House of Commons

Monday 20th June 2011 Commons Chamber

Monday 20 June 2011

The House met at half-past Two o’clock

Prayers

Monday 20th June 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 20th June 2011 Commons Chamber

The Secretary of State was asked—

[Mark Menzies (Fylde) (Con)]

1. What steps his Department is taking to encourage local authorities to provide weekly refuse collections.

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

The public have a reasonable expectation that their household waste, in all its various forms, will be collected weekly. That is why we have already ditched the last Government’s policy of imposing fortnightly collections, and we are now going to work with local councils to increase the frequency and quality of rubbish collections. We want to make it easier to recycle.

[Mark Menzies]

Does my right hon. Friend agree that by stopping Labour’s planned bin taxes, we are saving hard-working pensioners and families a lot of money?

[Mr Pickles]

My hon. Friend is absolutely correct about abolishing Labour’s plans for bin taxes, which would have hammered hard-working families. They were also ridiculous because they would have led to an increase in fly-tipping. The Keep Britain Tidy group has remarked that people would simply have dumped their garbage illegally in a bid to avoid the taxes. It seemed to me to be utterly unreasonable to pit neighbour against neighbour.

[Alison McGovern (Wirral South) (Lab)]

Wirral council’s ability to manage refuse collection is severely hampered by the financial settlement it has received. Will the Secretary of State or Ministers meet a Wirral delegation to discuss funding for local services, including refuse collections, in Wirral?

[Mr Pickles]

It is always a delight to meet people from Wirral, and if the council there—or, indeed, the hon. Lady—would like to meet me or some of my hon. Friends, we would mark it eagerly in our calendars.

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

What incentives and support—financial or otherwise—will the Secretary of State’s Department give to small councils such as Purbeck district council, which has moved to fortnightly waste collections but would be interested, if funds permitted, in moving to a weekly food collection?

[Mr Pickles]

My hon. Friend makes my point very well. As the Under-Secretary of State with responsibility for local government and planning announced, we are considering financial assessments. Often the kind of authority to which my hon. Friend referred could do with some help with procurement—we have seen a number of smaller districts get together—and we would certainly hope to deal with weekly collections in all their various forms.

[Mr Speaker]

Order. If the Secretary of State could face the Chamber, we will all benefit from hearing the full flow of his eloquence.

[Caroline Flint (Don Valley) (Lab)]

This money has been recycled many times over. At the Conservative party conference in October 2008, the Secretary of State promised:

“Under a Conservative Government, the weekly bin collection will be back.”

Since the election, eight Tory councils, including in the Prime Minister’s own constituency, have abandoned weekly bin collections, and the Secretary of State has been forced into a humiliating U-turn. Why can he not deliver on his promises?

[Bob Russell (Colchester) (LD)]

Rubbish!

[Mr Pickles]

My hon. Friend suggests, from a sedentary position, that that was rubbish, and I cannot disagree with him. We are looking at delivering weekly collections and a financial incentive for providing them, but we had to start from the basis of dealing with the legacy—we had first to remove the Audit Commission and the instructions in the waste and resources action programme suggesting that it was best to close these things down after local elections, and we had to ensure that the fortnightly collections, which the right hon. Lady advocated so strongly when she was Minister for Housing, were also stopped.

[Caroline Flint]

Of course, under Labour, recycling went up, and last week we heard that across our islands, Northern Ireland, Scotland and Wales have higher targets for recycling than England. I think that the record will show that most of the local authorities with fortnightly bin collections are Conservative-controlled. Is not the truth that this chaotic climbdown is a personal humiliation for the Secretary of State? He is making promises he cannot deliver, his own councils are not listening to him and he has been dumped on by his Cabinet colleagues.

[Mr Pickles]

I understand now why Polly Toynbee is so disappointed with the right hon. Lady’s opposition across the Dispatch Box. I apologise, Mr Speaker, for not directing my earlier remarks to you. She is concerned about the number of Conservative authorities, but their number is due to the fact that the majority of councils in this country are Conservative—she had a big chance in May to rectify that and failed singularly. However, we are removing the incentives for fortnightly collections, and looking at incentives for weekly collections.

[Mr James Gray (North Wiltshire) (Con)]

2. What plans he has to provide support through his Department’s housing policy to serving and former members of the armed forces. [Official Report, 13 July 2011, Vol. 531, c. 3-4MC.]

[Christopher Pincher (Tamworth) (Con)]

10. What plans he has to provide support through his Department’s housing policy to serving and former members of the armed forces.

[The Minister for Housing and Local Government (Grant Shapps)]

I am absolutely determined to ensure that serving and former serving personnel from the armed forces are treated properly when it comes to housing on their return.

[Mr Gray]

Serving men and women form a disproportionately large part of those who are homeless or rough sleepers. I therefore very much welcome the Government’s notification that they are a priority group under the Firstbuy scheme. However, many of them cannot afford to buy a house at all. Will the Minister now consider whether he can bring pressure to bear on local authorities, so that serving men and women are also designated as a priority for local authority housing?

[Grant Shapps]

I do not just want to remove the housing disadvantage for those who have served in the military; I want to put them at a positive advantage. That is why we have announced today that they will receive that priority in the Firstbuy scheme. I can also tell my hon. Friend that they will be a priority in the social housing allocation list. Also, if I may correct one point, the new figures for rough sleepers out today from CHAIN—the Combined Homeless and Information Network—show that just 2% of those who have served previously in the military are on the streets.

[Christopher Pincher]

I am grateful to my right hon. Friend for his answer. Will he join me in congratulating Tamworth borough council on the steps that it proposes to take in prioritising service people on its housing list? Professional organisations such as the Residential Landlords Association have also been encouraging their members to support service people with housing needs. Does that not demonstrate that the private sector can work with the public sector to deliver the housing element of our armed forces covenant?

[Grant Shapps]

I have no hesitation in congratulating Tamworth on its approach to the armed forces, or the Residential Landlords Association, which has done much to push this issue. I congratulate them, and I will go further when we draw up the social housing regulations after the Localism Bill has passed.

[Mr Andy Slaughter (Hammersmith) (Lab)]

4. What recent assessment he has made of the effects of reductions in central Government funding for local authorities on levels of local authority service provision.

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

13. What recent assessment he has made of the effects of reductions in central Government funding for local authorities on levels of charges for local authority services.

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

I can tell the House that I have made a new assessment of the consequences for local authorities of paying down the deficit. Currently, the average reduction in spending power for councils this year is 4.4%. However, if VAT were reduced, as per a recent suggestion, the £13 billion a year needed to pay for it would require the average cut in council spending to be 29.1%. In my view, that would be to go too far and too fast.

[Mr Slaughter]

That is all very interesting, but from next month, nine Sure Start centres in Hammersmith and Fulham will lose more than 90% of their funding, and therefore will close. Parents at one of them—Cathnor Park—have got a judicial review going, but they are having to expedite it, because the council is going ahead with 50 redundancies and closing services, despite the fact that the courts have not yet considered these matters. Will the Minister at least go as far as advising that rogue council not to proceed with those closures until the courts and the parents have had their fair say?

[Greg Clark]

That is a superb council, and it certainly does not need any advice from me. In fact, I am astonished that the hon. Gentleman has not taken the opportunity to congratulate his council on saving every library in the borough, by merging the service with neighbouring boroughs, and on saving £1 million. When he was leader of the council, he doubled the council tax and his Labour administration was booted out at the election. The current, Conservative administration was returned with a healthy majority at the last council election.

[Mrs Glindon]

As a result of the Government’s decision to impose huge, front-loaded cuts on local authorities, many councils are increasing charges for social care, hitting the elderly and the vulnerable. Will the Minister join me in condemning Tory councils such as North Tyneside council, which has increased its home care charges by more than 50%, from £99 to a maximum of £150 a week?

[Greg Clark]

We still have not had an answer—perhaps we will shortly—to the question of how the extra black hole that has opened up will be funded, and whether that will come from local government, but I will answer the hon. Lady’s question. Three years ago, one of the predecessors of the right hon. Member for Don Valley (Caroline Flint) as Minister for local government, the right hon. Member for Wentworth and Dearne (John Healey), complained that only one in five councils was using charging to its full potential. Indeed, the last Government issued statutory guidance to force councils to charge more for parking, for example. Council charging doubled under Labour. Unlike the last Government, we will not force councils to increase their charging.

[Sir Paul Beresford (Mole Valley) (Con)]

Does my right hon. Friend agree that there is great cost variation in like-for-like authority provision? Therefore, it is inappropriate to judge the quality of services by the amount of other people’s money—that is, taxpayers’ money—spent on them.

[Greg Clark]

My hon. Friend is absolutely right. His record in leading Wandsworth, which was transformed under his leadership—I am pleased to say that that transformation has continued under the leadership of Sir Edward Lister, whom I am sure the House will congratulate on his knighthood—shows what can be done when there is a Conservative council that takes the economies seriously.

[Henry Smith (Crawley) (Con)]

Does my right hon. Friend agree that, now that the Government have introduced greater transparency in relation to any amounts over £500 that local authorities spend, our constituents will be far better informed about the politics involved in the reduced budgets for local authorities?

[Greg Clark]

My hon. Friend is another distinguished former leader of a local authority, and he is absolutely right. We still have not heard whether those on the Opposition Front Bench think that it is a good idea for councils to have full transparency. I think that Nottingham city council is still holding out, but perhaps we shall be enlightened on that matter soon.

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

Today’s report from the Equality and Human Rights Commission demonstrates that Britain’s pensioners are not receiving the care that they deserve. In Birmingham, the coalition council’s cutting of care to 4,100 of the most vulnerable has been branded unlawful by the High Court. Having imposed the biggest cuts in local government history, does the Secretary of State take any responsibility? Will he intervene in this matter, or does he share the view of the Prime Minister that the actions of Birmingham city council were “excellent”?

[Greg Clark]

The problem with Birmingham is that it has a legacy of mismanagement and waste from the days of Labour control, which lasted quite a long time. If the hon. Gentleman is interested in the economies, as I am, will he tell us his position and that of the right hon. Member for Don Valley (Caroline Flint)? He is the Rasputin of the Labour party, the power behind the throne of Edward Miliband. I have to warn the Leader of the Opposition, however, that the hon. Member for Derby North (Chris Williamson) is an acolyte of the shadow Chancellor. In Wimbledon fortnight, it would perhaps be appropriate to say that he is one of Balls’ boys. Is it the shadow Secretary of State’s policy to add an extra £13 billion of cuts? Yes or no? And would that come from borrowing, or would it yet again come from local government? Will she tell us what her policy is? In the week that—

[Mr Speaker]

Order. I am grateful to the Minister, but he must now resume his seat. In the name of utilising our time properly—I use the word “properly” advisedly—we must focus questions and answers on the policies of the Government.

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

5. How much funding his Department has allocated from the new homes bonus scheme (a) to Lancaster and Fleetwood constituency and (b) in total since the scheme’s inception.

[The Minister for Housing and Local Government (Grant Shapps)]

The first new homes bonus allocations were made in April. Over six years, Lancaster will receive some £1.4 million and Wyre some £1.6 million. Across England, the allocations will total almost £1 billion during the spending review period. The next allocations will take place next April.

[Eric Ollerenshaw]

I thank my right hon. Friend for that reply on behalf of the two district councils. How long will it be before this policy and others of the new Government begin to address the failure over the past 13 years to get the right number of new houses that we need?

[Grant Shapps]

The policies are already having some impact. In the first year of this new Government, house building starts were up 22%. That compares rather favourably with the period during which the right hon. Member for Don Valley (Caroline Flint), who is now the shadow Secretary of State, was Housing Minister, when house building starts were a third lower than they are today.

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

The Minister will be aware that some Labour Members are rather sceptical about whether the new homes bonus will deliver more homes than were being built before the recession. Given that no research is being done into the effectiveness of the scheme, and that there is no evidence about such schemes in other countries, does he agree that it would be appropriate to have an independent review of the scheme’s effectiveness? If so, what period of time should the review cover?

[Grant Shapps]

The Chairman of the Select Committee is wrong to say that no research has been done into the scheme. Indeed, the impact assessment stated that it would increase house building starts and, as I have just said, there has been a 22% increase in house building starts in the first year of the policy. Let us compare that with the year before the policy was put in place, when house building under Labour was at its lowest level since the 1920s. There is therefore growing evidence that the new homes bonus is working rather well.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I make my usual declaration of an indirect interest.

The new homes bonus is paying out taxpayers’ money but it is not delivering. Planning permissions fell by 17% on year for the first quarter. Let us not confuse that with starts, which took place as a result of investment by the previous Labour Government. The Town and Country Planning Association, the Campaign to Protect Rural England and the Royal Town Planning Institute are clear that the changes in the Localism Bill will enable developers to buy planning permissions. Are those professionals wrong?

[Grant Shapps]

The idea that one quarter can be judged against an entire year’s evidence is, of course, nonsense. The evidence for the entire year is that house starts are up by 22%. I would rather take a year’s figures than one quarter’s. We know that councils right across the country, including Labour councils, are welcoming the new homes bonus money, which is now starting to make a real difference. Yes, it is right for local authorities and local people to take fully into account the economic benefits of building more homes in their areas.

[Mr Dominic Raab (Esher and Walton) (Con)]

6. What steps he is taking to reduce the level of fraudulent claims for funding awarded by local authorities.

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

Last month, in conjunction with the National Fraud Authority, I published a 10-point plan outlining how councils can save £2 billion a year from tackling fraud. Whether it be through dealing with tenancy cheats or organised crimes, this is a key way to save taxpayers’ money and protect front-line services.

[Mr Raab]

I thank the Secretary of State for that answer. Will he join me in recognising the lead taken by Elmbridge borough council, which over the last year alone recovered £72,000 of overpaid benefit and is using data checks to crack down on the abuse of the single person council tax discount, cutting out waste and fraud and saving taxpayers’ money?

[Mr Pickles]

I will indeed join my hon. Friend in congratulating his council. As I said in my original answer, this is quite a big deal, amounting to £2 billion a year. I think it was Cheshire East council that managed to save £500,000 a year on the single person discount. We are not talking about trivial amounts here; we are talking about something that will make a big difference.

[Robert Halfon (Harlow) (Con)]

7. What steps his Department is taking to support home ownership.

[Nadine Dorries (Mid Bedfordshire) (Con)]

14. What steps his Department is taking to support home ownership.

[The Minister for Housing and Local Government (Grant Shapps)]

I can announce today that, subject to contracts, more than 100 developers will offer the equity loan product Firstbuy and I can also say that this will build more than 10,000-odd homes as we initially anticipated—something like 10,500 in England—and bring up to £500 million-worth of investment across the UK.

[Robert Halfon]

Is my hon. Friend aware that, under the last Government, the waiting list in Harlow quadrupled? Does he accept that one of the best ways to break the poverty trap is to help families into shared equity schemes to give them a foot on the property ladder?

[Grant Shapps]

My hon. Friend is absolutely right. The waiting list doubled across the country, but in Harlow it quadrupled during the period of the previous Government. That is not good enough; we must build more homes to get ourselves out of that trouble. In addition, we need innovative products that share equity. I know that my hon. Friend is a keen supporter of that and I am sure it will help in his area as indeed it will in the areas of all Members across the country.

[Nadine Dorries]

Many residents in Mid Bedfordshire who are living in social and council housing would love to have the opportunity to buy the home they live in. We know that such policies introduce aspiration and narrow the gap between rich and poor, enabling people to get on to that property ladder. Does the Minister have any plans to introduce schemes like right-to-buy again so that residents in Mid Bedfordshire can have some hope?

[Grant Shapps]

My hon. Friend is absolutely right to talk about right-to-buy, which helped millions of people achieve the aspiration of owning their own homes. This Government fully support that objective. I think it is right, however, to recycle that money into building more homes. Under the affordable rent scheme that I have recently introduced, that is precisely what will happen: if people end up buying their home, more homes will be built, which will help to lessen that record social housing waiting list that we were disgracefully left with after 13 years of Labour Government.

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

Does not the Minister recognise that, far from promoting home ownership, his Government’s policies have led to a stagnant market in which housing starts are collapsing and public confidence has been shattered by a combination of the Minister’s incompetence and the Government’s economic management. Does he not recognise that the latest figures from the National House-Building Council—the most authoritative source—show that housing starts in April 2011, the latest for which figures are available, are 18% down on last year?

[Grant Shapps]

I am deeply shocked that the right hon. Gentleman, who is an acknowledged expert on housing, has chosen to judge what is going on in the housing market on the basis of a single month’s figure, rather than an entire year’s worth of data which shows a 22% increase in housing starts. Housing starts mean that homes get built, which is turn means that we are on the road to recovery in terms of starts and builds.

[Kelvin Hopkins (Luton North) (Lab)]

It has been reported recently that millions of people will never be able to afford to own their homes, and that only those who inherit equity from their families will be able to do so. However, equity will increasingly be used to pay for long-term care, and owner-occupation will diminish. Is that not the reality?

[Grant Shapps]

The hon. Gentleman is right to draw attention to a serious problem involving both long-term care and a reduction in people’s ability to buy homes. That has happened because house prices tripled over the 10 years following 1997. Eight out of 10 first-time buyers are buying their homes through the bank of mum and dad, but today those without that ability will be pleased to hear about our Firstbuy scheme, which will help more than 10,000 people in England to get a foot on the housing ladder for the first time.

[David Wright (Telford) (Lab)]

8. What recent discussions he has had with representatives of fire and rescue services on the effects of reductions in their budgets; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

I regularly meet representatives of fire and rescue authorities. My door is always open to their members if they wish to discuss their concerns. I have specified seven areas in which fire and rescue authorities might make efficiency savings, but the setting of fire authority budgets and service delivery are a local matter which is determined by individual fire and rescue authorities and not by central Government.

[David Wright]

Shropshire fire and rescue service

“has been hit by unprecedented cuts to its grant from Central Government, with a 12.6% reduction for years 2011-12 and 2012-13”.

Those are not my words, but the words of the chief fire officer in a letter sent to me the other day. Services and engine cover in Telford are to be reorganised. If response times fall away, will the Minister look again at the grant allocation for the Shropshire fire service?

[Robert Neill]

The local government grant accounts for only about 38% of the Shropshire fire and rescue authority’s total budget. Its spending power has therefore been reduced by only 2.1%, while its capital grant has been increased by 32%. The disposition of appliances and staff is, of course, a matter for the authority.

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

As my hon. Friend knows, following the floods of 2007 and the tragedy in Hull the Pitt report placed an obligation on fire services to provide the right equipment in the event of future floods. Will he ensure not just that that obligation exists but that money will be provided, and will he insist that local authorities make that happen?

[Robert Neill]

Some of the most important equipment made available for such purposes is the “new dimension” equipment that is provided through a central Government grant. The Government have continued to fund the equipment directly, and I am glad to say that, with the exception of one item, all of it is duly being rolled out.

[Chris Williamson (Derby North) (Lab)]

In February, the Under-Secretary of State accused me of scaremongering about the impact of his cuts on the fire service. However, freedom of information requests have confirmed that he has already presided over more than 1,000 firefighter job losses, although the Prime Minister pledged to supply funds to the fire service front line. Can he tell us whether he expects further firefighter cuts in the next 12 months, and if so, how many?

[Robert Neill]

The disposition of firefighters is entirely a matter for local authorities, whose job is to ensure that they fulfil their statutory obligations and meet their integrated resource management plan. Provided that they do those two things, it is not for central Government to micro-manage them. I know that it is difficult for the hon. Gentleman to understand that.

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

9. What plans he has to increase the powers of local authorities to tackle unauthorised development.

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

16. What plans he has to increase the powers of local authorities to tackle unauthorised development.

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

The Government take the problem of unauthorised development very seriously. There are already strong powers to enable local planning authorities to take action, and the Localism Bill, which begins its Committee stage in the House of Lords today, includes provisions in clauses 108 to 111 to strengthen authorities’ powers to tackle unauthorised developments, particularly when people have deliberately tried to conceal them.

[Mr Evennett]

I thank my right hon. Friend for his response and the work he and his Department are doing in this field. Does he believe the policies in the Localism Bill to which he has just referred will speed up the planning and enforcement process to help tackle the problems caused by unauthorised developments and business operations?

[Mr Pickles]

I do. A particular problem has been unscrupulous developers rather playing the game by both appealing against enforcement in respect of unauthorised developments and putting in fresh applications. In future, the applicant will have a choice of either appealing the enforcement or making a fresh application.

[Andrew Jones]

I thank my right hon. Friend for his answer. The 2006 planning enforcement review recommended that planning fees should not include a charge for enforcement. Will the Secretary of State confirm what the current position is, and is he considering changing it?

[Mr Pickles]

We will lay out changes with regard to enforcement and issue guidelines. For instance, we will increase the fine for enforcement from £1,000 to £2,500. It is important to send out the message that unscrupulous developers will no longer be able to play the system and get those vital months of freedom in which to continue with a development no one wants.

[Fiona Mactaggart (Slough) (Lab)]

One of the planning enforcement steps that the Secretary of State has made it harder for Slough local authority to take is dealing with what we call Slough sheds, which is people erecting garden sheds in their back gardens and letting them out for others to occupy. The Secretary of State has taken away the funds we had to be able to enforce against that abuse of garden sheds. What is he doing to ensure that local authorities have sufficient powers and resources to deal with the letting out of inappropriate buildings to needy people?

[Mr Pickles]

I regret to have to inform the House that, in all our deliberations, Slough sheds have not been at the forefront of the Department’s mind. If it is an important abuse, I frankly do not believe that the local authority cannot find the necessary resources to prioritise tackling it. However, we are looking at ways in which we can encourage small business and private enterprise to set up in private homes, and I hope the point the hon. Lady raises would not stand in the way of that.

[Chris Skidmore (Kingswood) (Con)]

11. What steps his Department is taking to reduce the number of empty homes.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

We have put in place powerful tools and incentives to support local communities to tackle empty homes. Through the new homes bonus, communities will receive a direct financial reward for bringing an empty home back into use, and we are investing £100 million to tackle empty homes directly.

[Chris Skidmore]

Under the previous Government, together with local residents I fought to prevent thousands of homes from being built on the Kingswood green belt, particularly since there are 2,260 empty homes in south Gloucestershire, an increase of more than 660 empty homes since 2004. What encouragement can the Minister give my constituents that we will do all we can to get these homes back into use?

[Andrew Stunell]

The new homes bonus will give local councils every incentive to bring empty homes back into use. They will get matching council tax receipts for six years for each home brought back into use, and that extra funding can be spent on things that benefit the local community, such as council tax discounts, boosting local services, renovating more empty properties or improving local facilities. The £100 million of investment is part of our affordable homes programme. Applications for that will be opened in the autumn, but I can tell my hon. Friend that 100 organisations have already expressed keen interest in it.

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

Will the hon. Gentleman take a look at the issue of empty offices that might be appropriate for housing? I walk past 200 Aldersgate, a massive office complex in the centre of our city that has been empty for years. That is a disgrace. Why cannot we use that for people who have nowhere to live?

[Andrew Stunell]

I am happy to tell the hon. Gentleman that he is just in time. There is a consultation on precisely the issue he has raised. It closes on 30 June, and I look forward to receiving his submission.

[Steve Baker (Wycombe) (Con)]

12. What steps he is considering in relation to senior pay in local government.

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

We have been clear that we expect councils to demonstrate much more restraint in the local decisions they make on senior pay. In addition, we have introduced measures in the Localism Bill and we are improving transparency arrangements to ensure greater local democratic accountability in determining senior pay.

[Steve Baker]

Many senior business men and their staff in my constituency have taken pay cuts as a result of part-time working through the downturn. Is local government sharing that pain?

[Mr Pickles]

I am delighted to tell my hon. Friend that a survey by one of the trade papers showed that chief executives’ salaries have dropped by 14%. In my view, that is certainly a very good start. We have asked chief executives who are earning more than £150,000 to take a 5% cut, and those earning more than £200,000 to take a cut too. They need to do that so they can look their front-line staff in the eye when taking these difficult decisions.

[John Cryer (Leyton and Wanstead) (Lab)]

Does the Secretary of State agree that the level of transparency being applied to the public sector should also apply to the private sector, and how can that be achieved?

[Mr Pickles]

That is a matter for companies and their shareholders. However, I am sure that somebody who has been a champion of the low-paid, such as the hon. Gentleman, will be very pleased that we are extending that transparency. It will apply not only to highly paid people but to low-paid people in the public sector, so that we can clearly see the level of remuneration that local authority workers receive.

[George Freeman (Mid Norfolk) (Con)]

15. What steps he is taking to enhance the role of neighbourhoods and town and parish councils in local planning.

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

The Localism Bill gives every community the right to have a neighbourhood plan, and town and parish councils will have a leading role in bringing the plans together. The National Association of Local Councils, which is the umbrella body for town and parish councils, is one of five organisations funded to provide assistance to neighbourhoods in drawing up their plans.

[George Freeman]

I thank the Minister for that answer, and on behalf of the 110 villages and four towns in Mid Norfolk I thank him for giving them the opportunity to take control of their own housing policy after a decade in which housing policy was something done to them by unelected Labour quangos. Can he reassure the town councils in my constituency that where a district council, for good reason, is seeking to complete a local development framework in an area with very high speculative pressure from developers, there will be some scope for town councils to put in place their own plan for their town, such that housing that has been provided for can be delivered in a way that will boost the identity of that town and its sense of itself?

[Greg Clark]

My hon. Friend is absolutely right. As he will know, the parish council in Attleborough, in his constituency, is already drawing up a neighbourhood plan, so that plan can have statutory force as soon as the provisions of the Localism Bill come into effect. I encourage other councils throughout the country to join the more than 90 parishes and neighbourhoods that are drawing up neighbourhood plans, even in advance of the Bill’s provisions coming into law.

[Heidi Alexander (Lewisham East) (Lab)]

The Minister will know that I do not share his optimism about the effectiveness of his planning process proposals in engaging people. How will relaxing the planning rules on converting offices into homes give more powers to neighbourhoods and communities?

[Greg Clark]

Having debated these matters with the hon. Lady in the Localism Bill Committee, I would have thought she would be the first to recognise the need to turn derelict buildings that are not being used into housing that can be used for people in city centres. I am surprised at her attitude. However, I can update her. I know that she expressed some scepticism about the idea that people would be enthusiastic about this, but I have to tell her that since the Bill Committee, we have been vastly oversubscribed by enthusiastic councils in all areas of the country that are eager to get on with neighbourhood planning. That has surpassed our expectations and bodes pretty well for the take-up of the rights.

[Duncan Hames (Chippenham) (LD)]

The Government’s natural environment White Paper proposes a new designation of green areas to be identified in neighbourhood plans. However, those plans must remain in line with the local authority’s strategic vision for its area. How does the Minister propose that neighbourhood plans could safeguard green areas of land identified for development in existing local development frameworks?

[Greg Clark]

I am grateful to my hon. Friend for his question. Our hon. Friend the Member for Cheltenham (Martin Horwood) proposed the designation in the first place. Hon. Members will see in the national planning policy framework that we will capture a definition that will allow the people who know green spaces best—those who live with them—to provide them with the protection for which they have been looking for some time.

[Jane Ellison (Battersea) (Con)]

17. What steps he is taking to improve the transparency of spending in local government; and if he will make a statement.

[The Minister for Housing and Local Government (Grant Shapps)]

All local authorities in England now publish details of their £500 spend online and our Department routinely publishes a wide range of statistics on local authority spend. I say all local authorities but there is one exception to that rule—Labour Nottingham.

[Jane Ellison]

Ministers have already referred to the sound stewardship of Wandsworth council, which not only publishes everything over £500 spending wise but publishes the salary and expenses of all its staff who earn over £58,200. Will the Minister urge all public bodies to follow that lead?

[Grant Shapps]

My hon. Friend is absolutely right about this. It is incredibly important that public bodies follow that lead. Transparency is at the very heart of allowing citizens to take part in local democracy and hold public bodies to account, and I cannot imagine for one moment why any public body would want to hold out against that. It is extraordinary that some do and even more extraordinary that one of them is a major city authority such as Nottingham.

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

Will the Minister be fully transparent about how much the people of Birmingham will have to pay for the establishment of the imposed office of a shadow executive mayor and what they will have to pay in reconversion costs if they happen to reject that back-to-front proposal when he finally consults them in a referendum?

[Grant Shapps]

I think we might be finally making progress. The good news for the hon. Gentleman is that when that kind of transparency is combined, everyone can hold local authorities to account—that is the whole point. When people try to cover things up and when huge amounts of expenditure go completely unchecked by armchair auditors, that cannot happen, but this way it can and will.

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

18. What assessment he has made of the likely effects of retention of business rates on local authorities in areas with high levels of deprivation.

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

The local government resource review is considering options to allow authorities to receive the repatriation of business rates. We will publish our proposals in July for consultation. We have been clear all along that the review will continue to support people where needed, to consider how to fund authorities where locally raised funding would be insufficient to meet budget requirements and to control council tax levels.

[Paul Goggins]

I am very grateful to the Secretary of State for his answer. I am sure he will agree that local authorities have a key role to play in promoting growth. There are very strong arguments in favour of allowing local authorities to keep their business rates, but given the great disparity that exists between local authorities across the country, can he give us a bit more detail about how he will make sure that local authorities in disadvantaged areas that do not have a strong business base will still be able to fund essential services?

[Mr Pickles]

I am grateful for the right hon. Gentleman’s question, because it allows me to make it absolutely clear that there is absolutely no intention whatever for councils to receive anything less than they currently receive with regard to the amount of grant. Manchester receives £714 per head and Trafford receives £325 per head. That kind of bridging is not easy to do, but I want him to understand that the system we are proposing will fully meet the aspirations of places such as Manchester, which has a very dynamic economy. We want to ensure that we no longer take from areas where growth exists, as happens under the existing provisions.

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

Hastings recently fell to 19th from the bottom on the index of multiple deprivation. Can the Secretary of State reassure me that in the new assessment, with business rates as a right incentive for councils, areas of deprivation will still get the support they need from central Government while growth comes back?

[Mr Pickles]

The short answer is yes. My hon. Friend is a doughty defender of her constituents, but there is irony in the fact that the worse an authority can present itself, the more grant it gets. When I was council leader I often wanted to state what the good reasons for coming to the area were, and I think we have found a system under which councils will be able to do that. Hon. Members should not be under any illusions—the existing system is bust; it is broken. It simply does not deliver and we want a system that will deliver for the richest and the poorest.

[Andrew Gwynne (Denton and Reddish) (Lab)]

But while the Stockport part of my constituency would broadly break even from localising business rates by raising almost the same amount as it gets in formula grant under the current arrangements, the Tameside part of my constituency would see a massive 35.7% drop—a shortfall of some £30 million funding. Does the Secretary of State understand that coming on top of his front-loaded cuts, such a massive reduction in funding for one of England’s poorest local authorities would be an unacceptable outcome?

[Mr Pickles]

My advice to the hon. Gentleman is to cancel the leaflet. If it has already gone, pull it back. There is no intention whatsoever, under any circumstances, that he should lose 34%—not in one lump, not in a series of lumps. He is going to have to trust me. We are producing a scheme that he will like. We are producing a scheme such that he might even consider crossing the Floor.

[Mr Speaker]

We are obliged to the Secretary of State, I am sure.

[Mr Douglas Carswell (Clacton) (Con)]

19. What steps he is taking to increase the fiscal autonomy of local authorities.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

The local resource review will enable local authorities to keep at least a proportion of the business rates that they raise. This will enable a number of local authorities to break free from dependency on central Government. The review will also bring forward proposals to free local authorities to raise tax increment financing to support infrastructure and related projects.

[Mr Carswell]

Does the Minister believe that we can achieve real localism without devolving revenue-raising powers from Whitehall to the town halls?

[Robert Neill]

The Government are anxious to ensure that local businesses are not subject to local increases in taxation which they cannot control, but on the other hand a real and powerful incentive is being created for local authorities to grow their tax base by attracting business to their area.

[Mark Pawsey (Rugby) (Con)]

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

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

Since the last oral questions we have announced plans to build 100,000 homes and create 25,000 jobs by selling off surplus public sector land. We have unveiled a new planning protection to help communities to protect valuable green open spaces. We have opened up the books on the lavish spending of the previous Government via the Government procurement card—Whitehall’s flexible friend.

On a more sombre note, we are making a £2 million contribution to the Auschwitz-Birkenau Foundation to ensure the long-term preservation and restoration of its memorial site. It is our collective responsibility to educate future generations about the horrors of the holocaust and never to forget why we need to challenge and combat the forces of hate.

[Mark Pawsey]

The need for more new homes is accepted across the House. In addition to Firstbuy and the new homes bonus, one way of increasing the supply of new homes will be to relax the planning rules, including allowing the conversion of empty commercial space. The Government’s current consultation on that proposal will be welcomed by first-time buyers as well as the Opposition. Will the Minister tell the House when the legislation might be introduced and estimate the number of new homes that might be created in this way?

[Mr Pickles]

I think the proposal will be welcome in all parts of the House. We heard opposing views from the hon. Members for Huddersfield (Mr Sheerman) and for Lewisham East (Heidi Alexander), but my hon. Friend has until 30 June, when we will be closing the consultation. The proposal could produce 70,000 new homes over 10 years. I share his commitment to that aim.

[Caroline Flint (Don Valley) (Lab)]

We have already heard today about the concerns over the level of charges being raised on the old and vulnerable in our communities as a result of the cuts, but it is not only those people who are facing increases in charges. Tory-run Wandsworth and Bexley councils are planning to charge children to play on their swings. Will the Secretary of State join me in condemning this fun tax, or is pay to play now official Government policy?

[Mr Pickles]

Let us be clear: under the Labour Administration councils were harangued about not charging. Councils were instructed to charge more. We will look at the level of charging in the context of the reform of local government finance, but it ill becomes the Labour party to suggest what the right hon. Lady is now suggesting when under Labour charges went up and the council tax doubled.

[Jessica Lee (Erewash) (Con)]

T4. I would like to bring to the attention of my right hon. Friend the Housing Minister the good work being done by Erewash borough council and the private landlord sector across the borough to encourage landlords to consider housing benefit recipients on an equal footing with tenant on private lets, which has strengthened the process of moving families into appropriate accommodation more quickly. Will he welcome this cross-sector work?

[The Minister for Housing and Local Government (Grant Shapps)]

My hon. Friend is absolutely right that the relationship between local authorities and private landlords is critically important. We have seen how the total stock of social housing declined under the previous Administration. We are going to do something about that by ensuring that we build an additional 150,000 affordable homes, but the relationship with the private sector is absolutely key, and I encourage and wholeheartedly welcome it.

[Mr Chuka Umunna (Streatham) (Lab)]

T3. Following that answer, we were told that the Government’s changes to local housing allowance will bring down private sector rents. If that turns out not to be the case, what plans have the Government to ensure that private sector rents are affordable for the large section of my constituents who earn too much to qualify for social housing or local housing allowance, but not enough to buy a home of their own and, as a consequence, spend a huge proportion of their income on rent every month?

[Grant Shapps]

The hon. Gentleman is absolutely right, and this is a huge problem for a large number of his constituents and those of many Members across the House. The answer, of course, is that I hope he will give his full backing to the Localism Bill in the Division Lobby when it comes back to the House, as it contains provisions on affordable rent that are designed to get people out of the private-rented sector and into lower-cost rents of perhaps 50%, 60%, 70% or 80%. That will help his constituents and many of ours to afford that rental.

[John Glen (Salisbury) (Con)]

T7. Does the Minister agree that the Government’s recent statement of 13 April on Traveller sites provides excellent advice to Wiltshire council when it comes to consider contentious planning issues in Alderbury and Salisbury?

[Mr Pickles]

It is quite reasonable to see this as an emerging policy. We have put out a consultation document on Traveller sites, and there are a few more days before the consultation closes. It should be clear in the council’s mind that this is a policy that is changing and emerging.

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

T5. The Housing Minister is familiar with the blight caused by private landlords in old terraced houses in Manchester and Salford. The area-based registration of private landlords has had some success in dealing with the problem, but those schemes under the Housing Act 2004 are coming to an end. If local authorities can show that there has been some success, will he agree to the extension of those schemes?

[Grant Shapps]

The simple answer is yes. I have visited the hon. Gentleman’s constituency and seen some of the problems for myself. I am very much in favour of the discretionary local licensing schemes, which can play an important part. I pledge that when I come back to see his Collyhurst estate, which is about to have its decent homes funding get under way and have work done on that, I will be very happy to visit one of those licensing schemes.

[Mr Speaker]

I call Nigel Adams. Not here.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Will my right hon. Friend visit my constituency so that I can show him at first hand the greenfield land that is being developed, while thousands of units neighbouring my constituency, which have been approved by Leeds city council for building on, are being completely ignored by housing developers, thereby totally undermining any regeneration the city would like to achieve?

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

I would be delighted to go to Yorkshire to visit my hon. Friend’s constituency and advise the council that the best way it can control its destiny is by adopting a local plan forthwith.

[Yasmin Qureshi (Bolton South East) (Lab)]

T6. Despite receiving £20 million of cuts—£5 million more than Wandsworth borough council, and £15 million more than Bexley—Bolton’s labour-run council will not be charging children to play. Will the Secretary of State join me in congratulating Bolton council on protecting children from the Government’s huge cuts?

[Mr Pickles]

Of course, that is because Bolton receives an enormous grant from the Government.

[David Rutley (Macclesfield) (Con)]

T9. In the week of the anniversary of the emergency Budget, what additional steps is my right hon. Friend’s Department taking to help the Government to achieve their fiscal mandate?

[Mr Pickles]

We have delivered a good settlement for local government; we are looking to reduce our own Department, including reducing at the top and reducing numbers; and we are looking to extend that by offering help on growth, on enterprise zones and on local partnerships for growth. This Department has changed enormously over the past year by becoming pro-growth and helpful to local communities, offering power to local government and ensuring that ordinary people do not face a big increase in council tax.

[Mr Speaker]

I think the hon. Gentleman might want an Adjournment debate on the matter.

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

In the Westminster city council area, 3,000 elderly and disabled people are losing social care, children’s centres are being cut, street cleansing is being cut and the youth service is being cut. In the light of that, does the Secretary of State think it is a good use of public money to run a summer roadshow

“to counter the messages that people are hearing about council services being reduced or withdrawn”?

[Mr Pickles]

We have been most careful to ensure that priority has been given to the most vulnerable. That is why we made sure that £6.5 billion went into the Supporting People programme, and £400 million into homeless programmes. We expect that to be reflected by local authorities prioritising the most vulnerable.

[Greg Mulholland (Leeds North West) (LD)]

It is a national scandal that wanted and profitable pubs are being closed against the wishes of the communities they serve and simply to serve the interests of greedy developers and pub companies. I was delighted to welcome the Minister with responsibility for community pubs to the launch of the all-party save the pub group’s new planning charter. Will he welcome that charter and work with the group to ensure that the Government do all they can to protect pubs?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

I am delighted to work with the hon. Gentleman and to discuss his charter—I should be delighted to join him in a pub, if need be. The Government are determined, through our planning reforms and the Localism Bill, to give communities an opportunity to acquire those assets that genuinely can be viable.

[Graham Jones (Hyndburn) (Lab)]

Conservative-run Lancashire county council has increased day-care charges from £5 to £30 starting from this month. Does the Minister think that the residents and elderly of Lancashire will see a 600% improvement from that Conservative council?

[Mr Pickles]

I dare say that, if Labour had been in control, we would have seen even bigger increases. After all, this is the year that Labour was going to impose pretty big front-loaded cuts on local authorities, and it was urging local authorities to increase their charges. A Labour MP should therefore not castigate a local authority that increases charges after listening to a Labour Government; he should be encouraging it.

[Laura Sandys (South Thanet) (Con)]

I have a council that is keen to transfer assets to community groups, and community groups are, encouragingly, interested in taking them on. However, there seem to be some barriers in terms of not only VAT and the complexity of the VAT system but community insurance policies, so will the Department put in place a working group to look at the barriers that are stopping people transferring assets to community groups?

[Mr Pickles]

My hon. Friend makes some very important points, but such matters are way above my pay grade. With regard to charitable trusts and the like, however, it would be sensible for her to talk to members of my Department, and we will do our best to help her.

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

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

On waste, will the Secretary of State confirm that his Department spent £1.3 million in the first four months of this year on legal advice and consultancy? How much of that was attributable to the consequences of his unlawful decision to try to abolish regional spatial strategies?

[Mr Pickles]

I am delighted to tell the right hon. Gentleman that the bill has come down from what it was under Labour, and that quite a lot of that money was actually expended on decisions taken by my Labour predecessor. We have been using that money to unravel the mess that he and his friends left behind.

[Mr Philip Hollobone (Kettering) (Con)]

The village of Braybrooke in my constituency is gradually being surrounded by unauthorised developments in open countryside as a result of applications from the Gypsy and Traveller community. What additional powers and guidance will the Secretary of State give to the local planning authority to ensure that the village is not completely encircled?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

The current consultation on the planning guidelines is open for a few more days, and we will be interested to hear my hon. Friend’s views if he has not already submitted them. We are determined to tackle this problem, and the Localism Bill and the changes to the guidelines are designed to achieve just that.

[David Wright (Telford) (Lab)]

The 1% increase in mortgage activity over the past 12 months is largely focused on remortgages. Why is that?

[Grant Shapps]

Because there was an enormous bank crash due to the fact that the debt in the British economy got out of all possible control, with Labour spending money that this country simply did not have. We are in the process of unravelling that mess. I am pleased to report to the hon. Gentleman that for the first time for a very long time average lending to first-time buyers has dropped below 6%.

[Bob Russell (Colchester) (LD)]

Further to Question 2, do Ministers accept that in towns where there is a major garrison there is a significant impact on the rented housing sector, both public and private? That being the case, will the coalition Government provide additional resources over and above what they would provide for a town without a garrison so that our current and former service personnel can be housed?

[Grant Shapps]

My hon. Friend is absolutely right about the additional pressures that arise when there is a garrison in a town. As I announced at the Dispatch Box an hour ago, this Government are determined not only to honour returning service personnel but to put them at an advantage by putting them right at the top of the list and for top consideration for such things as the Firstbuy scheme. We will send Firstbuy agents into the garrisons to ensure that they can help to get the right people into these new homes.

Petition

Monday 20th June 2011 Commons Chamber

Mr Charles Walker (Broxbourne) (Con)

- Hansard - - Excerpts

When coming here tonight, I received a text from Tony Siracusa, who said:

“Tonight, Charles, you’re our voice. Please continue to ensure we are heard in the House of Commons.”

I intend to do that this evening.

Before I present the petition I should like to thank Paul Mason, the leader of Broxbourne council, who organised an excellent march in support of the urgent care centre about which I am petitioning tonight. I also thank our campaigning newspaper, the Mercury, and in particular Gemma Gardner and the editor Gary Matthews.

The petition states:

The Petition of residents of Broxbourne Borough and surrounding areas,

Declares that the decision taken by Hertfordshire Primary Care Trust to close Cheshunt Urgent Care Centre (UCC) fails to recognise the importance and value of the UCC to the local community.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Health to use his offices to intervene in the matter to require the PCT to revisit its decision in regards to the UCC, and keep GP-led services operating at the site.

And the Petitioners remain, etc.

[P000930]

Eurozone (Contingency Plans)

Monday 20th June 2011 Commons Chamber

15:32

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

(Urgent Question): To ask the Minister what are Her Majesty’s Treasury’s contingency plans in case of a Greek default.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Hon. Members will be aware of the recent developments in Greece. There has been considerable media speculation about what this means for the Greek adjustment programme and potential market reactions. I am not going to engage in speculation on what might or might not happen but give the House an account of the facts as they currently stand.

Let me begin with some background on Greece and the financial assistance package. The international financial assistance package for Greece was agreed in May 2010. The package is composed of two elements: a loan of €30 billion from the International Monetary Fund and €80 billion of bilateral loans from euro area member states to the Greek Government. Although they were created at a similar time, neither the European financial stabilisation mechanism, which is backed by the EU budget, nor the euro area-only European financial stability facility contributed to the package for Greece.

The adjustment package requires Greece to undertake significant actions. There are some very difficult questions that Greece has to address now, because the package assumed that it would be able to access market funding again in 2012, but this now looks unlikely in current market conditions. The House will also be aware of political developments in Greece; a new cabinet has been appointed and the Government will soon be subject to a vote of confidence in the Greek Parliament. Later this month, the Greek Parliament will also be voting on a medium-term fiscal strategy, which is a key element of the conditions attached to the current adjustment programme.

Against this backdrop, the euro area member states have been discussing the next steps. The Eurogroup, which comprises euro area member states, today released a statement calling on

“all political parties in Greece to support the programme’s main objectives and key policy measures to ensure a rigorous and expeditious implementation”.

The statement also said that Ministers will

“define by early July the main parameters of a clear new financing strategy”.

This is a statement from the euro area member states only. Let me be clear: the UK has not been involved in these discussions. We did not participate directly in the May 2010 package of support for Greece, and there has been no formal suggestion of UK bilateral loans or use of the EFSM, which is backed by the EU budget. The UK participated in the May 2010 package for Greece only through its membership of the IMF. So the burden of providing finance to Greece is shared between the IMF and euro area member states, and we fully expect this to continue. Our position on that is well understood across the euro area.

The UK believes that the international community needs a strong IMF as an anchor of global economic stability and prosperity. Over the past few years, we have seen how important that role can be in times of crisis, as the IMF has taken swift and decisive action to support the global economy.

There is, of course, no room for complacency. The Treasury, the Bank of England and the Financial Services Authority are monitoring the financial system, including in the euro area, on an ongoing basis. Many scenarios are considered as part of the normal policy development process. Hon. Members will agree that it would not be appropriate for me to discuss the detail of those scenarios. I also remind hon. Members that UK banks have little direct exposure to Greece.

The continuing uncertainty in the euro area is a reminder of the benefits of taking early action to stabilise and recapitalise the banks, as the UK has done. The UK banking system has developed a strong capital position, which has made it more resilient and will insure it against future risks. UK banks have made good progress in sourcing funding, despite the difficult market conditions.

The difficulties faced by eurozone countries such as Greece and Portugal reinforce why it is right to pursue the course that we set last year to tackle the deficit. The House should reflect that our deficit is larger than that of Portugal, but that our market rates are similar to those of Germany. The action we have taken to strengthen the country’s finances stands us in good stead during this period of instability in the eurozone. No one on either side of this House should lose sight of the importance of these decisions in protecting the UK economy.

[Ms Stuart]

It is absolutely true that there is no room for complacency, but there is also no room for selective blindness and deafness, which there clearly is on the Front Benches. We have yet another question on a bail-out to which Ministers say, “Of course, we cannot be specific and we will not indulge in speculation on events that may or may not happen.”

The United Kingdom will not be isolated if Greece defaults. Economists across the world are increasingly saying that it is a question not of if, but of when and are arguing that, for all intents and purposes, it has already happened. Another bail-out package will not solve Greece’s problems because it is not regaining competitiveness and cannot do so while it is in the eurozone. Therefore, is it not time that Her Majesty’s Government woke up and prepared for the possibility and almost inevitability of Greece defaulting? The situation will lead either to a Greek default or to the break-up of the eurozone. Whichever way it goes, we will not be isolated.

I will therefore ask the Minister some questions that go to the heart of the resilience that needs to be built up. The first is about institutional resilience. If he is really telling the House that people at the Treasury and the Bank of England have not started to get together to make practical provisions about who will meet, hold discussions and take action in the case of a default that would be comparable to Lehman Brothers, he is guilty of not stepping up to the responsibilities of his office.

Secondly, the Minister’s economic plans are completely predicated on the rest of Europe and the world being economically successful. If Greece defaults, other economies will not grow and ours will be affected. Therefore, should he not reconsider his VAT increase, because that would give us greater resilience?

[Mr Hoban]

indicated dissent.

[Ms Stuart]

The Minister shakes his head; I ask him to take me seriously.

Thirdly, I ask the Minister to consider article 66 of the treaty on the functioning of the European Union, which states:

“Where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary union, the Council”,

after consultation, can impose

“for a period not exceeding six months”

measures to restrict capital flows between the EU and the rest of the world. The UK would be affected by such restrictions of capital flows. Has he discussed that with the Commission? Has he made provision for how the UK economy would deal with that if it was imposed?

[Mr Hoban]

The hon. Lady poses a series of very good questions, to which I will respond.

The hon. Lady asked whether the authorities are working together. I said in response to her initial question that the Treasury, the Bank of England and the FSA are working closely on this matter and monitoring the situation. We are keen to ensure that the UK banking system is resilient. The additional capital that the banks hold now, compared with at the start of the crisis, will help with that. As I said, UK banks have not had difficulty in sourcing funding in the market. There is a concern about liquidity risk, but UK banks are continuing to source funding.

I mentioned in my statement the exposure of UK banks to the Greek Government. It is $4 billion, which is less than our exposure to, for example, the Irish banks. The hon. Lady should bear it in mind that French banks’ exposure is about four times that amount and that German banks’ exposure is about five times that amount. We are taking the matter seriously and considering it carefully, and the Chancellor is currently at the ECOFIN meeting in Luxembourg, where I am sure it will be discussed.

The hon. Lady talked about reversing the VAT increase. The shadow Chancellor proposed last week a cut in VAT that would cost £51 billion, which would put at risk our credibility in international markets. We have taken the difficult decisions to ensure that UK market rates are in line with those of Germany. The proposal that she put forward, and which her right hon. Friend put forward last week, would mean interest rates rising for families and businesses across this country, putting the recovery at risk. I do not think that is a gamble that we can afford to take.

[Mr William Cash (Stone) (Con)]

Will the Minister concede that it is crystal clear that the Greek situation, like those of Ireland and Portugal, does affect us? Does he also accept that the idea that is being put forward in the European Union Bill of not having a referendum on treaties that relate to the eurozone would mean that, although we are affected by the situation, we would not be allowed to have a referendum on it? Will he ensure that when the Bill returns to the House of Commons, there are amendments to ensure that there is a referendum on this matter, which affects us, so that the British people can vote on it?

[Mr Hoban]

My hon. Friend makes a couple of points about our exposure to Greece and the Bill that is currently going through the House of Lords. As I said, the UK’s exposure to Greece is relatively small, with bank exposure at $4 billion. He will recognise that we have a big interest in ensuring the continued stability of the eurozone. That is why the treaty changes are being made—to put the European support mechanism for eurozone countries on a permanent footing and replace the EFSM, to which we have to contribute thanks to a decision taken by the previous Government, with a mechanism that is funded entirely by the euro area. We do not believe that there is a transfer of sovereignty from this Parliament to Brussels, so there is no need for a referendum on those treaty changes.

[Mr Jack Straw (Blackburn) (Lab)]

Will the Minister first check his figures? Figures in the Financial Times, citing Moody’s and Reuters, suggest that the exposure of British public and private sector banks to Greek debt is €13 billion, and that of Germany and France €34 billion and €53 billion. Those figures are much bigger than the ones that he gave.

Secondly, will the Minister not recognise that there is now a mood change in Europe? Der Spiegel, the German magazine, has had a cover story contemplating the end of the euro as we now know it, and Mr Charles Grant, the well known europhile, has done the same in The Times today. Instead of sheltering behind complacent language and weasel words that we should not speculate, the Government should recognise that this eurozone cannot last. It is the responsibility of the British Government to be open with the British people now about the alternative prospects. Since the euro in its current form is going to collapse, is it not better that that happens quickly rather than it dying a slow death?

[Mr Hoban]

May I just deal with the right hon. Gentleman’s factual questions? The figures about UK banks’ exposure to Greek sovereign debt were provided by the Bank of England, based on results at the end of quarter one this year.

On the right hon. Gentleman’s second question, I seem to remember that he was a member of a Government who seemed committed to taking this country into the euro. I do not know whether we have seen a damascene or deathbed conversion from the Labour party. I think it was right for this country to stay out of the euro, and that is the policy of this Government. We have a strong interest, though, in the continued stability of the eurozone, as it is our major trading partner. Continued instability in the eurozone could be a factor in holding back the recovery of the British economy.

[Mr John Redwood (Wokingham) (Con)]

Given that Greece needs a work-out rather than another bail-out, will the British Government go to the International Monetary Fund and the EU and say the following? First, a second bail-out would mean sending good money after bad and should not be done; secondly, we need an urgent conference of all the interested parties to reschedule and re-profile Greek debt in an orderly way to avoid huge systemic damage, while accepting that the problem has already occurred. Greece went bankrupt more than a year ago, but the Ministers of certain countries cannot believe it and are wasting taxpayers’ money on trying to pretend that it has not happened.

[Mr Hoban]

My right hon. Friend highlights the need for private sector involvement, and he will know that Chancellor Merkel and President Sarkozy agreed this weekend that there should be voluntary and private sector involvement in resolving the Greek debt. Some very strong accountability is attached to any future financial support for the Greek economy: a tough programme of privatisation, and structural reforms to improve its competitiveness. I emphasise to my right hon. Friend that although it is right that there should be private sector involvement, it is not in our interests for there to be huge turmoil in our largest trading partner, the European Union.

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

Clearly, it is vital and in all our interests that sustainable resolutions are agreed for Greek debt financing, but surely the Government must recognise that there needs to be a smarter approach than simply piling more and more austerity on Greece. What is the Financial Secretary’s response to those, including Boris Johnson, who said yesterday that

“austerity measures are making the economy worse”

in Greece?

Why does the Financial Secretary allow the EU to procrastinate continually and to kick a solution on the bail-out mechanism into the distance repeatedly? He says that the EFSM has not yet been used. The European Council meets at the end of this week. Will the Government ensure that they grasp the nettle this time, and make sure that a permanent eurozone-only bail-out mechanism comes into force as soon as possible rather than pushing it back again? Will he give assurances that the UK will attend any future meetings, which could involve the use of EFSM, even if they are eurozone Finance Minister meetings, because the UK’s empty-chair policy clearly is not working?

Given that the Financial Secretary tabled a little-noticed Commons motion last week to double the UK’s subscription to the IMF from £10.5 billion to £19.7 billion, was not the Foreign Secretary being disingenuous when he said on “Sky News” earlier that

“any such support for Greece is for the eurozone and for the IMF, not for the UK”?

Britain will end up paying more for the Greek bail-out via the IMF, so will the Financial Secretary come clean and say what he estimates our share of IMF bail-out costs will be for our taxpayers? Surely Ministers should pull their fingers out and ensure that the EU makes some final decisions on all that. Is not it about time that the Government showed some leadership?

[Mr Hoban]

The hon. Gentleman continues to amaze me with his remarks. He seems to forget the role that his Government played in setting up the EFSM. The Conservative party has delivered a commitment to ensure that it is replaced with a permanent mechanism—one matter that will be discussed at the European Council later this week.

It is clear that we do not want to be part of a bail-out of the Greek economy and that we do not want the EFSM to be used. The fact that we are outside the Eurogroup sends a clear signal that it does not expect us to participate in that bail-out. Of course, Madame Lagarde, the French Finance Minister, made it clear last month when she appeared on “Newsnight” that she thought that the resolution for Greece was a matter for the eurozone only.

The hon. Gentleman mentioned the increase in the IMF commitment. Of course, the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), committed to doubling the resources available for the IMF at the April 2009 G20 summit in this country. I am surprised that hon. Members have such short memories of those matters.

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

As several EU members have said that the only long-term solution to the crisis in the eurozone is establishing a fiscal union, has the Chancellor made it clear to them that there is no possibility of Britain joining that? As a member of the IMF, we are already playing a role in trying to bail out the European Union from its folly with its single currency.

[Mr Hoban]

As ever, my hon. Friend, whom I congratulate on becoming a member of the Privy Council in the birthday honours list, speaks wise words. The Chancellor has been very clear that we do not wish to be part of a fiscal government for the European Union. That is why we have fought for the right package for economic governance, which safeguards the independence and sovereignty of this House when it comes to making fiscal decisions. My hon. Friend rightly reminds us why it was right never to join the euro.

[Kelvin Hopkins (Luton North) (Lab)]

Whatever happens in Greece this afternoon, and even if there is a fire sale of public assets to buy time, the fact is that the euro is moving inexorably towards its death throes. The realistic choice is between a controlled deconstruction of the euro and the restoration of national currencies, or a crash that would be catastrophic for everyone.

[Mr Hoban]

The hon. Gentleman once again reminds us how important stability in the eurozone is—the situation could have a significant impact on the UK economy, which is why it is important that the Greeks resolve their problems in conjunction with eurozone member states. However, let me make this quite clear again: we do not want to be part of that bail-out.

[Duncan Hames (Chippenham) (LD)]

How does the Government’s disposition on these matters differ between the case of Greece and that of other strained but larger or more closely integrated economies, such as, say, Spain?

[Mr Hoban]

My hon. Friend will of course recollect that one reason why we made a bilateral loan to Ireland was the particularly close relationship between the UK and Irish economies. That relationship did not exist with Portugal, and it does not exist with Greece, so there is a different approach. It is important to remember that Greece was bailed out by eurozone countries, and that the bail-out of Greece should continue to be done by them.

[Chris Bryant (Rhondda) (Lab)]

Is not the danger of the Government’s deliberate attempts to steer as far away from any involvement whatever that the indirect, knock-on effect for British businesses and banks, and in the end for British taxpayers, will be far more significant than he is letting on? That is why many Opposition Members feel that he is being deeply complacent.

[Mr Hoban]

I do not think anyone is in a position to accuse this Government of being complacent. We are the Government who have taken action to tackle the fiscal deficit that we inherited from the Labour party. That has enabled the spreads between UK gilts and German bunds to narrow, reflecting market confidence in the measures that we are taking to sort out the problems in the British economy. The Labour party is failing to take its responsibilities seriously or to acknowledge the mistakes that it made when it was in government. It also fails to recognise the strength of support for the actions that this Government have taken to resolve the economic crisis in this country. Had we not taken that action, we might well have been in the firing line with Greece.

[Mr Richard Shepherd (Aldridge-Brownhills) (Con)]

The eurozone was never an optimal currency zone. It is predicated on a treaty arrangement that calls it irrevocable and irreversible. We should never have accepted the hubris contained in those phrases, which brought about the passage of the Maastricht Bill and the current situation. This Government and this country should not be involved, and it would be helpful if we said what everyone in the press now says: this arrangement cannot survive in its current form. The hubris of those politicians who led the poor Greeks and all those who believed in this arrangement should be exposed as such.

[Mr Hoban]

My hon. Friend is absolutely right that we have seen during this crisis the strains within the eurozone mechanism. The actions that needed to be taken to resolve the consequences of those strains include the bail-outs of the Greek, Irish and Portuguese economies. It is absolutely right that we secured that opt-out to the Maastricht treaty, to ensure that this country did not have to be a member of the euro, a position that the previous Government seemed not to support.

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

The Minister, the Government and the House want stability, but quite frankly, Greece is bankrupt, and cannot restore its economy while it remains in the euro. Is not the answer to introducing stability an orderly return to the drachma? Should not that be the burden of the Government’s policy?

[Mr Hoban]

The hon. Gentleman is absolutely right that we need stability in the eurozone, but I do not think that speculation here will help to deliver that stability to the Greek economy or the wider eurozone.

[Mr Douglas Carswell (Clacton) (Con)]

Most previous IMF rescue packages that I can think off have generally involved first a currency devaluation and secondly a debt default—or, should one prefer the term, a restructuring. Does the Minister agree that the IMF should be consistent with that approach in regard to Greece, and should not the IMF oversee a decoupling from the euro and a default on the debts, which would be consistent with its approach in other instances and rescue packages?

[Mr Hoban]

The IMF is the body best placed to decide the conditions to be attached to any rescue package that it puts forward. Strict conditionality is attached to the rescue package for Greece, including significant privatisations, tax collection reform and wider structural reforms. However, I think that this is a judgment for the IMF to make.

[Mr Dennis Skinner (Bolsover) (Lab)]

Does the Minister recall that when the Tories and Liberals were in opposition and sat over here on the Opposition Benches, the Tories wanted to see the collapse of the eurozone, but the Liberal Democrats thought the opposite and wanted to prop it up? Here we are today with a great opportunity to see the back-end of the euro, and I can only reach the conclusion, based upon his complacent answers, that the Lib Dems are running the coalition.

[Mr Hoban]

That was a flight of fancy by the hon. Gentleman. I would say to him and his hon. Friends that it was this Government who scrapped the euro preparation unit, which the previous Chancellor of the Exchequer set up in the Treasury.

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

It is only six weeks since £26 billion of European financial stabilisation mechanism funding was nodded through for Portugal. May I congratulate the Minister on the change we have seen in those six weeks, on his statement now that there is no question of any further EFSM funding, and in particular on what we read in the weekend press—that this is a red-line issue for the Treasury and that any further use of the EFSM is unacceptable? Long may it continue.

[Mr Hoban]

My right hon. Friend the Chancellor has made it very clear in his discussions with the Finance Ministers of EU member states that we do not want the EFSM to be used in this bail-out—a statement that Madame Lagarde confirmed on British television only a few weeks ago. I welcome my hon. Friend’s congratulations.

[Mr Denis MacShane (Rotherham) (Lab)]

The Minister is prudent not to join in the glee of the euro’s gravediggers, because if Greece defaults, it will not stop on the Acropolis—Portugal and Ireland will be next—and the nine out of 10 banks in the City that are European and foreign-owned will pay a terrible price. Rather than waiting for the eurozone to disintegrate into a set of competing currencies hiding behind capital-controlled walls—the notion that an open-trade Europe can exist in those conditions is nonsense—we should be very careful about where we are going. Boris Johnson said today that Greece was bankrupt. That is a signal to every Greek to get on his bike and seek work elsewhere. Is that really what we want—a new flood of economic migrants into Britain?

[Mr Hoban]

The right hon. Gentleman raises a series of points in his speech, but he makes a strong argument for why it is important that the eurozone is strong and stable. That has broad economic and social benefits. Clearly, if that is to happen, it is important for the Greek bail-out to work and be effective.

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

I am very concerned. The next debate is about trying to cut back on pensions and save taxpayers’ money, yet we are still planning to put through the IMF—a third party—taxpayers’ money that we are having to scrimp and save at home. My constituents will not stand for it. I am disappointed to hear the language of the Government at the moment, which seems to imply that Greece is an economy that is too big to fail. That is the same thing we had with the banks. We should put Greece out of its misery—it is flatlining—and no more of our public money should be sent abroad to Greece, even through the IMF. There are riots on its streets. Its people do not like the medicine being offered to it, and we cannot expect it to take any more. Let it depart peacefully from the euro. It cannot be sustained as it is; it is just good money after bad.

[Mr Hoban]

My hon. Friend will be aware that these are matters for the Greek Government, but I would say this. When money has been lent to the IMF, that does not reduce the amount of money available for public spending. We get interest on the balances that we lend to the IMF, and it has never defaulted on a programme yet. We need to recognise the importance of support provided through the IMF, although I do not really think that my hon. Friend is suggesting that we should withdraw from it. On fiscal consolidation, let me reiterate to my hon. Friends and to the Opposition, who have ignored this crucial fact, that if we had not taken the tough action that we took a year ago in our emergency Budget, it would be the UK, not Greece, in the firing line.

[Stewart Hosie (Dundee East) (SNP)]

Nobody wants to see Greece default, but that is most certainly possible. Were it to happen, there would be an immediate shock to the eurozone and, more widely, to the EU, our largest trading partner. That would have an impact on the UK. I am glad that the Minister said that the situation was being monitored, but the House and the public deserve more detailed information. If he has not already done so, will he ensure that the Treasury asks the Office for Budget Responsibility to assess the impact on UK growth of a potential Greek default, and publish that assessment quickly, so that we can understand precisely what the consequences might be?

[Mr Hoban]

The OBR will take into account the state of the eurozone economy in its normal forecasting. However, let me be clear to the House that the Treasury, the Bank of England and the Financial Services Authority work closely to monitor the strength of the financial system, and the exposure of UK banks to the Greek Government and the wider eurozone economy. The actions taken to date have ensured that our banks are well capitalised, have strong balance sheets and are less exposed to the Greek economy than, say, French or German banks. British banks can still access funding in international markets, which is a sign of the UK banking system’s strength.

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

May I urge my hon. Friend to bear it in mind that the nearer we get to the inevitable break-up of the euro, the faster the denials will be made that it is not going to happen? Will he urge the European Union to design a policy that creates a legal framework for an orderly departure of Greece from the euro? Can he name a single reputable economist who believes that the Greek economy can recover without a devaluation?

[Mr Hoban]

We all recognise the challenges that the Greek economy faces as a consequence of high levels of debt. That is one reason why it has been proposed that the banks take part in a voluntary initiative to roll over their debt, to reduce some of the burden on the Greek economy.

[John Cryer (Leyton and Wanstead) (Lab)]

In answer to one of his Back Benchers, the Minister said that if we put money into the IMF or the EU, that does not affect the rest of public spending. However, the rest of the world would recognise that if we spend money on one thing, that gives us less to spend on other things. Is that right or is it wrong?

[Mr Hoban]

If that is the hon. Gentleman’s view, he should talk to those on his Front Bench, who seem happy to propose £51 billion of unfunded tax cuts. Money that we lend to the IMF is money that is sitting on the Government’s balance sheet; it does not affect the spending decisions that we make. We are paid interest on the amounts lent to the IMF, which do not affect the amount of money that we can spend on pensions, schools or health, and I made the same point about how the EU funds the European financial stabilisation mechanism.

[Sajid Javid (Bromsgrove) (Con)]

Like Greece, we, too, have an enormous national debt, which more than doubled over the last 13 years, to more than £1 trillion, with an interest bill of more than £40 billion this year. Does the Minister agree that had we not had a change in Government 13 months ago, we, too, could have been facing the same sad fate?

[Mr Hoban]

My hon. Friend is absolutely spot on. We can see from the reaction of the Labour party in opposition that it has not learnt at all from its mistakes in government. If we had not taken tough action, we would have seen high market rates of interest, which would have increased costs for families and businesses across the country. We are now seeing the benefits of the tough decisions that we took in last year’s emergency Budget.

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

Given that the tough, sado-monetarist programme imposed on the Greeks a year ago has not worked, how many more sado-monetarist programmes will work?

[Mr Hoban]

When the Greek Government agreed last year’s debt bail-out package, it was assumed that they would be able to re-enter the markets in the spring of next year. That is clearly not the case, given current market pressures, which is why the Greek Government had to seek a second round of refinancing. However, they still need to take action to improve Greece’s competitiveness, reduce the size of the state sector through further privatisation and improve taxation, to get the economy back on track.

[Mr Peter Bone (Wellingborough) (Con)]

I congratulate the hon. Member for Birmingham, Edgbaston (Ms Stuart) on securing this urgent question, and I say gently to the Minister that it is a shame that he did not volunteer to make a statement on this matter first. What is Her Majesty’s view on whether the euro can survive in its current format?

[Mr Hoban]

I cannot speak for Her Majesty on this occasion, but I would say to my hon. Friend that we did not come forward with a statement today because no decisions have been taken. A statement was put out by the Eurogroup last night which recognised that work was in progress, and my right hon. Friend the Chancellor has continually sought to keep the House informed of the outcome of such discussions. Once ECOFIN has met today, there will be an opportunity for him to lay a statement on the outcome of that meeting.

[Mr William Bain (Glasgow North East) (Lab)]

Despite the European lenders having cut their exposure to risk in Greece by 30% in the past year, the risk of contagion in the eurozone has become the paramount concern. Will the Minister acknowledge that, with about $2 trillion exposure to Portugal, Ireland, Italy and Spain by lenders in the eurozone, any Greek default would have the potential to devastate the European banking system and jeopardise the economic recovery in the eurozone?

[Mr Hoban]

The hon. Gentleman makes an important point. In the event of a default, there would be consequences for the strength of bank balance sheets across Europe. That is why we are going through a stress-testing process across Europe at the moment to determine the consequences of various scenarios on the strength of bank balance sheets. UK banks have strengthened their balance sheets significantly and they hold high levels of capital. That will give them some insulation against the impact of a default.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my hon. Friend’s commitments on the non-IMF involvement of British funds in another bail-out for Greece. Does he accept that a country running a large balance of payments deficit can pay off foreign debts only if it is able to reverse that balance, and that to do that, it has to devalue? The man from Brussels cannot make water run uphill.

[Mr Hoban]

My hon. Friend has pointed to one way in which a country can regain competitiveness—through devaluation. There are other ways, including reducing labour costs and increasing productivity, and all those actions should be taken to ensure that the Greek economy and those elsewhere in the eurozone reach a much stronger position.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The impact on the British economy of events in the eurozone, and in Greece in particular, is potentially very significant. May I press the Minister further on what contingency plans the Treasury is putting in place to protect the UK’s financial and economic interests in the event of a Greek default or, worse still, a domino effect across the eurozone?

[Mr Hoban]

I will say this again, so that no one leaves the Chamber unaware of what is happening: as ever, discussions are taking place between the Bank of England, the Treasury and the FSA, and we are considering a number of scenarios and potential market events. I can say to the hon. Gentleman that British banks are better capitalised than they were at the start of the crisis, and because of the strength of their balance sheets, they are able to access funding in what can be quite difficult market conditions. That is a good sign of market confidence in the strength of the UK banking sector.

[Harriett Baldwin (West Worcestershire) (Con)]

Madame Christine Lagarde is clearly an outstanding candidate to be head of the IMF, but is the Minister slightly concerned that she is French and, given that the French banks have a very large exposure to the Greek problems, that she might therefore be conflicted in her approach to the problem?

[Mr Hoban]

Madame Lagarde is a strong candidate for the role of director-general of the IMF. My hon. Friend is absolutely right to point out that she is French; that fact has not escaped us in ECOFIN meetings. Madame Lagarde said on “Newsnight” a couple of weeks ago that she recognised that the bail-out of Greece involved a series of agreements between eurozone countries, and that that should remain the case.

[Bill Esterson (Sefton Central) (Lab)]

The Minister has an extraordinary level of confidence—well, I think it is confidence—in the Greeks’ ability to repay the loans they are currently receiving. I just want to check with him: how much of the £19.7 billion UK contribution to the IMF forms part of the Greek bail-out and how long he is prepared to see us continue to make our contributions through the IMF?

[Mr Hoban]

I do not think the hon. Gentleman is suggesting that we should withdraw our membership of the IMF—[Interruption.] It is not clear from the question he is asking. Part of the condition of any bail-out of an economy by the IMF—whether it is a eurozone economy or another economy—is a debt sustainability plan, which is a rigorous part of the assessment process. As was clear in the Eurogroup statement last night, the IMF and the Eurogroup have signed off on Greece’s debt sustainability plan, so they expect that money to be paid back.

[Joseph Johnson (Orpington) (Con)]

The hon. Member for Birmingham, Edgbaston (Ms Stuart) questions the UK’s resilience in the event of a wave of eurozone defaults. Does the Minister agree that in the eyes of the markets, the UK has already become something of a safe haven, with UK 10-year borrowing rates and credit default swap rates falling last week while the comparable rates in other countries soared, precisely because the UK Government have a good deficit reduction plan, and a good plan for settling our banks and making them stronger—and they are sticking to it?

[Mr Hoban]

My hon. Friend is absolutely spot on in his analysis. I believe that the 10-year gilt rates fell to 3.2% at the end of last week, which reflects the markets’ vote of confidence in the UK economy and particularly the fact that we took the difficult decisions that the Labour party shied away from when they were in government. We took those decisions, which is why the market rates are similar to those in Germany, yet our deficit is more in line with that of Portugal.

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

Can the Minister give an assessment of what effect a Greek default will have on the German and French economies, which are more exposed to such a default, and in turn on UK manufacturing?

[Mr Hoban]

The hon. Gentleman is right to say that German and French banks have a greater exposure to the Greek sovereign debt than the UK banks do. The French exposure is, I think, four times that of the UK, while the German banking sector’s exposure is about five times ours. That is why it is important that, as we go through the process of stress testing European banks, we look very carefully at the level of capital that our banks hold to ensure that they are in a position to withstand shocks and thus to support and sustain the economy.

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

The hon. Member for Birmingham, Edgbaston (Ms Stuart) attacks this Government’s VAT policy and, by implication, the deficit reduction policy. Does not what is happening in the eurozone absolutely serve as a timely reminder that we have to attack the deficit because that is how this country will maintain low interest rates?

[Mr Hoban]

My hon. Friend is absolutely right. It was clear in the reaction to last week’s statement by the shadow Chancellor that everyone thought his plan lacked sense and would have undermined the recovery in this country by putting interest rates at risk and forcing up the interest costs of businesses and families. We have taken the tough decisions to get the economy right; the markets have demonstrated through the rates at which firms and businesses can borrow that they have confidence in our plans.

[Several hon. Members]

rose—

[Mr Speaker]

Order. May I remind remaining contributors that this is not a general debate on the British Government’s domestic economic policy?

[Mr Philip Hollobone (Kettering) (Con)]

Does the Minister believe that the eurozone will remain intact with all its present members?

[Mr Hoban]

I am not going to comment on whether the eurozone will remain intact. Clearly, this crisis demonstrates the huge strain that the eurozone is under. That is why it was right for us to stay out of the eurozone.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Does the Minister agree that one of Greece’s biggest problems is that its people, backed up by the unions, have not accepted the austerity measures going through? Is that not a timely warning to unions in this country, which are complaining about how we are trying to get the deficit under control, of the consequences unless proper and sensible action is taken?

[Mr Hoban]

My hon. Friend has made an important point. It is clear that difficult decisions must be made if our economy is to be put back on the right track, and the Government are demonstrating their commitment to making them. Interest rates are lower than they would have been if we had not made those tough decisions, which is good for families and good for businesses.

Points of Order

Monday 20th June 2011 Commons Chamber

16:14

[Hilary Benn (Leeds Central) (Lab)]

On a point of order, Mr Speaker. The House is only too well aware of the mess that the Government have made of the handling of the Health and Social Care Bill, but today’s Order Paper reveals that they are now outrageously and desperately trying to deny the House the right to decide whether it wishes to recommit the whole Bill to a Committee. Can you confirm, Mr Speaker, that not only would the business motion tabled by the Leader of the House specifically prevent the tabling of any amendment on the form of recommittal to the motion tabled by the Secretary of State for Health, which will appear on tomorrow’s Order Paper—for example, an amendment proposing the recommittal of the whole Bill—but if tonight’s motion were objected to, there would be no debate on recommittal tomorrow?

Is it possible, Mr Speaker, for you to prevent that from happening, and protect the rights of Members, by establishing, under Standing Order 83B, a programming committee that could meet and pass a motion today which might enable us to have a proper debate tomorrow, with amendments, by invoking one of the exceptions in Standing Order 83A to the rule that programme motions should be taken forthwith?

Can you also tell us, Mr Speaker, whether, if the motion tabled by the Leader of the House is passed tonight, it will be in order for Members to argue in tomorrow’s debate that the whole Bill should be recommitted, especially as a motion in the name of the Leader of the Opposition calling for precisely that has been on the Order Paper since 24 May?

[Mr Speaker]

I am grateful to the shadow Leader of the House for his point of order and for giving me notice of it. The right hon. Gentleman has raised a series of very important matters, and I think that it is important to both him and the House for me to respond to them.

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

rose—

[Mr Speaker]

Will the hon. Gentleman allow me to deal with the point of order from the shadow Leader of the House? If after I have done so he remains dissatisfied, I will of course deal with any ensuing point of order.

Let me say first that the shadow Leader of the House is correct in supposing that if the Business of the House motion were objected to tonight, the programme (No. 2) motion would be put without debate or opportunity for amendment tomorrow. That is, as a matter of procedure, factually correct. The programme (No. 2) motion would be put without debate, as are all such motions varying or supplementing a programme order, unless they fall into one of the four exceptions listed in Standing Order No. 83A. The motion to be moved tomorrow is not covered by any of those exceptions, and so would ordinarily be put forthwith.

Secondly, there will indeed be no opportunity to move amendments. If the Business of the House motion is agreed tonight, the programme (No. 2) motion will be debated for up to an hour tomorrow, but no amendments may be moved. The same would apply if the motion were taken forthwith in accordance with Standing Order No. 83A. It would still be open to Members to table such amendments today to appear on the Order Paper tomorrow, but either way, under our procedures they could not be moved.

The right hon. Gentleman asked a very important question, namely whether it would be in order in the debate on the programme (No. 2) motion tomorrow to argue that the whole Bill, not just the clauses specified, should be recommitted, to which the explicit answer is yes. It would be possible to argue that more or less of the Bill ought to be recommitted, or, of course, to argue against recommittal altogether.

I understand the right hon. Gentleman’s concern about the matter as a whole—and he referred specifically to the position set out by the Leader of the Opposition last month—but the House is not being asked to agree to anything that is out of order. It is for the House to decide on the motions before it. As for the particular question of a programming committee, I can tell the right hon. Gentleman and the House that the Standing Order relating to such committees would apply only to proceedings on the Floor of the House, and the initial programme Order of 31 January specifically excluded the operation of a programming committee on this Bill.

Whether my response is welcome or unwelcome to different Members in the various parts of the House, I hope that Members will accept that it has been fully thought through, and has been offered on the basis of the Standing Orders of the House.

[Hilary Benn]

rose—

[Mr Speaker]

Of course I will take a follow-up point of order from the shadow Leader of the House.

[Hilary Benn]

Further to that point of order, Mr Speaker. I am extremely grateful to you for your comprehensive response. The Health and Social Care Bill programme motion passed on 31 January disapplied Standing Order 83B, which relates to programming committees only in relation to consideration and Third Reading, and which does not apply to Committee stage. If that is the case, could not a programming committee bring the matter within scope by the device of now suggesting a Committee of the whole House, which would therefore ensure that, even if that Committee of the whole House were not to be agreed to tomorrow, first, there would be a debate and, secondly, we could consider amendments?

[Mr Speaker]

I hear what the right hon. Gentleman says, but it is my understanding that a programming committee relates to the proceedings on the Floor of the House, and I think he is in some difficulty if he is praying it in aid in support of the proposition he has just made. If I am mistaken, no doubt I will be advised, and if he does not think that I have fully seized the gravamen of his point, he is welcome to return to it because these are important matters, but that is the best initial response I can offer.

[Mr Peter Bone (Wellingborough) (Con)]

Further to that point of order, Mr Speaker. Thank you for your careful explanation of this issue, but am I right in thinking that if the Business of the House motion is objected to tonight, the Government would not necessarily have to introduce their substantive motion tomorrow and could, instead, have a rethink?

[Mr Speaker]

As so often, the hon. Gentleman is right. He is absolutely right that there is no obligation on the Government to introduce their motion. They are perfectly at liberty to test the will of the House, but the organisation of Government business is a matter entirely for the Government. If they want to take note of who votes which way, or decide to sleep on the matter and reconsider—I entertain no especial prospect of that happening, but it could if that is what is in Ministers’ minds—that is a matter for Ministers.

[Mr Denis MacShane (Rotherham) (Lab)]

A day at Wimbledon!

[Mr Speaker]

I note what the right hon. Gentleman says about a lawn tennis championship taking place not far from here, but how relevant that is to Ministers’ thinking on this matter is not entirely obvious to me. We are grateful to him, nevertheless.

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

Further to that point of order, Mr Speaker. Is it in order for the Government to seek to prevent Members from tabling amendments to a programme motion, and, indeed, in effect to prevent you from deciding whether you wish to select any particular amendment—and do you have any idea what the Government are so afraid of?

[Mr Speaker]

It is for the House to decide to what it agrees; that is a matter for the House. Whatever attempts may be made to persuade Members of the merits of one course of action or another, they are perfectly free to do whatever is legitimate within the procedures of the House—that is up to them—and ultimately that is then a matter for the House.

[Grahame M. Morris (Easington) (Lab)]

Further to that point of order, Mr Speaker. I rise to speak in support of the points that have been made, and to seek a little further clarification. I am certainly not suggesting that the Government are trying to stifle debate, but it is unclear to the House whether the Government have sought to prevent amendments to the committal motion on the Health and Social Care Bill by accident or design. Can you confirm that the Government can still change their mind today by moving the motion tonight without the last section, which prevents amendments from being taken?

[Mr Speaker]

The answer to the hon. Gentleman off the top of my head is that if the Government were moved by the power of his argument or the eloquence of its expression, they would be perfectly free to change their mind, and if they were so minded, they would probably do so through the conventional method in these circumstances, namely by not moving the motion on the Order Paper. If the Leader of the House, as a fair-minded man, happens to be swayed by the observations of the hon. Gentleman or others, it is perfectly open to him and his colleagues to decide not to move the Government’s motion. I hope I have made the position clear.

It might also be helpful if I say by way of clarification in response to the shadow Leader of the House that the terms of a programming committee do not apply to—do not embrace—the proceedings in a Public Bill Committee. As I am helpfully advised, the deliberations of a programming committee do not apply to that element of the proceedings. In so far as there is any different interpretation, it might relate to interpretation as to the competences of a programming sub-committee. I hope I have explained the factual position of what a programming committee is, and is not, responsible for.

[Stewart Hosie (Dundee East) (SNP)]

Further to that point of order, Mr Speaker. I am not sure where this matter will lead the Labour party or others in the debate tonight, or possibly tomorrow. I am concerned, however, that this uncertainty may lead to the time protected for the Scotland Bill being eroded or eaten into, and I am seeking clarification from you or others that that will remain protected.

[Mr Speaker]

Well, there is a lot to be said for seeing what transpires. I know that the hon. Gentleman is a keen student of political history. Perhaps he will agree with me in this context that it is a good idea to remember the wise words of the late Lord Whitelaw. He it was who said, “As a rule, I do not believe in crossing bridges until I come to them.”

[Mr Dennis Skinner (Bolsover) (Lab)]

Further to that point of order, Mr Speaker. This all started because the Government said they were going to listen. That is what it was all about. Have you stopped listening? Come on!

[Mr Speaker]

I fear that the hon. Gentleman, perhaps not for the first time and possibly not for the last, has taken matters a little outside my capacity to rule—

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

rose—

[Mr Speaker]

He has nevertheless spurred the Leader of the House, and the Leader must be heard.

[Sir George Young]

Further to that point of order, Mr Speaker. It is precisely because the Government have listened that we have tabled the motion tonight to enable a debate to take place tomorrow. Had we not tabled such a motion, under Standing Orders the recommittal motion would have been proceeded with forthwith.

[Mr Speaker]

I am grateful to the Leader of the House, who I think has clarified matters very satisfactorily.

[Mr Frank Field (Birkenhead) (Lab)]

rose—

[Mr Speaker]

I am sure it is an unrelated point that the right hon. Gentleman wants to raise.

[Mr Field]

Further to that point of order, Mr Speaker. Given that this motion is crucial to the survival of the coalition, if the House follows the advice you gave to the hon. Member for Wellingborough (Mr Bone), we would soon get another motion on the Order Paper, would we not?

[Mr Speaker]

I am very grateful to the right hon. Gentleman. My response is twofold. First, the question is hypothetical; secondly, the survival of the coalition, as the right hon. Gentleman, a Member of 32 years’ standing, can well testify, is thankfully not a matter for me one way or t’other.

If the point of order appetite has been exhausted, perhaps we can now proceed to the main business.

Pensions Bill [Lords]

Monday 20th June 2011 Commons Chamber

16:27

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

I beg to move, That the Bill be now read a Second time.

May I first say something that might help the House? Hon. Members might not realise that there are a number of different things in the Bill, and I plan to go through those elements. I will obviously take interventions, and it would be helpful if interventions were made on those sections in due course; otherwise, it will take a long time, and I know colleagues want to speak.

The Bill is designed to secure this country’s retirement system, putting it on a stable and sustainable footing for the future. I remind the House that our first priority on coming into government was to secure the position of today’s pensioners. We acted immediately to introduce the triple guarantee, meaning that someone retiring today on a full basic state pension will receive £15,000 more over their retirement by way of the basic state pension than they would have under the old prices link. For 10 years, the previous Government talked about this, but we acted in our first year.

The backdrop to the Bill is that we have taken action, and we have committed to a permanent increase in the cold weather payments to £25—an increase the previous Government had planned to be temporary. The old rate, I remind colleagues, was £8.50. Last winter alone we paid out some £430 million to support vulnerable families. At the same time, winter fuel payments will remain exactly as budgeted for by the previous Government: at £200, and £300 for those over 80.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Will that be inflation-linked?

[Mr Duncan Smith]

With respect, it never was under the previous Government, and we are not going to change that policy. We have had plenty of discussions on this, and I remind the hon. Gentleman that, although the previous Government uprated it, the Red Book for that time shows that absolutely no money was allowed thereafter, so it was going to settle back. Let us be absolutely clear about that.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

Let me make a little more progress and then I will give way.

We have protected other key areas of support for pensioners, including free eye tests, free prescription charges and free TV licences for those aged over 75. Having quickly put incomes on a firmer footing, we have moved to secure older people’s right to work by taking decisive action to phase out the default retirement age, thereby sending a message that age discrimination has no place in modern British society and that older workers have a huge contribution to make.

Those were absolutely the right steps to take as a backdrop to the Bill, but they are just the beginning as we set about reforming our broken retirement system. At its heart, the Bill is about dealing with the challenge that faces the next generation, who will have to pay for their parents’ retirement while footing the bill for a crippling national debt, even before they start thinking about their own pension arrangements. I remind the House that 7 million people currently are not saving enough to have the income they want or expect in retirement. We need to look at the steps we can take to secure their future.

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

Is it not clear to the Secretary of State and the Government that although everyone accepts that there have to be changes, some of the proposals in the Bill are, for 500,000 women, unfair and unjustified? He should do a U-turn on those proposals as soon as he can.

[Mr Duncan Smith]

As I said at the outset, I will happily take an intervention on that part of the Bill when I come to it. Of course, that requires the hon. Gentleman’s staying for the whole debate, but that is up to him.

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

Many of us agree with the Secretary of State that it was about time that someone grappled with this particularly difficult issue of reforming our pension system, so I congratulate him on that, but we need to know very early in the debate whether that group of women will be fairly treated and whether the Government will think again, because those of us who feel positive about many of the reforms would find that a sticking point.

[Mr Duncan Smith]

I guarantee the hon. Gentleman that I will discuss the issue, and I hope he will still be here then—no doubt we can have an exchange on it.

The Bill addresses important issues, not just that of pension age. It is key that we get this generation saving and make sure that savings count and are not frittered away by the means test. We also have to find a way of sharing the cost of the retirement system between generations, ensuring a fair settlement for both young and old. I know that people think that retirement is all about just the group who are retiring, but as we look down the road ahead it is also very much about the generation who will have to pick up many of the bills. These are not easy decisions, but I want to make sure that the House recognises that we have to take decisions about the next generation; otherwise we will be guilty of falling into the same slot as the previous Government, who left us with the deficit.

Let me address auto-enrolment. The Bill takes forward the previous Government’s plans for automatic enrolment, which were debated and widely supported during the passing of the Pensions Act 2008 and to which we remain absolutely committed. The Bill refines some of the policy’s parameters to ensure that automatic enrolment works as effectively as possible, following the recommendations of the “Making automatic enrolment work” review that we initiated. First, we propose an increase in the earnings threshold at which automatic enrolment is triggered from an expected £5,800 under the previous Government’s plans—I say expected because the figure involves assumptions about changes as a result of inflation—to £7,475. That will protect those on the lowest incomes and will reduce the risk of the lowest earners saving for a pension when they do not earn enough to make it worth making all that effort and sacrifice. It will also simplify administration for employers by aligning the earnings trigger with the existing personal tax threshold.

[Jonathan Evans (Cardiff North) (Con)]

My right hon. Friend refers specifically to the linkage of the personal allowance but, as he knows, our Government are committed to increasing the allowance significantly. What impact is that likely to have on auto-enrolment?

[Mr Duncan Smith]

We are committed to reviewing that year by year, so I can assure my hon. Friend that we will constantly take it forward and not leave it static.

Introducing a waiting period of up to three months, which has been widely discussed and debated, will ease the regulatory burden on employers. We had many representations from employers. In view of the present circumstances and the difficulties that many of them face, it is important to recognise the key considerations that we had to take into account in framing the Bill.

Workers will retain the right to opt into the system if they consider it to be in their best interests to do so. That is important. Although we are allowing a let-out, if workers want to enter they will retain the right to do so. The Bill also amends legislation to enable employers with defined contribution schemes to self-certify their scheme. That is simple and straightforward. It makes it easier for employers with an existing scheme to try to align that. If it is aligned closely enough, the scheme can go ahead, saving employers the complication of having to change and engage in a new scheme. That is fairer and more reasonable.

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

Given that the vast majority of the 600,000 people who will be excluded from getting a pension under the raised threshold are women, is the Secretary of State at all worried that the Bill is beginning to look as if it discriminates against women?

[Mr Duncan Smith]

I recognise the hon. Gentleman’s concern. We are not blind to the issue, but we have decided to strike a balance between making the scheme work from the beginning and avoiding driving people on very low incomes into sacrificing too much and therefore not seeing the rewards. It is important to make the point that in the Green Paper, as the hon. Gentleman will have noticed, we talk about the single-tier pension, from which there will be very significant benefits to women. We hope that in due course that will achieve a balance.

I do not dismiss the hon. Gentleman’s considerations. We keep the issue constantly under review and will watch carefully to see what happens. It is important that we get auto-enrolment off the ground in a stable manner. I hope hon. Members on both sides of the House recognise that these are balanced decisions—sometimes nuanced decisions—that we have to take, but we will make sure that we review them.

[Mr Tom Watson (West Bromwich East) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

Indeed. How can I resist?

[Mr Watson]

The right hon. Gentleman knows that I have always admired his ambition, but is he familiar with the Burkean maxim that change always brings certain loss and only possible gain? What appears to sit within the proposals he is outlining today is certain loss for many thousands of women facing retirement. Will he sketch out a little more how he intends to give them security, given that many trade unions—the Public and Commercial Services Union, Unite, GMB and Unison—have just voted for strike action? I strongly contend that fear about insecurity in retirement is fuelling that.

[Mr Duncan Smith]

It is always nice to be accused of having ambition. I thought I was supposed to have given that up a few years ago, but I will be tempted by the hon. Gentleman. Workers can still opt in. They must be told that they can opt in, and if they feel it is the right thing to do, auto-enrolment will still be open to them. I will not be tempted just yet on the other subject to which the hon. Gentleman refers, which is the pensions age. I will take an intervention from him, if he wishes, when we get to that. For the moment I want to stay on auto-enrolment. As I said earlier, I recognise that these are not absolutes. In other words, to get the scheme going we have taken some of these decisions, but we will see where that goes. If there is a very big drive for more to go into it, we will take that into consideration.

Amendments made in the other place will ensure that the strength of the certification test is maintained by requiring that I and subsequent Secretaries of State ensure that at least 90% of jobholders receive at least the same level of contributions under the certification test as they would have received based on the relevant quality requirement for automatic enrolment. Employers told us in discussions that the certification test will significantly ease the process of automatic enrolment.

I believe that these changes, taken together, will allow us to present individuals and businesses with a credible set of reforms that will bring much of the next generation into saving for the first time, which was Labour’s intention when in government, and one that we will pursue, thus beginning to improve the poor level of saving. There has been some talk, not necessarily by hon. Members here, about the possibilities of mis-selling. We have retained the powers to prevent excessive charging in automatic enrolment schemes and will use them as necessary and keep them constantly under review.

Part 3 of the Bill covers occupational pension measures, including a few relatively minor changes to the legislation governing the uprating of occupational pensions. The Bill amends existing legislation to set the indexation and revaluation of occupational pensions at the general level of prices. These changes are consequential amendments that follow the Government’s decision to use the consumer prices index as the most appropriate measure of inflation for benefits and pensions.

I remind the House that the key legislation for setting the statutory minimums for the revaluation and indexation of occupational pensions is not in the Bill, as we have already considered the issue in previous debates on the Social Security Benefits Up-rating Order 2010. This is not the time to revisit those debates, but no doubt someone will want to. Hon. Members might wish to note that all the Government will do is set out the minimum increases; if schemes want to pay more than the statutory minimums, that is a matter for them. I think that the move to CPI is supported, by and large, by Members on both sides of the House. That is certainly the indication I was given by the right hon. Member for East Ham (Stephen Timms) and his previous leader, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown).

We must also consider judicial pensions, although I am not sure how long Members will want to spend on them. Part 4 introduces provisions to allow contributions to be taken from members of the salaried judiciary towards the cost of providing their personal pensions benefits. I know that the House will be very worried that this might be too tough on members of the judiciary, but I will resist any pressure to reduce this provision. Judges currently pay nothing towards the cost of their own pensions, while the taxpayer makes a contribution equivalent to about 32% of judges’ gross salaries, which we think is both unaffordable and unfair to the taxpayer. [Interruption.] I sense that the House is united at least on that.

[Nick Boles (Grantham and Stamford) (Con)]

Does my right hon. Friend agree that it is extraordinary that a party that professes a belief in equality failed to tackle this extraordinary unfairness in 13 years in office?

[Mr Duncan Smith]

I would like to be generous to Labour Members and say that they were thinking of the worst-off in society and hoped that they might be able to protect some members of the judiciary. We recognise that we cannot afford to do that, so we must make the system more responsible, fairer and more balanced for all, and these provisions will help us to do just that. It seems that the House is united at least on that.

That brings me to the area that I suspect most Members want to talk about—the state pension age. I believe that we will be able to secure a fairer and more balanced system only if we get to grips with the unprecedented demographic shifts of recent years. I will put the issue in context before moving on to some of the detail.

Back in 1926, when the state pension age was first set, there were nine people of working age for every pensioner. The ratio is now 3:1 and is set to fall closer to 2:1 by the latter half of the 21st century. Some of these changes can be put down to the retirement of the baby boomers, but it is also driven by consistent increases in life expectancy. The facts are stark: life expectancy at 65 has increased by more than 10 years since the 1920s, when the state pension age was first set. The first five of those years were added between 1920 and 1990. What is really interesting is that the next five were added in just 20 years, from 1990 to 2010.

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

On mortality rates, life expectancy has risen, but is the Secretary of State not aware of the huge inequalities between different parts of the country? We have not yet been allowed to discuss the detail of the equalisation of pensions, the unfairness and injustice of which 55-year-old women in my constituency want to discuss. Surely we ought to be looking at the detail of that, which the Bill simply does not do.

[Mr Duncan Smith]

I recognise the hon. Lady’s concern, but life expectancy has risen among all groups. I recognise also that some groups in certain parts of the country have a lower life expectancy—in pockets of the country, definitely—given the type of work they have done. The point is that, in setting and looking at pensions as we have done historically, that is one thing; the other thing is to look at the people in those conditions and ask, “Why is that the case?”

Surely we need to deal with the issue through public health policy, through the way in which we educate people and through the work experience and training that they receive, rather than by trying to do so through differential pensions. Importantly, if we tried to deal with it through pensions, we would be in the invidious and almost terrible position of telling one group of people that they were retiring at a set age and another group, “You’re better than them, you retire at a later age.” That would be an inequality and would be unfair generally, so the hon. Lady is right that there is an issue, but it is not right to deal with it through the pensions age; it is right to deal with it through public health policy.

[Mr Frank Field (Birkenhead) (Lab)]

Given that the Secretary of State has told the House, and there is no reason to doubt him, that his proposals are based on fairness, it is reasonable to assume that before the Bill completes its passage we will see some changes to the way in which it treats women.

May I question the Secretary of State on a wider point, however? The Bill sets in motion measures not simply to equalise the state retirement pension age for men and women, but to increase it. Does he not accept, as my right hon. Friend the Member for Croydon North (Malcolm Wicks) has previously said, that people who enter the labour market early are usually those who live the shortest in retirement? Would it not be fairer for the Government to base eligibility for the state retirement pension not on a person’s age but on their contributory years?

[Mr Duncan Smith]

I know that the right hon. Gentleman and the right hon. Member for Croydon North (Malcolm Wicks) have raised the issue in the past. I recognise their background, great experience and genuine sense of a need to try to figure out a solution. I am always willing to listen to argument and debate that, but my concerns are twofold: first, I am not certain that we have the data going back far enough to be able to make the calculation, although I might be wrong; and, secondly, I return to the point that in the past we have not done things in that way, because it is very difficult to set out differential pension retirement ages for different groups. We are going to equalise provision for women and men, but now the debate is about breaking them apart, and that would lead us into all sorts of debates about unequal retirement ages.

[Malcolm Wicks (Croydon North) (Lab)]

rose—

[Mr Frank Field]

rose—

[Mr Duncan Smith]

With respect, I recognise the right hon. Gentleman’s point, and I will take an intervention from his right hon. Friend the Member for Croydon North, but this is a complicated and fraught area that we should not necessarily deal with in the Bill. Beyond it, I am willing to hear more.

[Mr Watts]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I give way to the right hon. Member for Croydon North.

[Malcolm Wicks]

I am encouraged by the Secretary of State’s thoughtfulness on the matter, to which I hope we will return in Committee. According to the Office for National Statistics, almost one fifth, or 19%, of men in routine occupations—manual workers, labourers and van drivers—die before they receive their state pension. As my right hon. Friend the Member for Birkenhead (Mr Field) has implied, those people have probably worked since they were 14, 15 or 16 years old—very different from those of us who did not start in the labour market until our early 20s. Some sensitivity about when people who have worked for 49 or so years can draw their pension is a matter well worth pursuing.

[Mr Duncan Smith]

As I said to the right hon. Member for Birkenhead (Mr Field) and repeat to the right hon. Member for Croydon North, I am always willing to look and to think carefully about what proposals there are—not for the purposes of this Bill, obviously, but in the future. I know that he has written—

[Mr Watts]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

May I just finish my answer to the right hon. Gentleman?

I am always happy to discuss the matter. There are complications, and there may be some issues about women, too, because contributions are an issue for many women at the moment, so we cannot take these things lightly. I recognise the work that the right hon. Gentleman has done, however, and I am very happy to discuss the issue beyond this Bill, as is the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). For the purposes of the Bill, however, the right hon. Gentleman will forgive me if I stay to the point that we are going to equalise the retirement ages for men and women. The only question is, at what point?

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

rose—

[Mr Duncan Smith]

I am going to make some progress, but I give way to the hon. Member for St Helens North (Mr Watts).

[Mr Watts]

The Secretary of State seems to indicate that there is a potential practical problem. Is it not the case that when someone nears retirement age the Department looks at how many stamps they have paid and how many contributions they have made, which must mean that it keeps track of how long people have been working? That would resolve the problem mentioned by my right hon. Friend the Member for Croydon North (Malcolm Wicks).

[Mr Duncan Smith]

As I understand it, the pre-1975 data are very patchy and messy. I do not want to get sucked into this debate now, tempting as it is, and never to get on to the rest of the Bill; I do not think the hon. Gentleman’s colleagues would thank me for that. I recognise the issue and I am happy to discuss it post the Bill, but he will forgive me if I do not go down the road that Labour Members want by adding that in all of a sudden. I am not going to do that; we are going to stay with what we have. I am happy to listen to their concerns and to see whether we can make changes in future, but I do not give any guarantees.

[Tom Blenkinsop]

rose—

[Mr Duncan Smith]

To be fair, I want to make a bit of progress, because a lot of people want to speak. If the hon. Gentleman wants to raise something else about the matter, I will give way to him later.

Pensions policy has not been updated accurately to reflect all the increases that I spoke about. I remind the House, however, that we are by no means alone in having to deal with this issue; others are making decisions about it. Ireland has already legislated for the pension age to be raised to 66 by 2014, and the Netherlands and Australia are increasing state pension age to 66 by 2020. The United States is already in that position, and Iceland and Norway are now at 67. Under existing legislation, the timetable for the increase to 66 in the UK was not due to be completed for another 15 years, yet the timetable was based on assumptions that are now out of date. The Pensions Act 2007 was based on ONS projections of average life expectancy from 2004. Those projections have subsequently increased by at least a year and a half for men and for women, so the situation is moving apace. That is why we are taking the necessary decision to look again at the timetable for increasing the state pension age. The Bill amends the current state pension age timetable to equalise men’s and women’s state pension ages at 65 in 2018 and then progressively to increase the state pension age to 66 by 2020. This new timetable will reduce pressures on public finances by about £30 billion between 2016-17 and 2025-26.

The impact of the changes on women has been debated enormously, focusing particularly on certain cohorts. All but 12% of those affected will see their state pension age increase by 18 months or less. I recognise that some 1% of those impacted will have a state pension age increase of two years, but it none the less remains the case that those reaching state pension age in 2020 will spend the same amount of time in retirement as expected when the 2007 Act timetable was being drawn up. That is an important factor. There will be no change to the amount of time that they will spend in retirement—some 24 years, on average. In fact, the women who are affected by the maximum increase will still, on average, receive their state pension for two and a half years longer than a man reaching state pension age in the same year.

[Fiona Mactaggart (Slough) (Lab)]

Which of the facts that the Secretary of State has cited was he unaware of 12 and a half months ago, when in the coalition agreement the Government signed up to not introducing these changes before 2020?

[Mr Duncan Smith]

As a coalition, we are, and continue to be, bound by the agreement. [Interruption.] The hon. Lady can shout at me in a second, but let me try to explain. There is a slight problem with that element of the coalition agreement. It was done in that way at the time, and that is fair enough, but we have since looked at it carefully and taken legal advice. The agreement talks about men’s pension age being accelerated to 66, which would breach our legal commitment to equalisation and then not to separating the ages again. There are reasons for needing to revisit that, and we have done so and made changes.

[Rachel Reeves (Leeds West) (Lab)]

The coalition agreement states that the parties agree to

“hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.'”

The Secretary of State’s provisions clearly breach the coalition agreement, so what has changed?

[Mr Duncan Smith]

With respect, I have just said that there are certain elements that would not be legal. That is all that I am saying. The hon. Lady can go on about this point as much as she likes, but I have answered her. She might not like my answer, but that is the one I have decided to give. The fact that the women who will be affected will remain on the same level of retirement but will be in retirement for two and a half years longer than men is an important feature. I stand by the need to equalise women’s state pension age in 2018.

[Joan Walley]

rose—

[Rachel Reeves]

rose—

[Mr Duncan Smith]

I give way to the hon. Member for Stoke-on-Trent North (Joan Walley).

[Joan Walley]

Will it not be 55-year-old women who pay the price? Will the Secretary of State give the House some indication that he will change his policy so as not to discriminate against that cohort of women?

[Mr Duncan Smith]

It will disappoint the hon. Lady, but I have no plans to do that.

[Mrs Eleanor Laing (Epping Forest) (Con)]

My right hon. Friend is absolutely right in all that he is doing. No one can object to the equalisation of pension ages for men and women when we are fighting so hard for other areas of equality. However, does he recognise that for a particular group of some 300,000 women born in 1954 the transition arrangements are rather more difficult than for any other group in society? Although he should not change his policy, will he look at other ways to help that particular group of women?

[Mr Duncan Smith]

As I have made clear and will make clear later, the parameters of the Bill are clear and it is my intention to stand by those parameters. The ages will therefore equalise in 2018 and rise together to 66 by 2020. Of course, I am always happy to discuss these issues with colleagues from either side of the House, including those in the coalition. However, I make it absolutely clear that our plan is to press ahead with the Bill as it stands. The ages will therefore rise together to 66 by 2020.

[Alok Sharma (Reading West) (Con)]

Does my right hon. Friend not think that the criticisms from the Opposition are rather rich? In September 2004, the then Secretary of State for Work and Pensions, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), told the TUC:

“This Government will not raise the state pension age”,

yet Labour’s Pensions Commission reported in 2005 that the pension age should go up, and in the Pensions Act 2007 the Labour party legislated to increase it for men and women.

[Mr Duncan Smith]

Indeed; I welcome that comment from my hon. Friend.

[Rachel Reeves]

Is the Secretary of State honestly saying that the policy has been changed because of legal advice? If that is the case, will he publish that legal advice today before the winding-up speeches and before we vote? Will he also confirm that this is a breach of the coalition agreement?

[Mr Duncan Smith]

I do not publish legal advice, but if the hon. Lady reads the coalition agreement, she will see the reasons. I ask her to study it carefully.

I know that the hon. Lady is sincere in what she is saying, but I say one thing to her. She made it clear on the media earlier that it is the Opposition’s policy to move the rise to 66 to 2022 and for it not to start before 2020. That would cost £10 billion. She will presumably have worked that out. Where does she intend to get that £10 billion? We have heard nothing from the Opposition about debt reduction or the financing of future pensions. She should know that her policy would cost £10 billion, and she should consider that important issue.

[Rachel Reeves]

The Secretary of State rightly acknowledges that we have put forward proposals that would save £20 billion. [Interruption.] Has he looked at whether the increase to 67 could be brought forward, which would take us up to a saving of £30 billion? Can we find a compromise on those proposals, which would not cost women aged 56 and 57 so much money?

[Mr Duncan Smith]

We agree, then, that the hon. Lady’s proposals would cost us £10 billion. We are on Second Reading, and if she wants to raise the same point or table amendments in Committee, she can do so by all means. The Bill as it stands is exactly as we set out, with equalisation of the age in 2018 and the rise to 66. I have no plans to make any changes to that.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I am going to make a little progress. We have more time, and I will give way to other Members later.

[Mr Frank Field]

Will the Secretary of State give way on this very point?

[Mr Duncan Smith]

I wish to make a few points, then I will give way to the right hon. Gentleman again. I think I have been reasonably generous, and I plan to continue to be.

As I said earlier, if we delayed the change as the hon. Member for Leeds West (Rachel Reeves) suggests, it would cost us something in the order of £10 billion. That would be an unfair financial burden, and it would be borne disproportionately by the next generation. In a country in which 11 million of us will live to be 100, we simply cannot go on paying the state pension at an age that was set early in the last century. We have to face up to that, and to the cost and affordability of state pensions, in all the changes that we make.

If the last Government had managed to get re-elected they would be facing much the same decisions. I recognise the need to implement the change fairly and manage the transition smoothly. I hear the specific concern about a relatively small number of women, and I have said that I will consider it. I say to my colleagues that I am willing to work to get the transition right, and we will. Some have called for us to delay the date of equalisation of the pension age, but I wish to be clear again that this matter is the challenge of our generation, and we must face it. That is why we are committed to the state pension age being equalised in 2018 and rising to 66 in 2020. That policy is enshrined in the Bill.

[Mr James Gray (North Wiltshire) (Con)]

My right hon. Friend is being fair and sensible in his approach, and we admire his determination in introducing the Bill. I accept the cost of widening the transition period for the 2.5 million women involved, but will he give particular consideration to the small group of 33,000 women born in March 1954, on whom the change will bear down disproportionately harshly? Surely there is a way of finding a transition method that takes account of that small group of women.

[Mr Duncan Smith]

I repeat that the Bill that we have presented on Second Reading will retain the dates that we announced, but as I said earlier, I will quite happily discuss transitional announcements with anyone who wants to do so. I do not rule out discussions, but we plan to press ahead with the dates that I set out at the beginning of the process.

[Mr Frank Field]

The Secretary of State keeps insisting that he wishes to be fair, but the country increasingly thinks that he is being unfair to a particular group of women. The Opposition are not saying that his Department should not deliver the savings set out, but we are suggesting that they could be delivered in a different way. If he wishes to treat men and women equally, so that they make an equal sacrifice for the contribution that he has to make to the Exchequer, would it not be fairer to raise the state retirement age for both and women more quickly rather than collect £2 billion from a particular group of women?

[Mr Duncan Smith]

I think I have already covered that ground. I recognise the right hon. Gentleman’s concern, but I will not repeat what I have already said, because I do not think the House would appreciate that.

[Nic Dakin (Scunthorpe) (Lab)]

I welcome the Secretary of State’s comments about his willingness to consider transitional arrangements. My constituents, the class that left Foxhills comprehensive school in 1970, who were all born in 1953-54, have written to me to ask why the pensions goalposts should be moved twice so close to their retirement. What would he say to those women?

[Mr Duncan Smith]

The only answer is that, so far, it is seven years away for women. I recognise the concerns, but I have had letters from the public stirred up by a number of people, and the facts have been simply incorrect. I am trying to set out the facts as we see them. The hon. Gentleman may disagree with us, but often people fear that something is going to happen overnight. There is some warning.

[Jo Swinson (East Dunbartonshire) (LD)]

I think there is general acceptance that with increased longevity the pension age needs to be considered, including the current unfair distinction between men and women. However, there is a particular group of women who will be badly affected. I welcome the Secretary of State’s saying that he will consider transitional arrangements. Is he willing to consider with an open mind amendments in Committee and on Report, or other solutions that might be brought forward, to help that particular group of women?

[Mr Duncan Smith]

My hon. Friend tempts me enormously, but she will forgive me if I do not give in to that temptation. Let me simply repeat what I said earlier—it is a bit like a recording, but I shall do it none the less: we have no plans to change equalisation in 2018, or the age of 66 for both men and women in 2020, but we will consider transitional arrangements.

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

Does the Secretary of State accept that some women in the group that we are discussing have already retired or signed early retirement arrangements in the belief that they would receive their state pension when they were 63 or 64? The original equalisation was announced 25 years in advance. For some women, the equalisation that we are considering is only five years ahead. Surely that cannot be right when we are asking people to plan long term for their retirement.

[Mr Duncan Smith]

I think that the hon. Lady refers to people who have retired early, at around 57, as far as I can tell from her calculations. Other than that, I do not think that there is a huge difference. I recognise what their due would have been, but the change is no different thereafter for all the others. I acknowledge her point—I am sure that we will deal with it when we get into Committee.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I have given way a lot and I am not sure that we are going anywhere new on this. I have repeated myself several times. I will give way once more and leave it at that.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I want to emphasise the point that the hon. Member for Aberdeen South (Dame Anne Begg) made about people who have already retired. The latest health statistics show that healthy life expectancy for women and men does not necessarily keep pace with actual life expectancy. Many women in their 60s are trying to wind down their working hours because they are in poor health. The key point is not equalisation, but that people have not had time to plan for it. It is a great burden on people in the latter stages of their career who suffer ill health.

[Mr Duncan Smith]

I fully recognise the hon. Lady’s point. It applies to the whole debate. One could argue that even an extra year’s planning does not allow people time if they are not well. People living longer but being more ill is an issue for the health service—it is already having an impact on the health service. It is a reality—and a good thing—that people are living longer and are able to enjoy their retirement properly. For the most part, they can do that in good health, but I recognise that there are problems for those in poor health.

[Mr Watson]

rose—

[Tom Blenkinsop]

rose—

[Mr Duncan Smith]

Hon. Members will forgive me if I make some progress. I gave way to the hon. Member for West Bromwich East (Mr Watson) earlier, and, although I did not give way to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), others want to speak, and I must conclude.

All the changes should be put in the context of our recent Green Paper, which set out plans for fundamental reform of the state pension. They include the option for a single-tier state pension, set above the level of the means test, which would provide a decent foundation income in retirement for many of the next generation, who might otherwise be forced to live in poverty. Importantly, that includes many women and self-employed people who have tended to suffer poorer pension outcomes in the past, particularly women with caring responsibilities. The changes will be very beneficial for them. The Bill is therefore only part of the process, but it is critical as we take the necessary steps for the next generation. I believe that those are responsible choices for Britain, but responsible government is not always easy government. It involves commitment, tough decisions and a willingness to stay the course. We will not change from that—we will stay the course. We must try to secure our children’s future. The tough decisions are enshrined in the Bill, which I commend to the House.

17:09

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

The debate is extremely important and I am glad that the Secretary of State approached his remarks with such care. It is an important debate because our treatment of older people in our country is one of the most important ways in which we judge the health of a society. Those people have made our country what it is today, and, in their retirement, we respect and honour a lifetime’s work.

Frankly, when we came to power in 1997, too few of our older citizens enjoyed either that honour or that respect. Nearly 30% of our pensioners were forced to live in poverty. The state pension had declined from 20% to just 14% of average male earnings. That is why we set about changing that picture with such speed, passion and determination. That is why we lifted 1 million pensioners out of poverty; why we lifted gross income for our pensioners by more than 40%; why we ensured that no pensioner must live on less than £130 a week; why we introduced the winter fuel allowance, free off-peak travel on buses and free TV licences; and why we increased tax thresholds to ensure that 60% of pensioners now pay no tax. We are proud of our record. It is now set out in the Government’s own figures that pensioner poverty in this country is at its lowest level for 30 years.

In dealing with such long-term issues, the House could legitimately have hoped that the Government would have built on those changes in a careful and consensual way. Instead, they have built nothing but confusion. Last Monday, the Secretary of State had to slap down his colleague the noble Lord Freud on whether there should be a cap on benefits; on Wednesday, we had the spectacle of the Prime Minister not knowing the consequences of his own Welfare Reform Bill; and today the Secretary of State has come to the Dispatch Box when this morning’s newspapers are full of stories of how his Bill might be shredded, not in this House but in the very Treasury that pushed him out to walk this plank in the first place. It is U-turns, confusion and blunder, and the poor Secretary of State is forced to sit there in the middle as the House of Commons’s very own Captain Chaos.

[Nadine Dorries (Mid Bedfordshire) (Con)]

I thank the shadow Minister for giving way—I almost thanked “the Minister” in a throwback to another day.

Somebody—I am not sure who—left a note saying that all the money had been spent. Does the right hon. Gentleman agree therefore that some measures that we could not have predicted when the previous Administration were in power are now necessary, such as the ones proposed today?

[Mr Byrne]

Perhaps the hon. Lady would like to reflect on why, just over 12 months ago, the Government whom she is so proud to support set out a policy in direct contradiction to the one proposed in the Bill. I look forward to seeing which way she votes and how she justifies that to her constituents.

This afternoon, we must try to bring some order to that confusion, and establish which clauses we agree on, and which clauses the Government—and, I might say, the Treasury—need to rethink. The Secretary of State began with automatic entitlement, on which there is a measure of agreement—it is a rock that we should hang on to in that regard. The proposal for automatic enrolment of workers into workplace pensions is to be retained, which is important, because as a country, we under-save for pensions. In fact, 7 million could be under-saving for their retirements. Bringing those people into a pension system and creating a national pension scheme into which they might opt could lead to a step-change in savings in this country.

The previous Government were very careful to build that consensus, which we did patiently, beginning with the noble Lord Turner’s commission. I am grateful that the Government have not junked that proposal, but it is deeply regrettable that they are increasing the salary threshold to entitle an individual to auto-enrolment. It is also regrettable that they are introducing a three-month waiting period before people opt in.

I understand the trade-offs that the Secretary of State is trying to make, but frankly, he has made the wrong call. Why? The first reason is that the salary at which someone is automatically enrolled will be raised from £5,000 to nearly £7,500. The impact of that will hit 600,000 people—they will be much less likely to opt in to long-term savings. If the Government raise that threshold in line with the coalition’s ambition to increase the income tax threshold to £10,000, nearly 1 million people will be excluded, three quarters of whom will be women. Their loss, potentially, is £40 million of employer pension contributions.

The Government are proceeding in full knowledge of that. There is no defence of ignorance. Their review states:

“Many or most very low earners are women, who live in households with others with higher earnings and/or receive working tax credits. These may well be exactly the people who should be automatically enrolled.”

Yet the House has been presented today with proposals that could exclude more than 1 million people. We think, therefore, that the earnings threshold should be looked at again. And if that idea was not bad enough, the idea of a three-month waiting period makes it worse and in itself could mean 500,000 fewer people enrolling automatically in a pension scheme. The loss to them could be £150 million in employer pension contributions. Put those two things together and the average man or woman could lose nearly three years of pension saving—a 7% reduction in an individual’s fund. I am afraid that we simply cannot support that measure.

That takes me to the most audacious broken promise of the lot—the proposal to single out a group of 500,000 of our fellow citizens, all of them women, and say to them, “You know your plans for the future? Well, you can put them in the bin.” The Secretary of State might think it a relatively small and trivial number, but the Opposition do not.

[Ben Gummer (Ipswich) (Con)]

Will the hon. Gentleman give way?

[Mr Byrne]

I will in a moment.

This unfolding chaos has been impressive even for a Government who have presided over U-turns on forests, sentencing reform and the reorganisation of the NHS, because we thought we knew where we were. The coalition Government made a wise move in appointing the Pensions Minister to his brief—he is a man who knows a thing or two about pensions. Indeed, in one of his first major speeches, he told his audience:

“I have become known as something of a bore at pensions conferences.”

We have no problem with that. Then we had the coalition agreement. I do not know whether anyone remembers the coalition agreement—it was important once. Page 26 reads:

“We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”

For good measure, the Pensions Minister got to his feet a month or so later and said that the Government were committed to any change not being sooner than 2020 for women. Then, 118 days later, the Chancellor arrives on the scene. He stands at the Dispatch Box and says that

“the state pension age for men and women will reach 66 by 2020.”—[Official Report, 20 October 2010; Vol. 516, c. 956.]

Yet buried in the fine print, we learnt the truth—not the Pensions Minister, the Secretary of State or the Chancellor could bring themselves to that Dispatch Box and actually tell people straight that that policy set out in the coalition agreement was absolutely worthless. The truth was set out in the depths of the spending review, page 69 of which read:

“The State Pension Age will then increase to 66 for both men and women from December 2018 to April 2020.”

That is a promise well and truly broken. At least when the Lib Dems changed their minds about increasing tuition fees, they could pretend that they were just making things up to get elected, but this was a promise they made and broke in government. Just last summer, the Pensions Minister boasted of reforms in the system that he said included

“those who the system has always missed out such as women and the lower paid.”

In his own Department’s review, he said that he wanted to look at the “particular challenge” for

“women pensioners. A group I have long worked for, and who are so often the poor relations in regard to pensions.”

I will let the House draw its own conclusions. One moment the Pensions Minister is offering to protect women pensioners, the next he is presenting proposals that will punish half a million women with a bill for up to £16,000.

[Richard Fuller (Bedford) (Con)]

rose—

[Mr Byrne]

I will give way, and perhaps the hon. Gentleman can explain the Pension Minister’s change of face.

[Richard Fuller]

The right hon. Gentleman was giving a discourse on integrity in pensions provision under the previous Government, which I think is important, because many of my constituents will be worried about this issue, and will be looking for integrity. He is very good with numbers—it is when he has to add them up that he has trouble—so I am wondering, on the point of integrity, could he answer this question? The Labour party has recommendations for how best to treat the women he is highlighting who are being impacted by the Bill, and those recommendations are costed at £10 billion. In the interest of integrity, will he please advise me and other Members where he would find the money?

[Mr Byrne]

Can the hon. Gentleman confirm that he has seen the costings given in the parliamentary answer provided by the Pensions Minister on 9 March 2011?

[Richard Fuller]

I have not seen those costings, so the right hon. Gentleman can enlighten me further.

[Mr Byrne]

The Minister gave an interesting answer, because those costings say that if, for example, we increased the retirement age to 67 by 2035—that is, if we accelerated the reform by one year—that would save £6.9 billion. However, if the retirement age was increased to 67 by 2034, by accelerating the increase by two years, that would save £13.7 billion. Therefore, the question for us this afternoon is: how much will be saved by accelerating the reform for those women who are now having to retire later, and who therefore confront trying to find all that money magically, in the space of just four or five years? Has that been traded off against other options, such as introducing advances in the retirement age later on? That is the question that we have to get to the bottom of in this Second Reading debate.

[Richard Graham (Gloucester) (Con)]

rose—

[Ben Gummer]

rose—

[Richard Fuller]

rose—

[Mr Byrne]

I will give way in a moment.

Let us hear what the impact of the Government’s proposals will be, because the Secretary of State rather glided over this point. Some half a million women will receive their state pension at least 12 months later than they had previously been advised, with 300,000 women—those born between December 1953 and October 1954—experiencing a delay of one and a half years. For 33,000 women—those born between 6 March and 5 April 1954—that period increases to two years. For them, the loss in state pension will be around £10,000. For those on full pension credit, the loss will be closer to £15,000. Those women, with five years’ notice of the timetable change, have almost no time to prepare for their income loss.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the right hon. Gentleman give way?

[Mr Byrne]

In a moment.

We are talking about women in the age group that was asked by a Conservative Government in 1995 to set in train the equalisation of the state pension, a reform that we accepted, because it came with time to plan. However, that cannot be said of today’s proposal. This morning, Age UK warned that

“a sizeable minority are not even aware of the 1995 changes with nearly a fifth expecting to receive their State Pension at the age of 60.”

The Secretary of State’s proposals will now make that worse.

[Richard Graham]

rose—

[Harriett Baldwin]

rose—

[Fiona Mactaggart]

rose—

[Mr Byrne]

I will give way to my hon. Friend the Member for Slough (Fiona Mactaggart), then I will give way to Government Members.

[Fiona Mactaggart]

I heard the Secretary of State refer in his speech today to legal advice that said that the Government could not keep to their original proposals in the coalition agreement. He did not make the House aware of why the Government cannot legally do what they originally intended, so has he made my right hon. Friend aware of why that is?

[Mr Byrne]

My hon. Friend makes an extremely good point, because I think that that was news to the House. We would certainly expect that legal guidance to be published before we get to the Minister’s winding-up speech. That guidance is a material point in a debate that is important to many people, as well as many right hon. and hon. Members, because this Bill has such a poor effect on women in this country—the people we represent.

[Richard Graham]

rose—

[Harriett Baldwin]

rose—

[Mr Byrne]

In two minutes.

Michelle Mitchell, the charity director of Age UK, has said that

“it’s difficult to see how women can plan properly when the government keeps moving the state pension age goalposts”.

The director general of Saga has said that

“to make just one cohort of women bear all the brunt of this in the very short-term will undermine the concept of planning for retirement over the long-term and cause real distress to the responsible women who have made careful financial retirement plans.”

Can hon. Members tell me how this can possibly be justified?

[Harriett Baldwin]

I thank the right hon. Gentleman for finally giving way. I speak with a lot of interest in this matter, as a woman in her 50s—[Hon. Members: “Surely not!”]—I know, shocking isn’t it?—who has seen her pension age increase, first by five years and now by a further year. However, does he accept that there is an issue with rising longevity and that we therefore need to push forward the retirement age of women such as myself?

[Mr Byrne]

Of course. The hon. Lady makes an extremely fair point, and that is why, after the Turner commission met and the Pensions Act 2007 went through this House, a clear timetable was set for how the state pension age should increase. [Interruption.] The Secretary of State is muttering from a sedentary position about how the longevity assumptions have now been increased. That is perfectly fair, and we should have a national debate about how the state pension age should be brought forward; indeed, the Pensions Minister has issued a consultation. It is just a shame that it closes on Friday, after this debate is concluded.

[Richard Graham]

The right hon. Gentleman made two comments about how the Bill treats women. He estimated that the cost of the changes to some women would be £10,000. Does he not recognise, however, that the change in the value of the basic state pension as a result of this Government’s commitment to linking it back to earnings will be worth more than £15,000? Will he also acknowledge that, as a result of the new flat-rate basic state pension being applied, a lot of women who would previously have lost out because of their caring responsibilities will now benefit hugely? Does he not agree that women will benefit from the changes in the basic state pension in those two ways?

[Mr Byrne]

Let us take the hon. Gentleman’s second point first. I understand that the proposal for a flat-rate pension is included in a Green Paper. It is therefore an early statement of the direction of Government policy. Given what the Government have managed to do to commitments in their coalition agreement, I am not sure how much water that proposal holds. The hon. Gentleman’s first point was more interesting, because he was comparing the benefit for someone on a pension under the lock introduced by the Government with a pension that is linked to prices. Going into the election, no party proposed to keep the pension linked to prices, so his calculation is purely fanciful. Indeed, the Pensions Commission said that we should re-link pensions to earnings in 2012. That was in our manifesto, and that is what we would have done if and when we were returned to office. I am afraid that the hon. Gentleman cannot make up fantasy numbers comparing the reality—

[Richard Graham]

The right hon. Gentleman is generous to give way again but, with all due respect to him, I am comparing the fact of what was delivered by one Government over 13 years with the fact of what has been delivered by this new Government within one year. The Gloucestershire Pensioners Forum, which was created by members of his own party precisely to campaign against the de-linkage made by the late Mrs Thatcher when she was Prime Minister—[Hon. Members: “She is still alive.”] Indeed she is. I meant to say “the former Prime Minister”. The Gloucestershire Pensioners Forum has now fully recognised the value of re-linkage, which this Government will introduce. It is a shame that the right hon. Gentleman does not recognise these facts.

[Mr Byrne]

I am glad to hear that correction about Baroness Thatcher. I think that the hon. Gentleman would also accept his Government’s own figures, which show that pensioner poverty is now at its lowest level for 30 years. I am sure that he would accept that pensioner incomes increased faster than gross domestic product and faster than earnings over the past 13 years. That is why we are proud of our record of delivering on pensions.

[Ben Gummer]

In response to an intervention by the hon. Member for Slough (Fiona Mactaggart), the right hon. Gentleman said that the legal advice was news to him. It was not news to the House of Lords, however, as it was debated there on 15 February, at which point this matter was raised. Surely the real news appeared in the weekend’s newspapers, which have provided yet another bandwagon for the right hon. Member to jump on.

[Mr Byrne]

I do not know how much attention the hon. Gentleman has been paying to this debate, but we championed this issue before it came to the House of Lords and as it went through the other place. We will champion it through the House of Commons as well, until this bad Bill has been thrown out.

[Mr Alan Reid (Argyll and Bute) (LD)]

I agree that, for a small group of women, the Bill is unfair. However, I was pleased that the Secretary of State said that he would be happy to look at transitional arrangements. The right hon. Gentleman has been very good at criticising the Government, but will he please tell the House what the Labour party’s plans are?

[Mr Byrne]

I am grateful to the hon. Gentleman for decoding the Secretary of State’s remarks and putting on record that there will be transitional arrangements. I heard about that only by looking this morning at certain blogs written by Liberal Democrat Members, who also expressed great confidence that there would be a compromise on this. We look forward to hearing a lot more about what that compromise will be. It is a shame that it is not in the Bill in time for this Second Reading debate. We would all understand the logic of this if we heard a little more from the Secretary of State about why the Government are introducing this measure.

The truth is that the Secretary of State used as a justification for his argument the idea that women in this position will somehow be living that much longer to enjoy their new pension. Well, they will draw cold comfort from that. The point is that it is simply not realistic for women in their late 50s, who are truly fearful about being given no time to adjust to their loss of income. Surely that is the critical point for us this afternoon. Women in their later 50s will have earned less over their lifetime; they have lower state pension and private savings than men; many have been unable to join a workplace pension and have interrupted their careers to look after their family; many will have stood down from jobs on the understanding that they would get that state pension early.

These are not simply my assertions; they are the Government’s own facts. The Pensions Minister was forced to tell my hon. Friend the Member for Leeds West (Rachel Reeves) that 40% of women aged 56 have no private pension wealth:

“The proportion of women aged 56-years-old who have no private pension wealth”,

he told the House on 10 March,

“is estimated to be 40%.”—[Official Report, 10 March 2011; Vol. 524, c. 1266W.]

What on earth are those women supposed to do with the measures in the Bill? On 4 February he admitted that the median pension saving of a 56-year-old woman is six times lower than that of a man, yet he tells us not to worry because he has a plan. He has a word of reassurance—[Interruption.] The Secretary of State should listen to the plan of the Pensions Minister. I think he will be rather pleased with it, as we were offered words of reassurance and comfort. On 14 February, the Pensions Minister said:

“One reassurance I can offer is that those women…will be eligible to apply for jobseeker’s allowance”.—[Official Report, 14 February 2011; Vol. 523, c. 681-82.]

They might, I think, call that the final insult.

There is not much that unites the House these days, but concern about this Bill is fast becoming one of those causes. I understand that even the Department for Work and Pensions Whip, the hon. Member for Norwich North (Miss Smith), who is not in her place on the Treasury Bench has said:

“I’m pressing Ministers on this because a number of women have raised it with me, and it so happens that members of my own family are in this group. It’s certainly an issue I sympathise with greatly.”

Her concern is widespread. I believe that the hon. Member for Cardiff Central (Jenny Willott) has told no less than the Deputy Prime Minister:

“I agree with the Age UK protestors: these changes should be reconsidered.”

Nearly half the Liberal Democrat MPs have signed an early-day motion that says that the Government should

“rethink its retirement timetable in the Bill so that these women have a fairer chance to plan and save for their retirement.”

Tonight, there is a chance to put a vote behind those words.

Who will vote to support the Pensions Minister? Once, he never tired of telling the Tories about the error of their ways. He was the man who once said:

“Pension policy needs to be stable and predictable years ahead, not made up on the back of a cigarette packet.”

That was still there on his website, www.stevewebb.org, on 6 October 2009. Alongside it, I found another rather apposite quote:

“It is typical of Tory policy to hit the poorest the hardest.”

That is still there on his website. This is the Pensions Minister who said:

“As ever when it comes to pensions, it is as if women are an afterthought. That is clearly not the way in which to change state pension ages.”—[Official Report, 9 March 2010; Vol. 507, c. 33WH.]

That was not on his website. That is what he said in the House of Commons in March last year. Tonight, we have the chance to help the Pensions Minister stand by his words and his record. I think that we should help him with his honour.

This is a Second Reading debate. We are supposed to be debating the principles of the Bill and we are then asked to vote on those principles. We are being asked to do this when it is perfectly clear that the Government no longer believe in the Bill. We are privy to reports in the newspapers that the Government might be working on another U-turn. I am not sure whether it is Conservative or Liberal Democrat Members who are behind it, although I know who will claim the credit. The Secretary of State told the Financial Times today that there are “issues and concerns” that need sorting out, while senior Ministers, says the Daily Mail,

“are telling the Chancellor he must think again.”

The Secretary of State, it says, is “sympathetic”. I have to ask, then: why are we voting on a Bill that the Government do not believe in? The Chief Secretary does not believe in it; the Pensions Minister does not believe in it; half of the Liberal Democrat Members do not believe in it; the Tory Whips do not believe in it. What on earth are we doing going into the Division Lobbies to vote to punish half a million women through a Bill that no one believes in? Will the hon. Gentleman answer that question now?

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

It is unclear whether the right hon. Gentleman is going to vote against Second Reading—he has not said so yet. On the assumption that he is, he would have to find not just the £10 billion that his hon. Friends want to raise, but the £30 billion that this Bill saves. Where will he find £30 billion when all the money is gone?

[Mr Byrne]

I am glad that the Minister has raised that point. His own consultation, which closes on Friday, is examining the question of how savings can be made through acceleration of the granting of the state pension age later in life. That is an issue that should have been brought to the House for debate before we were asked to debate egregious measures that will hit half a million women. We should re-examine the timetable for the raising of the retirement age to 67, but that must be done on the basis of equal treatment of the sexes, and the principle that people should be given time to prepare.

We are sick of this confusion. We are sick of this chaos. We say to the Government today, “No more: you need to get a grip. Take this Bill away, and bring us a plan that you have had the decency to half think through.”

“The critical factor in pension arrangements is certainty. People need to be able to plan with certainty”.—[Official Report, 11 January 2011; Vol. 342, c. 179.]

Those are not my words, but the words of the Pensions Minister who is responsible for the Bill. Tonight the House will be asked to vote on a broken promise. We urge the Government to think again. We shall vote to oppose the Bill, and I urge others to do the same.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. As Members can see, this is a popular debate. Although I am not introducing a time limit at this point, if Members do not exercise restraint themselves, one will be introduced.

17:36

[Jonathan Evans (Cardiff North) (Con)]

Let me begin by drawing the House’s attention to the Register of Members’ Financial Interests, which shows my connections with the pensions industry over many years.

As you know, Mr Deputy Speaker, you and I entered the House on the same day back in 1992, but this is the first opportunity that I have had to observe the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) in full flow. I have often wondered how he managed to reach such an elevated position in Government in such a short time, and having listened to him today, I am still wondering.

I was staggered by the right hon. Gentleman’s opening remarks, in which he said how proud he was of his Government’s record on pensions. Is he utterly unaware of the destruction of the private pensions system in our country wrought by his former leader, and of the revelation that when the Labour Government were elected in 1997, the National Association of Pension Funds said that the end of dividend tax credit would mean the end of at least half the defined benefit schemes in our country? In fact, we have seen much more than that brought about as a direct result of the Labour Government’s policy. I believe that it was forecast to cost our private pensions system at least £50 billion. Is the right hon. Gentleman proud of the fact that under a Labour Government a record number of pension funds closed to new business? Is he proud of the record of a Labour Government who gave pensioners an increase of merely pence? I can tell him that people in my constituency remember that event.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Jonathan Evans]

I will in a moment—unlike the right hon. Member for Birmingham, Hodge Hill, who was not prepared to hear these remarks from me.

Two years ago, the state earnings-related pension scheme was not increased by even one penny by the Labour Government. That is an illustration of how much we can trust Labour on pensions.

[Sheila Gilmore]

Government Members constantly raise the subject of the 75p pension increase. It is not necessarily a choice that I would have made, but it is the choice that the Labour Government made at the time. The hon. Gentleman should bear in mind that that increase was introduced during the first couple of years of that Labour Government, when they were following Conservative financial rules.

[Jonathan Evans]

I am trying to get my head around the idea of Tony Blair standing at the Dispatch Box and taking his instructions from my right hon. Friend the Member for Richmond (Yorks) (Mr Hague). It is a little bit too difficult for me to accept.

I think it important for us to recognise real concerns that have been raised throughout the country. All Members of Parliament have received many letters, e-mails and other representations relating specifically to the proposals to increase the age at which the state pension kicks in and the impact that that will have on a number of people, not least women.

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

Before my hon. Friend moved on from his powerful previous argument, I wish he had remembered to add to his list the discreditable way Equitable Life victims were treated. Their pension shortfall dilemmas were kicked into the long grass for many years.

[Jonathan Evans]

I am grateful to my hon. Friend for making that observation, but I hope she will forgive me for not going down that road. If we were to do so there would be no time left for the debate in hand, because we would all be pointing out the many Labour shortcomings on pensions.

There has been a lot of misinformation about the proposals we are debating. I listened to a staggering example of that at 9.30 this morning on Sky News, when the otherwise excellent Charlotte Hawkins said that today we were going to vote on a proposal to make women work a further five years before receiving their pensions. It amazed me that that could be said; I am sure it must have been a slip of the tongue. Later, I opened my e-mails and came across a letter from a lady who will be required to wait a further two months as a result of these proposals, but who stated that she believed she will have to wait a further six years. That highlights the exaggerations, and in some cases the dishonesty, in the campaign that has been waged against the proposals.

[Harriett Baldwin]

Did my hon. Friend also see last week’s Age UK survey, which found that 20% of the women affected by the previous Government’s changes to equalise the pension ages of men and women had not realised what was going to happen to them?

[Jonathan Evans]

Indeed, and one of the difficulties in this regard is to do with the first change, to which almost all e-mails refer: that women were getting the pension at 60 and that that is now gradually being moved up to 65. The right hon. Member for Birmingham, Hodge Hill referred to his family being affected. Well, my wife is affected by these changes, but we in this House were aware of them because we legislated for them in 1995. [Interruption.] Yes, we have known about them, but we have known about them only here, because there has not been much dissemination of this information outside the Chamber to the rest of the public. [Interruption.] I am grateful to the hon. Member for Slough (Fiona Mactaggart) for indicating that that is so. The idea that the retirement age might then be moved up to 66 is not new. It was debated in this House back in 2007, and legislation was put on to the statute book. What we are doing now is moving the first of these dates forward, and in my view that is necessary. It is perfectly clear that a significant saving will be made.

The Secretary of State made a typically sensitive address, which was well received on both sides of the House, and not only because he said he was prepared to listen. I am staggered that any Minister who says they are prepared to listen to an argument is treated with contempt from the Opposition Benches. [Interruption.] Absolutely: it is an indication of what Labour Members were used to when their party was in government. I commend my right hon. Friend on his approach, however, and I am impressed by the sum of £30 billion.

The Opposition propose that we should not take these steps for a while, and that we should instead return to a 2020 or 2022 timetable. The argument that everything the Government do is being done too fast is a familiar Opposition refrain. It in effect suggests that we can somehow just pass the responsibility on to succeeding generations and not grasp it ourselves. I think we must grasp it ourselves, but that does not mean I am unsympathetic to the arguments about that specific cohort of women who are affected in a particularly negative way.

I know there were debates on these measures in the other place, but I am not persuaded that we must defer taking them to beyond 2020. I am not going to talk about the implications of the equality legislation so often supported by Opposition Members, even though that may have led to a situation whereby what was stated in the coalition agreement cannot now be put into effect. However, what I am certainly uncomfortable about is any woman having to wait more than an additional year. My right hon. Friend the Secretary of State will be aware that Sally Greengross—Baroness Greengross, a Cross Bencher widely respected in this area—put forward a compromise proposal that has much merit, based as it is on the idea that no woman waits for more than a year. The restriction was limited in that way, and the measure was exceptionally intelligently crafted.

I have read Lord Freud’s responses to this debate. He said that the proposal would cost not £10 billion, as the Opposition suggest, but only £2 billion. Given that I want to husband public resources—and that we apparently have the Opposition’s support for shifting retirement ages forward from 2034 and 2044 to dates that are significantly earlier, saving perhaps £2 billion—I am much more attracted to the idea of matching that saving and making far greater savings elsewhere.

Lord Freud responded to the debate by pointing out the gender equality legislation—the equality provisions of European law—that might make this a difficult proposition. However, I am not persuaded that my right hon. Friend the Secretary of State’s Department lacks minds sufficiently sharp to overcome this difficulty. [Interruption.] Yes, I am absolutely sure that the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), could draft the legislation required; but if not, he has all the necessary skill within his Department.

I am very happy to tell all of my constituents who have written to me on this issue that, because of what is happening with longevity, it is fair, if we are asking men to wait a further year, to ask women to wait another year. There are those who say it is a double whammy because we are also seeing equalisation from the age of 60, but that is already a part of the architecture and cannot be taken into account. I am certainly prepared to argue that case.

I want to make two final points that are connected not with this issue but with other aspects of the Bill. In it, adjustments are made to the financial assistance scheme. Many of my constituents have been affected by the collapse of Allied Steel and Wire. On the question of the general attitude of Labour toward pensioners, many of ASW’s pensioners know the “assistance” they got from Labour: none whatsoever. That is the reality. However, the truth is that, under the financial assistance scheme, many people are not even going to get the 90% that was flagged up as their likely reimbursement. I hope we get opportunities to address that issue. I am looking across at my hon. Friend the Member for Arfon (Hywel Williams)—I do not know whether I should call him my hon. Friend; he might be offended by that. My hon. colleague and I have discussed this issue, and it is important that we return to it to address some of the injustices in the operation of the financial assistance scheme as it affects ASW pensioners.

[Malcolm Wicks]

Will the hon. Gentleman give way?

[Jonathan Evans]

On that issue only, yes.

[Malcolm Wicks]

Will the hon. Gentleman at least acknowledge, in fairness, that it was the last Labour Government who set up both the financial assistance scheme and the pension protection fund, which, whatever the difficulties, have helped many tens of thousands of people who were going to lose their pensions?

[Jonathan Evans]

The right hon. Gentleman and I have known each other for many years and he knows I have the highest respect for him. I certainly accept that we eventually ended up with that legislation, but it took a long time to get there. However, he was material in trying to achieve that.

Let me also say a word about the effects of auto-enrolment. I was staggered to hear the right hon. Member for Birmingham, Hodge Hill tell us that he does not like the proposals on auto-enrolment. I have to say that I am concerned about the impact of our continually increasing the personal allowance—as I understand it, that is going to be part of our policy—if we are just going to link the personal allowance figure to the level at which auto-enrolment kicks in. I am reassured by what my right hon. Friend the Secretary of State says about keeping this under review, but the movement from £5,000 to £7,000 is not, as described by the right hon. Member for Birmingham, Hodge Hill, an attack on poorer workers. The reality, on the information that we have, is that those people would be worse off if they were within the scheme.

[Mr Duncan Smith]

May I tempt my hon. Friend with a thought about why the right hon. Member for Birmingham, Hodge Hill made such an issue of this? I wondered whether he was searching for a reason to vote against the very policy that his Government, when in power, wanted to bring in, because there is nothing else in it with which Labour disagree.

[Jonathan Evans]

I am aware that the Forum of Private Business does not like the fact that the Government have not made more adjustments in this area, and of course the Government would like to have a situation in which all parties were on board at the end of the review, but the proposal of the right hon. Member for Birmingham, Hodge Hill has virtually no supporters, save perhaps for those within the union movement—surprise, surprise. The reality is that the proposals we are taking forward are overdue, but there has been too much misinformation about this change. Ultimately, I want to see a situation in which no woman has to wait more than a year longer than she had expected to wait, but the linking of that issue with a 25-year lead-in to the equalisation of pensions at 65 by those engaged in this campaign has been deliberately misleading and has not served the interests of all the people who have written to us.

[Mr Deputy Speaker (Mr Nigel Evans)]

Thank you for your time constraint.

17:51

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

It is a pleasure to follow the hon. Member for Cardiff North (Jonathan Evans), but I will disagree with quite a bit of what he said.

I am disappointed about the change in the financial assistance scheme from the retail prices index to the consumer prices index, particularly in relation to Richards Textile factory in Aberdeen, which went bust with the collapse of its pension scheme. Although the very hard work of many Labour Back Benchers ensured that those pensioners did not lose all their money, they still feel aggrieved that they do not have the same cover as those who subsequently entered the pension protection fund and that they do not get quite as much as those covered by it.

Let me start by saying which parts of the Bill I agree with to show that not everything in it is bad, although quite a lot is. I agree wholeheartedly with the lifting of the default retirement age and I only wish that my Government had done that. I have a friend who has been told by his employer that he has to retire at 65 and he does not want to, but unfortunately his birthday falls on the wrong side of the divide.

I am also very glad that the Government are going ahead with the national employment savings trust. There was a bit of worry at the time of the election that some people in business who were not too keen on it, particularly on auto-enrolment, might put pressure on the coalition Government, who I am glad resisted. NEST is certainly the way forward for occupational pensions, to ensure that there is pension cover for everyone and that most people will not have to depend on the basic state pension as their sole income in retirement. That is very important.

I also agree with the proposal to bring auto-enrolment forward to July 2012 for large companies. If they are ready to go, the sooner the scheme gets up and running the better and the sooner it is tested the better, because part of the reason for rolling out auto-enrolment is to test how it works in practice.

So those things are all good, but that is as far as that goes and there are issues of concern. Like my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), I am concerned about the lifting of the auto-enrolment earnings threshold by £2,500. I tried to intervene about this early in the Secretary of State’s speech, but lots of other people were jumping up and down at the time. The problem is that low earners might not always be low earners. Auto-enrolment is important in getting people into the scheme as soon as possible and in ensuring that even low earners are enrolled in a pension scheme. If those people continue to earn similar amounts for the rest of their working life, the scheme might not have the returns that they would expect, but no one knows, at the start of their working life, what their eventual earnings will be and we should always err on the side of caution in ensuring that people enrol. The raising of the threshold could result in about 600,000 people not being enrolled who otherwise would have been. It has been said that those people could opt in, but it is highly unlikely that many people on such low incomes would do so. If the Government introduced a foundation pension or a pension for the state, which the Secretary of State put into context, the scheme would make a difference for people making such low contributions. Even someone earning just over £5,000 a year could make a valuable contribution to their eventual occupational pension.

I worry about that issue and I worry when I hear that the threshold might go up to £10,000 or more in future, because the whole point of auto-enrolment and of NEST was to make things easy, to make belonging to an occupational pension fund a no-brainer and to ensure that everyone who was in work would automatically pay into an occupational fund. People who are not auto-enrolled and who are not in the pension fund will lose out on the employers’ contributions as well, so they will lose out not only on their potential pension earnings towards the end of their life but on what we often think of as deferred wages in the employers’ contribution.

I am also concerned about the introduction of the three-month wait, for many of the same reasons I have just given. The shadow Secretary of State has already made the arguments, which are important to remember.

All those issues could probably have been swallowed if they had been the only things we were concerned about, but the big sticking point in the Bill, which I suspect most Members will be talking about this afternoon, is the acceleration of the state pension age, particularly the anomaly that hits the 500,000 women who at very short notice will have to wait more than a year for their pension. I wonder whether the Government have analysed exactly who will lose out as a result of the measures and which women will not be in work at the age of 66, when they get their state pension. The figure of £10 billion has been bandied around for how much it would cost not to go ahead with the proposal, but I suspect that is a gross figure. I do not know whether the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), has any idea how much the welfare bill will go up as a result of people’s falling out of work before they reach the age of 66.

I agree that it is right that the state pension age should rise and indeed inevitable that it will rise, and I accept that there are issues to do with longevity, but I am concerned that we are potentially creating not the pensioner poor but a group of people who become the new poor because they have fallen out of work in the last years of their working life and are struggling to get by on benefits. It is not good enough for the pensions Minister to say that for anyone who falls out of work before reaching the state pension age and who does not have a pension they can draw early, there is always jobseeker’s allowance or employment and support allowance. The contributory element of JSA lasts only six months and the Government propose that the contributory element of ESA will last only a year. Nowadays, women expect to have their own wages, but their qualifying for income-related JSA or ESA will depend on the household income and whether they have a working partner. For many women, that misses the point. Quite a few women in my constituency say, “I’ve only got a pension of £1 a week.” What they mean is that they have 60% of their husband’s pension and £1 a week on top of that, but they still see that £1 a week as their pension and they feel very aggrieved about that.

[Dr Whiteford]

Does the hon. Lady share my concern that the healthy life expectancy for men in Scotland is currently 60 years and for women is 62 years? In that context, a dramatic increase in the pension age for those people is simply displacing on to the benefit system the burden that will have to be met.

[Dame Anne Begg]

Indeed. The hon. Lady says more eloquently what I was trying to say about displacing people out of pension age into the working age poor. There is nothing to be gained for those people if all we are doing is delaying when they get their state pension. There will be the odd situation that when people retire, their income will go up, rather than people being able to work until they reach retirement age.

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

Does my hon. Friend agree that, as we are coming out of carers week, the Government should remember the 37% of women affected by the state pension age increase who will not be in the work force in the last years of their working lives, as the Government call it, and who have responsibilities caring for an elderly or ill relative or for their own grandchildren? They will be among those who suffer most as a result of the increase.

[Dame Anne Begg]

There are much wider issues with raising the state pension age such as the fact that, towards the end of their working life, many people may start to take on less paid employment because they have taken on caring roles. My generation of women is often called the sandwich generation in as much as they are looking after elderly parents or other elderly relatives as well as looking after their own grandchildren, to allow their sons and daughters to go to work. That is the generation that is caught by the anomaly—a generation of women who, perhaps, were not able to work throughout their married life and have not necessarily built up the national insurance contributions that will give them a full state pension.

I am curious about the Government’s argument that the flat rate pension will miraculously mean that all women will get a state pension, when my understanding is that that pension will still be based on the number of years of national insurance contributions. That was brought down to 30 years in the Pensions Act 2007, so women can already qualify. That Act also made it easier for carers to qualify for credits. I see the pensions Minister is about to jump up. Perhaps he can clarify whether the qualification for the flat rate pension will not be 30 years of national insurance credits.

[Steve Webb]

The hon. Lady raises serious points. She is absolutely right—for the basic pension, those credits are already in place. The problem is that many of the women we are discussing will have done their child rearing before credits for the state second pension came in, so they will still retire with inadequate state pensions, which would be corrected under our proposals.

[Dame Anne Begg]

So those women will still have to have the 30 years of credits, but in respect of the SERPS element they will be the winners. But for every winner in all these changes, there will inevitably be losers, and there will be those who have paid their SERPS all their working life, including women who have paid the big stamp but not the small stamp. They are the ones who often feel aggrieved. As the Minister knows, pensions policy is a minefield covered in all those booby traps. As soon as one presses down on one thing, another pops up, making it all very difficult.

It is the group of women who were born in 1953 and 1954 who are being expected, at very, very short notice—five years’ notice—somehow to change their whole financial planning for their retirement. As I pointed out to the Secretary of State in an intervention, when the equalisation came in the warning that people were given ranged from 15 to 25 years. The evidence that I received from Age UK showed that 20% of women still have not realised that they are not going to get the state pension at 60 but will have to wait until they are 64 or 65.

That proves not that we have been lax in trying to inform or educate women about what state pension they can expect, but that it takes a long time for such things to sink in and for people to make arrangements. In the case of the current proposal, the women who will be most affected have just over five years’ notice. That is unfair and I hope the Government will look again.

[Duncan Hames (Chippenham) (LD)]

In her intervention, the Chair of the Select Committee made the excellent point that some of the women we are talking about have already left the labour market, having taken early retirement. Does she agree that the Government have a special responsibility to those former Government employees who they persuaded to take early retirement instead of a redundancy option and who now find that they will not have access to a state pension as part of the plans that they would have made when deciding to leave their employment as civil servants?

[Dame Anne Begg]

I could not agree more. It is imperative that we get that sorted out now. I am sure that other local authorities will not be any different from my local authority, which knows that cuts are coming. My local authority managed to have a funding black hole of £25 million. Before there was any economic disaster in any other part of the world, it happened in Aberdeen. I will not talk about that being a Liberal Democrat council, but it was. That has resulted in large numbers of local authority employees—not only women, but predominantly women—being offered early retirement, which councils have been encouraging their employees to take because they do not want to go down the route of compulsory redundancies.

People have been signing up and are still signing up for early retirement without the full knowledge that what they are signing up for is a lower pension that will not be supplemented with the basic state pension when they reach the age of 63 or 64, as they thought it would be. In some cases, they may have to wait another two years. Their entire financial planning was based on the expectation that they would get whatever the basic state pension would be at that time. It is £105 now, so it will be more than that, and the flat rate pension may have come in. They were expecting at least another £100 a week in the income that they have worked out they will need to survive.

The short notice is the injustice. The Government must look at this again. They cannot leave out this group of women, who did not have the chance to build up their pension protection but who took on the burden of care in the community, saving the Government billions of pounds. The same group of women have had to fight many of the equality battles, yet it is being hardest hit, and it cannot be right that, because of the acceleration, the Government are making them pay the price not of deficit reduction—according to the coalition, the proposals will not apply until after the deficit is meant to have gone—but of the longevity of other groups.

I accept the Secretary of State’s point that the coalition Government discovered that their proposed acceleration was illegal. It would probably be illegal under European law because the Government had already said that they would equalise the pension age of men and women. That makes me wonder what else in the coalition document might be illegal. Has someone been through it with a fine-toothed comb? If that was such a glaring error, have others sneaked into the coalition agreement, or was it just this issue where someone failed to notice that signing up for the equalisation of the state pension age might not be fulfilled by the words of the coalition document?

I will vote against the Bill because it fails on the basic principle of fairness, and in pensions policy fairness is all. When those now sitting on the Government Benches were in opposition, fairness was all they talked about. The previous Labour Government went a long way in introducing fairness into the pensions system. Pension credit was certainly a revolutionary policy that lifted many pensioners out of poverty and transformed the incomes of many pensioners, who saw their incomes double when Labour was in power. Fairness must be at the heart of pensions policy, but the Bill does not pass the fairness criterion.

18:10

[Jenny Willott (Cardiff Central) (LD)]

The Bill has been somewhat hijacked by the women’s pension age issue, but as the hon. Member for Aberdeen South (Dame Anne Begg) has said, there is much in it that is very good and extremely uncontroversial. There are other proposals that are good, but which some people find controversial, such as those on judges’ pensions. Funnily enough, a number of speakers in the other place became extremely worked up about that. As the Secretary of State said, judges currently make no contributions to their pensions. The only thing they contribute to is survivors’ benefit, for which they pay the princely sum of 2.4% or 1.8% of their salary, depending on the scheme, but they get an extremely generous pension at the end of it. I understand that one in six judges draws a pension of more than £67,000 a year, which puts them in the top 0.01% of pensioners, as the employer contribution is around one third of the salaries. The hon. Lady has just said that fairness is all in pensions, but clearly that does not seem fair to an awful lot of people. At a time of great debate on public sector pensions, there is no reason for judges to be exempt from reform. There seems to be a clear consensus in this place, if not in the other place, that that needs to be tackled as soon as possible.

I also welcome much of the rest of the Bill. The introduction and simplification of many of the opt-out arrangements is really important. The hon. Member for Aberdeen South and I were members of the Work and Pensions Committee in the previous Parliament and did a lot of work on the arrangements for the National Employment Savings Trust and how to ensure that people on low incomes are encouraged and supported to save for retirement. Like her, I welcome many of the Bill’s proposals and think that it is really important that the measures are being introduced. Hopefully, the tweaks will overcome some of the problems identified during the passage of the Pensions Act 2007, which most people supported. Many of the concerns that were raised related primarily to small businesses and those on the lowest incomes and are covered by the Bill.

I am also glad that the Bill will set up a system that will make it easier for people on low incomes to save, because that has been a problem for far too long in this country and needs to be tackled. Although the level of means-testing is still an issue and therefore for some of those on the very lowest incomes, as employers will also contribute to pensions, it will be more worth while under the system in the Bill and the previous Act for more people to save.

However, like the hon. Member for Aberdeen South, I am afraid that I will do what I am sure everyone in the debate will do and raise the concerns about the proposals on the women’s state pension age. I am sure that you, Madam Deputy Speaker, will be sick to the back teeth of people complaining about the women’s state pension age by the end of the debate, as I am sure will the Minister. [Interruption.] You are far too charitable, Madam Deputy Speaker.

I agree with the Government that the state pension age needs to rise. In 1970, someone retiring at age 60 could expect to live a further 18 years. Last year, the figure was 28 years. There has clearly been a significant change in demographics in this country, which has to be reflected in our pensions system. We cannot expect people to work until they drop, but the more time they spend in retirement, the more strain that puts on the public purse.

That issue goes hand in hand with pensioner poverty. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who is no longer in his place, talked about the progress he felt the previous Government had made on pensioner poverty. Progress was made, but last year there were still 2 million people of pension age living in poverty, which is unbelievably high for a rich country such as the UK and a disgrace. Unless we seriously overhaul the pensions system, pensioner poverty will continue to be a problem. The longer people live, the less an occupational pension is likely to pay out, for those who are lucky to have them, and the longer they will have to live in poverty after they retire.

We must invest in the state pension in order to tackle pensioner poverty, which is one reason that I welcome the steps that the Government have already taken to bring in the triple lock, which has been a Liberal Democrat policy for a number of years. By linking the basic state pension to earnings and instituting the triple lock, pensioners will hopefully take home £15,000 more over the course of their retirement than they would have done under the previous Government’s policies. That will start to make a difference to levels of pensioner poverty.

What I think will really make a difference is the Pensions Minister’s plan for a flat-rate pension, if and when he is able to introduce that and work it through the House. As has been announced, the plan is for all pensioners with contributions of more than 30 years to receive a flat-rate pension of around £140 a week, uprated by inflation, from 2016. For many people, particularly women in the cohort which has been referred to today, that would be a significantly higher basic state pension than they currently receive. There is particular concern about those women, many of whom do not have private savings and do not necessarily have a full contributions record, as we have discussed in relation to the state second pension. The people who are likely to be penalised by the rising state pension age will benefit significantly from the introduction of a flat-rate pension.

We should not be trying to tackle pensioner poverty simply by increasing the burden on those in society who are working. Wages are flat at the moment and prices are rising, and the Secretary of State has laid out the change in the ratio of pensioners to working people in the population. We need to do something more fundamental. We need to create a sustainable way of managing our ageing population, rather than continually increasing the demands on taxpayers. The Turner commission and the 2007 legislation accepted the premise that, as longevity increases, so the state pension age must rise, but we have now learned from the most recent figures that the situation has changed even more than was understood when the commission carried out its work. We need to take that into account if we are to have a sustainable pension scheme that people can trust for the long term. The Government are right to look at raising the state pension age, and if the flat-rate pension is introduced in 2016, although hundreds of thousands of women will have to work longer, they will get a better pension in the end, which is a trade-off that many will feel is worth it.

As many Members have mentioned today, it is the cohort of women born in 1953 and 1954 who will feel the greatest impact of the change, particularly the 33,000 born in March 1954, who will have to work two years longer. Like other Members, I do not believe that the plans currently laid out are fair for those women. People need time to plan for their retirement, as the hon. Lady for Aberdeen South said. A number of Members have said that those women will have five years’ notice, but my understanding is that it will be seven years before facing the situation, so I would be grateful if the Minister clarified that. Seven years is not a very long time in which to plan whether to work for another two years. In order to keep the public support that we need for such long-term plans, pensions must have full support across this House and among the public as a whole.

[Stephen Lloyd (Eastbourne) (LD)]

I concur with every single word that my hon. Friend says. Owing to the difficult decisions that the coalition Government are making on the economy, I am confident that, by 2018, 2019, 2020, the challenges will have been met and the Government will be able to listen to Back Benchers from all parts of the House and move the change back to 2020. The difficult decisions that will have been made by then will mean that the economy is ready and able to sustain such a move.

[Jenny Willott]

I thank my hon. Friend for his intervention, and it will be interesting to hear what the Minister says to that when he sums up the debate. I am sure that during the debate several suggestions will be made on how to tackle the issue, and that is one.

The changes have to feel fair, but the current proposals do not. The hon. Member for Aberdeen South said that fairness is extremely important, and as the Pensions Minister has said it is extremely important that the basic state pension, whatever its structure, has to feel fair, because it has to last a long time and be free from arbitrary political intervention. The current proposals, however, do not pass the fairness test.

[Mrs Main]

The hon. Lady, who is making a powerful speech, seems, like me, to agree with an awful lot of the very good that is in the Bill, and it would be a shame to ditch the baby with the bathwater, as Opposition Members plan to do tonight. My hon. Friend the Member for Cardiff North (Jonathan Evans) has come up with an interesting proposal, and her hon. Friend the Member for Eastbourne (Stephen Lloyd) has just come up with one as well. Does she agree that Second Reading is the time to do so and to take such ideas into Committee? Like me, the hon. Lady will, I hope, have been encouraged by the sympathetic noises from Government Front Benchers, who are listening to the sensitive arguments from Government Members.

[Jenny Willott]

I absolutely agree. As the hon. Lady says, the point of Second Reading is that we have the opportunity to air a whole load of different options and concerns about the Bill, and as she says also, there have already been a couple of proposals for tackling the issue. I am sure that we will hear more as the debate goes on.

I completely agree that the Bill contains a huge amount that is valuable and important, so I am concerned about the Opposition saying that they will vote against it as a whole. Our constituents, living in our local communities, will be disappointed that the Opposition have taken that approach to the legislation and are not prepared to give a Second Reading to its positive elements.

[Dame Anne Begg]

I am sure that the hon. Lady received a large number of e-mails and letters from her constituents who are affected by this particular anomaly. Did any one of them say that she should vote for the Bill, or did they all encourage her to vote against it?

[Jenny Willott]

To be honest, I cannot remember whether anybody asked me to vote against the Bill. Most writers of the letters and e-mails that I have received raised concerns about the particular proposal in the Bill, and I agree with them. As I have already said, I share their concerns and have issues with what is proposed, but the whole point of Second Reading is that we have the opportunity to raise our concerns and to send the Bill into Committee, where people will be able to go through it clause by clause, to debate what the alternative may be and to have a chance really to scrutinise it. Today’s debate is not the time just to chuck it away.

[Dame Anne Begg]

If there are no changes in Committee and the Bill returns to the Floor of the House in the same position as it is in today, will the hon. Lady vote against it?

[Jenny Willott]

I cannot possibly say what I will do at that stage, because we do not know what shape the Bill will be in. I put the Bill in the safe hands—I am sure—of the Pensions Minister and of colleagues from all parts of the House, who will be able to look at it, try to refine it and send it back to us in the best possible shape. At that point, like all hon. Members, I will be able to decide whether to support it in its entirety.

[Sheila Gilmore]

If the hon. Lady or other Members table an amendment in Committee on the issues that she says she is concerned about, will she vote for them, as she did not when the Welfare Reform Bill was in Committee?

[Jenny Willott]

We have no idea who will be on the Committee for the Bill before us, so I cannot possibly comment on what amendments might or might not be tabled or on who might or might not support them.

The Government should, however, think again about these plans and find a way to make them fairer for the worst affected women. We have already heard a number of proposals, and I was pleased that the Secretary of State made it clear that he is open-minded and willing to listen to what options there are. It was important for us to hear that this afternoon.

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

I concur with my hon. Friend. The importance of today is that the strength of feeling about this one aspect of the Bill is aired, that Ministers convey the feeling that there will be a response and, most importantly, that there is a response that makes this part of the Bill fair.

[Jenny Willott]

I agree. My hon. Friend has spoken in the House in recent weeks on the issue and on her concerns about its fairness, and I am sure that Ministers are listening and taking that message on board.

I appreciate that this is a difficult and costly area in which to make any changes. The figures are mind-boggling, and a few months here and there will make a significant difference to the cost, but it cannot be beyond the wit of man to find a way to smooth the process in order to ensure that that small group of women does not end up being so badly affected. I have every faith in the Government and, in particular, in the Pensions Minister, who is generally regarded as one of the UK’s foremost experts on pensions. He has done a huge amount of work in the past on women’s pensions, helping thousands of women to get the money to which they are entitled, so I put him on notice today that I trust him to resolve the issue. I am sure that, if he cannot do it, nobody can.

18:26

[Hywel Williams (Arfon) (PC)]

The upshot of the Bill is that many people will have to work longer than they expected, and at short notice. That is the point. People will have made their plans, but they will no doubt have to be changed if the Bill goes through.

I am sure the Minister knows better than I that pension planning is a long-term business, and that is why there is such value in cross-party consensus, in stability, in fairness and in any change being slow and clear. Those are, I think, the Pensions Minister’s own views, and that is one reason why there have been constant problems since a previous Conservative Government broke the consensus on pensions almost 30 years ago—a consensus that the Turner changes in the 2007 Act re-established to an extent.

I, too, have received a lot of correspondence, with constituents and others expressing lots of concern at what they see arising from the Bill as a sudden change, which, they also contend, does not have broad support across the parties or among people throughout the UK. Some see the change as a fundamental break in the social contract between government and people, while others accept that as life expectancy lengthens so too must the length of the working life, but all object to the change in the implementation time scale that the Bill proposes.

Hon. Members have already said that an estimated 5 million people born between 1953 and 1960 will have to wait longer to reach state pension age. Although the wait for the majority of people will increase by less than one year, about 500,000 women born between October 1953 and April 1955 will have to wait more than an additional year and 126,000 women born between December 1953 and October 1954 will have to wait up to two years, losing about £10,000 in pension. Those are the facts as we understand them.

Men and women on low incomes who are reliant on pension credit and have no private pension savings will be most affected by the changes, and we have many such people in Wales. A great deal has been spoken about the gender effects of the potential changes, and women will be hit hardest, but there are also effects on disabled people and potential effects on ethnic groups.

We have also heard about class effects. I, too, have looked at the Age UK briefing, and it states for example that a higher percentage of people in social classes D and E are unable to work on, with one third of such women, at least, being in ill-health. Age UK also points out that awareness of the changes among people in classes D and E is very much lower.

There are also national and regional effects, which have had less attention. The changes will hit some sectors of society harder than others, and we in Wales, as in Scotland, have more people in those sectors than other parts of the UK. In Scotland, life expectancy is four years below the European average at 76 for men and 80 for women. Glasgow has the lowest life expectancy in the UK—71.1 years for men and 77.5 for women. These people will be severely hit.

[Jonathan Evans]

The hon. Gentleman is right about life expectancy numbers. Somebody with a fund who has a poor health record will get a bigger annuity than somebody who has a healthy record. How would he resolve that in terms of the state pension situation? He seems to be saying that he would not change the current arrangements.

[Hywel Williams]

A large number of people are unable to get an annuity in the first place because they do not have that sort of pension. Nobody is arguing against the fact that life expectancy is extending—of course, that should be welcomed. However, the fact that the change is being brought in quickly will particularly affect certain groups in relation to class, gender and where they come from.

The effects in Wales will be much more pronounced. That is demonstrated by figures for July 2009-10 on the composition of the work force taken from the ONS publication “Regional Trends”. The average proportion of the population in the UK who are managers and senior officials is 15.6%, the figure for the south-east is 18.3%, and the figure for Wales is 13%. Managers and senior officials will not be hit as hard by the changes, because they have other sources of pension income and live longer. In Wales, we have fewer such people who are able to depend on a decent pension and expect to live longer; unsurprisingly, the south-east has many more. Likewise, in the case of process, plant and machine operatives, the UK average is 6.7%, the figure for the south-east is 5%, and the figure for Wales is 7.3%. As regards people in elementary occupations, the UK average is 11.1%, the figure for the south-east is 9.7%, and the figure for Wales is 11.8%. Workers and future pensioners will be disadvantaged in Wales, as in the rest of the UK, but the effects there and in Scotland will be more pronounced.

Plaid Cymru Members welcome the continuation of automatic enrolment in pension schemes. Given the increases in short-term employment, casualisation and multiple part-time jobs, we share Age UK’s concern about the earnings threshold, particularly the possible negative impact of the three-month waiting period and its effect on staff who might not stay in the job for long enough. We have the same concern about those who have multiple low-paid jobs and therefore may not reach the threshold and be excluded.

In a speech I made some months ago, I expressed reservations about the indexation process, so I will not labour that aspect. My final point is about the Pension Protection Fund, which was raised by the hon. Member for Cardiff North (Jonathan Evans) and is referred to in part 3 of the Bill. The PPF came about partly as a result of pressure put on the former Labour Government by Members in all parts of the House arising out of the ASW steelworkers scandal: a very difficult situation in which the Government had to be persuaded—I use that word advisedly—to act. Unfortunately, the ASW campaign is still ongoing. I recently met some of the workers, and I have tabled early-day motions and attended meetings on the subject, as has the hon. Member for Cardiff North. In November 2010, the pensions specialist Dr Ros Altmann suggested possible ways in which the coalition Government could assist the ASW workers. Will the Minister tell us what progress is being made in that case? That would go a long way towards responding to the campaign by those workers.

18:35

[Ben Gummer (Ipswich) (Con)]

The salient fact of this debate is that by the time it finishes at 10 o’clock, the average age to which we and our constituents might expect to live will have increased by an hour and a half. If I were to speak for 10 minutes or a quarter of an hour, which I will not, then merely in the course of my speech average life expectancy would have increased by four minutes. I hope that that is compensation for what hon. Members are about to endure.

The simple fact of demography that for every hour that passes 15 minutes is added to the age to which we, as a population, can expect to live forces us to revisit the state retirement age—the age at which people stop paying taxes and start depending largely on the fruits of others’ labours. It is a fact that is unlikely to change in the half century to come. In fact, if the experience of the past few years is anything to go by, the acceleration of our expected mortality rates will only increase, rendering irrelevant and insufficient all the predictions on which we currently rely. There is near consensus that maintaining the existing pension age is unaffordable and that we should correct that by ratcheting up the state pension age year by year to reflect increasing life expectancy.

However, I am worried by the idea that by the mid part of this century, asking people to retire at 70—incidentally, the age intended by Lloyd George in his great Act of 1908—will be seen as the way to fix this problem, because we may not correct everything that we hope to correct just by increasing the state pension age and doing everything contained in this excellent Bill. Although I support the intention of the Bill and the immediate steps that it takes, the Government need rapidly to revisit the conventions and means by which successive Governments address the central problem of increasing life expectancy and the effect of that on the Exchequer and those working to fund it. Otherwise, we will again end up in a situation that is unsatisfactory and inadequate. It is unsatisfactory because with every increase in the state pension age, we inflict another set of injustices and unfairnesses on those who are approaching that moment in their lives. The predicament of the relatively small group of women we have been debating is a sure indication of far greater problems to come for Governments in future years.

Because we are facing this cross-generational challenge, it is incumbent on us to try to forge a consensus between the parties about the rules by which we deal with pensions policy. One of those rules is suggested by the example of the women who are particularly affected by the Government’s proposed changes. When times are normal—these are not normal times—there might be a rule whereby people are given at least 10 years’ notice before we change their pension entitlements or the age at which they can claim them. Perhaps the case of the class of ’53, as they call themselves, is the test by which the Government will be measured in this respect.

Although I understand why the Government might fairly ask that people work an additional year to deal with the horrendous deficit and national debt we have been left, to ask a relatively small group of people to work an additional two years with six years’ notice is a very big ask, not least because it calls into question other excellent parts of the Bill that are designed to encourage saving. We cannot ask people to save and then give them no time in which to do so. I hope that in considering a way to smooth the edge of this part of the legislation, the Government will not only fashion a compromise for the women who are being asked to work an additional 13 to 24 months, but thereby establish the first set of conventions by which successive Governments can deal with this issue.

Another unfairness in the Bill, which was not intended by the Government, results from the change from RPI to CPI for uprating. Many of my constituents who are on occupational schemes, mostly from British Telecom, have found that their pensions have been changed only two years after they were renegotiated between the trustee and the pensioners. The trustee claims that it has been forced to do that by the rules of the scheme. My constituents and I would be interested to know the degree of consideration the Minister gave to the effect that his changes to the uprating regulations would have on the occupational schemes of previously nationalised industries, because they have had a very adverse effect on people who thought that they had funded schemes.

Those are the unfair and unsatisfactory parts of the Bill, which I consider to be largely good. I understand that the Opposition supported the change from RPI to CPI, but on a temporary basis. With characteristic innumeracy, they therefore miss the central challenge that confronts us, which is not just the deficit that we must deal with between now and 2016, but the period after that. There is an idea that in 2016 the deficit will somehow come to an end, we will be finished with our problems, and we can then extract the cheque book from our pocket and go on another splurge. That will sadden people, because if we did that, we would find ourselves with one of the highest debt to GDP ratios in the developed world—higher than most of our developed competitors and significantly larger than almost all of our developing competitors, just at the point at which they move up the value chain to meet us on high-end manufacturing, learning-based skills and value-added services.

At that point, we will be faced with a demographic scene that is not much altered from the one the Government look at now. We need only look at the support ratio to tell us that. It currently sits at about four workers per pensioner—the lowest in the history of the state pension. Under the Pensions Act 2007, it would decrease by 2023 to 3.11 workers per pensioner. That figure will improve under the Bill to 3.35—a difference of 6%. At that point we will still be slipping down, and none of this changes the central projection to 2058—150 years after the introduction of the state pension—when there will be 2.74 workers per pensioner. There will then be fewer than three workers for every pensioner they must support.

Pensions are a double-sided promise. On the one hand, we, as parties engaging in government or opposition, must give people the security to know what they will receive in their retirement. That is why I urge the Government to look carefully at the women who will be particularly affected by this change, and at those who are coming to the end of their working life in the public sector. As many of their accrued rights as possible must be respected, because that is what was promised to them, whether or not it was prudent to do so at the time.

In understanding that, we have to be far more brutal with the younger generation, which has many more years to work. Frankly, younger people will not be able to have a pension of the size that their parents and grandparents have come to expect, because of the horrendous deficit and the enormous debt that we have been left by the previous Government—larger than those of almost all our competitors around the world. As a result of that debt, we will have less to spend on education, training and infrastructure improvement. [Interruption.] The hon. Member for Glasgow North East (Mr Bain) smiles, but it is true that as a result of the actions of his Government, we have less to spend on things that will grow the economy and there will be fewer tax receipts to pay for the welfare state that we have come to expect as a nation.

[Jonathan Evans]

I wonder whether my hon. Friend picked up on the remark from the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), when challenged on the cost of his proposal, that money could be raised by bringing forward significantly the current programme for retirement at the ages of 67 and 68. Perhaps we should bank that promise from the Opposition before it evaporates like so many of their remarks.

[Ben Gummer]

What I found surprising about that comment from the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) was that it completely ignored the sensible intervention by his colleague the right hon. Member for Birkenhead (Mr Field), who made quite plain the difficulty of bringing forward the state pension age rise too quickly because of its manifest unfairness on manual labourers, who have a much lower life expectancy than others. That is a central problem that we have to deal with and a reason why the state pension age will become inadequate. At some point, we have to address that unfairness, whether by measuring the length of period worked or by doing far more than has been done so far to improve the occupational health of large numbers of people in this country.

We come back to the essential problem: there is not only no money now, but there will be no money for many decades to come if we are to have the money to invest in growing our economy. Frankly, we will have no welfare state to pay for if we do not address these big issues now. We will be lying to future generations and forcing upon them a generational theft if we are not straight with them now about the reality that confronts them. That is my generation, as much as it is that of the hon. Member for Leeds West (Rachel Reeves). We will be expected to save considerably more and receive considerably less from the state. [Interruption.] The hon. Member for West Ham (Lyn Brown)—she is a Whip and I will not criticise her—is huffing and puffing away, but the fact is that between 2002 and 2006, the structural deficit was run up, inflicting this problem on generations of people to come. The worst affected will be those on low incomes and the unemployed—the very people her party was founded to protect.

We must be honest with future generations and correct the small inadequacies in this Bill. I urge the Minister to look carefully at the long-term reforms that are needed in our pensions system if we are not to come back here year after year to let down pensioners on the promises that were given to them in ages past.

18:48

[Malcolm Wicks (Croydon North) (Lab)]

Back in the 1940s, Aneurin Bevan referred to the ageing of our population as the “peculiar problem” of the era. When one thinks of the controversies just of the last few weeks over the national health service, the quality or lack of it in our care homes, and now the pension age, one can see how prescient the Bevanite analysis was.

I will argue that pensions policy is at its best when it has an understanding of the pace and grain of people’s lives and of the society—an understanding of how people work, their employment patterns, care patterns and family patterns. Looking back, one can see examples of that. Lloyd George—a reminder that there were once great Liberal reformers—was urged to introduce the first old-age pension, albeit at a slightly measly 70 years old, because working people were, rather peculiarly and in a sense for the first time, outliving their working lives, so it was asked where their incomes would come from. Thus occurred the birth, more than 100 years ago in this Parliament, of the first old-age pension. Much more recently, around the 1970s, Barbara Castle and other Secretaries of State realised that the national insurance system was inadequate when it came to women’s caring responsibilities, and credits started to be built into it.

My question is whether, by introducing uniform state pension ages—I listened with great care to what the hon. Member for Ipswich (Ben Gummer) said on the matter—we are now fashioning a policy that makes sense given the different life cycles of people in this country depending on their occupation and social class.

I think about my own family’s experience. My dad and my mum left school at 14 to work, and my dad had jobs in the market in Islington long before that age. At that time, the vast majority of people left school at that type of age. If they worked through to 65 or so, they would have been working for half a century or more. I did not get my first proper job until I was 21. I remember my nan from Islington—Hansard must record “nan” not “nanny”, because I do not want to excite Conservative Members—saying to me when I was 16, “Malcolm, why haven’t you got a job yet?” She just could not understand why I was not yet working.

My own three children were fortunate enough to go to university and then do some postgraduate qualifications—one of them very ably taught, by the way, by a young lecturer at Bath university, whose name I temporarily forget. I often wonder what happened to him. I refer, of course, to the Minister of State, the hon. Member for Thornbury and Yate (Steve Webb). My children did not get their first proper jobs, rather than holiday jobs, until their early to mid-20s. That is a pattern among certain middle class and professional families.

Today, some people coming up to claiming their state pension will have left school at 15 or 16, but some will not have got their jobs until their late teens, early 20s or even mid-20s. Are we being sensible when we say that people who have worked in hard, tough manual jobs for a very long time should be able to claim their state pension only at the same time as those of us from cosier professional and middle-class backgrounds? That is the issue that I wish to explore today.

The proposals in the Bill are based on certain assumptions, and two in particular. One is that the generalisation about life expectancy is true for all social groups. Others have questioned that assumption. I had an opportunity to intervene on the Secretary of State about it earlier, and I want to question it in a little more detail. The Minister of State and the House have heard my argument before. Alongside the gender issue, which is hugely important, there is the social class dimension, which the data show mainly affects men. It needs some airing and some debate, and I would argue that it also needs some solution. There is the assumption about life expectancy, which is broadly true but with some important qualifications, and also the assumption that if we keep raising the state pension age—and occupational pension ages, by the way, although I know that is another debate—the market will respond and jobs will be available. I want to question that assumption, too.

[Mr Denis MacShane (Rotherham) (Lab)]

I was shocked when a constituent of mine, Mrs G. E. Smith, came in to see my at my last surgery. She will be 60 next month, and she was hoping to retire. She works in an exhausting cleaning job in a sawmill. I think Ministers have no idea what life in hard manual work is. She is shattered and wants to retire, but she has been told that she now has to go on another year, which will be injurious to her health. The Government have no idea of how what we used to call the working class suffer.

[Malcolm Wicks]

I imagine that that woman might have been categorised by the Office for National Statistics, rather inelegantly, as being part of the social class of “routine occupations”. That includes many women who are cleaners, and men who are manual labourers, van drivers or packers—heavily demanding work. Can they all look forward to living to 80 or, as the Minister likes to remind us periodically, to 100? Actually, they cannot.

The class differences are most pronounced for men, but they also exist for women. Here are the ONS statistics. Almost one fifth of men from the lowest social class—19%—die before reaching the existing pension age of 65. We talk about pension ages, but sadly a lot of these guys are already dead by that point. That 19% figure compares with just 7% from social class 1. For women, the respective figures are not so stark, but 10% in routine occupations die before the current pension age of 60—not like my right hon. Friend’s constituent, I hope, but with that type of job—while the figure is just 4% for those from the professional classes.

[Steve Webb]

Will the right hon. Gentleman give way?

[Malcolm Wicks]

I am pleased that the Minister wants to intervene, but may I add another statistic? I have given him a lot of notice of this point, and a wonderful briefing paper has been presented, so I hope there might be some solutions. An additional pension penalty is paid by the poorest groups. Whereas the great majority survive to get the state pension, they then draw it for fewer years than people from the top social classes, because of earlier mortality. Life expectancy at 65 is 18.3 years for men from social class 1, which is professionals, but it is only 14.1 years for those from social class 5. That four-year difference is the same for women. A double pension whammy affects people from the poorest social classes, and that should at least raise a question in the Minister’s mind about whether the general policy that he is pursuing—to be fair, it is the general policy that my party’s Government were pursuing—is on the right track.

[Steve Webb]

The right hon. Gentleman is making a characteristically fascinating contribution. He is citing different social groups, but does he accept that the sizes of those groups are changing? His idea would have been brilliant in 1975, but in designing a pensions system for the 21st century and beyond, is he not trying to solve a problem that is diminishing with every passing year?

[Malcolm Wicks]

I was solving many other problems in 1975—they were so numerous that I cannot think of an example. I believe that there are solutions to the problems. They might be complex, but if the Minister will bear with me I will come on to them.

I first wish to make my other contrarian point about the general assumption that it will be all right if we keep raising the state pension age—and indeed the occupational pension age. It is about employment patterns. At the moment it is not the case that 90%-odd of men and women are working until they are 65 and 60 respectively, and that if we keep increasing the pension age by a year or two there will be jobs available. That is not the situation at all. Labour force survey data show that almost a quarter of men aged 50 to 64, and more than a quarter of women aged 50 to 59, are classed as economically inactive. Many of them are not working at the moment. Why do we assume that there will be jobs for them if they have to work for a few more years? More specifically, 39% of men aged 62 are currently not working. By the age of 64, the figure is 52%. Among women aged 58, two years before their current state pension age, 36% are not working. The assumption that general life expectancy increases will benefit everyone and the at least implicit assumption that jobs are available are at least partly illusory.

I am not challenging the demographic logic, or the fact the state pension ages—and, may I say in a reasoned way, occupational pension ages—have to increase. Of course they do. That is the logic of demography, and it helps us safeguard our welfare state system. I ask, however, whether the situation is right for a man or woman who left school at 15 or 16. They may have had caring responsibilities or periods of unemployment, but they will have essentially worked for 49 or so years. They currently get their pension at 65, in the case of men. Is it right that they should be on the same playing field as the professional person who left university and did not do the type of job that my right hon. Friend the Member for Rotherham (Mr MacShane) described, as a packer, cleaner, steelworker or miner, but who is from the professional classes, rather like many of us who are currently in this room? Is it right that the same state pension age should apply to both groups? I do not think that that is a state pension system that is in line with, or goes with the grain of, people’s lives. It does not seem fair to many people.

I meet many people from professional classes—politicians, business people, think tankers and broadcasters—who dread retirement. They want to keep working. They are hale and hearty and often at the top of their game. They want to carry on working, and that is a good thing. [Interruption.] My right hon. Friend the Member for Rotherham gives an important example. In 10 years, he will constitute another important example.

That is right and proper, but people who have done physically demanding work are literally worn out in an old-fashioned sense. Some of the steelworkers I met when we set up the Pension Protection Fund were physically worn out. They do not want to keep working for another couple of years. They want to retire to have a well deserved rest.

What is the answer? I think that we should try to calculate the records of those who left school at 15 or 16. I know that it is a challenge for the civil service. I have not got the briefing paper—the Minister has it and I am sure that he has read it. Given national insurance records, employment records and perhaps income tax records, should not we be able to calculate that people who have worked for 49 years can retire at the age of 65—for men and women in due course—rather than assume that they can carry on working? It is a big issue for social administration and it needs a bright Minister to tackle it. The Minister should give it rather more attention than I think he has given it so far.

19:01

[Richard Graham (Gloucester) (Con)]

Today’s debate takes place more than 100 years after the Old Age Pensions Act 1908 was introduced by a slightly different coalition Government, led by Lloyd George, but including Churchill in his Liberal phase. The most important change since then is clearly in life expectancy. My hon. Friend the Member for Ipswich (Ben Gummer) and other speakers this evening have already tackled that in forensic detail.

I think it would be helpful if I detailed a couple of salient facts as an introduction to my views about Second Reading. A hundred years ago, life expectancy was slightly less than the pension age of 65. That would imply a pension age of about 87 today. To put it another way, 10 million people who are alive today will live to be 100. Clearly, something must be done, and I am afraid that it falls to this coalition Government to do it. The Labour party had its chance. In 2002, the Labour Green Paper fudged the issue and, two years later, the then Secretary of State for Work and Pensions clearly told the TUC that raising the pension age would not happen. The message today from the shadow Secretary of State and the shadow Minister, the hon. Member for Leeds West (Rachel Reeves), who is in her place, blithely recommending as an alternative to some aspects of the Bill a speeded-up increase in the pension age beyond 2020, can therefore be treated with a huge bucket of salt. Their paymasters, the trade unions, simply would not let it happen. As is so often the case, it falls to this Government to tackle the difficult questions and decide how to balance the interests of future pensioners with those who are earning, paying taxes and paying for those pensions.

The most critical issue of fairness that the Bill must tackle is intergenerational fairness. When my right hon. Friend the Secretary of State introduced the Bill, he highlighted several aspects that are worth mentioning. He referred to life expectancy, and I hope that I have covered that point. He also mentioned fairness between generations, which is the basis for the main provisions of the measure. He talked about the importance of savings and their not being frittered away through a means-tested system. I echo that strongly. Correspondence from my constituents in Gloucester constantly reflects the unfairness between people living next door to one another, some on means-tested pensions and others not, owing to their small amounts of hard-earned savings.

The other key aspect is auto-enrolment. I pay tribute to the Labour party for the previous Government’s work on auto-enrolment, but once again this Government will have to implement the scheme. We have examined the details of simplifying the administrative aspects, ensuring an opt-out, not an opt-in, getting the self-certification from defined contribution schemes and so on. I welcome those aspects of the Bill as well as the changes to occupational schemes, in which I should declare an interest as chairman of the all-party parliamentary group on occupational pensions.

It is notable that no Labour Members referred to judges’ pensions. An extraordinary silence has come upon my friends on the Opposition Benches. Several Government Members have pointed out that having zero contributions to the judges’ pension scheme is surely a massively unfair anomaly, which Work and Pensions Ministers are quite correct to change. That should have been done years ago.

That brings us to the one aspect of the Bill that causes hon. Members of all parties some concern: the effect on women born between December 1953 and October 1954. I have written to the Secretary of State and the Chancellor, inquiring whether it would be possible to introduce some flexibility to tackle the specific problems of women in that age group. I received a letter from the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), which tackles the question in some detail. He said that

“implementation of the increase to 66 between December 2018 and April 2020 is the option that best balances sustainability with fairness in the face of demographic change.”

I recognise that Ministers have a difficult task in trying to balance often conflicting aspects of dealing with pensions. I wondered—the Minister has agreed to consider the matter—whether the same argument could be made even more convincingly for stretching the period from December 2018 to the autumn of 2020 so that the increased period of waiting for their pension for those women would effectively be reduced from 24 to 18 months. I am confident, given everything that has been said today, that Ministers will consider that during the Bill’s later stages. I await what happens on Report.

It is important that our constituents understand that today we are considering and debating the principles of the Bill. The detail will be examined in Committee and again in the Chamber. I believe that the principles for tackling critical issues such as savings, auto-enrolment, occupational pensions, judges’ pensions and changes in life expectancy should occupy our time here today.

I was genuinely disappointed by the contribution of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who gave a speech that contained a series of stories, rumours and quotes from newspaper articles—admirable soundbites in the absence of any policy. One must conclude that the shadow Secretary of State has no more policy on pensions than he had money left in the Treasury coffers a year ago. Although he said that he was proud of Labour’s pensions record, and the right hon. Member for Croydon North (Malcolm Wicks) gave one or two examples, such as the creation of the PPF, which are to be commended, I wonder whether Labour Front Benchers’ pride extends to the 75p increase in the state pension that was offered to my constituents so very recently. It is difficult to be proud of policy, but if Government Members are to be allowed some pride, it is in restoring the earnings link to the basic state pension, added to the triple guarantee that ensures that the basic state pension will always rise by at least 2.5% every year. That is a huge contrast to 75p.

I therefore believe that the Bill has a lot in it to commend to Members on both sides of the House. This issue should be non-partisan and non-tribal. We all want a good, affordable, sustainable pension for our constituents. I shall therefore support the Bill, which will make a significant difference to the 7 million people of both sexes who are currently under-saving, resolve the scandal of judiciary pensions, and allow for sensible reflections on aspects for women born within a particular year.

19:10

[Julie Elliott (Sunderland Central) (Lab)]

This debate is incredibly important to Members on both sides of the House. Before I move on to what most concerns me about the Bill, which has been raised by most hon. Members today, I should like to comment on some of the things that my right hon. Friend the Member for Croydon North (Malcolm Wicks) mentioned. My constituency’s past is in heavy industry, and it still has a huge element of industry. Both men and women work very hard in difficult, not-wonderful conditions. Many simply do not reach pensionable age. It is important to bear that in mind in our discussions. Nobody can argue with the statistics on the rate of increase of life expectancy, but in some areas of the country, especially in pockets within those areas, life expectancy is increasing much more slowly. That needs to be borne in mind in our considerations.

In my office, there are folders containing letters from many of my constituents who feel strongly about changes to their state pension age. Many have felt compelled to write to their MP for the first time. I want to speak on behalf of those people, who are predominantly women. They have told me what they think of the Government’s plans, and I promised that I would represent their views to the Government. I shall take this opportunity to raise their objections on their behalf. Some have told me extraordinary things about their lives, the jobs they have done and how hard they have worked. It is my privilege to speak on their behalf. Likewise, I was pleased to take part in a debate on this issue in Westminster Hall recently.

What are my constituents so unhappy about? These women have worked hard their entire lives and done everything right. They have worked, saved and planned. Along the way, many have raised families, and many now have caring responsibilities for younger and older members of their families—I could add that, in that way, they are saving the taxpayer money. They have made their contribution to society. They paid their taxes and national insurance in the hope of a happy, relaxed, financially secure and worry-free retirement, yet the Government have moved the goalposts. My constituents feel angry and let down. Many are afraid and wonder how they will manage financially. Those who must continue to work are fearful of the long-term implications for their health.

Before I go any further, I should like to make something clear. My constituents do not disagree that the state pension age should increase. They recognise that average life expectancy in this country is increasing and they recognise the dangers that come with an ageing society, but the Turner commission recommended 15 years of preparation before implementation, as a swift alteration could cause financial hardship and unnecessary anxiety.

That is of great concern to my constituents, some of whom have already retired. Many who were seven or eight years from pensionable age calculated their savings, pension entitlements and income and retired so that they could take on caring responsibilities within their families. They simply cannot adjust their finances to cope with such sudden changes.

The issue that concerns them, and indeed me, is the sense of injustice, which has left them feeling betrayed. When they started work aged 15 or 16, they had an idea of what was expected of them and what they were signing up to—similar, perhaps, to signing a contract of employment—but that is being unjustly altered, retrospectively, leaving them with very little time to prepare. They thought they were contributing to one thing, but in fact they will get another. There is simply not enough time for them to plan and prepare financially for their retirement, which causes them a great deal of anxiety. Moving the goalposts at such short notice is not the correct way to go about this. My constituents feel penalised, despite, as I said earlier, doing everything right.

Retirement should be about choice. People should be able to assess the prevailing factors and decide when it is appropriate for them to retire. Some of my constituents affected by these changes have already made the decision to retire and are living off small private pensions. The Bill effectively removes that choice. Their carefully planned savings will not suffice for the two extra years they will be forced to wait before receiving their pension.

I worry about the wider implications of the plans. The Minister says that we need to encourage people to save for their pensions, but what message is the Government sending to the young women of today? Are they saying, “You may save and you may plan, but we’ll make the changes anyway”?

I said that I would speak on behalf of my constituents, and I shall now directly quote just a couple of the letters I have received in the past few weeks. One constituent wrote:

“I started work aged 16 with the expectation of receiving a full state pension at 60. 5 years was added. I am now outraged to find that this government has changed it again. Having paid full contributions I now find myself worse off compared to my colleagues and friends who are only a few years older”.

As a result of the arbitrary way in which the Government have decided their dates, I am sure that some of that woman’s better-off colleagues and friends are only a few months or days older than her.

Another constituent wrote:

“I am currently in full time employment and have had 2 knee replacements and am about to have surgery on my back. I am in constant pain and find full-time work very difficult. However I was looking forward to my retirement. I had hoped not to have to claim for any benefits before my retirement but I can no longer see this being possible. I feel very let down and wonder why I have pushed myself to work so hard all these years”.

Have the Government assessed the costs they will incur when people who physically cannot work extra years claim benefits? Has that been taken into account?

Finally, another constituent said:

“I find that the goal posts are being moved and if these proposals go through I shall have to work for a further 91 weeks and £9,295 will be taken from my State Pension. I have worked hard all my life from the age of 15 and I have also brought up a family. I am looking forward to my retirement as the toll of all these years of working is starting to show and feel. This Coalition government is letting thousands of women down.”

[Jonathan Evans]

Hon. Members on both sides of the House will have received similar letters. The Labour party’s policy, as far as I understand it, is to begin the process in 2020. Therefore, those people would write similar letters—would they not?—if the policy adopted by the hon. Lady were pursued.

[Julie Elliott]

That is absolutely right. The Labour party set out a similar policy of raising the pension age, but we would have done it by 2020, which would have allowed a considerable time for people to plan and to take that into account. The problem with the Government’s proposal is not raising the pensionable age, but doing so in such a short period. That is radically different from anything the Labour party proposed.

The coalition agreement said that the state pension age would not rise sooner than 2016 for men and 2020 for women. The Bill breaks that coalition commitment. My constituents feel very angry and misled about that. Like many of the coalition’s ill-conceived policies, this is too much, too fast.

19:19

[John Glen (Salisbury) (Con)]

I would like to open my remarks by reflecting on a tale of two 64-year-olds. My great-grandfather died in Salisbury in 1944. In the words of my grandmother, who is now 90, he was seen at the time as an old man. Next week, my father will turn 64. He will retire having done a manual job for 48 years, and with the expectation of perhaps living, as his father did, to 90 or 92. But we do not know, which goes to the heart of the problem faced by the Government: changing expectations of how long we will live and what to do about it versus the reality that decisions will have to be made with finite resources.

I think that the Government have made an excellent start with this Bill, which addresses three interlocking issues. The first is our ageing population. Only a few weeks ago a lady came to my constituency surgery, sat down in front of me and asked whether I could help her. I said I would do what I could. I really thought it would be about an issue of care for herself or her aged husband, but in fact she wanted to talk about her 99-year-old mother. We have a ticking time bomb that, over the past two generations, Governments of all colours and parties and at all times failed properly to grasp. We cannot go on like that.

[Sheila Gilmore]

Will the hon. Gentleman accept that it is a gross generalisation to say that this problem has been ignored? The Bill makes a relatively minor change compared with the major changes proposed in the Turner report and the last Pensions Bill. It is wrong to suggest that this has not been looked at.

[John Glen]

I thank the hon. Lady for her intervention. I think I will address the thrust of her comments in a few minutes.

The second issue is our active ageing population. Notwithstanding the remarks of the right hon. Member for Croydon North (Malcolm Wicks), who pointed out the differences in life expectancy between regions and socio-economic backgrounds, many people expect to lead an active retirement, which is why I welcome the proposal to remove the default retirement age. That will be important in allowing people to do more and to continue working if they wish.

The third problem that the Bill addresses is the lack of saving. It has been said that 7 million people are not saving enough for retirement. The problem is the general sentiment that things will be all right on the night—people expect to be able to sell a property or make some money to put in a pension pot. The Government are facing up to these tough issues, and have realised that that is not a realistic proposition.

I recognise that there is a gap between the long-term solution and the needs of those currently near the pensionable age, and many have acute concerns about what will happen—many Members have referred to the cohort of women who face a particularly tough time. All the indications are that the Government are prepared to acknowledge and address those concerns, and I am sure that my hon. Friend the Pensions Minister will have an ingenious solution. However, I would like briefly to draw the House’s attention to a few specific issues.

Despite the welcome introduction of the triple lock, it is clear that pensioners feel a great sense of vulnerability. They know that they have a reasonable expectation of living many years, and are anxious that at a time of low interest rates and little investment income their basic state pension should grow. I therefore welcome the Government’s proposal. I recognise that it will cost a lot of money and will take time to work out, but its general thrust is the right one.

It has to be acknowledged that we have seen massive changes as a result of the increase in life expectancy over the past 50 or 60 years. Life expectancy at 65 has grown upwards of 10 to 15 years over the past two generations, and it would be helpful if the Government set out what we are aiming for. Notionally, we will have parity between genders over the next 10 years, but what are we aiming for? Are we saying that everyone should have a right to expect a fixed number of pensionable years? Are we seeking to address the statistical evidence on demographics and regional differences, or should we recognise, building on the comments of the right hon. Member for Croydon North about the level of complexity and a complexity deficit, that we will not be able to make the pensions system sufficiently complex to address every one of those factors?

We have to recognise that we need to do something, particularly about the 33,000 women who face this two-year delay, but it would help if we set out some broader principles. My generation—those under 40—will have to bear a much greater responsibility. I expect to work much longer, although I might have a different job from my father, who worked on the land. We need to send the message so that the next generation and those after know to put more into their pension pots and expect to retire later. My hon. Friend the Member for Gloucester (Richard Graham) has already mentioned the fact that 10 million people now living will live to 100. That is beyond the realistic expectations or assessments of most people today, but it will impose strains on public finances, health care costs and end-of-life care, which are the issues that we must address. We must not fail to consider my generation and those that come after because they do not seem to matter today.

I welcome the changes to auto-enrolment, but I ask the Government to avoid unnecessary and bureaucratic changes for small business people, especially those in the tourism or retail sectors, where staff turnover is high. Too often justice is not done in the detail to the headlines of Government. We need to ensure that small employers do not bear a disproportionate cost.

The free eye tests, free prescriptions, free bus passes, free television licences for the over-75s and the free winter fuel payments, along with the Government’s commitment to solidify the £25 payment in bad weather, are welcomed by many. Certainly, they are welcomed by the poorest members of my constituency—in Bemerton Heath and the Friary, for example—who rely on the payments year in, year out. I hesitate to say it, however, but is it really fair for those earning more than, say, £50,000 a year in retirement to have that extra money? There is usually a snigger, a gasp and a “Well, we don’t really need it.” However, in the assessment of true fairness, what value accrues to the public purse from expenditure on those people?

I welcome the Bill, which establishes the right direction, but there is still work to be done in certain areas, which I hope I have set out. No Government, past or present, will get everything right. I applaud the work of my hon. Friend the Pensions Minister and wish him well as he unravels these complex issues and develops a pensions system fit, in all respects, for the nation we live in and the number of years we can expect to live.

19:29

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

Like many Members, I have been inundated with e-mails and letters from women who will be affected by the acceleration in the state pension age. I declare an interest, in that I was born between 1953 and 1955, and will have to wait longer for my pension.

Last month I held a 90-minute Westminster Hall debate in which I outlined my opposition to the Government’s plans. The arguments that I put forward then still hold. The Government’s proposals are unfair, because they target a group of women based on when they were born and give them too little time to plan. These are women who have done the right thing—they have paid their national insurance contributions and planned for their retirement—and they should not be penalised by a Government who are moving the goalposts at the last minute. The Government are threatening to undermine confidence in the pensions system and some of the more positive proposals in the Pensions Bill, such as auto-enrolment, that are designed to improve pension coverage. However, people may think, “If the goalposts are moved at the last minute, why bother? We may make our contributions now, but who’s to say that the money will be there at the end, when we expect it?” That is the opposite of the Government’s intentions for pension reform, but it is a distinct possibility.

When I held my Adjournment debate, not a single Conservative MP spoke. I am encouraged that we have had such thoughtful and wide-ranging contributions from all parts of the House on this important issue today. I also hope that the opposition expressed in this debate will cause Ministers to pause and rethink their plans. My early-day motion on the issue has gathered 177 signatures from all political parties, so there is widespread support in the House for a rethink.

I would like to touch on the Secretary of State’s comments in today’s media. He said that it would cost in the region of £10 billion to drop the accelerated timetable, and that he would therefore stick to his plans. The Bill’s regulatory impact assessment says that the proposal will save no money before 2016, by which time the Chancellor says that he will have balanced the books. I am therefore unsure what the Secretary of State means. Is this about deficit reduction, or is it about fairness and equality?

I would like to touch on some issues that have already been covered and put some further questions to the Minister. What assessment has his Department made of the proposal’s effect on the number of unpaid carers and child minders in the UK? The accelerated timetable means that many people who would have taken up caring for relatives or provided child care when they retired, in order that the next generation could join the work force, will not be able to do so because they will be at work for another two years. That will have an important social policy impact. What assessment has the Department made of the proposal’s effect on volunteering and the Government’s big society agenda? People who have retired are not inactive; they volunteer at libraries, charity shops and lunch clubs. They also act as school governors and provide much needed care in our communities. If they are kept in the labour market for longer, they will be less able to volunteer in those ways.

I am also deeply concerned about unemployment among the over-50s. It is not easy for the women affected by the proposal to get another job or increase their hours to fill the two-year gap if they find themselves out of work, especially at such short notice. I receive many letters from constituents in their 50s who are willing to take any kind of work, but who are finding it impossible to get a job. It is not easy for people to return to the labour market once they have left. It is also becoming increasingly difficult to hang on to a job in later years. If women are expected to work longer, there needs to be work for them to do. That is particularly important given the current economic situation and the rise in unemployment. In looking for work, those women may well be competing against their own grandchildren in the labour market.

What projections and costings have the Government made for how many women affected by the proposal will have to claim employment-related benefits? Many women will not have enough savings to fall back on, particularly those who have been employed in low-paid work or who have taken time out to have children or act as carers. Will the Minister outline the measures that the Government plan to introduce to help them work longer? Will he comment on how women who are not in work are meant to balance their finances in the two-year gap, given that they will be eligible for jobseeker’s allowance for only six months if they have savings or will not be eligible at all—this is my understanding—if they have a small occupational pension?

I was going to mention some of the class issues affecting people’s life expectancy, but my right hon. Friend the Member for Croydon North (Malcolm Wicks), who is no longer in his place, went into that in great detail, and much better than I could. I would therefore like to end by asking the Minister about auto-enrolment and NEST—the national employment savings trust—which I broadly support. The three-month waiting period will mean that 500,000 fewer people will be automatically enrolled in a pension scheme. It is my understanding that workers will be able to opt in during that three-month period and receive the employer contribution, but people will do so only if they know that they have that right. Will the Minister assure the House that the regulations will require employers to explain that to jobholders from day one of their employment?

It is disappointing that NEST will not be allowed to deal with small transfers in and out, and sweep up small pensions from casual employment. Many people are employed dozens of times over their lives, many doing short-term jobs in, say, call centres. The reality is that we have a much more transient labour market. Provisions for transitions in and out of NEST should be included in the Bill, even if they cannot be implemented immediately. I very much look forward to the Minister’s response on those two issues.

19:35

[Julian Sturdy (York Outer) (Con)]

It is a privilege to have the opportunity to contribute to such an important debate, and to follow some extremely thoughtful speeches from all parts of the House. Ensuring that Britain has a fair and financially sustainable pensions system must rank as one of the most important priorities on the coalition’s ever growing “to do” list. After all, not only does this Bill shed light on a pensions system that is currently broken and unsustainable; it also touches on key issues of individual responsibility, a new savings culture and easing the administrative burdens on small businesses. All those factors make this Bill a significant piece of legislation. However, it is impossible to reflect fairly on the initiatives in the Bill without taking note of the current state of our pensions system.

Unfortunately, Britain’s pensions system is dangerously creaking, with real doubts about its financial sustainability. The challenges that it faces are frankly enormous. Official projections of average life expectancy were once again revised upwards in 2009, indicating that men and women are expected to live an extra one and a half years longer than was thought at the time of the Pensions Act 2007. Although we must welcome increasing life expectancy rates, their impact on our pensions system cannot be ignored—a point already covered by a number of Members, including my hon. Friend the Member for Ipswich (Ben Gummer), who did so very eloquently. The impact will be huge.

Meanwhile, it is a sad reality that too few people have been saving enough for their retirement in recent years. Indeed, according to the Office for National Statistics, fewer than 9 million people in Britain now participate in an occupational scheme, with around 7 million people not saving enough for their retirement. Combined with increasing life expectancy, our poor savings culture is a potent time bomb beneath the surface of our pensions system. In addition, the Pensions Commission recently described the UK pensions system as one of the most complex in the world. A 2009 survey by the Department for Work and Pensions highlighted the fact that 71% of people did not understand the workings of modern-day pensions. To my mind that is a worrying statistic.

With increasing life expectancy, a poor savings culture and a complicated system, our pensions systems is not fit for the 21st century. The status quo will no longer suffice. We cannot pass this ticking time bomb to the next generation. Change is absolutely necessary. This Bill paves the way for such timely reform. As in other policy areas, such as health, higher education and welfare, the Government are absolutely right to tackle pensions with a long-term focus on ensuring sustainability. As in other areas of Government, the coalition cannot be accused of currying favour ahead of the next general election. By tackling big, sensitive issues head-on, we will restore confidence and fairness in such vital areas. The Government are therefore right to commit to increasing the state pension age in the Bill. As I have said, we are experiencing significant increases in life expectancy.

I had hoped that that part of the Bill would be welcomed across the House—it was, after all, Labour which committed to increasing the state pension age in the Pensions Act 2007—but, sadly, that does not appear likely. In the light of new evidence about the rate of increasing life expectancy, I firmly believe that it is right to review the original time scales set by the previous Government and to speed up the process. I admit that that is not an easy decision to take, but it is vital that we grasp the nettle on this specific aspect of the Bill. If we are to pursue a policy to bring about long-term, sustainable change, we should do so courageously and without compromise to the Bill’s main principles.

I therefore urge the Government to resist calls from some to slow down their approach to increasing the state pension age, and I am pleased that the Secretary of State outlined his commitment in that regard earlier. Having said that, I acknowledge, as have many colleagues, that a sizeable group of individuals will now qualify for their state pension more than a year later than they would have qualified under the present arrangements, with more than 30,000 women qualifying more than two years later. Obviously, those affected will feel harshly treated, but it is encouraging to hear that the Secretary of State is willing to listen to the arguments put during the passage of the Bill. I very much welcome that; it is an important factor in the process. However, we must remember the previous Government’s regrettable mismanagement of Britain’s economy. Had we inherited a slightly more stable financial state of affairs, we might perhaps have been able to do more for those who now face a delay in their state pension entitlement.

The second part of the Bill deals with reforms relating to workplace pensions. I welcome the fact that the Government appear to be implementing the findings of “Making automatic enrolment work”, an independent review of automatic enrolment into workplace pensions. Independent reviews tend to be rather more balanced than those carried out by Whitehall Departments. I largely support the deregulatory nature of many of the workplace pension reforms. Reducing the cost of bureaucracy to small and medium-sized businesses should always be a cause for celebration. Indeed, I am led to believe that even the TUC supports this aspect of the Bill. Perhaps Labour Members can confirm that. Such support is wholly justified, as these reforms will ensure that, from 2012, millions of people will be saving for a pension for the first time. I have always believed in encouraging a new savings culture, and auto-enrolment is a really positive step in the right direction.

In summary, the challenges facing our pensions system can fairly be described as a ticking time bomb. The measures in the Bill alone will not be enough to turn the tide and reform pensions as widely as is necessary. Reforms of the state pension are currently being consulted on, and even at this stage I urge the Government to ensure a fair deal not just for future pensioners but for existing ones. Nevertheless, the Bill represents a good step forward in the attempt to tackle our out-of-date pensions system. The Government should again be congratulated on doing the right thing, even when it might not be the easiest of their duties. Good governance is about taking difficult decisions in the long-term interests of the country, which is what this coalition Government are doing. The Pensions Bill lays a solid foundation for a more sustainable and fairer pensions system, and I look forward to the Government building on it further in future.

19:44

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

I welcome the opportunity to contribute to this important debate. Like many hon. Members on both sides of the House, I have been contacted by a huge number of constituents about the measures in the Bill. Indeed, I expect that the e-mails are continuing to flood in even as I speak.

The debate today has rightly focused on women’s pensions, but it is important that we also remember the wider context. The majority of people want to plan ahead for their retirement, and they are happy to make their contributions during their working lives in the knowledge that they will reap the benefit when they retire. I am pleased that today’s debate has not had more heat than light, and that we have heard thoughtful contributions. All too often, insulting comments are made to suggest that people who have a decent pension might be getting something for nothing, or getting more than they deserve. I am genuinely glad that we have not heard any of that today.

For many working people brought up to do the right thing, pensions are like deferred wages. They have carefully planned for their later years because they believe that it is right to avoid being a burden on the state or on their families. Unfortunately, however, it is those thrifty, careful planners who are being let down by this Government in the Bill. It is sad that the Government have broken their promise in the coalition agreement not to raise the women’s state pension age to 66 before 2020. As we heard at the beginning of the debate, the coalition agreement clearly stated that the state pension age would rise to 66 but that this would

“not be sooner than 2016 for men and 2020 for women.”

Ministers have performed dramatic U-turns on a whole range of issues, some of which have been welcome, but this one is most unwelcome. The legislation will now accelerate the equalisation for women to 2018, and then increase men’s and women’s state pension ages to 66 by 2020. Anyone reading the coalition agreement when it was published would not have expected that to happen.

Some 2.6 million women will be affected by the Government’s proposals. The state pension age for women born between 6 December 1953 and 5 October 1954 will increase by more than 18 months. I should say that I do not have an interest to declare in that regard; the increase will not affect me, but it will affect many women in my constituency. The Government’s own impact assessment estimates that the measure will affect about 330,000 women. In the most extreme cases, some 33,000 women born between 6 March and 5 April 1954 will see an increase of two years. Those are the points that constituents are contacting me about, because they are worried about the impact that the Bill will have on them.

To put this in context, a woman born in April 1953, as one of my good friends in my constituency was, will be able to get her pension at the age of 62 years 11 months. However, another friend who was born just a year later, in April 1954, will have to wait until she is 66 before she can draw her pension. It is completely understandable that people feel that the measures are unfair. We have heard that comment time and again this afternoon. They are certainly not fair to the 1,200 women in my constituency aged around 56 and 57 who are set to lose the most from these changes, and who will have very little time to prepare or to amend existing plans. Many of them have worked in a series of jobs, raised families and perhaps worked part-time over the years. It is difficult enough for those women on low pay to plan for their retirement without this additional burden being placed on them. I think the most significant part of the issue before us is allowing people time to plan adequately for retirement.

Age UK has highlighted a number of concerns, not simply about the plans, but about the fact that people are not necessarily aware of them. It estimated that about 32% of the women it polled said that, following the Government’s proposals, they did not know when the state pension age would reach 65 for both women and men. Just one in 10 correctly said 2018. Almost half expected equalisation to happen before the planned date, while 9% thought it would be later than planned. As we can see, there is confusion.

In the last few months, despite the public outrage and a campaign supported by different charities and organisations, Members of all parties and affected individuals, it appears that, although Ministers might have begun to listen, they have certainly not come forward with any clear proposals on what they intend to do.

We all understand the simple truth that our society is ageing. The previous Labour Government recognised it and, as we have heard, established the independent Turner commission and built a consensus for change around a number of key areas: linking the basic state pension to earnings, raising the retirement age to 68 by 2046, starting the rise from 2024 and making private pensions opt out instead of opt in, with employers also making a contribution. After trying to build that kind of consensus, it is simply wrong to penalise women who have worked hard for their whole lives and now have no time to plan for their retirement.

As I have said, many women of this generation are already at a disadvantage when it comes to pensions. They have perhaps been denied access to private pension schemes and have had to take career breaks to bring up children. Raising the state pension age for women so rapidly could result in some women currently in their 50s having to work for two years more than they had previously thought. That might not seem a great deal if people are not at the stage of life when they are thinking about planning for retirement, but for people working in an arduous job with long hours or working very early in the morning, as many in the cleaning or hospitality sector have to do, or late at night, that means a lot. The women affected are being made to accommodate the changes within fewer than seven years and it will not be possible for them to make up the time and earnings that they would have wanted. They are at a significant disadvantage. We have also heard that the median pension saving for a 56-year-old woman is just £9,100—almost six times lower than that of a man, which stands at £52,800.

During our debate, we have also heard about the number of people eligible to be auto-enrolled in a pension scheme. I have concerns about that. I was a bit disappointed to hear some of the attacks on the shadow Secretary of State when he raised these issues. We all need to hear the Minister respond to the issues raised. I am concerned that limiting the coverage of the scheme could exclude women disproportionately. It has been estimated that 7 million people are not saving enough to ensure an adequate income for their retirement. We have heard genuine concern about that from Members of all parties. That is why there was cross-party consensus to introduce auto-enrolment.

Combined with a minimum employer contribution and the creation of a pension scheme that could be used by any employer, the principles behind the legislation could be expected to lead to a step change in the level of participation in pension saving. Concerns have been expressed today, however, that the Government are proceeding with the introduction of auto-enrolment in a way that will limit its scope, including raising the salary level at which someone is automatically enrolled from about £5,000 to about £7,500. The Government predict that up to 600,000 fewer people will be automatically enrolled in a pension scheme as a result—as I have said, disproportionately affecting women.

My concerns about that could be summed up briefly. I am worried that this will rise in line with the income tax threshold, and therefore looks set to increase to £10,000 over the next few years—excluding a considerable number of people who will be earning less. Compared to Labour’s original plans, it will exclude in the region of 1.5 million to 2 million people, of whom 1 million to 1.5 million would be women. I hope that the Minister will respond to these points later. Having a three-month waiting period before auto-enrolment could mean 500,000 fewer people automatically enrolling in a pension scheme, which does not improve the position on encouraging people to save for the longer term.

As other Members have made clear, there are also concerns about people who work in call centres, and perhaps others in the retail and the hospitality sector, as they might work a relatively low number of hours at various points in their careers. Some people might have two or three different jobs to hold down, each of which might be under the threshold, but not when they are viewed cumulatively.

[Sheila Gilmore]

Has it occurred to my hon. Friend that there seems to be a mismatch here in respect of this Department’s policies? Just last week and all through the Committee stage of the Welfare Reform Bill, we heard great things about the importance of mini-jobs and the people who undertake them. Such people sometimes have more than one mini-job. At the same time, however, that does not seem to have been read across into this Bill.

[Cathy Jamieson]

My hon. Friend makes exactly the point that I was about to make. There does indeed seem to be a mismatch. I have to say that I am not a great fan of the term “mini-job”. Some people are getting up at 6 o’clock in the morning to work a shift as a cleaner, then have to take their kids to school and subsequently do perhaps four hours in a local retail establishment, after which they have to pick the kids up from school only to have to go out to another job in the evening. There is not much that is “mini” about that when all those jobs are put together. This is exactly the sort of issue that Ministers need to address if this Bill continues through its parliamentary stages.

I think the general public understand that as people live longer over the coming decades, the state pension age will need to rise to ensure that people who have longer retirements do not have them on much lower incomes leading to a lower quality of life.

I have heard many Members express concern this afternoon about the proposals in the Bill. We are being asked to vote on the Bill’s principles, but I have heard many Members express real reservations about them. I believe that if we are not happy with the principles, it is our duty to represent our constituents by voting against the Bill. My constituents—not just those directly affected, but many others who also have concerns—are asking me to vote against it. If the Secretary of State had given us a firm commitment today that something would change and problems would be addressed, my constituents would have understood if I went back and told them about those assurances. In all honesty, I have to say that when I heard the Secretary of State outline right at the beginning of the debate that the Bill will go ahead as drafted, that was not the assurance I was seeking. That is not what my constituents want, so I will vote against the Bill tonight.

19:58

[Richard Drax (South Dorset) (Con)]

It is a pleasure to follow the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson)—I hope I have pronounced that correctly—although I do not entirely agree with what she said.

I want to congratulate the Secretary of State and the Front-Bench team on this Bill. This is a time-bomb that has been waiting to go off for years. The Labour party looked at it, sniffed it and walked away because it stank. It does stink. It is going to require a huge effort by this Government, particularly from the Pensions Secretary, for whose diligence I have huge admiration.

It has been long apparent that something had to give. As has been mentioned many times in this debate, our longevity has increased nationally by an average of 10 years since the 1970s. Today’s pensioner numbers have doubled since the 1950s and the increase is accelerating. The Office for Budget Responsibility has estimated that pensions will cost a stunning £32 billion by 2015—up by a third from today’s figures in just four years.

The problem was not created by the coalition, and neither is it exclusively our responsibility. Having packed the public sector to the gunwales, the last Government were well aware of the oncoming crunch, and had legislated to raise the state pension age to 66. The old understanding that public sector employees could rely on secure jobs with more generous final salary pensions as compensation for low pay is outmoded now. The pay gap has not only narrowed but reversed.

Figures from Policy Exchange for the past year show that the average public sector worker is now paid 35% an hour more than the average private sector worker, and Office for National Statistics figures tell us that in the year before that, the average public sector worker earned £2,000 more per annum than his or her private sector equivalent. Today private sector workers are worse paid, have less security of tenure, and have more fragile pensions than their public sector equivalents, but under the current arrangements they are expected to subsidise the more generous final salary pensions in the bloated public sector. They are understandably embittered, as, paradoxically, are the public sector workers, many of whose jobs were created by the last Government. They now feel threatened.

But deal with the pensions time bomb we must. The private sector has absorbed many shocks. So that we can survive the economic downturn, pensions, along with salaries and bonuses, have been hit hard. Final salary pensions are fast becoming a distant memory, even in larger firms, and new employer rules on automatic pensions enrolment which are due to come into force next year are likely to have further detrimental effects.

The public sector, however, needs a culture change. The current arrangements are simply unsustainable and unaffordable. The bottom line is that we all need to pay more into our pensions for longer, which means that the age at which we retire will be higher: it will be 66 by April 2020. The last Government legislated for that, but their legislation will be accelerated by this Bill. We will also need to supplement what we already pay with increased contributions.

We are told by Treasury Ministers that if we make these changes now, there is a chance of a decent and relatively generous pension for all entitled public sector workers. We are also assured that 750,000 of the lowest-paid public sector workers will not be asked to pay more, and that the extra contributions of another 500,000 will be capped. I am relieved to hear that the pensions of those who risk their lives serving their country—members of the police, fire service and military—will be protected.

Raising the state pension age to 66 and upwards will take years to implement, even on the revised timetable, and I am anxious to ensure that some worthy recipients do not slip through the net. Like others who have spoken today, I have received many letters and e-mails from people who are very concerned about the proposals. Mainly they are from women. The equalisation of the pension age, causing theirs to rise from 60 to 65, and the subsequent acceleration causing it to rise to 66 by 2020, appear to have left some unintended victims by the wayside. I ask the Secretary of State and the Treasury to think again about those cases.

In particular, women in their late 50s who were told to prepare for retirement at 65 have now seen the goalposts moved again. Overall, 5.5 million women now aged between 51 and 57 are affected to a greater or lesser degree, and 330,000 of them— those given less than two years’ notice of the change—are particularly badly affected. There will not be enough time for the women caught up in the scheme to save enough to address their loss. Many are among the lower-paid, 40% have private pensions, and many part-timers were excluded from occupational pension schemes until the 1990s. Moreover, members of that age group are more likely to be economically inactive owing to caring responsibilities. Perhaps an interim measure can be introduced to ensure that they are paid what they have worked for, and that the longer gap before they reach the state pension age does not cause unnecessary hardship. After all, those women worked through the years of genuinely lower pay in the expectation of a comfortable retirement, only to see it evaporate.

What matters most in this debate is to find a way to make our pensions fairer, more affordable and as generous as possible, while taking into account the changes in life span and the sheer numbers involved. I know that that is the intention, but now, for all our sakes and those of our constituents, we must make it a reality.

20:05

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Like other Members, I am encouraged by the agreement across the Chamber, particularly on issues related to fairness that mostly affect women. We agree, for instance, that we are all living longer and therefore need to extend our working lives. Contrary to what the hon. Member for South Dorset (Richard Drax) said, the last Labour Government took that into account in the Pensions Act 2007, following the recommendations of the Turner commission.

My right hon. Friend the Member for Croydon North (Malcolm Wicks) made a relevant point about variations in life expectancy connected with socio-economic inequalities, and about the time for which people in a healthy condition can expect to live. I agree that more research should be done on that.

[Harriett Baldwin]

The hon. Lady mentioned the steps that the last Government took to deal with increasing longevity. Does she agree that the figures produced by the original Turner commission suggest that things are moving much faster than was anticipated even in 2004, and that since then longevity has increased by at least a year?

[Debbie Abrahams]

I think that the hon. Lady is referring to the average. It is important for us to consider not just the average, but how the figure is spread across different socio-economic groups. It does not explain or excuse the Government’s failure to protect the women who are being detrimentally affected by the acceleration of the equalisation of the pension age.

As many people have pointed out, this is about fairness. We must focus on what is right, and the Bill fails the fairness test. Many figures have been cited in relation to what the Bill means nationally. Half a million women will have to wait more than a year longer to receive their state pensions, 300,000 will have to wait an additional 18 months, and an unfortunate 33,000 will have to wait a further two years. Moreover, the Government will increase the state pension age for both men and women to 66 in 2018.

I asked the House of Commons Library to conduct an analysis of the impact in my constituency. I discovered that 4,300 women and 3,800 men would be affected, and that approximately 200 women would experience a notional loss of income from their state pensions of up to £10,700. I have been contacted by dozens of women in my constituency who have been working since the age of 14 or 15, including one called Linda Murray. She gave me permission to use her name. She was born in 1954, and left school at 16 to start work. She wrote:

“I have never had a job that provided a pension or had the means to provide one for myself. I have worked full-time apart from a few years when I worked part-time while helping to look after my mother who needed 24-hour care. For most of my working life I expected to receive my pension at the age of 60. However when the age started to rise I accepted this, as did everyone else. My retirement date was set at 64. I now work 47 hours a week in a dry cleaners and it is hard manual work. Due to my personal circumstances, full retirement is not an option for me, at least for a few years, but I was planning to greatly reduce my hours. I know that I won’t be able to continue working as I am now until I’m 66.”

Many Members have mentioned that that is hard to do because of the physical wearing out of the body.

Linda continues:

“But my take-home pay is £267 a week—how am I going to be able to save enough from this to be able to work part-time when I’m 64?...This proposal is ill thought-out and cruel. It’s unfair to move the goalposts for a second time. Women of my age have worked hard and honestly and don’t deserve to be discriminated against in this way. We accept the need to equalise the retirement ages but it should be done in a fair way. I feel that this Act will create an underclass of women unable to continue in their present employment, unable to find another job and denied the pension to which they are entitled. In an interview in The Daily Telegraph…David Cameron said that a sudden rise in women’s retirement age was out of the question.”

So that is another broken promise. There are hundreds of women with similar stories, and there is considerable cross-party agreement that we need to do something about this. I therefore hope that Ministers are listening.

Another fairness issue is the switch from the retail prices index to the consumer prices index. The Department for Work and Pensions impact assessment produced figures that again suggest that the burden will shift from the Government and employers to the individual. Some £500 million will be taken from the Pension Protection Fund.

My final point is about the increase in income thresholds for automatic enrolment into occupational pensions and the delay in that regard. The former Labour Government introduced that measure in the Pensions Act 2008, but the current Government are restricting access to it by both increasing the threshold from £5,000 to almost £7,500 and introducing a three-month waiting period. Again, women and people in low-income jobs will be particularly affected. Indeed, the impact assessment suggests that those who will be most detrimentally affected will be women, people on low incomes, ethnic minority groups and people with disabilities.

We must not allow our pension system to be reformed in a way that pushes pensioners deeper into poverty. Labour did a lot to reduce inequalities—although I would have liked us to have done a lot more—but these reforms will make them worse.

20:13

[Nick Boles (Grantham and Stamford) (Con)]

First, I should tell Members that I am absolutely not a pensions expert; I have never spoken on the subject before in my life. I have therefore found this debate particularly enlightening, and I want to single out the speech of the right hon. Member for Croydon North (Malcolm Wicks) as it was extraordinarily illuminating and provoking. I hope Ministers will look at the issue he raised for the long term—after this Bill has been passed and changes have been made—and address the disparity between people who start work in their teens and those of us who are lucky enough to start work in our early to mid-20s.

I want to focus not so much on the detail of pensions, but rather on the context in which the Government are taking this Bill and its measures through Parliament. It is important to address that context because it explains so many of the difficult, controversial and even painful decisions the Government are making. It also informs and defines the approach taken by Her Majesty’s Opposition, which can be summarised by the refrain we have heard so eloquently and passionately from so many Opposition Members’ mouths tonight: it just is not fair.

Let us first consider the context from the Government’s point of view. Our strategy is simple. It is based on our reluctantly coming to the understanding that everyone in this country will suffer more—will suffer most, indeed—if the Government do not quickly deal with our unsustainable public finances. I use the term “unsustainable public finances” rather than “deficit” because it is important to understand that this is not just about dealing with the current deficit; it is also about putting in place a long-term platform of sustainable public finances. It is not about what we need to do between now and 2015; rather, it is about what we need to put in place for our country for the next two, three and four decades. The insight that everything must serve this overall objective of putting our public finances on a sustainable footing—

[Nicky Morgan (Loughborough) (Con)]

Will my hon. Friend give way?

[Nick Boles]

Yes, I am happy to give way to my hon. Friend—even in mid-sentence.

[Nicky Morgan]

I thank my hon. Friend for giving way. He might address my point later in his speech, but does he agree that this issue is about not just public sector finances but a pension system that all our constituents can understand? Pensions is a very complex subject, as the Secretary of State said in opening, and many people do not understand the current system. Constituents who are in great need approach us when they finally receive their pension calculations and realise they might not have enough for the retirement they had planned.

[Nick Boles]

I entirely agree. Indeed, clarity, simplicity and dependability are what we seek to achieve in all areas of public policy, and when we do not have that we end up with the public finances we inherited from the last Government.

We should not be shy about admitting that the state of the public finances is leading us to make a whole series of decisions that unquestionably have rough edges. Nobody on the Government Benches wants to withdraw child benefit from people paying the higher rate of income tax. Nobody on the Government Benches wants to withdraw education maintenance allowance from people hoping to stay on in education after the age of 16. Nobody on the Government Benches wants to charge students of the future the full cost—up to £9,000 per annum—of studying at university. Nobody on the Government Benches wants to put up VAT, which is paid by everybody in this country regardless of their income. We do not want to do any of those things, and not a single one of those decisions has no rough edges, not a single one of those decisions has no victims and not a single one of those decisions treats everybody in the country equally.

We have never claimed that these decisions have no rough edges—that they do not have victims, and that they treat everyone equally—but we have claimed, and do claim, that each of the decisions is an essential part of the overall objective of putting our public finances on a sustainable basis. If these decisions are not made and implemented in full, all the people affected by them—the very same young people who will not be getting EMA, the very same students who will be paying tuition fees, the very same pensioners who will be receiving their pensions a bit later—will suffer far more.

The Opposition’s stance is very revealing. They could have decided to restrict their opposition over the past year and during the rest of this Parliament to those matters on which they have a profound ideological dispute with the Government. They could have decided to oppose the benefits cap, whereby in future nobody will get more than average income from benefits and which will make it clear to people that the only way to earn more than the average is to work for a living. They could have decided to oppose the universal credit, which demonstrates our view that we have to remove excessive means-testing from the benefits system in order to make work pay. They could have decided to oppose immigration controls, which illustrate our view that we need to restrict the entry of people into this country, so that it is British people who can go out and get the jobs that our recovery creates.

The Opposition could have decided to focus on and restrict their opposition to those matters, about which they have genuine ideological differences of opinion with us that I entirely respect. However, instead, they are choosing to oppose all the measures we are introducing—even those that are driven not by an ideological programme or by an attempt to reshape the way this country operates, but by a wish to rescue this country from a road to ruin.

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

May I declare an interest as a trustee of the Conservative agents’ pension fund, and my other registered interests? Does my hon. Friend agree that Labour Members are opposing this because they are deeply embarrassed that they failed to increase the retirement age when they were in government? A much preferable approach is that followed by my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who gave very long notice of these programmes and really did fix the roof when the sun was shining.

[Nick Boles]

I thank my hon. Friend for his intervention and he is absolutely right: the contrast is stark and is not flattering to the Opposition. Indeed, I would go so far as to claim that the curious thing about the Labour Government is that they demonstrated the quality we would normally associate with Oppositions: total opportunism—the total failure to grapple with any difficult long-term issues, and instead doing just the easy things that win votes at the next election.

[Debbie Abrahams]

I refer the hon. Gentleman to the Pensions Acts 2007 and 2008.

[Nick Boles]

I thank the hon. Lady—and remind her that her Government had been in power for 10 and a half years by the time they introduced those Acts, even though it was clear long before they took office that such problems existed. However, I do not want to be too ungracious and I do accept that some things were done—but not enough and too late.

So why are the Opposition taking this approach of opposing everything under the general charge that it just is not fair? Is it really fair to tell people that a budget deficit on the scale that we face can be dealt with without pain; without some people being asked to sacrifice things that are important to them; and without everyone in the country experiencing a real material loss? Is it fair to tell young people that, actually, there is no reason to pull back on EMA; that there is no reason to restrict their income when they stay on in education; that there is no reason to change the basis of funding for universities?

[Alex Cunningham (Stockton North) (Lab)]

You have gone on a lot about ideological things, but is it ideologically bonkers to fight for a fair deal for women who have made the sacrifices that you are talking about? They have sacrificed for their country, for their families—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Unfortunately, I am not responsible, so it is not “you”. I am sure the hon. Gentleman did not mean that.

[Alex Cunningham]

I beg your pardon, Mr Deputy Speaker. Is it “ideological” for us to stick up for women who have had a raw deal through life looking after their families and doing a low-paid job, but who now find out they have to work even longer for a pittance of a pension?

[Nick Boles]

I thank the hon. Gentleman, but I fear he misunderstands me: I am not accusing him and his colleagues of being ideological, and that, in a sense, is my point. Actually, the Opposition are perpetrating a grand deceit on the British people, which is that there is anything fair about protecting all these things that we can no longer afford; that there is anything fair about arguing to the British people that we—

[Dr Whiteford]

Will the hon. Gentleman give way?

[Nick Boles]

No, I will not give way for the moment; I am in the middle of replying to the previous intervention. The Opposition are perpetrating the grand deceit that there is anything fair about pretending to the British people that this country is not poorer than it was; that it is not permanently poorer than we thought we would be in each of the next 20 years.

The point about what happened in the past three years is that the economy suffered a permanent drop. We can grow again from that drop—we can again achieve higher living standards—but we will never have back the growth that we lost in the past 10 years, and it is not fair to anyone to argue that this or any Government can proceed as if no sacrifices need to be made, no losses need to be felt and there can be an entirely victimless process of recovering from the terrible economic situation that the Government of the hon. Member for Stockton North (Alex Cunningham) helped to create.

[Sheila Gilmore]

Is the hon. Gentleman not perpetrating the debating technique of erecting a straw man in order to knock him down? Perhaps he would like to consider the terms of the Bill that we are discussing.

[Nick Boles]

I thank the hon. Lady, but I fear that this man is a lot more substantial than just straw—even if the Leader of the Opposition sometimes appears to be exactly the straw man she refers to. The entire membership of the Labour party is signed up to the deceitful argument that we can correct this budget deficit, restore sustainability to our public finances and rescue this country from decline without taking painful decisions that cause people loss. That very same argument has been made in every single one of these debates—in the debates about education maintenance allowance, about tuition fees and about all the other benefit changes. We are hearing that argument here again tonight. This is not really an argument about pensions, but one about the future of this country, and the argument used by the Opposition is always exactly the same.

[Dr Whiteford]

The hon. Gentleman has been using a lot of rhetorical questions in this debate. For me, the key question, if we accept the premise of his argument, is: why should women born in 1953 and 1954 take a disproportionate amount of the pain and take all that pressure for everyone else?

[Nick Boles]

The hon. Lady is eloquent, as so many people have been, on behalf of a particular group, and I would accept and understand that were they not equally eloquent on behalf of every single other group that is being affected by the process of getting our public finances on to a stable footing. I would have some respect if an Opposition Member said to me, “I voted for EMA, I voted for tuition fees and I am voting for the benefits cap, but this one I cannot bear because it is egregious, outrageous and singles out this group in a way that no other group is being treated.” But we do not hear that. All we hear is the same cry—“It isn’t fair”—applied every day, every week, to a different group of people. Opposition Members need to understand that it is not fair to pretend to people that we can do this without pain or loss. It is not fair to perpetrate on the British people the deceit that we can somehow grow our way out of this deficit without cutting off some things that everybody appreciates.

[Mr Watts]

I thank the hon. Gentleman for giving way. No one is saying that. People are saying that the reductions in public expenditure can be done slower to cause less pain. No one denies that the deficit has to be dealt with; the issue is how we go about doing that. It is about the difference between tax increases and cuts in public expenditure. Perhaps he will address those issues.

[Nick Boles]

The hon. Gentleman would have more credibility if we had heard, at any point in the past 13 months, a single specific proposal for a painful cut with unpopular consequences for a defined group of constituents who would write to all of us, but we have heard none, although we might be about to hear from the hon. Member for Leeds West (Rachel Reeves), who gesticulates at me.

[Rachel Reeves]

I do not know whether the hon. Gentleman was here for the speech of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), in which my right hon. Friend set out Labour’s proposals to increase the state pension age at a faster rate than in the previous Parliament while still giving people 10 years’ notice. Our proposal would mean that no one would have to wait for more than a year and would not disproportionately affect women of 56 or 57. So although the hon. Gentleman is making a very nice speech, it is not based on facts.

[Nick Boles]

The hon. Lady’s intervention betrays exactly what got her Government—or the Government whom she supported, because she was not in Parliament when they were in government—into such trouble. The only nettles that Labour is willing to grasp are those that will grow in 10 years’ time. There are no nettles now being grasped and there are no decisions that Labour, were they in government, might have to explain to the British people—there are only bills being deferred for later generations. I am afraid that the hon. Lady has revealed the shallowness and hollowness of Labour’s position by bringing forward one cut—one deprivation—that would come in only 10, 20 or 30 years’ hence, when all of us will be pushing up daisies or collecting a somewhat deferred pension.

Let me round up by saying that I hope that people, including even some of the women who will be affected so directly by some of the proposals in the Bill, will have respect for hon. Members on the Government Benches because when we reply to letters from constituents complaining about the unfairness of any of the Government’s individual proposals we are not going to take out the flannel and the soft soap—the first implements that Opposition Members reach for—but are going to explain the situation that the country faces. We are going to explain that, as before in our history, sacrifices are going to have to be made and everybody is going to suffer. Everybody will suffer some loss, but in doing so we will create a country and a public finance platform from which this country can grow again, from which we can make investments again and from which we can help those who need our help most. It is only with that honesty and that ability to admit the difficulty of our circumstances that we will earn the respect of the British people.

20:32

[Mr William Bain (Glasgow North East) (Lab)]

I would like to say that it is a pleasure to follow the hon. Member for Grantham and Stamford (Nick Boles), but that might be pushing it somewhat. He made a characteristically rumbustious and entertaining contribution and I would like to respond directly to some of the issues he raised. He spoke about rough edges, but the view that we have heard from Opposition Members and even from some Members on the Government Benches is not of rough edges but of rough justice for women aged 56 and 57. He spoke about the road to ruin, but we see other countries engaged on a different path, as President Obama said when he spoke to us in Westminster Hall. Those countries are engaged in growing their economies more. The hon. Gentleman spoke about fairness, but may I say to him that fairness and restoring trust in politics are not about making a commitment in a coalition agreement 13 months ago and cynically breaking it in the way that this Bill will if it receives a Second Reading tonight.

Reform of the pensions system is best conducted with the agreement of as many shades of political and other opinion as possible. It is far too important for short-termism, and the principles and as much of the detail as possible should be above partisan politics. That is why there are some aspects of the Bill that Opposition Members could support, but the glaring unfairness at the heart of the Bill in its treatment of half a million women in the acceleration and equalisation of the state pension age in 2018 means that I will be opposing it tonight.

Rising life expectancy and other demographic changes mean that there is agreement across the House that the state pension age should change to reflect the longer period of retirement that people in younger age groups are likely to enjoy. There are currently 10.5 million people aged 65 and over, compared with just 5.5 million in the same age group in 1951. It was the previous Government who established the Turner commission to examine in detail on a non-partisan basis the necessary changes in the state pension age in a way that was fair to future taxpayers, just for people approaching retirement, and long term in its scope, to allow people to save for their retirement in the full knowledge and with sufficient notice of changes in the state pension age.

The Bill, particularly in part 1, breaks those three basic principles by adjusting the settlement in a way that hurts 500,000 women across the country who were born between December 1953 and October 1954, including 900 in my constituency. It fails in the aim of delivering an improved basic state pension. It also breaches the terms of the coalition agreement, which ruled out any equalisation of the state pension for women before 2020.

[Nicky Morgan]

On that point—I speak as a former lawyer—my understanding of the explanation given earlier this afternoon was that there was a legal reason that the coalition agreement could not be fulfilled as it was drafted. Is the hon. Gentleman honestly saying that his Government would have proceeded with something that is deemed to be illegal, however desirable?

[Mr Bain]

I am grateful for that intervention. The way to get round all the problems, legal or otherwise, is to follow the excellent suggestion that my hon. Friend the Member for Leeds West (Rachel Reeves) has already made in the debate and will restate in her winding-up speech: prevent this unfair change from going ahead and instead look at some of the accelerations in pension age that can be made, particularly in respect of people retiring at 66 or 67, which can also save money for the Exchequer.

The Minister and the Secretary of State did not spell out to the House what the legal problems were. Some Members have speculated that they relate to matters of European law. I hope that when the Pensions Minister winds up the debate, he can outline the legal issues. They certainly were not outlined to the country when the coalition agreement was signed, or during the press conference—the love-in—in the rose garden thereafter.

The Bill also fails the test of fairness, because it places too great a burden for savings on one group of the population when the Government should be looking elsewhere, such as at equalising state pension eligibility at 67. As my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) pointed out, even before these deeply unjust proposals were announced by the Government, women had been disadvantaged in pension provision for some time. As she said, median pension saving of a 56-year-old woman is just £9,100, almost six times lower than that of a man which, on average, is £52,800. Research by Prudential establishes that the average woman retiring this year can expect an annual income in retirement of £12,900 per annum, compared with an expected income of £19,400 for the average retiring male. Further, the same study found that 28% of women planning to retire this year have no savings in private or company pension schemes, compared with just 10% of men.

The previous Government’s strategy of seeking to link the basic state pension to earnings and making private pensions opt out instead of opt in sought to redress the balance and would have been implemented if we were in government. More safeguards should have been established through the Bill, rather than entrenching inequity, as it appears to do. Following the Bill, women affected will have less than seven years to react to the changes, and may be less likely to be in a pension scheme at all, with less disposable income to supplement savings for retirement, and with greater care responsibilities. Women are also much more likely to wind down in later years of employment, be that to care for elderly relatives or for young grandchildren. Furthermore, it will be more difficult for women to move from part-time to full-time work, or indeed back into employment of any form, given current economic conditions. The Office for Budget Responsibility’s projection of 310,000 public sector job losses in the coming years will disproportionately impact women, who make up 65% of that work force.

The Prime Minister said on Radio 2 today that retirement should be

“a process rather than a cliff edge”

and that

“many people, when they get to retirement, would like to go on doing some work or part-time work”.

The reality is that the cliff edge imposed by the Bill is an unfair burden on 56 and 57-year-old women who have done the right thing and saved for retirement but are now being grievously abandoned by the Government.

Recent decades have seen a change in employment patterns among women. The dated notion that a woman’s role is to stay at home and look after the children has been well and truly dispelled, but for women in their late 50s who are due to be affected by the proposals, such changes in social attitudes may not have been reflected in the earlier parts of their working lives. The Government’s reckless haste in changing the state pension age for those women makes adapting to that change even more difficult.

As Carers UK indicated last month, these changes will have a disproportionate impact on other social groups. About 58% of carers—3.4 million people—are women, as are one in five carers aged between 54 and 60. Of the estimated 662,000 carers who combine part-time work with caring, 89% are female. For carers, there is little opportunity to make contributions to a private pension plan or savings, even if they are in part-time employment. For women who are carers, provisions in the Bill collude to put them at even greater disadvantage.

In responding to the comprehensive spending review last October, Joanne Segars, chief executive of the National Association of Pension Funds, noted that any changes must include an improved and secure basic state pension. Savings from the Bill’s proposals on the state pension age will not even exceed £l billion until 2018-19, which is well outwith the range of the Government’s fiscal consolidation plan. The Bill does not spell out how they plan to increase the basic state pension for all. Again, there is little in the way of incentive and assistance for people who will now have to work longer. As the Equality and Human Rights Commission notes:

“Rather than focusing on increasing men’s State Pension Age and perpetuating the gap between men and women, Government should focus on how to help women and men extend their working lives, if they wish to do so, and thus reduce the disadvantage that women face in the workplace by shortened working lives.”

Women will also be penalised by the design of the Bill’s provisions on auto-enrolment in pension schemes, which will reduce the number of people enrolled by almost 600,000.

This is a Bill of broken promises from a deeply dysfunctional Government. It changes the terms of the social contract between women, low-paid workers and the state, with insufficient notice and scant regard to the effects on rising inequality. They are unjust proposals that bear the imprint of the Chancellor, despite having nothing to contribute to his deficit reduction plan during this Parliament. They put the burden of further departmental savings on the shoulders of too few people, and those people have worked and saved for the pension contributions they have accrued. That is why the Bill deserves to be opposed in the Lobby tonight.

20:43

[Mike Crockart (Edinburgh West) (LD)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests, which details my paid employment in the pensions industry prior to my election last year.

I must admit to being a little confused by today’s debate. As a new Member, I had been under the impression that Second Reading was an opportunity for debate on the general principles of a Bill. I am also somewhat confused by the Labour party’s position. On the basis that some of the detail in the Bill is not yet right, it is prepared to throw the entire subject out and delay the reform that is necessary to move this country to a sustainable pensions system. It is worth spending some time looking at those general principles.

As has been noted, the present state pension age of 65 for men was set by the Widows’, Orphans’ and Old Age Contributory Pensions Act 1925, which was passed 86 years ago. That brought the pension age down from 70, which had been set in the excellent Old Age Pensions Act 1908. At that point, barely 40% of men lived long enough to claim it. The women’s pension age of 60 was set 71 years ago by the Old Age and Widows’ Pensions Act 1940, so change has not exactly been rushed into. As the hon. Member for Salisbury (John Glen) said earlier, this country’s demographics have meant that for decades we have faced a ticking pensions time bomb, but we have unfortunately been very slow to deal with it. We may well have started to do so in the past 10 years, but countries such as Sweden grasped the problem 20 years ago and introduced auto-enrolment back then.

Life expectancy is far from static, having gone up for those aged 65 by five years between 1920 and 1990 and, crucially, by a further five years between 1990 and now. Men can now expect to live until 77 and a half years old and women for four years longer than that, but not only are we paying state pensions longer; we can expect to pay them to far more people. As the baby-boomer generation of 1946-47 reaches retirement in 2012, 800,000 people will celebrate their 65th birthday—150,000 more than did so this year. It is now abundantly clear that our current state pensions system and its funding are entirely unsuitable and unsustainable. That is why I welcome the general thrust of this Bill and, indeed, much of its detail, but as we go forward it is clear that we have to sort out four elements to ensure a sustainable system.

First, we must be certain of what the state will provide. I welcome the current consultation, looking at the possibility of a single-tier universal pension, because, although it is not in the Bill, it is clearly part of the solution to the puzzle. With certainty about what they can expect from the Government, people will be able to decide whether the basic provision on offer is sufficient, although it is more likely to make it easier for them to decide to top up what is on offer.

Secondly, we must establish a level of state pension provision that is sustainable in the longer term and is regularly reviewed to ensure that it matches life expectancy. We simply cannot afford to find ourselves in this position again, having ignored the warning signs that our state pension offering has become unaffordable.

The current acceleration timetable for the state pension age will unfortunately, I fear, almost certainly fail to deal with the funding gap that I have outlined, but that does not mean that I support the Government’s current proposals, as it is quite clear that they will badly affect many women. It is simply wrong that those women, who are fast approaching their expected retirement age, will now be given as little as six years’ notice in order to plan how to cope with a delayed state pension. Some are already unemployed, caring for older relatives or working substantially reduced hours due to ill health.

The proposal hits especially hard those women who had already been told that their planned retirement would be delayed by four years. They are now being hit with a second delay. It will cause many to suffer unexpected financial pressures with insufficient notice, and it seems inequitable given the different outcomes for them and women of similar ages. An age difference of days could result in a pension two years later.

Unlike the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), however, I believe that there are signs that the Government may be prepared to move on the issue, and I urge them strongly to do so. The current acceleration timetable will not deliver sufficient progress, but, as Members have already said, a fairer way might be to accelerate the progression of the pension age to 67 and/or 68 years old and, by doing so, at least to give people 10 or more years in which to plan how they deal with it. That idea could find a great deal of support, given that Saga and Age UK have already proposed it, but I suspect that my support may well ensure that I am not a member of the Public Bill Committee.

On the third part of the pensions puzzle, we must make it as simple as possible for people to contribute to their own pensions provision and to take ownership of funding their own retirement. As we have heard, 7 million of us are not saving enough for our own retirement and 44% of working-age employees are not contributing at all towards a private pension.

That brings me to the fourth element of the solution—employers’ contributions. It is clear that to fill a funding gap of the size we are facing, we must strike a balance of responsibility between the state, the individual and employers. Mandatory auto-enrolment, as confirmed in the Bill, exemplifies that balance. The changes in the Bill will, I hope, do exactly what they aim to do in making automatic enrolment work, in the words of the title of the independent review. I hope that the provisions to raise the earnings threshold for auto-enrolment, to introduce the optional waiting period and to simplify the system of self-certification will increase employee and employer buy-in of the system.

Although raising the earnings threshold would certainly ease the financial difficulties of the lowest paid, it would effectively lock out of auto-enrolment those most in need of extra pension provision. Will the Minister reconsider that to see whether auto-enrolment could continue, merely delaying employment contributions until an earnings threshold is reached? Many examples of such graduated schemes already exist in the private sector. It is well known that even £1 invested earlier on for 40 years is likely to yield far greater returns than any amount invested 10 years later, once income has risen sufficiently to cross that threshold.

I agree with my hon. Friend the Member for Ipswich (Ben Gummer) that the proposals in the Bill are insufficient to deal with this immense problem. The auto-enrolment contribution level of 8% that is floated in the Bill is a start, especially from the low—indeed, at times non-existent—base that we have at present, but in many other countries the level is double that; in Sweden, for example, it stands at 18.5%. The proposed level is a good start, but only that.

More than five years ago, the Pensions Commission stated that

“there is…general acceptance that future policy needs to be based both on significant reforms to the state system and on a new approach to private pension saving which goes beyond a wholly voluntary approach.”

Having expressed my one concern about the Bill, I believe that it finally makes radical steps towards advancing that consensus, and I hope that the whole House will unite in supporting it.

20:52

[Alex Cunningham (Stockton North) (Lab)]

I am very keen to speak about this issue because it has resulted in my heaviest postbag for some time, with most of the correspondence coming from women. Some time ago, I was declared an honorary woman, which I took as a great compliment. I was in a discussion with half a dozen women who were talking about things of a feminine nature. One woman looked at another and said, “There’s a man here”, only to be told, “No, it’s okay—Alex is an honorary woman.”

I am very pleased that I am not a woman, because at my age I would be one of those losing out under the formula that the Government have put together. Only this afternoon, I received a phone call from one of my constituents, Fiona, who is a 56-year-old nurse. I wish that the Minister could have heard her voice and learned a little about the anguish and despair that was in it. She told me that she started work at the age of 17 and has worked in the health service for several decades, and that she now feels that the Government are slapping her in the face. She said that she had been aware for some time that her pension age would be going up from 60 to 65, and that she understood that and did not mind—she even thought it was fair—but that raising the age even further to 66 was going too far, too fast, and with very limited warning. In her own words—we have heard this cliché all day—“They keep moving the goalposts.”

Fiona pointed out that older nurses and other health professionals, particularly those in their sixties, would struggle to lift and assist the most frail and elderly patients. Similar issues exist for manual workers, many of them women, who simply cannot do the job that they were originally employed to do. Surely we should value people such as Fiona, not force them to replan their future with such limited notice. It was on behalf of Fiona and many other women in my constituency that I wanted to speak.

It is great that most people are living longer—of course, many others are not—but it brings challenges. It is important that as politicians we confront the difficult issues raised by the ageing population, not just for pensions, but in health care, the quality of life we provide for older people and how society treats the retired population. Those are all important issues.

My hon. Friend the Member for Sunderland Central (Julie Elliott) and my right hon. Friend the Member for Croydon North (Malcolm Wicks) outlined inequality in a different way today, with regard to manual workers who will be lucky to reach retirement age and even luckier if they get to 70, let alone the grand old age of 100 that some Government Members think they and their relatives will reach. Those manual workers are the people who have created wealth in our country, and yet they have never had the advantages of that wealth and they get very limited benefit from their pensions.

[Mr Watts]

Does my hon. Friend agree that it is also unfair that many of the women we are talking about started work at the age of 15 and so will have worked for 10 years longer than many other people by the time they retire?

[Alex Cunningham]

Indeed, that is the case. Some of the women in these difficult jobs may not have their health in later years, so they will lose in all ways.

All too often, the elderly are ignored and not treated with the respect that they deserve. The Government should play a big role in ensuring that society takes care of people when they have retired and are not as independent as they once were. Family, friends and community all play a big role, but the Government can and should lead by example. Pensions, among other things, are a big part of that.

I am proud of Labour’s record in this field. We lifted a million pensioners out of poverty, and free bus passes, free TV licences and the winter fuel allowance all play their part in helping pensioners. In common with other hon. Members, I want to home in on two things.

[Stephen Pound (Ealing North) (Lab)]

I apologise for interrupting my hon. Friend’s fluent and fluid flow. Does he agree that it is insane, barking and bonkers to the ultimate degree to expect someone who has worked in a hard, physical job for most of their life to have the same longevity as someone who has luxuriated in the soporific circumstances of a stockbrokers’ office? What will happen is that people will be signed off sick. It will cost the Government more money and treat women appallingly in the process. Does he agree?

[Alex Cunningham]

Could I disagree? I most certainly could not. People in my constituency used to build ships and it has one of the biggest chemical industries in the country. It has people who have worked in difficult circumstances in hard jobs. My hon. Friend is correct that such people cannot expect a longer life, so I think we should make it a little easier for them.

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

My hon. Friend is making a fantastic speech and it is great to listen to him. Does he agree that the issue is not just health and longevity, but that even people who are in very good health and will live longer simply cannot rearrange their economic affairs in the time that they have—six years’ notice of two additional years in the case of some of our constituents—to cover the loss of pensionable income that they will sustain when this Bill goes through?

[Alex Cunningham]

That is very much the case. I suppose that there will be an additional few years of misery for some people because they will not have the income to enjoy the things that they see other people enjoying. It is therefore even more important that we raise these issues today.

It is the significant effect on women that worries me. The Bill makes it more likely that those on low incomes will not pay into a pension. Many women have contacted me, incensed that they are losing out thanks to the Government’s changes. It is completely unfair. The Government Members who have talked about fairness need to think about women a little more. A total of 177 MPs signed early-day motion 1402 on the state pension age for women. It is time that the Government backed down on this issue. All afternoon and evening, Government Members have teased us by saying that the Government will change their mind. When the Secretary of State was here, he was shaking his head, but I have seen no such indication from the Minister as the teasing has continued.

Age UK’s report “Not Enough Time” makes it clear that women are unhappy with the plans, and it is worth repeating some of the statistics that it gives. The 330,000 women born in Britain between December 1953 and October 1954 will have to wait 18 months or two years for their state pension, and 33,000 will see their state pension age increase by two years at a loss of £10,000.

I suppose I should declare an interest, because just as I would be caught out if I were a woman, my wife Evaline is one of the women affected. Like others, she has fewer than seven years to plan for the changes. People need sufficient time to plan for the increase in the state pension age, and the changes are happening too fast and causing a lot of worry and anger. It will be the poorest women who suffer the most as a result, those who do not have savings to fall back on and are in low-paid jobs.

Raising the state pension age is necessary, however, to reflect the fact that some people are living longer. We all recognise that, and we need cross-party consensus on it, but we simply cannot afford this unfair treatment of women. It is always worth repeating that the coalition agreement promised that the women’s state pension age would not be raised to 66 before 2020. I do not care about the legal arguments and so on—if the Government are going to do that, they need to explain why. The Bill proposes equalisation of the age by 2018, and then increases to 66 for both men and women by 2020. Moving the goalposts—that cliché again—so late in the day has implications for public trust in the pensions system at a time when it is vital that we encourage more people to save for their retirement.

It is estimated that 7 million people are not saving enough for their retirement, but the Bill would raise the salary level at which someone is automatically enrolled in a pension scheme from about £5,000 to £7,500. That means that 600,000 fewer people will be automatically enrolled in a pension scheme, and again, women will be disproportionately affected. What long-term provision is there in the Bill for that group?

As I said at the start of my speech, I am glad that we are debating these issues today, but I believe that the Government have got the key elements of the Bill wrong. I cannot endorse the way in which a small but significant group of women, including my wife, are being hit by the accelerated pension age rise, nor can I support the changes to auto-enrolment given the problems that I have described. That is why I, too, will vote against the Bill today.

21:02

[Sheila Gilmore (Edinburgh East) (Lab)]

We often hear in pensions debates about the UK having very poor pension provision, but I suggest that one reason for that is that there has been a lack of consensus and consistency over the years. We have heard a great deal about the failure to tackle problems, but I would like to take Members back to the state earnings-related pension scheme, introduced by Barbara Castle in 1978. It meant that everyone who was paying national insurance contributions and was not already in an occupational pension scheme would be in a compulsory earnings-related scheme. The pension reached maturity in 20 years, so it was particularly attractive to women and to anyone with an interrupted career pattern. The problem was known about as long ago as then, so people who think that they have discovered it recently are wrong.

By the late 1990s there should have been many more people benefiting from that pension provision. To my mind it was one of the best things done by the Callaghan Government. They have been much maligned, but not only did they introduce that pension provision, but income inequality was at its lowest in the whole post-war period during their years. Government Members who say that they are keen to reduce income inequalities might do well to take a history lesson from that Government.

What happened to SERPS? It was torn up by the Thatcher Government in the name of giving people choice. I appreciate that it is argued that SERPS would have proved increasingly expensive and that we would have had to amend it, but how much better to be in a position to amend something than to have to start again from scratch. That is what happened at the end of the previous Conservative Government’s time in office.

When the Thatcher Government decided to tear up SERPS, the possibility of its proving too expensive was not given as a reason. They advanced the ideological reason of giving people the choice to opt out of state provision and take up some form of personal pension. Anyone who took up one of those personal pensions knows that the level of provision was extremely poor. We have heard a great deal about the mis-selling of pensions, but even if they were not mis-sold, the quality of those personal pensions was not good. I speak as someone who knows, not because I chose to opt out but because, as a partner in a legal firm, I was treated as self-employed and therefore could no longer be part of SERPS—I wish I could have been. Consequently, I took out a couple of personal pensions, and I can tell hon. Members that the provision is poor—almost to the point where I might as well have put the money under the bed. Certainly, I might as well have put it into a savings account.

Giving people that freedom of choice had other disadvantages. I well remember that my secretary at the time the change was made was of an age when she could opt out, and she did. I know that she did not opt into a personal pension scheme. Her rationale was, “I don’t have a very high income. I’ve got two children in the early teenage years, who are becoming increasingly expensive. Extra money in my pocket now is valuable to me.” I can understand her making that choice, but I am sure that, 20 years on, she now regrets it. I am therefore extremely supportive of enabling people to be included in pension schemes. It may be directive, bossy and even what the previous Conservative Government called the nanny state, but it ensures that people make provision for their retirement.

I am particularly disappointed that the Government have decided to change the income level at which auto-enrolment comes into force. They have increased it from the amount that was agreed through consensus to the level at which people begin to pay income tax. Ministers seemed to say during the debate that it is not inevitable that the level will continue to rise in line with whatever happens to income tax and income tax allowances. However, if that is the case, why tie it to income tax in the first place? It creates a suspicion that that will continue to happen. If that is not the case, we need to be clear about it.

We have heard a great deal in the debate about the long term. I started by talking about consensus and what went wrong when it was previously torn up. It is regrettable that the Bill risks tearing up another consensus—on the previous Government’s work on the back of the Turner report and the pensions legislation that was then introduced—by including an extremely contentious provision, which did not need to be in the measure were it not for a desire to make savings as part of the comprehensive spending review. Government Members have asked us not to oppose Second Reading because we are dealing with generalities. If the provision on women’s pension age had not been in the Bill, we would not have debated the measure for so long.

Despite what some Members have suggested, the Bill does not completely recast the pension system and provide for a solid and sustainable future. In many ways, it is a relatively minor amending measure, which alters some provisions from previous pensions legislation. Without the specific provision about women, we would largely be in agreement. I have already said why I am not entirely happy about the provisions on auto-enrolment, which change previous legislation, but nevertheless the particular provision on women’s pension age has caused the difficulties about which we have heard. The Bill is objectionable not just because the pension age is increasing, but because a double change over a short period affects the same cohort of women.

The proposals have been under discussion and the subject of campaigning over at least the past six months—we are not debating recent proposals. Ministers have hinted today that they might be prepared to make changes in due course to take account of people’s concerns, but those concerns have been raised ever since the proposals were made. The Bill has been through the House of Lords, when there was an opportunity to make the adjustments that Ministers have appeared to suggest today. Did that happen? No, it did not. There was no suggestion at that stage that the Government were willing to make any such changes.

We could have held today’s debate knowing what changes the Government are considering. Perhaps in his closing speech the Minister will say what changes he is prepared to make to the part of the Bill dealing with pension age. He should show not just that the Government are making another attempt to ensure that the coalition partners go through the Division Lobby together, but that he has been listening, not only to his coalition partners and the Opposition, but more importantly to the many women who have campaigned and given clear reasons why they want the Government to change their mind. If the Minister is thinking of changing the proposals, he owes it to those women to tell them how. He has the opportunity to do so in his closing speech.

21:12

[Priti Patel (Witham) (Con)]

I am intrigued by the debate thus far. A range of hon. Members have followed a number of themes. The hon. Member for Edinburgh East (Sheila Gilmore) and others argued that the poorest will be affected by the changes that the Government are making, but they are already affected by the lack of good, sustainable state pension provision, which is one of the major issues that the Bill addresses.

I welcome the Bill and congratulate the Government on it. In my view, it will transform the pensions landscape. As we have heard, in recent years, there have been significant increases in longevity and changes in how we lead our lives. Things are changing at a dramatic pace. That will not stop, and nor should it; frankly, we should celebrate it. Not only are we living longer, but our expectations of quality of life in retirement are changing beyond all recognition compared with those of previous generations, as is how people spend their retirement. With increasing life expectancy, it is vital that our state pension age increases.

[Susan Elan Jones (Clwyd South) (Lab)]

The hon. Lady rightly makes the point that we are living longer, which is of course something to celebrate. However, we are not living that much longer than we were when the coalition agreement was formed.

[Priti Patel]

I thank the hon. Lady for her remark. It is a fact of life that we are living longer. At the end of the day, there are serious pressures on public finances and on funding for our state pensions. The Government are seeking to address that serious issue. Ultimately, this is about the future of a sustainable state pension. The Bill is not about today or tomorrow, but about future generations. It is right that the Government tackle this fundamental, serious issue in the way that they are. Furthermore, we have all seen from Department for Work and Pensions figures that more than 10 million people in the UK can expect to live to see their 100th birthday. This reform is therefore clearly long overdue.

People are living longer and healthier lives, but we simply cannot ignore the pressure that this puts on the state pension system. In my view, increasing the state pension age is the only fair and sustainable option. We have heard a range of quotes in the Chamber today from various organisations. There are experts in our society who understand how our pensions are funded, and it is worth noting that the chief executive of the National Association of Pension Funds said:

“Our ageing population means increases in the State Pension Age are unavoidable. This rise in the State Pension Age to 66 from 2018 to 2020, as implemented in the…Bill, is a sensible move.”

[Mr Watts]

We keep hearing the same arguments, as though Opposition Members have not taken on board the need for changes. Our issue is with the speed, and with the unfairness to a specific group. If the Government address this issue, we can have consensus, which surely is what we all want.

[Priti Patel]

The previous Labour Government had the perfect opportunity to address this issue. Opposition Members say that their issue is with the speed, but this is now about having a sustainable pensions system, as we simply cannot carry on as we are, so I do not think that the hon. Gentleman’s remarks are plausible. The status quo is not an option.

[Sheila Gilmore]

Will the hon. Lady give way?

[Priti Patel]

I am going to close my remarks shortly, so I hope that the hon. Lady will forgive me if I do not take her intervention.

I want to touch briefly on auto-enrolment. We know that millions of people are not putting aside anywhere near enough money for their retirement. I was previously an employer, including of young graduates. On starting their working lives, they do not think about retirement, saving for their pensions or anything of that nature. Although auto-enrolment was started by the previous Government, it is a good thing, and we really have to get on with it. This is about a culture change to people’s understanding of the need to save, and of how much they need to save, for their retirement. It is not about one lump sum. It is about what they expect to get out of retirement and their potential quality of life.

To conclude, I think that these reforms are welcome and long overdue. The changes to the state pension age and auto-enrolment will lead almost to a cultural revolution and a transformation of the pensions and savings culture in our society. That is a welcome step forward.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I remind the next speaker that she must finish by 9.30 pm.

21:18

[Yasmin Qureshi (Bolton South East) (Lab)]

I have been a little bemused by suggestions from Government Members that the previous Labour Government did nothing on pensions. When Labour came to power in 1997, one of the biggest challenges it faced was tackling pensioner poverty and improving the quality of life for older people. We must bear it in mind that the Tories had been in power for 18 years. Between 1979 and 1997, 29% of pensioners were living in poverty. Between 1997 and 2010, Labour made huge achievements, as a result of which average gross pensioner incomes increased by more than 40% in real terms, and more than 1 million pensioners were lifted out of poverty. No pensioner need now live on less than £130 per week, compared with £69 per week in 1997. The winter fuel allowance, free off-peak travel on local buses, free television licences and other benefits have helped to take 1 million pensioners out of poverty.

Government Members seem to suffer from collective amnesia. The previous Labour Government established the independent Turner commission because they recognised, as we all now do, that there was an ageing population and that the retirement age had to be changed. However as a result of the Turner commission a consensus was built on three things: linking the basic state pension to earnings; raising the retirement age to 68 by 2046, starting in 2024; and making private pensions opt-out instead of opt-in pensions, with employers also making a contribution. However, the Government’s proposal goes back on that consensus, raising the state pension age for women so rapidly that some women in their 50s will have to work an extra two years that they have not planned for, and raising the pension credit age so rapidly that the poorest pensioners would lose around 10% of their lifetime retirement income. Reducing the number of people eligible for automatic enrolment in a pension scheme has also had an effect. Let me deal with each of those separately.

Labour’s Pensions Act 2007, in which we accepted some of the things carried out by the Conservative Government in 1995, set out the timetable for equalising the state pension age for men and women, legislating to increase it to 65 for men by 2020, and then to 66 by 2027, 67 by 2036 and 68 by 2046. The coalition agreement stated that the parties had agreed to

“hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”

However, the Bill proposes to accelerate equalisation for women by 2018, and then to increase the state pension age for both men and women to 66 by 2020. As so many Members have mentioned today, this is a U-turn that hits women aged around 56 to 57 particularly hard. It means that 4.9 million people are affected, 2.6 million being women and 2.3 million men. Some 500,000 women born between 6 October 1953 and 5 March 1955 will have their state pension delayed by more than a year, with the 300,000 born between 6 December 1953 and 5 October 1954 waiting an extra 18 months or more. The 33,000 women facing a two-year delay will suffer a loss in income of £10,000, while for those in receipt of pension credit, the figure is closer to £15,000. Those women are being made to accommodate the changes within less than seven years.

Women are already at a significant disadvantage in pension provision. The median pension savings of a 56-year-old woman amount to just £9,100, which is almost a sixth of the same figure for a man, which stands at £52,800. That is why this is such an important issue and why so many Members have concentrated on it. It is not fair to speed up the equalisation timetable. We oppose any change before 2020. The Government must stick to their coalition agreement promise. However, we support an acceleration of the timetable for both men and women from 65 to 66 between 2020 and 2022. That would achieve the aim of reaching a state pension age of 66 more quickly, but would affect 1.2 million fewer people than under the current plans, and affect an equal number of men and women.

The reason given for the changes is that we cannot afford not to make them because of the budget deficit. With respect, that is just incorrect. When the coalition Government made their promise, they knew what the deficit was. This is another example of the coalition saying one thing to get into power and another thing in power. For example, during the election the Tories said that there would be no VAT rise. They knew the deficit then, so why did they promise no VAT rise? They also said that there would be no top-to-bottom review of the health service, which would cost £3 billion. The Lib Dems knew about the deficit, yet they still said that there would be no rise in tuition fees. The Tories said that Equitable Life people would get a fair share of remuneration, yet they have backtracked on that, too, even though, as some of us have suggested, if the deficit is the issue, those people can receive some payments now and some later—that is, after 2015. Further, we are told that the Government’s measures will cut the deficit by 2015, yet the provisions in the Bill will come into play after 2015.

The Bill also deals with automatic enrolment. The Labour Government were legislating to introduce auto-enrolment into workplace pensions, which is a good thing because we estimated that 7 million people were not saving enough for their retirement. To ensure an adequate retirement income, we built cross-party consensus to introduce auto-enrolment. That meant that people would opt out of pension savings, rather than opting in. Combining a minimum employer contribution and the creation of a pension scheme that could be used by any employer, the measure was expected to lead to a change in the level of participation in pension savings.

The Government are proceeding with the introduction of auto-enrolment, which we welcome, but they are limiting its scope. They are raising the salary level at which someone will automatically be enrolled from £5,000 to £7,475, which will result in 600,000 fewer people being auto-enrolled in a pension scheme, a disproportionate number of whom will be women. The Government are also introducing a three-month waiting period before auto-enrolment, which they predict will mean that 500,000 fewer people will be automatically enrolled. Most people have an average of 11 different employers over their working lives, so this provision could lead to a loss of almost three years’ pension for many people. I know that the Secretary of State has said that he will listen, and I ask the Government to reconsider these issues, which have been raised by Member after Member, certainly on this side of the House, today.

21:26

[Rachel Reeves (Leeds West) (Lab)]

Today’s debate has shown the concern and anger that exists at the rapid rise in the state pension age. Members on both sides of the House have had the chance to show that they are listening to their constituents, and they now have the chance to assure the women who will be affected that they understand their plight and are willing to vote down these changes.

We have heard from 20 Back Benchers today, but only two—the hon. Members for Grantham and Stamford (Nick Boles) and for Witham (Priti Patel)—have spoken in defence of the policies as they stand. That was a brave decision to take, but I believe that it was ultimately the wrong one. The reasons for the concerns being expressed across the House are clear. As many hon. Members have said, under the proposals, 500,000 women will have to wait more than a year longer for their state pension, with 33,000 having to wait two years longer.

We all know that life expectancy is increasing, so the state pension age needs to rise. My hon. Friend the Member for Sunderland Central (Julie Elliott) pointed out that the women writing to her understand that, too. However, it cannot be right for a particular group of women to have their state pension age increased at a faster rate than anyone else’s with such little notice. All hon. Members have emphasised that point today. My hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) said that there was no evidence that life expectancy was increasing for 57-year-old women at a faster rate than for anyone else, so why are those women being asked to shoulder so much of the burden? My hon. Friend the Member for Aberdeen South (Dame Anne Begg) and my right hon. Friend the Member for Croydon North (Malcolm Wicks) said that the changes will start to kick in in just five years from now, in 2016, giving much less notice than the 10 years that Age UK, the Turner report and the Pensions Policy Institute recommend.

Let us think about the women who will be affected, as my hon. Friends the Members for Erith and Thamesmead, for Oldham East and Saddleworth (Debbie Abrahams) and for Sunderland Central did in their eloquent speeches. The women hit by these changes are the backbone of our families. They are the mums who took time off work to bring up their children, the daughters who are helping their parents as they get older, and the grans who are providing child care for their children’s children, to help their children to balance work and family life. They are the women who have done the right thing. They have looked after their families, they have worked hard and they have played by the rules. They want to look forward to their retirement, not worry about how to make ends meet as they see the pension age being changed again. Moving the goalposts so near to retirement is unfair and unjust. A year ago, the Government seemed to get it. The coalition agreement said that women’s state pension age would not start to rise to 66 before 2020. However, that promise has been breached, and women are being hit hard.

The last few weeks have been filled with speculation that the Government were about to perform a U-turn. We have heard rumours of numerous proposals and options. However, the Secretary of State told us this afternoon that he was going to stand by the proposed timetable, although only this morning the Financial Times reported him saying:

“I understand there are issues and problems and I’ll constantly look at ways to see whether there’s a way of doing”

something about that. What is the truth? Hon. Members who spoke today seemed to think that concessions will be forthcoming for the women most affected by the Bill, but what assurances can the Pensions Minister give to that effect, as we are none the wiser after today’s debate?

Given the double-speak, it is no wonder that utter confusion reigns. The women affected and everyone else planning for retirement need time and they deserve certainty. Even the hon. Members for Grantham and Stamford and for Loughborough (Nicky Morgan) say they want certainty in policy, but these proposals are inducing the exact opposite—huge uncertainty. What the Government are offering is utter chaos. It is another example of the shambles at the heart of this Government and symptomatic of what is fundamentally wrong with their approach. Ministers should listen, consult, assess the impact and only then make policy. At the moment, things are happening the wrong way round. That is why the Government are in this mess.

Hon. Members have picked up on many clauses this afternoon—including my hon. Friend the Member for Aberdeen South and the hon. Member for Edinburgh West (Mike Crockart), who spoke thoughtfully about the benefits of automatic enrolment of workers into occupational pensions. Automatic enrolment was introduced by the last Labour Government and is set to mean an extra 7 million people saving towards their retirement. As my hon. Friends the Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Edinburgh East (Sheila Gilmore) have said, we regret the watering down of auto-enrolment, as well as the waiting period and the increased threshold before people become enrolled automatically.

Of course, the issue we have heard most about today, on which I shall focus the rest of my comments, are the changes to the state pension age. I will build on the thoughtful speeches made by so many Members of all parties, including my hon. Friend the Member for Aberdeen South and my right hon. Friend the Member for Croydon North, but also the hon. Members for Arfon (Hywel Williams) and for Cardiff Central (Jenny Willott).

The plans we have debated today simply do not meet the test of fairness. These changes mean that half a million people will have to wait more than a year longer for their state pension. The hon. Member for Grantham and Stamford called these women “rough edges”; I call them 500,000 women and their families who have had their plans blown out of the water so close to their retirement date.

[Nick Boles]

Will the hon. Lady give way? This is outrageous—

[Rachel Reeves]

Yes, I look forward to hearing whether the hon. Gentleman really believes that 500,000 women are rough edges.

[Nick Boles]

I apologise, Mr Speaker, that in the heat of the moment I did not wait for the hon. Lady to give way. I thank her for that at least, but she has made the outrageous assertion that I referred to the women as “rough edges” when I was saying that the policies had some rough edges. I think she should withdraw that outrageous implication.

[Rachel Reeves]

I am sure the hon. Gentleman’s constituents in Grantham and Stamford will feel very reassured that he does not regard them as rough edges, but speaks of the rough edges that have resulted from this Government’s policies.

These changes mean a loss of income of up to £10,000 for these women. For those in receipt of pension credit, the loss is closer to £15,000. There is something particularly perverse about targeting this specific group of women. As my hon. Friends the Member for Kilmarnock and Loudoun and for Glasgow East (Margaret Curran) have said, the average 57-year-old woman has just £9,100-worth of pension savings compared to £52,800 for a man of the same age—a sixfold difference. About 40% of 57-year-old women have no private savings to fall back on, so how can these changes be fair?

As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) and my hon. Friends the Members for Aberdeen South, for Slough (Fiona Mactaggart) and for Kilmarnock and Loudoun have said, all this goes against the coalition agreement that stated that the changes would not start to kick in before 2020. The Secretary of State says that the breach reflects legal advice, but when I asked him to place it in the Library, he did not guarantee to do so. I do not think there is anything illegal about sticking to a commitment and I urge Ministers to publish that legal advice and explain the breach. No one in the country voted for these policies. It is not what coalition MPs signed up to, and there is absolutely no obligation on Government Members to support the breach when we vote this evening.

During this afternoon’s debate, we have heard very few attempts to defend the proposals that we are now being asked to vote on—and I am not surprised. Time after time, Government Members have called for a rethink. Having heard the depth of anger up and down the country, the Government’s excuse that women are living longer simply does not hold water. The hon. Member for Ipswich (Ben Gummer) raised the issue of increasing longevity, but he still concedes that these changes are unfair. After all, he will have to explain to the 1,000 women aged 56 and 57 in Ipswich why they will have to bear the brunt of increasing life expectancy for everybody. The same is true of the hon. Member for Cardiff North (Jonathan Evans), who pointed to increasing longevity but ultimately concluded that the Government’s proposed changes are unfair on the 1,000 women aged 56 and 57 in his constituency. This applies to the hon. Member for Gloucester (Richard Graham), who has 1,100 such women in his constituency to answer to.

The hon. Member for Salisbury (John Glen) referred to the Government’s introduction of a triple lock guarantee, but he too has serious problems with the Government’s plans. After all, he will need to explain himself to the 1,200 women aged 56 and 57 in his constituency. The hon. Member for South Dorset (Richard Drax) referred to unintended victims of the proposals. There are 1,300 unintended victims in his constituency. The hon. Member for York Outer (Julian Sturdy) defended the broad direction of Government policy, but referred to the unfair treatment of the 1,200 women aged 56 and 57 in his constituency. The hon. Member for Cardiff Central spoke in support of pension reform, but was nevertheless vocal in her opposition to these particular proposals. Given that her constituency contains 700 women aged 56 and 57, no wonder she wrote on her website this morning that the Government needed to

“think again about these plans and find a way to make them fairer”.

The hon. Member for Edinburgh West, whose constituency contains 1,100 women aged 56 and 57, thinks that the changes are too severe. The hon. Member for Grantham and Stamford talked of the 1,300 women aged 56 and 57 in his constituency. I wonder what he will say in reply to the letters from his constituents that I am sure are building up in his office. Will he say that the proposals are just the side effects of the rough edges of this policy? The hon. Member for Witham talked of people living longer, but expressed no understanding of the 1,000 women aged 56 and 57 in her constituency. I hope that they were listening to her remarks.

[Nick Boles]

Will the hon. Lady give way?

[Rachel Reeves]

I have already given way to the hon. Gentleman once, and I will not do so again.

All the Members who have spoken today—indeed, all Government Members—should think carefully about how they can consistently defend those women and vote for the Bill. In the absence of any concessions from the Minister, I urge Members who think that the changes are unfair and disproportionate to send a message to the Government and vote them down.

I have talked about the way in which the Bill will affect a great number of women and what that entails for them, but what we are really talking about are real lives. We have heard some powerful and moving stories in the Chamber today, particularly from my hon. Friends the Members for Houghton and Sunderland South (Bridget Phillipson) and for Stockton North (Alex Cunningham). However, I want to touch on the story that was shared with us by my hon. Friend the Member for Oldham East and Saddleworth, the story of her constituent Linda Murray. Linda started work at the age of 16. Although she has worked throughout her life, she has never had the benefit of a workplace pension, or had the means to provide one for herself. She works 47 hours a week for a dry cleaner, and it is hard manual work: the sort of work that was described by my right hon. Friend the Member for Croydon North. Linda is no longer with her husband, and full retirement is not an option for her, at least for a few years. Her take-home pay is £267 a week, and she faces the impossible task of having to save £1,200 just to be able to work part-time from the age of 64. She is extremely worried about her future. That is just one story from one woman, but each and every one of us in the Chamber will have heard countless more from women in our constituencies who are approaching retirement with fear and trepidation.

At the heart of the issue is fairness. It is not about increasing longevity: we know that people are living longer, and that is a good thing. It is not about the restoration of the earnings link. That is something for which we legislated, and it is a good thing that people will be better off. [Interruption.] We legislated for it, and we welcome it. It is not about the flat-rate pension that is at some point down the track, and may or may not benefit the women about whom we are talking today. No; today’s debate is about half a million women who are being treated without fairness or justice by a Government who act first and think later.

We celebrate increasing longevity, we support the earnings link, and we welcome simplification of the pension system. We would work with the Government on all those things, but any changes in the state pension age must meet two tests. First, people must be given adequate notice and, secondly, there must not be a disproportionate impact on one group. We have set out an alternative that would equalise men’s and women’s state pension ages by 2020 and increase the state pension age for men and women to 66 by 2022.

We would work with the Government on proposals of their own as long as they met the two tests that we have set out. I think that that is what many Government Members seek from the Government. In that way we could save money, make pensions sustainable, show fairness, and treat people with dignity and respect. Right now, the policy is in a state of chaos. Ministers need to get a grip. We have heard many pleas for concessions, but none has been forthcoming. The mood in the House today has made it clear to the Minister that he must think again. I urge him, and his Government, to do so, and I urge hon. Members to vote down the Bill this evening.

21:40

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

We have spent a worthwhile six hours, and I enjoy nothing more than debating pension reform. There were 24 contributions, and I want to respond to as many of the points raised as possible in the time available to me. Not all Members will have been present at the start of the debate, so it might be worth reminding them that this Bill is about more than clause 1, although clause 1 does two important things: it treats men and women equally sooner, and it responds to rising longevity by 2020.

The Bill contains two further major measures, however, which Opposition Members who vote against it would take away from us. The first is reforming auto-enrolment to make it work. That was the subject of an independent review that we set up last summer, which was conducted by highly respected advisers who want to make auto-enrolment work and get it in place next year. We have heard that many women in their late 50s have no private pension savings. Well, why is that? Who was in charge for the past 13 years? We want to make auto-enrolment work, and to get on with that. Voting down this Bill would stop us in our tracks.

[Dr Whiteford]

Will the Minister give way?

[Steve Webb]

In a little while; I want to make some progress first.

The Bill’s third key element—which, again, voting it down would stop—is making judges put some money into their pensions. I think that Members were rather shocked when they discovered that the taxpayer put 32% of a judge’s salary into a judge’s pension, and that the judge in respect of their own pension entitlements puts a big fat juicy zero. This Bill will correct that. If the Opposition succeed in voting it down, they will stop us doing so. We need to make progress with the Bill, therefore. Second Reading is about the principles, and we stand firmly behind them.

In the debate, the shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—who has rejoined us now—glossed over the auto-enrolment provisions and said the Labour party will vote against the Bill. That would leave £30 billion to be found, as that is what the Bill would put into the Exchequer. When asked where the money would come from, he replied, “Well, we’d move a bit faster on age 67” and then added, in brackets as it were, “in the 2030s.” For a former Chief Secretary to the Treasury to tell us that the way to find money for a problem in the next Parliament is to look to somewhere in the 2030s sounds vaguely familiar. The answer is always, “Tomorrow, and tomorrow, and tomorrow”—

[Mr Byrne]

Will the hon. Gentleman give way?

[Steve Webb]

In a second. [Hon. Members: “Give way.”] I will give way. The reason there is no money, as the right hon. Gentleman said, is because difficult decisions were always deferred to tomorrow.

[Mr Byrne]

I am grateful to the Minister for giving way. He is making his remarks with his customary eloquence. As the following figure has not been presented this afternoon, will he remind the House precisely how much the acceleration of the state pension age for women before 2018 will save? Is the sum about £1.2 billion—yes or no?

[Steve Webb]

Interestingly, the right hon. Gentleman and his colleague the shadow Minister are saying two different things. The right hon. Gentleman knows that the sum for the changes up to 2020 is £10 billion. His shadow Minister, the hon. Member for Leeds West (Rachel Reeves), says we should delay to 2020 and find £10 billion while he wants to vote against the Bill and find £30 billion at some time in the 2030s. I think the House knows where we stand on that.

I am grateful to those Members who took the trouble to address auto-enrolment, but the shadow Secretary of State glossed over that issue. He said we ought to enrol at £5,000, which is not the right figure, but let us accept it for the sake of argument. He then said we should not put up the threshold. Therefore, under his scheme with the threshold at £5,000, someone who earned £5,100 would be auto-enrolled on that £100, and as we start at 1%, they would have to put in £1—not £1 a week, but £1 a year, or 2p a week. That is what will happen if we do not let this Bill make progress. We will be requiring employers and employees to put 2p per week into the employee’s pension. Does the right hon. Gentleman think that might in any sense undermine the credibility of our proposals?

[Dr Whiteford]

I agree with the Minister that this issue has been glossed over in today’s debate, but in our debate on welfare reform last week great store was set by so-called mini-jobs. It seems to me that those are exactly the jobs that will not be included in auto-enrolment. Can the Minister understand why that fuels concern that a mini-job is simply a euphemism for a low-paid, low-skilled job that keeps women trapped in poverty?

[Steve Webb]

The hon. Lady will be aware of the national insurance floor of roughly £100 a week. Many of these mini-jobs, as she describes them, will be below that and would not be covered by auto-enrolment anyway, but once such people are above the threshold for national insurance, they will be able to opt in should they want to. Moreover, if a mini-job occurs later in life and they have some track record of a connection with pensions, they might well have a conversation with their employer about opting in and triggering the employer contribution.

[Several hon. Members]

rose—

[Steve Webb]

As there were 25 contributions to the debate, I want to try to respond to some of the points that were made, and then I will certainly give way some more.

My hon. Friend the Member for Cardiff North (Jonathan Evans)—indeed, Cardiff was well represented in the debate: by my hon. Friend the Member for Cardiff Central (Jenny Willott) and by the hon. Member for Arfon (Hywel Williams), who raised issues relating to Allied Steel and Wire—pointed out Labour’s track record on pensions. He was right to do so, because although one or two Opposition Members glossed over history, he reminded us of the 75p pension increase—something that can never happen again under our triple lock. He reminded us of the failure of the previous Government to get to grips with Equitable Life and of the tax grab by the previous Chancellor and Prime Minister on company pensions. That is not a proud record.

The hon. Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, made a characteristically thoughtful contribution and I am grateful for her support for our abolition of the default retirement age. The link to that issue has not often been made in today’s debate. The previous Government were planning to raise the state pension age to 66, 67 or 68—but to leave it legal to sack people for turning 65. There is a logical flaw there, and I am sure the House is ahead of me on that. It is therefore right that we have taken away employers’ ability to sack people for the “sin” of turning 65.

I am also grateful for the hon. Lady’s support for our going ahead with the National Employment Savings Trust and the flexibility around auto-enrolment in 2012. She asked whether our £10 billion estimate of the cost of delay to 2020 was a gross or net figure. It is a net figure, taking account of benefit offsets. However, a lot of the points that she and a number of other Members made would apply whenever we raised state pension ages. For example, it was the hon. Member for Erith and Thamesmead (Teresa Pearce), I think, who asked, “What will happen to volunteers? What will happen to carers?” Those are important questions, but they would of course arise whenever state pension ages are raised—and she supports a party that legislated to raise the pension age to 68. She is right that these issues need to be addressed, but they exist not specifically because of this Bill but because of legislation that is already in place.

[Mr Watts]

Is it not a fact that, if the Minister accepted the Opposition’s proposals, they would deal with the short-term problem, the long-term problem and the unfairness, and he would probably get more support from his own party?

[Steve Webb]

I am grateful to the hon. Gentleman for recognising that there is a long-term problem, which not all his colleagues have done.

My hon. Friend the Member for Grantham and Stamford (Nick Boles) made the point that this is not about the deficit. That is quite true—these measures do not save us money in the current comprehensive spending review period. However, I have a figure to present to the House: £1.3 trillion. That is the national debt at the end of this Parliament, even after our austerity measures. That is the legacy; that is the reason we need to get a grip on these matters.

As well as the 25 Members who spoke today, there were two almost silent voices—especially silent in the Opposition’s contributions. The first silent voice was tomorrow’s taxpayer. Labour wants to put the Bill into the 2030s. If we delay the changes, all these things will have to be paid for by someone else. As long as it is not the people who write to us—somebody else will pay, and they do not write to us, so that is fine. That voice needs to be heard.

The second voice that was not really heard much in the debate—although a few coalition Members did raise it—was that of employers. Of course, many of the Bill’s measures on auto-enrolment are about easing the burden it imposes, particularly on smaller firms, which are crucial to our recovery and the fundamental improvement of the economy. These measures strike a balance. The waiting period gives employers time to get people on the payroll. The threshold enables employers to take on people on a lower wage, with less bureaucratic burden. The voice of the employer and the costs and burdens on business were issues that the Opposition almost did not raise at all.

My hon. Friend the Member for Cardiff Central (Jenny Willott) was very generous in her remarks, supporting the measures on judges and on auto-enrolment. She quite properly raised concerns about the state pension age, but she made an important point about our state pension reform agenda generally. There are two sides to the state pension deal—when people get it and what they get. One Opposition Member this evening described the state pension as a pittance, but who oversaw it at that level for 13 years? We have brought forward, in our Green Paper, proposals for a single tier of state pensions set above the level of the means test. That is one of our reform options and that is the pension, if those proposals go ahead, that every one of the women we have been talking about today would get, so there is an issue about when they get the pension, but there is also, crucially, an issue about what they get. We are actively looking into that and I am grateful to my hon. Friend for raising it.

The hon. Member for Arfon asked about Allied Steel and Wire workers and the financial assistance scheme. I can confirm that I met them along with the Secretary of State for Wales and Dr Ros Altmann, who has done a huge amount of good work in this area, back in November and that I wrote to update the Secretary of State last week. We are aiming to provide forecasts for financial assistance scheme members once the wind-up process for schemes is completed. In the case of ASW, the scheme is still winding up, so the financial assistance scheme is not yet in a position to provide forecasts, but we hope to make progress later this year. The hon. Gentleman also asked about Dr Altmann’s ideas for getting money into the scheme and we have looked at trying to release value from annuities. That is not looking as hopeful as we had hoped but we are working hard to see if that can be done and I am grateful to the hon. Gentleman for making the point.

My hon. Friend the Member for Ipswich (Ben Gummer) gets the prize for making the sharpest intervention. He pointed out to the shadow Secretary of State the legal advice and comments made by my noble Friend Lord Freud in the House of Lords on 30 March. I know that my hon. Friend reads little else and I am grateful to him for drawing those comments to our attention. [Interruption.] As the right hon. Member for Birmingham, Hodge Hill has asked the question, let me tell him the answer before he asks again. My noble Friend was responding to an amendment that would have slowed the process at which we equalise the men’s and women’s state pension age. The right hon. Gentleman will know that we are on a process of equalisation, and the legal issue is that we deviate from equalisation if at any point we widen the gap. The coalition reference to moving men in 2016 and women in 2020 would widen that gap. The issue is directive 79/7, which

“deals with the progressive implementation of the principle of equal treatment for men and women in matters of social security…Any change we now wish to make needs to be considered in relation to the position left by the 1995 Act.”—[Official Report, House of Lords, 30 March 2011; Vol. 726, c. 1279.]

That is on the record and has been for several months.

[Mr Byrne]

I am grateful to the Minister for finally setting out that legal advice to the House, but he must answer this question: why was the commitment in the coalition agreement if there was a law that made it impossible?

[Steve Webb]

If it had been self-evidently not possible, I think that the right hon. Gentleman would have pointed it out in the past 12 months, but I have not heard him do so.

The right hon. Member for Croydon North (Malcolm Wicks) made a characteristically thoughtful speech and I hope that he is on the Public Bill Committee. That would lengthen our proceedings, but in a very nice way. He raised the important issue of the entitlement of people with long years of national insurance payments to a national insurance pension. He generously referred to the fact that I taught his daughter at university; I hope that I contributed in some way to her social mobility as a result. He raised the serious issue of using long periods of national insurance records. As my right hon. Friend the Secretary of State pointed out, the records before 1975 are a mess, which the right hon. Gentleman will know as he is one of my many predecessors. Our ability to use those records is very limited and one of my concerns about his proposal, which I am happy to discuss with him in a genuinely open way, is the position of women, because they would have to be credited for times when they were not in paid work. Some of that paid work will have been before home responsibilities protection was introduced and so we simply would not know who to credit. That is only one of the issues, but as I have said, we are happy to engage with him in the spirit of openness.

[Malcolm Wicks]

I am grateful for that. My point was that those who have been working since the age of 15 or 16 in manual occupations are often physically worn out and need to retire earlier than Governments have proposed. If the objections or concerns are technical, that suggests that if there is a technical way forward, we could arrive at it—could we not?

[Steve Webb]

As I have said, I am happy to engage with the right hon. Gentleman in an open and constructive way. I suspect that wishing away the technical problems might be more difficult than he imagines, but I am happy to have that dialogue with him.

My hon. Friend the Member for Gloucester (Richard Graham) who chairs the all-party group on occupational pensions—

[Sheila Gilmore]

Will the Minister give way?

[Steve Webb]

As I have five minutes to respond, I had better not.

My hon. Friend the Member for Gloucester made a characteristically thoughtful contribution. I am grateful to him for that. He raised the issue of intergenerational fairness, which goes to the heart of the Bill. It is why we need to progress with it and debate it through the House. A number of our constituents who have written to us about the Bill imagine that this is the only chance we get to debate it. We will be in Committee right up to the final day before the summer recess, I am delighted to say, and we will return to it on Report, so there is ample opportunity to debate and discuss the Bill.

The hon. Member for Sunderland Central (Julie Elliott) raised the issue of manual labourers. I accept that that is an important point, which needs to be addressed. My hon. Friend the Member for Salisbury (John Glen) quite properly raised the issue of long-term principles. I hope he will respond to our Green Paper consultation, which looks specifically at age 67 and 68, mechanisms and processes. Those are the principal issues that we are trying to raise.

The hon. Member for Erith and Thamesmead, who tabled the relevant early-day motion, asked about transfers into NEST and so on. As she knows, the idea of NEST was to get the thing going and to cater particularly for people who might not otherwise have access to a pension. Once that roll-out is complete in 2017, the whole system will be reviewed and the issue of transfers-in will be looked at as part of that review, so I can give her that assurance.

My hon. Friend the Member for York Outer (Julian Sturdy) supported the Bill and said that good governance is about taking decisions in the long-term interests of our country, which is what the Bill does. I thank him for that. The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) raised issues about auto-enrolment. I have already pointed out why we are doing it and the balance that we are trying to strike. My hon. Friend the Member for South Dorset (Richard Drax) spoke about the fragility of private sector pensions. I agree with him. That is why it is vital that we move ahead with the Bill and make auto-enrolment work, rather than delaying it, as the Opposition want.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) asked whether people will be able to work in their later years. I can tell her that women are already, on average, leaving the labour market after state pension age. In 2004 women on average left the labour market at 61.6 years. In the past six years that has gone up by more than a year, so there are already trends of longer working lives. We need to build on them.

The hon. Member for Glasgow North East (Mr Bain) said that other countries are following a different path. I can tell him that they are not. Other countries are raising their state pension ages and in some cases raising them faster than we are. My hon. Friend the Member for Edinburgh West (Mike Crockart) supported many aspects of the reforms. I congratulate him on a very well researched contribution. I am grateful to him for the principles that he set out—simplicity and making auto-enrolment work—and I note his comments about the state pension age changes.

On that issue, which has clearly been the focal point of the debate, let me sum up the position. We heard a number of hon. Members raise their concerns about the state pension age. The Government’s position is clear. We are not simply living longer; we are living longer at a faster rate. The improvement of five years in life expectancy at pension age took 70 years between 1920 and 1990. The next similar improvement happened in 20 years. The improvement in longevity is like a runaway train. We must address that. Those who vote against Second Reading are not just deficit deniers, but longevity deniers. They need to recognise the real changes.

My right hon. Friend the Secretary of State, in his characteristically resolute way, confirmed that the Government believe that we need to equalise more rapidly and reach age 66 as the retirement age more rapidly, but he also said that he recognised that we need to implement that fairly and manage the transition smoothly. He went on to say that he heard the specific concerns about a relatively small number of women and that he was willing to work to get the transition right. I am committed to doing the same, together with him.

If the House were to reject the Bill tonight, those who vote against must tell us where £30 billion will come from, how they will make auto-enrolment work and why judges should not have to pay for their pensions. I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

21:59

Division 299

Ayes: 302

---

Conservative: 258
Liberal Democrat: 42

Noes: 232

---

Labour: 219
Scottish National Party: 6
Plaid Cymru: 2
Democratic Unionist Party: 2
Social Democratic & Labour Party: 1
Green Party: 1
Independent: 1

Bill read a Second time.

PENSIONS BILL [LORDS] (PROGRAMME)

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

That the following provisions shall apply to the Pensions Bill [Lords]:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 19 July 2011.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Steve Webb.)

Question agreed to.

PENSIONS BILL [LORDS] (MONEY)

Queen’s Recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Pensions Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—

(1) any expenditure incurred in consequence of the Act by the Secretary of State, and

(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Steve Webb.)

Question agreed to.

PENSIONS BILL [LORDS] (WAYS AND MEANS)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Pensions Bill [Lords], it is expedient to authorise—

(1) the levying of charges under the Pension Schemes Act 1993 for the purpose of meeting expenditure of the Secretary of State in making grants under that Act, and

(2) the payment of sums into the Consolidated Fund.—(Steve Webb.)

Question agreed to.

Business without Debate

Monday 20th June 2011 Commons Chamber

delegated legislation

[Mr Speaker]

With the agreement of the House, we shall take motions 5 to 9 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Taxes

That the draft International Tax Enforcement (Belize) Order 2011, which was laid before this House on 4 April, be approved.

That the draft International Tax Enforcement (Dominica) Order 2011, which was laid before this House on 4 April, be approved.

That the draft International Tax Enforcement (Grenada) Order 2011, which was laid before this House on 4 April, be approved.

That the draft Double Taxation Relief (Qatar) Order 2011, which was laid before this House on 4 April, be approved.

That the draft International Tax Enforcement (San Marino) Order 2011, which was laid before this House on 4 April, be approved.—(Stephen Crabb.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Contracting Out

That the draft Contracting Out (Local Authorities Social Services Functions) (England) Order 2011, which was laid before this House on 10 May, be approved.—(Stephen Crabb.)

Question agreed to.

Business of the House

Ordered,

That, at the sitting on Tuesday 21 June, notwithstanding the provisions of paragraph (7) of Standing Order No. 83A (Programme motions), proceedings on the Motion in the name of Mr Secretary Lansley relating to Health and Social Care Bill (Programme) (No. 2) shall be brought to a conclusion not later than one hour after the commencement of proceedings on the Motion, at which time the Speaker shall put the Question; and no amendments to the Motion shall be moved.—(Sir George Young.)

[Mr Speaker]

Before I invite the hon. Member for Broxbourne (Mr Walker) to present his petition, which I know Members will be eagerly anticipating, I appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and quietly, extending the same courtesy to the hon. Gentleman that they would want to be extended to them in such circumstances.

Cheshunt Urgent Care Centre (Hertfordshire)

Monday 20th June 2011 Commons Chamber

22:19

[Mr Charles Walker (Broxbourne) (Con)]

When coming here tonight, I received a text from Tony Siracusa, who said:

“Tonight, Charles, you’re our voice. Please continue to ensure we are heard in the House of Commons.”

I intend to do that this evening.

Before I present the petition I should like to thank Paul Mason, the leader of Broxbourne council, who organised an excellent march in support of the urgent care centre about which I am petitioning tonight. I also thank our campaigning newspaper, the Mercury, and in particular Gemma Gardner and the editor Gary Matthews.

The petition states:

The Petition of residents of Broxbourne Borough and surrounding areas,

Declares that the decision taken by Hertfordshire Primary Care Trust to close Cheshunt Urgent Care Centre (UCC) fails to recognise the importance and value of the UCC to the local community.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Health to use his offices to intervene in the matter to require the PCT to revisit its decision in regards to the UCC, and keep GP-led services operating at the site.

And the Petitioners remain, etc.

[P000930]

Private Gary Barlow

Monday 20th June 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

22:21

[Helen Jones (Warrington North) (Lab)]

I am grateful for this opportunity to raise the case of Private Gary Barlow, who served with the Queen’s Lancashire Regiment, was shot in Northern Ireland on 4 March 1973 and died early the next morning. He was 19 years old.

There may be those who wonder why a case that is now nearly 40 years old should be debated on the Floor of the House. My answer is simple: it is about justice for Gary, for his family and for the people who tried to save him. Not only was Gary Barlow tragically killed, but his bravery was never properly recognised and his family suffered, and continue to suffer, both because of his death and because of what happened to them after it. It is in the hope that we can at least provide some recognition of Gary’s bravery tonight, and at least some modicum of comfort to his family, that I have asked for this debate.

Gary’s death was investigated by the Historical Enquiries Team set up by the Police Service of Northern Ireland in 2005 to investigate any deaths that were attributable to what we still call the troubles, and to try to bring some resolution to the families involved. It is, of course, very difficult to bring things to a conclusion after so much time has elapsed. Some witnesses are no longer available and some documents are no longer there. However, the inquiry team did a very thorough job, and the basic facts of what happened to Gary on that day are now clear. I want to summarise them, if I may—and it will be a summary, not a full account, because of the time available.

On 4 March Gary was part of a patrol that was sent to the Divis flats to carry out a search operation. A soldier had been shot and wounded there earlier in the day. The soldiers searched some premises, and then joined others in a Saracen armoured personnel carrier. At that point they heard a shot, and the men got out to deploy in defensive positions. Those at the Army observation post on the top of the Divis flats pinpointed where they thought the gunman was, and the soldiers were ordered to carry out a search. They encountered some difficulties in doing so, but they used the Saracen to ram the doors of the garage opposite, and Gary and another soldier were ordered to search that building.

Not surprisingly in the context of the time, a hostile crowd gathered. As the situation deteriorated and the light was fading, the lieutenant in charge ordered his men to withdraw. They all got back into the Saracen, except Gary. No roll-call was taken at the time. It appears from witness statements that the lieutenant asked the two corporals to account for all their men. Gary’s corporal shouted to ask whether they were all back, and someone said yes. It was only when the patrol got back to base that Gary’s room-mate realised that he was missing. At the same time, two young girls arrived, sent by a woman in the Divis flats, at some considerable risk to herself and to them, to tell the Army that a soldier had been left behind.

A patrol later found Gary, face down on the floor of that garage, shot and bleeding profusely from a head wound. He was given medical care by the Royal Army Medical Corps and taken to hospital, but tragically he died early the next morning. The Provisional IRA claimed responsibility for Gary’s death, but no one was ever charged with his murder, although several people were investigated and a number of searches were carried out. Again, in the context of the time, when it was difficult to get people to co-operate with the police, that is entirely understandable.

However, in one raid, Gary’s rifle was found. It had not been fired. When the inquiry team investigated the case, as well as looking at the facts, they considered concerns raised by Gary’s family that his hearing had been damaged in an earlier incident. The team found in his service record a note of an incident on 5 February that year. They thought that that may have related to an earlier incident in the Divis flats, when soldiers were attacked by a blast bomb. They acknowledged that Gary’s family received a call shortly afterwards from one of his friends who said that he could not speak on the phone because his hearing had been damaged. The inquiry team therefore concluded that it was likely that Gary did not hear the order to withdraw, either because of where he was in the building, or because his hearing had been damaged earlier.

The facts of Gary’s death are tragic enough. However, I also believe that he and his family were let down by what happened on that day and by their treatment later. The first question of course is whether Gary was fit for duty that day. The inquiry team was not able to resolve that satisfactorily because his Army medical records were not available. However, I think that his family and others would want to know that lessons have been learnt and that no soldier will again be put in such a position when their hearing might be impaired.

There were also failures on the part of the lieutenant and the corporal in command of Gary’s section that day. Even when due allowances are made for the stress that they were under at that time, and for the extremely difficult situation in which they found themselves, they should have made sure that all their men were accounted for. The British Army expects very high standards of its officers and non-commissioned officers. Those standards are generally met and even exceeded. However, on this occasion, they fell short and that mistake led to Gary’s death.

The Ministry of Defence later wrote Gary’s parents a very detailed letter. It put the failure down to the very difficult operational circumstances that prevailed at the time. However, the inquiry team pointed out that those circumstances prevailed throughout Northern Ireland and that they would nevertheless have expected what they called military discipline and training to kick in to ensure that a proper roll-call was taken.

It was not, and it appears from the evidence that Gary, left alone, was attacked by a group of youths. Some women in the area urged him to leave. He refused to leave his post. Remember that it seems that this young man was not aware that he had been ordered to withdraw. He stood his ground and fought back. He did not discharge his rifle. His family believes—and it seems reasonable—that he did not do so to avoid the possibility of injury to civilians. Eventually, he was shot in the head and neck. The inquiry team said that, in not firing his rifle and in standing his ground, he displayed courage and strength of character. I believe he did more than that: he acted in the finest tradition of the British Army, both in refusing to leave his post and trying to stand his ground, and in trying to avoid injury to civilians. We should remember that this was a young man of only 19. Many who are older and more experienced would have done less, but he held out until the end.

Gary’s bravery, however—this is the sad thing—was never properly recognised. His family have fought for a long time to find out the true circumstances of his death, and to ensure that he is recognised. I pay tribute to them this evening, especially to his parents and his sister, Tina. They did so even though they themselves suffered after his death. They were not notified of the inquest, for instance, even though his father had expressed a wish to attend. In fact, they read the inquest verdict in the Daily Mirror. I ask the House to try to comprehend how it must be to lose a son in such circumstances, and then for the family to read about an inquest that they did not know had taken place.

Gary’s things were returned to his family in a slovenly way—in boxes, without even a note or covering letter—thus increasing their grief. Most of all, as well as letters of condolence, they received death threats. As a result, they were advised by the police to leave their home. They have only just returned to the Warrington area.

Nevertheless, they have sought recognition for the bravery of their son and brother. That bravery has been recognised elsewhere. The inquiry team discovered one of the young girls who was sent to the Army post on that day—of course, she is now a grown woman. She said that her mother was too frail to be interviewed by the team, but that she nevertheless prayed for Gary every day. She also said that once a year, the women in the area organised a mass for the repose of his soul. We should remember that those women were in a staunchly republican area of Belfast, yet they recognised the bravery of that young man.

We should do no less. I know that it is too late for Gary to receive a gallantry award. His mother received the Elizabeth cross last year—I am proud that Labour introduced that—but as the Minister and hon. Members will know, the Elizabeth cross recognises the sacrifice of the families of those who are killed on operations, and is not in itself a gallantry award for the person killed. However, that young man behaved admirably, and I hope that we can tonight finally put on the record our appreciation of his bravery.

Gary’s family gave him to the Army and to his country. Let us be honest, even after all these years: he was let down, and they were let down. People who join the forces expect to put their lives on the line if necessary, but they also expect proper care to be taken of their welfare and, if they are killed, proper care to be taken of the welfare of their families. In that way, we failed, yet I have never once heard Gary’s family complain. Their only concern is for him.

I once said to Gary’s mother, “You must be very proud of him, Mrs Barlow.” She replied, very simply, “Yes, I am.” This young man was a fine British soldier and a very brave young man indeed. It is time that we recognised that. His mother is proud of him; we should be proud of him too. I hope the Minister can put on the record tonight how much we as a country appreciate the sacrifice that Gary made, and ensure that the lessons have been learned, so that never again will a family be put in this situation.

22:34

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

I pay tribute to the hon. Member for Warrington North (Helen Jones) for securing this debate on the very tragic death of Private Gary Barlow slightly over 38 years ago. As it happens, I know the Divis flats and the observation tower. I have served and seen the difficulties of operating there, as did the Queen’s Lancashire Regiment in 1973.

Private Barlow joined the Army in 1970 and went into the Queen’s Lancashire Regiment, and he deployed to Northern Ireland with his regiment in the early years of Operation Banner, at the end of 1972, when the violence in Northern Ireland was at its height. Tragically he was killed in Belfast on 5 March 1973 aged just 19. There was absolutely no doubt who killed him: responsibility for his death was admitted by the IRA and the murderous thugs who supported it in the Divis flats. He was part of a four-man patrol that had deployed to search an area following a series of shooting incidents. The patrol was forced to withdraw rapidly as a hostile crowd had gathered, and Private Barlow was in the process of searching a garage at the time and did not withdraw with the rest of his unit, as we have heard.

Unfortunately it was not until later that Private Barlow’s patrol realised that he was missing—the hon. Lady brought out one or two very good points about that—and returned to retrieve him, by which time he had been shot and injured by the IRA. Tragically, he succumbed to his injuries in hospital later that night. Had he lived, Private Barlow would have seen his 58th birthday this week. He was one of more than 250,000 service personnel who saw service in Northern Ireland during the 38 years of Operation Banner, which was the longest single operation ever mounted by the British Army. The Army demonstrated a resolute, disciplined and flexible attitude towards adapting to a unique deployment of military forces on UK territory—it was never a happy occasion. The resilience that our soldiers displayed over such a long period and under extremely difficult circumstances greatly contributed to the peace that now exists. They and the community at large have suffered death and injury, and we should again take this opportunity to remember their commitment, bravery and sacrifice, and that of Private Barlow.

In recognition of the ultimate sacrifice paid by Private Barlow, his mother, Mrs Rona Barlow, has already been presented with the Elizabeth cross and the memorial scroll. The Elizabeth cross is awarded as a symbol of national recognition of the sacrifice and loss of those UK armed forces personnel who have died on operations or owing to acts of terrorism. It is a reminder of the contribution made by those who have paid the ultimate price for our freedom and our security, and of how highly their service is valued. Regrettably, however, it is not for me to recommend that Private Barlow be given a further award. Our honours and awards system relies on the bestowal of gallantry awards soon after the event for which it is believed an individual’s actions should be recognised.

The convention adhered to is that no award can be made for an event that took place more than five years previously. To rely on incomplete and sometimes contradictory or anecdotal evidence so long after the event can be regarded as a slight to those commanders at all levels whose task it was to reward the most deserving as they judged at the time. This system has been developed over many years, and is designed to ensure that the process by which awards are made is fair and consistent, and it has stood the test of time. Neither the present Government nor any previous Administration have departed from the strict rule that British gallantry awards are not granted retrospectively.

Recommendations for gallantry awards are generated by commanders in the field and scrutinised at a number of levels by military committees, the last of which is the Armed Forces Operational Awards Committee, which comprises five senior officers representing all three services, and which ultimately recommends to Her Majesty the Queen who should receive awards. This process is completely independent of political influence, and it would not be possible—nor would it be right—for me to seek to influence this process. On a personal note, however, I would like to take this opportunity to pass on my condolences to Mrs Barlow for the loss of her son, and to express my deep gratitude for his service to this country and her dignity in grief. I would also like to take this opportunity to put it on the record that we are fortunate to have individuals such as Gary Barlow, both then and now, who are willing to demonstrate their bravery by serving with our armed forces. In the words of his commanding officer while expressing his and his regiment’s sadness and horror at Private Barlow’s death:

“He was a fine boy and a good and brave soldier”.

I am told—the hon. Lady mentioned this too—that the family were subjected to intense and often unwelcome media and public scrutiny, and to threats. I am sincerely sorry for the additional distress that this must have caused them. In the 1970s, when Private Barlow was killed, very little support was offered to bereaved families by the military, so I would also like to take this opportunity to reassure his family and the House that measures now exist to prevent other families from suffering the same experience.

Each death of a member of our armed forces is a tragedy—for their comrades and the country, but most especially for their family, such as Private Barlow’s family. As the years have progressed, I believe that we have got better at learning the lessons from each death, both in the field and in how we help and support the families left behind. Gone now are the days when the first that a family heard about the death of their loved one was a tersely worded official telegram. Despite the challenges of 24-hour media, we are largely successful at ensuring that families hear from us before impromptu and unofficial sources when a tragedy occurs. Sadly, with the increasing operational tempo since 9/11, we have learned a lot about loss and grief, and so have steadily improved the support and help available to families who lose a loved one. Every effort is made to ensure that the next of kin are informed as soon as possible by those who are appropriately trained, and a period of grace is given before the official announcement is made. It grieves me to say that this is going on even this week, as we know.

Since 2005 we have appointed and trained both casualty notification officers and visiting officers, so that the support that we offer families is not provided by those associated with the delivery of the worst news. Our dedicated visiting officers are able to guide, support and assist families through the difficult times of the repatriation ceremony, funeral arrangements and the return of their loved one’s effects. The hon. Lady was quite right to draw attention to the way in which this could sometimes be done in an arbitrary manner, with the arrival of some boxes containing a loved one’s effects. Visiting officers can be assigned to a bereaved family for six to nine months, but support remains available through the Army’s inquiries and aftercare support cell, right up to an inquest and beyond, unlike in 1973.

All families show different reactions to the loss of a loved one. Our visiting officers are trained to understand the differences and react accordingly, so that the level of support received is determined by the need of the family. The support is therefore enduring in nature and co-ordinated in provision. In addition to giving emotional support, the visiting officer can act as a conduit to practical support regarding pensions, counselling and financial matters. This includes access to public funds that are available to help families attend the significant events associated with their bereavement, helping with funeral expenses, travel to the repatriation, funeral and inquest, and accommodation. Public funds are also available to help families after their initial period of grief and mourning to move on with their lives, through the continuity of education allowance, the maintenance of the living overseas allowance, the ability to remain in service accommodation for up to two years and the transfer of the resettlement allowance. These are changes that have happened since 1973.

I referred earlier to the lessons that are now learned in the field. The Army keeps all its procedures under continuous review to ensure the safety of its personnel. Additionally, systems exist at various levels to identify lessons from incidents and make recommendations to take action to prevent similar circumstances from arising in future, including, where necessary, a statutory service inquiry and, when there is a death during operations, a service police investigation. We are not complacent. Despite the strides that have been made in recent years, we recognise that more can always be done. The armed forces covenant, which was published on 16 May, sets out what service personnel and their families can expect from the Government and the nation in recognition of what we ask them to do to keep us safe. The Government are determined to remove disadvantages encountered as a result of service, as well as ensuring that the armed forces community receives the recognition to which it is entitled. By publishing the covenant we have a clear sense of what we are trying to achieve and have established the right direction of travel that will allow us to do so.

As a nation, we have an obligation to our servicemen and women who, like Gary Barlow, commit themselves to the service of this country and risk paying the ultimate price to keep us safe, as well as to the families who support their loved ones in the armed forces through good times and bad. Our commitment to them should be just as enduring, and with the publication of the covenant, we believe that we have established a way of ensuring that this commitment does not waver. The nation will hold us to account.

I reiterate what I said to the hon. Lady earlier. This was an awful tragedy. As it happens, I also joined the Army in 1970, and to think of a young man of 19 being killed in that way in Northern Ireland must bring us all grief. I hope that raising this matter in the House of Commons will lead the Barlow family, and Mrs Rona Barlow and the sister whom the hon. Lady mentioned in particular, to appreciate that Private Barlow’s death is recognised and truly appreciated by the nation.

Question put and agreed to.

22:45

House adjourned.

Petition

Monday 20th June 2011 Petitions

Monday 20 June 2011

Dolphins (Japan)

Monday 20th June 2011 Petitions

The Petition of residents of Workington,

Declares that the petitioners believe that there is a need to raise awareness both nationally and internationally about the slaughter of thousands of dolphins each year in the waters around Japan; notes that it is estimated that some 23,000 dolphins are slaughtered each year in the area of Taijii; further declares that the petitioners believe that there is a need to raise awareness for the majority of Japanese citizens, who are unaware that this is going on in their country; and notes that the petitioners believe that the dolphin meat which is highly contaminated is being distributed to an unaware Japanese public protected by a Government that knows the dangers of this practice and the risks to health it poses.

The Petitioners therefore request that the House of Commons urges the Government to take steps to raise awareness of the slaughter of dolphins and urges the Foreign Secretary to call on the Japanese Government to prevent the distribution of contaminated dolphin meat.

And the Petitioners remain, etc.—[Presented by Tony Cunningham, Official Report, 15 September 2010; Vol. 515, c. 970.]

[P000860]

Observations from the Secretary of State for Environment, Food and Rural Affairs:

The UK Government strongly oppose the hunting of all whales, dolphins and porpoises other than some limited whaling by indigenous people to meet defined subsistence need. The UK regularly raises its concern at both European and International level over the dolphin hunts in Japan. We continue to call on Japan to halt its needless and unsustainable slaughter of these animals and are deeply disappointed that Japan continues to carry out these large-scale hunts, despite widespread international opposition.

The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon) who is responsible for marine and natural environment, wrote to his Japanese counterpart in July 2010 to express the UK public’s concern and Government officials have met with the Japanese Government to highlight the UK’s opposition to the hunting of dolphins.

Dolphin meat has been reported to be highly contaminated with toxic chemicals such as mercury, methyl mercury and PCBs. At the annual meeting of the International Whaling Commission, we urged whaling nations to take note of the consequences of contamination for the animals themselves and also for the consumers. We called for more nations to inform consumers about the associated health risks of contaminated meat.

The UK remains fundamentally opposed to the killing of dolphins in Japan and will continue to make it known at every appropriate opportunity, including at this year’s meeting of the International Whaling Commission in July.

Written Ministerial Statements

Monday 20th June 2011 Written Statements

Monday 20 June 2011

Burdens on Local Government

Monday 20th June 2011 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

Between 1997 and 2010, council tax bills doubled. One of the reasons for this was central Government imposed unfunded or under-funded burdens on local authorities.

The coalition Government are committed to ensuring that the net additional costs of all such new burdens from central Government policy or initiatives are fully funded to help keep council tax down.

The new burdens doctrine sets out the factors that Departments should take into account when considering the costs and savings to local authorities arising from changes to policies and programmes. It applies to all Departments and covers all local authorities, including police authorities, fire and rescue authorities and local precepting authorities.

As part of the Government’s commitment to this principle, and in the spirit of greater transparency in Government, today I am publishing a copy of the Whitehall internal guidance on this issue: “The New Burdens Doctrine, Guidance for Government Departments”. A copy has been placed in the Library of the House and it is also available on the Communities and Local Government website at: http://www.communities.gov.uk/publications/localgovernment/newburdens2011.

Government Response to NHS Future Forum

Monday 20th June 2011 Written Statements

[The Secretary of State for Health (Mr Andrew Lansley)]

As I informed the House on 14 June 2011, the Government have accepted the core recommendations of the NHS Future Forum’s report. A list of the key changes the Government intend to make as a result has already been placed in the Library.

I have today laid before Parliament “Government Response to the NHS Future Forum”, Cm 8113, a detailed explanation of how the Government plan to implement improvements to their plans for NHS modernisation. Some, but not all, of these changes require amendments to the Health and Social Care Bill.

On 16 June the Government tabled a motion to recommit the relevant parts of the Health and Social Care Bill to a Public Bill Committee. The House will debate this motion tomorrow.

I am also laying before Parliament later today “Government Response to the House of Commons Health Select Committee Fifth Report of Session 2010-11: Commissioning”, Cm 8100.

“Government Response to the NHS Future Forum”, Cm 8113 is in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. Copies of “Government Response to the House of Commons Health Select Committee Fifth Report of Session 2010-11: Commissioning”, Cm 8100, will be available later today.

Appointment of National Employment Savings Trust Corporation Trustee Members

Monday 20th June 2011 Written Statements

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

I am pleased to announce the appointment of the following trustee members of NEST Corporation:

Mr Iraj Amiri

Mrs Sharon Darcy

Mr Nigel Stanley

These appointments will take effect from 20 June.

The appointments will bring a wide breadth of knowledge and skills to NEST Corporation, particularly in the areas of representing the interests of consumers and financial management.

The new trustee members will join the current chair and six trustee members who were appointed last year. Together, they are the trustee of NEST and as such they have a fiduciary duty to act in the best interests of scheme beneficiaries. Trustee members are also responsible for setting the strategic direction and objectives for NEST.

NEST Corporation is the trustee body responsible for running the NEST scheme. It was set up under the Pensions Act 2008 as a non-departmental public body (NDPB) that operates at arm’s length from Government and is accountable to Parliament through the Department for Work and Pensions (DWP).

House of Lords

Monday 20th June 2011 Lords Chamber

Monday, 20 June 2011.

14:30

Prayers—read by the Lord Bishop of Exeter.

Caste Discrimination

Monday 20th June 2011 Lords Chamber

Question

14:36

Asked By

[Lord Harries of Pentregarth]

To ask Her Majesty’s Government what is their assessment of the finding of the National Institute of Economic and Social Research concerning the existence of caste-based discrimination in the United Kingdom.

[Baroness Northover]

My Lords, Ministers have been carefully considering the findings of this report on caste discrimination and the wide range of views expressed by interested parties. The Government’s red tape challenge currently has a three-week spotlight on equalities. This presents people with a further opportunity to express their views on the possible need for caste legislation. We will announce our intentions once we have had sufficient opportunity to analyse the comments from this exercise.

[Lord Harries of Pentregarth]

I thank the Minister for her Answer. I appreciate that this report is being given very careful attention. In view of the fact that the UK’s record on racial discrimination is to be examined by the Committee on the Elimination of Racial Discrimination, will the Government bring the report mentioned in the Question to the attention of that committee and will they respond to its recommendation in August 2003 that caste-based discrimination be included in domestic legislation?

[Baroness Northover]

First, I commend the noble and right reverend Lord for all that he and my noble friend Lord Avebury have done to flag up this matter. Caste discrimination, like any other form of discrimination, should not be tolerated. He refers to the UN committee, which is reporting in August this year. We are aware that that is likely to flag up caste discrimination. At the moment, as I said, the spotlight is on equalities. The report is being given very serious attention. The national institute report states that evidence suggested that such discrimination was found, but it also makes clear that putting this conclusion beyond categorical doubt is difficult, which is why this report, the evidence around it and the submissions are receiving such attention at the moment.

[Lord Avebury]

My Lords, the Equalities Minister told me that the Government would be in a better position to announce their findings on whether to activate the section in the Equality Act on caste discrimination once they had assessed the views that were expressed by stakeholders as part of the red tape challenge, which the noble Baroness has mentioned. As that exercise is about regulations, does my noble friend agree that stakeholders would not know that it was important for them to respond to the challenge until my honourable friend wrote to them? Many of them, including the Anti Caste Discrimination Alliance, have not received the letter, so they will have only a week to respond before the period of consultation ends at the end of this month. Does my noble friend also agree that among the Dalit organisations, there is overwhelming support for caste to be made a protected characteristic under the Act? She will remember that from having heard them in the committee room upstairs when they were first consulted.

[Baroness Northover]

I thank my noble friend for that and for his dogged determination to ensure that anyone who is vulnerable will not be discriminated against. I can assure him that officials wrote to 22 caste stakeholders from the pro and anti-legislation lobbies on 10 June, advising them about the red tape challenge and inviting them to participate in the debate by expressing their views on the possible need for caste legislation. That will add to the submissions that are already in.

[Lord Lester of Herne Hill]

My Lords, is the Minister aware that one of the disadvantages of not exercising the power given to them by the previous Parliament to include caste discrimination as part of race discrimination is that there might be litigation in this country that relies on, for example, the views of the CERD committee to which she has referred?

[Baroness Northover]

I hear what my noble friend Lord Lester says, and I should think that anyone hearing that will quake in their boots. If there is indeed caste discrimination, anyone meting that out needs to be wary. That is echoed in what my noble friend says.

[Lord Soley]

From her general discussions, does the Minister have any idea of the extent to which the relevant community leaders are aware of a problem of caste discrimination? If so, what do they say when asked about it?

[Baroness Northover]

My Lords, I think that they are aware of that. Given the debate on the Equality Act and all our discussions over the past few years, it would be a miracle if it had passed them by and they were not aware of it. In my view, all the communities seem to be well aware of the discussion over this. It seems to be generally accepted that caste is there. What is disputed is whether there are practices of discrimination. Whether it is declining or maintained is also disputed.

[Baroness Royall of Blaisdon]

The red tape challenge is especially important for the Government. However, discrimination is discrimination, and I respectfully suggest that only anti-discrimination legislation would provide real redress for victims.

[Baroness Northover]

The noble Baroness makes a cogent point. One of the things that the report sought to identify was whether this could most appropriately be addressed by the legislation or whether it fell outside that. Some issues, such as bullying in schools, may well be dealt with by schools being much more alive to this problem. However, evidence is coming through on both sides about how legislation is required, because this kind of discrimination will not be caught by the current legislation. That is the key in this instance.

[Lord Tebbit]

My Lords, can my noble friend say when the problem first arose in this country?

[Baroness Northover]

Well, there is an interesting one. This is a question that neither the academics nor I can answer. One of the things that is very striking about the issue is how little academic work has yet been done on it. That academic work is increasing and improving, which I welcome.

[Lord Dholakia]

My Lords, is the Minister aware that there are two major Hindu organisations in this country: the Hindu Forum and the Hindu Council? Will she ensure that those organisations are contacted with a view to seeing how the community in the first instance can look at the issues that have arisen and deal with them as part of the community initiative, and, if that does not work, to see what other actions are necessary?

[Baroness Northover]

I know that there is such dialogue, but I will take back his suggestion and urge that further action is taken.

Armed Forces: Foreign Pilot Training

Monday 20th June 2011 Lords Chamber

Question

14:44

Asked By

[Lord Rotherwick]

To ask Her Majesty’s Government what steps they are taking to fill vacant places in military pilot training programmes with foreign service personnel.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Colour Sergeant Kevin Fortuna, 1st Battalion The Rifles, Lieutenant Oliver Augustin, 42 Commando Royal Marines, Marine Samuel Alexander MC, 42 Commando Royal Marines, Corporal Michael Pike, 4th Battalion The Royal Regiment of Scotland, Lance Corporal Martin Gill, 42 Commando Royal Marines, Rifleman Martin Lamb, 1st Battalion The Rifles, Corporal Lloyd Newell, the Parachute Regiment, Craftsman Andrew Found, the Royal Electrical and Mechanical Engineers attached to the Royal Scots Dragoon Guards, and Private Gareth Bellingham, 3rd Battalion The Mercian Regiment, who were all killed recently on operations in Afghanistan. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.

As a result of the strategic defence and security review, the Royal Air Force has reduced its long-term requirement for pilots of all platforms. Consequently, a decision was taken in February to reduce the numbers of UK trainee pilots undergoing the initial phase of flying training. It will take some time to remove the resulting additional spare capacity from the training programme and we are actively seeking to offer any surplus training slots to foreign students.

[Lord Rotherwick]

I would like to associate myself with the remarks of the Minister. I am not sure whether he is aware that I have been on an Armed Forces parliamentary scheme and visited RAF training stations. I have been made aware of the considerable number of training vacancies for fast-jet pilots. Does the Minister agree that when the UK sells military aircraft, it is prudent to have a world-class training facility where affordable places are available to foreign pilots? Does he recognise also the wonderful relationships with foreign pilots that are generated during pilot training, with proven long-term results for diplomatic relations in times of trouble and conflict?

[Lord Astor of Hever]

My Lords, I was aware that my noble friend was doing the Armed Forces parliamentary scheme and I very much commend the important work that it does. The Ministry of Defence recognises the value to the country obtained from training pilots from partner countries. We are at the early stage of discussions with the UK defence industry to explore how best to take this issue forward. Supporting the training needs of our partners and allies provides important defence and diplomacy benefits—for example, the involvement of Denmark in operations in Libya—and is also a critical factor in securing contracts for defence export sales, which are worth billions of pounds and thousands of jobs to the UK defence industry.

[Lord Rosser]

My Lords, on this side we, too, offer our sincere condolences to the families and friends of Colour Sergeant Kevin Fortuna, Lieutenant Oliver Augustin, Marine Samuel Alexander MC, Corporal Michael Pike, Lance Corporal Martin Gill, Rifleman Martin Lamb, Corporal Lloyd Newell, Craftsman Andrew Found and Private Gareth Bellingham, all of whom were killed recently on active service in Afghanistan. Like the Minister, we pay tribute to those who have been wounded and face lengthy rehabilitation. We have been reminded again this afternoon of the enormous sacrifices being made by the members of our Armed Forces.

The Minister said that the Government were seeking to offer any surplus training slots to foreign trainee pilots. Will such personnel pay the marginal costs of their training or the full economic costs, bearing in mind the additional expenditure that we now face in respect of our operations in Libya? How long will the training of foreign personnel continue—the Minister referred to the time that it would take to remove spare capacity from the training programme—and approximately how many foreign personnel does he expect that we will be training?

[Lord Astor of Hever]

My Lords, flying training for foreign students under international defence training is provided at full cost. Training provided by the UK Armed Forces is rightly considered as some of the best in the world. As such, we expect demand to continue. We have no plans for that to diminish. I do not have with me the figures on how many foreign students are trained. I am aware that for this financial year— 2010-11—the requirement was for 155 students in total to be trained. I will write to the noble Lord with the exact figures on foreign students.

[Lord Lee of Trafford]

My Lords, I should like first to join these Benches in the earlier tribute.

Given that, unfortunately, for the next 10 years or so we are going to be without our own aircraft carrier, can my noble friend tell the House what plans the Government have to maintain carrier training of pilots using French and American aircraft carriers, and what the appropriate financial arrangements are going to be?

[Lord Astor of Hever]

My Lords, Royal Air Force and Royal Navy pilots have for a number of years undertaken carrier training with our allies; and, as my noble friend said, we are currently in discussions with the French and the US navies on future training programmes ahead of the Queen Elizabeth carriers entering service. The Royal Navy currently has two pilots training with the US navy. In addition, the RAF and the Royal Navy have five exchange officers serving in the US navy flying the F/A-18 and AV-8B aircraft. As for the financial arrangements, as discussions are ongoing, the financial arrangements are still being considered.

[Lord West of Spithead]

My Lords, I do not think that the Minister has, in a sense, answered the sheer complexity of the last question. Being able to operate a large-deck carrier with fast jets is incredibly complicated. I understand that we have a few pilots training with the Americans and the French, but will he please confirm that we are going to establish a focus, a package of training and all the measures attached, rather like we had for the CSSE when we did this with the Polaris programme, so that we can drive from now until the first large-deck carrier is fully operational? By removing the Harriers, it is very difficult. It needs a real focus, and we need to do something like that.

[Lord Astor of Hever]

I can give the noble Lord the information that he wants not just on the pilots but on the whole of the deck-handling operation. We are looking at this very closely with both of our allies.

[The Earl of Shrewsbury]

My Lords, does my noble friend agree that UK-trained foreign pilots will be better able to work alongside our own forces in future conflicts?

[Lord Astor of Hever]

I entirely agree with my noble friend.

[Lord Teverson]

My Lords, the European Defence Agency recently awarded helicopter training for six NATO and Partners for Peace organisations to AgustaWestland, which will take place in Wiltshire. Does the Minister agree that this is an excellent role for the EDA and an excellent result? Does he see other opportunities from the EDA for similar training in the United Kingdom?

[Lord Astor of Hever]

I thank my noble friend for that question. I am not fully briefed on what we could get from the EDA, but we welcome our foreign friends and allies sending pilots for training over here. We give an excellent service.

Universities: Admission

Monday 20th June 2011 Lords Chamber

Question

14:54

Asked By

[Baroness Benjamin]

To ask Her Majesty’s Government what measures they have put in place to ensure that people from ethnic minority backgrounds achieve admission to top universities.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

My Lords, universities are responsible for their own admissions policies and decisions. The Government are establishing a new framework with increased responsibility on universities to widen participation, including to the most selective institutions, as set out in our guidance to the Director of Fair Access. Ethnicity is one factor which will be considered in access agreements. The proportion of black and minority-ethnic undergraduates in higher education has grown from 16.4 per cent in 2001-02 to 20.4 per cent in 2009-10.

[Baroness Benjamin]

I thank my noble friend for that encouraging Answer. I am sure he will agree with me that many more children from BME backgrounds, and white working-class boys, need to be encouraged to start thinking of their education path to top universities from as early as primary school. The numbers of BME students going to university have increased, but research by the Runnymede Trust has shown that BME students predominantly do not apply to the top 20 leading universities.

At the University of Exeter, where I am chancellor—I declare an interest—very few British-born BME students apply. Research shows that only 8 per cent of BME students who do go to university attend Russell group universities, resulting in less prestigious degrees and lower employment opportunities. Can my noble friend the Minister tell the House what is being done proactively by the Government, by schools and by universities to inspire BME students to apply to top-class universities, as exemplified by Michelle Obama during her visit to Britain last month?

[Lord Henley]

My Lords, I agree with my noble friend that the process ought to start at the earliest possible stage, at primary schools and throughout schooling, to encourage all children to consider this option. I am also grateful to my noble friend for mentioning that other group who ought to be addressed—white working-class males, who are again, sadly, very badly underrepresented.

I would not entirely accept her figures for the more selective universities. The figures I have for the Russell group show that something like 14 per cent of those attending come from an ethnic minority background. Obviously that varies from one institution to another: for fairly obvious reasons, at Queen’s University Belfast it is as low as 2 per cent whereas it is over 50 per cent at the London School of Economics. It varies throughout, but the overall figure for the Russell group is some 14 per cent.

[Lord Winston]

My Lords, I declare an interest as a professor at Imperial College London. Is the Minister aware of the outstanding work done in getting children from ethnic minorities and impoverished backgrounds into that university, a Russell group university, in particular the work of the Reach Out Lab, which allows children aged seven to 18 to do practical work in all forms of science as a way of training them to think about aspirations for a great university? Does the Minister agree that universities could do more to make the relationship between schools and universities seamless by opening their doors and making this kind of work possible across the country?

[Lord Henley]

The noble Lord answers his question for me. The institution to which he refers and to which he is attached has a very good record indeed. I have the figures in front of me: the figure there is some 45 per cent. We offer congratulations to Imperial College on what it is doing. What he said about the work that the higher education institutions themselves should do plays very strongly indeed and I would commend his words to the House and to the entire higher education sector.

[Lord Elton]

To put the answer that my noble friend has given in context, could he very kindly tell us what is the proportion of the population formed by ethnic minorities in the same definition that he has used in relation to the academic world?

[Lord Henley]

It depends what you mean by the same definition. If one takes the general working population, the figure is some 11.1 per cent, compared to that 20.4 per cent that I gave; if one just takes the under-30 age group, which is obviously nearer to those who are at university, the figure is 13.4 per cent. I am afraid I cannot break the figures down any further.

[The Lord Bishop of Exeter]

My Lords, I very much welcome the Government’s recent campaign to inform people of the exact nature of the new fees system and the help that will be available to students. However, it would be helpful to know what steps the Government will be taking to assess how effective that campaign has been in reaching all sections of the community, not just ethnic minorities but other unrepresented groups as well, and what steps will then be taken to communicate with those found not to have been reached by the recent campaign?

[Lord Henley]

My Lords, we accept that many people have not quite understood what the Government are proposing. We wish that they would and we will try to educate them in that process, so that they understand that eligible students will not be paying upfront or paying more than they did in the past. They will pay for longer but they will not pay more per year. Obviously, we will do research into what we have done to see just how effective that has been.

[Lord Stevenson of Balmacara]

Your Lordships’ House will recall that the recent report by the noble Lord, Lord Browne of Madingley, recommended that graduates would begin to pay their loans back only when their earnings reached £21,000 and that interest would be charged at the cost of borrowing to the Government. Will the Minister confirm that the Government are now proposing that the interest rate to be charged after earnings reach £21,000 will be as high as 3 per cent plus RPI? Will he indicate what studies have been carried out on the impact that this will have on admissions from people from ethnic minority backgrounds?

[Lord Henley]

My Lords, the noble Lord asks a large number of questions, which I propose to answer simply. We have broadly followed the recommendations by the noble Lord, Lord Browne, but not entirely, and we draw our own conclusions. But he is quite right to say that we decided that no one would pay until they were earning at least £21,000 a year and that there should be an appropriate level of interest beyond that rate. That was set out in a Statement some six months ago, which was repeated in this House, and is what we shall be ensuring comes to pass with the passage of the relevant clauses in the Education Bill. The noble Lord can also wait for the introduction of the higher education paper which will be published shortly.

Health: Hepatitis C

Monday 20th June 2011 Lords Chamber

Question

15:01

Asked By

[Baroness Randerson]

To ask Her Majesty’s Government what assessment they have made of the number of people infected with hepatitis C who remain undiagnosed.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, to the end of 2009, the latest year for which complete data are currently available, a cumulative total of 79,165 laboratory diagnoses of hepatitis C had been reported to the Health Protection Agency. The HPA advises that the number of laboratory diagnoses made will be higher than this because of underreporting, but the number of undiagnosed individuals is not known.

[Baroness Randerson]

The Health Protection Agency refers to a very much higher number of people—possibly 250,000—being infected with hepatitis C. That is its estimate, and there are other estimates of up to 450,000. I very much welcome my noble friend’s detailed Answer, but since 1997 the number of cases of hepatitis C reported each year has almost trebled. The majority are still undiagnosed, and I ask that in future there is more systematic and proactive screening of prisoners in prison to ensure that we diagnose more cases.

[Earl Howe]

My noble friend is absolutely right that there is a range of estimates of both the incidence and the prevalence of hepatitis C. I could spend some time explaining why that is, but it is partly to do with the long incubation period of hepatitis C, the symptoms of which do not manifest themselves for many years. My noble friend is also right that prisons tend to be a repository of this condition. In recent years, the story there has been good. The provision of information for prisoners and prison staff on hepatitis C and other blood-borne viruses has increased. There has also been increased access to hepatitis C testing for prisoners. We have had improved access to treatment for prisoners with hepatitis C and to drug treatment generally, which is of course absolutely germane to this condition. I believe that the focus is there, but that there is more to do.

[Lord Morris of Manchester]

My Lords, can the Minister tell the House how many patients infected with hepatitis C by contaminated NHS blood have since died in consequence?

[Earl Howe]

My Lords, I am sure that the noble Lord will know that precise figures are not available for that group, but I hope he will also recognise that we have taken steps to improve the financial help available to these unfortunate victims of the contaminated blood disaster of the 1970s and 1980s.

[Lord Walton of Detchant]

My Lords, does the Minister agree that under GMC rules on informed consent, it is not proper to take a sample of blood for another purpose and then to screen that blood for the presence of hepatitis without the consent of the individual? However, does he further agree that for research purposes or for epidemiological research, it is perfectly proper to screen large batches of blood samples taken for other purposes, such as epidemiological research, provided that the results are anonymised?

[Earl Howe]

The noble Lord is quite right that generally speaking there is no problem about using human tissue samples for research purposes where those samples are anonymised. In other circumstances, of course, the Act demands that the principle of consent should apply.

[Baroness Gardner of Parkes]

My Lords, obviously there is no general screening programme for hepatitis, and we appreciate the severity of cases such as that involving contaminated blood, which has just been referred to, but can the Minister explain what an ordinary person should be looking for before submitting themselves for screening? It must be advantageous to have such conditions diagnosed early rather than late.

[Earl Howe]

My noble friend is absolutely right that early diagnosis is always a good thing for this condition as it is for many others. We know who the risk groups are, and therefore the important thing is to target screening and testing at those groups. Predominantly, the at-risk groups are injecting drug users or former injecting drug users; they account for well over 80 per cent of cases of hepatitis C. Those groups are the focus of our efforts in primary and community care, and especially in prisons.

[Lord Patel]

My Lords, does the Minister agree that some ethical issues might arise in the mass anonymous screening of blood samples if a treatment was available for the disease that was being screened?

[Earl Howe]

In the case of hepatitis C, treatments recommended by NICE are of course available that, if taken early enough, can dramatically affect the course of the disease. I think we are in danger of straying into legislative territory that is perhaps the occasion for a wider debate as to how, if at all, we might expand the scope of the Human Tissue Act so as to reach those cases that I think the noble Lord is referring to.

[Baroness Thornton]

My Lords, we all welcomed the Government’s Statement in January announcing increased support for those with hepatitis C. Will the Minister please tell us what progress is being made to deliver the exception from means-testing of the new payments and the provision of prepayment prescription certificates, and which national charities are in receipt of the additional funding of £100,000 to support the victims of hepatitis C and their families?

[Earl Howe]

My Lords, the Caxton Foundation has been established to address the group of hepatitis C victims identified in the Government’s Statement earlier this year: that is, those victims of the contaminated blood disaster who went on to develop hepatitis C. I understand that the foundation will begin to make payments later this year that will include payments to those who are eligible for the free prescriptions service to which she referred.

Localism Bill

Monday 20th June 2011 Lords Chamber

Committee (1st Day)

15:09

Relevant document: 15th Report from the Delegated Powers Committee.

Amendment 1

Moved by

[Lord Greaves]

1: Before Clause 1, insert the following new Clause—
“Purpose of this Act
(1) The purpose of this Act is to promote a political and administrative system and culture which—
(a) is based on the principle that each decision should be made at the lowest practical and effective level, and that where there is a conflict between decisions at a higher or more local level there is a presumption that the local level will prevail unless there are clear and over-riding reasons why it should not;(b) is underpinned by basic rights for all persons and safeguards against arbitrary discrimination against any person;(c) focuses public decision-making on bodies which are elected, representative and accountable;(d) may incorporate minimum standards for the provision of public services that may be established by Parliament, government and elected bodies at a higher level than that at which decisions are made, but otherwise welcomes diversity of provision on the basis of locally determined needs and preferences;(e) includes a restriction against regulations and orders by government and bodies at higher levels than the minimum absolutely necessary;(f) shapes the structures of local government in ways that are designed to facilitate the involvement of local citizens, individually and as members of their communities and neighbourhoods;(g) welcomes and encourages the involvement of local citizens in the design of such structures and participation within them; and(h) encourages the formation of bodies by local citizens in which they may organise to influence public decision-making, take part in processes of local governance and help to provide local services.(2) A public body or public official shall, when acting under the provisions of this Act, have regard to the political and administrative system and culture described in subsection (1).
(3) In subsection (2) “public official” means a government minister or employee, or an employee of any body responsible for making decisions on behalf of the government or a local authority.”

[Lord Greaves]

My Lords, as it is the beginning of Committee, I should declare my interests yet again. I am an elected member of Pendle Borough Council, vice-president of the Open Spaces Society and a member of the British Mountaineering Council and its access, conservation and environment group. There may be others, which I shall declare if they arise as the Bill progresses.

Topically and coincidentally, an article by Julian Glover in the Guardian this morning, headed “The coalition still hasn't worked out the principles that bind it together” states:

“Last year's coalition agreement was brilliant at forcing a quick start, but useless as a guide to the government's founding values now the pace is slowing. It provided a to-do list of reform but avoided deep questions that must now be confronted: what is the coalition's attitude to democratic accountability, the role of markets and competition in public service? What does it mean by localism? To what extent should empowerment be accompanied by a harsher willingness to allow people to fail if they do not act? Above all, is the reconstruction and fragmentation of the state ideological rather than a consequence of deficit reduction?”.

Those questions are fundamental to the Bill in front of us.

Localism is not new, although the word “localism” used in this context is fairly new. The first person whom I could find using it was David Blunkett in 2004, and what he said then is not much different from what the Government are saying now.

The amendment seeks to state at the very beginning of the Bill that its purpose is to promote a political and administrative system and culture which is based on localism—localism as defined in the amendment. Proposed new subsection (1)(a) states that it should be based on the principle which in Eurojargon is known as subsidiarity and that,

“there is a presumption that the local level will prevail unless there are clear and over-riding reasons why it should not”.

It is not clear that that presumption is uniformly and consistently applied throughout the Bill. We have some very localist provisions; we then have some very detailed national prescriptions; and they rest side by side as one reads avidly through the 430 pages of the legislation. I do not want to be too critical; I am trying in the amendment to provide the Government with a friendly challenge to look at some of the inconsistencies that may exist and to tell us clearly what their view of localism is.

Proposed new subsection (1)(b) states that localism is,

“underpinned by basic rights for all persons and safeguards against arbitrary discrimination against any person”.

It must not be local majoritarianism; it should be based on the principles of democracy in which basic individual rights are fundamental.

Proposed new subsection (1)(c) states that localism,

“focuses public decision-making on bodies which are elected, representative and accountable”.

All Governments in the past few years have said that they want to decentralise and get away from the controlling hand of Whitehall and Westminster in the detailed way in which it has developed in this country. It is not clear in all cases, either with the previous Government or with this one, that the predominant role of democratically elected authorities is high in their mind; in fact, it is not clear that local government is always held in high regard by the people at the centre. Yet true localism must be based on democracy.

Proposed new subsection (1)(d) deals with the knotty problem of minimum standards. There was considerable and interesting discussion in Committee in the House of Commons as to how localism interacts with a belief that in many areas—certainly, for example, in social care—national government has not only the right but the obligation to lay down minimum standards before local diversity can apply. The question of what those minimum standards should be and in which areas they should apply is fundamental and it is not clear that the Government have given this issue the clear thought required.

15:15

Proposed new paragraph (e) seeks to include a restriction against regulations and orders from central government to the minimum absolutely necessary. If the figure in the Bill is 142, as the Local Government Association has calculated—or whatever it is—no one will persuade me that that complies with the requirement for them to be the minimum absolutely necessary. You have only to look at some of them to see that removing them would not cause the whole edifice to collapse.

Proposed new paragraphs (f), (g) and (h) concern local democracy, local involvement and the growing interest and realisation in local government, particularly in the past 10 or 15 years, that the framework for local government in which councils are elected—whether by thirds, every four years or whatever, and then simply get on and do their will without further involvement, often at many stages, by the local population—is no longer the way forward. Local democracy has to involve local citizens, individually and as communities and neighbourhoods, and the system should welcome and encourage that local involvement.

Very often when Governments think it is a good idea for communities to be involved, they do so on the basis that that involvement is different and separate from the system of democratic local government. That will not work. It is absolutely crucial that the system of democratic local government is fundamentally based on involvement and participation by local people. This has to be a genuine involvement, not only the organising of surveys and so on which are written so that they are effectively rigged to get the outcome required.

Proposed new paragraph (h) involves encouraging the formation of bodies by local citizens in which they may organise to influence public decision-making. This reflects the argument of the noble Baroness, Lady Bakewell, at Second Reading when she gave a graphic account of how people had been actively involved in campaigning in her borough in London. However, this cannot always be organised by authorities, local government or national government; it will happen when people want to do it. The important thing for Government is to ensure that the structures make it easy to do and not restrict or block it.

Proposed new subsection (2) is the most important of all. It requires that public bodies and public officials should be under a duty to act in the light of the principles of localism and the points set out in proposed new subsection (1). At the moment that is not the case. People, officials and bodies cannot be challenged because they are behaving in a traditional bureaucratic way—or, at least, not legally challenged because there is no underlying requirement for them to change their culture and the way they do things and to help create a more democratic and better society.

I hope that the Government look favourably at this amendment. I can understand that they might want to change a few of the words. They might think that some of it is rather revolutionary. If they look underneath the surface, they will see that it is highly revolutionary, but it is what this Bill ought to be about and ought to be based on. There are parts of this Bill that are based on this; but there are other very substantial parts, as we will find out as we go through the Bill, which are not. They are still centralised and, even when the proposal has been put forward and can be described as localist, it is top-down localism. It is saying, “You must behave in this way, which we define as localist, because it’s good for you—but we will determine the rules and regulations and the way in which it’s going to work”. That is not localism; it is a new form of top-down government. It may be better than doing everything at central level and not paying attention to local level, but it is not true localism.

As I say, I hope that this friendly challenge to the Government will be well received and that we end up with a Bill that is indeed true localism. I beg to move.

[Baroness Farrington of Ribbleton]

My Lords, the noble Lord, Lord Greaves, has had a long, distinguished and occasionally challenging career—and I say that as someone who served on the same authority for 20 years. I put two points to him. First, would he agree with me that almost everywhere else in Europe, unlike in this country, the principle of subsidiarity refers to the most local level of government—that is, local government— at which a good decision can be taken or policy made? Localism based on community groups and neighbourhoods that are self-forming and sometimes self-selecting are not a version of subsidiarity under the widely used European term.

Secondly, the noble Lord referred to people in the locality and the difficulty of decisions being made above the locality level. How would he envisage that working? I cite two issues to do with planning from my experience in local government. In the 1980s, long-stay mental hospitals were being replaced by local hostels for people to be reintegrated into the community. I faced ferocious public meetings with people who were absolutely determined that it would not happen in their backyard. It was an extremely difficult decision, made worse by the sadness in Ribbleton of three of the people who had spoken out publicly against such hostels coming to me privately and telling me that members of their families had been locked away for decades.

The second planning issue involved a hostel for former prisoners around the corner from where I lived. If the localism that seems to be implicit in this legislation had applied, they would not have had it, and I cannot think of any other community that would have welcomed the proposal. An absolutely ferocious public meeting was held. I was the only member of the planning committee who had given approval to it and who was present at that meeting. It was verbally nasty. When I was out with my children, I was threatened with a beer bottle by a member of the public who had been at the meeting and had been drinking. At the end of the meeting a ferocious woman in a hat bore down on my husband and said, “Is she your wife—can’t you keep her under control?”

That sort of public meeting and those sorts of services are the most intractable. They are very difficult unless a decision and delineation are made so that the general good and the needs of smaller groups can be protected. I know from his background that the noble Lord, Lord Greaves, would sympathise with the need for the provision of both those services for ex-prisoners and former long-stay patients.

[Lord Lucas]

My Lords, I look forward to addressing the questions that the noble Baroness, Lady Farrington of Ribbleton, has just raised when we come to the neighbourhood section of the Bill. It is important that for such people, and indeed for Gypsies and others who have traditionally been made unwelcome, we have a system whereby localism does not become exclusion.

I welcome the amendment of the noble Lord, Lord Greaves. My noble friend Lady Hanham may remember that in 2006 my brother, Tim Palmer, published a pamphlet with Policy Exchange called No More Tears. If she has read that, she will realise that I am a considerable radical when it comes to localism—I share his views—and I regard the Bill as a small step on the way. In her reply to the amendment, I hope that at this stage of the Bill we shall have a good exposition of where the Government stand on localism at the moment, which will give us a good context for the rest of these debates.

[Lord Jenkin of Roding]

My Lords, there was much in my noble friend’s speech in moving the amendment with which one could not but agree. I particularly liked his point that there may be too many provisions in the Bill where it appears that the Government are trying to tell local authorities how to exercise their newly granted general power of competence. I look forward to identifying particular points in the Bill and saying, “Look, this is not necessary”.

Where I have had difficulty with my noble friend’s new clause is that it is not going to achieve anything in the direction that some of us would like to see. You have to look at the individual provisions of the Bill if you actually want to reduce the degree of central control or direction of a locally exercisable power. If my noble friend is seeking to oblige the House to look at the Bill with that in mind then his speech will have made a useful contribution, but I am not sure that the provision that he seeks to put in would add anything. The way that one deals with legislation is that one looks at the provisions in the Bill itself and that is what we will spend a large part of the next four weeks doing.

On the interpretation of the Bill, I remind the House that the courts decided long ago, in the case of Pepper v Hart, that if the provisions of a Bill are unclear, the courts are entitled to see what Ministers said in introducing and debating it. I had to downsize my own household when we moved back to London, and I offered around my bound Hansards, which covered well over 40 years, to see whether anyone wanted them. They are all now in the Supreme Court on the other side of Parliament Square. I have not been to look at them but I am told that that is where they are. They did not cost me or the court anything. That is in order that the Supreme Court judges can have in front of them the Hansard reports of what was said by Ministers to be the purpose of the Bill.

Looking at what Ministers can say about this Bill and what is actually in it, one wonders what the purpose of the proposed new clause is. My noble friend made an interesting exposition of a number of points, but it would not be appropriate to add a new clause of this sort when we have eight days of debate in which we will be dealing with the details. I have to say that if my noble friend sought to press his new clause to a Division, I would have some difficulty in supporting him. I hope that he will forgive me.

15:30

[Lord Shipley]

My Lords, I support the amendment moved by my noble friend Lord Greaves because I believe that defining the principles and the culture of this Bill matters profoundly to our understanding of the debates that we will have on each of its parts. I declare my interest as a member of Newcastle City Council.

The coalition agreement is helpful because it underpins where the Bill has come from. It says:

“The Government believes that it is time for a fundamental shift of power from Westminster to people. We will promote decentralisation and democratic engagement, and we will end the era of top-down government by giving new powers to local councils, communities, neighbourhoods and individuals”.

That is a powerful, clear statement and it should be the test by which we examine the Bill in Committee. However, I think that it would help us to have a closer definition of terms. The definition of “local councils” is clear to us all, because local councils have a statutory role. However, a community can be both a community of interest and a community of place and it is important that we do not confuse the two. Neighbourhoods are clearly places; one or more neighbourhoods, when joined together, make a community. Ultimately, neighbourhoods form the electoral base—the ballot box base—on which democratic decisions can be made. Those neighbourhoods joined together create a ward, through which councillors are elected. As for individuals, these are the people who work in, live in or visit the area, but I think that this predominantly relates to those who have a vote and therefore are residents in their council area.

My noble friend Lord Greaves talked about the importance of the principle of subsidiarity and devolving decision-making to the lowest level possible. I hope that we would all agree with that aim. One of my worries, which I have expressed before in your Lordships’ House, is that we as a country are in grave danger of confusing localism with atomisation. Government and Whitehall departments create thousands upon thousands of little platoons. Those may be in the health service, schools or a whole range of organisations operating at a local level, but they are not co-ordinated by their local council—they are not strategically led by a democratically accountable body. They are run in and out of Whitehall and they are not ultimately accountable to the test that I said should be applied—the ballot box. These issues of principle are vital, which is why I believe that my noble friend’s amendment is exceedingly important. It is about subsidiarity and the power of the ballot box—it may be through referendums or through the election of individuals—but it has to be about reducing, not increasing, the powers of the Secretary of State on local matters.

In Committee, we will come on to an interesting test. In the council tax referendum, people will have the power only to reduce the council’s recommended council tax. With true localism, there would be a power to increase council tax as well as to reduce it—that, too, should be the subject of a referendum if people want it to be. It also implies that we have got a representative system in place in which the ballot box can operate. We do in rural areas, through parish councils. It is a great deal more difficult in urban areas, where the only democratic system based on the ballot box is the ward in which councillors, one or more, have been elected. It is important, as we go through the Bill, to make sure that we tie that democratic accountability through the ballot box to the decisions that are being made. That is particularly important in discussions on planning matters.

Finally, I hope that all Whitehall departments will understand that they have to be integrated into the localism agenda. It will not be enough for DCLG to be the Whitehall department that is pressing the localism agenda along with local councils throughout the country if it then finds that other Whitehall departments wish to retain direct budgetary control and control through the atomisation of public services.

[Lord Ouseley]

My Lords, I welcome the discussion on this amendment, which gives us an opportunity to consider the guiding principles of this legislation. It is quite clear that there is much confusion in the Bill about what localism is and whether we are being offered localism or greater centralisation. The opportunities to shift power to the people, so to speak, may in fact be giving greater opportunities for those local groups that are already well organised and sufficiently competent to challenge local authorities and other local service providers. Therefore, it is important that we establish some understanding of the principles of the Bill, to try to remove some of those confusions as we consider the detail of the clauses, as we inevitably will—some to a greater extent than others.

I particularly welcome the amendment because, if we are genuinely going to shift power to people, it provides us with an opportunity to consider how we become much more inclusive. Paragraphs (b) and (c) in the proposed new clause offer us the opportunity to consider how we can ensure that all have the opportunity to share in the power that is being shifted to local people.

Secondly, we need to reinforce local democracy. The confusion in the Bill may almost enable us to weaken our current system of local government, whereas we should be looking to strengthen it. Local government is the one area where we have proper accountability, even if it is not as effective as it should be; there is no basis on which we are able to demonstrate that we are seeking to engage with people more, getting them to participate in those local democratic processes. In talking about localism, we miss an opportunity if we do not also look to engage people and strengthen local democracy by getting them to engage in the current processes.

If we are to establish a culture of inclusion as the amendment suggests, it is important that we state these principles right at the heart of the beginning of the Bill, so that we have them as a guide to facilitate our detailed consideration.

[Lord Plumb]

My Lords, I welcome the comment of my noble friend Lord Jenkin that the good points made by the noble Lord, Lord Greaves, should be incorporated in the Bill. However, I do not really see the point of putting them in an amendment, although they are extremely important and should be thoroughly examined. As has been said, many seek to define “localism” and we look forward to the government guidance.

I am totally in favour of devolving greater freedom to local authorities and communities and giving them a right to challenge and bid for assets. Those of us who have been involved in local government at different levels for decades know that its self-reliance in making decisions has always been dominated by Whitehall. Surely we should consider favourably and with due justice a bottom-up approach to planning and to making the system clearer, more democratic, more effective and, one hopes, with less red tape. All that surely makes sense.

Of course, with power—that power may be thrust on local authorities to some extent—comes responsibility. We are all aware that local authorities are having a tough time getting to grips with that responsibility at a time of tight budgets. However, nothing concentrates the mind more effectively than revenue restrictions. The Financial Times correctly stated:

“Without revenue, local democracy is hollow”.

Giving more responsibility to locally elected representatives obviously raises many questions, given that local authorities often have to refer to another body for ultimate decision-making. For example, we have a very effective Health Protection Agency, which has the capability to ascertain, investigate and identify outbreaks of infectious food-borne diseases. It acts as a central point of expertise in disease management and its capability is recognised worldwide. The possible loss of such co-ordinating bodies, with the consequent loss of expertise, runs the risk of reducing the ability to monitor and identify outbreaks of food-borne diseases, which have to be reported by local councils. Co-ordinating bodies are key in responding to incidents such as the recent E. coli outbreak in Germany, which it has been suggested was due partly to poor communication between local investigators and a national body. Therefore, we need that link to a central body and we need expertise on the ground to deal with a problem at local level. I hope my noble friend the Minister agrees that the co-ordinating body is essential to deal rapidly with potential disease spread.

15:45

[Lord Taylor of Goss Moor]

My Lords, I support my noble friend’s amendment, because it goes to the heart of the fundamental issue of how our body politic and administrative systems work. The amendment essentially sets out what we want to do in a Bill called the Localism Bill, before we discuss how to do it. That is an important reminder of what we should put in front of those who draft these things, because in this country, unlike many others, when we talk about empowering people, the assumption is that somehow Whitehall has to define every element of it, in particular because it may otherwise be subject to legal challenge. Other countries give a power of competency at a local level and look to those who exercise those powers to defend the manner in which they have done so rather than rely on the crutch of how the national tier has defined what they should do.

By definition, having a Bill of this size that calls itself the Localism Bill illustrates the flaw inherent in our body politic: we do not understand the principle of devolving decision-taking to others or that that decision-taking has to involve devolution of responsibility for the “how”, not just the principle of the “what”. One does not have to have spent much time talking with the Local Government Association or others to realise the many reservations of powers to Ministers that are inherent in the Bill, which is an inch-and-a-half thick. It cannot be right that a Bill that is about empowering local communities has to be defined in that kind of detail, although I suspect that that is not so much a flaw of the Bill but of the system—let us not forget that the Bill amends many other Acts and, if they were all here, I do not think that I could hold the Bill in my hand.

[Baroness Hamwee]

My Lords, I take issue with my noble friend Lord Taylor only to the extent that we should start with not just the “how” but the “why”. It does not matter what you call something, provided you do not then use your term as an excuse for sloppy thinking. That is a danger. It would be easy during our debates on the Bill to say that such-and-such is local or localist, without analysing what that means and what it should mean in each context.

The noble Lord, Lord Jenkin, referred to Pepper v Hart. I must say that it worries me when people who have not been closely involved with our proceedings say, “Parliament clearly must have thought such-and-such”, and one wonders whether Parliament has thought at all about a particular issue.

Representative democracy is so valuable for lots of reasons, but I have written down four: balance, priorities, nuance, and wide objectives. When the noble Baroness, Lady Farrington, spoke about community groups being self-selecting, I thought that she was going to say that they were self-serving—just occasionally, they are and I, too, recognise the examples she gave. The issue of bail hostels precluded my party from taking control of our local authority in 1978. My noble friend Lady Tonge was elected in a by-election shortly afterwards, having failed to be elected at that earlier point. However, the issue was of concern in a community that one should have thought was most sympathetic to the problem that the establishment of the bail hostel was addressing. The centre has a role, but its role is not to protect local people against their own local authority.

The noble Lord, Lord Jenkin, asked what the clause would achieve. It sets criteria against which the detail of the Bill can be tested. Something that is superficially local or localist is not sufficient.

[Lord Elystan-Morgan]

My Lords, I have considerable sympathy with the sentiment behind the proposed new clause. Ever since I was a schoolboy, I have been arguing for devolution in one way or another, and I have not changed. In the past few months, in regard to the boundaries Bill, the police Bill and the Public Bodies Bill, a great deal of the House’s time has been taken up by me arguing devolution points, as I am sure the noble Lord, Lord Taylor of Holbeach, will remember. My sympathies are all with the new clause, but a constitutional issue of immense magnitude is raised by it.

Pepper v Hart, as mentioned by the noble Lord, Lord Jenkin, caused a massive upheaval in the whole concept of interpretation by a court of what was contained in an Act of Parliament. Up until then, the same rule had abided for utterings in an Act of Parliament as for the interpretation of a will. It was the golden rule of interpretation. That was very simple. It was that the strict grammatical meaning of the words should determine the matter unless there was some obvious or latent ambiguity. In other words, it was in any event restricted to solving the problem that arose from an ambiguity. It was not of general content. When Pepper v Hart came along, it did not change that rule; all it did was change the machinery by which one tried to deal with that conflict.

The new clause, whose intentions are admirable, seems to be an attempt to go well beyond that. It is not confined to situations of latent or patent ambiguity but deals with a whole host of general situations. I will be corrected if I am wrong, but it seems to be an attempt to act as if we had a written constitution at the limits of the Bill, and those limits are very wide indeed. But we do not have a written constitution. Therefore, we could have endless argument as to whether there is a patent or latent ambiguity. To speak for a moment of my former occupation, I have no doubt that clever lawyers would seek to persuade courts that there were ambiguities and conflicts where there were none. Here we have a presupposition that one can pretend in legislation that there is a written constitution, as set out in the new clause, when in fact we do not have such.

The new clause is titled “Purpose of this Act”, but the purpose of an Act is set out in its preamble, which is not part of the Act itself. It is very much like the memorandum of a limited company: it sets out the metes and bounds of what can be contained in the legislation. With the best will in the world, the new clause, laudable though it is, would, if carried, create a massive constitutional problem to which there is no real answer.

[Lord Dixon-Smith]

My Lords, it seems a long time ago now, but I spent 28 years in local government. The noble Lord, Lord Greaves, has done the House a favour in tabling this amendment because it has enabled us to have this useful, fundamental debate before we get into the detail. As I was unable to speak at Second Reading, I should declare myself as a landowner in Essex, in case anyone wishes to raise it at any point.

The noble Lord, Lord Elystan-Morgan, has pointed out the problem with the amendment. There is much in it with which one could agree in principle. I think similarly to the noble Lord that, the more one tries to define localism, the more one is at risk of destroying it. Once you start to spell it out in words of one syllable which ordinary people can understand, you begin to restrict freedom of action. As I understand it, the purpose of localism is to get local matters back into the control of local people as much as one reasonably can. However, the Bill does not tackle the fundamental problem that is faced by all, which is the issue of local government finance. When I was first a Member, my county received less than 50 per cent of its finances from the centre. I remember warning the council in those days of the dangers if that balance shifted. Today, the balance is somewhere near 80 per cent from the centre. Whatever we do in the Bill, there will always be that fundamental weakness: the ability of the centre to control events at a local level because of a lack of financial independence.

If anyone wants to try to interpret the Bill, they should first read this debate. Everything that has been said is appropriate and relevant and it has been very useful to have this discussion. I look forward to hearing what my noble friend on the Front Bench has to say, but I hope that the noble Lord, Lord Greaves, will not take the amendment any further. It seems to me that he has achieved what he wanted in having this debate. If we tried to put this down in writing, I am sure that we could all think of additional words and words that we would prefer not to see, but if an issue came before the courts on this basis, I think we would be giving them an impossible task. Having had the debate, I hope that the matter goes no further.

[Baroness Byford]

My Lords, I was very disappointed not to be able to speak at Second Reading as this is a matter very close to my heart. On this occasion, I do not believe I have an interest to declare in that I have never been a local councillor. My family has farming interests in Suffolk, which perhaps I should declare, as that will come up later. Clearly, over many years, I have been involved in local organisations and charities, some of which are declared in my interests.

The amendment has given us an opportunity—particularly those of us who could not speak at Second Reading—to speak on this matter. I am a staunch believer that decisions should be taken at the lowest level. I welcome the Bill and look forward to taking part in the various aspects of it, when we may want to strengthen, improve or alter it slightly. That is the nature of the Bill; it is huge and covers a wide section of specifics.

However, I have slight difficulties, even with this amendment. It is headed “Purpose of this Act”, and proposed new subsection (1)(a) says that,

“there is a presumption that the local level will prevail unless there are clear and over-riding reasons why it should not”.

It does not explain what would happen then or what that would achieve. I do not think that it is appropriate to nitty-gritty one’s way through the amendments at this stage. Various questions need raising on them, word by word and sentence by sentence.

I actually rose to say that, although we have had this worthwhile short debate, I do not believe that my noble friend’s amendment is necessary. The Bill clearly sets out what it wants to do. When we come to the individual clauses within it, there may well be important issues that we want to look at and reflect on in greater detail. At this stage, I want merely to say that while I have sympathy with the amendment, it is not one that I support.

16:00

[Lord Tope]

This is the first time I have spoken in Committee and I again declare that I am a councillor in the London Borough of Sutton and a member of its executive. I put my name to my noble friend’s amendment for a very particular reason. I have heard it described as a Second Reading amendment—slightly a contradiction in terms, but I understand what is meant—and it prompts an important debate that we should have at the start of our proceedings.

Unusually, we have a Bill with a one-word title: “localism”. It seems to mean different things to different people and it appears to mean different things in different parts of this Bill. Above all, it seems to mean entirely different things in different parts of the Government. Therefore, my noble friend and I thought that the amendment would prompt a useful Committee-stage debate at the beginning to try to discover between ourselves what we understand by “localism” and where we disagree about it. Of course, neither I nor my noble friend would pretend that this is the ultimate, perfect, absolute definition, but it sets out fully some principles that we believe are important when considering localism. It is not localisation, as I often hear it described. It is not simply decentralisation or devolution.

We have had an interesting debate. Almost every speaker has, in effect, said, “Yes, but”. One or two, notably the noble Lord, Lord Ouseley, welcomed the debate for the right reason—that it sets out what we are trying to do. As others have said, localism is not atomisation. As I said at Second Reading, localism is not populism and it is important to understand that. Alternatively, as someone else said, it is not majority-ism—I do not know whether that is a word or whether I can say it. Local democracy, which is what this is about, is democracy. It is about ensuring that all voices are heard and listened to with equal respect. It is a system and a process, not necessarily one that makes the decisions but one that informs those who are democratically elected and accountable for the decisions. In other words, it is a process that informs the decision-makers. It may be that, in particular circumstances, it is appropriate for those decision-makers to delegate that decision, but it is not simply dumping decisions and abrogating the responsibility that local councillors are elected to take.

After all these years in local government, I would be the very last person in this House to claim that all local councillors and all local government are always perfect and get things right. Of course they do not. There are too many examples, probably run by all parties, where local authorities are not good at engaging with local people and local groups, whether they be geographical or interest groups. This amendment tries to say that that is a very important part of the decision-making process. I shall not deprive my noble friend Lord Greaves from turning the clock back some 20 or so years to that time on Lancashire County Council when he was answering the questions put to him by the noble Baroness, Lady Farrington. However, as she knows, not quite 20 years ago both of us were members of the EU Committee of the Regions, the body set up in 1994 to be the voice of regional and local government. We both have some knowledge and experience of subsidiarity, as practised on the continent but rarely in this country. Subsidiarity in this country seems to stop at national level. We have all argued for many years that if subsidiarity means bottom-up, in simple terms, it should start at the bottom and not be top-down. Devolution is top-down—and is a very good and necessary thing in a centralised state—but subsidiarity should build from the bottom up.

I agree with the noble Baroness that, as in other countries, decision-makers should be informed by their engagement with their local communities in a much better way than is the case now. At issue is the way that they are informed in making their decisions. We need properly accountable and elected people and bodies. All of us who have been councillors for any length of time can cite similar examples to those cited by the noble Baroness, Lady Farrington. I am sure that we have all faced quite strong public opposition. As leader of the council and even in the ward that I represent, I, too, faced such opposition. I will not digress for too long, but I was faced with a similar instance of a mental health hostel being set up in a residential road in my ward. There was initial fear, suspicion, worry and concern among the neighbours. The way in which we approached this was to hold a meeting of residents in somebody's front room. We discussed the issue and went through a lengthy process. In the end, as a result of the engagement, the immediate local community were not just supportive of the proposal but remained very supportive of the house itself and of the people in it, and integrated them as an active part of the community. Of course, it does not always work that way; it is never that easy or simple, but it is part of the answer to how you approach the making of those responsible decisions.

[Baroness Farrington of Ribbleton]

My Lords, does the noble Lord accept that in the cases that he and I cited, that applied, but that in the case of our school for ex-prisoners, pressure was put on the seller of the property when permission had been given, and the seller refused to sell to NACRO?

[Lord Tope]

I am grateful to the noble Baroness. I did not mean to imply that these things are simple and easy and that all you need to do is talk to people and everything will come out right; I am not that naive or simple. I am just saying that the way in which decisions are made is often as important as what the final decision is, and sometimes helps and facilitates the making of those difficult decisions. They need to be made by the appropriate sphere of government that is democratically elected and accountable.

We set out here, at some length, what we believed should be the definition of localism—what we believe it means. We did so in part to see who would agree with us and who would not. We think that these are the criteria on which we should judge the Bill as we go through Committee: that is why we tabled the amendment in Committee, at the beginning. We are saying that these are the criteria by which we should judge whether this part of the Localism Bill reflects what we understand to be localism, and that if it does not meet the criteria perhaps something in the Bill could be improved. We have had a useful, relatively short debate and perhaps have a better understanding at least of what we on these Benches mean by localism. I am not sure quite what noble Lords who made a “yes, but” response understand by localism. As they said, perhaps it will become clear as we go through the various stages of the Bill.

[Lord Beecham]

My Lords, I, too, declare an interest as a councillor in Newcastle upon Tyne and as a vice-president of the Local Government Association. A week ago in your Lordships' House, the government Chief Whip lamented the fact that not enough legislation was being debated in Grand Committee. Of course, it would have been quite wrong for this Bill to be assigned to Grand Committee. However, this debate could hardly be better placed than in Grand Committee in the Moses Room. After all, that Room bears a portrait of a majestic, bearded figure bearing tables of stone on which are incised 10 commandments.

This afternoon, the noble Lord, Lord Greaves, comes to us not with 10 commandments but with 10 criteria by which this Bill is to be judged. Try as I might—and I have tried—I cannot find very much to disagree with. It is something like 120 years since Sir William Harcourt, a distinguished Liberal Chancellor of the Exchequer, proclaimed, somewhat optimistically from one point of view, or perhaps pessimistically from another point of view, that, “We are all socialists now”. Nowadays, we are all localist, but that definition of localism is, to put it mildly, somewhat elastic. I think the noble Lord, Lord Greaves, has set out as good a definition as one might reasonably expect. If I had a reservation, it would be that in proposed new subsection (1)(d) in the amendment the reference is to,

“minimum standards for the provision of public services”.

I accept that that would be a partial definition, but I think one needs to look at minimum entitlements in addition to minimum standards. Standards imply provision of a service; entitlements are a somewhat broader concept that would, for example, avoid us reverting to a 19th-century poor law view in which benefits are calculated differentially across the country. Indeed, there is a case for variation, and I have sometimes thought of promoting a society for the preservation of the postcode lottery because it seems to me that localism of any definition implies different choices according to local circumstances. I therefore welcome the thrust of this proposed new clause.

[Baroness Hamwee]

Would the noble Lord agree that a better term might be “postcode democracy”?

[Lord Beecham]

I would not say that it is a better definition, but I would accept it as an additional definition. However, the spirit is shared across the Chamber.

The key to the noble Lord’s amendment is surely the emphasis on representative local democracy. That is what local government is and must be all about. That is what, as we go through this Bill, we shall see is in danger of being significantly undermined, both in the Bill’s provisions and in some of the current policies that are being applied. Representative local democracy is different from government by referendum of the kind that we sometimes see in jurisdictions such as Switzerland or California, but we will debate those matters later.

I think the noble Lord, Lord Shipley, was entirely right to borrow my phrase about the atomisation of local government. There is a real danger in this Bill and in other legislation that is currently being debated in Grand Committee and other places that that will be a feature. He is also right to say that all government departments need to adopt an integrated approach. In that context, it is worth reflecting on what appears to be happening to what is now called community budgeting and was called total place. There is little evidence, it seems to me, certainly based on an Answer that I received from the Minister, that anyone in government, apart from the Department for Communities and Local Government, is taking this very seriously, but it is a serious issue and I certainly wish the Minister well in her efforts to persuade her colleagues to sign up effectively to it. In that context, if we are talking about local government promoted and administered on the lines that the noble Lord’s amendment suggests, we need to look closely at what is happening in that regard.

Having said that, I think there are difficulties in the noble Lord’s amendment as an amendment. The noble Lord, Lord Jenkins, and other noble Lords, including the noble Lord, Lord Elystan-Morgan, have pointed out the—

16:15

[Lord Jenkin of Roding]

The noble Lord, Lord Beecham, and I have known each other for a great many years, but perhaps I may establish at the outset of this Committee stage that there is no “s” on the end of my name. I hope that he will forgive my interruption.

[Lord Beecham]

I sincerely apologise to the noble Lord. I sometimes felt closer to him than to the former noble Lord who does have an “s” at the end of his name. He and other noble Lords referred to the implications of incorporating this amendment into legislation. There are difficulties in that respect. To refer for one moment to my previous argument about the integration of government, that will not be made any easier by the abolition of government offices, which were a very useful mechanism for two-way information flow between central and local government.

I return to the form of the amendment in a constructive spirit and ever willing to help cement relations on the government Benches between the two partners to this coalition. Bearing in mind, of course, that one of the great localists was Joseph Chamberlain—who started life as a municipal socialist and Liberal and became a Liberal Unionist and very much part of a significant coalition which did great damage to the Liberal Party—it is surely possible to bring the two views together. Without necessarily incorporating the terms of this amendment into the Bill, it would be possible to follow the alternative method implied by the noble Lord, Lord Jenkins—Lord Jenkin—which was for the Minister to make a statement.

If the Minister were to make a statement saying that these are acceptable propositions about localism and, taken together, broadly constitute a reasonable definition of localism, surely that would suffice to meet the test of legality referred to by the noble Lords, Lord Jenkin and Lord Elystan-Morgan. It would reinforce the import of these propositions as criteria against which, if necessary, the legislation and Acts under it might be interpreted—if necessary, in the last resort—by the courts.

I hope and anticipate that the noble Lord will not press his amendment to the vote, but it would be helpful if the Minister at least indicated support for the principles about which there has been very little difference in today’s debate.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, I thank everybody—it practically is everybody—in this Committee for starting this Bill off so thoughtfully, as the speeches have been today. Mind you, they have been mostly Second Reading speeches rather than a straightforward debate on an amendment. None the less, it has been an interesting and informative time.

It will perhaps not surprise the Committee that I am not going to accept the amendment, nor do I think that it is appropriate from this position to assert that I am happy with the principles underlying this amendment. If I am not careful, if I say that I support it, we could be landed with a series of judicial reviews, the Minister having said that the principles were all absolutely fine—I am not going to do that. I accept that somewhere and in some of them there is the spirit of localism and that is really what we are looking at. There really is no way that one can start a Bill with a purpose such as this because it will never measure out exactly what the purpose of the legislation is, and it rather puts one into a straitjacket for the rest of the debate.

Having said that, perhaps I may move on to the debate. It was suggested that localism is ideological, but it is not—it is extremely practical. For a long time we—certainly those who are in local government, and I declare an interest as I have been in local government—have inveighed against the centre and said that we should have much more powers in local government and be given much more responsibility. That is what the Bill does. Its purpose is to pass down as much as possible to local areas, not only to local government but also to neighbourhoods and communities.

That does not bypass local government. By getting neighbourhoods and communities involved, there is a better and more democratic discussion. Views are better understood and put forward. As for the comments of the noble Baroness, Lady Farrington, on neighbourhoods making decisions, the decisions she mentioned would have been made in conjunction with the local development plan or the strategic plan and could not have been made by a neighbourhood on its own. That is tantamount to understanding that local councils will not be bypassed by what is going on.

Local democracy, by definition, is the involvement of as many people as possible. Too often there is complete disinterest in local areas about what local government is doing because no one believes that the functions belong to local government rather than central government. I do not believe that that will be the case by the time we have finished considering the Bill.

There has been support across the House for the measures in the amendment. My noble friend Lord Lucas said that the Bill represents small steps to localism, and I agree that we are on the way to achieving that. The noble Lord, Lord Shipley, referred to the grave danger of confirming localism by atomisation, although the point may have been raised originally by the noble Lord, Lord Beecham, who described it as involving “little platoons”. But do we really believe that neighbourhoods and communities are little platoons? Do we not believe that they are what make up local areas and communities, and should we be ignoring what they say? The Bill gives the electorate ample opportunity to take part in democracy and make sure that its voice is heard.

I turn to the specific questions. I was asked whether a council tax referendum could be used to increase rather than reduce this tax. The purpose of the council tax referendum is to replace the very unwelcome capping regime which I think we all agree was to the detriment of local decision-making. The council tax referendum would ensure that if the council wishes to put up council tax more than is recommended, it will have to be at the behest of the local community. The noble Lord, Lord Ouseley, mentioned reinforcing local democracy, which again I think I have covered. As we go through, we will see how this reinforces local democracy.

I think that my noble friend Lady Hamwee—although I am not too sure where my noble friends are at the moment and where they are not—also covered the point about representative democracy. My noble friend Lord Dixon-Smith came back to the fundamental debate, which is that by producing such principles there is a risk of destroying what the Bill is trying to do, and I agree with him. The Bill does not discuss local government finance. Indeed, noble Lords know that a review is going on at the moment, so it is not appropriate in this Bill.

I have covered most aspects of what has been raised in the debate. I would only say that I think that the principle of localism is well established. The issue was debated at length during the Bill’s passage through the other place. I do not know that anyone has picked up too much of what that debate was about. It pushes out as far as possible into communities and neighbourhoods, and into the hands of individuals and community groups, but in doing so it does not undermine local democratic principles. Localism means handing power down directly to councils, freeing local government from central and regional control. At other times, it means creating new rights for local communities to become more involved in local affairs, which is what I have been describing as what neighbourhoods and communities can do. In rolling back central direction, it will also be necessary to ensure that local authorities are accountable for all the decisions they take. We considered the Bill’s principles in our Second Reading debate two weeks ago, and I hope that we can now make progress on our scrutiny of the substantive provisions.

Finally, perhaps I may address the question of the amendment raising a couple of risks. I touched on the risk of judicial review proceedings, and I want to underline that by saying that it is our view that judicial proceedings could be brought on the grounds that a decision made under the Bill had been made without regard to the principles. I think that that would be a very retrograde and unfortunate step. An example of that might be if a Secretary of State exercised a power to make secondary legislation in a non-localist way. There is a risk that it could also be used as a guide to the legal meaning of a provision in the Bill, so if in the future there was doubt as to what a provision meant, a court would be able to take account of the purpose of the Bill as set out in this proposed clause. The risks are therefore quite high. I thank my noble friend for introducing the proposed new clause but I regret to tell him that I will not be accepting it.

I wonder if I could raise another point at this stage. At Second Reading I indicated that we would listen to noble Lords’ concerns about shadow mayors and mayors as chief executives. We are keen to build on the common ground and consensus that the Bill has enjoyed. I should therefore like to say at this stage that when we reach the debate on mayoral provisions, the Government will be pleased to support amendments that have the effect of deleting from the Bill mayoral management arrangements; that is, mayors as chief executives and the concept of shadow mayors. In more detail, this means that we will delete mayoral management arrangements and we will be supporting Amendment 57 in the names of my noble friends Lord Jenkin of Roding, Lord Tope, Lady Scott of Needham Market and the noble Lord, Lord Beecham. We will also be supporting Amendments 62A, 66A, 84E, 87A to 87D, 108A and 187 in the names of my noble friends Lord True and Lord Howard of Rising, which complete the changes needed to delete mayoral management arrangements. I should add that deleting these provisions from the Bill will not prevent councils deciding to do away with the non-statutory post of chief executive should they choose to do so. Indeed, the newly elected mayor of Leicester has announced that he is proposing to do just that.

In order to delete shadow mayors from the Bill, we will also support Amendments 69A to 69C, 73A, 74A, 75A, 77A, 77B, 79A, 81A and 84A to 84D, again in the names of my noble friends Lord True and Lord Howard of Rising. It is the Government’s view that these amendments best achieve the removal of these provisions while retaining provisions needed for an effective process for creating city mayors.

16:30

I recognise that there are a number of other amendments relating to shadow mayors and mayoral management arrangements. We will not support those as, given the above amendments, they would be unnecessary.

I am sure the Committee will understand that this decision has come about as a result of concerns that have been raised in the Commons and in discussion here at Second Reading. I am sure the Committee will welcome the Government’s decision in these matters.

[Lord Beecham]

My Lords, I thank the noble Baroness for her reply in general but, more particularly, for the last part of it. I think there was widespread support for the denouement to the protracted debate over many months about these two—if the noble Baroness will forgive me for saying it—rather absurd propositions, of which, I think in all fairness, Ministers were not necessarily the authors. There has been a remarkable story around whether the proposal for shadow mayors was on or off, with various statements being made by Ministers and then countermanded, but the final outcome will be warmly received. It augurs well, I trust, for the way in which debate on this Bill will be taken forward. We look forward to even more changes in the direction of good sense and local democracy.

[Lord Jenkin of Roding]

Without wishing to prolong the debate, I should like to endorse what the noble Lord, Lord Beecham, has said and to thank my noble friend for the swift acceptance of two of the substantial amendments to which I have put my name on the Marshalled List.

When I had the opportunity to discuss matters very briefly with the Minister’s right honourable friend the Secretary of State, he said that he thought that we were going to be able to reach accommodation on some of the points that had been made at Second Reading. My noble friend has done exactly that, and I express my gratitude.

[Lord Greaves]

My Lords, the Minister’s last two announcements are extremely welcome and I am quite prepared to trade my amendment for them. It is good news all round. As the noble Lord, Lord Jenkin, has just said, it bodes well for future debate.

It is only in the House of Lords that the noble Lord, Lord Beecham, or anyone else, would raise in evidence events that took place more than 100 years ago. While the short-term effects of Joe Chamberlain’s and the other Liberal Unionists’ defection was extremely damaging to the Liberal Party, the slightly longer-term result of it was that the Liberals gained their greatest ever victory in the 1906 election, in which Joe Chamberlain and his allies in the Conservative Party were roundly trounced. If we are looking for historical precedents, there is one.

[Lord Beecham]

Would the noble Lord care to recall what happened at the subsequent general elections?

[Lord Greaves]

The Liberal Government were returned to power with a smaller majority in both elections of 1910. That is a historical fact. Unfortunately, the First World War then intervened and caused all sorts of bother.

I thank everyone who has taken part in this useful debate, which has set the tone for a lot of the detailed discussion to come. The noble Lord, Lord Jenkin, quite rightly said that the details in the Bill will determine what happens if and when it is passed. The underlying values—or, as he called them, principles—of the Bill and the conflicting principles that many of us see within it will be a continuing theme as we debate the detail, and it is right that we should continue to relate the one to the other.

The noble Lord, Lord Beecham, hit the nail on the head and homed in on the most fundamental part of the amendment: the importance—I do not use the word “primacy”— within any local democratic system of democratically elected local government. We can argue about the structures and whether they are good or bad—about their size and the way they work and so on—but unless there is a presumption that decisions locally will be taken by those who are elected by and accountable to the people in general, the whole system risks becoming anarchic. As we go through the Bill, a recurring theme will be the extent to which what is proposed in it strengthens or undermines local government. That will be absolutely vital.

The noble Baroness, Lady Farrington, raised a fundamental question about what you do when people in a neighbourhood or a community, which are two different concepts—a neighbourhood is a place where people live and a community is the way in which people interact with each other, although they are sometimes, but not always, the same—rise up in a way that you might think is populist, unreasonable or hysterical but which is, nevertheless, in the noble Baroness’s words, ferocious. Those of us who have been around in local government and local campaigning for a long time have all known this and have all seen it. It is very difficult. Without the buttress of democratically elected local government there is no way in which such forces can be resisted unless there is an imposition by bureaucratic bodies from above, which, philosophically and fundamentally, is not the way to do it.

I remember a proposal a few years ago to open a residential home for people suffering from schizophrenia in a former Quaker meeting house. The reaction of the people living in a wide area around it was ferocious. It was a difficult situation but the councillors across the board stood firm, behaved in a reasonable way and gave permission for it. That home is still in operation and no one has a word to say against it. Councillors have to take decisions on the basis of reason and not on the basis of public reaction on every occasion.

This is very difficult just before an election. When we run a council we have a fundamental principle that in the three or four months before an election we never introduce a new traffic calming scheme. This is because everyone is in favour of a traffic calming scheme until it is put in and then everyone finds things wrong with it. However, you sort out the problems and a few months later everything is all right. Another thing you never do is change the arrangements for waste collection and recycling. You do all these things in the summer and well before elections come along. You sort out the problems in a sensible way and everyone then is, hopefully, fairly happy.

There has to be a certain amount of such manipulation, otherwise you cannot do things—at least, you cannot do things and get re-elected. Nevertheless, democratic government is fundamental to it all. We on the Liberal Democrat Benches believe that this is an ideological matter. That is not to say that it is not also a practical matter. The practicalities set out in the Bill relate to how you carry out matters in line with your underlying ideological principles. If it is not ideological, I do not know why it is called “Localism”. “Isms” tend to be ideological. I think “Localism” is a silly name for the Bill. Nevertheless it is the name it has been given. I was musing as to whether we would have a “Conservatism” Bill, or a “Liberalism” Bill, or perhaps a “Conservatism-Liberalism” Bill on the lines of Marxism-Leninism, which I never quite understood. I thought then that perhaps the Finance Bill each year should be called the Optimism Bill.

On that note, I thank all noble Lords for taking part in the debate and look forward to debating some of the more practical things that we will come on to. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Clause 1 : Local authority’s general power of competence

Amendment 2

Moved by

[Lord Greaves]

2: Clause 1, page 2, line 1, leave out “or elsewhere”

[Lord Greaves]

My Lords, this group might take us a little less time. In moving Amendment 2, I shall speak to Amendment 3, which is in the same group.

These amendments probe in what circumstances a local authority would use the general power to do anything outside the United Kingdom. I do not imagine that local authorities will be encouraged to carry out military adventures in new parts of the Middle East, or indeed anywhere else. What are those things outside the United Kingdom that local authorities cannot do at the moment and which they might want to do under the new general power?

Secondly, I want to probe in what circumstances an authority might want to do anything other than for the benefit of its own area or residents. Surely, local authorities are elected to serve and represent the interests of their own residents and to carry out services in their area. There are already means by which local authorities can do work for other local authorities, for example, and can carry out activities outside their area, but it is invariably with the consent of the local authorities in the areas outside their own area. What is it that the Government think that local authorities might do that they cannot do at the moment outside their area and not for the benefit of their residents? I do not know why residents would want to elect a local authority that spent a lot of its time and energies doing things for other people outside its own area. These are two basic questions. I beg to move.

[Lord Beecham]

Perhaps in the absence of any other contribution, I might make a suggestion to the noble Lord. I do not know whether my suggestion will appeal to the Minister, but there will be occasions when a local authority wants to do something, particularly overseas, which might be deemed to be outside its current powers. For example, it might want to do something in collaboration with authorities in the developing world; there might be relationships with a country or locality where help might be given with infrastructure or education. It might be that in a community or urban area there were people whose origins lay abroad, perhaps in the subcontinent or elsewhere, where there was some sort of disaster, and a local authority might wish to make a financial or other contribution.

I am frankly rather surprised that the noble Lord should take such a narrow view of these issues. We play a reasonably prominent role in the affairs of local government internationally—something that I have always personally eschewed, having neither the time nor inclination to travel to or from Strasbourg, Brussels or places further afield. But there are many in local government who do and who make a significant contribution to international co-operation, so I would have thought it was fairly obvious that it would be desirable to widen the possibilities here. Obviously, local councils in exercising any such powers remain answerable to local communities, and sometimes those communities would be among the first to press for action to be taken by the local authority or local government bodies as a whole. I myself, when I was involved in the Local Government Association, was keen to promote capacity-building in the Israeli-Arab municipal sector, for example. The association, through international local government bodies, has helped out in other places where there have been conflicts—Kosovo is a place in point. The noble Lord could be a little more ambitious in what he thinks local government might be able to do in cases that strike individual local authorities or groups of local authorities as ones where the expertise of local government and local communities in the UK might make a contribution. I hope that he will not press his amendment.

16:45

[Lord Greaves]

Does the noble Lord agree that everything that he has mentioned has taken place and is taking place, and therefore can be done under existing powers? What new projects or activities does he think ought to take place that would require the new general power of competence in these areas?

[Lord Beecham]

My Lords, I do not think that it is necessary for me to answer that. We are talking about a general power of competence; the less fettered it is, the better. It may be that individual actions have not been challenged, although at times of international disasters, when suggestions have been made that local authorities should contribute financially towards appeals that have gone out, that has been felt to be outside their powers. I am not suggesting that that would be a common practice but, if it is seen as a priority by a particular local authority, it should be open to that authority to do so.

[Baroness Hanham]

My Lords, I am tempted to thank the noble Lord on the opposition Benches for answering the question for me. The noble Lord, Lord Beecham, has put his finger absolutely on the button: there are many areas where local government can help overseas. In fact, going back to my own days in local government, I remember well that we gave enormous help to the setting up of local government in a place called Mbale in Uganda. We had exchanges between officers on my council and officers from Mbale. We taught them how to start and set up a rates system and a community charge system. So there is that, as well as the help abroad for people in emergencies. There are all sorts of areas where this power is necessary.

My friend opposite has done well to point out that there are times when this would be valuable, but also that what we are talking about is a general power of competence and, whether or not it was available under the well-being power, it is reiterated under this power to ensure that there is no mistake about it.

Amendment 2 attempts to limit unnecessarily the extent of the general power of competence by restricting the exercise of power to the United Kingdom only. Amendment 3 also attempts to limit unnecessarily the extent of the general power, by requiring that the authority be able to demonstrate that activity has directly benefited the authority, its area or persons resident. If you are benefiting someone or a country abroad with your help, I hope you would also be affecting your residents, who would be glad that you were doing so.

The effect of the amendments is to attempt to turn this into a well-being power. We need to give local authorities confidence in the powers available to them. Rather than grant a power to do specified things, the new power is drafted on the basis that local authorities will be able to do anything that an individual with full capacity can do. That is the general power of competence, and that is the way that it is drafted. We believe that this will give local authorities freedom to act in the interest of their local communities and to generate efficiencies and savings, the benefits of which will be passed on to those communities. I would not be willing to accept the amendment and I hope that the noble Lord will be happy to withdraw it.

[Baroness Hamwee]

My Lords, before my noble friend responds, perhaps I may ask the Minister about Amendment 3. I entirely understand that a local authority should be able to do something that is only indirectly for the benefit of its residents and I understand that the Government might want to make sure that a local authority is not open to a claim that what it is doing is not, even indirectly, for the benefit of its residents. Is that the sort of technical protection that lies behind these words? Surely what a local authority does should be at least indirectly for the benefit of its residents, even if there is disagreement as to whether something is for the benefit of its residents. In the minds of the people who are taking the decisions, that must be the case, must it not? Perhaps this is a technical protection, which I had not understood until the Minister spoke.

[Baroness Hanham]

My Lords, of course we expect councils to act in the best interests of the communities that they serve, but we do not believe that it is for the Government to dictate what that means. Local authorities are, as we know, accountable through the ballot box and the other provisions of this Bill, not to mention our system of administrative law, which requires the statutory powers for any public authority to be exercised reasonably, in good faith and for proper purposes only. I think that that covers the questions that my noble friend Lady Hamwee has asked and sets into context the provisions in the Bill.

[Lord Greaves]

My Lords, I am not sure that I understood that last exchange; I shall read Hansard carefully so that perhaps I will understand it. I am grateful to the Minister for her response and to the noble Lord, Lord Beecham, for assisting her. These were probing amendments—nothing more—and I shall read carefully what has been said. On that basis, I ask leave to withdraw Amendment 2.

Amendment 2 withdrawn.

Amendment 3 not moved.

Clause 1 agreed.

Amendment 4

Moved by

[Lord Greaves]

4: After Clause 1, insert the following new Clause—
“Objective of the general power
(1) A local authority shall exercise the power conferred by section 1 with the objective of achieving sustainable development.
(2) In this section “sustainable development” means development that meets the social, economic and environmental needs of the present without compromising the ability of future generations to meet their own needs including the application of the following principles—
(a) living within environmental limits,(b) ensuring a strong, healthy and just society,(c) achieving a sustainable economy,(d) promoting good governance, and(e) using sound science responsibly.”

[Lord Greaves]

My Lords, this is an important amendment on sustainable development. There is growing concern that this Government are sidelining sustainable development despite their welcome ambition to be the greenest Government ever. At the moment, there is considerable uncertainty out there as to how sustainable development will be achieved by central and local government and how their commitments and goals will be taken forward. Funding has been withdrawn from the Sustainable Development Commission, which was the watchdog and adviser to the Government on their sustainability goals. Without this body auditing government output across Whitehall, it may be difficult to highlight and address government decisions that do not support the achievement of sustainable development.

In February, Defra released Mainstreaming Sustainable Development—The Government’s Vision and What This Means in Practice. There are concerns that this seeks to redefine sustainable development by placing greater emphasis on the economic pillar, as in the document priority is given to stimulating economic growth and tackling the deficit, both of which are, obviously, important matters. Then in this year’s Budget and the subsequent policy initiatives, the Government made it clear that they are taking forward a pro-growth agenda to address the economic deficit. None of us will disagree that that is required, but we must continue to take urgent and effective action to achieve sustainable development, to reduce our impacts on the natural world and to make the transition to a green economy. Such action must be in all sectors, covering the whole Bill—that is the purpose of the amendment—including the planning system, but not just the planning system, to ensure a consistent and co-ordinated approach.

The delivery of local priorities within a localist agenda that involves local people on a far greater scale than at the moment must continue to be linked with the delivery of larger-than-local national and international priorities. Certain critical goals need a shared approach. Achieving sustainable development is one of them. In 1983, the World Commission on Environment and Development, convened by the UN, was created to address growing concern about the consequences of the accelerating deterioration of the human environment and natural resources across the globe. The outcome of the work, the Brundtland report, Our Common Future, was published in 1987 and provided us with the well known international definition of “sustainable development”. Importantly, the report launched a comprehensive gateway to sustainability which included social, economic, political, institutional and environmental criteria. It established important broad principles which, to this day, have influenced environmental laws and planning in a wide range of countries, including this one.

In this country, in 2005, we adopted the sustainable development strategy, Securing the future. This strategy established the twin goals of living within environmental limits and providing a just society by means of a sustainable economy, good governance and sound science. These five guiding principles of sustainable development are repeated in the amendment. They are intended to underpin all policy and legislation and act as a lens through which all new proposals are viewed.

My fundamental question is whether this is still the view of the present Government. Do the Government accept that this view of sustainable development underpins all their work, not just planning activities? Does sustainable development underpin everything in the Bill? Do the Government still hold to the Brundtland definition and, if not, what is their definition now? Do the Government still accept that sustainable development is a means of balancing economic, social and environmental needs equally and bringing them together? Or is there now to be a presumption for development which is economically sustainable, even if not socially or environmentally sustainable—or less socially and environmentally sustainable than economically sustainable?

That fundamental question lies behind a great deal of current government legislation and activity. The coalition Government have been working on a presumption in favour of sustainable development to be included in the national planning policy framework, the NPPF. A draft of the presumption was released last Wednesday by the Department for Communities and Local Government. There are widespread concerns that the definition of “sustainable development” used for this purpose is significantly different from the Brundtland definition and gives the economy proportionately greater weight than the environmental or social aspects.

This is also a probing amendment. I hope that the Minister will be able to give me satisfactory answers. The more satisfactory they are, the more progress we will make on the Bill. This fundamental matter arises in a number of parts of the Bill, particularly in Part 4, “Community Empowerment”, Part 5, “Planning” and Part 6, “Housing”. I look forward to the Minister’s reply.

[The Lord Bishop of Exeter]

My Lords, I welcome this amendment with its intention to remedy what is at least a perceived gap at the Bill’s heart. Without it, or something like it—it may need a bit more work—the Bill does not yet contain an adequate definition of “sustainable development”. In fact, almost no definition of the concept is given in the Bill at all.

In Clause 95 there is a requirement for local authorities responsible for planning—district, county, unitary authorities and others—to co-operate in relation to planning for sustainable development, but little clear indication is given as to what this co-operation will entail or what it will achieve in practice. The notes to the Bill indicate that local planning authorities will also be expected to consider whether to prepare joint local development documents, but again such development is not defined.

As so much of the Bill is about planning, empowerment of local communities and new building, it is perhaps unwise to proceed without an associated statutory description of what sustainability means, particularly in these contexts. The noble Lord, Lord Greaves, has already referred to the most widely accepted and used definition of sustainable development—the Brundtland commission’s statement. That definition is still worth quoting. It says that sustainable development is development which,

“meets the needs of the present without compromising the ability of future generations to meet their own needs”.

It contains within it two key concepts—the concept of needs, particularly the essential needs of the world’s poor, to which overriding priority should be given, and the idea of limitations imposed by the state of technology and social organisations on the environment’s ability to meet present and future needs. This definition of sustainable development has as much to do with spirituality and culture as with the environment and economy—the two categories already mentioned.

A sustainable community has to be one that offers both a positive present and a positive future for all people—economically, environmentally, socially, spiritually and culturally. It is responsible to the needs of all and exercises careful stewardship of a community’s environment and its soul. In short, I suggest that true sustainable development is about sustaining the common good.

In an earlier debate on Clause 1, the noble Lord, Lord Greaves, spoke of the distinction between a neighbourhood and a community, between where people live and how people interact and behave. I suggest that true sustainable development has to do with both. If this Localism Bill is to have real value, it must also have the ability to ask not only who gains but also who may be excluded from the benefit of the ideas and proposals which it contains. Without some coherent definition of sustainable development at its heart, I fear that this may not be so.

17:00

[Lord Taylor of Goss Moor]

My Lords, this is an extremely important amendment. Although my noble friend proposes it as a probing amendment, I hope Ministers may come to recognise that incorporating a clear and balanced definition of sustainable development in the Bill is fundamental to the workings of a Bill that is predicated on sustainable development. It is important to set out this definition in statute and not simply in the proposed national planning policy framework.

I declare my interests in this area: I chair the strategic partnership that is delivering an eco-community in Cornwall, which is all about these issues; I chair the National Housing Federation, which takes an interest in these issues; and I chair in a voluntary capacity the Rural Coalition, which brings together some 14 national bodies with a particular interest in the sustainable development of rural communities, including Britain’s major planning bodies and organisations such as CPRE and CLA. All these bodies have expressed concern about the absence of a proper and balanced definition.

I have taken an interest in this issue for more than 20 years, but did so most particularly when I was asked by the previous Government to carry out a review of rural planning on a non-partisan basis in relation to economic development and housing—the Living Working Countryside report. The first chapter concentrated on the way in which the term “sustainable development” can lead to perverse consequences when people do not use a balanced definition. Too often, developments have been refused because sustainability is seen in purely environmental terms, not in terms of the sustainability of communities and the rural economy. Exactly the same criticism could be made the other way around, if sustainability is seen too often simply in terms of economic development. I share the concerns expressed about the proposed definition.

This issue is not without consequences. It directly filters down to the way in which decisions that profoundly affect the sustainability of communities are taken at the local level. In the review, I said something else that is important here. The sustainability of communities, when we are looking at how they develop, is not about a judgment on whether that community is sustainable, because one might argue that many communities, if started from scratch, would not be created in the form that they are. The question is always: does change contribute to enhancing the economic, social and environmental sustainability of that community, or does it detract from it? It is a moving target and we should not seek perfection before we allow change. It is perfection that we are striving towards—not that we can achieve it at any given moment.

For all these reasons, it is fundamental that Parliament is clear about what we mean by a presumption in favour of sustainable development, and we cannot have that clarity if we do not set out in statute a proper definition of it. The meaning that we may each take may be different. One reason that I rise to speak is that, the more we put on the record what we mean by these issues, the more likely it is that we will get the right consequences. I simply do not believe that we should empower something so fundamental if it is simply part of the planning guidance, rather than the statute itself, and is easily amendable.

It is fundamentally obvious that if we believe that this sustainable development is important to the legislation, if we believe that it is an important principle in how this country should go forward, and if we believe that it is important to how we develop communities, we should at least be clear about what we mean by it. Having been involved in these debates for 20-odd years, I learnt long ago that if one talks simply about sustainable development, a large part of the audience is unlikely to know what you are talking about at all, and the rest of the audience thinks it knows what you are talking about, but if you do not explain it, you are liable to find out that everyone has a completely different idea of it, depending on their particular vested interest.

I regard it as something of an achievement of the Rural Coalition that we bring together such a diverse range of views, which is perhaps best epitomised by the involvement of the CPRE on the one hand and the CLA on the other. We have always agreed that getting the balance right is fundamental, and that it should be set out at this stage in the legislation. While this may be a probing amendment, I hope that we will get from the Minister a commitment to bring something into statute and agree that the definition should be balanced and forward looking about what we can achieve, not simply an assessment of the status quo.

[Lord Lawson of Blaby]

My Lords, this has been an instructive exchange, so far. No one has been able to define sustainable development and, indeed, the Bill does not define it. There is a simple reason for that, because the term “sustainable development” is totally meaningless. It is one of those cant expressions that grew up with the Brundtland report—perhaps a bit earlier; but that report referred to it—and is meant to feel good, but has absolutely no meaning whatever.

The right reverend Prelate attempted to define sustainable development as the type of development that he approves of. He is perfectly entitled to approve of some forms of development more than others, but that is not the sort of thing that you can put in a Bill, and quite rightly so. We live in a developed economy that has been developing for at least 1,000 years. That seems to be pretty sustainable to me. I cannot think what is unsustainable about it. It has also, importantly, led to a considerable rise in living standards among a greatly increased population.

Look at the developing world: that is what they want to do, too. They have great poverty and they want the sort of development that we have had in the developed countries. They say, “Now we are going to do that”. The idea that there is something unsustainable about it is proven to be false by the fact that it has been going on for 1,000 years or more—much more, in fact. The idea that sustainable development has any meaning whatever is clearly nonsense. It is a great pity that the Government put the phrase in the Bill. If they had not, we would not have this ridiculous debate. At least, I commend them on not attempting to define something which has no meaning whatever.

[Lord Newton of Braintree]

My Lords, before I say anything else, I should probably declare an interest, which I hope that I do not have to declare every time, which is that my wife is a former chairman of Braintree District Council and currently the cabinet member for planning and strategy. I hasten to add that, on this subject, we have not considered our views together, and I am not expressing her opinions—as I do on everything else, of course.

This is an unusual occasion for me. I do not usually find myself tempted to my feet by my noble friend, who is historically rather more robust than I am. I am normally seen as being on the softer side of the party. I have every sympathy what he just said. I will not elaborate, therefore, but I add a second heretical view, which is that, from what I have heard so far today—and I have reservations about parts of the Bill—we are in danger with all these definitional clauses of creating a pure lawyers’ paradise in which every decision is capable of endless judicial review to determine what these meaningless words mean. I do not encourage that.

[Lord True]

My Lords, I declare an interest as the leader of a local authority in London. I also thank my noble friend for her earlier comments on shadow mayors, which were extremely welcome. I do not want to come between my noble friends Lord Greaves and Lord Lawson, but I express concern about the way in which the amendment, with its merits or otherwise, is framed. Here, I follow the remarks of my noble friend Lord Newton of Braintree.

The amendment as framed, which requires a local authority to exercise the power, is applied to the core general power of competence at the start of the Bill. That means that everything done by any local authority under the Bill may be subjected to the tests. Many of the tests are desirable—I certainly do not go as far as my noble friend Lord Lawson in his comments on sustainable development, which is in principle an admirable objective—but I fear that, if the amendment is applied to the Bill in general terms, the willingness to use the general power of competence may be tainted by fear of legal action. The fundamental point that I hope that we will pursue is, as I said at Second Reading, that we should do nothing to limit the power of general competence or to discourage local authorities from employing it.

It is a worthy try by my noble friend Lord Greaves, but I hope that if he wants to return to this important principle, it should not, for the reasons expressed by my noble friend Lord Newton, be applied to this part of the Bill.

17:15

[Lord Lucas]

My Lords, I enjoyed what my noble friend Lord Taylor of Goss Moor said, and I would like to hear more about that, but I hope that we do not embark on a definition in the Bill for something that, in all practical terms, will be impossible to define in practice. Not only will it have the effect described by my noble friend Lord True, but for neighbourhood plans, anything of this sort will make any power that the neighbourhood has completely nugatory because it will always be open to attack by someone who has their own definition and own ways of looking at sustainable development in any particular circumstance. We have an example in east Hampshire where a decision has been taken that sustainable development means that there should be no new development of any sort in the countryside. In other words, to fit in with that strategic objective, there can be no neighbourhood plans because there can be no development. That is all based on sustainable development.

[Lord Taylor of Goss Moor]

If I may say so, that is precisely why, if we are to have a Bill that makes the definition of sustainable development the whole basis of our planning system, we should say what we mean. It was precisely the issue mentioned by the noble Lord that led me to start my report by saying that we need to ensure that our approach to sustainable development is properly defined as a balance between economic and social environmental interests, is forward looking and is not an assessment of the countryside as unsustainable.

[Lord Lucas]

I therefore think that this is a very important thing to get right. I shall listen to the Minister with great interest. If we get it wrong, it has the potential to destroy a very important part of the Bill.

[Lord Tope]

My Lords, in moving the amendment, to which I have added my name, my noble friend made it clear that it is a probing amendment. It might therefore be that the Minister is not about to accept it. If that proves to be the case, I am conscious that the Minister has received considerable advice from behind her that she should not attempt to define sustainable development now or at any time in the future. Therefore, perhaps she could confirm that the Government intend, in the not very distant future, to publish their definition of sustainable development, a definition that will subsequently appear in the national planning policy framework document. If she can confirm that, can she also confirm that it will at least reflect the balanced approach that the amendment seeks to achieve?

[Lord McKenzie of Luton]

My Lords, we should congratulate the noble Lord, Lord Greaves, on giving us an early opportunity, during the course of the Bill, to debate this very important issue. We agree that it is important to enshrine, at an appropriate point in the Bill, a definition of sustainable development and the principles that he has outlined in the amendment. We agree with the definition and with the principles that he has set out. I anticipated that we would have this debate a little later when we got to Part 5 of the Bill, but important points have been made about this not being just about narrow planning; there is a broader dimension to it.

I agree with what the noble Lord said in moving the amendment. There are concerns about sustainable development being sidelined by the Government. He referenced the Budget pronouncements. Clause 124 could be a change in the balance of the assessment of sustainable development, and we have a lack of clarity over the NPPF; indeed, the advisory group’s draft has moved us some way away from what the previous Government had accepted and which I thought was generally accepted as sustainable development.

With some hesitation, I disagree with the noble Lord, Lord Lawson, that sustainable development is a meaningless concept. The fact that we may have had 1,000 years of growth generally in the economy and growing prosperity is fine, but are there not judgments to be made along the way about what that has done to the environment? Certainly in latter years, has not that growth often been achieved by recognising that you have to balance the impact, for example on the environment? I do not believe that it is a meaningless concept.

I agree with the point made by the noble Lord, Lord True, about the framing of the amendment, and I shall come on to that in a moment. There is a real risk that you create a lawyers' paradise. One of the assessments of well-being powers, and why they were not better used, was that lawyers, who were very cautious, got involved and that that precluded the use of the power more extensively than was anticipated at the time. I therefore very much agree with the right reverend Prelate the Bishop of Exeter in his approach to sustainable development, and with the noble Lord, Lord Taylor of Goss Moor. I disagree with the noble Lord, Lord Lawson.

When thinking about the Opposition’s response to this amendment, I considered how it sits with the local authority’s duty to prepare community strategies. That is set down in the Local Government Act 2000. There has hitherto been a requirement to prepare community strategies for improving economic, social and environmental well-being and contributing to the achievement of sustainable development in the UK. I asked the DCLG whether that obligation still exists. It does, but perhaps the Minister will confirm the Government’s intention to repeal the duty to prepare a sustainable community strategy. Instead, the Government have set down light-touch, best-value statutory guidance, on which they are consulting. The consultation document is extremely interesting, and shows about four pages of rubric on one page of a draft definition of “best value statutory guidance”. Only one sentence potentially touches on sustainability. It states:

“Under the duty of best value, therefore, authorities should consider overall value, including environmental and social value, when reviewing service provision”—

in place of the existing obligation to have sustainable community strategies.

The noble Lord, Lord Greaves, said that he wanted something that ran throughout the Bill, but I do not believe his drafting achieves that. Specifically, it states:

“A local authority shall exercise the power conferred by section 1”,

which is the general power. Again, analysis of the well-being power showed that it was not used in preference to statutory powers that local authorities may have. If we saw that replicated with the general power, in a sense what the noble Lord is seeking to achieve here would not capture that.

I understand that this is a probing amendment, and we support its thrust. We certainly want to see those definitions in the Bill and are happy to work with the noble Lord to achieve some refinement to the approach set down in his amendment.

[Baroness Hanham]

My Lords, I understand that this is a probing amendment and I thank all noble Lords who have taken part in this short debate. The Government are not unsympathetic to the attempt to describe “sustainable development”. In fact, they have already done so on two occasions. They support the Brundtland definition, and their statement on maintaining sustainable development, published in February this year, includes a commitment to embed these principles across government policy. Therefore, it is not only in this Bill that the sustainable development is likely to come about.

We accept that there is a strong relationship between the Government’s approach and the ambitions of this Bill. However, whether we can spell it out in a way that is acceptable on four fronts is probably more difficult. It would put it on to a statutory framework that is a lawyers’ paradise. The expectation and understanding is that local people will be best placed to understand what is right for sustainable development locally, and noble Lords may have become aware of the definitions that have appeared in the consultation on presumption in favour of sustainable development that has just been published.

On the planning system, we believe that there is a presumption in favour of sustainable development at the heart of the new planning system. We will look to local planning authorities to prepare local plans on the basis of objectively assessed development needs and with sufficient flexibility to respond to rapid shifts of economic change. They should approve without delay development proposals that accord with statutory plans—noble Lords opposite mentioned that—and should grant permission where the plan is absent, silent or indeterminate, or where relevant policies are out of date.

That issue is one of planning. Noble Lords also referred to the generality. February’s Statement made clear the Government's view that there are three pillars—the economy, society and the environment—which are interconnected. We recognise that long-term economic growth relies on protecting and enhancing the environmental resources that underpin it, and on paying regard to social needs. Those are the principles of sustainable development that we need to take forward.

I will resist, at least for the moment, having a definition such as that put forward by the noble Lords, Lord Greaves and Lord Tope. If there was ever going to be a definition, we would need to be very clear and sure that it would be legally unchallengeable, because definitions never define the whole process and all the opportunities; sometimes they are restricting rather than helpful. Some of my noble friends behind me may be slightly sad about this. I say to them that in general the Government have some sympathy with sustainable development. As I have indicated, they have already made commitments on the subject. However, I regret to say to the noble Lord, Lord Greaves, that his proposed new clause would not be helpful at this stage.

[Lord Taylor of Goss Moor]

My Lords, I will speak briefly. I welcome two aspects of what the Minister said. The first is her reiteration of the Government’s support for the principles of sustainable development, which is important. The second is the fact—I have listened carefully and will read Hansard later—that she did not rule out setting out these principles in the Bill. We will have to see whether we can convince the Government to do it. Their open-mindedness at this point is very welcome.

I say to those who think that a thousand years of economic development prove that we do not need sustainable development that in that time some civilisations collapsed as a result of the overuse of their resources; I refer to central America, the desertification of the north African coast and, in my own area of Cornwall, the disappearance of the herring trade. Today we see more profound impacts on the environment, such as the destruction of the rainforests, and we should not sit content in this country and assume, just because until now we have survived quite well when others have not, that we have greater wisdom than civilisations that collapsed before us.

[Lord Greaves]

My Lords, again I am grateful to all noble Lords who took part in this debate, which has been slightly enlightening and has taken us forward a little. I am particularly grateful to the right reverend Prelate the Bishop of Exeter and to my noble friend Lord Taylor of Goss Moor for their strong support. As I listened to my noble friend just now, I thought that the greatest economic growth in this country during the past few hundred years was the Industrial Revolution, and how much better that revolution would have been—surely it would not have been stymied in any serious way—if environmental considerations had played a much greater part in development during that period instead of the massive attacks on the physical environment: the quality of air and all the rest of it. It has cost an enormous amount of money to clean it up since. It is not just economic growth, is it? It is the way you do it; it is regulation in ways that protect the environment and finding ways in which economic growth can be environmentally beneficial.

17:30

I am afraid that I disagree fundamentally with the noble Lord, Lord Lawson of Blaby. He said that the phrase “sustainable development” is meaningless. I have some sympathy with that part of his argument because I have said that in many ways from the Benches in the other corner of the Chamber on almost every Bill affecting the environment since I came into this House. People have continually been willing to use the phrase “sustainable development” without pinning down what it means. I do not believe that pinning it down would result in a legal nightmare; I think it would result in clarity. Both the previous Government and this Government have been moving towards a much clearer definition of what it means, and that is to be welcomed. I very much welcome the sympathy—perhaps I will get some tea as well, I do not know—which this amendment elicited from the Minister on this occasion. The problem with it is very simple; the Government are now saying on every occasion that there will be a presumption in favour of sustainable development, and it is not possible to keep on saying that without having a fairly clear idea—you can keep on saying it, but it is not sensible—of what it means.

My noble friend Lord Lucas said that he fears that any definition would result in interminable legislation. As my noble friend Lord Taylor said, if there is no definition, that is when interminable legislation is likely. The noble Lord, Lord True, noted that the amendment applies to the core of the Bill, not just to the planning part. That was absolutely deliberate. I understand his point, but it was deliberate because we believe that sustainable development affects far more than simply the functions of local authorities and other bodies in planning.

I do not think I have anything else to say on this. I accept the Minister’s sympathy. I will glow in that sympathy for a short while, and on that basis I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Schedule 1 : General power of competence: consequential amendments

Amendment 5

Moved by

[Lord Greaves]

5: Schedule 1, page 188, line 10, leave out paragraphs 2 to 4

[Lord Greaves]

My Lords, Amendment 5 is grouped with an amendment from the noble Lord, Lord Wigley. I do not normally take the lead on matters Welsh in your Lordships' House, but there seem to me to be two important issues here. One is the matter in Schedule 1 —why local authorities in Wales are to be deprived of what we are told is going to be a wonderful thing: namely, the new general power of competence. I understand it is because the Welsh Assembly Government have said that they do not want it, but it is often the case in legislation that even if Wales and the Welsh Government do not want to make use of legislation in the short run, they are given a permissive power to adopt later, if they decide to do so, powers that are going to be introduced in England. There are a number of matters in the Bill for which that could be the case, and my question is simply: why is that not being done in this case?

However, there is a more fundamental thing. We often get Bills in which we get tangled up with devolution matters halfway through and have to try to untangle them at that stage. The basic reason for putting down this amendment was to ask the Government whether at this very early stage of the Bill they can make a clear statement on devolution and Wales to explain the basis on which Wales is included, and in many cases not included, in this legislation and how the Bill works in relation to Wales and devolved matters. I beg to move.

[Lord Wigley]

My Lords, Amendment 18 stands in my name and is grouped with Amendment 5. Before getting into my own comments, I warm to the latter comments by the noble Lord, Lord Greaves, in proposing Amendment 5, about the very complex model of devolution that we now have for Wales. Scotland has a fairly clear-cut model for which something is devolved or not devolved. In Wales, there are bits of Acts here, there and everywhere that are a nightmare for those who need to interpret them. It is something that the Government might like to look at at some stage in the interests of everyone and of getting some symmetry in the relationships that we have within these islands.

At Second Reading, I said that I would ask questions in Committee on the applicability of Clauses 1 to 8 to Wales. Your Lordships will be aware that local government in Wales is wholly devolved. That was established by the Local Government (Wales) Act 1994, when we were still under the Welsh Office. With the establishment of the National Assembly in 1999, responsibility moved from the Secretary of State to the Assembly. Following the referendum this March, full legislative competence came to the Assembly over these matters. I realise that that was after the Localism Bill had started its passage in another place, and I understand that some adjustments have been made to take that on board.

Amendment 18 is therefore very much a probing amendment. The Explanatory Notes with which we are provided state that Clauses 1 to 8 are relevant to England only. I realise that the notes do not have status in law, but they are none the less important for us in debate and therefore one takes notice of them. Yet Clause 5(8) refers to the effects of these clauses upon Wales. Clause 5(2) provides that:

“the Secretary of State may by order amend, repeal, revoke or disapply”,

statutory provisions if he thinks this may prevent local authorities exercising their general powers of competence in England. If these powers apply to England and Wales, quite serious questions arise about the implications for local government in Wales, and that runs through other parts of this Bill. As Clause 5(8) refers to,

“an order … that has effect in relation to Wales”—

those are the words in the Bill—clearly this is a possibility. Will the Minister give us some indication of the circumstances in which this could apply to Wales—some examples, perhaps, or some issues—and how often it is anticipated that these powers might impact on Wales?

Clause 5(8) also states that the Secretary of State must consult Welsh Ministers before using such powers in a way that impacts on Wales, so I shall press a little more on the meaning of consulting. If consulting allows the UK Minister to agree or disagree with his Welsh counterparts, if he agrees and carries on regardless, does that not undermine the devolution of local government issues to Wales as provided in legislation and as was assumed in the referendum that we have just had? I suggest that if there was provision for requiring a legislative competence Motion to be passed in the Assembly on each such order brought forward by the UK Minister indicating the Assembly’s consent to that, it would at the very least safeguard the devolved powers from being eroded by being overridden from Westminster. Otherwise, what measures do the Government intend to put in place to deal with any such disagreement? This is meant to be a helpful amendment to ensure that the power over local government in Wales is not clawed back to Westminster, and that clarity will be provided for those who have to live with its consequences.

I will briefly address Amendment 5, which was moved by the noble Lord, Lord Greaves, and is also in the name of the noble Lord, Lord Roberts of Llandudno. As things stand, by virtue of Schedule 1, as I interpret it, local government in Wales will continue to retain the power for the promotion of well-being, as laid out in the Local Government Act 2000, even though local authorities in England will be subject to changes under this Bill. Amendment 5 appears to have the effect that changes to local government in England will also apply to local authorities in Wales, but under paragraph 12 of Schedule 7 to the Government of Wales Act 2006 this cannot be done without a legislative competence Motion in the Assembly. The referendum in March confirmed the Assembly’s legislative competence in these matters. Is it the intention, therefore, of the noble Lords, Lord Greaves and Lord Roberts, to re-reserve these powers to Westminster? I would be glad to have the Minister’s comments on this, and indeed on both amendments.

[Baroness Hanham]

My Lords, I hope I will be able to reassure the noble Lord, Lord Wigley. I am so sorry—

[Lord Beecham]

My Lords, a few years ago I had the pleasure and privilege of chairing a review into local public services in Wales. I visited Caernarfon and, after a meeting with the leader of the council and officers of that borough, I sauntered through the streets of Caernarfon. It was an unnerving experience because everyone was, perfectly naturally in that part of Wales, speaking Welsh and I could not understand a word of it. I am bound to say that I have rather the same sensation having heard the noble Lords, Lord Greaves and Lord Wigley, this afternoon. I do not pretend to understand all that they have asked.

I confine myself to one question to the Minister, but perhaps also to your Lordships who have moved and spoken to these amendments: has the Welsh Local Government Association been asked to give a view on these matters? That would have been sensible. I confess to not having done so myself, so I am not in a position to criticise others who may not have. However, it would seem important, at least by the time we get to Report, to have inquired whether the Bill is acceptable to the Welsh Local Government Association or whether it would prefer the amendments moved.

[Lord Wigley]

In fact, the Welsh Local Government Association is very exercised about having clarity in this Bill. There is a lack of clarity and it would welcome some clarity on the points that have been raised.

[Baroness Hanham]

I apologise to the noble Lord opposite for trying to cut him out on the way.

As I was saying before the noble Lord rightly interrupted me, I hope that we will be able to reassure the noble Lord, Lord Wigley. The Government have been asked to amend the Local Government Act 2000 to enable Welsh Ministers to make orders under this particular power rather than them having to ask English Ministers to do so as at present. We are considering that and I hope that I will be able to give the noble Lord a final response on that later.

It might be helpful if I quickly went through how this Bill applies to Wales. I also confirm that we have been in regular contact with the Welsh Assembly Government about the application of the provisions of the Localism Bill to Wales. The devolution extent of provisions in the Bill is set out in the Explanatory Notes, and where provisions do not apply to Wales this reflects the wishes of the Welsh Ministers about whom we have talked.

The following provisions apply to Wales: providing fire and rescue authorities with additional powers— that was by amendment on Commons Report; predetermination; pay accountability; abolishing the duty to promote democracy; repealing the petitions duty; business rate supplement ballots; the discretionary power for local authorities to grant business rate discounts; assets of community value; the community infrastructure levy; major infrastructure projects—the abolition of the IPC; housing reform, particularly homelessness; repairing obligations in leases of seven years or more; the abolition of HIPs; and the abolition of the standards board provisions applied to police authorities in Wales.

17:45

There have been two legislative consent Motions in relation to the Localism Bill. First, for provisions relating to local government pay accountability, to the abolition of the duty to promote local democracy, and to the abolition of petitions duties and homelessness duties, a legislative consent Motion was debated and agreed in the Assembly on 8 February. The noble Lord, Lord Wigley, nods his head, so that is clearly right. Secondly, for government amendments relating to the general and charging powers of fire and rescue authorities in Wales and to assets of community value, a further legislative consent Motion was debated and agreed in the Assembly on 14 June.

We are not changing how the well-being power works in Wales. It will continue to act as it always has, and Welsh Ministers will continue to submit proposals to the Secretary of State where they encounter barriers to the exercise of that well-being power. Welsh Ministers were offered the opportunity to have the general power of competence but they decided against it.

The noble Lord, Lord Wigley, spoke to Amendment 18. Although the general power of competence does not apply to Welsh local authorities, in theory it might be possible for Clause 5(1), the barrier-buster power, to be used to amend the law in Wales as it applies to English local authorities. In effect, therefore, the general power of competence can be adopted in future if that is what Wales wants. Although, as I said, the circumstances in which this might happen are considered to be very limited indeed, the requirement to consult Welsh Ministers was introduced to address possible concerns that might arise later about the scope of the power. Once again, that has been agreed with the Welsh Ministers. The amendment seeks to make the condition more onerous by requiring the consent of the Assembly.

[Lord Wigley]

I am very grateful to the noble Baroness. If this is just an in-case provision—in case a change in future required this to be exercised—and given the emphasis that she has rightly put on having agreement from Assembly Ministers, what would the circumstances be if, having consulted, there was a disagreement?

[Baroness Hanham]

I will have to take advice about that because I was not expecting that question. I will write to the noble Lord and not hazard a guess because we might end up offending each other. If I may, I will make sure that he gets an answer to that specific question.

With that explanation, I hope the noble Lord, Lord Wigley, will feel able to withdraw his amendment. I think the noble Lord, Lord Greaves, was very much heading to get the sort of answers that I have now given, so I hope he will feel able to withdraw his amendment on the basis that I have given sufficient information.

[Lord Greaves]

My Lords, I am grateful to the Minister for that. I will read it carefully, and I will take advice from people in our group who are more Welsh than I am and see whether they agree with it too. On first hearing, it does sound a fairly straightforward explanation of where we stand in the Bill, which was the purpose of putting down the amendment.

The noble Lord, Lord Wigley, asked me whether I wanted to re-reserve powers. I do not, in any circumstances —this was merely a useful peg to pin a couple of questions on, which have been answered fairly satisfactorily.

The only question that comes to mind listening to the Minister, which she may not be able to answer, is how widely the Welsh Ministers consulted local authorities in Wales on whether they wanted the general power of competence. She may not have that information, but it is an open question that someone might have the answer to.

The noble Lord, Lord Wigley, suggested that the devolution settlement in Scotland was simple. It may be more straightforward than in Wales, but one of the last big Bills in which I was involved was the Marine and Coastal Access Bill in the previous Parliament. The whole relationship with Scotland was an absolute nightmare. It was all down to the details of the way in which the devolution settlement for Scotland affected a whole series of matters in that Bill. However, Scotland is not much affected by this Bill, and perhaps we should be grateful for that.

The Minister’s first remarks on the way in which the Government are thinking about releasing some of the controls on Wales were welcome. If that comes about, I think we would be very much in favour of it. On that basis, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Schedule 1 agreed.

Clause 2 : Boundaries of the general power

Amendment 6

Moved by

[Lord Tope]

6: Clause 2, page 2, line 13, leave out subsections (1) and (2)

[Lord Tope]

My Lords, I shall speak also to Amendments 7, 8 and 9. In common with the rest of local government, for many years we have pressed to have a general power of competence. I should make clear at the start that we are wholeheartedly in support of this, although I increasingly wonder exactly how much extra difference it will make. I nevertheless welcome it without reservation.

I have no intention of pressing these probing amendments to the vote but want to give the Government an opportunity to place on record a little more clearly the limitations being imposed on that general power; certainly I am not clear on them. Amendments 6 and 9 probe the nature of overlap and the boundaries imposed on the general power by pre-commencement and post-commencement limitations and, in particular, the intentions of the Government in relation to post-commencement limitations. Amendment 8 probes why local authorities should not be able to change their governance arrangements at least to a degree under the general power. These are questions to which we would really like some answers. If Parliament graciously is granting the general power, the fewer limitations the better. We wonder, as we will in later stages of the Bill, why it is necessary to say what local authorities may or may not do once they have that general power. With that, I look forward to hearing the clarification and expansion from the Minister, and I beg to move.

[Baroness Hanham]

My Lords, I thank my noble friend for his question. The general power is drafted on the basis that local authorities will be able to do anything that an individual might do, other than that which is specifically prohibited. In practice, this means that local authorities will be required to act in accordance with statutory limitations or restrictions. This is not surprising as we would not want local authorities to be completely outside the law.

Clause 2(2) sets out that limitations in legislation apply to the general power but draws a distinction between pre- and post-commencement limitations. Restrictions in post-commencement legislation will apply to the general power only where the drafting of the new legislation is clear that this is the policy intention. Amendment 6 would remove the requirement that local authorities exercising the new power act in accordance with any restrictions. Amendment 9 removes the definitions of post- and pre-commencement limitation from the clause.

Some restrictions on the activities of local authorities are obviously needed—for instance, a council should not have free rein to override the rights of others and these should be set out in the clearest terms—to ensure clarity for local authorities and avoid the uncertainty that has led to legal challenges to local authority powers in the past. That is what these subsections seek to achieve. We cannot require pre-existing limitations to expressly refer to the general power but, where these are found unnecessarily to restrict the general power, they can of course be removed following consultation. Amendment 7 would allow local authorities to decide their own governance arrangements and Amendment 8 will allow local authorities to use the general power to further contract out its functions.

We believe that it would be inappropriate that local authorities should be entirely free to change their governance arrangements. The Government set the overall governing structures of local authorities while still providing them with sufficient flexibility to decide on the most appropriate arrangement for their individual circumstances. This ensures democratic accountability and that transparent and workable arrangements are put in place. Arrangements for discharge of functions remain subject to existing legislation. Contracting out of functions will continue to be permitted in specific cases. The noble Lord asked specifically why local government should not be able just to make its own decisions about its governance. The answer is that the Government are right to be able to set the overall governing structures of each local authority.

[Baroness Hamwee]

I am puzzled by the answer about contracting out. Is not what is important that a local authority ensures that a particular service is delivered, rather than how it delivers it?

[Baroness Hanham]

My Lords, contracting out is clearly one of the ways in which a local authority can carry out its services but it will still be subject to the Deregulation and Contracting Out Act 1994. Those provisions are not being repealed, so they will continue to be part of the legislative control that will be maintained on the general power.

[Lord Tope]

I am grateful to the Minister for her reply, which I will read with great interest tomorrow. I am still a little puzzled about the restrictions on the governance, to which we will come at a later stage. If I understood the Minister correctly, she said that the Government felt that it was right to have some restrictions on what local authorities could do in their governance arrangements. I wish that I had the quote with me but I recall that, in the August edition of Total Politics, the Secretary of State said that he did not care what system of governance local councils have. He even said that they could have a choral system and sing sea shanties for all he cared, provided only that the system of government was efficient, transparent and accountable—three criteria to which every one of us would agree. Therefore, I am still a little puzzled as to why the Government feel that it is necessary to restrict a general power of competence in this area. Nevertheless, we will no doubt get to this in the later stages of this Bill. In the mean time, I beg leave to withdraw Amendment 6.

Amendment 6 withdrawn.

Amendments 7 to 9 not moved.

Clause 2 agreed.

Clause 3 : Limits on charging in exercise of general power

Amendment 10

Moved by

[Lord Tope]

10: Clause 3, page 3, line 13, leave out “, or could be done,”

[Lord Tope]

My Lords, Amendment 10 stands in my name and that of the noble Lord, Lord Greaves, as does Amendment 11 where our names are reversed but we are as one, as always. These probing amendments are simply to ask the Government to explain more fully—for instance, as regards Amendment 10—the meaning of “or could be done”, so that we can understand better what this overlap of power means and what power the local authority is using that is not the general power.

Amendment 11 causes me a little more concern, not least because among my responsibilities on my council is that for the provision of leisure services, and therefore I particularly want to understand a little better than I do at the moment what exactly the Government mean in suggesting that no local authority should ever make a year-on-year surplus. If some parts of our leisure services were not able to make a profit, that would have quite a serious effect on my local authority and, I suspect, on some others. Perhaps I do not fully understand the provision, so I look forward to an explanation from the Minister of exactly what is meant by it. I beg to move.

18:01

[Lord Beecham]

My Lords, I endorse the amendments and the questions that the noble Lord, Lord Tope, has asked because it is far from clear what the import of these provisions will be, particularly in relation to charging. Do the costs of provision allow for just the basic costs or would they include the cost of replacement, renewal, training and reinvestment? The definition in the Bill seems very narrow. Perhaps the Minister would agree to take it away and look at it. I do not think that there is a lot between us on this. We on this side are not seeking, and nor do I think is the noble Lord, to encourage a position where the provision of a service is translated into a commercial enterprise, but the boundaries are perhaps less obvious than they might first appear. I should have thought it would be possible to reach an accommodation that gives sufficient tolerance to allow a surplus to be reinvested into the service as opposed to something that might be distributed elsewhere.

[Baroness Hamwee]

My Lords, “the costs of provision”, the term used in Clause 3(3), could mean only the direct costs of provision or it might mean the indirect, back office costs and so on. Can the Minister help me on the exact import of the term? My second question concerns how this provision fits with Clause 4, which deals with doing things for a commercial purpose. Is there some sort of provision that falls short of doing things for a commercial purpose but which is outlawed by Clause 3(3)?

[Baroness Hanham]

My Lords, the answer to that will have to come in a note, I am afraid, because I am not clear about the relationship between the two. I will make sure that my noble friend has a reply to her questions so that she may return to the point on Report if she so wishes.

With regard to the provision of leisure services, which was the specific area raised by the noble Lord, Lord Tope, those services are subject to separate powers to charge, so they are unaffected by the general power by virtue of Clause 3(2)(c). In other words, these services once again come under previous legislation and therefore cannot be subject to this legislation. I think that this is going to be the answer that we will give to a number of these issues, where the general power of competence is restricted by previous legislation which is not being amended or annulled. I hope that that answers the question.

[Lord Tope]

My Lords, I am grateful to the Minister for her answer, but I am bound to say that I am not any wiser than before. I have used leisure services as an example since it happens to be one for which I am responsible, but perhaps it was the wrong example, which is one of the troubles with using examples. Frankly, I am no clearer about the meaning of this provision and what restrictions it would bring about.

I can see from my raised position that the noble Lord, Lord Beecham, wishes to speak.

[Lord Beecham]

Perhaps the noble Lord could offer the Minister the example of a meals on wheels service that an authority might provide instead of, say, leisure services.

[Lord Tope]

Indeed, I am happy to offer the Minister the example of a meals on wheels service, which has just come to mind as possibly a more appropriate example. I would be grateful if she could elucidate a little more because I see that I am not the only noble Lord in the Committee who has failed wholly to understand it. If it is not possible for her to do so today, I am sure that she will write to us, but if she is able to be a little clearer about what is covered rather than what is not covered by this provision, I would be grateful.

[Baroness Hanham]

My Lords, I will try to be a little more helpful. Part of the answer is that the Government believe that a local authority service should not make a surplus year on year. I think that that was one of the points raised earlier. By providing a power to charge for discretionary services, the Government’s aim is to encourage authorities to provide the sort of services that they would otherwise decide not to provide or improve at all because they cannot justify or afford providing them for free or improving them. I do not think that that actually answers the question, so I am going to write to the noble Lord before the next stage.

[Lord Greaves]

Before my noble friend responds, the crucial question that comes to mind is this: if the provision as it is in the Bill is passed, does it change the existing situation?

[Baroness Hanham]

The existing situation is that current legislation limits what can be done, and this continues to limit it. Under the general power, if it is not restricted by current legislation, then it is permissive.

[Lord Tope]

I am grateful to the Minister for her offer to write, which it is hoped will clarify the situation. I might suggest that if we are all struggling a bit with what is in the Bill, perhaps the drafting is not as clear as it should be, and that is something on which we shall all have to reflect. In the mean time, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Amendment 11 not moved.

Clause 3 agreed.

Clause 4 : Limits on doing things for commercial purpose in exercise of general power

Debate on whether Clause 4 should stand part of the Bill.

[Lord Jenkin of Roding]

I did not give notice of my intention to ask a question about Clause 4, but I have listened to the discussion on the previous group of amendments with some interest. Clause 4(1) gives me a certain amount of anxiety. The provision describes,

“power on a local authority to do things for a commercial purpose only if they are things which the authority may, in exercise of the general power, do otherwise than for a commercial purpose”.

Does that really just mean that if it is illegal to do it otherwise, they may not do it for a commercial purpose, or is there some inwardness here which perhaps I have not appreciated? It sounds almost tautologous. If a local authority cannot do something, presumably it cannot do it whether for a commercial purpose or otherwise, in which case why put it in the Bill? If there are differences or some distinction is being drawn here, I would be most grateful if my noble friend could explain it to me.

[Baroness Scott of Needham Market]

My Lords, I want to join this brief exchange because I am developing an increasing sense of Alice in Wonderland. It feels as though we are operating in two worlds: the old world in which local authorities were only allowed to do things that were in statute, and the new world in which they are free to do anything unless they are barred. It is beginning to feel, in the context of this debate and future debates, that there is a real problem about being caught in the middle where local authorities will be stopped from doing a lot of the things that previous legislation allowed them to do. I am sorry, but I find it difficult to express the point, but I am sure that noble Lords are beginning to get a sense of what I mean. The question of how significant the general power really is, if local authorities are continually hampered by previous legislation, will become very important. It is an issue to which we will keep coming back.

[Baroness Hanham]

My Lords, Clause 4(1) provides that an authority may,

“do things for a commercial purpose”;

that is, to trade under the general power, while subsection (2) provides that if an authority is doing something for a commercial purpose, it must be carried out “through a company”. If an authority wishes to trade, under subsection (1) it can do so, but if it wants to do something else for a commercial purpose, it must be carried out through a company. It is not trading, rather it is presumably providing a service of some sort, and that must be done through a company.

[Baroness Farrington of Ribbleton]

I, too, am slightly confused. I remember sitting in the Minister’s seat when we were discussing the Greater London Authority Bill—I can see smiles of remembrance in turning to the Box. When asked a direct question by the noble Baroness, Lady Hamwee, I remember seeing one person in the Box nod and another shake their head. I should like a little more clarity than that. Examples of trading would be interesting. If a parks department was selling surplus plants, would that be trading? It is that sort of thing that I would like to know in a written response from the Minister. I hope that she will accept, given my earlier example, that it is not a criticism of her reply.

[Baroness Hanham]

My Lords, I think that it would help everybody if I replied in writing.

Clause 4 agreed.

Clause 5 : Powers to make supplemental provision

Amendment 12

Moved by

[Lord Beecham]

12: Clause 5, page 4, line 10, leave out subsection (3)

[Lord Beecham]

My Lords, this is an important clause. It is almost a case of the Secretary of State giveth and the Secretary of State may take away, and there are some significant concerns about it.

The clause begins with what I think is intended to be a helpful provision, Clause 5(1), where if the Secretary of State thinks that a statutory provision may prevent or restrict an authority exercising the general power, he may by order amend, repeal, revoke or disapply it. Following debate in another place, some limitations on the exercise of that power under subsection (1) are set out in Clause 6. However, there remains real concern about much of the legislation that might be disapplied. That is certainly one key provision to which I will return.

There are problems also in other parts of the clause. Subsection (2) deals with the position where if the Secretary of State “thinks”—it is odd that that word is used in legislation, but so be it—that the general power is overlapped by another power then he may by order amend, repeal, revoke or disapply any statutory provision, whenever passed or made. In respect of that provision, the Delegated Powers Committee has expressed significant reservations. I refer to paragraph 17 of its report on this part of the Bill, which states:

“Where this power is exercised in the same instrument as the power in clause 5(1), the procedures applicable to orders under clause 5(1) apply. But where the power is exercised separately, the order is, despite being the exercise of a Henry VIII power, subject only to negative procedure”.

The committee was not persuaded by the memorandum that the case had been made for a departure from the normal presumption that the power should be subject to affirmative procedure. It did not think that it should be displaced and recommended that,

“orders under clause 5(2) which amend Acts should, where not combined with orders under clause 5(1), be subject to affirmative procedure”.

I would be grateful if the Minister could indicate whether the Government are prepared to accept that recommendation, or, if a conclusion on that has not been reached, whether she would in due course provide a view.

18:15

The next two subsections also provide very wide powers for the Secretary of State. Subsection (4) states that he may,

“by order provide for the exercise of the general power by local authorities to be subject to conditions, whether generally or in relation to doing anything specified, or of a description specified, in the order”.

In other words, the general power of competence may be qualified significantly simply by order. Subsection (3) states that the Secretary of State may prevent local authorities doing anything which is specified, or is of a description specified, in the order.

Those are two substantial qualifications. The Secretary of State can, effectively at a stroke, by order cut down the power of general competence, disapply it completely in relation to activities which he considers should not be carried out or make them subject to conditions. On that point the Delegated Powers Committee commented:

“We do not consider that this is justified. We recommend that orders under clause 5(3) amending earlier orders so as to extend the earlier order to other authorities should be subject to the affirmative procedure. This applies equally to orders under clause 5(4)”.

Again, I would ask the Minister to indicate the Government’s response—if she can, today—to the committee’s view.

Reverting to the dispensing power with which Clause 5(1) provides the Secretary of State and acknowledging that the Government sought to clarify the position in what is now Clause 6, I nevertheless point out, as does Amendment 14, that there are many Acts of Parliament which could under the Bill as it stands see their impact significantly diluted by a dispensation on authorities no longer to have to comply with duties that are imposed on them. I shall not, of course, read out the long list, but matters affected could include those relating to equalities—about which the Equality and Human Rights Commission has expressed clear views—the Chronically Sick and Disabled Persons Act, the Public Health Act, environmental legislation and much else besides. As indicated, all that would be required in terms of process for this dispensing power to be exercised would be an order, which your Lordships might think is not satisfactory in the context of the conflict that would then arise with the very principle of the power of general competence which, like the noble Lord, Lord Tope, I welcome. I share with him the qualification that one does not quite know how far it extends present powers, but it is nevertheless a welcome indication of the Government’s overall approach.

In addition to those significant reservations, there are questions arising under other amendments that I propose in relation to consultation. Amendment 15 suggests that all local authorities which may be affected by an order that might be contemplated under previous provisions should be consulted, not merely those which the Secretary of State may select. In addition, two further groups should be consulted: persons or organisations representing local government, including organisations representing members of staff of local authorities, who would clearly have an interest in this matter, as well as such other persons as the Secretary of State considers appropriate. These would be, I suggest, fairly straightforward matters, and I would hope that the Minister felt able to accept those suggestions.

In addition, Amendments 22 and 23 are based on, or certainly reflect, submissions made by a number of bodies, including the Equality and Diversity Forum. The amendments seek to insert some safeguards. Amendment 22 provides that,

“the policy objective intended to be secured by the provisions is necessary because it could not be satisfactorily secured other than by the provision proposed”.

So there would be a greater onus on the Secretary of State to satisfy that condition. Amendment 23 seeks to add that,

“the provision does not relate to any statutory measure having constitutional significance, including, but not limited to, the Human Rights Act 1998”.

Both proposals are made by the Equality and Diversity Forum, which represents a wide range of national and non-governmental organisations. In its briefing material it welcomes the Government’s proposals for the creation of the big society and the decentralisation of power, as it puts it, but states that it is very concerned about the far-reaching powers set out in Clause 5 that,

“permit the Minister by order to ‘amend, repeal, revoke or disapply’ any statutory provision that he thinks ‘prevents or restricts local authorities from exercising a general power’”.

In its view,

“such extensive powers could be used to revoke or repeal a number of important statutory provisions, such as the Public Sector Equality Duty created by the 2010 Equality Act, with minimal parliamentary scrutiny”.

It continues:

“This has to be seen in the context of the red tape challenge website which proposes the removal of the whole of the Equality Act 2010 on the basis that it is a ‘burden on business’”.

Perhaps when she replies the Minister will tell us how that consultation exercise is going and what the weight of demand is for change to the statutory requirements that have been, as it were, put up for review or possible abolition.

In welcoming new Clause 6, the Equality and Diversity Forum, as I say, finds that it does not go far enough.

Taking the Government at their word, one anticipates that they would wish to see the general power as unfettered as possible. These provisions in the Bill, unless amended, would leave too much power in the hands of the Secretary of State of the day effectively to curtail the general power of competence on the basis of little protection in the way of scrutiny by Parliament. At the very least, as the Delegated Powers Committee suggests, there should be an affirmative procedure for any order to be made. This ought to follow, as these amendments suggest, a proper and thorough consultation process before any disapplying orders are made and before conditions are laid down, let alone the hugely overriding provision in Clause 5(3) which would prevent local authorities doing anything described or specified in the order.

It is a wide-ranging power effectively to cripple the exercise of the power of general competence. I cannot believe that that is intended, but that is what the drafting suggests. Again, I hope that the Minister will take this away and enter into further discussions about this strange contradiction to the thrust of the part of the Bill we are now discussing.

[Lord Greaves]

My Lords, I have Amendments 16 and 17 in this group and, because of the usual vagaries of grouping, I have two amendments in the next group which are either identical or of identical import to Amendments 22 and 23 in this group: Amendment 22 is effectively the same as my Amendment 21 in the next group and Amendment 23 is effectively my Amendment 25 in the next group. I shall therefore speak to the two amendments in this group and not to those two of my amendments when we get to the next group.

Amendments 16 and 17 relate to the process of consultation. Amendment 16 seeks to add a further category to the three categories already in the Bill, which at Clause 5(7) states:

“Before making an order under subsection (1), (2), (3) or (4) the Secretary of State must consult—such local authorities … such representatives of local government, and … such other persons (if any), as the Secretary of State considers appropriate”.

I seek to add to that the words,

“such persons who are representative of interests substantially affected by the proposal”.

Clause 5(7) currently requires the Secretary of State to consult local authorities, representatives of local government and such other persons, if any, as he considers appropriate. Amendment 16 would require the Secretary of State to consult the additional category I have stated.

It is important that the Secretary of State should be required to consult with those who could potentially lose the benefit of statutory protection, whatever it may be, before the provision in question is repealed or amended. The amendment closely reflects the consultation requirements in Section 13(1)(a) of the Legislative and Regulatory Reform Act 2006, on which it is based, and also Clause 10(1)(b) of the Public Bodies Bill of blessed memory. In both cases the requirement to consult representatives of those substantially affected is additional to the duty to consult such other persons as the Secretary of State considers appropriate. My question is: why the change in this Bill compared with, particularly, the Legislative and Regulatory Reform Act 2006?

Amendment 17 seeks to remove the words “if any”. Those words appear to have been added to this Bill when compared with the existing legislation on which it is based. In the spirit that the Bill is too long already, I offer to take out two little words. More seriously, what difference in meaning is created by the addition of these words when compared with the existing legislation? That is the kind of question you get from people like me who are suspicious that any change is for a reason and not on a whim.

The noble Lord, Lord Beecham, referred to his Amendments 22 and 23; as I have said, my Amendments 21 and 25 are of identical meaning. The noble Lord referred to the red tape challenge. The Government seem to have a knack for totally unnecessary major public relations disasters. It is a good idea to remove red tape when it is not necessary, but the huge scale and breadth of the Acts of Parliament and regulations which are being churned out, month by month, on the different areas of the red tape challenge are a recipe for many people becoming concerned, jumping up and down and mounting campaigns which one hopes will be largely unnecessary when the final result comes out.

Having made that comment, I shall devote attention to the amendments. Amendment 21 to Clause 6(2) sets out a number of conditions that have to be met before the Secretary of State can make an order under Clause 5(1). Amendment 22, as moved by the noble Lord, Lord Beecham, would add a further condition—

18:30

[Baroness Hanham]

To be a little bit pedantic, I am perfectly happy to answer those questions, but I think we are on the seventh group of amendments, with Amendments 12 to 17 to Clause 5, and Amendments 22 and 23. The noble Lord has just referred to Amendments 20 and 21, which I think come in the next group. It may be more convenient if they could be considered there.

[Lord Greaves]

I apologise. I shall explain it all again, because there is a mess-up in the groupings and it is best to discuss the questions under the amendments tabled by the noble Lord, Lord Beecham, rather than under mine that come later. I keep referring to mine because my notes obviously refer to them.

[Lord Jenkin of Roding]

If my noble friend objected to the grouping and thought that the amendments should have been put together differently, he had plenty of opportunity over the weekend to put that to the Government Whips. As it is, surely to goodness he must debate those amendments in the group in which they are listed on the amendment paper—otherwise it becomes extremely confusing.

[Lord Greaves]

I agree entirely, except that I did make changes to the grouping. As a result of this, we are where we are. I attempted to make sense of it, but in the end it did not come out that way. Let me be absolutely clear: I am talking to the two amendments in the group that starts with Amendment 12 as moved by the noble Lord, Lord Beecham. I apologise for the confusion in the numbers, which is entirely in my head and in my notes. I shall attempt to be much clearer.

I am talking now about Amendment 22, which is in the group that we are debating. The amendment, which was tabled by the noble Lord, Lord Beecham, and which I entirely support, reflects the analogous condition in Section 3(2)(a) of the Legislative and Regulatory Reform Act 2006. This additional safeguard is needed and is not covered by the other conditions—for example, the requirement for proportionality. The reason is that Clause 6(2)(a) refers to the proportionality of the “effect of the provision”, while Amendment 22 relates to the means of achieving that objective. The Secretary of State would have to be satisfied that the particular amendment or repeal proposed is the only way of satisfactorily securing the objective; it would require him to consider whether there were other possibilities—for example, by issuing guidance to local authorities or by amending or repealing a less significant provision. This is an extremely complicated matter. I do not know whether the Minister will be able to give us an answer that can satisfy us all, but again perhaps further discussion, either by letter or in person, can take place.

Amendment 23, which relates to the Human Rights Act and similar Acts, would add a further condition to Clause 6(2). Section 8 of the Legislative and Regulatory Reform Act 2006 makes a specific exception for the Human Rights Act. The Minister in the House of Commons stated that Clause 6(2)(e) would preclude the making of an order repealing the Human Rights Act or any part of it, but that paragraph relates to the provision—in other words, what the order proposes to do. This is different from whether the statutory provision itself, which is the subject of the order, is of “constitutional significance”. The point is that the 2006 Act recognises that distinction. The Bill as it stands does not recognise it and the question is why not. Why the change? The amendment of the noble Lord, Lord Beecham, would restore the distinction, which would be a very sensible thing to do.

[Lord Newton of Braintree]

My Lords, having already declared my wife as an interest, I will not repeat that. However, in view of the contents of Amendment 14, I should mention that I am in possession of a disabled person’s blue badge and that I chair a mental health trust.

I wanted to join in on this debate partly because of puzzlement and partly because I thought that the noble Lord, Lord Beecham, moved his amendments—in particular Amendment 14—with rather more diffidence than I had expected, and certainly with less vigour. By the time you have got through five of these clauses, your mind begins to glaze over, to be honest. However, as I read the provisions as a mere layman, what is being said here is that local authorities can do anything they like, subject to some broad qualifications, and the Secretary of State can allow them to do anything they like if he likes what they want to do; but if he does not like what they want to do, he can do whatever he likes to stop them—and all this with a limited piece of secondary legislation, possibly altering primary legislation, and on the basis of a negative resolution. I think that is it in plain English—I hope that it is, and I see some nods.

At the end of the Public Bodies Bill, I said that I thought that Henry VIII had suffered a major setback but not a terminal defeat and had gone off to regroup somewhere. Well, I now know where—it was in the Department for Communities and Local Government. Here is Henry VIII, on his charger, writ larger than ever before.

I have reservations about this, to put it mildly. The noble Lord, Lord Beecham, used a telling figure in the Second Reading debate, that there were over 1,200 pieces of legislation that could be amended by this Bill, using these powers. He has picked out some of them, and I think that he has done us a service, but I want to know the justification for this. If it is secondary legislation that is being changed, I can understand it, but if primary legislation, which has been duly and thoroughly debated and passed by Parliament, can be swept aside in this way, there is a real question about what we are all doing here. I note that safeguards have been written in, but I am not sure that they are on a parallel with the safeguards written into the Public Bodies Bill. At the very least, if the House is expected to acquiesce in these proposals, it needs at least a similar level of safeguard as we have in the Public Bodies Bill. I rest my case for the moment.

[Lord Best]

I have not spoken in the Committee stage, so I declare my interest as president of the Local Government Association. In that capacity, let me say that the earlier remarks from the Minister on shadow mayors and mayors acting as chief executives will be extremely well received at the LGA this evening.

I wanted to say one or two things in support of the remarks of the noble Lord, Lord Newton. The underlying intention is honourable—that if the general power of competence is inhibited by any other legislation, the Secretary of State has what could be rather draconian powers to overrule other legislation. But that clearly needs to be hedged around with some safeguards. A number of us have received representations from an alliance of disability groups, which are particularly concerned that some of the legislation that relates to their rights and entitlements might be diminished. That came to us from Age UK, Scope, which is involved with people with cerebral palsy, the National Autistic Society, the RNIB and Mencap. All these organisations are deeply concerned that some of the protective legislation that surrounds the world of disability might be done away with for the possibly good reason that it got in the way of the power of general competence —but that would seem a lesser priority. So we need reassurances here, and I support this bunch of amendments.

[Lord Jenkin of Roding]

My Lords, I wish to add something to what my noble friend Lord Newton of Braintree and the noble Lord, Lord Best, have said. The anxiety is not so much that any Government would be so stupid as to try to repeal essential provisions on welfare of the sort that have aroused some alarm but that this Government might be succeeded by another who are not so keen on the whole process of localism, devolution and subsidiarity and might therefore use the powers in a way that would restrict the general power, which might go contrary to the purposes of this legislation. I declare once again that I am joint president of the London Boroughs Association, which is certainly concerned about this possibility. The chances of any Government wanting to make material inroads into the welfare legislation to which reference has been made, and much of which is in the list in the amendment tabled by the noble Lord, Lord Beecham, are a little unreal. No doubt, however, reassurance will be necessary, and I hope that my noble friend on the Front Bench will be able to reassure those who have expressed anxieties that that is not the intention.

As I understand it, the purpose of this clause—the whole of the purpose of the power that is given—is simply to enable a local authority to exercise its general power of competence. If there are obstacles in previous legislation that prevent that, or if there is overlap, then to that extent the order may then remove the obstacle. It cannot just sweep away whole legislation; as I understand it, the provision in question has to be specifically related to the general power. I have had a lot of representations as well, and it is right that these fears should be aired on the Floor of the House so that reassurances can be given. However, the noble Lord, Lord Beecham, made the point that there is a distinction between the clauses as to whether the resolution is affirmative or negative.

I have two things to say. The first is that if the Joint Committee on Statutory Instruments makes a recommendation—I, too, read the wording that the committee recommends strongly that it should all be affirmative—it would be very unusual indeed for a Minister not to accept it. I have been through a number of Bills, most recently the Energy Bill, where that has been accepted. The whole range of recommendations was accepted, and government amendments were put down to achieve that. The second point is that if you have sufficient parliamentary supervision, that should be a sufficient assurance of protection. The power is necessary if you are going to make a reality of the general power of competence but it has to be defined, as I think it is intended to be, and it has to be subject to affirmative resolutions as recommended by the Joint Committee.

[Lord Dixon-Smith]

My Lords, I had not intended to intervene but I am tempted because I need to ask the Minister one question: could this subsection not be used by some other Secretary of State at some point in future to amend this legislation because it has a power in it to which he or she objects?

18:45

[Baroness Hanham]

My Lords, in reply to that last question, the powers to amend legislation are relative to the use of the general power. Under Clause 1 the Secretary of State will be empowered to sweep away any legislation that is standing in the way of the power of competence—that is what that clause is about. The answer to my noble friend Lord Dixon-Smith is that I do not think that that would be possible. The provision does not get rid of any legislation at all; it is only any legislation that stands in the way of the general power of competence.

I hear the concerns that have been raised regarding this clause and I hope that I will be able to reassure noble Lords on some of it. I say at the outset that the power is normally subject to the affirmative procedure, as set out in Clause 209. There are limited exceptions to that, but we are taking on board and considering the recommendations of the Delegated Powers Committee as we have on other matters. We will come on to that in due course, but noble Lords may feel reassured that the general view that the Delegated Powers Committee is not overridden will probably be maintained.

Unlike Clause 1, where the Secretary of State can take away legislation, Clause 5(3) and (4) provide reserve powers to allow the Secretary of State to restrict what a local authority may do under the general power or to set conditions around it. We believe that these powers are a necessary safeguard, given the breadth of the new power, to ensure, for example, that risks to both local government finances and the Exchequer are properly managed.

The powers will be of the most limited use. The Government have no plans to use the powers in subsections (3) and (4) and expect them to be used extremely rarely, if at all. However, they might be used to deal with, for instance, any risks that might arise from authorities’ use of the new general power to engage in novel financial transactions. They are therefore a tug back if local authorities seem to be going well beyond their brief under the general powers.

On Amendment 14, the general power of competence is designed to give local authorities real freedom to innovate and act in the interests of their communities, although not to be too innovative in financial terms, as I have just said. However, there is continuing misunderstanding about the scope of Clause 5(1). This provides the Secretary of State with powers to remove or change statutory provisions that prevent or restrict use of the general power—that is, restrictions or limitations that bite on the general power by virtue of Clause 2, the clause where the Delegated Powers Committee considers that there should be an affirmative order. The whole clause is about removing barriers to the legal capacity of authorities to act, so that they may act innovatively and in the best interests of the community. It is not aimed at removing duties, nor is it a general purpose tool to remove any legislation that places burdens on local authorities.

Until now, there has been no comprehensive list of the legal duties placed on councils. To remedy this, the Government agreed with the Local Government Association that we should compile such a list—the noble Lord, Lord Beecham, referred to this—so that everyone is clear what legal obligations local councils have and to check whether the duties are relevant.

The review is ongoing. Once it is completed, it will be decided whether any changes are necessary to the statutory duties, but neither the review nor the barrier-buster power that is in Clause 5(1) is aimed at removing statutory duties protecting vital front-line services, so there is no link between these processes.

The Clause 5(2) power can be used only to remove English authorities’ powers that are obsolete because they are overlapped by the new power. Its purpose is to tidy up the statute book and simplify the law, but there will be no practical effect on the scope of local authority powers or duties.

Amendments 15, 16, and 17 are unnecessary; they attempt to gold-plate the consultation arrangements already in this clause. The existing wording in the clause does exactly what it says it does—it will ensure that anyone who needs to be consulted will be consulted—so no further elaboration is needed. The consultation must be carried out properly and in accordance with general public law principles. This means that the Secretary of State must act reasonably in deciding whom to consult and must act in accordance with equality duties, which were also mentioned, and he can be challenged if he does not.

We believe that the more specific a list becomes, the more likely it will inadvertently exclude people who need to be included. We have seen this many times in legislation. I well remember trying to get more and more people put on to the face of a Bill, but that is not always helpful. We believe that it is better that these matters are left to be judged in the particular circumstances, as quite often the consultation list will change, depending on what is being proposed. We believe that the consultation requirements are comprehensive and we do not think that these amendments are necessary.

On Amendment 22, the power is a power to remove statutory restrictions. If the same thing can be achieved in a different way, it is hard to see how they can be statutory restrictions in the first place. I am sure that, if an order is unnecessary, that will be brought to attention of the Secretary of State during consultation.

Amendment 23 raises a concern about the Human Rights Act. We want to make it very clear that an order under Clause 5(1) cannot be used to repeal the Human Rights Act. It is unlikely that the power is wide enough, as it is a power to remove restrictions and limitations that prevent a local authority from acting as a natural person and a natural person could not get rid of the Human Rights Act. It is not a general purpose tool to remove any obligation placed on local authorities. Furthermore, the third condition requires that the provision made by the order does not remove any necessary protection, which means protection afforded by measures such as the Human Rights Act. The fourth condition requires that the provision made by the order will not prevent any person from continuing to exercise any right or freedom that he might reasonably expect to continue to exercise. Any right conferred or protected by the European Convention on Human Rights is a right that a person must reasonably expect to keep. Finally, and most significantly, the fifth condition is that the provision made by the order is not constitutionally significant. I think that we can agree that repealing the Human Rights Act would be constitutionally significant. The DPRRC has signified that it is content with the safeguards on this power. In addition, we have provided for a stringent parliamentary procedure. Therefore, we do not think that anything further is necessary.

The noble Lord, Lord Newton, and others have raised concerns about the conditions on the use of the power. It may be useful at this stage to say that Clause 6, which limits the power under Clause 5(1), was introduced in the other place as a result of the concerns expressed. We believe that a list would need constant updating. If something was inadvertently left off the list, that would not mean that it could be amended. We believe that Parliament, when considering orders made under these powers, will be able to judge whether the use of the power is appropriate.

I hope that I have covered all the amendments, although I think that one or two got muddled into the next group—certainly, Amendment 22 appears in my notes twice. I hope that I have responded to noble Lords’ questions satisfactorily and that they will not press their amendments.

[Lord Jenkin of Roding]

Before my noble friend sits down, will she confirm that she has repeated the explanation that was given in the memorandum to the Joint Committee on Statutory Instruments about the difference between subsections (1) and (2), which the Joint Committee expressly and firmly said that it did not accept? Is she now firmly saying that she will nevertheless insist on the difference—an affirmative resolution for an order under subsection (1) but a negative resolution for an order under subsection (2)? If so, I would find that difficult to accept.

[Baroness Hanham]

My Lords, I hope that I said in my remarks that I understood what the recommendation was and that we would look at it further. It is almost inconceivable that a recommendation from that committee would be ignored.

[Lord Greaves]

My Lords, I shall comment briefly on the consultation amendments in my name, Amendments 16 and 17. The noble Baroness said that they would gold-plate the legislation. As I understand it, they would simply put this legislation on the same basis as the Legislative and Regulatory Reform Act and the Public Bodies Bill, which was in this House only recently. I am tempted to ask why those pieces of legislation were gold-plated. I hope that this might be looked at again.

The noble Baroness also said that adding a requirement for consultation with representatives of people who are likely to be affected could restrict the amount of consultation that took place, but as it would be an additional requirement—the requirements in the Bill would not be changed at all—and would include the words,

“such other persons that the Secretary of State considers appropriate”,

it is difficult to see how it would restrict anything. It would simply extend the amount of thought that the Secretary of State would have to give to exactly who is being consulted and provide a bit of guidance to him. The two arguments that the Minister has put forward seem a bit weak. When Hansard comes out tomorrow, I will read exactly what was said, but I think that it would be no skin off anybody’s back to accept the amendments.

Finally, I asked why the words “if any” had been added to the similar provisions in other legislation that this is based on. Perhaps the Minister will write to me and explain the significance of that.

19:00

[Lord Beecham]

My Lords, I am sorry that I disappoint the noble Lord, Lord Newton, by my uncharacteristically diffident approach to this legislation. I shall try to repair that omission. I was trying to give the Government some credit for responding to concerns raised in another place about Clause 5(1) in particular. Incidentally, the long list of statutory provisions in Amendment 14 was derived from those tabled in another place. The noble Lord is right to say that there are many more statutory provisions that could be disapplied or to which the legislation might extend. I think that the number is 1,296, but there is a formidable list here.

However, that is not the only concern. In particular, Clause 5(3) does not relate to dispensing powers; it is a simple provision, which says:

“The Secretary of State may by order make provision preventing local authorities from doing, in exercise of the general power, anything which is specified, or is of a description specified, in the order”.

In other words, the Secretary of State takes power to disapply the general power of competence on whatever topic and in whatever form he fancies. That is a very different proposition from one that seeks to allow a disapplying power to permit and facilitate the exercise of the general power of competence and it is completely unsatisfactory. It is a remarkable proposition: the Secretary of State seeks to give a power to do anything unless he objects. It is the political equivalent of Henry Ford’s “You can have any colour as long as it’s black”. Of course, Henry Ford inspired Aldous Huxley’s Brave New World—Fordism is the theme that runs through the book. The title of Brave New World, of course, is not inappropriately derived from “The Tempest”. Noble Lords will recall Caliban’s wandering gaze:

“O brave new world, That has such people in't!”.

Well, it is not a brave new world that has such propositions in it. I hope, again, that the Government will look not only at Clause 5(1) and the matters deriving from that, but, in particular, at the sweeping powers under Clause 5(3) which can apply under subsection (5) to,

“all local authorities … particular local authorities, or … particular descriptions of local authority”.

I suppose that means particular classes of local authority.

In replying and endeavouring to be helpful, as of course she does, the noble Baroness indicates that the Government will expect to use these discretionary powers only to deal with particular actions of local authorities which cannot at this point be identified. She referred to “novel financial transactions”. Well, I suppose that a local authority could engage in a novel financial transaction now. It would have to ensure that it was legal, and if it was not legal it could be challenged. It is not at all appropriate to have as sweeping a power as this against unknown and unknowable possible future activities of local authorities. If the Government are particularly concerned about financial transactions, why do they not, for the avoidance of doubt, make that a category in the Bill? But they do not, because the power is simply unlimited.

There are also some issues around the drafting. I appreciate that there are difficulties with the drafting, but when Clause 6 says,

“the provision does not remove any necessary protection”,

what does that mean? What is a “necessary protection”? It is presumably necessary, or not, in the eyes of the Secretary of State. All of that confirms the undesirability of the procedure, about which the noble Lords, Lord Jenkin and Lord Newton, have been rightly exercised, being of a negative kind as opposed to an affirmative resolution.

Again, I hope that the Government will look at this matter. The noble Lord, Lord Newton, rightly referred to the Government’s wise second thoughts on the Public Bodies Bill, and there are certain parallels here. I hope that the Government will take seriously the substantial objections, both to the process and also, in particular, to the thrust of Clause 5(3), which, as I said in moving the amendment, contradicts the whole spirit of a general power of competence that many of us applaud and would be glad to see in the Bill. If the Government want to achieve their reputation for promoting localism, they need to review and revise the procedures and principles set out in this clause. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendments 13 to 18 not moved.

Clause 5 agreed.

[Earl Attlee]

In moving that the House be resumed, perhaps I may suggest that the Committee stage begins again not before 8.04 pm. The Committee will be aware that the House will have to debate a Statement and a Question for Short Debate, so the Committee may possibly resume a little later than but no earlier than the time I stated.

House resumed. Committee to begin again not before 8.04 pm.

Greece: Default Contingency

Monday 20th June 2011 Lords Chamber

Statement

19:05

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, I shall now repeat a Statement that has been made in another place by my honourable friend the Financial Secretary to the Treasury. The Statement is as follows:

“Honourable Members will be aware of the recent developments in Greece. There has been considerable media speculation about what this means for the Greek adjustment programme and potential market reactions. I am not going to engage in speculation on what may or may not happen, but give the House an account of the facts as they currently stand.

Let me begin with some background on Greece and the financial assistance package. The international financial assistance package for Greece was agreed in May 2010. The package is composed of two elements: a loan of €30 billion from the International Monetary Fund, and €80 billion of bilateral loans from euro area member states. Although they were created at a similar time, neither the EFSM, which is backed by the EU budget, or the euro area-only EFSF contributed to the package for Greece. The adjustment package requires Greece to undertake significant adjustment efforts.

There are some very difficult questions that Greece has to address now, because of the assumption when the package was put into place that Greece would be able to access market funding again in 2012, which looks unlikely in current market conditions. The House will also be aware of political developments in Greece and that a new Cabinet has been appointed; the Government will soon be subject to a vote of confidence in the Greek Parliament. The Greek Parliament will also be voting on a medium-term fiscal strategy, which is a key element of the conditions attached to the current adjustment programme, later this month.

Against this backdrop, the euro area member states have been discussing next steps. The euro group released a statement today calling on,

‘all political parties in Greece to support the programme’s main objectives and key policy measures to ensure a rigorous and expeditious implementation’.

The statement also said that Ministers will,

‘define by early July the main parameters of a clear new financing strategy’.

This is a statement from the euro area member states. Let me be clear: the UK has not been involved in those discussions. We are not participating directly in the May 2010 package of support for Greece and there has been no formal suggestion either of UK bilateral loans or for use of the European financial stabilisation mechanism, which is backed by the EU budget. The UK only participated in the May 2010 package for Greece through its membership of the IMF. So the burden of providing finance to Greece is shared between the IMF and euro area member states, and we fully expect this to continue. Our position on this is well understood in the euro area.

The UK believes that the international community needs a strong International Monetary Fund as an anchor of global economic stability and prosperity, and over the past few years we have seen how important that role can be in times of crises as the IMF has taken swift and decisive action to support the global economy. There is of course no room for complacency. The Treasury, together with the Bank of England and the FSA, is monitoring the financial system, including the euro area, on an ongoing basis. Many scenarios are considered as part of the normal policy development process, but honourable Members will agree that it would not be appropriate for me to be discussing the detail of those scenarios. May I also remind honourable Members that UK banks have little direct exposure to Greece?

The continuing uncertainty in the euro area is also a reminder of the benefits of taking early action to stabilise and recapitalise the banks, as the UK has done. The UK banking system has developed a strong capital position, which has allowed it to become more resilient and will help insure it against future risks. UK banks have made good progress in sourcing funding despite difficult market conditions.

The difficulties faced by eurozone countries such as Greece and Portugal reinforce why it is right to pursue the course we set last year to tackle the deficit. The House should reflect that our deficit is larger than that of Portugal, but our market rates are similar to those of Germany. The action we have taken to strengthen the country’s finances stands us in good stead during this period of instability in the eurozone. No one on either side of this House should lose sight of the importance of these decisions in protecting the UK economy”.

My Lords, that concludes the Statement.

19:10

[Lord Eatwell]

My Lords, I am most grateful to the noble Lord for repeating as a Statement the answer to an Urgent Question given by the Financial Secretary in another place. I must begin by congratulating him on the feat of speaking for a full four and a half minutes without referring for a moment to the substance of the Question asked. However, he still has some way to go before acquiring the skills of Mr Alan Greenspan, who famously qualified his speeches when chairman of the Federal Reserve by declaring that, “If anyone understood me, I misspoke”.

Of course, everyone will agree that we live in dangerous financial times and it is incumbent on all those in authority to take care when commenting on market-sensitive information, even to the extent of not answering legitimate parliamentary questions. However, the other fundamental aspect of these uncertain times is that it is important to plan for the worst, even as we hope that it will not happen. Assurance that the Government are indeed planning for the worst will enhance rather than reduce market confidence. Without going into any analytical detail, will the noble Lord tell us what is the Treasury’s current worst-case estimate of the potential exposure of UK financial institutions should there be a disorderly Greek default? Even if he will not answer that question, in the event of market disorder will the present Government stand behind UK financial institutions as the previous Government did? Any worst-case estimate should not, of course, refer just to direct exposure to Greek sovereign and private debt, as the noble Lord did just now, but to the exposure to other jurisdictions that might reasonably be assumed to suffer contagion from a Greek default. Just as the collapse of Lehman Brothers inflicted such a shock on the western financial system that the wholesale funding markets froze, pushing major banks into insolvency from which they had to be rescued by the state, so in similar fashion a default in Greece could produce knock-on effects. Of course, all these effects may already be priced into the market—we hope that they are—but we must plan for the worst.

As the noble Lord will be aware, Mr Michael Cohrs, a member of the new Financial Policy Committee of the Bank of England, has stated that what keeps him awake at night is the interconnectedness of the system, which could create ripple effects in financial markets throughout Europe and beyond. Without referring to any particular market or giving any other detail, what is the Treasury’s worst-case estimate of the scale of those ripple effects as they might impact the UK?

We also learnt from the Lehman collapse that the consequential fall in bank lending to households and industry—Lehman had been growing at more than 20 per cent a year and then ceased to grow at all—resulted in a fall in GDP from which the UK still has not recovered and, again in consequence, led to a sharp rise in the Government deficit. What contingency measures have the Government put in place to ensure that lending to industry and households will not be cut in the face of any market turmoil produced by a Greek default? Industry in particular needs to be confident that lending will be available at reasonable cost. Will the Minister guarantee that at the very least the lending targets of Project Merlin will be attained? If the eurozone economic problems put upward pressure on the UK deficit, will the Government revise their deficit reduction policy?

Finally, given the potential damage to the UK economy of financial disorder in the eurozone, does the Minister accept that it is very disturbing that Her Majesty’s Government seem to take pride in the fact that they are playing no part in the development of UK policies that will minimise future damage to the UK? Is it not time for the Government to be more proactive in Europe in pursuit of Britain’s best interests?

19:14

[Lord Sassoon]

My Lords, I shall try to respond to the noble Lord’s questions one by one. First, he asked about the exposure of UK banks to Greece—not only the direct exposure but the wider exposure. It is important to recognise that the exposure of the UK banks to Greece is modest relative to that of other countries. For example, the exposure of the UK banks to the Greek public sector is $4 billion, which compares with the $22.7 billion exposure of the German banks to the Greek public sector. The total exposure of the UK banking system to Greece, including other credit commitments, is of the order of $19.2 billion. To put it into context, that compares with outstanding credit commitments to Portugal of more than €30 billion and to Ireland of the order of €180 billion.

I will not comment on what the ripple effects might be. In repeating my honourable friend’s Statement that the Treasury, the Bank and the FSA are running a whole range of scenarios against which we test the resilience of the UK system at any one time, I refer the noble Lord, Lord Eatwell, and other noble Lords to the financial stability report—the regular six-monthly report—that will be forthcoming from the Bank of England within the next few days, which will no doubt give an updated assessment in the wider context of how the Bank sees these matters.

On the question of contingency measures, the critical issue here is that the UK banks have been recapitalised and have been through stringent stress tests. They continue to be subjected to the appropriate stress tests by the FSA. They are in a strong position. The Merlin agreement has been signed. It is a much more comprehensive agreement than anything that the previous Government had to ensure the continuing flow of credit, particularly to small and medium-sized enterprises. I agree with the noble Lord that this is a critical issue. There is absolutely no suggestion that any of the events that we are talking about in Greece will have a direct impact on the ability of the banks to rise to the commitment they have made in the Merlin agreement.

The other thing that is absolutely critical here is that the UK continues to retain the utmost confidence of the international markets. The fact that interest rates on the 10-year benchmark gilt are this evening standing at 3.22 per cent, with spreads that have narrowed against the benchmark German bund since the general election, shows the confidence that the international markets have in the strong position of the UK. Those low interest rates enable the banks to fund themselves and to lend on to British small and medium-sized enterprises in order to underpin the recovery of the economy.

That takes me directly to deficit reduction. I am very grateful to the noble Lord for feeding me the lines which make the critical points, because it is only as a result of sticking to the deficit reduction plan that we have the low interest rates that mean that our businesses can be supported by the banks in this very difficult international climate. If we were doing what the shadow Chancellor proposed last week—unfunded tax reductions which would cost £51 billion over the lifetime of this Parliament—we would very soon lose the confidence of the international markets, our interest rates would zoom upwards and our banks and, indeed, individual lenders would be in a very serious position. Therefore, we will stick to our deficit reduction plan, as recently endorsed by the IMF in its latest report.

The noble Lord referred to our position in Europe and our contribution to the debate. Noble Lords who were present for our very interesting debate on Thursday of last week on your Lordships’ European Union Committee’s report on EU economic governance will have heard me explain at length how we are fully involved at every stage in discussions to make sure that the eurozone arrangements strengthen fiscal governance and that we drive forward the wider market reforms of the 2020 vision. The UK is absolutely central to discussions ensuring that what we need in Europe to get us out of the weak situation that others are in—this applies inside or outside the eurozone, but particularly within it—are the market reforms that will bring sustainable growth and ensure that we do not have these sorts of Greek problems into the future.

19:21

[Lord Hamilton of Epsom]

My Lords, would my noble friend like to comment on press reports that Standard Chartered Bank is ceasing to be involved in short-term interbank transfers with European banks? Does he believe that to be true? Is it happening with other British banks? If so, what are the implications?

[Lord Sassoon]

My Lords, I am not going to comment on what is going on in the markets and with individual banks at all, and I am sure that my noble friend would not expect me to. However, I would make the point, which was also made in the Statement, that UK banks have been able, in very tough market conditions, to improve their funding position very considerably over the past year and more. The overall situation of the interbank market is far better—although we should not take any of these things for granted—than it has been at points during the financial crisis. It is therefore important, as my noble friend reminds us, that confidence within the banking system enables there to be liquidity. As I say, we are in a much better position in that respect than we were during the financial crisis itself.

[Lord Myners]

My Lords, I start by congratulating the Minister on taking longer to answer questions than he did to repeat the Statement given by his honourable friend in the other place. One might suggest that the reason we have low interest rates and banks are not lending is more to do with the fact that the economy is moving back towards recession than for the reasons that the Minister gave. Let me ask three short questions that I think can be answered by short and quite factual answers. First, have the Government absolutely ruled out any use of the EFSM in support of Greece or any other European nation, over and above the commitments already made? Secondly, has the Bank of England accepted Greek sovereign credit as collateral for loans made by the Bank of England to the European Central Bank, and therefore for loans on which the Bank of England is exposed? Thirdly, are we as a country exposed to the need to recapitalise the ECB should Greece default on its sovereign debt?

[Lord Sassoon]

On the role of the EFSM, I would refer the noble Lord to the words of the French Finance Minister, Christine Lagarde, when recently interviewed on the BBC. She talked about the package for Greece being one of bilateral loans, and she saw the likelihood of any future support for Greece as a continuation of that bilateral arrangement. So there has been no question of using the EFSM in the context of Greece. As for the question on the Bank of England, I am certainly not going answer for what the Bank of England does or does not take in—nor would the noble Lord, Lord Myners, for one minute begin to think that I would start answering questions about the bank’s collateral policies. As to the capitalisation of the ECB, that is an entirely hypothetical question, as the noble Lord knows full well.

[Lord Higgins]

My Lords, is it not apparent that the Greek economy cannot become competitive in the foreseeable future at its present exchange rate? Greece will be condemned to an endless succession of deflation and bailout unless it leaves the euro. Is it therefore not extremely important that discussions by the British Government and in the European Community should take place on how to minimise any collateral damage should that come to pass?

[Lord Sassoon]

My Lords, I am not sure that I entirely accept my noble friend’s starting premise. The position is that Greece is a member of the eurozone, and the eurozone will continue to be the eurozone. We want to see the strengthening of fiscal and economic discipline within that zone. When the IMF put together and led the programme that Greece signed up to—which had elements of fiscal consolidation, structural fiscal reform and wider structural reform—it was done precisely in the context of Greece continuing to be a member of the eurozone, and that is the continuing position. The package has been put together and the new Government have some decisions to take. The IMF is coming up to its regular review before the next drawdown of the package, but that is entirely in the context of Greece being able to finance itself on an ongoing basis within the eurozone.

[Lord Lamont of Lerwick]

Has my noble friend seen the extraordinary anti-German graffiti and the slogans being shouted by the crowds in Athens? Does that not illustrate what Professor Martin Feldstein, the Nobel prize-winning economist at Harvard, has always said—that the euro, far from bringing countries together, increases tensions between them? Can my noble friend also explain what sense there is in Ireland and Greece borrowing more money to lend to Portugal, and Ireland and Portugal borrowing more money to lend to Greece?

[Lord Sassoon]

My Lords, I have not been on the streets of Greece or seen what is going on in Athens, but clearly it is regrettable if anti-German sentiments are being expressed on the streets there. However, I have not been following the detail of the riots. The main thing is that we need to support the Greek Government and encourage them, as the eurozone Ministers have done in their statement today, to progress their package and enable the IMF to complete the upcoming assessment. As for the second-order effects of who needs capital where in order for loans to flow, my noble friend reinforces the point that this is a very interconnected system and the ongoing work on the short-term and medium-term stability of the eurozone has to be mindful—as we have been reminded already this evening—of the interconnectedness of the systems at every level.

[Lord Davies of Stamford]

My Lords, is it not the case that this is not a euro crisis, as many commentators have been trying to pretend, but a Greek funding and fiscal crisis caused by excessive borrowing by the Greeks, irresponsible lending and mispricing of risk by lenders? It is not the first time that we have seen that in the past year or two. Does the Minister agree that this would have arisen irrespective of the currency that Greece happened to have? It would have happened whether Greece had been in the dollar zone or the pound sterling zone or still had the drachma. Secondly, to avoid the risk of a considerable panic, is not a renegotiated package for Greece necessary, providing for an orderly restructuring of its debts, a credible series of repayments and a set of definite figures for offsets and provisions by Greece’s creditors? Is it not time that we began to think in those terms? Thirdly, is it not the case that Greece leaving the euro or a Greek devaluation is the opposite of what is required? If Greece went back to the drachma, it would of course greatly enhance the value of its euro debts—and its debts are primarily in euros—but that would increase the burden on Greece and increase the portion of Greek assets that overseas lenders and investors would have to write off. Such a move would be counterproductive and damaging from our point of view as well. Moreover, devaluation never works as a stimulus to growth unless wage bargainers are under monetary illusion and cannot tell the difference between nominal and real wages and do not ask to be compensated for the reduction in real purchasing power. That is a most unlikely situation for Greece at the present time.

[Lord Sassoon]

I agree with the noble Lord, Lord Davies of Stamford, that if the UK continued with the excessive deficit policies of the previous Government, we would be in a terrible mess in this country. Whether you are in or out of the euro makes no difference, and the UK would be experiencing considerable problems if we had not gripped the deficit. I agree with the implication of his analysis on that point. On the second question about sustainable financing, that is precisely where the IMF starts its assessment of debt sustainability. The critical first plank of sustainability for Greek debt hinges on Greece sticking to its agreed fiscal consolidation path. All else flows from that. As for the Greeks or anyone else leaving the euro, that is a hypothetical question and not one that we should spend any time on.

[Lord Newby]

Does the Minister agree that it is critical not just for Greece but for the UK economy that there is not a disorderly Greek default? In that circumstance, does he agree that the least worst option in what is a difficult situation is to agree an orderly re-profiling of Greek debt? If so, will the Government support moves by the eurozone Finance Ministers to bring about such a re-profiling?

[Lord Sassoon]

I certainly agree with my noble friend that the last thing anyone wants is disorder, whether default or anything else. As I made clear, the next steps are, first, a question for the eurozone itself. We are not directly involved in the eurozone discussions. To address my noble friend’s point, the statement from the euro group today reads:

“Ministers agreed that the required additional funding will be financed through both official and private sources and welcome the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing Greek debt at maturity for a substantial reduction of the required year-by-year funding within the programme, while avoiding a selective default for Greece”.

As I said, that is a matter for the eurozone Ministers, but I think that they are addressing the issue in the way that my noble friend suggests.

[Lord Lea of Crondall]

Would the Minister care to remind the House of the percentage of, first, the euro area, and, secondly, of the European Economic Area, of which we are a part, which is constituted by the Greek economy? I would not say that it is peanuts, but is it not a rather low percentage? If Europe wished to, could it not help to restructure the Greek economy—with stringent terms, by the way? Would not the whole House stand behind that policy agreed around Europe and say that we want it to work—God’s speed, we want it to work? Are there not some Members of the House who do not want it to work?

[Lord Sassoon]

I am happy to confirm that Greece is a relatively small part of the euro area but, as we have already identified this afternoon, Greece is interconnected, as are all the European and global financial markets. Therefore, one should not in any way trivialise the Greek situation and the capacity for difficulties in the markets.

That said, it is also important to be clear about the lines around whether the UK should or should not be involved in these matters. We are not a member of the eurozone; we are not going into the eurozone; and we are not going to make any preparations to enter the eurozone in the lifetime of this Government, this Parliament. We must make sure that, on the one hand, we are not part of any ongoing and permanent support mechanism for the eurozone; at the same time, we have to play a full part to ensure that the eurozone economic governance is fit for purpose.

[Lord Flight]

Does my noble friend agree that if relatively less or more successful countries or economic areas are to share a currency, there is a requirement for substantial ongoing transfer payments, as is the case within the US and even within the UK? Secondly, does he by any chance know roughly what proportion of Britain's exports to the eurozone are to what I would call hard northern Europe, compared to softer southern Europe?

[Lord Sassoon]

I am not able off the top of my head to break down the analysis of our exports, and I am not quite sure where my noble friend would draw the line between hard and soft. The critical point here is that more than 40 per cent of our exports go into the eurozone. Of course, they are generally distributed in relation to the size of economies, with Ireland, as we discussed in relation to the Irish package, having for historical reasons a disproportionately large share. My noble friend makes the point that it is absolutely in the UK's interest to ensure that the eurozone economies are successful, because that is where the largest part of our exports go.

[Baroness Noakes]

Does my noble friend think that a new set of arrangements made within the euro area by the IMF for Greece will work this time? It did not work last time. Unless there is some confidence that new arrangements made to support Greece will work, in the sense that they can restore the Greek economy—there is very little sign that the Greeks are able to take any medicine which would restore it to health—would we not be better served by working within Europe to help our European friends understand that letting Greece remove itself from the eurozone and take the default that it clearly is in is in everybody's interest?

[Lord Sassoon]

My noble friend Lady Noakes asks a very good question. It is inevitable that people will ask: was the package appropriate? One should take comfort from the fact that the IMF has a long and successful record of implementing restructuring programmes. The IMF programme for Greece was put in place in market conditions and with a market outlook somewhat different from that which Greece and the eurozone subsequently encountered. The first requirement is for the Greek Government to be encouraged to get back on track, to stick to the agreed fiscal consolidation path. Beyond that, it is for the IMF to see what needs to be done. The key thing is for the original plan to be back on track. I therefore think that we should not at this point second-guess whether the plan is or is not appropriate.

I will not be drawn into whether the Greek situation would be better in one hypothetical scenario or another.

[Lord Tugendhat]

My Lords, does the noble Lord agree that, however brave the Greek Prime Minister is —he has shown extraordinary guts and determination—and however much a new Greek Government might wish to pursue the austerity programme and the conditions being laid down, there must be room for doubt whether any Greek Government can secure the degree of self-discipline within the country that would enable them to meet the conditions of the IMF and of the other European countries? That being the case, does the noble Lord not agree that the great interest of the United Kingdom Government lies in co-operating as closely as possible with our eurozone partners in putting together contingency plans to meet whatever eventuality may occur, because the Greek Government are extremely unlikely to be able to live up to their promises?

[Lord Sassoon]

My Lords, I am not going to be drawn by my noble friend Lord Tugendhat into giving a commentary on Greek politics, which I am not qualified, in any case, to do. However, the Greek Parliament will hold a vote of confidence on the new Government very soon—I believe that it may be tomorrow. Critically, the Greek Parliament will vote on a medium-term fiscal strategy consistent with the agreement into which they have entered. That vote in the Parliament is expected to be later this month. I think that it would be wrong to question the commitment of the Greek Government and Parliament to the package. On contingencies and close co-operation, I can only confirm that, either in terms of what is being done by the authorities in the UK or in co-operation with our European partners, we will certainly look at a wide range of contingency plans and scenarios.

Biological Diversity

Monday 20th June 2011 Lords Chamber

Question for Short Debate

19:40

Asked By

[The Earl of Selborne]

To ask Her Majesty’s Government how they propose to implement the agreement reached at the meeting of the Conference of the Parties to the Convention on Biological Diversity held in Nagoya, Japan, in October 2010.

[The Earl of Selborne]

My Lords, I start this short debate on the Convention on Biological Diversity by declaring my interest as chairman of the Living With Environmental Change partnership and by thanking those who put their name down to speak this evening.

The recent natural environment White Paper, entitled The Natural Choice: Securing the Value of Nature, describes the 2010 Conference of the Parties to the Convention on Biological Diversity, held in Nagoya, Japan, as historic. We all hope that this will prove an accurate assessment and that the outcomes over the next decade deliver a new international deal to protect and enhance biodiversity and ecosystems.

The conference emphasised the value of the natural environment to human welfare and livelihoods and stressed the link between action on biodiversity, climate change and development. We all fervently hope that its new global vision will be achieved. This is stated as follows:

“By 2050, biodiversity is valued, conserved, restored and wisely used, maintaining ecosystem services, sustaining a healthy planet and delivering benefits essential for all people.”

The parties also agreed on a shorter-term ambition, which was to:

“Take effective and urgent action to halt the loss of biodiversity in order to ensure that by 2020 ecosystems are resilient and continue to provide essential services, thereby securing the planet’s variety of life, and contributing to human well-being, and poverty eradication”.

To achieve this, the parties agreed on 20 targets and five strategic goals. These commendable aspirations, however, have to be put into the context of the failure of Governments to meet the previous target, which over the previous 10 years was to achieve a significant reduction in the rate of biodiversity loss by 2010.

The convention’s report, Global Biodiversity Outlook 3, pointed out the failure to do anything of the sort. It warns of critical tipping points that could lead to large-scale rapid changes causing potentially irreversible damage to ecosystem services. The question is therefore whether this new strategic plan, with its 20 targets, will prove more effective.

In summary, the new strategic plan emphasises the need for effective and urgent actions, appropriate and effective policies and evidence-based decision-making. Each member state is required to develop a natural strategy in line with the strategic plan, integrating sustainable resource use across all sectors of policy and meeting biodiversity targets.

We missed our targets up to 2010 because of a basic lack of understanding among Governments about the value of nature and the long-term benefits to be derived from its protection. There was a lack of public awareness of how ecosystem functions contribute to human welfare and of their benefits, including goods and services, some of which can be valued economically and others that have a non-economic value. Ecosystem services, such as soil formation, nutrient cycling, flood hazard reduction, water purification and air pollution reduction are all underpinned by biodiversity, and the level and stability of ecosystem services generally improve with increasing levels of biodiversity.

Earlier this month, the UK National Ecosystem Assessment was published by the Government. It was a collaboration of scientists from a number of Living With Environmental Change partners, and could prove to be a massively helpful tool to help decision-makers in government, business and society put in place long-term measures to protect and enhance our ecosystem services, including our biodiversity. Both this report and the recent White Paper are important developments that point in the right direction.

A third document to be launched later this month is the England Biodiversity Strategy, which is to be followed by strategies from the devolved Administrations. Tomorrow, the European Union Environment Ministers will, we hope, adopt the EU biodiversity strategy. Here is a plethora of strategies and documents, and they will all have to spell out just how we are going to deliver on the Nagoya commitments.

Of the 20 targets, I will refer to just a few. Target 6 requires all fish stocks to be managed and harvested sustainably, and target 7 requires areas under agriculture and forestry to be managed to ensure conservation of biodiversity. We could have a full debate on the implications for the common agricultural policy and the common fisheries policy, as perhaps we should, but clearly the EU biodiversity strategy will have to come up with some convincing reasons why that might become a reality.

Target 9, which concerns invasive alien species, is of particular relevance to our overseas territories, in a number of which the accidental importation of species, such as rats, has caused serious damage to the indigenous wildlife: for example, ground-nesting birds. Indeed, programmes are already in place in some of our overseas territories to eliminate such pests, but more programmes will clearly be essential if we are to meet our obligations under this target.

Target 15 commits Governments to restoring 15 per cent of degraded ecosystems by 2020, and the White Paper accepts this commitment. There will have to be a clear evidence-based assessment of what constitutes a degraded ecosystem and an inclusive procedure, by which I mean it should include as many people as possible in the process of determining priorities for restoration.

A key outcome was the Nagoya protocol on access to genetic resources and the sharing of benefits arising from their use. Access and benefit-sharing provisions are critical to countries with exploitable genetic material. Very often that means developing countries, which must at all costs protect their intellectual property. Access agreements are also very important to our national centres of excellence such as the Royal Botanic Gardens, Kew and the Natural History Museum. Kew's core business is to collect and research plant diversity for conservation purposes and to enhance the sustainable use of plants. The Nagoya protocol encourages research that contributes to conservation and the sustainable use of biodiversity through the establishment of simplified measures for non-commercial research. This protocol is to be welcomed, and particularly the intention to simplify measures for non-commercial research.

Again, whether all this will be practical will depend on whether Governments, the business community and society at large understand and value our biodiversity. In this country, we are short of taxonomists, which means that for many species we lack experts who can identify species before they face extinction. The House of Lords Science and Technology Committee has, on three occasions, reported on the need for a national programme to support systematics and taxonomy. There are now grounds for believing that government departments, research councils and the taxonomic community itself are addressing this serious issue. We need to engage the enthusiasm of both urban and rural populations. I pay tribute to such organisations as the open air laboratories, OPAL, which enlist the wider public in such projects as the bugs count undertaken with the Natural History Museum.

The environment White Paper pledges the Government to invest £1.2 million to support the development of the National Biodiversity Network. This network collates a vast amount of records provided largely by knowledgeable volunteers and local organisations around the country, a highly cost-effective way of generating essential data. The long-term support for the National Biodiversity Network is of key importance if we are to meet our targets.

Above all, we need to encourage a new generation of naturalists. We need to ensure that in these difficult times public funds are still available for local museums and natural history societies so that we can continue to generate these biological records.

I look forward to hearing from the Minister that the natural environment White Paper will be followed up by policies and actions that will ensure that by 2020 we have indeed met these challenging targets.

19:51

[Baroness Hilton of Eggardon]

My Lords, I have to declare an interest as a trustee of the Pond Conservation Trust. Freshwater is one of the most extensively exploited and vulnerable parts of the environment. That vulnerability has been further exposed by the drought that we have experienced this spring. Moreover, the harsh spell of weather that we had before Christmas, with record low temperatures, led to many frozen ponds and streams, and so further jeopardised the wildlife that is dependent on freshwater.

In the past 20 years, huge investment has gone into attempts to improve the quality of our rivers, but there has been little improvement in the biological condition of those rivers. About one-third of the monitored length of our rivers is not in a good biological condition due to such things as industrial pollution and fertiliser run-off from farmland. Over the next 20 years, a further £20 million will be spent to protect freshwater ecosystems through agri-environment schemes, investments in the infrastructure of the water industry and in conservation grants. However, ponds, a major reservoir of freshwater diversity, continue to decline in quality.

The Government’s White Paper on the natural environment, published this month, says,

“They are often overlooked but small water bodies such as ponds and ditches play a critical role in supporting ecosystems … Ponds alone support 70% of freshwater biodiversity and more endangered species than lakes, rivers, streams or ditches”.

Inevitably, government schemes to protect the environment will tend to be large-scale, such as the landscape-scale works recommended in the Lawton review, but ponds are essentially small-scale and local. The Pond Conservation Trust has since 2008, in company with local people and various partners, helped to create 1,600 new ponds, 420 of which are specifically for biodiversity action plan species. This project has also helped to change attitudes and has been used as an example of good practice by NGOs and by the Government.

However, work such as this cannot depend on local efforts alone, but needs to be underpinned by appropriate science and government policy. I want to ask the Minister two questions. Is he satisfied that the freshwater science base of this country is sufficient to provide the evidence needed by policy-makers to protect and ensure freshwater biodiversity? It is not just the species that depend on water directly—such as frogs, toads, newts, dragonflies and various plants and invertebrates—but also birds and bats, mammals such as voles and otters, and reptiles such as grass snakes. Secondly, as new schemes are introduced, are effective monitoring systems in place to determine which schemes are successful and cost-effective?

19:54

[Baroness Parminter]

My Lords, I congratulate my noble friend Lord Selborne on introducing this debate in such a timely manner, given that tomorrow the Environment Council meets to discuss the EU’s biodiversity strategy till 2020. That meeting of EU Environment Ministers will be an important test of resolve in meeting the commitments agreed at Nagoya last year to meet the huge biodiversity challenges that we face.

I applaud the Government on the welcome they have given to the development of an EU biodiversity strategy and hope that tomorrow the targets suggested by the Commission in the draft strategy are adopted. In particular, I welcome the actions suggested by the Commission relating to the sustainable use of fisheries resources, including the gradual elimination of discards. Only today, a report to be debated at the UN from the panel convened by the International Programme on the State of the Oceans warned that ocean life is at a high risk of entering a phase of extinction of marine species unprecedented in human history.

We must stop exploitative overfishing now, and so it is vital that the reference to achieving maximum sustainable yields of fish by 2015 is retained in the EU’s biodiversity strategy. If removed, our efforts—and I commend the Government’s initiatives to date on this—to secure ambitious reform of the common fisheries policy are entirely undermined. They are undermined even before the starting gun on the reform of the CFP is fired in the next couple of weeks. Therefore I very much hope that our representative at tomorrow’s meeting will be pushing back hard on those countries, including France and Spain, which are pushing for the removal of this reference to stop overfishing.

I welcome the draft EU biodiversity strategy, but it mentions only in passing the key issue of financing biodiversity protection. Clearly, if we are to make a reality of the Nagoya conference goals, finance is key. It was this House’s EU Select Committee report on the EU financial framework from 2014 that recommended that biodiversity protection be mainstreamed through all the relevant funding instruments, especially the CAP, and that it be reflected in the framework itself.

Given that the Commission’s proposals for the new framework are due out next week, I would be keen to hear from the Minister whether the Government agree that the EU’s commitment in the area of biodiversity should be reflected in the framework. However, any financing available through the EU budget is going to be small compared to that required to meet the scale of the challenge. Two weeks ago in the welcome natural environment White Paper, the possibility of financing biodiversity protection through biodiversity offsets was raised. The Government propose to establish a new voluntary approach to biodiversity offsets and to test that approach in pilot areas.

Biodiversity offsetting schemes have been in existence in other parts of the world for some time. All the evidence from these is that such schemes must be well designed. Successful existing schemes, notably those in the US and Australia, generally involve an impartial oversight body. Their function is to monitor the size and quality of the offsets, making sure that they are calculated properly so that offset sites are ecologically similar and deliver an amount of biodiversity adequate to offset the impacts. They help developers to know how many credits, and crucially which type, they need by transparent calculation of offset needs or debits. Key to the scheme’s success is rigorous methodology to determine what trade-offs are appropriate or allowable.

I support the Government’s decision to pilot biodiversity offsetting so as to test and refine the operation, but I do question whether a voluntary scheme will generate enough interest to establish a viable biodiversity market. Moreover, I question whether a locally managed scheme where the approach to be taken,

“should be as simple and straightforward as possible”,

to quote from the White Paper, will have the necessary rigour to deliver the desired “no net loss” biodiversity outcomes. As such, perhaps I could invite the Minister to say a few words about how the Government intend to help with the design of the various schemes in the pilots as details in the White Paper are rather thin. This is a crucial part of how the Government are going to be taking forward our biodiversity commitments.

I say again that this is an extremely timely debate. Maintaining healthy, viable ecosystems over the long term is crucial to human well-being and to the survival of our planet. To that end, it is vital that we have a large-scale strategic vision, such as that drawn up at Nagoya, as well as clarity on how it will be delivered at the European, national and local levels so that we can better deliver the necessary biodiversity protection.

20:00

[Lord Gardiner of Kimble]

My Lords, I, too, congratulate my noble friend on securing this important debate. The Nagoya protocol rightly relates to global issues, but I will concentrate on the effective implementation of the agreement in the UK. I therefore declare an interest as executive director of the Countryside Alliance, as well as a farming one.

This country should show leadership not only internationally but within the European Union to protect and enhance natural assets and to promote environmentally sustainable growth. I am pleased that the Government's natural environment White Paper seeks to address many of these issues. However, I hope that I am not being too ungenerous by saying that one has to wade through amounts of jargon and suggestions of new bodies being set up to try to discover what we can do practically in our towns, suburbs and countryside to achieve economic growth in an environmentally sympathetic way and to adhere to the principles of Nagoya.

I am well aware that this country may be a small cog in the global environment, but we are significant because we should and can lead from the front. This is an area where, collaborating closely with our European and Commonwealth partners, we can force the pace. We can do so much in urban areas to make a significant contribution not only to biodiversity but to the quality of life of the residents and workforce of our cities and towns. Companies and institutions should play their part in bringing a greener infrastructure to urban areas. Everyone with a garden—large or small, window box or terrace—can also play their part. The noble Baroness, Lady Hilton of Eggardon, gave us a lead on why our ponds and water courses are so vital.

I turn to matters rural, for it is here that much of Nagoya in the UK will be achieved. With more than 70 per cent of the UK managed by rural communities, farmers and land managers play a crucial role for the nation in so many regards such as water supply, flora and fauna, food production and landscape. We need increasingly to ensure that we produce enough food in this country, as food security becomes an ever higher priority in public policy. There is of course a range of professionals who have cared for the land over many generations. The Government should back them in this role.

When it comes to halting declines in habitats and species—a key objective in the Nagoya agreement—one needs to look no further than the uplands of the north of England. There, heather moorland that has been managed for grouse shooting has been responsible for making the greatest contribution to the improvement in the environmental health of the country's outstanding wildlife and geological sites. Sites of specific scientific interest cover more than 2 million acres of the land surface of England, and provide vital and extensive refuges for wildlife and essential free natural resources for people. Today, 96 per cent of grouse moors are in a favourable or recovering condition. The support of upland landowners and grouse moor managers has been crucial in achieving this goal. Moorland managed for grouse shooting accounts for some 850,000 acres of uplands, 60 per cent of all upland SSSIs and nearly one-fifth of all England's SSSI land.

What is either not known or overlooked is that the majority of that management is carried out at the private expense of the land manager. The rural community of this country has a long track record of working in harmony with nature. Since the Moorland Association was formed 25 years ago, members have regenerated and recovered more than 217,000 acres—including 57,000 in the past decade—thereby exceeding the Government's 2010 conservation target by 170 per cent. Grouse moor owners have shown that they have the ability to achieve this at their own cost, but it should be with the Government's backing.

It may be an inconvenient truth for some, but it is the case that the hare was in its most abundant numbers when its habitat was managed for coursing and hare hunting; the red deer herd on Exmoor was one of the finest in the world because of the management undertaken by the three packs of staghounds; and the fox was best managed and looked after when the species was considered quarry rather than vermin. The White Paper claims that:

“Nature is sometimes taken for granted and undervalued”.

However, this is simply not the case for those individuals who manage the countryside and have an interest in its future. The Government should take the opportunity that already exists in the countryside, with rural communities undertaking conservation work each year.

All signatories to the United Nations convention on biodiversity are to draw up national biodiversity plans. These should include measures to control invasive species, halt the loss of genetic diversity and expand nature reserves to 17 per cent of the world's land area by 2020. Are we to lose the nightingale because we are not prepared to manage the muntjac, which is destroying the habitat of so many species at an alarming rate? Are we to lose the iconic red squirrel because we allow the grey to run riot? It is important that by the time the convention meets in India in October 2012, our country will have made further progress in achieving these highly laudable aims.

The White Paper suggests that there will be local nature partnerships, new nature improvement areas and a range of initiatives. I therefore urge the Minister to ensure that in the evolution of these proposals and their fulfilment, those in the countryside who know so much about it and have a track record of caring for it are actively engaged at every step of the way. It is because of the people I have spoken about, not in spite of them, that the British countryside has remained as exceptional as it still is. If we are serious about implementing Nagoya and securing practical results, we must engage the rural communities on whom we already rely.

20:07

[Lord Knight of Weymouth]

My Lords, I start by congratulating the noble Earl, Lord Selborne, on the Question that stimulated this excellent debate and on his fine opening speech. The Convention on Biological Diversity is a key plank of the international community's commitment to protect our environment. I was fortunate to attend the 2006 conference of the parties in Curitiba, Brazil, as the UK ministerial representative, and I have retained a strong commitment to this agenda as a result. Last October's conference of the parties to the convention in Nagoya, Japan—as the noble Earl said—was described by the Government as “historic”. None of us can disagree, and it was an important statement of intent from the new Government that the Secretary of State herself attended to take part in the negotiations.

The outcome was positive. The 190 countries agreed a refreshed vision that by 2050 biodiversity will be valued, conserved, restored and wisely used, maintaining ecosystem services, sustaining a healthy planet and delivering benefits essential for all people. The parties also agreed a shorter-term ambition to:

“Take effective and urgent action to halt the loss of biodiversity in order to ensure that by 2020 ecosystems are resilient and continue to provide essential services, thereby securing the planet's variety of life, and contributing to human well-being, and poverty eradication”.

The five strategic goals are particularly significant in focusing our minds. They are: to address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and society; to reduce the direct pressures on biodiversity and promote sustainable use; to improve the status of biodiversity by safeguarding ecosystems, species and genetic diversity; to enhance the benefits to all from biodiversity and ecosystem services; and to enhance implementation through participatory planning, knowledge management and capacity building.

This is the right response from Governments to the challenges facing the planet—not just for the sake of biodiversity but because of the importance it has for human prosperity and well-being. The national ecosystem assessment, commissioned by the previous Government and published by this one, gives examples of that importance to humanity. It states that the benefits that inland wetlands bring to water quality—here I pay tribute to the speech of my noble friend— are worth up to £1.5 billion per year to the UK. Pollinators are worth £430 million per year to British agriculture. The amenity benefits of living close to rivers, coasts and other wetlands is worth up to £1.3 billion per year, and the health benefits of living with a view of a green space are worth up to £300 per person per year. It is clearly in the public's interest for the commitments made in Nagoya to be translated into action here in the UK. Indeed, they can serve as the benchmarks to test the success of the Government in delivering on their commitment to the natural environment.

I do not want to appear too cynical, although that is the burden of opposition, but while UN conferences meet every two years and agree important words—the noble Earl suggested this—and while we have in the past made commitments, for example, to the IUCN's Countdown 2010 target, targets are serially not met by Governments of whatever complexion and words too often do not turn into action. I have therefore looked at the new White Paper, The Natural Choice, with great interest. It was not published with much of a fanfare. I heard about it via word of mouth. I am sure that is not down to the new shyness of Mrs Spelman, the Secretary of State, to be heard in the media. I am happy to believe that the media had little appetite for something as uncontentious as a policy paper on the natural world.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

It is good news.

[Lord Knight of Weymouth]

It is good news, as the Minister says from a sedentary position, but it does raise my first question for him. If we are to realise the aims of Nagoya, we need to raise the profile of these issues and their importance with the public. How is the department going to achieve this? A genuine cynic might say it has already done a remarkable job. At the same time that Mrs Spelman was in Nagoya, her department was busy trying to privatise the forests. It is a novel approach, but privatising trees was certainly an effective way of getting the public engaged on the importance of protecting biodiversity.

Returning to the White Paper, I accept that it makes clear that the Government's detailed response will be in a new biodiversity strategy for England, which has been referred to,

“to follow this White Paper”.

Can the Minister assure us that, unlike the water White Paper or the waste policy document, this will not be delayed? Will it be published this month, as the noble Earl suggested? Can we expect Ministers touring the studios to promote it this time? What about the money? I note that over the five-year period Defra will lose £2 billion in cash terms from its budgets. There are around 70 commitments in the White Paper. How much will be spent on meeting them? How much has been committed to fund meeting the new commitments made in Nagoya? The press release the department published at the time suggested new money of £2.6 million over four years for international biodiversity. Can the Minister assure us that that is enough?

In the mean time, there are some other questions to ask in relation to action at home and abroad to address the five strategic goals that I took the time to read out. I very much welcome the renewed commitment in the White Paper to the Darwin initiative. I have been fortunate enough to visit Darwin projects in three continents of the world and have seen the very positive effect on animal and human populations alike. Darwin is part of the UK punching way above its weight internationally on these issues. The world genuinely looks to us to help broker conservation agreements such as the GRASP agreement I signed in Kinshasa in 2005 to protect great apes. This sort of work is the result of remarkable work by civil servants in the Minister’s department. Can he tell us whether staffing and resources in the tiny international wildlife division are being protected?

At home, in my time, I was pleased to insert in the Natural Environment and Rural Communities Act the duty for public bodies to have regard to biodiversity loss. Whitehall took some persuading that that was justified and was not a costly burden on services such as the NHS. Can the Minister tell us, in the course of meeting the first of the five Nagoya goals, what bilateral discussions have taken place since October between Defra Ministers, Ministers from other departments and Ministers from devolved Administrations that have included biodiversity protection on the agenda? If he cannot tell me off the top of his head, perhaps he will write to me. How will the Government ensure that action is taken across departments, in devolved Administrations and in all tiers of Government to secure the commitment to halt biodiversity loss?

Finally, the other strategic goals all need biodiversity to be a key consideration in land use. How will this be achieved? I was pleased in my day to agree PPS9 with the then Office of the Deputy Prime Minister to secure this as a material consideration in the planning system. The planning system is currently going through massive changes via the Localism Bill, which is in Committee today in this Chamber, and measures such as PPS9 will be absorbed into the national framework and the regional tier of planning protection will disappear altogether. Conservation groups have rightly expressed concerns that the Government's approach to growth will damage the environment. In that context, can I ask the Minister how the Secretary of State is getting on with Mr Pickles? They appeared to have a bit of a set-to over waste collection. Have such arguments been consigned to the dustbin of history or is there a danger of them being recycled over the burden that councils, developers and planners will have to bear in playing their part on halting biodiversity loss? Given that the Chancellor said in his Budget speech that planning will now have jobs and growth as the priority, can the Minister give us reassurance that this will not squeeze out biodiversity and the goals of Nagoya?

To conclude, this has been a useful opening debate in what I hope will be ongoing scrutiny by your Lordships' House of the implementation of the Nagoya agreement. The ambition is to be applauded, but it is against the actions of the whole of the Government that the Secretary of State and her Ministers will be judged.

20:16

[Lord Henley]

My Lords, I start by offering my welcome to the noble Lord, Lord Knight of Weymouth, on what is, I think, his first appearance at the Dispatch Box back as a spokesman on Defra matters. The noble Lord started his ministerial career, some years ago, as a Minister in this honourable department, and we welcome him back as the opposition spokesman on this. He brings a wealth of experience, and I was particularly grateful for the fact that he reminded us that he had attended earlier conferences on this matter. He will bring great expertise to this subject.

The noble Lord asked me quite a number of questions, as did all the other noble Lords who spoke. I think that all noble Lords will understand that, in the 12 minutes that I am allowed, it will barely be possible for me to answer a mere tithe of the questions. I will try to do my best, but I make it clear that I will respond by letter in due course in good time. I would also like to thank my noble friend Lord Selborne for bringing forward this debate—in the dinner hour, admittedly, when we are limited to merely an hour. I would also like to echo a point made by an opposition spokesman and say that this might have to be the first of many debates where we can explore these issues in good time.

I was very grateful to my noble friend for referring with praise to the natural environment White Paper, as did others, just as I was grateful for his references to Kew, to which he has given honourable service in the past. Kew is close to all our hearts and I imagine that the noble Lord, Lord Knight, was involved with Kew back in his ministerial days. Again, that is something that we would want to look to.

The noble Baroness, Lady Hilton, asked a number of detailed questions but started off by mentioning that she was a trustee of a freshwater trust, and referred to the drought. I remember the last time we had a fairly serious drought. One can only say that in this House—not in another place, but we are all somewhat older—we can remember Denis Howell and how, soon after he was appointed Minister for Drought, we had a lot of rain. My right honourable friend the Secretary of State has pointed out to me that ever since she announced that there was a drought in one part of the country, we have had some fairly consistent rain. However, the noble Baroness quite rightly referred to many rivers not being in good condition, and she wanted to know what we were going to do about that, whether our work on freshwater science was adequate and what monitoring there was of our various agri-environment schemes. Again, I will write to her.

On the larger questions of drought and water shortage, again I would refer back to the Climate Change Act and the work that has been done over the years since then in terms of adaptation to climate change by a number of bodies. I was recently at Rutland Water where I saw what Anglian Water was doing in terms of announcing its adaptation to climate change. There is much we can do, much that is already being done and we should be grateful for that.

My noble friend Lady Parminter referred, among many other things, to problems relating to the sustainable use of fishery resources. Again, this is something very close to my honourable friend Mr Benyon’s heart, particularly the problems of discards. We will continue to work on this, and I know my honourable friend has made considerable progress, but this is something we obviously have to work very hard on in our negotiations with Europe.

My noble friend Lord Gardiner, among many other things, referred to the particular importance of achieving both economic growth and greater biodiversity. The important thing to remind all noble Lords is that these are not opposed to each other—they are matters that we can achieve together and certainly want to. Again, I was very grateful for what my noble friend said about heather moorland and the grouse moors. I remind him, as I think he was reminding the House, that they are really the only businesses in the upland areas that survive without subsidy.

The noble Lord, Lord Knight, as is right and proper for all opposition spokesmen, asked a whole range of questions, particularly about the importance of raising the profile of these matters. We can achieve that to a very small extent through debates in this House, but it is something that we should all try to do. He asked about the timing of a future White Paper on water. Again, that is something for which he would not expect me to give a conclusive date at this stage, but I can assure him that it will appear in due course at the appropriate time. We want to make sure that we get that right.

The noble Lord also asked about the importance of bilateral discussions, not just between Defra and other departments but between Defra and the devolved Administrations. I can assure him that we will continue to discuss matters with all other departments, as the Government are increasingly good at doing, but we shall also continue to discuss these things with the new devolved Administrations. I can assure him that, with new Ministers being in place in all three of the devolved Administrations, we have already established relations with them and we will make sure that we discuss these matters more importantly.

I want to devote my closing few minutes to Nagoya. As the House will be aware, my right honourable friend the Secretary of State played a key role in securing those milestone agreements at Nagoya. I thank the noble Lord, Lord Knight, for his remarks about her attendance there. Since then, officials have been working very hard to ensure that those key decisions from that meeting are implemented and that we prepare for the next conference in Hyderabad in 2012.

There were 47 decisions made at the Nagoya meeting and we have identified five key strategic priorities for implementation, as my noble friend Lord Selborne made clear. The key strategic priorities are: first, implementing the strategic plan for biodiversity from 2011 to 2020; secondly, pursuing the objectives of the resource mobilisation strategy; thirdly, stepping up the process to integrate valuation of biodiversity and ecosystem services into financial processes; fourthly, making progress on reducing emissions from deforestation and forest degradation, which is, I should say for the sake of Hansard in case I get a further chance to talk about it, what we now refer to as REDD+; and, fifthly, establishing the intergovernmental platform on biodiversity and ecosystem services.

As well as that, we have been working, as other noble Lords have made clear, with the European Commission to develop the EU 2020 biodiversity strategy, which was published on 3 May. The noble Baroness, Lady Hilton, and my noble friend Lady Parminter, said that tomorrow the Environment Council will consider these matters. I very much hope that an agreement can be reached, but I note the queries from some noble Lords about how we will achieve that. We recently published—again, I am grateful to all those who have spoken about it—our natural environment White Paper for England and our national ecosystems assessment for Britain, and I welcome what the noble Lord, Lord Knight, said about that.

In the few remaining moments, I should like to say a little about the five strategic priorities and explain the work that is underway to ensure that the United Kingdom both meets the demands of the Nagoya agreement at a domestic level and achieves the greatest influence internationally. Implementing the strategic plan for biodiversity was one of the main areas for United Kingdom leadership at Nagoya and now offers opportunities to show our leadership role. That plan set 20 targets in all areas of biodiversity. The United Kingdom led in the preparations for the strategic plan and it is therefore appropriate that we should now lead in the development of meaningful, proportionate and realistic indicators for these targets for use by the global community. This week, the United Kingdom is doing just that by hosting an expert workshop to develop such indicators. To inform the work of this workshop, the United Kingdom commissioned an international review of the use of indicators for assessing biodiversity at the national level, which will be a key reference document for the experts.

The resource mobilisation strategy is intended to be the main means of providing support to developing countries to implement the strategic plan on global biodiversity. At Nagoya, there was agreement to indicators of biodiversity spend and we are already engaged in the process of establishing baselines and targets for those 15 indicators. We are also identifying options for innovative financial mechanisms for biodiversity through our work in the EU.

We are also putting natural capital at the heart of government accounting by working with the Office for National Statistics to fully include natural capital in the United Kingdom environmental accounts and will establish an independent natural capital committee reporting to the Economic Affairs Cabinet Committee chaired by the Chancellor of the Exchequer. The committee will advise the Government on the state of English natural capital.

Finally, turning to REDD+, my department is working closely with the Convention on Biological Diversity to help develop advice on applying biodiversity safeguards, which are operational guidelines and standards that should be applied to prevent harm and enhance biodiversity in forests and linked environments from REDD+ activities, as well as indicators for REDD+, through research, finance and by leading expert discussions. This will also inform negotiations on safeguards in the climate change convention and, in turn, will help to achieve other linked benefits for developing countries and the global environment, including effective carbon storage and poverty reduction.

The International Climate Fund supports these multiple goals under forestry and REDD+, helping countries’ wider efforts on climate change mitigation and adaptation, and sustainable low-carbon development. My department has £100 million allocated to support REDD+ over the next four years but that is only part of the £2.9 billion coming from the United Kingdom through DECC and DfID.

I would like to go on speaking for some time, but obviously there are constraints on that. What I can say is that I would like to offer an assurance that I will write to noble Lords about a range of the points they have raised, and to make it clear that the Government take their biodiversity commitments very seriously indeed. Officials within Defra are working hard to ensure that we continue to show leadership both internationally and within the country as regards biodiversity, and we are committed domestically to ensuring positive and real change.

Again, I thank my noble friend for raising the matter and I welcome the opportunity I have had to outline, albeit briefly, some of our approach to the commitments made at Nagoya.

Localism Bill

Monday 20th June 2011 Lords Chamber

Committee (1st Day) (Continued)

20:31

Clause 6 : Limits on power under section 5(1)

Amendment 19

Moved by

[Lord Greaves]

19: Clause 6, page 4, line 32, leave out “make provision” and insert “make an order”

[Lord Greaves]

My Lords, in moving Amendment 19, I shall speak also to Amendments 20 and 24, but I should it make it absolutely clear, in view of the discussion on the previous grouping, that I am not speaking to Amendments 21 and 25 as they are substantively the same as Amendments 22 and 23, which we discussed in the previous group. There is no point in going over them again.

Amendments 19 and 20 seek to change the word “provision” to the “order” so as to assist the Government in making these clauses more understandable. There are two uses of the word “provision” in Clauses 5 and 6. In Clause 5(1) the word “provision” refers to existing statutory provisions, while in Clause 6(1), where I want to make these changes, the word “provisions” refers to an order made under Clause 5(1), so “provision” means two quite separate and different things. For anyone reading the Bill, it is not entirely clear until you have sorted it out that that is the case. It is easy to solve the problem simply by calling them “orders” in Clause 6(1) rather than provisions. They are orders, and while I do not expect the Minister to say that we can have the amendment, I hope that she will look at it and see whether the Bill can be tidied up in this sensible way, or by doing something similar that would satisfy the draftspeople.

The third amendment in the group, Amendment 24, is rather more substantial. It arises from concerns expressed by the Open Spaces Society about the effect that the Bill may have on special pieces of land that at the moment are protected under trust rights. The amendment seeks to insert the words,

“the provision does not remove or amend any trust or right of the public, or repeal or amend any statutory procedure (whenever passed or made) for the removal or amendment of that trust or right”.

The society is worried that even with the limitations proposed, the general powers could be used to enable local authorities to do whatever they want with open spaces and public access land.

Clause 1(1) enables a local authority to do anything that individuals generally may do. It is suggested that the Government either amend the Bill or give a Pepper v Hart undertaking that the Bill or any action under it will not bypass existing legislation in order to authorise a local authority or Minister to use, appropriate or dispose of land which is subject to special protection or conservation, or relax any existing procedures relating to that land.

There are some public interests which are considered so special that they are given particular statutory safeguards to prevent them being easily abolished or altered. One example is a highway, whether it is a motorway, public footpath or anything in between. Another example is an open space or park which may have been subject to a specific statutory trust when first transferred to a local authority, such as under Section 10 of the Open Spaces Act 1906, or is deemed to be held in trust for the use of the public under a judgment of the House of Lords in 1897 known as the Brockwell Park case. No doubt noble Lords have the details of that at their fingertips—I do, but I shall not read it all out in great detail.

The Bill’s general power does not appear to be intended to be extended to relax the existing special procedures for the protection of these public trusts or rights, but there is a risk that attempts will be made to argue that it does so once it is passed. The Government are therefore asked either to insert a provision clarifying this point or at the very least to give an assurance to the Committee today or subsequently.

I have with me a fascinating document which is a photocopy of a Times law report dated July 1897. I would be delighted to read it to the Committee, but will not do so. It sets out the details of the judgment to which I referred.

My final point is rather more modern. The Government are committed under the coalition agreement and various policy statements that have been made in the past year to the creation of a new green space designation. How are such new green spaces, which will be provided under what the Government are proposing, to be safeguarded unless they are held under one of these protective statutes or a restrictive covenant that cannot be easily released? I do not expect the Minister to be briefed on that question, but it needs to be thought about in wider government policy. If it is their intention to provide a significant number of new protected green spaces under some designation or other, which is the Government’s excellent policy particularly in urban and suburban areas, how are they to be protected? Whether the Minister can dig out any information on the latest government thinking and let us know about it, I do not know, but it would be very helpful if she could. I beg to move Amendment 19.

[Baroness Byford]

Can my noble friend enlarge on his Amendment 24? I am not quite sure that I understand it correctly as he has proposed it. Does it mean that any current public open space or public access land could not be altered even if a local community wanted it? He will be well aware of cases where, following subsidence of cliffs, footpaths have had to be altered. I would hate to think that, in some way, his well intentioned amendment would restrict what local supporters of open access might be able to do. Has he considered that problem?

[Lord Greaves]

I am not a lawyer but lawyers could look at the amendment to see whether the wording is wrong. The amendment is not intended to apply to access land designated under the Countryside and Rights of Way Act 2000, whether it be mountain, moorland, heath or down; it is also not intended to apply to commons because they have separate protection under the Commons Act; nor is it intended to apply to coastal access land covered by the 2000 Act. It is intended to apply to open spaces such as local parks, local mini parks, amenity land and so on which have been provided in the past under a trust deed or conditions of transfer to local authorities. I am no expert on this—nor, I imagine, is the noble Baroness—but it is intended for land which is protected not by general legislation but which has particular circumstances and particular legal conditions attached to it.

[Baroness Byford]

Perhaps the Minister will clarify this when she responds because I am still not quite clear. If local people decide that they want to alter the space, or whatever it is, I am concerned that if the amendment goes through as it stands that would not be possible. I still may not be right and I should like some clarification.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, I shall start with Amendment 24 because the noble Baroness, Lady Byford, has asked me to clarify what it means. I do not know because it is not my amendment. It is the amendment of the noble Lord, Lord Greaves.

I am also not sure of the problem that gives rise to Amendment 24. I suggest that the noble Lord and I talk about this before the next stage because there is clearly something in his mind about trusts. I do not think it is affected by the Bill but he perhaps still sees it as a problem. I shall give him my answer and then he can consider whether that is necessary.

The order-making power in Clause 5(1) can be used only to remove restrictions and limitations that stop a local authority from acting as a natural person does. It is not a general purpose tool to remove any obligation placed on local authorities such as the removal of trusts or safeguards associated with particular public interests. In exercising the power, the Secretary of State is bound by his own obligations under the Bill in relation to the conditions safeguarding any protections, rights and freedoms which, in our view, provide sufficient safeguards against the removal of any statutory trust in relation to open spaces or parks. I think that answers the noble Lord’s question and perhaps he will advise me whether that is so when he comes to reply. If not and he is still worried about it, we might have a word before we get to Report.

Amendments 19 and 20 reflect a preference for the word “order” over “provision”. Although it possibly makes little difference in practice, we believe that “provision” is right because there may be cases where one order deals with a number of provisions and each provision should meet the tests set out in subsection (2).

We believe that Amendments 21 and 22 are unnecessary. The power is a power to remove statutory restrictions. If the same thing can be achieved in a different way, then it is hard to see how they could be statutory restrictions in the first place. So if an order is unnecessary, I am sure that that would be brought to our attention before it was ever passed.

Amendments 23 and 25 were not spoken to by the noble Lord. As for Amendment 24, this would also be governed by the third and fourth conditions set out in subsections (6)(2)(a) and (6)(2)(b), which say that the provision should be “proportionate” and should strike a “fair balance” between competing interests. However, the noble Lord will tell me whether he needs to discuss this matter further before the next stage or will accept what I have said.

20:45

[Lord Greaves]

I am most grateful for the Minister’s response. On Amendment 24, I shall take further soundings from my advisers on the matter in the light of what she has said. If necessary, I shall take up her offer—I thank her very much. On the other amendments, I shall reflect on what she has said, because she clearly made a substantive point that I had not previously considered. I thank her for causing me to use some more brain power on that matter. On that basis, I beg leave to withdraw the amendment.

Amendment 19 withdrawn.

Amendments 20 to 25 not moved.

Clause 6 agreed.

Clause 7 : Procedure for orders under section 5

Amendment 26

Moved by

[Lord Beecham]

26: Clause 7, page 5, line 27, leave out “negative,”

[Lord Beecham]

My Lords, there are three short amendments here. The first simply reaffirms previous amendments, which would leave out the possibility of a negative as opposed to an affirmative order. The second is slightly different in character and deals with the Clause 8 reference to an eligible parish council on which the general power might be conferred, eligibility being to be determined by the Secretary of State under Clause 8(2). The point of the amendment is to focus attention on the fact that at this stage we have no idea what would constitute an eligible parish council and to invite the Minister either to get that on the face of the Bill or to make the intention clear. It would be ridiculous, in our submission, if we were to leave the Bill in a state whereby a tiny parish council would have the full range of general powers of competence. I realise that that is not the intention, but it should be clarified during this legislative process.

Finally, Amendment 28 again refers to the issue of the affirmative rather than negative procedure. I will not again rehearse those arguments. I beg to move.

[Lord Greaves]

My Lords, on the affirmative business, I think that the noble Lord and the Minister will know that the proposal has our support. It seems that the Government are looking hard at recommendations made by the Delegated Powers Committee. We look forward to their comments in due course, but there is clearly a head of steam round the House over this, and I hope that the Government are sensible.

On the question of parishes, I have seen a draft version of the proposed order. I am not sure how widely it has been circulated or what its status is, except that it has “Draft” stamped all over it. It would be very helpful if it could be circulated widely. I think that it is a good order in its present form; it makes it much easier for a parish council to become eligible than it is under the present set-up. We will find out whether the noble Lord, Lord Beecham, will also think that it is good, since it may well apply to quite small parish councils. There is no point in discussing that further today—but clearly, before Report, it needs to be in the Library of the House so that everybody can see it.

[Baroness Hanham]

My Lords, I confirm that the statutory instrument relating to this is in the Library and has been there since 15 June.

Clause 8 defines local authorities for the purposes of the chapter, which are the bodies that will have the new power. By restricting the definition to “eligible” parish councils, the clause provides a power for the Secretary of State to set conditions by order for which parish councils will have the general power.

We are not making the general power of competence available to all parish councils, as the noble Lord suggested. Our view is that, given the breadth of the power and the widely varying circumstances of parish councils, there should be some criteria in place to demonstrate that the parish is representative of its community and has some understanding of the power to help to prevent misuse.

The draft statutory instrument that we made available to the House in the Library on 15 June indicates our intention that, to access the power, two conditions need to be met. These are that two-thirds of the councillors are democratically elected and that the parish clerk has received training in the use of the new power. These criteria have been discussed with the National Association of Local Councils and other interested parties.

Our aim is to ensure that eligible parish councils will be able to use the new power at the same time as other local authorities—an improvement over what happened with the existing well-being power, which was extended to some parish councils only in 2009. However, the noble Lord asked me particularly about the criteria, and those are the criteria that will be in the statutory instruments.

Amendments 26 and 28 are being considered. I will come back on these at a later stage.

[Lord McKenzie of Luton]

I wonder if the Minister could help me on one point, although I have not participated in this debate. Is the order in the description of eligible parish councils for the general power the same one that will run for parish councils for neighbourhood planning?

[Baroness Hanham]

My Lords, I would have to get an answer to that for the noble Lord. I am not sure. This specifically refers to the general power. I think that it might be different for neighbourhood planning where there is a parish council, but I would like to be sure. Perhaps I can wave my hands and find out. No one seems to know. If my runner, my noble friend Lord Attlee, can achieve something, we can deal with this. I think that the noble Lord has asked a question that we will need to give a written reply to.

[Lord Beecham]

I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Clause 7 agreed.

Clause 8 : Interpretation of Chapter

Amendments 27 and 28 not moved.

Clause 8 agreed.

Clause 9 : General powers of certain fire and rescue authorities

Amendment 29

Moved by

[Baroness Smith of Basildon]

29: Clause 9, page 8, leave out lines 33 to 41

[Baroness Smith of Basildon]

My Lords, I shall speak also to Amendments 30 and 31. I am seeking some clarity with the probing Amendments 29 and 30. The Bill extends the general powers of fire authorities. We discussed that at Second Reading and we understand the reasons why, but concerns about the power of the Secretary of State to then prevent fire and rescue authorities from using those powers or place conditions as the Secretary of State may dictate by an unamendable order have already been raised by both my noble friend Lord Beecham and the noble Lord, Lord Newton of Braintree. The issues around scrutiny have been well rehearsed and could apply equally to these clauses on the fire service.

I have a few other questions, and seek clarity from the Minister if she is able to assist me on this. In Clause 9, I seek to understand why new Section 5C makes changes to the Fire and Rescue Services Act 2004 and why new Section 5E contains the procedure for the Secretary of State’s orders for new Section 5C. New Section 5C(1) and (2), as the Minister said earlier, ensure that if there is a statutory provision that curtails the new rights and powers of a fire authority, or if something overlaps, they can be removed, and there are procedures for the orders there.

It would be helpful to have an explanation on this. When the Secretary of State is seeking to put forward orders under new Section 5C(1) and (2), he has to follow a procedure. He has to consult and he has to publish a draft of the order and an explanatory document outlining the proposals, giving reasons for the order and outlining any consultation that has been undertaken, any representations that have been made as a result of that consultation and any changes that have been made. However—this is what I fail to understand—that procedure does not apply under new Section 5C(3) and (4). There is no guidance and no provision for the Secretary of State to use those powers—other than to consult—for new subsections (3) and (4). There is no duty to publish the consultation or to give information on any changes that have been made.

New Section 5A, which will be inserted into the 2004 Act, gives new powers to allow the fire authority to do pretty much anything that it thinks is appropriate or incidental to its functions, but it is then constrained by the Secretary of State, who can in effect withdraw that right by order, as long as he consults. I find it difficult to understand why there is no guidance, no process and no criteria by which the Secretary of State’s actions can be judged to be reasonable or appropriate. That could make things extremely difficult for a fire and rescue authority. Having told the authority that there are virtually no boundaries, as long as what it does is appropriate to its functions, however incidental, the Bill then specifies boundaries but does not say what those boundaries are, other than that they can be changed by the whim of the Secretary of State as long as he consults. Issues of parliamentary scrutiny have already been raised, but there are wider implications relating to why the process that is outlined in new Section 5E, which is similar to the process for the new powers of competence given to local authorities, is not applied to new Section 5C(3) and (4).

Will the noble Baroness say what guidance will be published for the fire and rescue services, so that they know what the boundaries are? What criteria will the Secretary of State use? These two new subsections give the Secretary of State the power to prevent fire and rescue services from doing anything that they want to do or allow the Secretary of State to put conditions on that. Unless they and the Secretary of State know what the boundaries are, the Secretary of State seems to be able merely by order to prevent them from doing anything that they have chosen to do.

Will the criteria that are used, whatever they are—they are not in the legislation and I am not sure that they will be published at all—be the same for all fire and rescue authorities or will they be performance related in some way? It would be helpful to know why the procedures provided for the Secretary of State in new Section 5E apply to subsections (1) and (2) of new Section 5C but not to new subsections (3) and (4). I do not understand the logic of that. I understood the noble Baroness to say that the reason for the powers in new subsections (3) and (4) was to safeguard finances but that there were no plans to use them—these situations would be rare. However, I do not think that that is adequate when we are putting into legislation something that we feel we may not often use. I am sorry if the argument is rather complex, but I find it difficult to understand why no process is in place for orders relating to what are in effect more draconian parts of the legislation when there is a process for other parts.

Amendment 30 is a probing amendment to seek clarification on what can be charged for. As noble Lords will understand, since the Fire Services Act 1947, fire and rescue services have been allowed to charge for what are known as special services—those that are not their core services. The 2004 Act endorsed that. The Government then consulted on a specified list of 12 special services that could be charged for at local fire authorities’ discretion. To date, not all authorities have charged for all those services, although I note that, with the downward pressure on the fire and rescue service budget, a number of fire and rescue services are now looking to charge for more services and are putting proposals to the authorities. The current position is that the Secretary of State has to set out by order, following consultation, the services for which a fire and rescue service may charge and who it may charge. Those services which are charged for are quite clear and must be specified. The proposals in the Bill are completely the opposite. They basically say that the fire and rescue authority can charge for anything that is not in the list. It is a very limited list, and it is therefore likely to lead to more authorities charging for more services.

21:00

I have a number of questions; if the noble Baroness is able to answer them, it will help my understanding. I am not clear about what are regarded as core services. The Bill lists three areas which it describes as emergencies that cannot be charged for, but there are a number of grey areas. The Explanatory Notes for the 2004 Act referred to issues where the fire and service authority would look to give community support. The example was a provision in Section 12 of the 2004 Act which provides the fire and rescue authority with the power to agree to the use of its equipment or personnel for any purpose it believes appropriate wheresoever it chooses. For example, a fire and rescue authority may agree to help pump out a pond as a service to its community. I think that your Lordships would agree that that would be an appropriate task for a fire and rescue service to undertake. However, having given this example in 2004, are the Government now saying that this is a service for which the fire and rescue authority could charge?

Has any assessment been made of the income that is likely to be generated from this extension of charging powers? Has any assessment been undertaken before embarking on this legislation of just how many authorities currently charge and for which services? How is this likely to change? For example, local authorities can charge for animal rescues. Few do, so Mrs Jones’s cat up a tree would be rescued; anyone who was listening to Ronnie Corbett on Radio 4 as we were driving into the House today would have heard his story about this. If a farmer’s cow was in a ditch, for example, most fire and rescue authorities would undertake that. Few would charge for it.

Has any assessment been made of the impact on insurance premiums? There is a lack of clarity, but there is likely to be increased charging for domestic and commercial flooding incidents. If they are a result of intemperate weather causing floods, that could not be charged for. However, a burst pipe could be charged for in some parts of the country but not in others. That could lead to insurance companies assessing the risk of whether or not the householder is likely to claim against their insurance.

I wonder if it is the Government’s intention to seek, through charging, increased revenue for fire and rescue authorities to compensate for the cuts in fire authority budgets. We need greater clarity. It is important to understand exactly what can be charged for by which authorities. The authorities need to know that, as do the public and businesses, who may find an increased burden on them as a result.

Amendment 31 is specific. It proposes that fire safety and prevention issues should not be charged for and should be regarded as a core service. Under the 2004 Act, that was changed. It was stated in the Explanatory Notes that the fire and rescue service already carries out a wide range of activities to promote community fire safety,

“with the aim of preventing deaths and injuries in the home and reducing the impact of fire on the community as a whole”.

This includes fire safety education, especially for vulnerable groups, smoke alarm installation, chip pan safety demonstrations and fire safety checks for households and others. It goes on to say that most fire and rescue authorities undertake training, working with young people, local businesses, agencies and partnerships. This work is currently carried out on a discretionary basis, and the effect of Section 6 would be to impose a statutory duty. Under the Bill, although it is a statutory duty, it is not included in the list of items that cannot be charged for. Is it the Government’s intention that in future fire and rescue authorities’ fire prevention and fire safety work should be charged for? In making the case that they should not be charged for, I refer the noble Baroness to her own department’s fire statistics, which show how many more people now have smoke alarms in their homes as a result of the work undertaken by fire and rescue services, and the fall in the number of deaths as a result of fire safety and fire prevention measures. In 2001, there were 228,300 deaths due to fire. That figure fell in 2008 to 130,000. That is a significant fall. We should praise our fire and rescue services for the community safety and fire prevention work that they have undertaken. It would be a tragedy if that work was now to be charged for and we saw a rise in fatalities as a result of not carrying out the fire prevention work that our fire and rescue services are capable of delivering.

I apologise to the noble Baroness for asking so many questions but I hope that she can offer me reassurance on the points that I have raised.

[Baroness Hanham]

My Lords, I do not think that I can reassure the noble Baroness about everything at this stage, as she asked a lot of detailed questions of which I had no notice. I will ensure that she receives a full reply to the many questions that she has raised. However, that does not mean that I am not going to answer the other points.

Amendment 29 aims to remove the similar provision in Clause 9; that is, in new Section 5A(1). The aim is to provide the appropriate national authority with powers to prevent stand-alone fire and rescue authorities from exercising the general power to do anything specified, or of a specified description or to set conditions around the use of the power. The noble Baroness referred to restrictions on innovative finance, which I mentioned earlier.

The argument for keeping the provision is also strong for fire and rescue authorities. For example, the power could be used to protect firefighter/public safety or the Exchequer from novel or risky financial transactions. This takes us back to the previous discussion on new Section 5A(1). We are most concerned about any financial arrangements or financial transactions which may or may not be justified and over which nobody has any control, although I admit that that is not covered in the Bill. These provisions provide a necessary safeguard, given the breadth of the new power, to ensure that risks are managed and can be managed.

For a new order made under new Sections 5C(3) and 5C(4), the appropriate national authority must consult and adopt the affirmative procedure. This should ensure that the order is subject to rigorous parliamentary scrutiny.

The effect of Amendment 30 would be to remove entirely the charging provisions set out in Clause 10 in new Sections 18A, 18B and 18C. That would mean that the fire and rescue service would not be able to charge for any functions under the Bill. Charging is optional—it is a “may” in the Bill—and subject to a local consultation. It is capped at up to full actual cost; that is, not for profit. This enables the fire and rescue service to cover its costs for providing services, but it particularly excludes individual and domestic premises.

Fire and rescue authorities are funded to maintain an efficient service. There is no explicit funding for ancillary activities that have increasingly fallen to brigades by default. The noble Baroness made some suggestions about cats up trees and cows in ditches. I have here the words “animal rescue”, which probably amounts to the same thing, and reference to the provision or removal of water in non-emergency situations. Flooding would therefore be covered. There would be other provisions along those lines. Indeed, there is increasing demand for the provision of such services, and that is why the existing charging provisions have been updated in the Bill and why the authorities may make charges.

The noble Baroness will know—she made this point—that charging for some functions has been possible since the Fire Services Act 1947. This power was replicated by Section19 of the Fire and Rescue Services Act 2004. Clause 10(3) of the Bill, which is not removed by this amendment, repeals the Section 19 charging powers in the 2004 Act. Removing the inserted provisions in Clause 10 while repealing Section 19 would mean that fire and rescue authorities would be unable to make any charge for these services.

The noble Baroness also inquired about whether any assessment of insurance had been made. Perhaps I may include an answer on that in my written reply, because of the detail involved.

I turn finally to Amendment 31 about education and reducing deaths. I immediately accept what the noble Baroness said about there having been a welcome reduction in death over the past few years. We believe that fire safety education is a cost-effective means of reducing fire deaths and injuries. Community safety campaigns such as Fire Kills have achieved significant success. Under Section 19 of the Fire and Rescue Services Act 2004, fire and rescue authorities can already charge for giving advice to persons in relation to premises where a trade, business or other undertaking is carried out.

However, it was never the Government’s intention to enable charging for community fire safety or prevention activities, and I will reflect on the best way to achieve our aim. However, I owe the noble Baroness an apology because in my recent letter I said that the Fire and Rescue Services Act 2004 covers the promotion of fire safety as a core function. However, the Bill does not repeal this function and, therefore, fire and rescue authorities will not be able to charge for this service. I apologise for the error in my letter. Our intention was that it should not be possible to charge for core functions such as community fire safety prevention. Perhaps I may make that absolutely clear. Fire fighting and emergency medical assistance are highlighted in Clause 10, proposed new Sections 18A and 18B. We have received advice that as community fire safety and prevention is not excluded from the general charging provision, charging is possible. We will seek further and urgent advice. We need to come back to this issue at Report. Given the advice we have received, particularly on this aspect of charging and cost-effective advice to persons and fire safety education, my complete understanding is that we do not want to charge for them, but in order to make that absolutely clear, we will come back to this issue. I hope that the noble Baroness will not press her amendments.

[Baroness Smith of Basildon]

I am grateful to the Minister for her thoughtful response, which is, I think, confirmation that core functions, as outlined in the 2004 Act, including community safety and fire prevention, would not be charged for. That is extremely helpful. My Amendment 30 was only a probing amendment. It sought clarification on the change from previous statements on what can and cannot be charged for under this legislation. I am grateful to the noble Baroness for her offer to come back and answer my questions in more detail.

What I am trying to get at in Amendment 29—a point she has partially answered, but not entirely—is why the procedures are different in proposed new Section 5C(1) and (2) from those in subsections (3) and (4), under which the Secretary of State can stop a fire and rescue authority doing something or can contain it. I do not understand why the process is different and applies only to fire services, not local authorities. If the noble Baroness can address that issue in her reply, it would be very helpful. I am grateful for the consideration that the noble Baroness has given to my concerns, and I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Clause 9 agreed.

21:15

Clause 10: Fire and rescue authorities: charging

Amendments 30 and 31 not moved.

Clause 10 agreed.

Amendment 32

Moved by

[Lord McKenzie of Luton]

32: After Clause 10, insert the following new Clause—
“Integrated Transport Authorities and Passenger Transport Executives
(1) After section 98 of the Local Transport Act 2008, insert—
“CHAPTER 2AGeneral powers98A General powers of Integrated Transport Authority
(1) An Integrated Transport Authority (“ITA”) may do—
(a) anything it considers appropriate for the purposes of the carrying-out of any of its functions, or otherwise for the purpose of improving the effectiveness and efficiency of transport in, through, to or from any part of the integrated transport area (its “functional purposes”),(b) anything it considers appropriate for purposes incidental to its functional purposes,(c) anything it considers appropriate for purposes indirectly incidental to its functional purposes through any number of removes,(d) anything it considers to be connected with— (i) any of its functions, or(ii) anything it may do under paragraph (a), (b) or (c), and(e) for a commercial purpose or otherwise anything which it may do under any of paragraphs (a) to (d) otherwise than for a commercial purpose and to do it anywhere in the United Kingdom or elsewhere.(2) An ITA’s power under subsection (1) is in addition to, and is not limited by, the other powers of the ITA.
98B Boundaries of the general power
(1) Section 98A(1) does not enable an ITA to do—
(a) anything which the ITA is unable to do by virtue of a pre-commencement limitation, or(b) anything which the ITA is unable to do by virtue of a post-commencement limitation which is expressed to apply—(i) to its power under section 98A(1),(ii) to all of the ITA’s powers, or(iii) to all of the ITA’s powers but with exceptions that do not include its power under section 98A(1).(2) If the exercise of a pre-commencement power of an ITA is subject to restrictions, those restrictions apply also to the exercise of the power conferred on the ITA by section 98A(1) so far as it is overlapped by the pre-commencement power.
(3) Where under section 98A(1) an ITA does things for a commercial purpose, it must do them through—
(a) a company within the meaning given by section 1(1) of the Companies Act 2006, or(b) a society registered or deemed to be registered under the Cooperative and Community Benefit Societies and Credit Unions Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969.(4) Section 98A(1) does not authorise an ITA to do things for a commercial purpose in relation to a person if a statutory provision requires the authority to do those things in relation to the person.
(5) Section 98A(1) does not authorise an ITA to borrow money.
(6) In this section—
“post-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed after the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force on or after the commencement of section 98A(1);“pre-commencement limitation” means a prohibition, restriction or other limitation imposed by a statutory provision that—
(a) is contained in an Act passed no later than the end of the Session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force before the commencement of section 98A(1);“pre-commencement power” means power conferred by a statutory provision that—
(a) is contained in an Act passed no later than the end of the session in which the Localism Act 2011 is passed, or(b) is contained in an instrument made under an Act and comes into force before the commencement of section 98A(1);“statutory provision” means a provision of an Act or of an instrument made under an Act.
98C Power to make provision supplemental to section 98A
(1) If the Secretary of State thinks that a statutory provision (whenever passed or made) prevents or restricts ITAs from exercising power conferred by section 98A(1) the Secretary of State may by order amend, repeal, revoke or disapply that provision.
(2) If the Secretary of State thinks that the power conferred by section 98A(1) is overlapped (to any extent) by another power then, for the purpose of removing or reducing that overlap, the Secretary of State may by order amend, repeal, revoke or disapply any statutory provision (whenever passed or made).
(3) The Secretary of State may by order make provision preventing ITAs from doing under section 98A(1) anything which is specified, or is of a description specified, in the order.
(4) The Secretary of State may by order provide for the exercise by ITAs of power conferred by section 98A(1) to be subject to conditions, whether generally or in relation to doing anything specified, or of a description specified, in the order.
(5) The power under subsection (1), (2), (3) or (4) may be exercised in relation to—
(a) all ITAs,(b) particular ITAs, or(c) particular descriptions of ITAs.(6) Before making an order under subsection (1), (2), (3) or (4), the Secretary of State must (whether before or after the passing of this Act) consult—
(a) such ITAs,(b) such representatives of ITAs, and(c) such other persons (if any),as the Secretary of State considers appropriate.98D Procedure for orders under section 98C
(1) If, as a result of any consultation required by section 98C(5) with respect to a proposed order under section 98C(1), it appears to the Secretary of State that it is appropriate to change the whole or any part of the Secretary of State’s proposals, the Secretary of State must (whether before or after the passing of this Act) undertake such further consultation with respect to the changes as the Secretary of State considers appropriate.
(2) If, after the conclusion of the consultation required by section 98C(5) and subsection (1), the Secretary of State considers it appropriate to proceed with the making of an order under section 98C(1) the Secretary of State must lay before Parliament—
(a) a draft of the order, and(b) an explanatory document explaining the proposals and giving details of—(i) any consultation undertaken under section 98C(5) and subsection (1),(ii) any representatives received as a result of the consultation, and(iii) the changes (if any) made as a result of those representations.(3) Sections 15 to 19 of the Legislative and Regulatory Reform Act 2006 (choosing between negative, affirmative and super-affirmative parliamentary procedure) are to apply in relation to an explanatory document and draft order laid under subsection (2) but as if—
(a) section 18(11) of that Act were omitted,(b) references to section 14 of that Act were references to subsection (2), and(c) references to the Minister were references to the Secretary of State.(4) Provision under section 98C(2) may be included in a draft order laid under subsection (2) and, if it is, the explanatory document laid with the draft order must also explain the proposals under section 98C(2) and give details of any consultation undertaken under section 98C(5) with respect to those proposals.
(5) Section 98C(6) does not apply to an order under section 98C(3) or (4) which is made only for the purpose of amending an earlier such order—
(a) so as to extend the earlier order, or any provision of the earlier order, to a particular authority or to authorities of a particular description, or(b) so that the earlier order, or any provision of the earlier order, ceases to apply to a particular authority or to authorities of a particular description. 98E Limits on charging in exercise of general power
(1) Subsection (2) applies where—
(a) an ITA provides a service to a person other than for a commercial purpose, and(b) its providing the service to the person is done, or could be done, in the exercise of the general power.(2) The general power confers power to charge the person for providing the service to the person only if—
(a) the service is not one that a statutory provision requires the authority to provide to the person,(b) the person has agreed to its being provided, and(c) the authority does not have power to charge for providing the service.(3) The general power is subject to a duty to secure that, taking one financial year with another, the income from charges allowed by subsection (2) does not exceed the costs of provision.
(4) The duty under subsection (3) applies separately in relation to each kind of service.”.
(2) Chapter 3 of Part 5 of the Local Transport Act 2008 is repealed.
(3) In section 9A of the Transport Act 1968, after subsection (2) insert—
“(2A) Chapter 2A of Part 5 of the Local Transport Act 2008 applies to the Executive of each integrated transport area as it applies to the Authority.
(2B) The powers exercisable by an Executive by virtue of subsection (2A) are exercisable by the Executive in its own capacity.”
(4) In section 1(4) of the Local Authorities (Goods and Services) Act 1970, after the words “and any joint authority established by Part IV of the Local Government Act 1985” insert “and any passenger transport executive established under section 9 of the Transport Act 1968”.”

[Lord McKenzie of Luton]

Amendment 32 introduces a new clause related to integrated transport authorities and passenger transport executives. The form of the clause should come as no surprise, as it was moved in exactly this form in Committee in the other place. Indeed, if we took it forward at Report, it would need some updating—for example, to touch on some of the issues we discussed earlier on Clause 5, and so on. In that debate, the Minister, Andrew Stunell, said:

“Integrated transport authorities and passenger transport executives are the responsibility of the Secretary of State for Transport. I am sure that he will be interested in the points that have been made, so I will ensure that the relevant parts of Hansard are drawn to his attention. I am sure that the appropriateness of the available powers is something that he will want to consider in light of the views of the sector and, more widely, of the local government community”.—[Official Report, Commons, Public Bill Committee on the Localism Bill, 10/3/11; col. 961.]

The purpose of retabling the amendment is to give the Minister the opportunity to give us an update.

Noble Lords will probably be pleased to know that I do not propose to go through the amendment line by line, but perhaps I could spend a few moments to explain what it would do and why for those who have not joined our debate before. The new clause would give the six integrated passenger transport authorities a general power in recognition that integrated transport authorities are single purpose authorities. The provisions have been drafted using the same structure as those setting up the general powers for fire and rescue authorities, but with changes to reflect the differences between integrated transport authorities and fire and rescue authorities. The six integrated transport authorities and their passenger transport executives represent the six largest city regions outside London, which are home to 11 million people. The integrated transport authorities and passenger transport executives are the strategic bodies that plan, promote, procure and provide the public transport networks on which those conurbations rely to keep them moving, and which are vital for their development.

The impact assessment on the general power of competence for fire and rescue authorities states:

“Stand-alone fire and rescue authorities will need a similar power”—

to that of local authorities—

“to address the lack of sufficient freedoms and flexibilities to do things that they might properly wish to do which could benefit or contribute to their purposes. Freeing up fire and rescue authorities by providing general powers in the same vein as for local authorities, will therefore … promote the radical devolution of power away from Westminster and Whitehall”.

It would therefore seem perverse, having discussed those powers, if integrated transport authorities were not seen to need similar powers to address the lack of freedoms and flexibilities that may affect what they may properly wish to do.

The major reason why integrated transport authorities require a general power is the straightforward fact that they want to deliver better services more efficiently through collaborative working, which will become increasingly important in current times. It is considered that, without a general power, the integrated transport authorities and their passenger transport executives will not have the legal compass that local authorities will enjoy. Services in the public sector are being challenged to do more with fewer resources and to work in different ways to deliver services. Transport authorities should be able to support growth through local enterprise partnerships, so their ability to work collaboratively across partners will be increasingly important as the new structures develop.

A functional general power would facilitate such working much more readily. It would put beyond doubt the legal uncertainty that might hold back innovative initiatives in metropolitan areas. In non-metropolitan areas, the transport function sits with the local authority, which will have the general power of competence, so there starts to be a divide between transport authorities that have a general power and those that do not.

A general power for the integrated transport authorities and their passenger transport executives would assist them in joint procurement, partnership work and innovative service provision. For example, the Government have said that they want the majority of public transport journeys to be made using smart ticketing by 2014, and they have provided passenger transport executives and Bristol, Nottingham and Leicester local authorities with funding to achieve that. The PTEs are working with Bristol, Nottingham and Leicester authorities on issues such as systems testing, data analysis and ticketing equipment to ensure that that government objective is met in a timely and cost-effective way. However, without any change to the general power of competence, local authorities in those three areas will have that power to engage in joint enterprises and deliver such programmes, but passenger transport executives will not. There are other similar reasons that could be advanced for why these general powers are needed.

My question to the Minister is: please can we have an update on whether the Government will support this general power for integrated transport executives? If the Government do not feel able to support that currently, perhaps the Minister can spell out why she believes that the powers of those transport authorities are sufficient as they stand. The detail of the clause would need some tidying up if we returned to it on Report, but I hope that we could do that with the assistance of the Government. I beg to move.

[Lord Shipley]

My Lords, I support the amendment. It is important that we understand the important role that ITAs and PTEs have in those metropolitan areas. I come from one of those areas. We have always had joint board arrangements, of which fire and rescue has been one, and there have been others. The ITA, and the PTE as part of the ITA, needs to have similar powers at least to fire and rescue authorities, although it is better to have a complete power of general competence. Perhaps I may give an example. The Government are keen to have smart-card operations across the country by 2014. That is being led by PTEs in the areas where PTEs have been directly financed. However, three councils—Nottingham, Leicester and Bristol—do not have PTEs, although they are financed for smart-card ticketing and supported by the PTEs from those other urban areas. Unless the Bill is amended those PTEs will not have a power of general competence, whereas the other areas will, as will those three councils. I think that there will be some complications in procurement policy unless that issue is addressed. It will be interesting to hear the Minister’s views on the situation because, as things stand, there appears to be an anomaly.

[Lord True]

My Lords, it could be that my attention wandered a little, in which case I apologise to the noble Lord. Looking at his amendment, it appears to me that a number of the powers conferred on the Secretary of State by this amendment are precisely the powers which the noble Lord was arguing earlier should be removed or struck down in relation to local authorities. Perhaps the noble Lord could reassure me where the party opposite is because new Section 98C is a twin of Clause 5, which we were discussing earlier, and new Section 98D is a twin of Clause 7, which we were also discussing earlier. Perhaps the noble Lord would explain where the party opposite lies in relation to local authorities and ITAs.

[Baroness Hanham]

My Lords, as the noble Lord has said, this was discussed in the other place. My honourable friend Andrew Stunell gave an assurance that this matter would be looked at and that the attention of the Secretary of State for Transport would be drawn to the debate in Hansard, which would have been very much along the lines of the debate here this evening about making decisions on what should be done.

I cannot go further than to say that discussions are taking place between the Secretary of State for Communities and Local Government and the Secretary of State for Transport. I will expect to have details of them in the not too distant future. It would be sensible, if and when we know the outcome of the discussions—and I am sure we will—for the noble Lord to come and talk to me about it before Report, when we can discuss whether the amendment is appropriate and correct. I am happy to offer him that discussion, depending on the outcome of the discussions between the two Secretaries of State.

[Lord McKenzie of Luton]

My Lords, I thank the noble Lord, Lord Shipley, for his support for the amendments. Clearly he is knowledgeable about what goes on in ITAs and PTEs and about the importance of this extended power. The noble Lord, Lord True, was astute to spot that the amendment was a version of one moved in the Commons—it was the original one, tabled before the amendments to Clause 5 and other clauses that we debated tonight. As I indicated when I moved it, if we took this forward on Report we would need to align it with where we were hoping to lead the others.

I am grateful for what is probably a quarter of a loaf from the Minister. Clearly, we will hope for clarity and a decision to be made by the Secretaries of State by the time we get to Report. This is an important issue that we want to take forward, and if we can do so on the basis of agreement, so much the better. I should be grateful if the noble Baroness could keep me and other noble Lords who have an interest in this informed as the discussion unfolds so that we will have the opportunity to consider the matter in good time before Report. Having said that, I beg leave to withdraw the amendment.

Amendment 32 withdrawn.

Clause 11 : New arrangements with respect to governance of English local authorities

Amendment 33

Moved by

[Lord McKenzie of Luton]

33: Clause 11, page 19, line 32, leave out “Part 1A” and insert “Parts 1A and 1B”

[Lord McKenzie of Luton]

My Lords, I shall speak also to the other amendments in this group. Amendment 33 sits alongside Amendment 85. I will revert to those amendments shortly. Amendments 59 to 62 inclusive seek to make the provisions of proposed new Section 9HF more acceptable. The Delegated Powers and Regulatory Reform Committee described the provisions in their current form as an inappropriate delegation of legislative power. We agree.

New Section 9HF enables the Secretary of State by affirmative procedure to enable or require,

“a … local authority operating a mayor and cabinet executive to confer a local public service function of any person or body on its elected mayor”,

and to transfer a local public service function from any person or body to the elected mayor. Local public service function is widely defined, and public service is defined as a service provided to the public or a section of the public that is provided either under statutory authority or that is wholly or partly funded by central and local government. As the Delegated Powers Committee points out, this is a remarkably wide power and could cover many activities carried out in the voluntary sector, as well as other public services such as those provided by the NHS, the police and other elected authorities. For example, what is done by a local charity—perhaps a housing charity, supported by Supporting People funding—would come within the definitions here. It could also include the functions of integrated transport authorities which we have just discussed and on which an amendment focused.

The amendments press on three areas. Amendments 59 and 60 seek to include in the circumstances in which such powers operate a leader and executive model of governance as well as a mayor and executive model. I acknowledge that further consequential amendments relating to the transfer of functions would be needed, for example, to new Section 9HF(1)(b)—I say this before the noble Lord, Lord True, gets to it. Incidentally, in talking of transfers of functions, I do not see any tax provisions relating to these transfers. Of course, a whole raft of tax provisions, particularly referring to transfers in London, were introduced at the Bill’s final stages in the other place, so I have a query about whether something is due in respect of them.

21:30

Amendment 61 constrains the Secretary of State’s powers and prohibits the modification and disapplication of current or future legislation and Amendment 62 is an attempt to deal with both process and criteria. They would require consultation with affected persons. It would also be incumbent on the Secretary of State to set out why the use of these powers would result in an improvement to the existing arrangements. There would also be a requirement to explain how the transferred functions would be carried out in an efficient, transparent and accountable way. Frankly, even these safeguards are probably not strong enough, particularly in the light of the Delegated Powers Committee’s report.

Perhaps in the mean time the Minister can tell us why these powers operate only when the governance arrangements involve a mayor. What would the situation be should an authority with a mayor revert to a leader and executive model? Is this a one-way transfer? Indeed, in what circumstances is it envisaged that these very strong powers would be used?

There is no requirement in the Bill for the transfer of property rights to be paid for on some market-value basis. What can the Minister tell us about how that might proceed? What is the intent? New Section 9HF(6)(a) refers to the transfer of property rights and liabilities which could not otherwise be transferred. Can the Minister tell us what type of restrictions on transfers it is expected could be overridden by these powers? Will he also deal with the point raised by the Delegated Powers Committee concerning the disapplication of the hybrid instrument procedure? Paragraph 29 of its 15th report of the 2010-12 Session states:

“Given the lack of any statutory requirement to consult before making an order under section 9HF, the Committee is concerned that the disapplication of the hybrid instruments procedure—and thereby the opportunity to petition Parliament—leaves inadequate means to ensure private or local interests are taken into account when the power is exercised”.

How does the Minister respond to those comments?

Finally, Amendments 33 and 85 would add to the Local Government Act 2000 a new Part 1B, which would make additional specific provision for when the Secretary of State is contemplating the transfer of a local public service function from an integrated transport authority. The provision would require that there be a consultation involving all district councils in the integrated transport area as well as the relevant ITA. It would also require the Secretary of State, following that consultation, to make a judgment about how a proposed transfer would improve the effectiveness and efficiency of transport in the area. In essence, the amendments are a particularised version of what is proposed under Amendment 62.

The more we examine the powers of the Secretary of State under new Section 9HF, the more concerned we become. I hope the Government will be able to respond positively on some of these points and, in particular, will say how they propose to meet the criticisms by the Delegated Powers Committee. I beg to move.

[Lord True]

My Lords, having been vaguely disobliging on the noble Lord’s previous amendment, I have a question for the Minister. I do not expect the answer this evening, but perhaps she has it and perhaps I do not understand the Bill fully. I think the points about each-way transfer, which are included particularly in Amendments 59 and 60, are interesting and potentially important because, if we are legislating for the long term, we must envisage that there may be circumstances in which mayoral arrangements will not be successful or popular and people will wish to make transfers in the opposite direction. I imagine that is possible under the Bill that has been sculpted by my noble friend, but I have some sympathy with the points made by the noble Lord, Lord McKenzie.

[Lord Jenkin of Roding]

I have a question on this which arises from the extremely helpful statement that my noble friend made this afternoon. This part of the Bill contains the provisions about the roles of mayors and chief executives being combined. My noble friend has indicated that that in fact is not going to happen. I have just revisited the amendments that were down to deal with that, and they would have taken out large parts of the clauses that we are now discussing. If they had been taken in a different order, I suspect that the Chairman would have had to say that, if the amendment was carried and all these parts taken out, the amendments moved and spoken to by the noble Lord, Lord McKenzie, would have fallen with them. As it is, that has not happened yet.

Of course, what we do not know—and I hope my noble friend at some stage will be able to tell us—is how the Government intend to implement the concession that she announced earlier today, to my great delight, that the part of the Bill dealing with mayors and chief executives was going to be dropped. I hope my noble friend sees the difficulties we are in: we are discussing a clause, much of which may disappear. I do not want to disappoint the noble Lord, Lord McKenzie, because he has made two or three very valid and interesting points, but it is because of the order in which these have been taken that he is able to discuss those things at all, because otherwise they might have fallen with the amendment to take out the combined roles.

[Lord McKenzie of Luton]

No doubt the Minister will clarify this for us. I have not had a chance to go through all of the amendments that will be affected by the earlier announcement but I did not think that this was one of them. If it were, I would be very content.

[Lord Jenkin of Roding]

I am grateful to the noble Lord for clarifying that, but in fact there are some amendments, that take several pages right out, that were intended to remove this whole part of the Bill.

[Baroness Hanham]

My Lords, we have removed—or will remove as we go through, as I understand it—the mayoral arrangements associated with referendum mayors. As the noble Lords will understand, there are two sorts of mayors: mayors who are elected by the local electorate under the Local Government Act and mayors who would have been elected under the new provisions. We have now removed the new provisions on shadow mayors and at the same time taken out the mayoral management associated with that—that is the referendum mayors. However, mayors can still be introduced under the previous legislation. On my understanding—and I will need to be absolutely clear about this—the provisions relating to the mayor and the chief executive can still be carried out because a local authority can elect to do it now anyway.

Unless there is disagreement coming from the Box, I will take it that that is what we are talking about now. We swept out so many amendments that, like the noble Lord, I have not had a chance to chase up on those. If that is not the case, I will advise the noble Lord in due course.

The noble Lord has asked a number of questions that, under the circumstances, I will be very chary about answering because I think we need to be absolutely clear what bits are in and what bits are out. I think it would be helpful if I came back to those, and I ask the noble Lord to withdraw the amendment for the time being.

[Lord Jenkin of Roding]

If I may express a view, I have to say that I think that that is the right course because it may well be that when the amendments to reflect the change announced this afternoon have been made, this whole passage of the Bill, several pages of it, may look very different. It would then be necessary to consider which of the remaining parts of the Bill the noble Lord, Lord McKenzie, might still like to amend. At the moment I do not see how we can do that.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for her brief reply. Clearly, we need to get back to these serious issues on Report. I say to the noble Lord, Lord Jenkin, that, from reading the Bill, I understand that this issue is not linked to how someone becomes a mayor; it is focused on a mayor and executive arrangements, however they are created. I do not think that what we discussed earlier would strike those down. If it did, the amendments would become otiose.

Notwithstanding that point, I say to the noble Baroness that there were a series of questions which deserve a serious answer about why this power is limited to mayors and executives, and does not apply to executive and cabinet arrangements. Why is it only that one model that can be the recipient of the Secretary of State’s powers? More particularly, the protections and the fettering of that very wide power that needs to be undertaken is not just my worry—the Delegated Powers Committee is very clear on it. We will certainly wish to return to that.

The noble Lord, Lord True, made reference to an each-way transfer. My main point was that, if it is to apply at all and if sufficient safeguards can be put in, it should be when there are leader and executive arrangements, and when there are mayor and executive arrangements, as well as the supplementary point about what happens if you go from one to the other.

I do not know whether the noble Baroness has any further information as a result of the missive. If not, I will withdraw the amendment and leave the issue until Report but this is most certainly a matter to which we will return, if we have to, on the basis of the point made by the noble Lord, Lord Jenkin.

[Baroness Hanham]

My Lords, I am grateful for that. It would be helpful if we came back to all this. In the mean time, before Report, I will make sure that the noble Lord and the rest of the Committee have a full answer.

[Lord McKenzie of Luton]

I beg leave to withdraw the amendment.

Amendment 33 withdrawn.

Clause 11 agreed.

House resumed.

House adjourned at 9.43 pm.