 32 (The Royal) Squadron.

Employment Support (Disabled People)

Thursday 9th June 2011 Written Statements

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

I have today published a copy of the report to the Government by Liz Sayce, chief executive of RADAR, reviewing specialist disability employment programmes. Copies of the report will be available in the Vote Office.

Meeting the aspirations of disabled people for employment in the full range of jobs and sectors of the economy, and ensuring that the services we provide reflect the needs of individual disabled people in the modern work place are important goals. The employment services we provide for disabled people must be effective. This report shows clearly that there is more that needs to be done.

I welcome this review, and the central theme that resources for supporting disabled people into and in employment should be primarily focused on disabled people themselves.

The report contains a range of specific recommendations, and the Government intend to consult on these before making any decisions. A full response and consultation will be issued shortly.