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Oral Answers to Questions
(13 years, 5 months ago)
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Karl MᶜCartney (Lincoln) (Con)
1. What arrangements are in place to ensure increased funding for the NHS during the comprehensive spending review period.
The Secretary of State for Health (Mr Andrew Lansley)
We will increase NHS funding in real terms in each year of this Parliament. Compared to the level of expenditure in the national health service in the last financial year, the resources available to the NHS will increase by £12.5 billion by the end of the spending review period. The budget available for the NHS in the financial year 2011-12 is 3.9% higher than spend in the previous year, 2010-11.
Karl MᶜCartney
Can my right hon. Friend give me any examples of how the increased funding this Government have promised here in England is, unlike what is happening in Wales, delivering better care for our NHS services?
Mr Lansley
Yes, I can indeed do that. We are committed to real-terms increases in the NHS budget in England. According to an analysis by the King’s Fund, the Welsh Assembly Government—a Labour-led Welsh Government —are going to reduce the NHS budget by 8.3% in real terms by 2013-14 in comparison with 2010-11. That might be one reason why it is already the case that in Wales, 26.4% of patients in April 2011 waited more than 18 weeks for treatment.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the Secretary of State confirm that his definition of a real-terms increase is based on a 2.9% figure? Will he also confirm that the retail price index actually stands at 5%, so any claim that he is increasing the NHS budget in real terms is a complete and total con?
Mr Lansley
I think that it has been conventional over many years for the calculation of real terms in public accounting to use the GDP deflator. Given that it includes the prices of investment goods, Government services and exports and subtracts the price of UK imports, it gives a more appropriate overall measure of inflation.
Henry Smith (Crawley) (Con)
Does my right hon. Friend welcome the increase in the NHS West Sussex budget of £35 million this year, which, coupled with the provisions of the Health and Social Care Bill, means that we will have far greater patient choice in our local area?
Mr Lansley
Yes, I do indeed welcome that. We all know that last year, this year and in future years, increases in the NHS budget in real terms will not be the kind of real-terms increases we saw in the past, but they will be real-terms increases. What we are already seeing in the NHS—we saw it last year—is that with a 2.2% increase in cash spending, there is none the less an ability to sustain, and in many respects improve, performance.
John Healey (Wentworth and Dearne) (Lab)
In spite of the spin, the truth is that the Prime Minister’s personal promise to give the NHS a real rise in funding is being broken. It is not just how much that counts; it is how well the money is spent. Today it is one year to the very day since the Health Secretary launched the Government’s plans to “liberate” the NHS. He told the House:
“we will phase out the top-down management hierarchy”—[Official Report, 12 July 2010; Vol. 513, c. 663.]
He said that he would reduce “the number and cost” of NHS-related quangos, so why is he setting up the new national commissioning board, set to employ 3,500 people, when even its chief executive says that it
“could become the greatest quango in the sky we have seen”.
Why is the right hon. Gentleman setting up more than 500 public bodies in the NHS when 161 do the job now, and why are the Government wasting precious NHS funding on the biggest reorganisation in history, when it could and should be spent on patient care?
Mr Lansley
Since the election we have reduced the number of managers in the NHS by more than 4,000 and increased the number of doctors by more than 2,000. The NHS commissioning board—I did not hear from the right hon. Gentleman whether he supports it—is part of our strategy to give the NHS not only local clinical leadership but national leadership through it. The functions covered by the board are currently undertaken by something approaching 8,000 staff; the number delivering those functions in future will go down to 3,500 staff, so the reduction in administration will be dramatic.
John Healey
We had plans to reduce bureaucracy, which were published, and we also said that the Government should keep Labour’s waiting time guarantees for patients, which the Health Secretary told the House a year ago today were “unjustified” targets, which he would remove. The Prime Minister has now promised to keep waiting times low, but after one wasted year of NHS reorganisation by the right hon. Gentleman’s Government, an extra 25,000 patients a month are waiting more than four hours in accident and emergency departments, an extra 12,000 patients a month are waiting more than six weeks for tests, and an extra 2,300 patients a month are waiting more than 18 weeks to get into hospital for the treatment they need. The NHS deputy chief executive has called the rise in long waiting times this year “unacceptable”. Does the Health Secretary agree?
Mr Lansley
As we said in the NHS constitution, we do not intend patients to be waiting for more than 18 weeks. [Hon. Members: “They are!”] The April figures show that we met the operational standard, which is that more than 90% of admitted patients and more than 95% of non-admitted patients should be treated within 18 weeks. The right hon. Gentleman’s analysis of waiting times did not include the fact that the average time for which patients waited for treatment in April was 7.7 weeks, down from 8.4 weeks in May 2010. The average time for which patients wait is being reduced.
Bill Esterson (Sefton Central) (Lab)
2. What assessment he has made of the conclusions and recommendations of the recent report by the Commission on Funding of Care and Support.
Chris Ruane (Vale of Clwyd) (Lab)
7. What assessment he has made of the conclusions and recommendations of the recent report by the Commission on Funding of Care and Support.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
11. What assessment he has made of the conclusions and recommendations of the recent report by the Commission on Funding of Care and Support.
Roberta Blackman-Woods (City of Durham) (Lab)
15. What assessment he has made of the conclusions and recommendations of the recent report by the Commission on Funding of Care and Support.
The Minister of State, Department of Health (Paul Burstow)
As the Secretary of State said in his statement to the House last week, the Government welcome the report of the Commission on Funding of Care and Support and will consider its recommendations carefully.
Bill Esterson
The Government may say that they welcome the report, but can the Minister explain why the White Paper on social care will now be published in spring 2012 rather than in December 2011, as the commission’s report recommends? Do the Government want it to be kicked into the long grass because of Treasury interference?
Paul Burstow
The hon. Gentleman is entirely wrong. The Government’s approach is to have discussions with the official Opposition and to engage fully with stakeholders from Age UK, Carers UK and many other organisations, not just about funding reform—which is an important part of our reform of social care—but about questions of quality and law reform.
Chris Ruane
My constituency in central north Wales contains a high percentage of pensioners, many of whom come from the industrial cities of the north-west and Birmingham. What protocols exist to deal with cross-border issues involving pensioners’ care?
Paul Burstow
That important question must be partly addressed by the hon. Gentleman's colleagues in the Welsh Assembly, but one of the issues raised by the Law Commission’s recommendations on law reform that we must address is that of ordinary residence tests to ensure that people have access to the right care at the right time and in the right place.
Paul Burstow
Cross-government discussions take place about any matter that requires legislation and funding—and of course the Treasury plays its part in those discussions.
Roberta Blackman-Woods
Does the Minister agree that the Government need to act quickly on the commission’s report, not least because the Southern Cross situation, which is affecting many people in my constituency, has shown that the current model, which involves relying largely on private care, is simply not sustainable?
Paul Burstow
We will return to that important matter later, with the urgent question. However, we must examine the position of Southern Cross and the business model that underpinned it very carefully, in order to understand how such a model was agreed to under the arrangements for regulating care providers that existed before the establishment of the Care Quality Commission.
Mr Stephen Dorrell (Charnwood) (Con)
It is now more than a decade since Sir Derek Wanless first identified a funding gap in long-term care for the elderly. I welcome the Dilnot report, but will the Government act quickly to establish a partnership arrangement enabling private money contributed through insurance to be added to some public money, so that that funding gap can be filled?
Paul Burstow
The answer to the first part of the right hon. Gentleman’s question is that the Government are already committed, through the spending review, to the provision of an additional £7.2 billion for social care over the next four years, which will involve an unprecedented transfer of resources from the NHS to social care. As for the second part of his question, the Dilnot report makes many recommendations, and the Government will work through them and present their conclusions next year.
Duncan Hames (Chippenham) (LD)
The question of who benefits from the proposals, and by how much, depends on the assumptions made about the potential maximum outlay on care home residence under the existing arrangements. That may change as the length of time for which people live in care increases. Does the Minister accept that if the implementation of the proposals is to be progressive, both now and in the future, the Government will need to test, and keep under review, their assumptions about the longest likely duration of care in homes?
Paul Burstow
That is an important point. One of the factors that will change those assumptions is the extent of our effectiveness in preventing and postponing the need for such services. “A vision for adult social care”, which we published last year, emphasised the need for more investment in preventive measures. That is why we have provided, and continue to provide, additional resources for reablement, which not only does the individuals concerned a great deal of good but saves money for social services authorities.
Sarah Newton (Truro and Falmouth) (Con)
Does my hon. Friend agree that in the months before the White Paper is published it will be important to take time to build the necessary all-party cross-House support for long-lasting reform?
Paul Burstow
My hon. Friend is absolutely right, and the exchanges on the Secretary of State’s statement last week made it plain that we are committed to having those discussions and working to secure a long-lasting reform. That is the only way in which such a reform can secure the necessary changes, both in law and funding, for this country.
Rachel Reeves (Leeds West) (Lab)
The Southern Cross crisis is causing extreme anxiety to the people who live in the homes, including the one at Hopton Mews in Armley, in my constituency. How will the Government ensure that local authorities and the Care Quality Commission have the necessary resources to oversee the transfer of homes to their new operators?
Paul Burstow
I shall certainly elaborate on how we are doing that in greater detail later. For some months we have been working with the landlords, the lenders and Southern Cross, and making sure that local authorities are fully prepared for any likely contingency and the CQC is ready to deal with re-registrations, should that become necessary.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Minister of State has told us that one of the reasons why the publication of the White Paper has been delayed is to allow cross-party talks, so I wonder whether he can help us: when will the meeting between the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition take place?
Paul Burstow
I am surprised that the hon. Lady does not know. As I understand it, there is a date in all three people’s diaries, but it is not for me to share that date. Although we do need to have cross-party talks between the leaders and the health spokespeople involved, we should also look back and draw some lessons from the royal commission on long-term care. What surprises me is that when that report was published by the right hon. Member for Holborn and St Pancras (Frank Dobson), all that was offered was a debate—not a debate that the Government would lead, but a debate that would take place across the country. We are still waiting for the end of that debate. This Government have a timetable and a commitment to engage.
Mr John Baron (Basildon and Billericay) (Con)
3. What arrangements he plans to put in place to ensure clinical commissioning groups are held accountable for their performance in respect of cancer outcomes.
The Secretary of State for Health (Mr Andrew Lansley)
The first NHS outcomes framework includes a number of outcomes relevant to people with cancer. For example, domain 1, on preventing people from dying prematurely, includes progress in improving one-year and five-year survival rates for breast, lung and colorectal cancers. A number of indicators will also be relevant to patients with cancer, such as health-related quality of life for people with long-term conditions, and improving the experience of care for people at the end of their lives. Clinical commissioning groups will be held to account for their contributions to improving those national outcomes through the commissioning outcomes framework.
Mr Baron
The all-party group on cancer and others lobbied for a greater focus on outcomes, but the one-year and five-year cancer survival rates may now be less statistically robust, as CCGs cover smaller population sizes than primary care trusts. Will the Government therefore give added priority to the excellent work of the National Cancer Intelligence Network in producing a set of evidence-based process measures to complement, not replace, other evidence so that CCGs can be held accountable?
Mr Lansley
The House will know of my hon. Friend’s consistent support, through the all-party group, for patients with cancer. I entirely agree that a number of proxy measures and process measures will be relevant in the context of the commissioning outcomes framework. There may be measures that are attributable to CCGs individually in some respects. For example, the quality of life of people living with long-term conditions, to which I referred, would be relevant to a small population. For other measures, however, it may be appropriate for the CCGs to be held to account at the level of, for example, a cancer network, using cancer registry data.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
The considerable improvement and focus on breast, lung and bowel cancer is very welcome, but groups campaigning on prostate and ovarian cancer are extremely worried about both the lack of update guidance and the failure to reverse premature death, especially in ovarian cancer, over the last 30 years. Has the Secretary of State anything new to tell us about the direction in these areas?
Mr Lansley
The right hon. Gentleman will doubtless be aware that we published a quality standard for ovarian cancer, and that the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), published the outcomes strategy for cancer, which will have been relevant to many of the issues to which the right hon. Gentleman refers. I continue to look forward to the results of a major trial on screening for ovarian cancer, but I am afraid that I anticipate that we shall not be able to see the results and recommendations for nearly three years.
Simon Hughes (Bermondsey and Old Southwark) (LD)
4. How many 24-hour GP services are in operation; and if he will make a statement.
The Minister of State, Department of Health (Mr Simon Burns)
We are not aware of any GP practices that offer services on a 24-hour basis.
Simon Hughes
Will the Minister confirm that the Government would have no objection, and would not put any barrier in the way, if Guy’s and St Thomas’ NHS Foundation Trust and the local Southwark services wished to set up a 24-hour service at Guy’s hospital, with the collaboration of the local community?
Mr Burns
As the right hon. Gentleman will know, the local NHS has responsibility for commissioning local primary care services, and in doing so it must take into account the results of the local population and their needs. If he is working with the hospitals and organisations that he has mentioned and he has some constructive ideas that they are going to consider, I too would be personally interested to hear from him about how they envisage doing things.
Mr Ben Bradshaw (Exeter) (Lab)
What has happened to the Labour Government’s guarantee that everybody should be entitled to see their GP within 24 hours, and also be able to book an appointment more than 48 hours ahead? Will the Minister publish a full performance table for GPs, so that the public can make an informed choice?
Mr Burns
As the right hon. Gentleman will know, the access measures concerning people being able to see their GP within a reasonable period of time are set out in the quality and outcomes framework. The evidence that I have seen certainly shows that our approach is generally working very well, although there are variations in different parts of the country, especially London, where I believe there is scope for improvement.
Valerie Vaz (Walsall South) (Lab)
5. What discussions he has had with the Chancellor of the Exchequer on the cost to the public purse of NHS reorganisation arising from the proposed changes to the Health and Social Care Bill.
The Minister of State, Department of Health (Mr Simon Burns)
The Treasury had sight of the impact assessment published alongside the Health and Social Care Bill, which estimated savings of about £5 billion by 2014-15, and £1.7 billion a year thereafter. A revised impact assessment will be published as the Bill progresses.
Valerie Vaz
I thank the Minister for his helpful answer. Given that there are to be new structures—the NHS commissioning board, the clinical senates, the local commissioning groups and Public Health England—will there be new money for them, or will the money come out of the allocated budget?
Mr Burns
I thank the hon. Lady for her helpful question. As she will appreciate, the money will come out of the existing allocations, but what she needs to understand is that as a result of this, and as a result of improving and cutting out wasteful inefficiencies and bureaucracy, we will actually be saving significant sums. Administration will be cut by a third, so that we can invest all the savings in front-line services.
Gavin Williamson (South Staffordshire) (Con)
Does my right hon. Friend agree that although there is a cost in making these changes, it will have been paid back within two years, and that £5 billion a year will be available to be invested in front-line services and making sure that people in South Staffordshire get the best possible from their health service?
Mr Burns
My hon. Friend makes an extremely important point, because not only are his figures correct, but thereafter until the end of the decade there will be savings of £1.7 billion a year, on current projections. Every single penny of that will be reinvested in front-line services for patients.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The Minister continues to insist that his reorganisation will result in savings that will be reinvested in patient care. Yet even before we have the impact assessment for the changes in the legislation, we know, as will Members across this House, that on a daily basis people are leaving primary care trusts with their redundancy money. That totals £800 million and upwards, and it has not been costed. We also know that the Royal College of General Practitioners has said that we will have gone from having 163 statutory organisations to having 521. Are not the costs of this misconceived car crash of a reorganisation spiralling out of control?
Mr Burns
The reality is that the hon. Lady does not understand, or will not accept, the figures published in the impact assessment. What she does not like is the fact that by the end of this Parliament there will be savings of about £5 billion, and thereafter of £1.7 billion until the end of the decade. That will all be reinvested in front-line services. The hon. Lady will not accept, and wishes to misrepresent to members of the public, the resulting benefits in improved and enhanced patient care.
Mark Lancaster (Milton Keynes North) (Con)
6. What steps he has taken to increase access to NHS dentistry since May 2010.
The Secretary of State for Health (Mr Andrew Lansley)
I am pleased to be able to tell my hon. Friend that the number of people with access to NHS dentistry has increased by nearly three quarters of a million over the past year.
Mark Lancaster
I am grateful to my right hon. Friend for that answer. In Milton Keynes in recent years we have seen greater access to dentistry. One area of particular concern is access to dentistry for children, so may I press my right hon. Friend on how exactly he will address that problem?
Mr Lansley
I agree with my hon. Friend. We have made it very clear that, contrary to the practice of the previous Government, we are not looking for dentists to deny access to NHS dentistry to children whose parents are not registered with them. Alongside increasing access to dentistry as a whole, we intend specifically to secure increased access for children to NHS dentistry. That will be even more the case in the pilots that we will start this month, which are specifically intended to secure a more preventive approach to dentistry, which maintains good oral health. That is especially important for children.
Andrew Gwynne (Denton and Reddish) (Lab)
Does the Secretary of State not understand that there has been real progress with the Tameside and Glossop primary care trust and their “access, booking and choice” facility, which guarantees access to NHS dentistry when they require it for anyone not already registered with an NHS dentist? Does he not understand that there are real concerns that with his reorganisation, and without that priority focus by the primary care trust, those advances may be lost?
Mr Lansley
On the contrary, with the progressive transfer of responsibilities to the NHS commissioning board there will be much more consistency in contracting for access to NHS dentistry, which at the moment is often a lottery in different places across the country, with the amounts paid per unit of dental activity varying dramatically between neighbouring practices. The new pilots are intended to achieve something that was not achieved under either of the two previous dental contracts, by securing a much stronger preventive approach based on capitation and registration for dentists. It has been welcomed by the dental profession and it promises a great deal for a new contract.
Sir Paul Beresford (Mole Valley) (Con)
You will be aware, Mr Speaker, that I have some slight interest in this subject. Access to NHS dentistry is related to what is on offer. Does the Secretary of State agree that with the huge advances in dentistry, we should be reviewing what is and is not available, and what should or should not be available, from NHS general dental practitioners?
Mr Lansley
My hon. Friend will know that under the new dental contracts, I want to arrive at a point where everybody who wishes to has access to NHS dentistry. I was pleased to see that when we set out the details of the piloting proposal, the chair of the British Dental Association’s general dental practice committee, Dr John Milne, said:
“we are encouraged that the Department of Health is to begin testing new ways of delivering care. We are pleased that two principles that we believe are particularly important—quality of care and a continuing care relationship between practitioner and patient—are central to what is being piloted.”
As in other areas, we are moving from a system that simply incentivises activity to one that is much more focused on quality and outcomes.
Mark Pawsey (Rugby) (Con)
8. What guidance his Department issues on the use by GP surgeries of premium rate telephone numbers.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
The Department has amended the general medical services regulations to prohibit GP practices from using telephone numbers that charge patients more than the equivalent cost of calling a geographical number to contact the NHS. Since April this year, GPs have not been allowed to use a number that charges patients more than the cost of an equivalent geographical call.
Mark Pawsey
I have been contacted by a constituent who is a patient at a practice in Rugby that uses telephony based on 084 numbers. My constituent is concerned about the additional charges incurred by patients when contacting the surgery by phone, particularly by mobile phone. Will the Minister update the House on the work of the Department in ensuring that GP surgeries do not use such numbers unnecessarily?
Anne Milton
I thank my hon. Friend for raising this matter. I understand that five GP surgeries in NHS Warwickshire use 084 numbers, and that the primary care trust has been assured that patients using those numbers are not charged more than the cost of using an equivalent local number. It is absolutely clear that there is no distinction between landlines, mobiles or payphones. The directions are very clear that patients should not expect to be charged any more.
Mr Andrew Love (Edmonton) (Lab/Co-op)
I, similarly, have three GP practices that use those telephone numbers. I have made extensive contact with my local PCT about this, but it did not seem to know what to do. Can the Minister assure us that the clear advice she is giving here today will be distributed around the health service, so that we can put an end to this?
Anne Milton
The Department is very clear, and the general medical services contract makes it very clear, that GPs are not allowed to do it. There are a number of options open to GPs who already have such telephone contracts, such as calling patients back, altering the contract arrangements or, indeed, paying the costs themselves.
Mr Matthew Offord (Hendon) (Con)
9. What steps he is taking to improve NHS patient outcomes.
The Secretary of State for Health (Mr Andrew Lansley)
I am committed to ensuring that the NHS achieves improved outcomes for patients. The NHS outcomes framework will drive continuous improvement in those outcomes. By way of example, we have made good progress in reducing the number of health care associated infections. In the year ending March 2011 the number of MRSA bloodstream infections decreased by 22% and clostridium difficile infections decreased by 15%, compared with the year before. Those are key positive results in the drive to protect patients from avoidable harm.
Mr Offord
I applaud the Minister for his work in those areas, and I draw attention to the increased work in cancer care, which I also applaud. However, may I ask him to assure the House that he will not lose focus on other areas, such as mental health, and that the Government will continue to address problems in those areas, which have such consequences across the country?
Mr Lansley
I certainly will. Indeed, the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), and I launched the outcomes strategy for mental health earlier this year, in order to make it absolutely clear that across the NHS, and indeed public health, we ensure that mental health services attract the right priority and focus as we develop outcome measures.
Liz Kendall (Leicester West) (Lab)
The Prime Minister has promised that waiting times will not rise despite his massive NHS reorganisation, but we now know that in May 15,500 patients waited more than six weeks for their diagnostic tests—four times as many as last year—and that 1,800 waited more than three months, which is 10 times as many as last year. Average waits for diagnostic tests are also up. Does the Minister agree with the Royal College of Physicians that those increased waits, including waits for vital tests to diagnose cancer, will harm patient care: yes or no?
Mr Lansley
No, we have met the standard that patients should not wait longer than 18 weeks—a 90% standard for admitted patients and 95% for non-admitted patients. If I recall correctly, the latest data for diagnostic tests showed that there was a 1.9 week average wait for diagnostic tests, which compares with 1.8 weeks in May last year. On cancer waiting times we have achieved an improvement—up to 96%—in the number of patients who are seen by a specialist within two weeks. The hon. Lady really needs to go back and talk to her colleagues in Wales, where 26% of patients wait longer than 18 weeks, compared with less than 10% of patients here; indeed, many patients in Wales wait more than 36 weeks. We have a contrast between a coalition Government in England who are investing in the health service, with improving performance, and a Labour Government in Wales who are cutting the NHS budget and seeing performance decline.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
10. What steps his Department is taking to provide funding for healthcare infrastructure projects.
The Minister of State, Department of Health (Mr Simon Burns)
The Department’s capital budget for this spending review period will be higher in real terms than spending in 2010-11. Forecast capital spending in 2010-11 is £4.2 billion and the amount available in 2011-12 is £4.4 billion. By 2014-15, the total amount of capital made available since the start of the Parliament will be £22.1 billion.
Dr Poulter
Is the Minister as concerned as I am about the failure of Suffolk primary care trust to act to invest in proper buildings and infrastructure for the Gipping valley practice in Claydon in my constituency? That practice has been forced to treat patients out of a portakabin for 15 years now. Will he agree to meet me, and local doctors and patient groups, to see whether we can find a solution to the problem?
Mr Burns
I fully appreciate my hon. Friend’s concerns. As he will appreciate, the matter is primarily for the local NHS. If it is any consolation to him, I am advised that Suffolk PCT will continue to work with the GP practice on the issues, but I would be more than happy to see my hon. Friend to discuss the matter further.
Stella Creasy (Walthamstow) (Lab/Co-op)
12. What estimate he has made of the change in net public expenditure on older people’s social care since April 2010.
The Minister of State, Department of Health (Paul Burstow)
The latest available data on social care expenditure are for 2009-10, when net expenditure on social care for older people was £7.5 billion.
Stella Creasy
Many of my constituents will have been deeply concerned by the admission of Peter Hay, the president of the Association of Directors of Adult Social Services, that nearly £1 billion is being taken out of social care budgets following cuts to local government, and by his warnings about the consequences for provision. When will the Minister deliver interim funding relief, so that patients are not stuck in hospitals because they cannot be discharged, and so that we can be sure that we will avoid a crisis in social care?
Paul Burstow
If the hon. Lady had read on, she would have found that £700 million of the £1 billion is to be found not through cuts in services, but through efficiency savings, for example through the use of telecare, which significantly reduces costs, and investment in reablement services, which save resources and help people to get back on their feet. That is all in the report that she is waving around. When it comes to investment, the Government have already made clear their commitment through the spending review, and are investing, by the end of this Parliament in 2014-15, an additional £2 billion—something that her party did not do when in government.
Bob Blackman (Harrow East) (Con)
The extra money being given to adult social care should be good news, but in Harrow, the council, which is Labour-run, has applied the £2.1 million additional funding to redundancies in general areas, rather than passing it on to the weak and the vulnerable. Will my hon. Friend take action to ensure that the new money provided by the Government reaches the people who need it?
Paul Burstow
I am absolutely determined to make sure that the additional resources that the NHS is transferring to social care deliver real benefits for people who need social care services, protect services, and allow local authorities to make the right decisions about how they continue to support not just investment in prevention, but those most in need.
Pat Glass (North West Durham) (Lab)
It is disappointing that we will now not see the Government’s White Paper until the spring, but will the Government agree to take forward the commission’s recommendations on national eligibility criteria and portable care assessments? The Minister will understand that that is now urgent, given the Southern Cross crisis.
Paul Burstow
The hon. Lady raises a question about eligibility; of course, we know from the latest figures in an ADASS survey that the majority of local authorities moved, under Labour, to “substantial” needs being the test for access to social care; that happened on her watch, not this Government’s watch. When it comes to portability, the Law Commission has made recommendations that the Government have to consider, and yes, we need to look to legislate on that.
Hazel Blears (Salford and Eccles) (Lab)
The Minister was present this morning at the launch of a report on dementia care by the all-party group on dementia. He will know that the key recommendation is to shift resources from acute hospital care to more preventive services in the community. What steps will he take to ensure that that shift really happens, over and above the £1 billion that has been allocated, much of which has already been spent by local authorities on plugging the gaps caused by other cuts in their budgets?
Paul Burstow
As the right hon. Lady was at the presentation, she will know that it was also identified that we currently spend about £8 billion on dementia services, and the Audit Commission identified that we could save at least £300 million through better use of preventive and early-intervention services. The Government have set out a very clear approach. First, we need to invest in services to provide for earlier diagnosis, because that is the best way to plan for dementia. Secondly, we need investment in services in our hospitals that shorten the length of stay and deliver good quality. Thirdly, we need care homes with the right training for staff, so that they can manage dementia and behaviour problems effectively.
Alun Cairns (Vale of Glamorgan) (Con)
13. What progress he has made in reducing the use of mixed-sex accommodation in the NHS.
The Minister of State, Department of Health (Mr Simon Burns)
In just six months, the number of reported breaches of mixed-sex accommodation guidance has fallen by 83%, from 11,802 in December 2010 to 2,011 in May 2011. Across England, the reported breach rate is now 1.4 per 1,000 finished consultant episodes, compared to 8.4 per 1,000 FCEs in December 2010.
Alun Cairns
A 93-year-old female patient from my constituency was placed in a cardiac ward opposite a mental health patient who also needed cardiac treatment. This male patient was much younger and was left in a near-naked state for much of the day. That caused so much distress to my constituent that she discharged herself early. What effort and focus can the Minister give to the NHS in Wales to ensure that such breaches and mixed-sex wards are ended?
Mr Burns
I am saddened to hear my hon. Friend’s account of what happened in a hospital in, I assume, his constituency. I can appreciate how distressing it is. As he will understand, that comes within the responsibility of the Welsh Administration as a devolved power. My advice to my hon. Friend is two things. I hope the Welsh Assembly will, first, follow the example of my right hon. Friend the Secretary of State and concentrate on reducing mixed-sex accommodation, and secondly, stop cutting funding for the health service so that it can afford to do that.
Mr Mark Spencer (Sherwood) (Con)
Can the Minister explain briefly how he has managed to make such rapid progress in 12 months, given that the previous Administration made no progress whatsoever?
Mr David Burrowes (Enfield, Southgate) (Con)
14. What progress he has made in reducing rates of hospital-acquired infections.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
As the Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), has just said, clarity and vision are what is needed. The coalition agreement made it clear that the NHS should adopt a zero tolerance approach to all avoidable health care-associated infections, which have caused so many problems for the public over so many years. In 2010-11, there were just under 1,500 MRSA bloodstream infections. That is a decrease of 22% on the previous year. That means that infections are at their lowest level since mandatory surveillance was introduced. In the same period, there were just under 22,000 occurrences of C. difficile infections, which is a 15% decrease compared to the previous year. We will continue with our zero tolerance approach.
Mr Burrowes
I thank the Minister for that reply and the rapid progress made under this Government. I welcome the new C. difficile objective and the publication of weekly statistics, but does the Minister share my concern that it is the same hospitals that keep appearing with the highest number of C. diff cases? What is her Department doing to help those hospitals reduce such cases?
Anne Milton
My hon. Friend is absolutely right. Under the previous Administration there was a national target of reducing C. difficile infections by 30% by 2011, but that does not address the problem because, as he rightly says, there are hospitals that consistently had high rates of infections, so we changed that. Since April, every PCT and every acute trust has its own objective. The organisations with the highest rates of infection will have more ambitious objectives than those that are doing well.
Nic Dakin (Scunthorpe) (Lab)
16. What progress has been made on the review of children’s congenital heart services.
The Minister of State, Department of Health (Mr Simon Burns)
The consultation on the future of children’s congenital services ended on 1 July. The joint committee of primary care trusts, which is overseeing the consultation, is expected to make a decision later this year, based on an independent analysis of the consultation, reports from overview and scrutiny committees, and a health impact assessment.
Nic Dakin
I thank the Minister for his reply and his thoughtful response to the Back-Bench debate that took place in the Chamber. Will he ensure that if any further reconfiguration options have emerged from the consultation, they are properly considered and go out to further consultation before a decision is made?
Greg Mulholland (Leeds North West) (LD)
Further to the previous question, if there are further options in addition to the four already presented, I ask that the Government do not rule out looking at the matter again if it is shown that it is possible for Leeds and Newcastle to serve the north of England.
Mr Burns
As the hon. Gentleman will appreciate, I do not want to be drawn into that too far because this is an independent assessment by the joint committee of primary care trusts and I do not want to be seen to be interfering, but I can say that neither we nor the JCPCT have ever said categorically exactly how many centres there should be. It will be up to the JCPCT, as it considers the representations it receives, to decide how many there should be. If it decides to have more than four, it would not need the processes that he is suggesting because it has the power within its remit to increase the number if it thinks circumstances warrant it.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
18. What steps he is taking to improve cancer care for older people.
The Minister of State, Department of Health (Paul Burstow)
We are working with Macmillan Cancer Support and Age UK on a £1 million programme to improve cancer care for older people. The programme consists of 13 pilot sites across the country to improve intervention rates for people over 70 who have a cancer diagnosis. Pilots will introduce new ways of assessing older people for cancer treatment, offer short-term, practical support for older people undergoing cancer treatment and will address any age discrimination in cancer services by identifying and addressing the training needs of all professionals working with older people.
Mrs Hodgson
I am sure that the Minister will have seen the report published today by the Roy Castle Lung Cancer Foundation, which reiterates the considerable research showing that older lung cancer patients do not receive the same level of treatment as younger lung cancer patients. In fact, it shows that a 60-year-old sufferer is six times more likely to be given surgery than an 80-year-old sufferer, which obviously means that their outcomes are considerably worse. How does the Minister explain that inequality and how can it be tackled?
Paul Burstow
I am grateful to the hon. Lady for highlighting that further piece of evidence that shows why the Government have already given a commitment to ensure that there are no exemptions for the NHS from the application of our duties in respect of age discrimination, as there should be no place for age discrimination in the NHS. In addition, the work we are doing with Macmillan Cancer Support and Age UK is the way forward to ensure that we learn the lessons and drive up standards for the care of older people.
Rachel Reeves (Leeds West) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Health (Mr Andrew Lansley)
My responsibility is to lead the national health service in delivering improved health outcomes in England, to lead a public health service that improves the health of the nation and reduces health inequalities and to lead the reform of adult social care that supports and protects vulnerable people.
Rachel Reeves
Having met families and patients who use the children’s heart unit in Leeds, I know the value of that service. Does the Secretary of State agree that asking families to travel across the country, which is the stark reality they face if the unit is closed down, puts at risk the family support that is so important to children during these difficult times, and will he pledge to do all he can to keep the heart unit open?
Mr Lansley
I am sure that the hon. Lady will have heard the reply from the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), who explained the continuing process that the joint committee of primary care trusts will undertake. In the context of her question, it is important to make it clear that the intention of the review is not to close paediatric cardiac centres. Surgery in some of the centres might cease, depending on the conclusions the committee reaches, but they will continue to provide specialist non-surgical services for local populations. The review intends to ensure that as much non-surgical care is delivered as close to children’s homes as possible through the development of local congenital heart networks.
Claire Perry (Devizes) (Con)
T2. Under the previous Government, Savernake hospital in my constituency was redeveloped. As a result, taxpayers have got stuck with nearly £1 million a year in private finance initiative unitary charges and local services offered have been cut drastically. Will the Minister undertake to look at all hospitals labouring under uneconomic PFI burdens and meet me to discuss the Savernake hospital situation specifically?
The Minister of State, Department of Health (Mr Simon Burns)
I am grateful to my hon. Friend, because she has been campaigning on this issue for more than a year, and rightly so. Work is being done on the whole issue of PFI and the NHS to ensure value for money. Given her concerns, I would be more than happy to meet to discuss this particular case.
John Healey (Wentworth and Dearne) (Lab)
I want to say to the Health Secretary directly that it is a disgrace how he and his Ministers have ducked responsibility for reassuring more than 30,000 elderly and vulnerable residents whose homes may be at risk because of the financial crisis at Southern Cross. Today’s urgent question is the second time in a month that this House has had to drag Ministers to Parliament to explain what is going on. Southern Cross is set to close down completely by October. Will the Secretary of State give a commitment this afternoon to the residents of Southern Cross, their families and 40,000 staff that Ministers will in future show leadership and make public statements to this House?
The Minister of State, Department of Health (Paul Burstow)
I am grateful to the right hon. Gentleman for his question. He will of course know that when the first urgent question was asked, the Government had already provided a written ministerial statement setting out these matters in great detail, and we are happy to answer the questions that hon. Members will want to put in the urgent question later on. We have also said throughout that we do not help the welfare or interests of residents by an ongoing running commentary on these matters.
Mr Rob Wilson (Reading East) (Con)
T6. Despite the Government making available an additional £400 million for primary care trusts to support carers, I understand that my local Princess Royal Trust carers service is finding it very hard to engage with the local PCT in my constituency. Will Ministers remind PCTs to follow guidance and work with local carers’ organisations to develop plans for using the additional Government money that has been provided?
Paul Burstow
I share the hon. Gentleman’s concern. The NHS operating framework that the Government published last December makes it abundantly clear that primary care trusts need to work with their local authorities and care organisations to agree a budget and, where possible, to pool it so that it can be provided to individuals to enable them to get respite in the way that suits them best. I will certainly be pursuing this through the Government’s normal assurance processes to ensure that these things happen through the operating framework, but the hon. Gentleman might also want to invite his local overview and scrutiny committee to call to account local commissioners for the way in which they are behaving at the moment.
Mr John Spellar (Warley) (Lab)
T3. NHS West Midlands is cutting nurse training next year by a fifth and predicting a reduction of 7.25% over five years in the qualifying work force—not bureaucrats, but nurses—thereby denying youngsters in this country training for a worthwhile profession and career. Is not this a scandal and a shambles, and what is the Minister going to do about it?
Mr Lansley
The right hon. Gentleman may not know this, but following representations made directly to me I have looked at this very carefully. The strategic health authority is currently responsible for the number of nursing commissions that it undertakes. It has assessed the number of commissions that it should undertake based on its future work force requirements and has reached the conclusion that it is indeed reducing the number of commissions in the west midlands. That is not true to the same extent in other strategic health authorities across the country. In the listening exercise conducted by the NHS Future Forum, further recommendations were made about how we can reform education and training, and we will be taking those forward to try to ensure that there is greater collective understanding of work force requirements.
Mr David Ward (Bradford East) (LD)
Recent figures show that just over 40% of Bradfordians have not visited a dentist in the past two years, and many of my constituents say that that is simply because they cannot get an NHS dentist. Does the Minister agree that it would be extremely difficult for a centralised national commissioning board to deal with this insufficient supply of NHS dentists at a local level?
Mr Lansley
I am interested in my hon. Friend’s point. As he will have heard in response to an earlier question, we are already increasing access to NHS dentistry, with a 0.75 million increase in the space of a year. In fact, it is probably possible to address more effectively some of these questions of access to dentistry through a consistent national contract that can be responded to locally through the work of the health and well-being boards, which will be able to make their own recommendations through the joint strategic needs assessment.
Yvonne Fovargue (Makerfield) (Lab)
T4. Given that the UK has the worst one-year and five-year survival rates for lung cancer compared with Australia, Canada, Norway, Sweden and Denmark, as has been highlighted today by the Roy Castle Lung Cancer Foundation report, what measures is the Secretary of State taking to improve the detection of lung cancer symptoms in primary care?
Mr Lansley
The hon. Lady will know that we are focusing, as I said in response to an earlier question, on improving survival rates at one and five years for lung cancer, among other cancers. One essential task is to improve public awareness of the symptoms of lung cancer, and we are already piloting means by which we can do that. At the same time, there have been research trials on the effectiveness of X-ray screening for lung cancer, and we will look at the results shortly.
Mary Macleod (Brentford and Isleworth) (Con)
I have been contacted by a constituent who has just graduated in dentistry but has been unable to find a placement for his dental foundation year. What support are we giving such students so that we increase access to NHS dentistry?
Mr Lansley
I understand that more dentists are currently employed in the UK than ever before. My hon. Friend makes an important point and if she is able to provide further details, I will pursue it, because one objective of deaneries should be to ensure that the major investment that we put into the initial education of dentists is followed through in professional training.
Anas Sarwar (Glasgow Central) (Lab)
T5. Some 3,500 residents at 98 Southern Cross care homes, including 48 residents at Arcadia Gardens in my constituency, are facing an uncertain future. The Scottish Government have today said that they will work on the presumption that those people will still be in their homes after this crisis. What discussions has the Secretary of State had with Scottish Ministers about finding new operators and a solution that does not show complacency, but delivers continuity of care for the residents?
Paul Burstow
That is exactly what the Government are doing. We have had those discussions with the devolved Administrations, and officials are engaged with the landlords and lenders to ensure that they are doing just that. I look forward to answering the urgent question shortly.
Andrew George (St Ives) (LD)
It is acknowledged that the rising rates of norovirus are worse where there is a shortage of acute hospital beds. How does the Secretary of State square the understandable desire to get on top of hospital-acquired infections with his zeal to reduce acute hospital beds?
Mr Lansley
I am grateful to the hon. Gentleman. He will understand that each hospital trust or acute trust must be responsible for ensuring that there is not an excessive length of stay for patients and that it has the ability to isolate patients if necessary. Norovirus is one circumstance in which trusts often have to open additional capacity. In my experience of hospitals, that is precisely what is generally done. There is an ability to open new capacity if necessary when norovirus strikes.
Mrs Jenny Chapman (Darlington) (Lab)
Consulting on changes to health services is not an easy thing to get right. I think that the Secretary of State would agree with that. Will he undertake to look at the consultation taking place in County Durham and Darlington on acute stroke services, because I and the local council believe it to be misleading?
Mr Lansley
I will, of course, look at that consultation, with which I am not directly familiar. The four tests that I set out shortly after the election—understanding patients’ current and prospective choice; understanding what is demanded by clinical safety and evidence; understanding the view of the public, as represented through the local authority; and understanding the intentions of commissioners, particularly the clinical commissioning groups that are being established—give a much stronger basis for understanding future configuration decisions.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I am sure that my right hon. Friend is aware of the campaign group Transplant 2013, which aims to increase the number of people on the organ donor register by 60% by 2013. Will he join me in encouraging people not only to sign up to the register, but to discuss that action with their families, so that when the time comes their whole family is aware of their wishes?
Mr Lansley
Yes, I join my hon. Friend in that. I have signed up to the organ donor register and have discussed that with my wife so that she knows my wishes. I encourage others to do the same. In the last few days, I have been to the retirement event of John Wallwork, who was the first surgeon to undertake a successful heart and lung transplant in this country. He has led the charitable activities on transplant over recent years. I know that he would share our desire for more organs to be available for this vital activity.
Grahame M. Morris (Easington) (Lab)
Has the Secretary of State had an opportunity to pause, reflect and listen to the NHS foundation trusts, particularly North Tees and Hartlepool NHS Trust, which serves part of my area, given the uncertainties created by the Health and Social Care Bill and the difficulties that they are encountering in raising capital for new build and modernisation? In particular, will he indicate what consideration he has given to detailed safeguards?
Mr Simon Burns
I appreciate that question, because I understand how important the issue is to the hon. Gentleman. We have had considerable discussions on this matter, which is currently being further discussed by the Department of Health and the Treasury. We hope to reach some decisions shortly, and he will be one of the first to know.
Dr Julian Lewis (New Forest East) (Con)
How can a consultation process on children’s heart units that includes the best unit in the country outside London, at Southampton general hospital, in only one out of four options and disregards the population of the Isle of Wight completely be anything other than fundamentally flawed?
Mr Burns
As my hon. Friend will know from the debate that we had in the House a few weeks ago, it would be inappropriate for me to comment, because I must in no way be seen to be prejudging the issue. The inquiry and consultation is independent. However, I can say to him that the inquiry is not fixed on determining only four sites if the results of its consultation suggest that there should be more. The decision rests with the inquiry.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Secretary of State will be aware that there has been a tripling of prescriptions for drugs such as Ritalin, or to give it its generic name methylphenidate hydrochloride, in the past decade. He will also know that National Institute for Health and Clinical Excellence guidelines state that those drugs should not be prescribed to children under the age of six. Why cannot his Department give a breakdown showing how many of those prescriptions are going to children under the age of six? Will he heed the call from the Association of Educational Psychologists for a review of the growth of the prescription of those powerful psycho-stimulants to very young children?
Paul Burstow
The right hon. Gentleman raises a very important point. We need to ensure that we have the right data to understand prescribing practice properly, so that we can both challenge bad practice and ensure that the NICE guidance is properly followed. I would like to look more closely at his points and then write to him in detail.
Mr David Evennett (Bexleyheath and Crayford) (Con)
Will my right hon. Friend join me in congratulating advisers working for Bexley stop smoking service, who helped more than 1,600 people stop smoking last year? Does the Minister agree that helping people stop smoking should remain an important public health priority?
The Parliamentary Under-Secretary of State for Health (Anne Milton)
I am happy to join my hon. Friend in congratulating those who are making efforts locally. As he will be aware, public health services will move to local authorities, and I am sure those efforts will continue. Some 80,000 people a year die of smoking-related disease, and 320,000 young people are taking up smoking each year. We must not only help those who are smoking to stop but prevent young people from taking it up.
Kerry McCarthy (Bristol East) (Lab)
The number of patients waiting more than four hours in A and E went up by 76% in the past year, which is an extra 200,000 people. I think we all know what a hellish experience waiting in A and E can be. Does the Secretary of State agree that that is a backward step, and that he ought to take steps to rectify it?
Mr Lansley
Shortly after the election we took clinical and expert advice that made it very clear that the expectation that 98% of patients should be seen within four hours was not clinically appropriate in some cases, so we relaxed the 98% limit to 95%. As it happens, I believe that according to the latest data, between 97% and 97.5% of patients are being seen in under four hours.
Jo Swinson (East Dunbartonshire) (LD)
Hospital admissions for food allergy went up by 500% between 1990 and 2006, and there are 15 million hay fever sufferers, which has a real impact on productivity, so we urgently need better allergy services. When will the Government report on the pilot in the north-west of England of a new model of allergy services?
Mr Lansley
I fear that I do not know when that will be available, but I will certainly write to the hon. Lady. I have visited the allergy unit at Addenbrooke’s hospital in my constituency, and I know how effective, and indeed cost-effective, such work can be in treating allergies.
Southern Cross Care Homes
(13 years, 5 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Emily Thornberry (Islington South and Finsbury) (Lab)
(Urgent Question): To ask the Secretary of State for Health if he will make a statement on the future of Southern Cross Care Homes.
The Minister of State, Department of Health (Paul Burstow)
As the House will be aware, Southern Cross has been working with its landlords and lenders to agree a restructuring process to secure a viable way forward for the future. As I set out to the House on 16 June, the Government have made it clear that our overriding concern is the welfare and safety of the 31,000 residents in Southern Cross’s care, and that we expect all parties to work together to secure a consensual, solvent restructuring of the business that meets their collective responsibility to secure the welfare and care of residents.
When I last updated the House on 16 June, Southern Cross, its landlords and lenders had the previous day announced an agreement to work through, over a period of four months, arrangements for a consensual, solvent restructuring. Yesterday’s announcement was one step in that ongoing process, and discussions to resolve the remaining steps continue.
I know that there is concern about what yesterday’s statement might mean, and that residents, families and staff are anxious to know what will happen next. Let me repeat the assurance I have given to House before: whatever the outcome, no one will find themselves homeless or without care. We will not stand by and let that happen. We will continue to work with the Association of Directors of Adult Social Services, the Local Government Association, the Care Quality Commission and others to ensure that there is an effective response to any potential disruption to the continuity of care and to ensure that all residents are indeed protected. A consensual restructuring that assures a smooth transition to new arrangements will mean that those contingency arrangements will not be needed. We all want that to happen.
Let me reassure hon. Members about some of the questions that I know they will have. First, yesterday’s announcement stated that at the end of the restructuring process the Southern Cross corporate entity will cease to exist. That has no effect on the provision of care or the operation of care homes. Southern Cross remains in operation, and will continue to operate all its care homes until any transfer to new operators takes place.
Secondly, the transfer of care homes to alternative operators will be a managed process that ensures continuity of services. Yesterday’s statement makes it clear that care home staff will transfer on their current terms, and that the service that residents receive should be unaffected by the transfer. All parties involved in the negotiations have given a clear commitment that the continuity of care will be paramount in that process. Local authorities are already working to ensure that they can assist in the smooth transfer of arrangements in respect of homes in their areas. The Department has been working with ADASS and the LGA to support that.
Thirdly, no transfer will take place without new operators being approved and registered by the CQC. There has been speculation that companies with no experience in the care sector will take over the running of homes, but that will not happen. Alternative operators will need to be reputable and experienced companies that can satisfy the CQC that they are capable of delivering high-quality care and of meeting all regulatory standards. The CQC will not drop its standards in ensuring that requirements are met. I understand that each of Southern Cross’s landlords is settling its arrangements regarding which care home operators to work with, which is an essential part of the ongoing discussions. That will cover all landlords, so that there is a clear way forward for all homes.
Finally, I assure the House that the CQC has been working with Southern Cross landlords and other stakeholders for several months to ensure the smooth transition of services, and that it has processes to deal with re-registration, and to undertake the essential checks that are needed as a priority. It is having ongoing conversations with Southern Cross, landlords and other providers on the timing of applications.
The Government’s priority is to ensure that the current problems with Southern Cross are resolved and that a sustainable way forward can be secured, but, as the Prime Minister has previously stated to the House, we must all be clear on what future action is taken and draw lessons from what has happened.
I said earlier that yesterday’s statement from Southern Cross was one step in a process that will be ongoing in the coming weeks and months. Until all future arrangements are settled, Southern Cross will continue to operate and to provide care in all its homes. Only at the end of the process, when all transfer arrangements have been completed, will Southern Cross as an entity cease to exist. By then, all homes will have a clear plan for future operation, and the continuity of care will have been secured. That is the approach that the Department of Health has taken. Officials are in daily contact with all relevant parties. This Government are not sitting back; we are fully engaged.
Mr Speaker
Order. I thank the Minister for his statement, which was very informative, but he significantly exceeded his time. I will therefore allow the shadow Minister slightly more than her two minutes so that there is equity between the two sides. I emphasise for the future, however, that answers to urgent questions must be of the prescribed length, and the same goes for questions from now on.
Emily Thornberry
I thank the Minister for his response to my urgent question. Yesterday’s Southern Cross announcement that responsibility for managing 752 homes will pass back to the 80 landlords who own them has created a vacuum. I was interested to hear him say that that was part of a managed process, because it does not look like that—it has been a source of terrible uncertainty and great anxiety among residents and families. We have had so little information.
I am grateful for the information that the Minister has given today, but we need much more. Can the Government publish a list of all 80 landlords, or are the rumours correct that some of them have yet to be identified? Yesterday it was further announced that control of 250 of the homes would be handed back to the landlords immediately. We need to know which homes they are so that people living in them know who is running their home. Many of these landlords have little or no experience of running care homes. Does he have any information on the intentions of property companies such as London and Regional homes, which owns 90 former Southern Cross homes, or Prestbury, which owns 21?
I understand that the Association of Directors of Adult Social Services is doing its best to support its members, who will have a key role in ensuring that the operating companies can provide good quality care, and also that local authorities know how to perform financial stress tests to ensure that the new businesses have sound financial models, but what assistance is the Minister giving? Does he intend to provide additional resources to hard-pressed local authorities in order to help them? What advice can he give to local authorities if, for example, the new company is an offshore company? If the Department of Health does not have the expertise to assist ADASS, will he give that organisation access to officials from the Department for Business, Innovation and Skills, who might be able to provide that assistance?
Presumably, the new operators taking control of the homes will need to be registered with the Care Quality Commission—the Minister has assured us that that will happen—but given the staff shortages at the CQC will he assure us that the registrations will be completed quickly? The House has heard him guarantee that the new operators will honour the previous terms and conditions of the 44,000 employees, but how does that square with the announcement of 3,000 job losses? Does he know how many homes are likely to close and what the timetable is for such closures? What will happen to the 50 former Southern Cross homes owned by Lloyds properties, which is in administration? What about NHP, which owns 250 former Southern Cross homes and which is at a standstill with its bondholders? These problems must be addressed. We need a home-by-home plan from the landlords, and he must give us that plan. The buck stops with him. Will he now accept his responsibilities?
Paul Burstow
My slightly-longer-than-it-should-have-been answer to the hon. Lady’s question was an attempt to set out as much detail as was possible about the steps being taken to achieve a consensual, solvent restructuring of the business so that the homes can continue to operate. That is what my answer was all about. She asked about the role of the CQC, which, as I said to her, has been working for some months with the landlords to ensure a smooth process of re-registration as new operators are identified to take on the running of individual homes. I also said in response to her initial question that every home will be transferred. There is a plan in place that will lead to all homes being transferred over the next four months. She asked about engagement with BIS. Of course, as part of the ongoing work, the Department of Health is engaging with BIS to ensure that we have the very best advice in dealing with these issues. The Government have been—and remain—fully engaged with the process.
Mr Stephen Dorrell (Charnwood) (Con)
For the avoidance of doubt, will my hon. Friend confirm that the Government’s policy since the beginning of this saga has been motivated by a single and paramount concern—to secure the continued and orderly delivery of care to the right standards to the residents of these homes—and that, in that respect, this Government are operating unchanged precisely the policy operated by their predecessors?
Paul Burstow
My right hon. Friend is absolutely right to make that point, which allows me to make another point. The Health and Social Care Bill is currently before this House—Members are enjoying the Committee stage at this very moment—and it contains the very provisions that will allow us to put in place a regime, which currently does not exist, to ensure proper oversight and engagement with those issues from a central Government perspective. The previous Government did not leave such a regime in place, nor did they put in place the necessary tools to allow the Government to do everything that they might want to do and that the hon. Member for Islington South and Finsbury (Emily Thornberry) might like us to do.
Frank Dobson (Holborn and St Pancras) (Lab)
Does the Minister accept that if any elderly people are moved out of their homes, there will be an increased incidence of death and a reduction in people’s mental and physical health? What measures is he taking to ensure that as few people as possible are moved from those homes?
Paul Burstow
The right hon. Gentleman is absolutely right: we are working hard with the landlords, lenders and others to ensure that those risks are minimised, because the trauma of a hasty care home move and a forced closure leads to exactly those consequences. The Association of Directors of Adult Social Services has published new guidance for its members to manage those difficult decisions and processes and to minimise that risk as far as humanly possible.
Mr Stewart Jackson (Peterborough) (Con)
This is not a time for party political point scoring. The House will have been reassured by the Minister’s comments, as will the many residents of Astoria Park Southern Cross home in Park crescent, Peterborough, along with their families. The only point I would make to the Minister is that when the immediate crisis has been resolved, there should be a mechanism to work with key stakeholders such as the Care Quality Commission to understand the lessons of the flawed business model that Southern Cross pursued.
Paul Burstow
My hon. Friend is absolutely right, and that is indeed one of the many issues we need to consider as we proceed towards publishing a White Paper next year on social care reform. We have to ask questions about the regulatory framework that existed when that business model was established. We also need to ensure that we have the necessary tools to deal with large care home providers of this sort, where an individual local authority might be unable to cope with the consequences. Those are the issues that we are working with and that we shall continue to work with.
Glenda Jackson (Hampstead and Kilburn) (Lab)
The Minister gave a list of consultations and apparently daily meetings of his officials with care home providers and landlords. The one group that was markedly lacking in the process was the residents of the homes and their families. When will they be included in this process? Who will be responsible for informing them of the timeline if there have to be moves, and will they be in a position to object strongly if, for example, an elderly person does not wish to be moved from the home in which they are resident? Who is responsible for informing those people?
Paul Burstow
The first thing to say is that everything I have set out for the House today is about minimising the numbers of closures and moves. It is about ensuring continuity of care and continuing care in existing care homes. However, having said that, I made the point in response to her right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) that there is new guidance for local authorities on how they engage with the residents of care homes and their families, and it is the responsibility of local authorities to do just that.
Andrew Percy (Brigg and Goole) (Con)
Were it not for my two county councils, information about the two homes in my constituency—Windsor Court in Goole and St Mary’s in Scunthorpe—would not have been forthcoming at all. Given that it has also taken me several weeks to try—unsuccessfully—to get Southern Cross to allow me even to visit their homes, can the Minister give me an assurance that he will do everything he can to ensure that we are given home-specific information as quickly as possible? If such information is not being made available to Members of Parliament, it is probably not being made available to residents or their families.
Paul Burstow
Yes, and I gladly undertake to ensure that if further information needs to be shared during the summer recess, hon. Members in all parts of the House will receive it in a timely fashion, so that they can address their constituents’ concerns.
Hywel Williams (Arfon) (PC)
There are 1,772 people in 35 Southern Cross homes in Wales, but I did not hear the Minister refer to them at all in his answer. Where does the buck stop, as far as they are concerned? Is it with Welsh local authorities, with the Welsh Government, or with him, even though this matter is devolved?
Paul Burstow
I have had, and continue to have, contacts with the Ministers responsible for policy in this area in the devolved Administrations, but the legal responsibility for continuity of care from the point of view of the public purse rests with the local authorities. That is where the legal powers sit, and it is where the legal responsibility has to be placed. We are working with the Local Government Association and others to ensure that the local authorities are able to put contingency plans in place.
Ben Gummer (Ipswich) (Con)
Lombardy Park in my constituency provides residential care for extremely vulnerable young adults with severe learning difficulties. They, and especially their parents and families, are extremely concerned about what is going on. What reassurance can the Minister give them that those residents will be protected and looked after?
Paul Burstow
I understand entirely the point that my hon. Friend and other hon. Members are making on behalf of their constituents. The nature of the reporting of the announcement yesterday, and other announcements before it, is a source of worry for residents, staff and families. I hope that today’s statement will go some way towards giving them some reassurance. Equally, it will not help the successful, solvent restructuring of the business, which will provide that continuity of care, if we have an endless commentary on it. What is important is that the necessary actions are taken, and they are being taken.
Vernon Coaker (Gedling) (Lab)
Does not the Minister understand that it is not endless commentary that we want from him but some reassurance for residents in these homes? Also, it is not continuity of care that they want, but continuity of the place in which they live. These are not just residential homes; they are places where people live, and they form a valuable part of the community. What reassurance can the Minister give us that this is not only about continuity of care for those people but about their having continuity of residence in the home they live in?
Paul Burstow
The hon. Gentleman is absolutely right; this is about people’s homes and their futures. That is why the Government have been working to make it abundantly clear to all those involved in the process what their responsibilities are, and what the local authorities’ responsibilities are. We have also made it abundantly clear that in no circumstances will the Government do anything other than ensure the future continuity of care for people. No one will be made homeless, and no one will wind up without the care and support they need.
Greg Mulholland (Leeds North West) (LD)
Considering the real concern in areas around the country, including Leeds, and the clear duty of local authorities in this role, does the Minister agree that it is inappropriate and irresponsible for councils such as Leeds city council to pursue a raft of closures in their own care homes while this problem clearly exists?
Paul Burstow
My hon. Friend tempts me to comment on an individual local authority’s decisions, the details of which I do not have. It seems to me that that is an area that the council in question will have to look at carefully. The key thing has to be that local authorities are responsible for looking at the availability of good- quality care home placements in their area and to supply individuals who are funded by the local authority and who need a decent care home with just that.
Dame Anne Begg (Aberdeen South) (Lab)
I have nine Southern Cross homes in my constituency, and they are sitting on some very expensive real estate. The problem for Southern Cross was that its rents were too high. What negotiations has the Minister undertaken with the landlords to ensure that that problem does not continue and beset the new operators who we hope will take over the running of those facilities?
Paul Burstow
I do not know the particulars of the homes to which the hon. Lady refers, but if she would like to write to me with more details, I will certainly look at that matter. Many of the homes that Southern Cross owns have been specifically built and designed to provide residential care for older people, and there is therefore no other purpose for which they could usefully be converted—[Interruption.] Opposition Members might chunter about that, but that is why a consensual, solvent restructuring is now the best and most likely outcome of the process.
Mr Robert Buckland (South Swindon) (Con)
The residents, staff and families of the King’s Court home in my constituency will be encouraged by what they have heard today, but will my hon. Friend write to me with all the relevant information about the key issues of continuity and quality of care provision at King’s Court?
Paul Burstow
My hon. Friend is right to bring to my attention, and that of the House, the concerns of his constituents. I certainly hope that the statement I was able to make today is of some reassurance, along with the commitment I made to continue to keep both the House and individual hon. Members informed as this matter goes forward.
Nick Smith (Blaenau Gwent) (Lab)
This is the second time this month that this Minister has been dragged to the Dispatch Box to answer urgent questions about Southern Cross. The Government need to get a grip. May we have a ministerial taskforce from across Government to manage and monitor the transfer of homes to landlords? We need to ensure stability and give peace of mind to Southern Cross residents and their relatives.
Paul Burstow
I note that the hon. Gentleman seems to be a bit like a stuck record, repeating the point that he made last time. The reality is that the Government are taking the necessary steps, are exercising their responsibilities correctly and are making others responsible and accountable for discharging their legal responsibilities as well. What the hon. Gentleman left out from his question was any suggestion of what specific powers his Government put in place that would have allowed us to deal with this issue. There are no such powers.
Glyn Davies (Montgomeryshire) (Con)
Does the Minister feel that there would be value in considering the financial regulation of care homes and the care home sector so that this sort of situation does not occur again in future?
Paul Burstow
My hon. Friend is absolutely right. I hope that we can learn the necessary lessons about what regulation should exist at the national level and what powers are in place for regulators to intervene in these circumstances. The reality is that the regulatory powers that this Government inherited from the previous Government are next to non-existent. That is one reason why hon. Members have been able to drag Ministers to account, as has been said, before the House. What we have said as a result is that as we work to produce the White Paper, we will address these issues to make sure that we have a system in place.
Mr Dennis Skinner (Bolsover) (Lab)
Another day, another Tory disaster. We have frail, elderly men and women who do not even know what day it is, yet this Minister, because he is so obsessed with the private sector, fails to tell us that he is going to restore the cuts to local authorities that would enable them to handle the crisis.
Paul Burstow
I thank the hon. Gentleman for his comments. He should just reflect on the fact that this company and this business model were established during the 13 years when his party was in office, and on the fact that his party did not put in place the necessary regulatory measures that would have allowed anything other than the very measured approach that this Government are taking— working with the lenders and the landlords to ensure a consensual restructuring of this business. That is what the residents of these homes want, and this is what we are doing to make it happen.
James Morris (Halesowen and Rowley Regis) (Con)
I recently visited Roxburgh House in Cradley Heath in my constituency, where a number of vulnerable elderly residents are concerned about their future. Does the Minister agree that we need not only to address the continuity of care in those homes now, as he has described, but seriously to review the situation, once this crisis has been managed, to make sure that it does not happen again? Will he outline the steps he will take to ensure that that happens?
Paul Burstow
I am grateful to my hon. Friend. That is exactly what we also need to work on, which is why we are providing in the Health and Social Care Bill the necessary powers for regulations to be made that would allow such a regulatory approach to be developed. During consideration of those ideas in Committee, it was far from clear whether the Opposition believed that this was a worthwhile approach to adopt.
Mrs Madeleine Moon (Bridgend) (Lab)
Before entering this House, I was a care standards inspector in Wales. Part of the problem is the fact that we are not willing to pay properly for the appropriate registration and inspection of care homes. One thing that worried me about the Minister’s statement was when he said that the registration of the new management bodies for these homes would be completed quickly. It should not be “quick” registration; it should be thorough and effective registration. May we have an assurance that the registration will indeed be thorough and effective? Secondly, may we have an assurance that the care standards inspectors will not be diverted from carrying on the ongoing inspection of other homes, and thus protecting other frail and vulnerable adults in care homes around the country?
Paul Burstow
I said in response to the original question that there would be no relaxation of the standards when it came to the registration of new homes, and that there would be no rush but a smooth transition to the running of the businesses by new operators. There was no suggestion that the process would take place in a rushed way. I urge the hon. Lady to read the record later.
As for the role of the CQC, we made it clear last year that we would allow it to recruit the necessary staff, and that there would be no limit to its ability to recruit staff whom it felt that it needed in order to do its job.
Andrew George (St Ives) (LD)
What other lessons have the Government learned from this case? The new regulatory measures in the Health and Social Care Bill are welcome, but if greater proportions of both health and social care are being exposed to this level of speculative capital, do the Government not need to reflect on whether further measures are required?
Paul Burstow
I am keen not to start leaping to lots of conclusions. About 77% of all social care provision in England is already in the private sector. This is not an experiment, but a fact of life that has evolved over the last 20 and 30 years and has been overseen by Administrations of all colours. What we do need to do is ensure that we have effective, proportionate regulation that safeguards the interests of residents who see these homes as their homes, along with robust arrangements on the ground to safeguard good quality.
John Mann (Bassetlaw) (Lab)
Can the Minister confirm that elderly people could now be forced out of the homes in which they have lived for years and be stuck in homes that are inferior, or are situated many miles from where they live?
Paul Burstow
I believe that the hon. Gentleman has been in the House for a considerable time. He will know that the secret that he appears to be sharing with the House, and with others who are following our proceedings, is not something totally new. He knows that care homes close already, and he knows that, as a consequence, people do face such terrible circumstances. That is why the Government, working with ADASS, have ensured that the necessary arrangements and good practice advice are in place, which is something that his party did not do.
Alison McGovern (Wirral South) (Lab)
Residents of Bebington and the rest of the Wirral are extremely concerned about the Southern Cross experience. Will the Minister say more about the specific lessons that we need to learn from it, given the Prime Minister’s announcement yesterday about the wider opening up of public service delivery?
Paul Burstow
As I said to my hon. Friend the Member for St Ives (Andrew George), 77% of adult social care is already in the private sector, and as we said in “A vision for adult social care”, we want a more vibrant, diverse market which includes voluntary sector providers. We want to examine the role of regulation, to ensure that it assists with the management of that market and, fundamentally, to ensure that it protects the rights and best interests of those who use these services.
Mark Durkan (Foyle) (SDLP)
Will the Minister assure me that consultation with the devolved authorities will take account of the different mix of landlords and lenders there? On a wider issue, will he assure the House that the undertakings he has given in respect of older residents will apply, at least equally, to much younger residents who are receiving bespoke care packages for conditions such as acquired brain injuries, often on a different contractual basis and outside the normal Southern Cross business model? Will such people be fully taken care of?
Paul Burstow
I am grateful to the hon. Gentleman for his question, which allows me to deal with an earlier question on the same subject. The answer is absolutely yes. The continuity of care will be not just for the benefit of older residents of care homes, but for the benefit of any individual who relies on the services provided by the company.
John McDonnell (Hayes and Harlington) (Lab)
I have been raising concerns about the management of Southern Cross in the House since 2007, in early-day motions and Adjournment debates. Despite assurances from the Care Quality Commission and from the company itself, the system resulted in neglect and abuse in my borough, which, at one point, suspended all placements in Southern Cross homes. I therefore view with some scepticism the assurances given today by the commission and participants in the company. Will the Minister be able to empower local authorities to take control of homes if they are threatened with closure and residents may be forcibly moved?
Paul Burstow
The hon. Gentleman has been raising those concerns in the way that he has, and I will certainly look at the points he has raised in the past. Local authorities have certain statutory powers in respect of their ability to respond to the closure of a care home by managing and resourcing that. We have been, and continue to be, in discussion with local authorities on that, so that they are able to respond in the event of a closure. I return to my key point, however, and the key reassurance we have not only from the company, but from the landlords: this is a solvent restructuring of the business, so that the care homes continue to operate and to provide homes for their residents.
Barry Gardiner (Brent North) (Lab)
It is not only the residents of the Birchwood Grange and Coplands homes in my constituency who are concerned about their future; so, too, are the people who work in those homes. Can the Minister guarantee that the new operators will honour the terms and conditions of those workers, so that they can see that their future is also secure?
Paul Burstow
There is an undertaking that the TUPE regulations would apply: there would be a transfer on the current conditions. That is what all the staff have been told, and I am certainly happy to repeat the undertakings that have been given by those responsible for those undertakings.
Jack Dromey (Birmingham, Erdington) (Lab)
Shameful speculation brought Southern Cross to its knees, but local authorities will now have a key role to play in rescuing the homes of 31,000 people in a year when, according to Age UK, the social care budget is being cut by 8.4%. What discussions has the Minister had with the Department for Communities and Local Government, because it cannot be right to ask local authorities to accept public responsibility for a private failure and to deny them the necessary resources?
Paul Burstow
As I have made clear, given the current stage of the announcements on this solvent restructuring, we appear to be in a position where the scenario the hon. Gentleman asks about will not come to pass.
Barbara Keeley (Worsley and Eccles South) (Lab)
There are more than 300 residents in seven Southern Cross care homes in Salford, and their quality of life is our primary consideration. What assurance can the Minister give to those residents and their families that future providers will not play for short-term profit, but will truly consider their quality of life? Reassurances will not mean much if a new provider gets into the same business model and same way of carrying on as Southern Cross.
Paul Burstow
The hon. Lady is right. As we move forward and achieve a successful conclusion to this process, we must put in place the necessary measures to ensure that this cannot happen again. We must take a critical look at the regulatory environment in which this particular business model was allowed to grow—a business model that thrived during a boom, but that was predicated on the assumption that there would never again be a bust. There was a bust however, and that is why the company is in this mess.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
The great majority of these homes were given landlords, but the one in my constituency was owned by Southern Cross and the title deeds have been passed to the bank. I have no confidence in the banks doing anything else but selling such deeds for the maximum profit. Does the Minister agree?
Paul Burstow
I would reassure the hon. Gentleman on that point by repeating that we are engaged with not only the landlords, but the lenders too, about all their responsibilities on the fundamental issue of the welfare of the residents of these care homes. We continue to make that point. That is the legal obligation that local authorities have to honour, and we are working with all those parties to make sure that that is what happens.
Lindsay Roy (Glenrothes) (Lab)
There are four Southern Cross care homes in my constituency. Does the Minister agree that in terms of care provision people should be treated first as people, not as sources of potential profit?
Grahame M. Morris (Easington) (Lab)
There seems to be a measure of agreement among Members on both sides of the House about the need for proper regulation, oversight and management of these homes. Will the Minister therefore take the opportunity to dissociate himself from the remarks made and position adopted by the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns) on 7 January 2004? He moved an Opposition motion deploring the then Labour Government’s
“over-prescriptive, expensive and bureaucratic regulation of the care home sector”—[Official Report, 7 January 2004; Vol. 416, c. 324.]
That statement is reminiscent of the neanderthal, neo-Conservative approach adopted by his right hon. Friend the Chancellor in his remarks on deregulating the banking sector.
Paul Burstow
I am going to stay focused on the welfare and interests of the residents of these homes, and we will have those political debates on another occasion.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Just a few weeks ago, I visited Bellevue Court, a home run by Southern Cross in my constituency, where I was told that the home would stay part of the restructured Southern Cross group and that there would be no redundancies. We now find that there is to be no restructured Southern Cross group, so does the Minister understand the scepticism that will be felt by families and staff involved in Southern Cross if the guarantees given a month ago did not last the month?
Paul Burstow
What we have is a process that is working towards that solvent restructuring of the business to ensure that each home is able to be taken over by an operator or a group of operators so that good-quality care can continue to be provided for the people who live there. That is what this process involving the landlords, the lenders and Southern Cross is all about. What we know from the statement made by the company yesterday is that it has given an undertaking for the TUPE transfer of the staff. We also know that the company will be working over the next four months to ensure that smooth transition. As my statement said, the public authorities—the Care Quality Commission and the local authorities—are working with the company to ensure that that happens.
Mr Jim Cunningham (Coventry South) (Lab)
The Minister knows as well as I do that local authorities may have a legal obligation to intervene in this situation but they cannot do that without Government assistance with the resources. It is no good the Minister blaming a previous Labour Government or local authorities; he is passing the buck to local authorities. I thought that Pontius Pilate died 2,000 years ago, but we have just seen his resurrection.
Paul Burstow
What I would say to the hon. Gentleman is that there is not a question of funding these homes, because they are not insolvent. The business is not going into administration—it is going through a restructuring—so there is no request for funds and there is no need for those funds in order for local authorities to be able to carry out their current legal duties.
Ann Clwyd (Cynon Valley) (Lab)
I do not know whether the Minister heard the excellent Radio 4 programme “You and Yours” earlier this week, which included a long discussion on care homes and care in the community. The programme gave the impression that more care home problems are in the pipeline and that we are dealing with Southern Cross today, but several others are in a similar situation. Can he give us any assurances on that point? Will he also examine care provision in the community, because many care companies also provide that service to local authorities and it would be an absolute catastrophe if the same thing were to happen to care in the community?
Paul Burstow
It is for those very reasons that this Government last year set out a vision of reform of social care based on greater personal control and personalisation of the services that people need to sustain them in the community. It is also why we have committed to produce a White Paper that will focus on issues of quality and regulation, and that will bring together the other issues associated with how we reform the laws in this country, which have evolved in a piecemeal fashion over the past 60 years and which make the system opaque and hard to navigate. Those are the commitments that we have entered into and will continue to prosecute.
Gordon Banks (Ochil and South Perthshire) (Lab)
The Minister talks about every home being taken over, but it is obvious from his earlier remarks that he expects closures. That is a worry for me, given the two care homes in Tullibody and Crieff in my constituency. Just how many closures are acceptable to him?
Paul Burstow
Closures in their constituency are of concern to any hon. Member, and I suspect that that is why we have made it clear that we have been working with the Association of Directors of Adult Social Services. I am not going to come up with an arbitrary threshold below or above which something is good or bad; we need to focus on the needs of the individuals, which is why I have made it clear, in response to some of the hon. Gentleman’s colleagues, that we now have best practice advice on how such closures are to be managed. That did not exist, and was never drafted, under the previous Government.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
The Minister said that he had been in discussions with the devolved Administrations, as I would expect him to be. What assurances can he give the House based on those discussions for residents in constituencies in Scotland, Wales and Northern Ireland about their future under the plans he has announced today?
Paul Burstow
The approach is one that I have rehearsed quite clearly today before the House. We as a Department continue to work closely with the devolved Administrations, sharing information about our contact at a national level with the landlords as a landlord committee as well as with individual landlords. If the hon. Gentleman has specific concerns about Scotland, he should contact the Scottish Government, too.
Tony Lloyd (Manchester Central) (Lab)
My local authority does not know who the successor landlords are in some of the cases in Manchester. The people I represent do not know who their landlords will be. This most complacent of Ministers ought to be able to come to the House and tell us the answer to this question: does he guarantee that every one of these offshore financial companies will agree to take over the running of these homes? That is what my constituents need to know.
Paul Burstow
What I have told the House is that the process in hand, following the statement made yesterday by Southern Cross, will ensure a smooth transition of every home to a new operator over the next four months.
Bill Esterson (Sefton Central) (Lab)
This will be of great concern to many people who live and work in homes that are not run by Southern Cross. Many other people will be affected. The Minister has spoken about regulation and care home standards. Will he bring forward proposals to consider the business regulation, and can he tell us when he will do that? That is the way to provide reassurance and security for many people who live and work in homes other than the 31,000 in Southern Cross.
Paul Burstow
My right hon. Friend the Secretary of State for Business, Innovation and Skills has already made statements and commitments about looking at the business model and at why it was thought to be appropriate for this sector.
Roberta Blackman-Woods (City of Durham) (Lab)
I met my local authority a few weeks ago to discuss the Southern Cross situation and it was obvious that it was not totally prepared for the complete withdrawal of Southern Cross from the social care market. Will the Minister tell the House whether he has issued or intends to issue guidance to local authorities on how to deal with this situation?
Paul Burstow
It is not a question of trying to write guidance in Whitehall. This is about our engagement with the Association of Directors of Adult Social Services about how directors discharge their statutory responsibilities. Writing guidance does not deal with the immediate changes. We need to ensure that local authorities’ existing legal obligations to ensure continuity of care are properly exercised.
Chris Leslie (Nottingham East) (Lab/Co-op)
Is it not obvious that if the Government are implementing swingeing cuts in the money they give to local authorities, they in turn will give less money to the care homes, and that this is only the beginning of a set of care home closures that could be catastrophic? Does the Minister seriously believe he can wash his hands of all responsibility?
Paul Burstow
In the spending review last year, the Government took our responsibilities very seriously. As a result, we identified and agreed that by 2014-15 an additional £2 billion would go into social care to support those budgets. We know from the work that has been done by others that with efficiency savings, such as those I was talking about earlier as regards reablement and telecare, that resources are sufficient to sustain the system while we do the necessary work to reform it.
Andrew Gwynne (Denton and Reddish) (Lab)
There are nine Southern Cross homes across Tameside and Stockport and still more in adjacent Manchester. Although some good work might be being done at an individual district level, I am not convinced that much contingency planning is being done across city regions such as Greater Manchester. What encouragement and, more importantly, financial assistance, can the Minister give local authorities to ensure that there is cross-city regional co-operation so that residents are certain of keeping their homes?
Paul Burstow
It really is not a question of financial assistance; it is about the co-ordination of the Association of Directors of Adult Social Services and the Department’s regional directors of social care, who are working with those colleagues at local authority level, and about making sure that they are co-ordinating their activity with the Care Quality Commission. All those things are happening, have been happening and will continue to happen to ensure that we do what the Government are committed to doing—ensuring continuity of care and that people can stay in the homes they are currently in with the knowledge that the Government really are committed to making sure that they have no doubt that they are not going to be thrown out on the streets as a consequence of this business’s restructuring.
Electricity Market Reform
The Secretary of State for Energy and Climate Change (Chris Huhne)
With permission, Mr Speaker, I would like to make a statement on reform of the electricity market. Since privatisation in 1990, our electricity market has served us well, delivering reliable, affordable electricity, but in the years ahead we face unprecedented challenges, which the existing market was not designed to meet. Over the next decade, around a quarter of our existing power stations will close, threatening the security of our electricity supplies. Some £110 billion of investment is needed to replace those plants and to upgrade the grid. That is twice the rate of investment of the last decade and the equivalent of 20 new power stations. At the same time, demand for electricity could double over the next 40 years as the population increases and as we increasingly turn to electricity for heat and transport. We also face ambitious carbon emissions and renewable energy targets as we seek to build a cleaner energy future for Britain and for the world. To achieve our goals, we need to take decisive action now to increase low-carbon electricity generation, including nuclear and renewable energy as well as carbon capture and storage.
None of these challenges can be met for free. We will have to pay to secure reliable, clean electricity for the future and we cannot ignore the long-term trends in electricity prices. Increases in wholesale costs and the carbon price are likely to lead to higher bills in future, even without factoring in the huge investment in new infrastructure that is needed. It is vital that we put in place market arrangements that deliver this investment as cost-effectively as possible. The current electricity market simply is not up to the job and cannot deliver investment at the scale and pace we need. Without reform, our reserve capacity—the power plants we can call on when demand surges—will fall to uncomfortable levels. We would face a much higher risk of black-outs by the end of this decade and we would also be locked into a worrying reliance on fossil fuel imports, putting us at risk of rising and volatile prices. Consumers could end up paying more.
That is why I am putting before the House today a series of measures to reform the electricity market, diversifying our generation mix and boosting investment in secure, sustainable and home-grown low-carbon technologies. There are five key elements to our reforms. First, the Chancellor announced in the Budget a new carbon price floor to put a fairer price on carbon, thereby reducing uncertainty for investors and providing a stronger incentive to invest in low-carbon generation now.
Secondly, we will send a clearer message that low-carbon electricity is a key part of our future energy mix. We will introduce a new system of long-term contracts to remove uncertainty for investors and consumers and to make low-carbon energy more attractive. Contracts for difference will be introduced for all forms of low-carbon generation, lowering the cost of capital and allowing clean technologies with high up-front and low long-run costs to compete fairly against traditional unabated fossil fuels. This will build on the carbon price floor, providing the additional clarity and certainty that investors need.
Thirdly, we will introduce an emissions performance standard to send a clear regulatory signal about the amount of carbon that new fossil-fuel power stations can emit. This will reinforce the requirement that no new coal-fired power stations are built without carbon capture and storage, while ensuring that vital investment in gas can take place. Carbon capture and storage is a key part of our plan to decarbonise electricity generation. It is the only technology that can potentially reduce emissions from fossil fuel-fired power stations by as much as 90%.
Fourthly, to ensure security of supply in the future, we will introduce a new contracting framework for capacity, changing the way we secure our back-up electricity. That capacity mechanism could mean centrally procuring capacity that is set aside from the market and used only when needed, or it could mean a market-wide mechanism, in which all providers offering reliable capacity are rewarded. Under both options, we plan to ensure fair and equivalent treatment between all the different ways of accomplishing what we seek—demand response, storage, interconnection with our European partners, and extra generation. Shifting or cutting demand for electricity is likely to be more cost-effective than simply building more and more power plants, and complements our work to drive down demand through energy efficiency measures such as the green deal and smart meters. Fifthly, we will put in place transitional arrangements to ensure that there is no hiatus in investment while the new system is set up, and we will create new institutional arrangements to deliver the reform package.
Together, the reforms will tackle the immense challenges facing the electricity market. They will put in place the framework to deliver the capacity and demand-side response that we need to guarantee future security of supply. They will encourage investment in proven low-carbon generation technologies, and will give investors confidence that there will be a market for electricity generated with commercial carbon capture and storage—confidence that will drive investment in both demonstration and commercial CCS plants.
Six energy companies supply around 99% of customers in the UK. Alongside action by Ofgem to improve liquidity, the reforms will boost competition within the market. They will make the UK a magnet for low-carbon investment, generating jobs and growth. That will help energy-intensive industries. However, we are also committed to bringing forward a package of measures to ensure our continued international competitiveness.
The reforms will achieve our aims at least cost to the consumer, with bills for households and businesses likely to be lower and less volatile over the period to 2030 than if we had left the market as it is. They will enable us to build a flexible, responsive electricity system, powered by a diverse and secure range of low-carbon sources, en route to a cleaner, greener future. The reforms insure us against fossil fuel price shocks, end 25 years of policy dithering, and will keep the lights on, and bills down.
Alongside the electricity market reforms, I am also publishing today the renewables road map. For too long, discussion about renewable energy has focused on barriers. Now, for the first time, we have set out a detailed, step-by-step plan to overcome those obstacles. The road map sets out a comprehensive action plan to accelerate the UK’s deployment and use of renewable energy. It puts us on the path to increase our renewable energy consumption fourfold by 2020 while driving down the cost over time. Growth on that kind of scale will be challenging, but necessary.
The road map identifies eight technologies that have the greatest potential for the UK, such as offshore wind, where we have abundant natural resources and already have the world’s largest market. Subject to further value-for-money assessment, the Department is setting aside up to £30 million over the next four years to support technology development programmes to improve the efficiency and reduce the costs of offshore wind. With industry, we are setting up a taskforce to drive the work to achieve cost-competitive offshore wind. The recently published microgeneration strategy also outlines the actions that the Government are taking to tackle the non-financial barriers that could prevent microgeneration from realising its full potential. Together, the renewables road map and the microgeneration strategy, which has already been published, will reduce costs for consumers, and enable mature renewables to compete against other low-carbon technologies in the longer term.
I am also publishing today the final report of the Ofgem review. The review reaffirms the Government’s commitment to a strong, independent regulator, able to give confidence to investors, protect consumers and help meet our energy and climate targets. The summary of conclusions was published in May; the final report provides further detail on how the Government will seek to strengthen the regulatory framework.
The package of reforms that I have announced today will yield the biggest transformation of the market since privatisation. They will create an enduring framework for future investment, and will secure our electricity supplies for the future, providing our consumers with the best deal possible, helping us meet our ambitious carbon targets, and putting us at the forefront of low-carbon technological development, ready to lead the world in the next energy revolution. I commend this statement to the House.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I thank the Secretary of State for advance sight of his statement. We are pleased that he agrees with his predecessor, my right hon. Friend the Member for Doncaster North (Edward Miliband), about the need for reform. The Government have already sent some signals about the future shape of the UK energy market.
The Secretary of State should be congratulated on standing up to the fuzzier elements of his party with his U-turn on nuclear, which he no longer happily describes as a “failed technology” but says is an essential part of the UK's getting off the “oil hook”. The Government’s eventual acceptance of the recommendation of the Committee on Climate Change in its fourth carbon budget was largely welcomed by most people, even if his colleague the Business Secretary was described as “squirming in his seat like a schoolboy” at the Cabinet meeting which discussed it.
However, the Government have failed to deliver on many fronts since the Secretary of State for Energy and Climate Change took office. Recent ill-judged Government intervention in the energy market has already led to a hiatus in energy investment and uncertainty across all sectors. The solar feed-in tariffs fiasco destabilised the solar sector and sent shockwaves through other renewable sectors. Companies, including RWE, are considering pulling out of the UK because of the uncertainty caused by the Government in the investment landscape. That was underlined by the Pew Environment Group’s report, which showed that the UK dropped from fifth to 13th in a global ranking of countries for green investment. We have seen a green investment bank failing to deliver the necessary investment now and being criticised by the CBI director general, John Cridland, who warned that the bank
“certainly won’t work if it needs the Treasury’s permission to blow its nose.”
There is a question mark over whether the Secretary of State’s proposals will deliver. The track record is not good. We believe that the Government must meet some key tests if reform is to work. A new market needs to be greener and to create certainty for industry, room for innovation in emerging energy solutions, and crucially, a good deal for consumers both as users of energy and as taxpayers, and it must deliver the necessary investment in the UK energy sector for security of supply.
In the White Paper, we have a mixed bag of measures. There is an emissions performance standard—a policy that the Energy and Climate Change Committee considers, at the level set,
“would have no material impact and is therefore pointless.”
I could say rather uncharitably that that sounds a little like a summary of Government green policy. Certainly, it is not popular, and already industry is puzzled about exactly what it will achieve. If we are to have an emissions performance standard, the Secretary of State needs to explain to us why it is any more than green window dressing. How will the transition to carbon capture and storage be accommodated within this measure, when we are still awaiting not only the sign-off on project 1, but the future Treasury and European funding for projects 2, 3 and 4?
The proposals also include a carbon floor price, although we knew about that because it was announced in the Budget independently of these proposals—a running theme for the Department, which most of the time seems to be run by remote control from 11 Downing street. The Department has only just woken up to the impact that this tax grab on industry and its potential to export businesses and their emissions overseas will have on the UK industrial landscape. Better late than never, but it is catch-up.
Two measures are being consulted on. A contract for difference will pump public money into supporting more expensive energy production—a mechanism which we hear from the Secretary of State will encourage other users into the market, but with such complex administration, we worry, as do many businesses, that small suppliers and new investors will struggle to keep up. We also see proposals for a capacity mechanism and energy auctions, the devil of which will be in the detail. The right hon. Gentleman should expand on which technologies will deliver most benefit, what the costs to the UK will be, how the consumer will afford it, and how we will avoid expensive stranded assets in a new dash for gas.
Investors need confidence, certainty and clarity. The White Paper could help, or it could herald an era of overly complex and overlapping measures, paid for by the taxpayer, that will lead to higher than necessary energy bills. Customers are currently getting a raw deal, so any change must support the consumer. The existing big six energy companies will undoubtedly need to provide in this era of new energy generation, but we need to free up the suffocating oligopoly that stifles real competition from new energy investors. The prize is driving down the cost of new energy generation and prices and increasing real choice for consumers. The Secretary of State, who has been insouciant in the face of rising energy bills, should stop worrying so much about his next meeting with the big six chief executives and start worrying a bit more about the consumer.
Will the Secretary of State please tell us exactly when the legislation will come before Parliament and when he expects the reforms to be implemented? We already have the delayed Energy Bill circling Parliament and a renewables road map announced today: he cannot keep stacking up policies like waiting aircraft. I am pleased that he is convening a group to look at decentralised energy, but can he give us more details on that? So far his Department has been rolled over by the Treasury at every turn, so could he tell us what these changes will cost the taxpayer and what he is doing to protect the public from unreasonable price rises? How will the Government decide when to conduct energy auctions, and how will he ensure that all players will be able to bid in order to reach this new dream world he talks of? Apart from the now delayed green deal, what is his strategy for reducing energy demand?
Mr Speaker
Order. I am sure that the shadow Secretary of State is bringing her remarks to a close, because she has exceeded her time.
Meg Hillier
We cannot afford the dithering, delay and postponement that has characterised Government policy so far. We want to support and work with the Government to achieve these outcomes, but we need answers on those points from the Secretary of State.
Chris Huhne
We are certainly having to play catch-up—I make no bones about it—because after 13 years of Labour Government we inherited a situation in which the UK was ranked 25th out of the 27 European Union member states on installed renewables. The hon. Lady talks about the speed and dynamism exhibited by the Opposition when they were in government, but not a single new nuclear power station has been consented to since 1986, so the reality is that the track record of which she boasts is entirely mythological, like some Grecian beast seen far off in the mists that suddenly vanishes.
We are confident that there will be enormous benefits for small suppliers as a result of these changes, because it is precisely the long-term contracts that will encourage new entrants into the market and ensure that they have certainty about price, which they cannot rely on if they do no understand the market as well as the big six. That will make our market more competitive, which is a fundamental way of ensuring that we get a better deal for the consumer in the long run.
The hon. Lady asked which technologies will benefit more. We are not attempting to pick winners, unlike the Opposition, evidently. We want a level playing field for all low-carbon technologies, because we recognise the genuine uncertainties about the development of such technologies. As we learn more about which technologies will be the most effective and have the lowest cost, we will invest more in the winners, and that will be discovered through normal market processes.
When it comes to consumers, we have been clear about the need to reduce the complexity of tariffs and insist that every energy bill shows the lowest tariff available from the supplier, and we have had a clear review of the retail market from Ofgem. We want greater competition and are encouraging new entrants through all these means, in addition to the support of a 67% increase in the social discount budget, compared with the money set aside under voluntary agreements by the previous Labour Government. We are helping in particular those who most need help with their energy bills, because they are the most vulnerable, and Government Members can be proud of that.
New legislation will be introduced at the beginning of the next Session, in May 2012. The working group on decentralised energy will attempt to tackle all the different barriers to decentralised energy, ensuring that it is able to play its full part in diversifying our supply. The key to auctioning, which I very much want us to adopt, is that there should be greater certainty about costs so that those who are participating in the auction are able not only to see that they have a reasonable chance of winning but to identify their costs.
The hon. Lady asked what measures we are taking on the reduction of energy demand. The most significant of those is the pioneering measure in the Energy Bill—the green deal. We are the first of any of the leading G20 countries to introduce this measure, which we continue to maintain is on course for launch in October 2012, when it will be a roaring success.
Mr Speaker
Order. A great many right hon. and hon. Members are seeking to catch my eye, but there is heavy pressure on time and I must therefore appeal for single, short questions without preamble and for comparably pithy replies from the Secretary of State.
Mr Tim Yeo (South Suffolk) (Con)
As the task of attracting huge amounts of new investment into new low-carbon electricity generating capacity is extremely urgent, can the Secretary of State assure us that the passage of the necessary legislation will be a top priority for the Government in the next Session? Will he ensure that as much clarity as possible about the levels and manner of operation of the feed-in tariffs, with contracts for difference, will be available as soon as possible to reassure investors that it is a new, stable and predictable regime?
Chris Huhne
I assure the hon. Gentleman that the Government are extremely seized of the urgency of getting the legislation through during the second Session and of issuing the contracts, so that they will be on course and we are able—I hope—to issue the first contracts in 2013.
Malcolm Wicks (Croydon North) (Lab)
I will put to one side a Liberal Democrat Secretary of State attacking the Labour Government for being slow to build nuclear reactors, which shows a capacity for humour that I admire. Do the Secretary of State and the Department now have contractual details from our gas supply companies, which used not to be the case? That would, first, enable him to assure himself about the security of supply, not least given that we often buy gas on the spot market or in the short term, and secondly, enable his Department to scrutinise those contracts to make sure that when companies increase gas prices they are doing so in ways that are fair to the customer.
Chris Huhne
The right hon. Gentleman makes a very good point; he is expert in this area. The Energy Bill, which we hope will achieve Royal Assent in the autumn when we come back from the recess, contains provisions that ensure that we are able to be informed about these measures and ensure greater security of supply. He will have read in the press about long-term arrangements being contracted, for example, between Centrica and the state of Qatar. We have a number of these longer-term arrangements. Security of supply is important in physical terms, and we also think about it in price terms. The 30% increase in gas prices over the past year has been a significant shock to a number of consumers. One of the reasons we want to get to low carbon is to protect the economy and consumers against that sort of shock.
Mr Speaker
I always enjoy reading the Secretary of State’s book, but on the whole I prefer the abridged to the “War and Peace” version.
Tony Baldry (Banbury) (Con)
As a Minister in the Department of Energy at the time of the privatisation of the electricity industry, I have watched with concern as a market that had 13 participants at that time has shrunk to just six under Labour. How will my right hon. Friend’s proposals drive competition?
Chris Huhne
I thank the hon. Gentleman. That is exactly right. The biggest feature of the market is the fact that 99% of British energy consumers are served by just six companies, and we desperately need to increase that number. The arrangements that we are announcing today are designed to bring new entrants into the market by providing certainty on price, because one obstacle that they have is in understanding how the market works. Many of the new entrants will therefore be encouraged to invest.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
The Secretary of State referred to the need for a “strong, independent regulator” to protect consumers. Given the store he places by that, is it not time that Ofgem looked again at the practice of door-to-door selling, through which many vulnerable consumers are being ripped off by the big six?
Chris Huhne
The hon. Gentleman is absolutely right. We continue to monitor that issue and are discussing it with Ofgem. We will bring forward any appropriate measures when we have considered the matter.
Mr Charles Walker (Broxbourne) (Con)
Carbon charging is a tax on jobs. Why are we retarding economic recovery by introducing what is in essence a carbon tax on business and job creation?
Chris Huhne
I do not accept my hon. Friend's analysis. Nick Stern has described the failure to take account of the carbon consequences of our actions as the greatest market failure of all time. Sometimes we have to incorporate the consequences of our actions for the environment into the market decision. That is what we are doing.
Caroline Lucas (Brighton, Pavilion) (Green)
Given that electricity market reform will lead to windfall profits for existing nuclear plant of at least £50 million a year and given the rising concerns about fuel poverty, of which the Secretary of State will be aware, will the Government introduce a windfall tax on nuclear and use the revenue to help those living in fuel poverty?
Chris Huhne
The hon. Lady is referring, I think, to the potential impact of the carbon price floor, which will of course begin in 2013 and then rise slowly. There will be no impact of the type that she is suggesting until its introduction. It must be considered alongside all the measures we are introducing to save energy and protect those in fuel poverty.
Mrs Anne Main (St Albans) (Con)
The Secretary of State will be aware of the amount of green tax that is already put on people’s energy bills. I am puzzled about why his Department will set aside £30 million of taxpayers’ money for a certain technology. Surely if we are encouraging the market, it should be the market that puts up the money and not the taxpayer.
Chris Huhne
There is a sound argument in economic literature for encouraging early-stage technologies. Many British Governments have done that for many years. Green taxes are much lower than the estimates that have been bandied about recently in the press. We are committed to bringing forward in the annual energy statements our estimate of the overall impact of all our policies—not only the low-carbon policies, but the energy-saving policies—on consumer bills. The last time we did that, it was estimated that in 2020 our policies would add just 1% to consumer bills, and that assumed a world in which gas prices are lower than they are today and in which oil prices are only $80 a barrel, instead of $118 a barrel. If we want to protect British consumers against the vagaries of these markets that are buffeted by events, such as those in Libya and the middle east, we have to move to low-carbon sources of electricity. That is good news for British consumers, not bad.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
The Secretary of State has said little about the role of solar energy in future policy development. Representatives of the industry have told me that the Government’s feed-in tariff proposals have effectively decapitated the industry. What discussions has he had with industry representatives to overcome that and promote the industry?
Chris Huhne
My colleagues and I have had many discussions with the solar industry. The hon. Gentleman should know that nobody installing less than two tennis courts’ worth of solar panels has been in the least bit affected by the scheme announced by the Government whom he supported. For three years, the previous Government also made no allowance for those proposing to install more than two tennis courts’ worth of solar panels. I make no bones about the fact that we need to protect the consumer interest. If we had not acted, we would have taken so much money out of the budget that it would have affected not only small-scale solar, but other renewables. It is time to end boom and bust not just in the economy but in solar panels.
Martin Horwood (Cheltenham) (LD)
I will skip my own anti-nuclear preamble and just congratulate the Secretary of State on his plans for an emissions performance standard. Does he agree that that and other parts of his plans will in the end protect consumers from the price shocks associated with fossil fuels?
Chris Huhne
There is absolutely no doubt; my hon. Friend makes a very good point. Over the past year we have had a 30% increase in the price of gas, which has fed through exactly into consumers' gas prices and into electricity prices, too, because gas is such a significant part of how we generate electricity. By moving more towards low-carbon sources of electricity—renewables and nuclear—we will insulate ourselves against such price shocks. That is good news for the economy, good news for all businesses, whether they are in this area or not, and good news for jobs, and I hope that it will be welcomed in all parts of the House.
Dr Alan Whitehead (Southampton, Test) (Lab)
Does the Secretary of State agree that a targeted capacity mechanism almost inevitably becomes untargeted as it chases lagging investment? That inevitably also leads to overcapacity, at a high price. Does he accept that a representation market, coupled with interconnection, storage and demand reduction arrangements, goes with the grain of a low-carbon energy economy and the electricity market reform measures that he is proposing? If he does, why is he holding a further consultation on capacity mechanisms outside the time scale of his main proposals? Does he have no idea what a capacity mechanism might look like, and is someone twisting his arm in the whole process?
Mr Speaker
I was not very good at maths at school, but I counted five questions there. I know that the Secretary of State will provide a pithy reply.
Chris Huhne
There is a clear description in the White Paper of the different models on which we are consulting, and we are clear that there are essentially two families. One is the strategic reserve, which is effectively bought by the Government and released into the market at a clear trigger point, and the other is a wider range of capacity that is bought through a generalised mechanism for the market as a whole. Either of those targets a particular level of spare capacity, because we have to avoid black-outs in future. If the hon. Gentleman reads the detail of the proposals, I think he will find them compelling. We will reach decisions by the end of the year.
Laura Sandys (South Thanet) (Con)
I welcome this fundamental reform of the electricity market. To what extent do we believe we can attract the supply chain to the renewables sector, and is the Department working closely with the Department for Business, Innovation and Skills to ensure that we see an industrial benefit, not just a carbon benefit?
Chris Huhne
My hon. Friend makes a very good point, and yes, we are doing that. We have an enormous potential market with a lot of expertise, particularly in offshore wind, as she well knows. I had the pleasure of opening in her company what was at the time the largest offshore wind farm, quite near to her constituency. We can have an enormous supply chain, and we have to send out clear signals of our commitment, as we are doing. We are also getting the costs down to £100 per megawatt hour, and we can have an enormous and effective industry.
Albert Owen (Ynys Môn) (Lab)
We all want to see an affordable, secure and low-carbon supply of electricity. On affordability and price, the Secretary of State will know that people who live in peripheral areas of the United Kingdom pay more for their electricity. Is there anything in the White Paper that can assist them, particularly as those areas produce the electricity in the first place?
Chris Huhne
That is a good point. One thing that Ofgem is currently examining is the transmission review, and we will have to wait and see. The point that I and a number of other people have been making is that in future, in a world in which electricity will not be generated very close to centres of population—we will no longer be siting power stations in the middle of our cities, like Battersea power station; they may instead be far away from cities, as they will have to be where the wind blows or where the tides are—we will have to reconsider transmission charging to ensure that renewable types of energy are not penalised. That will go for distant communities as well.
Conor Burns (Bournemouth West) (Con)
The Secretary of State may be aware of the proposals for a wind park of between 900 MW and 1,200 MW covering some 76 square miles just 10.2 miles off the coast of my constituency. Many people in our area are profoundly concerned about that. Given that the local authorities do not have any role in the process, is he prepared to meet me, and my hon. Friends the Members for Christchurch (Mr Chope), for Poole (Mr Syms) and for Bournemouth East (Mr Ellwood), so that we might discuss it with him?
Chris Huhne
I would be happy to meet my hon. Friend on the subject. I caution him, however, against being too hostile to what is, after all, potentially a very interesting development that could have considerable benefits not just for the country as a whole but locally. Every single energy source has its detractors, whether it is nuclear, onshore wind turbines, offshore wind turbines, natural gas or fracking. The reality is that we need to find our electricity from somewhere, and that includes offshore wind farms.
Mr Mike Weir (Angus) (SNP)
I am very encouraged by the Secretary of State’s response to the hon. Member for Ynys Môn (Albert Owen) on transmission charges. Does he recognise that such charges are fundamentally discriminatory against renewables in their current form? Will he give an undertaking that, as part of his electricity market reform, he will finally tackle that matter?
Chris Huhne
That is a responsibility for Ofgem, with which I have had good discussions on the subject. I have made my position very clear—I believe that I am in exactly the same place on this as the hon. Gentleman—and we look forward to Ofgem’s proposals with interest.
Simon Hughes (Bermondsey and Old Southwark) (LD)
The introduction of emissions performance standards is a welcome new policy, but may I ask the predictable follow-up question? Will the Secretary of State confirm that coalition Government policy says that nuclear power stations will be built only if there is no public subsidy, which means no greater subsidy for them, irrespective of subsidies that are given to other parts of the energy industry?
Chris Huhne
I have made it absolutely clear that there is no public subsidy for nuclear. Let me explain exactly what we are saying. At the moment, we have the EU emissions trading scheme, which is designed to encourage low-carbon forms of activity and to discourage high-carbon forms of activity. I do not regard that as a subsidy to nuclear. I do not regard the carbon price floor, which exists to support the EU emissions trading scheme, as a subsidy to nuclear—I do not regard a price guarantee that is designed to get certainty for low-carbon generation as a subsidy to nuclear. There will be no extra subsidy for nuclear.
The only justification for giving a subsidy to a technology when it is out there in the market is if it is an early-stage, pioneer technology, such as wave or offshore wind, that has not reached full commercialisation. Otherwise, there should be a low-carbon, level playing field right across the board to discourage carbon emissions and to encourage low-carbon activity.
Mr Iain Wright (Hartlepool) (Lab)
The Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), who is on the Treasury Bench, has been kind enough to visit Hartlepool and has seen for himself the huge potential in new nuclear and offshore wind. The statement was good on the analysis of problems, but not so good on providing solutions. What practical, tangible support will the Secretary of State provide to ensure that Hartlepool can realise its vision as the European leader in energy?
Chris Huhne
The hon. Gentleman is being slightly unfair, given that our proposal provides precisely the certainly and clarity to investors that will mean a real increase in investment in all of those low-carbon technologies. I very much hope that his constituency benefits from that process.
Sarah Newton (Truro and Falmouth) (Con)
I believe that this reform package could unlock billions of pounds of private sector investment, and that it is critical for our national security and new technology, including marine and deep geothermal energy. What analysis have the Government undertaken to estimate how much money will be unlocked by the reforms?
Chris Huhne
Ofgem’s overall estimate is that we need new energy infrastructure investment across all energy sources, including gas, of £200 billion. In terms of plant and grid connections alone for electricity, we are talking about £110 billion over the next 10 years. That is roughly double the normal level of energy investment that takes place in this country. That will be a significant source of demand to fuel the recovery, and of extra jobs, and there will be enormous opportunities for growth throughout the country.
Barry Gardiner (Brent North) (Lab)
Four million families heading for fuel poverty does not constitute affordability; a £200 billion shortfall in infrastructure does not constitute security of supply; and a new dash for gas does not constitute low carbon. The Secretary of State knows, as the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) certainly does, that vertical integration in the big six is the biggest single problem. Why did the Secretary of State not address that in his statement, and when will he do so to break up the monopoly of the big six?
Chris Huhne
I have great respect for the hon. Gentleman’s expertise in this area, but slightly less respect for the passion with which he tries to hold this Government to account. Given that no type of electricity-generating plant can be built in less than 18 months—if I am not entirely incorrect, the Government in power 18 months ago were a Labour Government—the idea that any enormous shortfall in infrastructure investment is down to this Government is far-fetched.
Mr Mark Spencer (Sherwood) (Con)
Given the Secretary of State’s comments about fluctuations in the price of imported fossil fuels, does he recognise the strategic importance of UK Coal and the market to delivering flexible electricity via carbon capture and storage? Will he undertake to work with the UK coal industry so that it can assist in solving the problems in which we find ourselves?
Chris Huhne
The ministerial team are committed to bringing on CCS, which will provide a place in the long term for coal to continue to meet our energy needs. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), who has responsibility for energy, is meeting representatives from the coal industry tomorrow to discuss precisely this matter.
Ian Lavery (Wansbeck) (Lab)
In addition to what has been said about the British deep-mine coal industry, does the Energy Secretary agree that it will play a crucial role in future electricity generation in the UK? If so, what sort of assistance can he give to ensure the survival of the UK coal industry?
Chris Huhne
I can assure the hon. Gentleman that coal is an important part of our energy mix now and going forward, which is why we have found £1 billion in the comprehensive spending review to fund CCS. Indeed, there has been a substantial increase in deep-mine coal over the past year.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
My constituents in Suffolk Coastal, which I christened the “green coast” in my maiden speech, will be very happy with the announcement of these reforms. Given those announcements, will the Secretary of State indicate when something such as Sizewell C might be built?
Chris Huhne
The first of the new power stations is at Hinkley Point—construction of the earthworks is already under way—and the others will arrive in fairly short order after that. There will be a further opportunity to consider that in detail during the debate on the national policy statements on Monday.
Jon Ashworth (Leicester South) (Lab)
Many of my constituents are understandably angry about increased electricity and gas prices—British Gas is a striking example—so can the Secretary of State guarantee that these reforms will not contribute to increased energy prices in the short to medium term?
Chris Huhne
It is inevitable that, given that we need the new investment that we have been discussing today, there will be a cost. The energy companies are not the Salvation Army. They do not do things out of altruism; they do them because they are going to reach a rate of return on capital. However, I can assure the hon. Gentleman of this: if he looks at the detail in the White Paper, he will see that our proposals will reduce costs to the consumer compared to leaving the market as it is. Central to our ambition is ensuring that we have affordable, low-cost electricity and that we protect British consumers from the vagaries of past years—with the 30% increase in gas prices and a corresponding increase in electricity prices.
Andrew Percy (Brigg and Goole) (Con)
My right hon. Friend will be aware of the successful Pulse Tidal project in the Humber. Will he assure the House that, as the Government move forward, tidal will remain a key priority for them and that funding will be secured for investment so that that investment does not go overseas?
Chris Huhne
Tidal power is exciting and has great prospects. We have some enormously important potential sites for tidal stream—for example, the area around the Severn barrage—and I am confident that as the technology progresses it will play an important part in our energy mix.
Mark Tami (Alyn and Deeside) (Lab)
In the Secretary of State’s statement, there is one mention of nuclear power, but I do not recall him mentioning it at all when he delivered it. Putting that aside, does he not accept that the industry needs certainty? Otherwise there is a danger that the investment will go elsewhere.
Chris Huhne
I entirely agree with the hon. Gentleman. Investors need certainty and clarity, and that is what we are giving them today.
Andrew George (St Ives) (LD)
I warmly welcome my right hon. Friend’s statement. On decentralised energy, does he agree, particularly with regard to onshore wind, that the sooner it is enabled, the sooner we can overcome the innate reluctance of many communities to accept it. and ensure that they can share in the benefits?
Chris Huhne
I agree with my hon. Friend about the importance of community schemes. That message has come clearly from the successful schemes, particularly those north of the border. He is absolutely right to point out that when the community has a clear stake in a proposal, it is much more likely to back it.
Mr William Bain (Glasgow North East) (Lab)
The United Nations Environment Programme has found that investment in large-scale renewables in China reached $49 billion last year, whereas in Europe it fell by 22% to $35 billion. Where will the Secretary of State find the capital to drive the expansion in the offshore wind sector, given that the green investment bank is having its borrowing and lending powers so badly restricted by the Treasury?
Chris Huhne
The achievements in the low-carbon sector in China are quite extraordinary, and the hon. Gentleman has cited one of them. However, I do not agree that we will have a problem with capital shortage. If we provide the certainty and clarity that we are providing, we will find the investment. It is also very noticeable—I hope that he has noticed this—that the green investment bank will begin to borrow and lend from 2015, and that the biggest investment in many of our renewables programmes will come in the latter part of this decade, so the green investment bank will be there in time to help.
Glyn Davies (Montgomeryshire) (Con)
Many of us believe that there is currently an over-dependence on onshore wind to achieve the Government’s low-carbon targets. The mid-Wales uplands are under threat of being desecrated through industrialisation by a plethora of multiple wind farms. Does the Secretary of State agree that cumulative impact and high landscape value should be material planning considerations in deciding on onshore wind projects?
Chris Huhne
I accept the position that my hon. Friend has taken on the particular proposals that affect his area. All I would say is that by comparison with other renewable technologies, onshore wind is a tested, effective and affordable technology. It is the lowest-cost renewable technology available in these islands, and it produces electricity at a similar cost to first-of-a-kind nuclear power stations. However, I return to what I said earlier to my hon. Friend the Member for Bournemouth West (Conor Burns) about energy sources. It so happens that every energy source has its detractors. As I view wind turbines as beautiful, I hope that we will not find opposition all over the country to what is a cheap and effective source of energy for our consumers.
Paul Flynn (Newport West) (Lab)
Post Fukushima, many of our competitor countries in Europe are planning nuclear-free futures, mainly because of the increased cost that Fukushima has created, by making nuclear reactors uninsurable, with a possible bill of hundreds of billions of pounds afterwards. Is it not irresponsible to go ahead with the plans in Britain without any reassessment of cost? Weightman is not allowed to consider that. Can the Minister really say that he is going ahead without subsidy? He seemed to be saying today, “We’re going to have subsidies for old nuclear and new nuclear, but call them something else.”
Chris Huhne
No, the hon. Gentleman is wrong on that. We are setting out a framework to discourage high-carbon activities and encourage low-carbon activities. We do not make any technological judgment about how those particular things proceed. The hon. Gentleman is right that Germany, Italy and Japan have all announced either moratoriums or pauses for new nuclear construction. However, it would be wrong to jump to the conclusion that costs will necessarily increase in those circumstances, because obviously if there is less demand for some of the components in nuclear power stations, the normal economics would tell us that their price might fall, so the process might become cheaper. However, I can assure him that we will bear safety in mind first and foremost. That is what I asked Mike Weightman to address, and that is what he has answered in the interim report and will answer in the final report.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I wonder whether the Secretary of State is aware that there has been a proposal in my constituency for a tidal barrage for the last 20 years. Is there anything in the proposals that will finally allow such developments to compete on a level playing field with proposals for wind?
Chris Huhne
That is one of the technologies that we are taking forward in the renewables road map, and I want to make progress on it. We have a considerable resource in that technology, which we want to develop further right the way around the United Kingdom’s sea frontier.
Mark Durkan (Foyle) (SDLP)
Whatever other concerns the Secretary of State might try to refute in relation to the carbon floor price, he cannot dispute the fact that if levied in Northern Ireland, it would have a hugely distorting impact on the single electricity market—which is based in statute—north and south in Ireland, with its own regulatory framework, and remove the very certainty and clarity for investors, the need for which he has said his reforms are addressing. Does he recognise not only that the carbon floor price will harm consumers and industry in Ireland, but that distorting the single electricity market at this stage would damage the prospect of this island harnessing offshore energy from Ireland in the future?
Chris Huhne
The hon. Gentleman is right to say that the electricity market arrangements in Northern Ireland are quite distinct from those in England, Scotland and Wales. There is effectively a single market between Northern Ireland and the Republic, and we need to be aware of and respect that. I gather that discussions are ongoing at official level and elsewhere to ensure that there are no unintended consequences of the changes that we introduce.
Jo Swinson (East Dunbartonshire) (LD)
Feed-in tariffs are proving effective in encouraging people to generate their own renewable energy. Will the Secretary of State look at how they could also be used to encourage the use of negawatts—that is, energy saved—to give people an additional cash incentive to ensure that their homes are warm and snug, and well insulated, so that they do not waste energy?
Chris Huhne
We have been clear in the White Paper on electricity market reform published today that we want to encourage demand-side response. My hon. Friend makes the good point that, in an ideal world, we would move beyond the temporary switching off of demand in order to close the gap between demand and supply and adopt the practice of paying people to reduce overall demand at all times. We are working on that, and we show awareness of that matter in the White Paper. This is a holy grail, however, and we have not yet found a way of doing that without opening up the possibility of wholesale fraud and other problems, but it is a good, interesting idea and we would like to look at it further.
Points of Order
Mr John Denham (Southampton, Itchen) (Lab)
On a point of order, Mr Speaker. On 7 March, the Prime Minister stood with the chairman of Bombardier and said:
“I am bringing the Cabinet to Derby today with one purpose—to do everything we can to help businesses in the region create the jobs and growth on which the future of our economy depends.”
People are now asking whether the Prime Minister already knew that his Government were planning to give the Thameslink order to Germany, costing thousands of jobs, so I asked the Prime Minister in a written question when he knew the outcome of the procurement. His reply, tabled yesterday, does not answer the question, but refers to an irrelevant answer to a different question tabled by my right hon. Friend the Member for Derby South (Margaret Beckett). Is there anything that you can do, Mr Speaker, to get the Prime Minister to give a factual answer to a factual question, or should we assume that he has something to hide?
Mr Speaker
I am grateful to the right hon. Gentleman for his point of order and for giving me advance notice of it. He came into the House long before I did; he is a seasoned campaigner and a man of great wisdom and experience. He will therefore know that I am not responsible—I say this with some relief—for anything that the Prime Minister might say or do. That is well beyond my ken. The right hon. Gentleman has placed his concerns on the record, and I am sure that he will find other methods, through the use of the Order Paper and other parliamentary processes, of further registering his views and probing the Prime Minister.
Mrs Anne Main (St Albans) (Con)
On a point of order, Mr Speaker. I am seeking your guidance because we are due to have an Opposition day debate tomorrow whose title is as yet totally unspecified. That means that members of the public who wish to attend the debate will have had no notice of the subject, and hon. Members who might wish to prepare for the debate have no cognisance of it. I understand that 48 hours’ notice is normally given of such debates and their titles. May we seek your guidance on why that courtesy is not being extended to us?
Oliver Heald (North East Hertfordshire) (Con)
Further to that point of order, Mr Speaker.
Oliver Heald
Thank you, Mr Speaker. For some hours, the PoliticsHome website has been reporting details of the wording of tomorrow’s motion, yet when I went to inquire where the motion was, I found a queue of Members doing the same thing and we were told that it had not yet been tabled. Should not the rule be that the motion is tabled here first and then put into the media? Is it not time that the recommendation of the Wright Committee that 48’ hours notice should always be given was referred to the Procedure Committee?
Mr Speaker
I note what the hon. Gentleman has said in support of the point of order raised by the hon. Member for St Albans (Mrs Main). There is inevitably a certain amount of letting off steam in points of order, but the simple factual position is that this is not a matter for the Chair. The hon. Gentleman asked a normative question about what the rule should be. That is a matter for the House to decide; I have no power in these matters. It is commonplace for some notice to be given, but that is not an unfailing practice. It is for the Member in charge of the motion to decide on the timing of its tabling, in keeping with such rules of the House as apply, but there has been no breach of order in this case. The concern has been registered and will have been heard—
Mr Speaker
In a moment. The hon. Gentleman has had one bite; he must not be too greedy. I call Mr John McDonnell.
John McDonnell (Hayes and Harlington) (Lab)
On a point of order, Mr Speaker. A letter has gone from the Ministry of Justice today to chief probation officers around the country informing them that the core functions of probation services are to be put out to tender. This is the wholesale privatisation of probation services—possibly the most significant change in probation practice in this country since the service’s foundation. There has been no ministerial statement or written ministerial statement, so may I through you, Mr Speaker, suggest to the Government that this matter is of such import that there should have been at least a written ministerial statement on it?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and for advance notice of it. The short answer to the query he raised and the concern he expressed is that I have not been informed of any oral statement on this matter today. I had understood—and, at the time of speaking, I do understand—that there will be a written ministerial statement from the Ministry of Justice about public bodies, but I have not seen the contents of it. I say what I do with some care because it is my best understanding at the moment. If I am wrong or if the hon. Gentleman is dissatisfied, he can return to the matter. I am sure that he will in any case find other ways of pursuing it.
Mr Speaker
No day would be complete without a point of order from the hon. Member for Stone (Mr Cash). We will come to him; I am saving him up; we look forward to hearing him.
John McDonnell
Further to that point of order, Mr Speaker. The only statement that has come out today has been the consultation paper on reforms proposed in the Public Bodies Bill. The probation service is not covered by that Bill or by the paper itself. I want to emphasise again, through you, Mr Speaker, that this is a significant matter that warrants a ministerial statement of some sort.
Mr Speaker
There are other ways of pursuing the matter. The hon. Gentleman can do so through the use of the Order Paper. I add that we have business questions on Thursday, so if there is no route before then that satisfies the hon. Gentleman, I will look out for him on that occasion.
Oliver Heald
On a point of order, Mr Speaker. Given that the Opposition motion is likely to be
“That this House believes that it is in the public interest for Rupert Murdoch and News Corporation to withdraw their bid for BSkyB”,
would it be in order for the shadow Leader of the House to rise and tell us whether that is the case, as doing so would be a courtesy to the House?
Mr Speaker
The hon. Gentleman is a persistent and indefatigable fellow, but I need to say two things to him. First, that is not the way we go about the confirmation of business in this place. Secondly, although it is extraordinarily generous of the hon. Gentleman to refer me to the PoliticsHome website, I am not among those who browse it with any frequency. [Interruption.] “Very wise” says a Government Whip on the Treasury Bench; I suppose Government Whips know about these matters. I think it was the hon. Member for Lichfield (Michael Fabricant) who volunteered that helpful advice to me.
Mr Cash
On a point of order, Mr Speaker. Have the problems with the Division bells in Portcullis House been sorted out? Would you be good enough to look into the matter, Mr Speaker, as last night a number of problems led to significant delay. Has it been sorted out; is the root cause being investigated?
Mr Speaker
I was not aware that there was a problem; I am now. I hope that there is not still a problem. I have known the hon. Gentleman for at least 13 or 14 years and the thought that he might, as a result of some failure, miss a vote is something that saddens me. Whether the same would be said of him by the Government Whips is a matter of legitimate speculation and conjecture. We will leave it there for today.
National Debt Cap
Sajid Javid (Bromsgrove) (Con)
I beg to move,
That leave be given to bring in a Bill to set a legal cap on the amount of outstanding net Government debt as a percentage of gross domestic product; and for connected purposes.
Before I came to this House, I worked as an international bond trader and structurer. One of my roles was to advise Governments that had gone bust. The Governments of Mexico in 1994, Thailand and Indonesia in 1997, Russia in 1998 and Argentina in 2001 believed that investors had an insatiable appetite for their bonds, regardless of their ability to pay. The consequences were devastating.
For the benefit of Members who might be tempted to write off sovereign defaults as a developing world problem, let me cite Iceland, Greece, Ireland, Portugal and—very soon, perhaps—Spain and Italy. Had we not had a change of Government 14 months ago, we could have been engulfed in a sovereign debt crisis of our own. Although the coalition Government have restored fiscal probity, it would have been far better if we had not been taken to the brink in the first place. That is why I believe that one idea that we could usefully pinch from our American friends is that of a debt ceiling. Despite the political debate that America’s debt ceiling has provoked in Washington—indeed, precisely because of it—Britain should set a cap on its net national debt as a percentage of GDP.
As in the United States, net public debt has soared in the United Kingdom over the past decade, rising from £312 billion to £920 billion, or from 31% of GDP to 60%. Of course, some of that was due to fiscal stabilisers resulting from the recent financial crisis, but most of it was due to a failure of government. Instead of trying to find solutions to long-term challenges to the public finances, the previous Government took the easy way out, believing that the answer to every problem was to spend more money.
Had that excessive public spending led to hugely improved public services, perhaps the previous Government could have been forgiven, but in many cases it made things worse rather than better. Under the previous Government, welfare spending increased from £149 billion to £218 billion, yet the number of workless households increased from 3.7 million to 3.9 million. Under the previous Government, health spending increased from £58 billion to £117 billion, yet England shamefully lags behind virtually every other European country for cancer and stroke survival rates. Under the previous Government, education spending increased from £50 billion to £87 billion, yet, according to the OECD’s world rankings, over the past decade Britain fell from seventh in the world for reading to 25th, from seventh in the world for maths to 27th, and from fourth in the world for science to 16th. In short, under the previous Government Britain has had Scandinavian levels of public spending but Mediterranean levels of service. Such an attitude to excessive debt was not only economically wrong, but morally corrupt. Politicians have no right to pass the buck to the younger generation by ducking the tough decisions now. Why should our children pay for our mistakes?
Britain would not be the only country in Europe to adopt legal fiscal constraints. Germany passed a debt brake law in 2009 to cap the federal deficit at a conservative 0.35% of GDP by 2016. Switzerland also has a debt brake, and France’s lower house voted just last month to pursue a similar idea. According to the International Monetary Fund, as many as 80 countries now operate fiscal rules, whereas just seven operated them in 1990. Some Governments, however, are determined to learn the hard way that the markets will impose a limit on state borrowing, just as they do on individuals and companies. The recent bail-outs of Greece, Ireland and Portugal show what happens when Governments ignore that fundamental truth, and act as though investors had no choice but to buy their bonds. Clearly, market discipline is not enough to hold back reckless state spending. By the time the market itself says no, it is too late.
Despite the Government’s efforts, Britain’s inherited economic problem is such that it will take at least another four years to eliminate the structural budget deficit. As a result, net national debt will peak at 71% of GDP in 2014. The coalition Government have not shied from tough decisions and have embarked on a major programme of public sector reforms, but what is to stop a future Government reverting to unrestrained borrowing? Thankfully we do not live in a one-party state, and it is possible that one day we may have a Government who are less economically literate than the current one; so why do we not make it harder for a future Government to create a mess in the first place? A debt cap is no guarantee against fiscal irresponsibility, but it will certainly make it harder for politicians to rely on their favourite ruse of “Buy now, pay later”.
Although my Bill would leave it to the Treasury to set the cap level, I think that fixing it at about 40% of GDP would be appropriate. There is nothing particularly significant about that figure, but, given my 20 years of experience, I believe it would be a sensible place at which to begin the debate.
The start date for the cap would have to be set at some point in the future, perhaps 10 years from now, but that would in no way diminish the effectiveness of the cap. Indeed, knowing the goal a decade in advance would provide the Government with a clear and consistent downward target.
Ideally, the cap should include off-balance-sheet liabilities such as unfunded public sector pensions and private finance initiative schemes. Following the creation of the independent Office for Budget Responsibility, this Government are leading the way in trying to assess the amount of such “hidden” public debt. Indeed, tomorrow the OBR is set to publish the whole of Government accounts for the first time in Britain’s history, and that is likely to estimate such debt at over £l trillion. Once a suitable method to measure such liabilities becomes more commonly accepted, perhaps they, too, can be included in a revised cap.
Without proper enforcement, good intentions count for little, so the OBR should be given the task of monitoring compliance with the cap. Should the cap be violated, the Government would be given a fixed period to remedy the situation. Failing that, the Government would be forced, by law, to repurchase Government bonds early, thereby reducing net outstanding debt. Nevertheless, critics will say that faced with the prospect of cutting spending or raising the cap, a Government will always opt for the latter, but my Bill would require the Government of the day to make their case openly in Parliament and to explain to the nation as a whole exactly why they believe they need to borrow more. There will need to be a vote, and MPs will have to explain their decision to their constituents. For any Government conscious of their duty, let alone their popularity, the disincentive to doing this should not be underestimated. My Bill will, at the very minimum, force a national conversation where previously there has been only stealth and obfuscation.
Nation states have rightly used public debt as a fiscal tool for centuries. Britain’s debt has been both far higher and far lower than it is now, but it has never been more unsustainable. I believe that restoring Britain’s fiscal rectitude is the calling of this generation of politicians, and the time to start is now.
John Mann (Bassetlaw) (Lab)
It is always a joy to listen to new Members coming up with old ideas, or old Members coming up with new ideas, and here we have a new Member eagerly supported by many of the new generation of Tory MPs—a generation who fundamentally hate the concept of the public sector and Government. The tradition they—
John Mann
Well, my right hon. Friend the Member for Blackburn (Mr Straw) is one of the few who would be able to pray in aid the key point I am about to make about previous debates. I am sure the hon. Member for Bromsgrove (Sajid Javid) would love to pray in aid some of the past figures of the right, such as Margaret Thatcher, Ronald Reagan and Winston Churchill, but unfortunately for him there is only one politician whom he can pray in aid on the proposition of capping the national debt, and he is a Labour politician; or rather, he was a Labour politician but he switched sides. His son was once the MP for Bassetlaw, and his name was MacDonald: Ramsay MacDonald. At that time, a failure to understand basic economics led to the formation of a national Government and to John Maynard Keynes having to rescue those who were stuck in the failed logic of the gold standard and everything that emanated from that. A similar constraint on Government action was rejected between 1980 and 1984 by Ronald Reagan, who in fact did exactly the opposite. Such a constraint was also rejected by Margaret Thatcher between 1979 and the end of the 1980s. Although she did many things wrong, she did not accept this fundamental concept and she failed to shrink the state.
Such a constraint was also rejected by Winston Churchill, and that example is perhaps the most relevant. Can we imagine being sat here in 1939? Luckily, Keynes had by then won the argument against Ramsay MacDonald and the Labour traitors who formed the national Government on the flexibility of economic policy. Hitler was determined to invade this country, as well as the rest of Europe, and we were required to spend to defend ourselves. Can we imagine our being hamstrung by a requirement to change legislation to allow this country to spend money from the public purse in order, rightly, to defend ourselves? Now we see the shaking of heads by those on the Government Benches, because the argument has been lost—I will demonstrate precisely why they have lost the intellectual and economic argument.
In 1999, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) decided to pay off some of the national debt. Which bits of it was he paying off? He was paying off national debt from the Napoleonic wars, which went back nearly 200 years, to a time when, again, there was a national crisis and a wise Government determined that this country should spend to defend itself. So, we see the naivety of the would-be Reaganites and Thatcherites, who are, in fact, the MacDonaldites. They would restrict our ability to act at times of crisis on the economy, they would reject the wisdom of Keynes and they would opt purely for the logic that Milton Friedman adopted and tried out in 1973 in Chile—the people there were the only ones after Ramsay MacDonald to attempt this economic philosophy. That is what the motion proposes.
I have learned over the years in this place that it is sometimes best that these arguments are had and then left to rest, particularly as we reach the summer recess. This is such an unwise proposition that I shall resist even the temptation of allowing a vote on it and, thus, giving it credibility.
Question put and agreed to.
Ordered,
That Sajid Javid, Mr Frank Field, Mark Garnier, Matthew Hancock, Joseph Johnson, Mr David Laws, Andrea Leadsom, Jesse Norman, Claire Perry, Mr John Redwood, Mr David Ruffley and Nicholas Soames present the Bill.
Sajid Javid accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 20 January 2012, and to be printed (Bill 218).
Sir Malcolm Jack KCB
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Sir George Young)
I beg to move,
That Mr Speaker be requested to convey to Sir Malcolm Jack KCB, on his retirement from the office of Clerk of this House, the House’s gratitude for his long and distinguished career, for his wise contribution to the development of the procedure of the House and to close understanding among the Parliaments of the Commonwealth, for his leadership and professionalism in the discharge of his duties as chief executive of the House, and for the courteous and helpful advice always given to individual honourable Members.
I hope that we will now move on to more consensual territory.
It is a pleasure to move the motion and lead the tributes today to Sir Malcolm Jack. A hundred years ago, my great-grandfather, Sir Courtenay Ilbert, was Clerk of the House. Among the tributes that were paid to him as he stood down in 1921—coincidentally, the last time the House applauded the services of an outgoing Clerk during a coalition Government—was this, from Asquith,:
“he has sat in that chair, the duties of which are more arduous, more responsible, and more delicate than the world outside knows, and I am sure that I am expressing the universal opinion of the House when I say that he has worthily maintained its great traditions”.—[Official Report, 15 March 1921; Vol. 139, c. 1258.]
Those words ring as true today as they did then.
Sir Malcolm was appointed Clerk and chief executive of the House in 2006 and has seen the House administration through a period of great change. The recommendations of Sir Kevin Tebbit’s review of the management and services of the House were challenging, but Sir Malcolm saw immediately that half measures would not do: the challenges had to be tackled immediately and it was his persuasion and energy that ensured that considerable structural change took place that streamlined the House’s governance, reduced the number of House Departments and resulted in a more efficient service for Members and indeed members of the public.
That reflected the administrative half of the twin responsibilities that we give the Clerk of the House. The ancient role of the Clerk is to be our principal constitutional adviser and our chief expert on all aspects of our business. I say “the ancient role”, but more recent events have shown the importance of the Clerk’s independence. Sir Malcolm’s grave warnings that provisions in the Parliamentary Standards Bill in 2009 might lead to judicial incursion into matters that are exclusively ours, and his measured advocacy of an alternative course, obliged the then Government to withdraw that whole part of the Bill.
“Parliamentary privilege” is an often misunderstood term but we all understand how important it is to our right of free speech. Sir Malcolm is acknowledged as a great authority on such matters and I have no doubt that his expertise in all the procedures of this House will be on show in the eagerly awaited 24th edition of “Erskine May”, of which he is the editor and which will be officially published tomorrow—yours, Mr Speaker, for just £267.
Sir Malcolm’s family and background have been cosmopolitan. He was educated in Hong Kong before university in the UK. He is one of the few of our Clerks who speak Cantonese. He cuts an elegant figure, no doubt partly attributable to the many lengths he swims almost every day at 4 Millbank. Indeed, when he was Clerk of the Agriculture Committee he was known as “the most elegant man ever to don Wellington boots”.
He has been a great champion of our links with overseas Parliaments, particularly within the Commonwealth and especially in Africa. He deserves our thanks for the links that he has nurtured with many African Parliaments and the support and guidance he has given them, which I know they have much appreciated, most recently in the seminars in Malawi last year and Tanzania earlier this year. About Sir Malcolm’s appearance in a Masai warrior’s robe at the Commonwealth parliamentary conference in Nairobi last year perhaps little should be said, but I am told that photographic proof is available for a modest fee.
By profession Sir Malcolm is a philosopher as well as a Clerk and has published learned books and articles on philosophical subjects. He has put this into practice here. When he was a Clerk in the Table Office, a Member trapped his hand in a filing cabinet. Others present in the room looked on with interest. “Can’t you do something?” the unfortunate Member asked, “I’m in physical pain.” Malcolm decided to be helpful, “Ah,” he said, “metaphysical pain is far worse.”
He is also credited with what his colleagues know as “Jack’s law”, which states that mentioning the name of a person ensures the appearance of that person and, moreover, the speed of the appearance is in direct proportion to how disparagingly the person has been described.
Sir Malcolm’s “Who’s Who” entry gives a remarkable list of recreations, including,
“thinking for oneself…empires adrift, Johnsoniana”—
Samuel, I think, rather than Boris—
“oriental ceramics, Africana, escaping southwards.”
We rejoice with Sir Malcolm that escaping southwards will soon be much easier. We thank him for his 44 years’ devoted service to the House, culminating in five years as Clerk of the House, and we send him and his partner Robert Borsje our warmest good wishes for the future.
Hilary Benn (Leeds Central) (Lab)
It is with great pleasure that I rise to support this motion on behalf of the Opposition, although it is a pity that Sir Malcolm is not here, for obscure reasons of tradition, to savour our praise. Oppositions do, from time to time, create a bit of trouble for the Government of the day, and in doing so we are always very helpfully advised by the Clerk of the House, who equally helpfully advises the Government on how to avoid the trouble. That is the skill of the Clerk—to offer guidance without fear or favour in the interests of our democracy—and that is exactly what Sir Malcolm has done with resolute distinction and great wisdom.
In addition to the achievements that the Leader of the House has recalled, Sir Malcolm has seen this place in and through turmoil—no more so than two years ago, but however bad that was, some of his predecessors have had a much tougher time. At the end of the 1500s, the Clerk had his own expenses troubles: he was so out of pocket that Members had to pass round the hat to pay his salary. In 1723, Thomas Ward made some extremely disobliging comments about King George I and for his pains was whipped around Palace Yard—the ancient equivalent of appearing before one of our more vigorous Select Committees. Later that century, Lucas Kenn was attacked in Cornhill, losing his wig and hat in the process, by a group who had just given evidence to a House Committee and wanted their documents back. I am glad to say that since then the pen and the tongue have replaced the fist and the whip but they are just as sharp in their own way.
Having joined the Commons Clerks Department straight from university in 1967, Sir Malcolm has seen it all—from the Agriculture Committee, as we have just heard, to the Joint Committee on House of Lords Reform, and from Ways and Means to the House of Commons Commission. Sir Malcolm’s perspicacity and that watchful eye of his, peering over the table—that is what I will always recall—will have escaped few Members’ notice over the past 44 years. As we have heard, he has been very keen to share our experience with parliamentarians across the Commonwealth and the world, and to learn from them. His influence may be greater even than we suppose. I am advised that when attending the Commonwealth Parliamentary Conference in Arusha in 2009, he was being driven by the Clerk of the Kenyan Parliament from Nairobi—an extremely gruelling journey—when in the middle of nowhere they had a flat tyre. While gloomily contemplating the problem, they were astonished by the sudden appearance of a priest, who had presumably been summoned telepathically by Sir Malcolm. As well as providing spiritual guidance, the priest managed to change the tyre and they continued their journey.
Throughout his career, as well as giving sound advice and service, Sir Malcolm has found time to write widely on subjects far removed from Parliament. He has written about the 18th-century politician and philosopher Bernard Mandeville, who first talked about the division of labour, and about Lady Mary Wortley Montagu, who once wrote a political periodical entitled the “Nonsense of Common-Sense”, which I am sure Sir Malcolm will have heard from hon. Members of the House from time to time. Yet, from his seat at the desk he has offered quiet, wise and courageous advice—never more so than in the wake of the expenses crisis, as the Leader of the House has recalled. At that time, he reminded us all that our freedoms as a Parliament—for that is what privilege is for—should not be cast aside in haste. Those freedoms are far too precious for that. I hope that he will cast an eye over the draft Bill on parliamentary privilege when it finally makes its appearance.
In his letter informing the House of his intention to step down, Sir Malcolm said that
“members’...duties…will necessarily ruffle and disturb the peace of consensus”.
I hope that we will promise Sir Malcom that we will all do our best to heed that advice, aided and abetted by the new edition of “Erskine May” that we are all eagerly anticipating.
I am sure that the House will agree with what Sir Malcolm said recently:
“One of the best features of the job is that I never know exactly what the day will bring”.
That is one of the joys of this place, and I am sure that the same will be true of his retirement. It is with great and heartfelt thanks that, on behalf of the Opposition, I join the Leader of the House in offering our best wishes to Sir Malcolm and his partner, Robert Borsje, for their future.
Sir Alan Haselhurst (Saffron Walden) (Con)
I have had the honour of serving in this House for a high proportion of the years in which our retiring Clerk has served, and I am pleased to have the opportunity to attest to the enormous work that he has done at various levels, giving sagacious and good-humoured advice throughout. His knowledge of this place is such that we should perhaps hope that his memoirs will be confined to the next edition of “Erskine May”, rather than branching out into any other form.
I pay special tribute to Sir Malcolm for the devotion that he has shown to a matter beyond the immediate needs of the House: the Commonwealth Parliamentary Association. To take up what my right hon. Friend the Leader of the House said, Sir Malcolm has understood, during his time as Clerk, that Parliament is seen very much as a central feature of the whole Commonwealth parliamentary structure. He has put himself out at all times to ensure that the Clerks department and hon. Members are actively engaged in discussions and liaison with other parliamentary associations across the Commonwealth. That is an important part of parliamentary activity, though not, perhaps, the one most noticed by the public. He has played a great role in strengthening those parliamentary connections, and we should be grateful to him for that. It is fitting that towards the climax of his parliamentary career he will, alongside you, Mr Speaker, play a pivotal part in the centennial conference of the Commonwealth Parliamentary Association in London later this month.
Mr Jack Straw (Blackburn) (Lab)
I apologise to the House for departing as soon as I have spoken, but I am due to give the Gareth Williams memorial lecture in Gray’s Inn at 6 o’clock; I shall be late.
The Clerks of the House are the guardians of our procedure and—with you, Mr Speaker—our rights and privileges. Happily, we take the work of the Clerks for granted, their encyclopaedic knowledge as a given, and their efficiency as the norm. We would, however, soon notice the difference if the Clerks did not excel at their work. None has excelled more in his dedication, commitment and skill than Sir Malcolm Jack, Clerk since 2006, to whom we pay tribute this afternoon.
I have been in this place for long enough, but Malcolm had been a Clerk for 12 years before I arrived. In the 32 years in which our services have coincided, I have come to know Malcolm well, and to regard him as a friend. The Leader of the House and the shadow Leader of the House were sensitive enough not to mention which fool was Sir Malcolm’s adversary over the Parliamentary Standards Bill in 2009, but it was I. I had, in good faith, judged necessary a modest little provision putting a gloss on that most sacred of rights, parliamentary privilege, to ensure that the Independent Parliamentary Standards Authority could work better. As many will recall, Malcolm weighed in tenaciously with objections. Even with the usual assistance available to Ministers to enable them to take the intellectual high ground in debate—heavy whipping, arm-twisting, promises to recalcitrants of overseas trips—my task was doomed to failure. To every argument that I advanced from the Dispatch Box, the advice of the Clerk of the House was quoted back at me as holy writ. It was a hopeless task. The result of the Division was Straw, Jack 247; Jack, Malcolm 250. He won, I lost and the Bill, it must be said, was much better for it. If ever Malcolm had needed, which he did not, an expression of complete confidence in him by the House, that was it.
I know, too, from my many friends among the staff in the House that Malcolm is held in enormous respect and affection by them. He has carried his duties with a light touch and ready humour. I have great pleasure in endorsing the motion of gratitude to Sir Malcolm, and I offer him my deep personal thanks and every good wish in his retirement.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
It is a pleasure to offer, from the Liberal Democrat Benches, support for the motion in recognition of the work of Sir Malcolm Jack. Forty-four years is an extraordinarily long time in the service of the House. I always find it worrying when people who have been here longer than I have leave, for one reason or another. Like policemen getting younger, it is a reminder of things one does not want to know about.
Sir Malcolm arrived here from a background which was, in those days, not conventional, and all the better for that. He had been educated at school in Hong Kong and attended Liverpool university where he got a first- class degree. It is a model not sufficiently followed, perhaps, even in subsequent years and one to which we should return to draw a wide breadth of talent into the service of the House. It was certainly not a mistake to recruit that Liverpool university graduate—quite the contrary. It was a very wise move.
In the course of Sir Malcolm’s time here, it has been a pleasure to be able to talk to a scholar of achievement and repute, which marks him out, and that has been of great benefit to us. But the line in the motion that most appeals to me is the reference to his “courteous and helpful advice”. If the right hon. Member for Blackburn (Mr Straw) self-deprecatingly described himself as the fool who started the argument with Sir Malcolm Jack, I was the slightly wiser man who sought his advice. It was the Justice Committee which asked the Clerk of the House to give us evidence, took that evidence from him, published it in a report and made it available to the House so that it had a powerful effect on the Parliamentary Standards Act 2009. I think we all acknowledge how important it was to protect the rights of our constituents that are embodied in that unhelpful phrase, “parliamentary privilege”, a subject on which he has a surpassing knowledge.
While supplying that “courteous and helpful advice” and doing the things that Clerks traditionally do, Sir Malcolm was continuing a process by which the Clerk of the House became the chief executive of the House—a pretty challenging process and one in which he has helped us significantly. It is a process that will continue under his distinguished successor, and its difficulties and challenges must not be underestimated. The fact that Sir Malcolm coped well with those is a mark of the respect in which we now hold him and is a further and particularly compelling reason why we should thank him for his service to the House and wish him much happiness, enjoyment and scholarship in the future.
Sir Stuart Bell (Middlesbrough) (Lab)
I am grateful for the opportunity to follow the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), who was a member of the House of Commons Commission for 17 years. I did not get anywhere near his record. I served only 10 years on the Commission.
It is a pleasure to catch the Speaker’s eye because this is a parliamentary occasion, as well as a memorable occasion. It is memorable because Sir Malcolm Jack has served 44 years in the House and by my reckoning he has served through seven Prime Ministers, one of them, Harold Wilson, being a retread. As was touched on by the Leader of the House, Sir Malcolm also served as Clerk to the Agriculture Committee—wellingtons and all—for eight years. If anything shows assiduity, devotion to duty and attachment to the House, it is serving that Committee for such a lengthy period. He moved on to become Clerk of Supply and Clerk of Standing Committees. He also served the Joint Committee on House of Lords Reform from 2002 to 2003. If he believes in déjà vu, he has only to close his eyes, open them again and see that House of Lords abolition or reform, however one wants to describe it, is back on the agenda.
Sir Malcolm has managed to combine his duties in the House with being a philosopher, a scholar and a writer, whose books had not only to be written but to be researched. I surmise that the research was as arduous as the writing. One of his works which will be worth looking at is the saga, “Corruption and Progress: the eighteenth-century debate”. It should be read again by all the cognoscenti in our present era. They may find that, if I may quote French, plus ça change, plus ça reste le même: the more it changes, the more it stays the same. Many of those in the news at present might have a good look at that. Sir Malcolm would understand more than anyone that progress and change are not the same.
On reading the various publications of Sir Malcolm, I came across a book entitled “The Turkish Embassy Letters of Lady Mary Wortley Montagu”. My ears pricked up and, I went chasing down to the Library. I thought journalists from the tabloid newspapers might have got there before me, but I am happy to say that they did not. The book is a very interesting account of what went on at the end of the 1600s and into the 1700s and is well worth the read.
That book mentions Sir Malcolm’s vocation as an independent scholar. His book on Lisbon published in 2007 is certainly also worth a read for those who love Portugal, as he does, and its beautiful capital city. I note, as did the Leader of the House, that in “Who’s Who” one of Sir Malcolm’s recreations is listed as “escaping southwards”. I imagine there are many in the fourth estate who might look to him for advice on how they might make an early escape southwards.
Forty-four years of service. Can one understand that? Sir Malcolm was in the House under the Speakership of Horace Maybray King, who was in the Chair when I first came to the House in the 1950s. Sir Malcolm sat on the House of Commons Commission for almost five years. The right hon. Member for Berwick-upon-Tweed referred to the fact that Sir Malcolm moved from Clerk of the House to become its first chief executive. He understood that the Commission is an intrinsic part of the workings of Parliament under your chairmanship, Mr Speaker. Its work is, for the most part, as the right hon. Member for Berwick-upon-Tweed will understand, unsung and unnoticed, but none the less invaluable.
As the Leader of the House said, Sir Malcolm saw the need for the changes recommended by Sir Kevin Tebbit and he brought them about. His work might have been unnoticed until the famous expenses scandal. As a member of the Commission he became a focal point for us all. He gave us his advice wisely and discreetly. He saw the House through turbulent times and as the Leader of the House said, and as my right hon. Friend the Member for Blackburn (Mr Straw) graciously recalled, Sir Malcolm played a major part in steering the House away from losing its privileges under the Parliamentary Standards Bill. With Sir Malcolm’s help, the Leader of the House and I hijacked the Bill and made it a better Bill in the interests of Parliament. So he used that time of crisis as a time of opportunity.
Sir Malcolm was also accounting officer with overall responsibility for the House’s finances, resource accounting and internal controls. All these had a great impact on this sovereign Parliament for a sovereign nation.
In the letter that Sir Malcolm wrote to the Speaker, which was mentioned by the shadow Leader of the House, he stated:
“Unwarranted and unfounded criticism from whatever quarter should not deflect Members from their duties which will necessarily ruffle and disturb the peace of consensus.”
Sir Malcolm was one of those unsung Officers serving the House of Commons Commission who was instrumental in assisting the House to make a much-needed transition.
While talking about transition, I hope that you, Mr Speaker, will not mind my saying that Sir Malcolm had to lead the transition from one Speaker to another mid-Session. I can testify from my own experience and observation to the friendship and camaraderie he extended to you, Sir, and the advice he offered on so many new areas, which I am sure you appreciated and valued. That is an important and significant point that ought to be made. The Leader of the House referred to the 24th edition of “Erskine May”. Although it is to be published tomorrow, a copy is already available in the Library and has been read many times by many Members in the short time it has been there.
I will end my remarks with a quotation from the famous poet Andrew Marvell, though it might be out of context:
“He nothing common did or mean
Upon that memorable scene”.
We should make it “this memorable scene”. Sir Malcolm retires from the House with his honours thick upon him, and deservedly so. I salute him, as does the House and Parliament, and as should the nation.
Mr Speaker
I hope that the hon. Member for Stone (Mr Cash) will imitate the quality of “Erskine May”, a copy of which he is clutching, but I feel modestly confident that he will not seek to equal its length.
Mr William Cash (Stone) (Con)
I am extremely grateful, Mr Speaker, and note that the latest edition of “Erskine May”, the 24th, produced by Sir Malcolm Jack, is dedicated to you:
“To The Right Honourable John Bercow MP, Speaker of the House of Commons, and to the Lord Speaker, Speakers and Presiding Officers of the Commonwealth Parliaments, on whom fall the great responsibilities of guardianship of the parliamentary system.”
In the words of Maine’s “Ancient Law”, justice is to be found in the interstices of procedure, so it is a proper reflection on your role that Sir Malcolm makes that dedication in this excellent book, which I am glad to point out is somewhat shorter than previous editions. I have had occasion in the past to read out certain passages, for example in relation to the Maastricht treaty, to remind Members exactly of their responsibilities, but I do not need to do so on this auspicious occasion, nor would I wish to.
The remarks that have been made about Sir Malcolm, whom I have known since I first became involved in the processes of the House in 1967, are that he is a man of enormous integrity, a great scholar and a purveyor of the wisest advice, based on his knowledge of philosophy and history. He has been a remarkable Clerk and has been in our service. One thing I recall most specifically about his great career is the fact that he has been a persistent defender of the sovereignty of this House. The case mentioned by the right hon. Member for Blackburn (Mr Straw) in his fulsome tribute occurred in adversarial circumstances but demonstrates that those involved realised upon reflection that the advice Sir Malcolm gave was of such quality that it needed to be followed by a successful vote, which shows that we owe him a great debt. Questions of parliamentary privilege are not merely esoteric—the expression is greatly misunderstood—but relate, as others have said, to the defence of the rights of those whom we represent.
Furthermore, Back Benchers rely heavily on the advice of the Clerk, and I have had reason to be deeply grateful for the wise and impartial advice that Sir Malcolm has given periodically on great matters of parliamentary and constitutional importance. I have no doubt whatever that his successor, Mr Robert Rogers, will follow in his footsteps and that we will have the advantage of his wise advice as well.
In conclusion, I want to put on record my appreciation—shared no doubt by many other Back Benchers—for the tremendous work that Sir Malcolm has done. It is enormously important that we, as Back Benchers, have access to impartial and wise advice, particularly against the blandishments, manoeuvrings and machinations of the usual channels, the Whips. I have experienced more than my reasonable share of that in the 27 years for which I have had the honour of being in this place, but I have always had the most tremendous help from those like Sir Malcolm, and from him in particular.
Mr Frank Doran (Aberdeen North) (Lab)
I am delighted to have the opportunity to add my thoughts on Sir Malcolm Jack and his career to those that have already been expressed. Like many Members, when I arrived in this place I had no idea who was who or how it was run, and I stayed that way for many years, but Malcolm Jack always stood out as someone I recognised. The Leader of the House has referred to his dignified bearing, and I first became aware of him as a much younger Clerk, when I was an even younger Member. He clearly stood out as someone of importance, even though I did not know what position he held; that was the impression he gave. I got to know him much better when I became Chair of the Administration Committee and, subsequently, a member of the House of Commons Commission. This place produces many exceptional people, but Malcolm Jack is particularly exceptional. Many colleagues have commented on the advice he has given regularly to the Commission, often in difficult circumstances, and how valuable it is.
In trying to pull together a picture of Malcolm Jack, I picked up one or two things from various political websites. I found an interesting description in a column following an appearance Dr Jack made before the Liaison Committee last year. He was described as
‘the grandest panjandrum in the palace. He is so clever that he makes David “Two Brains” Willetts look like a village simpleton. Friends call him “Three Brains”, or at least they should. Dr Jack appeared in his full outfit, including a tailcoat and gigantic comedy white tie. He looked like a brilliant scientist winkled out of his lab in order to accept a Nobel prize.’
I see that philosopher’s frown every time he is thinking, particularly when chewing over the difficult issues that might have led that reporter to think that of him.
I want to concentrate on two aspects of Malcolm Jack that stand out in my experiences of him. The first is that he has always been available, as many have said, and not just to Members or important commissioners and holders of grand positions, but to his staff. I had many discussions with him through the crisis that we all dealt with. I know of no Clerk, with the exception of those in the 1500s who could be flayed in New Palace Yard if they got things wrong, as the shadow Leader of the House mentioned, who has had to deal with such challenges. In virtually every discussion I had with him one of his key concerns was the effect that the crisis was having on the morale of the staff. He protected his staff, many of whom are paid much less than they would be outside this building, and was always available to them as much as he was to anyone else. He understood the loyalty they felt to this place and that they were severely damaged by the crisis. We thought that we were the ones who were damaged, but many others were damaged in that process. His concern about the impact on the staff was extremely important, and he knew that the reputation of the House was extremely important to them.
The second area where I think he distinguished himself, and which has also been highlighted by the Leader of the House, is in his attempt to modernise this place, which I think has been very important. The Leader of the House mentioned the Tebbit report. I remember asking a senior Officer of the House, shortly after becoming Chair of the Administration Committee, how decisions were made about repairs and improvement to the building. To summarise, the answer was basically, “It’s what your Committee wants, Sir.” There is a culture of deference in this place, although I think it has reduced over the past four or five years. It is important that it reduces, because we do not make the right decisions when deference is the motivation behind the advice that is given to Committees and others in this place. In the conversations that I have had with Malcolm Jack, he recognised that.
Malcolm Jack was not the initiator of the Tebbit report—the Commission had ordered it before his appointment—but he made sure, as the Leader of the House pointed out, that it was implemented very speedily. This House is a better place for that. It is much more structured; there is planning. For example, six or seven years ago there was no long-term strategy for the maintenance of this building; now there is a 25-year strategy with five-yearly reviews. Simple things like that make a difference to this place, and Malcolm Jack has been responsible for seeing that through.
I had a brief discussion with Malcolm when I heard about his retirement—he may not thank me for saying this—and we were talking about his successor. I believe quite strongly that one day the position of the Clerk and that of the chief executive will be separated and we will see much more outside influence. Malcolm is probably the exception to the rule, but 44 years in one place is not the best training to run that place. One needs outside influences and to know what is happening in the outside world. I think he understands that. He may be a bridge between the old-style Clerk and the new-style chief executive of the future.
There are lots of things that I wanted to say, but what we all want to do is to offer him and his partner all best wishes for the future. I know that he has a lot of plans to do more writing; “Erskine May” is not the limit of the opportunities that he sees for himself. I add my congratulations to him on the service that he has provided to this House and wish him and his partner all the best for the future.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Sir Malcolm Jack is proof that the United Kingdom’s largely unwritten constitution is not only unwritten but living. The mark that he leaves on his office and on the institution of the Clerks in this House is perhaps, as the hon. Member for Aberdeen North (Mr Doran) suggested, a lessening of their deference, not only to Members but in relation to their position in the British constitution. The former Home Secretary, the right hon. Member for Blackburn (Mr Straw), referred to the Parliamentary Standards Act 2009, which challenged the supremacy and privileges of this House. I believe that Sir Malcolm was innovative in his approach in taking on a more public role than his predecessors by being a less deferential part of the British constitution.
That is a reminder of the fact that this House and Parliament does not just depend on what we say about ourselves, and on what judges say about us and the laws that we make; we depend, as an institution, for our sovereignty, on the institution of the Clerks themselves. I listened with interest to the hon. Member for Aberdeen North say that the role of chief executive should be separated from that of Clerk of the House. Part of the strength of the institution of the Clerks is that they combine the two elements. Every aspect of this House is subordinate to the work that the House does, which is supervised by the person who ensures that our procedures are fit for purpose.
I pay tribute to Sir Malcolm for the innovations that he has brought to the British constitution and for the way that he has strengthened this House throughout a very difficult period.
Mr George Howarth (Knowsley) (Lab)
As the hon. Member for Stone (Mr Cash) is leaving the Chamber, I want to say that I am very pleased that he has a new copy of “Erskine May”. On our occasional bus journeys in the morning, I look forward to him to reading out what will no doubt by then be a heavily annotated version of his copy of “Erskine May” to the general enlightenment of myself and the other passengers on the bus. That volume will indeed be a continuing tribute to the Clerk of the House, Sir Malcolm Jack.
A great deal has been said about Sir Malcolm Jack and the public role that he has played in shaping the way that this House has operated in recent years. I certainly endorse all of that. The quality that he had was also, at the same time, an old-fashioned one, in that he was always available to provide very wise advice to any Member who wanted to use the procedures of the House for a good purpose. I am personally grateful to him for having done so on many occasions—in a quiet way, but guiding one through the procedures as they applied in the particular circumstances. I like to think that the wisdom and great scholarship that has been attested to is a testament to the time that he spent at Liverpool university; so many people who went to that university share those qualities.
Let me conclude by saying that I hope that he and his partner enjoy a long, happy and fulfilling retirement.
Question put and agreed to.
Resolved, nemine contradicente,
That Mr Speaker be requested to convey to Sir Malcolm Jack KCB, on his retirement from the office of Clerk of this House, the House’s gratitude for his long and distinguished career, for his wise contribution to the development of the procedure of the House and to close understanding among the Parliaments of the Commonwealth, for his leadership and professionalism in the discharge of his duties as chief executive of the House, and for the courteous and helpful advice always given to individual honourable Members.
Alison Seabeck (Plymouth, Moor View) (Lab)
On a point of order, Mr Speaker. I rise to seek your guidance on an incident that occurred in Westminster Hall earlier today. We were in the middle of a debate discussing poverty and housing dereliction, and the Minister, the hon. Member for Hazel Grove (Andrew Stunell), described the contributions of hon. Members as bringing sob stories to the debate. Interestingly, we queried it at the time. We have a Hansard copy of the debate in which the word “sob” has been removed. Clearly, that is very politically sensitive, because we felt that it was somewhat insulting. Is there any way, Mr Speaker, that you or your good offices could check whether we had misheard the Minister? Having watched back the video, I have to say that it does not look like he mispronounced any word. If so, how do we find out how that word was removed and who authorised its removal, because clearly the record would appear not to be factually correct?
Mr Speaker
I am grateful to the hon. Lady for her point of order. The reality, as some Members will be aware, is that the Editor of Hansard does have some discretion in the compilation of the Official Report, and marginal adjustments can be made, although ordinarily one does not expect adjustments to be made which change the meaning of what has been said. I think the safest thing that I can say to the hon. Lady on this occasion is that I will look into the matter and revert to her when I have done so.
Royal Assent
Mr Speaker
I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Sports Grounds Safety Authority Act 2011
Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011
Wreck Removal Convention Act 2011
Police (Detention and Bail) Act 2011
Public Bodies Bill [Lords]
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
21:59 - The House divided: - Ayes: 231 / Noes: 307 - Question accordingly negatived.
22:15 - The House divided: - Ayes: 304 / Noes: 229 - Question accordingly agreed to.
Mr Speaker
I inform the House that the amendment has been selected. To move Second Reading, I call the extremely patient Minister, Mr Francis Maude.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I beg to move, That the Bill be now read a Second time.
It seems almost unseemly to move a Second Reading in the wake of the august tributes to the retiring Clerk of the House. It is actually quite appropriate, because many of the tributes to Sir Malcolm, which I heartily endorse, talked about his understanding of and commitment to the powers of this House. Central to those powers is the House’s power and right to hold the Executive to account. That is essentially what the Bill is about. It will enlarge the scope of the state—the public realm—which this House and Parliament can hold to account, and reduce the scope of quangos and non-departmental public bodies and the range of public state entities that are not accountable to a democratic authority. That is long overdue. The Bill will put in place a mechanism that will enable this Government and future Governments to change the landscape of those bodies without the need for separate primary legislation whenever anything is sought to be done.
The public are right to expect a system in which Ministers are accountable for what the Government do and for how taxpayers’ money is spent. For too long, there has been the proliferation of a complex network of public bodies, which has worked against that expectation by blurring the lines of accountability and disguising inefficiency and duplication in the delivery of public services. It is for that reason that last summer the Government conducted an intensive review of public bodies, which was stimulated and led by the Cabinet Office but conducted by the relevant Departments across Whitehall. It was the most comprehensive interrogation of the role of such bodies for decades.
We subjected each body to four tests. The first was existential and asked whether the body needed to exist and whether its functions needed to be carried out.
Joan Walley (Stoke-on-Trent North) (Lab)
When the review was carried out, what environmental appraisal was there of the proposals?
Mr Maude
In conducting the reviews, the Departments will have considered the environmental implications. One example that I am about to refer to would have carried no environmental implications. Obviously, the Departments would have considered the environmental implications in every case. Before any action is taken under the powers in the Bill, there will be an opportunity for further detailed scrutiny.
The first question was whether the functions had to be carried out at all. In some cases, the answer was no. We decided fairly rapidly that the Government probably did not need an independent non-departmental public body to deliberate on the purchase of wine for the Government. That is of course an important function that must be carried out properly, but there does not need to be an NDPB to do it.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
One body that is widely thought to be necessary and desirable is a chief coroner to provide leadership to the coronial profession. It would be possible to create that post without creating the kind of elaborate body that the Government are rightly anxious about by designating an existing coroner to have that leadership role with just a small amount of additional support.
Mr Maude
We rather agree with what my right hon. Friend says. There is concern that a whole new apparatus and bureaucracy should not be set up, with all the associated costs, which the previous Government’s plans would have entailed. However, we understand the concern that not proceeding with the establishment of a chief coroner would look insensitive, and would perhaps be insensitive in the circumstances. I will say a word later about the detail of our plans in respect of that office.
Mr Kevan Jones (North Durham) (Lab)
What has changed from when the Minister was in opposition, when he voted for the chief coroner and his party’s Front-Benchers spoke in favour of it in Committee? The Minister spoke about cost and there is an issue about cost. Why has he not yet published what savings will be made by not having a chief coroner? If, as he recognises, certain functions have to be carried out in the Ministry of Justice, at what cost will those functions be carried out?
Mr Maude
It will cost very much less. The set-up costs for the office of the chief coroner, as planned under the Coroners and Justice Act 2009, would have been £10.9 million and there would have been running costs of £6.6 million a year. I will tell the hon. Gentleman exactly what has changed. A Government have come to office and inherited the biggest budget deficit in the developed world. We had to take urgent steps to control and eradicate the deficit. As a result of that, he will be glad to know, despite having a budget deficit roughly the same size as that of Greece, we now enjoy interest rates roughly the same as Germany’s.
Mr Jones
The Conservative central office spin is wearing a bit thin. Will the Minister break down the costs? The other place was disputing the one-off set-up cost. Included in the so-called £6 million a year is nearly £1 million for contingency, which is 20% of the supposed running costs. Would it not help to justify his arguments if a detailed breakdown was printed, which the Ministry of Justice has signally failed to do and he has not done today?
Mr Maude
I will, of course, ensure that my right hon. and learned Friend the Lord Chancellor hears what the hon. Gentleman has said. There will be plenty of opportunities, such as at Question Time once a month, for the hon. Gentleman to ask those questions of Ministers at the Ministry of Justice.
Mr Maude
Do I have every single detail about every single body contained in the proposals? No I do not. I can answer in detail on the bodies that are within the responsibility of the Cabinet Office. This is an enabling Bill, which will enable the House of Commons and the House of Lords to scrutinise the detail of the proposals in each case. There will be plenty of opportunity for that to be done in the case of the office of the chief coroner, because the Government will introduce amendments in Committee, where the issue can be explored in great detail. I am confident that all the questions that are springing up can be answered at that stage.
Mr Bob Ainsworth (Coventry North East) (Lab)
The Minister is trying to evade collective responsibility for the decisions that the Government are taking. He is also ignoring the fact that there was widespread consultation on this matter and that it was supported by the Opposition. It was found that, almost without exception, nobody disagreed with this. This is far and away the cheapest and most effective way of getting consistency into the inquest service. The cost of the inconsistency is both human and monetary. The costs that the Minister talks about need to be offset against the costs of the judicial reviews that are brought regularly against the current system. He knows that this is the most preposterous U-turn. The suggestion that the coronial service should be accountable to this House is also a disgrace. It should be independent. It can therefore only answer to one of its own. That is why the creation of the office of chief coroner is so necessary.
Mr Maude
The office of chief coroner will be brought into existence. It will not be set up in the elaborate way and with the extensive additional costs embodied in the proposals of the previous Government. The office will exist. The functions, to the extent that they are needed, will be exercised in a way that is affordable in the current circumstances. If the right hon. Gentleman, for whom I have considerable respect, is really suggesting that we should spend this amount of extra money on this matter, he needs to tell the House what he would cut to enable that to happen.
Charlie Elphicke (Dover) (Con)
Surely the concern is not just over the amazingly expensive offices that many quangos like to equip themselves with, but over the amount of pay that they receive. People at the UK Film Council get more than £150,000 a year, the British Waterways chief executive gets £230,000, and a similar amount goes to the chief executive of the Dover Harbour Board, dare I mention it? Surely we should ensure that the cost of each individual is reduced to a sensible amount.
Mr Maude
One of the benefits brought about by this Government is to make all that more transparent. We have exposed for scrutiny by the public and the House what those high salaries are, and it is right that we should do so. They may be completely justified in many cases, but they ought to be justified and scrutinised, so I make no apology for introducing that degree of transparency.
Helen Goodman (Bishop Auckland) (Lab)
While the right hon. Gentleman is talking about salaries, perhaps he will address the abolition of the Agricultural Wages Board, which protects the incomes of the poorest people in the countryside. Its abolition will mean that those workers lose more than £150 a week in sick pay straight away. How can he defend that?
Mr Maude
I justify it on the basis that the Government of the hon. Lady’s party introduced a minimum wage, which was voted through by the House. The Agricultural Wages Board was introduced at a time when there was no national minimum wage. It now exists, and we take the view that an independent body with the AWB’s powers no longer needs to exist.
Andrew George (St Ives) (LD)
The point about the Agricultural Wages Board is not just that it pins down a minimum wage for agricultural workers but that there are six scales of pay and other protections for those workers, who have a very weak voice in the labour market. The Minister talks about transparency, but the rural voice will be lost unless transparent decisions are made in the Chamber about each of the bodies involved, including the Rural Advocate, who speaks up on behalf of the most vulnerable in rural communities.
Mr Maude
On the hon. Gentleman’s point about the Rural Advocate, it seems to me that rural areas are very well represented in this House. It seems odd that a separate body should be created to be a rural advocate, because it seems to me that it is the duty of Members of Parliament to be the advocate for their constituents. There are many very effective advocates of rural residents and constituents.
The Department for Environment, Food and Rural Affairs proposes to consult on the AWB in the autumn. It will be part of a wider consultation package on the future of the agricultural wages committees and the agricultural dwelling house advisory committees.
Mr Sam Gyimah (East Surrey) (Con)
I fear that the Minister is being led down the path of discussing every public body covered in the Bill. Is it not the case that the public bodies identified in the Government’s review form a significant layer of state control, and one from which people can only feel distant? Bringing accountability to bear on that layer is the most important aspect of the Bill for him to focus on.
Mr Maude
My hon. Friend makes a very good point. These bodies are rarely discussed in the House, and that is part of the problem that we are seeking to deal with. Unless there is a compelling reason why a state function should be carried out by a body that is independent of any democratic accountability, the presumption should be that it is accountable. That is the test that we apply.
Rehman Chishti
I am grateful to the Minister. Between 2007 and 2008, public sector organisations spent about £4 million on hiring political consultants to lobby Government, which is totally unacceptable. What steps are being taken to ensure that it does not happen again?
Mr Maude
The guidance has been tightened up considerably. Taxpayers find it quite offensive that a body that is not democratically accountable should use taxpayers’ money, in some cases, to hire lobbyists to lobby Government to give it more taxpayers’ money. We have taken urgent steps to ensure that that does not recur.
Alun Cairns
I am very grateful. I could not agree more with my right hon. Friend about lobbyists, but does he also accept the danger that many public bodies will start to employ internal lobbyists directly rather than commissioning and contracting them? That would also be a waste of money.
Mr Maude
My hon. Friend will forgive me, but I really do need to make progress. A great many Members wish to contribute to the debate.
Our first test of a body was the existential test—does its function need to be carried out at all? If, as in most cases, the body’s functions were deemed necessary, we then sought to establish whether the functions should be carried out independently. We had three tests. If a body carries out a highly technical activity, if it is required to be politically impartial or if it needs to be able to act independently to establish or measure facts, it is right for it to remain outside direct ministerial or other democratic accountability. That is clearly the case with bodies such as the new Office for Budget Responsibility, Ofgem and many others.
Any body that does not meet any of those tests will either be brought back into a Department, where it can be held accountable to the House through a Minister, or devolved to local authorities. In both cases there will be democratic accountability. Or in some cases, a body’s functions could be carried out outside the state altogether in the private or voluntary sector. We went through an extensive process to determine the outcome of the review.
The first task was simply to establish how many quangos there were and what they did. It may sound absurd, but it was and remains incredibly difficult to get firm information on that. Many do not publish accounts, there is no central list and there are many different types of quango with different statuses. The official list of non-departmental public bodies contains 679 bodies, excluding those in Northern Ireland, but that does not include non-ministerial departments, Government-owned public corporations or trading funds. Our review covered 901 bodies, and we believe, but cannot be certain, that that is the true extent of the landscape. I stress that departmental executive agencies were not within the review’s scope. They are directly controlled by Ministers, who are accountable to Parliament for what they do.
At the end of that review, I announced our proposals to the House on 14 October last year. They were that 481 of the bodies should be substantially reformed, including 192 abolished entirely and a further 118 merged. Since that announcement we have concluded consideration of a number of other bodies, and I can tell the House that the current total is that 495 bodies will be reformed, including 200 abolished and 120 others merged into 59 successor bodies. We have moved quickly to implement that programme, and I am pleased to tell the House that 45 bodies had been abolished by the end of April this year. Overall, we expect to make administrative savings—I stress that they are administrative—of £2.6 billion from public bodies over the spending review period. That money will be better spent on protecting public sector jobs and on front-line services.
Mr Maude
If the hon. Gentleman will forgive me, I am going to make progress. I have given way a great deal, and I do not want this speech to go on too long. I am sure that is a sentiment that the House will support.
I note that the previous Government’s intention, set out in 2009, was to abolish 120 bodies, saving the conveniently round sum of £500 million. Yet in the six months following that announcement, they did not even manage to abolish half of them—a clear demonstration that, as ever, they had a better knack for the headline than for the hard work of implementing what had been promised.
Where public bodies have been retained, they will be subject to a process of rigorous triennial review, to ensure that they remain fit for purpose, that the need is there, and that the justification for them remaining independent is still valid. Far too often, bodies have been created and left well beyond the time when they are needed, partly because there has been no means to reform or disband them—any such change would have required primary legislation, time for which is, as we know, at a premium in the House.
The Government’s response to the Select Committee on Public Administration report outlined the principles of that review process, and I look forward to giving further details to the House in due course. The review process for individual bodies will be led by the responsible Minister in each case, and co-ordinated and supported by the Cabinet Office.
The House will be aware that the Bill was brought from another place, where it has received substantial scrutiny, resulting in a number of important amendments. I thank noble Lords for their constructive engagement in this process, which has helped the Government to produce an even more coherent and well-structured Bill—it was fairly coherent and well-structured to begin with. I hope that it will command the support of this House and the confidence of the public. I pay particular tribute to my noble Friend Lord Taylor of Holbeach for his skilful stewardship of the Bill in the other place.
The Bill is centred on a series of order-making powers that enable Ministers to make changes to public bodies through secondary legislation, subject to the approval of Parliament. That mechanism creates a coherent and efficient procedure for reform, while properly giving Parliament the ability to scrutinise both the principle and the detail of the proposals.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Will the Minister give way?
Mark Lazarowicz
Although there is no doubt nothing wrong with dealing with some of those bodies by order, can the right hon. Gentleman not understand the concerns many of us have about the fact that bodies such as the Office of Fair Trading and the Competition Commission can simply be merged by order, when there were hours, days or weeks of debate in the House, including in Committee, to set them up? Is not that a dangerous precedent for the Government to set?
Mr Maude
Powers to amend primary legislation by secondary legislation are not unprecedented. An amendment made in the other place, which the Government supported, will mean that either House can require an enhanced affirmative procedure. Such a procedure not only requires consultation before a draft order is laid, but allows a further period for reflection on, and analysis and scrutiny of, the proposal. It is reasonable to have a reasonably accelerated process for the reform of public bodies. Otherwise, we will end up in a position in which we have a wholly incoherent landscape of public bodies. I confess that even at the end of the process that we are currently proposing, that landscape will still be quite muddled, but it will at least have been cleared up to some extent.
Gavin Shuker
Further to the point made by my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) on the OFT and Competition Commission, is that not an odd state of affairs? There are reports that one of those bodies will take responsibility for NHS contracts worth more than £70 million, yet today we are discussing the changes to them abstract from Monitor’s responsibilities.
Mr Maude
The functions will continue to exist, but there will be a rationalisation of the landscape of the bodies. A single competition authority will be created. A number of the consumer advocate functions will be given to citizens advice bureaux, which will strengthen their role and bring welcome additional funding to them—[Interruption.] I would hope that hon. Members welcomed the enhancement of the role of CABs that the Bill brings about.
The Bill provides an ability to make further changes as need arises in future. Each order-making power is limited in its application to those bodies that are listed in the relevant schedule to the Bill. Clause 1 creates a power for a Minister to abolish a body or office by order. Such an order may either abolish the body’s functions if they are no longer required, or transfer some or all of them to another eligible party, such as a Government Department, a charity or another public body.
In some cases, an order under clause 1 will be motivated by the principle of accountability—that a Minister should be directly accountable for Government actions within their sphere of influence. For that reason, we propose to abolish the Child Maintenance and Enforcement Commission and to return its functions to the direct control of the Department for Work and Pensions. In other cases, a body will simply be abolished to halt unnecessary expenditure and duplication. For example, clause 1 will also be used to introduce orders to abolish the Valuation Tribunal Service, the functions of which can now be performed by Her Majesty’s Courts and Tribunals Service, and which therefore no longer needs to be a separate entity, with its own overhead costs.
The next four clauses of the Bill create a complementary set of powers to merge groups of bodies, to modify constitutional or funding arrangements, or to modify or transfer a body’s functions. The breadth of those powers is a reflection of the breadth of the Government’s reform agenda. We aim to enhance the scope of civil society by the creation of a new waterways charity to replace British Waterways. Our agenda spreads to the modification of regulatory bodies such as Ofcom and the Equality and Human Rights Commission to ensure that they are fully focused on their vital regulatory functions.
In total, 294 bodies currently appear in the schedules to the Bill, demonstrating the importance of this measure to the reform agenda. Details of our proposals for each of those bodies are available in a document that has been placed in the House Library. I can assure the House that that document will be updated regularly throughout the passage of the Bill, and I hope it forms a valuable basis for debate in Committee.
In addition, the Bill creates specific powers for Welsh Assembly Ministers to take forward a number of changes to public bodies operating in Wales. Those will assist the Welsh Assembly Government as they seek to simplify their public bodies landscape and to deliver further savings, and I hope that those measures also enjoy the support of the House.
As I have indicated, the passage of the Bill through the Lords saw a number of modifications to the mechanisms of the Bill. The modifications tighten the purposes for which those powers can be used and ensure the appropriate balance between speed and scrutiny in the reform process. Those changes mean that the Bill that was introduced in this House strikes a carefully crafted balance. It will enable Ministers to make much-needed reforms to public bodies without recourse to specific primary legislation, an innovation that I believe will support efficient management of public bodies both now and in the future. Yet at the same time, the Bill requires Government to make the case for their proposals to stakeholders and to Parliament, guaranteeing that proper consideration is given to the exercise of important public functions.
I should tell the House that the Government intend to introduce a number of amendments in Committee. In particular, the House will be aware that following the written ministerial statement on 15 June by the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), who has responsibility for business and enterprise, the abolition of the regional development agencies will now be taken forward in primary legislation through the Bill. Abolishing the RDAs in the Bill will ensure that the Government can meet our timetable for the development of a new framework for regional growth, providing clarity and opportunity to businesses across the nation.
Similarly, we will seek to amend the Bill to modify the Broadcasting Act 1990 to revise the funding arrangements for S4C by removing the retail prices index link, while securing the channel’s independent future status and delivering significant savings.
I can also inform the House that the Government will seek to reintroduce the office of the chief coroner and the Youth Justice Board to the Bill’s schedules, overturning votes in the other place. As I said earlier, my right hon. and learned Friend the Lord Chancellor has listened to the concerns raised in relation to the important functions that those bodies are designed to carry out, and I believe that our revised proposals will gain wide support. We have agreed that the office of the chief coroner should remain on the statute book, and our amendments will propose adding it to schedule 5 to the Bill to enable some of its functions to be transferred to the Lord Chief Justice and the Lord Chancellor.
The Government will propose a number of more technical amendments to the Bill, including measures to clarify the requirements of the consultation process in clause 10, to ensure that any orders made under the Bill in relation to the funding arrangements of bodies or offices require the consent of the Treasury and to modify the list of taxes subject to variation in their provision as part of a transfer scheme made in connection with an order under the Bill.
The Government are committed to bringing about radical change in the administration of government in the UK—change that responds to the public’s demand to place the principles of transparency, accountability and value for money at the centre of what the state does. Quango reform has been long promised by parties on both sides of the House and is long overdue, but we have now taken the difficult decisions necessary to make it possible and to make it happen. By enabling a comprehensive and overdue reconfiguration of the landscape and by creating a framework to support better management of public bodies in the future, the Bill gives the Government the essential tools with which to turn this commitment into reality. I commend it to the House.
Tessa Jowell (Dulwich and West Norwood) (Lab)
I beg to move,
That this House, while agreeing that there needs to be a constant reassessment of the role, effectiveness and relevance of public bodies, declines to give a second reading to the Public Bodies Bill because it fails to provide a full and comprehensive plan for the reform of public bodies; regrets that Ministers have failed to properly cost reforms and identify savings, have failed to understand the important functions performed by some of the bodies affected by the Bill and therefore to provide for credible successor arrangements, have failed to consult properly on proposed reforms with the public and the bodies themselves, and have failed to undertake a proper impact assessment of each affected body; and considers that the overall effect of these failings has been that the House has been presented with legislative proposals which undermine the credibility of the proper processes of government.
It gives me great pleasure to move the reasoned amendment in my name and those of my right hon. and hon. Friends. I have listened closely to what the Minister has said. He was courteous and kind about the treatment of the Bill in another place, but to describe the scrutiny process in the terms he did was an understatement. In fact, the Bill, which in its original form gave him licence to meddle on an unprecedented scale in the affairs of bodies discharging functions on behalf of the public, was not just overhauled, but was mauled by the scrutiny of another place. Lord Woolf said that it was
“a matter of grave concern to the judiciary.”—[Official Report, House of Lords, 9 November 2010; Vol. 722, c. 75.]
The Lords Constitution Committee said that it struck
“at the very heart of our constitutional system”,
and Baroness Royall was not alone in saying that
“this is a bad Bill. It is badly thought out, badly structured, badly executed, bad for the constitution, bad for public bodies and bad for government.”—[Official Report, House of Lords, 9 November 2010; Vol. 722, c. 68.]
I listened closely to what the Minister said were his intentions for the scrutiny of the Bill in the House, and I would like to put him on notice: we will fight with every available argument to ensure proper protection for the Youth Justice Board, which has led to such a dramatic fall in youth crime, and we will fight to honour and see implemented the commitment to the office of the chief coroner. The Minister can deploy a parliamentary majority to vote down the decisions taken in another place, but, as has been indicated already by my right hon. and hon. Friends, as well as other right hon. and hon. Members, he will not be able to defeat the argument in the country over the chief coroner—an argument supported eloquently by the Royal British Legion. I therefore hope that, with humility, he will take heed of the debate and judge it on its merits.
The original Bill, as published by the Tory-led coalition, planned to sell off our forests. I would like to pay the warmest tribute to the campaign so excellently and eloquently led by my hon. Friend the Member for Wakefield (Mary Creagh), which rightly saw a climbdown by the Government and brought together 600,000 people in a campaign against the sale of our national heritage. The original Bill also left 150 organisations in the organisational limbo of what was then schedule 7 of the Bill—sounds innocuous enough, does it not? But Channel 4 was listed, as were the Independent Police Complaints Commission, the Charity Commission, the Criminal Cases Review Commission and the independent Judicial Appointments Commission. All were placed in a schedule that would have left them open to being axed at the stroke of a Minister’s pen.
The process of these reforms has been deeply flawed, and the Government still lack detailed plans for many of the bodies that they are seeking to change, merge or abolish. They have produced a Bill before a plan, rather than a plan before a Bill. Having said that—by way of introduction—of course we support the reform of public bodies and public services. Indeed, before the election, the previous Labour Government had put in place a programme to reform public bodies. That programme must be constant and continuing.
Nevertheless, these organisations carry out an enormous range of important public functions and play an important part in the life of the people of this country, providing support for our universities, our sports culture and the arts, standing up for vulnerable people, holding Governments to account, upholding minimum standards and helping to improve our public services. As the Institute for Government, of which I am a fellow—an unremunerated position—wrote,
“public bodies are now fundamental to the function of Government.”
The needs of the country constantly change and our public bodies must change too, which is why every Government need constantly to reassess their role, effectiveness and relevance. We did that and the Government are doing the same. That is not the issue. When we came to power in 1997, there were almost 1,130 public bodies, and by the time of our 2009 review, we had cut their number to about 750—a reduction of almost one third.
Simon Kirby (Brighton, Kemptown) (Con)
The right hon. Lady claims that her Government reduced the number of quangos, but actually spending went up in real terms by about 50%. How does she explain that?
Tessa Jowell
We ought to take into account the reduction of bodies at the Department of Health, link to that the significant reduction in the number of bodies announced by the Haskins review of Natural England and consider the systematic reduction in the number of other bodies, as well as the fact that some were merged and others increased their functions. However, in March 2010, we announced plans to go further and faster and to reduce the overall number of bodies by a further 123.
Tessa Jowell
I do not necessarily accept that that was the largest reduction. However, devolution was one of the most significant policies introduced—and proudly so—by the Labour Government, and of course previously reserved powers were then devolved to the Scottish Parliament and the Welsh Assembly.
A 20% reduction would have saved £500 million from next year. The Minister jibbed at that, but we viewed the process of altering, closing down and merging public bodies as one that should take place systematically over time. Those £500 million of savings would have been realised by next year.
Mr Kevan Jones
Does my right hon. Friend agree that a lot of what is being proposed is window dressing, in the sense that even closing down bodies such as the Audit Commission will cost some £400 million in pension liabilities and winding up other assets? When we look at some of those organisations in detail, we see that the payback period might not come for, say, 10 years.
Tessa Jowell
My hon. Friend is obviously correct. I intend to make some progress now, but I will come to precisely that point in a little while.
We would have saved £500 million by 2012-13 as a result of planned and properly costed change and reform. We also accepted that there is scope for further reform. We agree that the Railway Heritage Committee should be reformed and that the National Endowment for Science, Technology and the Arts should enter the voluntary sector. We also support the reform of a number of other significant bodies. The problem is not with reform, nor is it with the tests that the Minister has set for that reform, as I will set out in a moment; the problem is with his ill-thought-out and rushed through Bill. There has been confusion about what the Minister’s motives are. First he told us this week that the Bill was about, as he put it, “sound money”; later we were told that it was about underpinning good government. However, whether the issue is money or good government, the Government’s proposals in this Bill are certainly not the answer.
The Government are asking the House to agree to the abolition of important bodies such as those raised by my hon. Friends in interventions—they include Consumer Focus, the Commission for Rural Communities and the Football Licensing Authority—but the right hon. Gentleman cannot yet tell us what he will put in their place. He has also claimed £30 billion in savings when the reality is that the Government will save £1.6 billion—or less, when redundancies have been paid for.
Andrew George
I hope that the right hon. Lady would agree that rather than trading figures for partisan purposes, we need to have a proper audit of what is going on. A moment ago she mentioned the Commission for Rural Communities. As that body is being brought in-house by the Department for Environment, Food and Rural Affairs—that is probably a sensible thing to do—we do not necessarily know whether that will be counted as a saving or whether the costs will be lost from the overall audit of what quangos cost the country. At the end of the day, however, the important point is the one that I made earlier. We need a rural advocate that is independent of all the partisan debate that we have in this place.
Tessa Jowell
The hon. Gentleman has set out the precise nature of the debate that will need to take place in Committee, because losing the independence and the advocacy role of a number of these significant bodies will harm the proper process of representing interests that often get too little hearing in this House.
Helen Goodman
Does my right hon. Friend agree that what is exposed by the abolition of the Agricultural Wages Board and the Commission for Rural Communities —as well as the proposals on forests, on which there had to be a U-turn—is an attitude of arrogance towards the countryside and the idea that it is not necessary to listen because the Government think that they know best?
Tessa Jowell
I certainly hope that the Minister will accept my invitation to rethink some of the Government’s proposals and ensure that the Committee stage involves genuine and proper scrutiny of some of the compelling individual cases. I also hope that he will show proper respect and understanding, not for, as it were, the headline description of a clutch of quangos, but for the vital functions that many such bodies perform—as my hon. Friend has so clearly described—in protecting the quality of life for people across the country in a variety of different ways.
Oliver Heald (North East Hertfordshire) (Con)
Will the right hon. Lady give way?
Tessa Jowell
If the hon. Gentleman does not mind, I am going to make some progress, as there are lots of Back Benchers who want to speak in this debate.
The approach that the Government have taken in this Bill is the opposite of the clear and costed plan that was produced by the last Government. They are abolishing and merging bodies, in some cases without any idea of what their functions are. Again, I hope that a greater understanding of those functions will result from further scrutiny. Even now, more than 10 months after the review of public bodies began, we are still in the dark over what the Government have planned for a number of the bodies in this Bill. A number of consultations have begun, but the Government are not even waiting for the results. Consultation was eventually promised on the regional development agencies, but it has now been withdrawn because it would disrupt the process of disassembling RDAs that is already under way. Today the Secretary of State for Justice has announced a public consultation on all the bodies that affect his Department, but this will report after the Bill has gone through Parliament. Therefore, the Minister here today is effectively asking this House to give its permission fundamentally to change or to abolish those bodies before his colleagues have decided what will be put in their place.
While the Government cut quangos in this Bill, they are adding hundreds of bodies elsewhere. Let us take the national health service. As a result of the Government’s chaotic approach to the NHS, they have tripled the number of statutory bodies in the NHS, which now number 521. There will now be new shadow commissioning groups and authorised commissioning groups, primary care trust clusters, strategic health authority clusters, clinical networks and clinical senates, all of which will be overseen by the NHS commissioning board, which the chief executive of the NHS has described as
“the greatest quango in the sky”.
The question that we now have to ask the Minister is whether, even with the passage of this Bill, he believes that there will be fewer public bodies in 2015 than when he first entered his Department. What is his baseline number and what will be the number of quangos in 2015? I am happy to give way to him if he wishes to speak at the Dispatch Box. Okay, the House will note the absence of an answer to that question. The Government do not even know how much money they are going to save. In an article in The Sun—the Minister’s newspaper of choice for these purposes—in March, he claimed that the Government would save £30 billion in spending on quangos,
“so we can protect jobs and frontline services”.
What he failed to mention was that the majority of those savings were from cuts to the very front-line services that he had pledged to save. Almost £25 billion are from cuts to housing and universities, with almost another £2 billion from our arts, our sports and our museums. Only £2.6 billion of the claimed savings were from actual administration, and even that figure has now come under scrutiny.
In written evidence submitted to the Public Administration Committee, the Minister’s own Department admitted that only £1.6 billion of cumulative administrative savings can be found. Perhaps the Minister would like to explain to the House where the other £1 billion of administrative savings are likely to come from. [Interruption.] Again, the Minister appears not to know where the administrative savings will come from, and this is before the Government have even looked at redundancies, which are a major cost of any organisational transformation. The Local Government Chronicle has estimated that the bill for redundancies at the RDAs alone will cost the Government at least £100 million, yet the Department for Business, Innovation and Skills has not even estimated how much they will cost in this financial year. Information gathered from parliamentary answers shows that out of all the Departments affected, only two have so far made estimates of the likely costs of redundancies, neither of which is the Department headed by the Minister. The Minister should take this opportunity to admit to the House that he has no idea what the net savings will be from his reform of public bodies, and no idea of the cost of the redundancies. This deeply flawed Bill is part of a deeply flawed, ill -thought-out programme of reform that could well end up costing more money than it is projected to save.
Mr Maude
I want to make it absolutely clear, as I have done before, that these are cumulative administrative savings over the spending review period of £2.6 billion, and that they are net of restructuring costs—[Interruption.] That was made absolutely clear in March, in my response to the Select Committee. The right hon. Lady has lots of suggestions for what should not be done in the Bill; has she any suggestions for what should be done to reform the quango landscape?
Tessa Jowell
Yes, we certainly have. I should like to refer the right hon. Gentleman to the programme of reform that was clearly set out by the previous Government, on which I am sure full information is available in his Department. If not, I am happy to provide it for him. It involved £500 million-worth of savings by 2012-13.
Let me now turn to some of the specific bodies listed in the schedules to the Bill. When the Minister began this process of reform, he said that public bodies would be allowed to remain if they fulfilled one of three criteria—namely, if they performed a technical function, if they dealt with issues that required political impartiality or if they needed to act independently to establish facts. I should like to say to the Minister that those are good, rigorous tests of public bodies.
Let us apply those tests to the Agricultural Wages Board. If the Minister believes that we should preserve bodies that perform an important technical function, surely the board should be removed from the Bill, because it sets the pay of 140,000 people in England. That also covers holiday pay, sick pay and overtime. If the board is abolished, fruit pickers and farm workers will see their wages fall. Workers could lose between £150 and £265 a week in sick pay, because that would no longer be guaranteed. School-age children working at weekends or in summer jobs will also lose out. The Farmers Union of Wales has warned that
“unless there are systems in place to protect payments to agricultural workers, the industry will not attract the highly skilled technicians it needs to thrive.”
I hope that the Minister will recognise that Labour is seeking to help him by today launching our “Back the Apple” campaign, which shows our commitment to fairness in the countryside and our backing for the Agricultural Wages Board. It is a precious asset that helps to ensure the decency of fair wages and to enable people working in the countryside get a fair deal.
Tessa Jowell
Let me turn briefly to the Commission for Equality and Human Rights—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. There should be only one person on their feet. If the shadow Minister does not wish to give way, the hon. Gentleman should recognise that fact.
Tessa Jowell
Thank you, Mr Deputy Speaker. The hon. Member for St Ives (Andrew George) did not catch my eye—
Tessa Jowell
I must make some progress; I am sure that the hon. Gentleman will have a chance to speak later.
The Minister’s second criterion for the preservation of bodies was that they should deal with issues that require political impartiality. The Commission for Equality and Human Rights is an example of one such body. It exists to break down inequality and to build opportunity and the type of society in which fairness and a life of dignity and respect are not merely an ideal but a fact. The commission’s inclusion in schedules 3 and 5 to the Bill leaves it open to being rendered ineffective by having its constitution altered, or its functions amended or transferred. I ask the right hon. Gentleman to think again. Only a year ago, the coalition told us that it was going to “tear down” the barriers that people faced as a result of who they were, and that it would stand up for fundamental human freedoms. In defending the Commission for Equality and Human Rights, will he stand up for the fundamental human freedom that it represents?
The third type of body to be preserved under the Minister’s tests are those that need to act independently to establish facts. Consumer Focus is an excellent example. It is the statutory consumer champion, and it has strong legislative powers.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
My right hon. Friend might not have been in the Chamber earlier this afternoon when the Secretary of State for Energy and Climate Change referred to the need for a strong consumer champion in the energy market, especially as there is effectively a cartel of six big energy companies. Given that the functions of Consumer Focus are effectively being transferred to Citizens Advice, does she acknowledge the concern that the work of those two bodies in protecting the consumer involves two very different skill sets?
Tessa Jowell
My hon. Friend is absolutely right. The combination of the regulatory responsibility of Consumer Focus and the voluntary responsibilities and representation involved in Citizens Advice’s role is wholly inappropriate. I hope that the Minister will think again on that proposal as well.
I want briefly to refer to S4C, which also remains in the Bill. S4C is vital to sustaining the Welsh language’s prominence in Welsh culture and society. We therefore hope that the Minister will agree to the independent review of S4C for which the leaders of all four main parties in Wales have called.
I also want to deal briefly with the office of the chief coroner and the Youth Justice Board. I urge the Minister to stick to the settlement that was concluded in another place in this regard. As has already been mentioned, the introduction of the office of the chief coroner received cross-party support when it was legislated for in 2009. There is a desperate need to improve the coronial system, which fails too many families. Establishing such a system is also a central obligation under the military covenant. I hope that the Minister will heed carefully the words of Chris Simpkins, the director general of the Royal British Legion, who has said that he believes that
“this decision would be a deep betrayal of bereaved Service families. We anxiously await a response that will satisfy us that the interests of Service families will be represented.”
Over the course of the last Parliament, the Youth Justice Board oversaw a 43% reduction in first-time youth offenders, by working with youth offending teams to focus on the causes of crime. In another place, Lord Woolf said:
“this initiative has been wholly salutary. It…gave new hope to all those who were concerned for this area of our justice system. The best test of the innovation is to ask, “Did it work?”…the balance sheet would show a huge improvement”.—[Official Report, House of Lords, 28 March 2011; Vol. 726, c. 961.]
I hope that, during the Bill’s progress through the House, the Minister will consider carefully the power of these arguments from people of the utmost distinction and sincerity.
In conclusion, let me reaffirm our support for reform, while stating that it needs to be planned, properly costed and undertaken on the basis of clear necessity and an understanding of the context in which these bodies operate. The way in which the Government have conducted this legislation to date has been an affront to decent process. I now call on Members of all parties, having properly considered the important role and function of many of the bodies that so clearly meet the Minister’s test, to rebuild the shaken confidence in this legislation and support our reasoned amendment in the Lobby this evening.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. As many hon. Members want to catch my eye, I am reducing the time limit to six minutes.
Stephen Mosley (City of Chester) (Con)
For those of us who have kept an eye on the Public Bodies Bill as it made its turbulent six-month passage through the other place, today’s Second Reading comes as a relief. We now have a Bill substantially different from the one originally proposed—a Bill much improved by the amendments tabled in the other place and supported by Ministers. We now have a Bill whose principles should be acceptable to all Members; a Bill that will shine the light of accountability and transparency on many parts of the extended public sector and that will deliver huge value-for-money savings for the hard-pressed taxpayer.
In the last 10 years, the cost of non-departmental public bodies, like much of our nation’s spending, has spiralled out of control. Despite a steady reduction in the number of quangos since 1979, the cost to the public purse has almost continually increased, with annual Government funding doubling to £39 billion in the years since the turn of the millennium. This Bill will allow huge savings to be made—a cumulative saving of £30 billion over the spending review period, with estimated annual savings of at least £11 billion a year by 2014-15.
As highlighted by the shadow Minister and in the amendment, costs will occur when shedding such excessive waste, but the potential long-term benefits are so great that it is essential for the Government to push ahead and deliver the long-term efficiency and sustainability that this Bill will enable.
I am sure that all Members will join me in welcoming schedule 5, which transfers British Waterways’ network in England and Wales to a new charitable trust. My constituency has a certain claim to the resurgence of our nation’s waterways in the 20th century, for it was in Chester that Tom Rolt, the founding father of the Inland Waterways Association, was born in 1910. It is worth noting that since the middle of the last century, the Inland Waterways Association has itself been calling for a third sector model for running our nation’s waterways.
The proposals from the Department for Environment, Food and Rural Affairs to create a new waterways charity, initially from the British Waterways Board, but eventually including the Environment Agency navigations in 2014, have been widely welcomed—but it is crucial that we get this right. Half the population lives within five miles of one of our canals and rivers, and 13 million people use them every year. These days, people do not use them only for boating or angling. In Chester, we have cycleways and safe green walkways into the city centre for shoppers and commuters. We have dog walkers and joggers, and canals and waterways are at the centre of economic regeneration in many of our urban areas.
There will still need to be public financial support for our waterways, especially after the inclusion of the Environment Agency navigations that have less commercial opportunities than British Waterways, and DEFRA will need to ensure that this support continues in future. Unlike many of the organisations facing change, British Waterways has welcomed these proposals, stating that
“by moving to a civil society organisation, British Waterways aims to increase the level of public and volunteer participation in the waterways and widen the network’s supporter base”—
a sentiment and a proposal that I am sure we can all support.
Accountability and value for money are central to all areas of public service. That being so, I am heartened by the proposals formally to abolish the regional development agencies. In budgetary terms, my area’s Northwest Regional Development Agency is the largest RDA outside London. In 2008-09, its budget was £421 million, and as of May last year, it employed 481 members of staff. Yet despite its huge budget and complement of staff, private enterprise has suffered proportionately more as a result of the recession in the north-west than in other regions of the UK.
Mark Tami (Alyn and Deeside) (Lab)
Does the hon. Gentleman not accept that the whole Deeside hub area, which covers his seat and mine, is one of the most vibrant and growing manufacturing areas in the whole country? We have to build on that rather than undermine it.
Stephen Mosley
I totally agree, but one problem with the RDA is that it stops at England’s border and has not looked over it. We have reached a situation in which there is almost a wall between Chester and north Wales. I hope that with local enterprise partnerships, we will have more local interaction so that there will be an improvement.
As I was saying, the north-west has suffered disproportionately more as a result of the recession than any other UK region and has seen the largest net decline in private enterprises in the country. Many of the private enterprises that should be powering the region forward have simply shut up shop—not a great success story for our regional development agency, and not something that I have seen splashed across one of its expensively produced glossy magazines, which seem to focus more on what it has spent than on what it has achieved.
Business sometimes needs support, especially at the start-up phase, but the remote, bureaucratic regional development agency model is not the most productive way of providing it. The replacement of RDAs by local enterprise partnerships—local, accountable and business-led organisations—is greatly to be welcomed.
I wholeheartedly welcome the proposals in the Bill. The one area on which I seek reassurance from the Minister relates to the proposed triennial review process of remaining public bodies. The Public Administration Committee made detailed criticisms of the five-yearly review process that existed until 2002. I would welcome an opportunity to examine the new triennial process and the criteria against which public bodies will be evaluated in future. As I have said before, I am enthusiastically supportive of the Bill, which is a continuation of the Government’s relentless approach to localism, accountability, transparency and efficiency. I hope that all right hon. and hon. Members will support the principles that lie at the heart of the Bill.
Susan Elan Jones (Clwyd South) (Lab)
I wish to speak up for our one Welsh language television channel, S4C. I call for the provisions that affect it to be totally removed from the Bill. How did they come to be included? Was the plan for S4C’s future the result of meticulous thought, planning and consultation? No. It was a backdoor deal between Ministers from the Department for Culture, Media and Sport, who declared that they had never actually seen the channel, but had a liking for Fireman Sam, and the BBC, on the eve of the comprehensive spending review. The BBC offered up S4C as a concession—an appetiser in the face of Government threats of much deeper cuts. This deal was the result.
The Government announced that they would slash direct funding by 94% and shoehorn S4C into a so-called “partnership” deal with the BBC, which would pick up some of the shortfall. The BBC has agreed to top up funding to 75% of previous levels until 2015; after that, S4C will have to pitch for funds and the BBC will be free to do what it wants, even though its own funding is guaranteed for much longer.
The Government have had to throw S4C into the Public Bodies Bill to get their plan through because S4C’s funding is currently protected by law. S4C’s status and funding were set in law in recognition of the crucial role that it plays in protecting and promoting a language classified as “vulnerable” by no less august a body than UNESCO—a language that has steadily disappeared from communities over the last 100 years and is now spoken by just over 20% of Welsh people, down from 60% at the dawn of the 20th century.
Welsh does have a future, however. Its use is now rising for the first time in living memory—precisely because of hard-fought initiatives like S4C. The cross-party Welsh Affairs Committee, of which I am a member under the august chairmanship of the hon. Member for Monmouth (David T. C. Davies)—I hope he will be a right hon. Member one day—stated in the plainest possible terms in its recent report that S4C has played a
“key part… in bolstering the everyday use of the Welsh language”,
and concluded that S4C
“brought the Welsh language into many homes where it may not have been heard previously.”
Helen Goodman
My hon. Friend is making an eloquent case in citing the private deals made by the Ministers in the Department for Culture, Media and Sport. Has she considered the possibility that they took account of the views of News International and the plurality issue?
Susan Elan Jones
They probably took as much account of those factors as they appear to have taken of everything else involving S4C.
Alun Cairns
May I return the hon. Lady to her point about funding? She claimed that S4C had suffered a 94% cut, but if we are to have a sensible debate about this important issue, should we not recognise the reality, which is that it will be subject to cuts of 6% per annum for the next four years? That is much better than what is happening to many other public sector departments, and should be sufficient for it to deliver its objectives. Does the hon. Lady regret the fact that over the last 13 years there has not been adequate scrutiny—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I believe that the hon. Gentleman hopes to catch my eye later. He cannot make his speech now.
Susan Elan Jones
The hon. Gentleman could have made a much better intervention about funding. If the intervention that he made was intended merely to back up his party’s crib sheet, I do not think that that was very sensible. He could have pointed out that yesterday the Department said that it would remove the reference to S4C from schedule 4 and give it a clause of its own, but, unbelievably, no additional funds and no commitment to funding after 2015.
Susan Elan Jones
I would love to, but I am conscious that from now on there is no more injury time.
The Select Committee concluded that
“S4C provides value for money.”
This is no sweet little niche cultural project that is propped up out of the kindness of taxpayers’ hearts. The channel is already cutting costs, and has overheads of only 4.5%, compared to 12% at the BBC. It is popular and well watched. According to the Select Committee, its
“share of the viewing audience during peak times”
is holding up “remarkably well”, and viewing figures for key programmes compare favourably with those for their English language equivalents.
On top of all that, the channel supports 2,000 Welsh jobs and contributes £90 million to the Welsh economy. This is not an institution in desperate need of top-down reform. The Bill, however, will impose catastrophic changes that will not even comply with its own aims. Ministers talk the language of sustainability, but they refuse to guarantee S4C’s future beyond 2015. They talk about accountability and transparency, but this move will take S4C’s funding out of direct Government control and hand it over to an arm’s-length body. They talk about maintaining S4C’s independence—where have we heard about the independence of the media before?—but they have announced no change in the law on BBC Trust responsibility for every penny of the licence fee. The whole plan was drawn up on the back of an envelope by people with no knowledge of S4C or the language that it promotes, who wanted to cut costs without worrying about the consequences. S4C deserves better.
I am not saying that we cannot have a debate about improving S4C. Indeed, we appear to have been engaging in such a debate for the best part of the last year, and I think that that is right, as is the independent review. The first step, however, is to remove S4C from the Bill altogether. I will vote for its removal as soon as I get the chance, and I hope that the whole House will join me in doing so.
Mr Mark Williams (Ceredigion) (LD)
It is a pleasure to speak on a Bill that is a great improvement on the version originally presented in the House of Lords, although I do not think that the Minister quite conceded that.
Schedule 7, perhaps the most contentious part of the Bill, has gone, and there is much more restriction of Executive power. The Bill has been amended to require a statutory duty to consult on orders, the simple affirmative procedure has been replaced by an enhanced affirmative process whereby representations can be made to the Minister, and the Minister may re-lay an amended order if necessary. All bodies mentioned in the schedules are now subject to a five-year sunset clause, which means that authority to amend them is confined to the current Parliament and future Governments must either renew the legislation or pass their own. Notwithstanding the inevitable criticisms, this is not the same Bill that the House of Lords Delegated Powers and Regulatory Reform Committee said
“would grant to Ministers unacceptable discretion to rewrite the statute book, with inadequate parliamentary scrutiny of, and control over, the process.”
Paul Flynn
Does my hon. Friend recall the Welsh proverb “Mae allwedd arian yn agor pob clo”, which can be translated as “The key of money opens every lock”? It is both a suitable motto for the Murdoch empire and a warning that the money going to the BBC might be used to take over S4C.
Mr Williams
I am grateful to my hon. Friend for that quotation. I concur with the sentiment behind it, and I will say something about S4C in a moment. I also associate myself with the spirited defence of the channel presented by the hon. Member for Clwyd South (Susan Elan Jones).
The Bill still gives rise to concern on a number of grounds. We might expect that from a Bill that abolishes and reforms a significant number of public bodies, all of which will have their defenders—I shall defend two Welsh organisations later in my speech—but it is worth reflecting on the Government’s reasons for proceeding with it. Under Governments of all parties there has been a huge increase in the number of public bodies in the past 30 or 40 years, and the present Government face the need to reduce the deficit. I was relieved to hear the word “accountability” from my right hon. Friend the Minister for the Cabinet Office as frequently as I did.
Robert Flello (Stoke-on-Trent South) (Lab)
Will the hon. Gentleman give way?
Robert Flello
I am most grateful to the hon. Gentleman. He talks of accountability. The bereavement and support charity INQUEST says that the Government’s proposals to
“dismantle the office of the Chief Coroner”
will
“add yet another layer…to the…fragmented structure where lines of accountability are opaque and clear leadership is absent.”
The charity believes that accountability will be reduced if responsibility is given to the Ministry of Justice.
Mr Williams
I am not sure whether the hon. Gentleman was present when my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) mentioned the office of the chief coroner. I refer him to my right hon. Friend’s remarks.
I think we should remind ourselves of the consensus that exists. It is clear that setting about getting rid of a number of public bodies created by primary legislation raises significant challenges, and that the only way of making that achievable was to create a streamlined model. However, it is undoubtedly true that the Bill as originally presented was over-zealous. It was entirely unacceptable that the remaining bodies listed in schedule 7 could be added to other schedules by order. That is now rightly not the case, and the Bill is more suitable for the purpose for which it was intended.
I welcome the addition of clause 10, which creates a need to consult the person or office holder to which the proposal relates as well as persons
“representative of interests substantially affected by the proposal”.
That, I believe, needs to be reinforced.
In my constituency in the west of Wales, 60% of residents speak Welsh as a first language. S4C and plurality in Welsh language broadcasting is vital, and concerns remain about the model currently proposed and the impact that it would have on, in particular, S4C's governance and independence. I do not start from a “no change” position. At a time when other broadcasting bodies face significant cuts, S4C cannot—and, for that matter, does not—expect to be treated differently from other broadcasters. It has shown a willingness to discuss a new model with the DCMS and the BBC, but fundamental differences remain between the BBC and S4C.
The two basic concerns relate to long-term funding and guarantees of funding after 2015, which has been partly addressed—I will qualify that later—by yesterday's written statement, and to S4C’s remaining independent. Yesterday's written statement confirmed that an amendment would be introduced that would put in statute the level of funding for S4C that is required for it to meet its statutory remit as a Welsh language broadcaster. I await the text of the amendment, because it must pave the way for a formula set by the Government and not the BBC, providing parity with other broadcasting organisations.
It is also vital for S4C to remain financially and operationally independent, and not to be run by the BBC. The DCMS has made clear that it expects S4C to be independent, and has given a number of undertakings to guarantee that. It would be helpful if the Department also made abundantly clear that the BBC must not have its personnel in S4C's management team, and that S4C must remain in charge. Discussions are taking place to find a suitable model, but it is hard not to conclude that the Department for Culture, Media and Sport has put all its eggs in one basket in an attempt to meet the time frame for this Bill, instead of addressing fundamentally the challenges of supporting S4C in an age when digital services have led to an increasingly fragmented market and at a time of reduced public expenditure. This looks rushed, and it would surely be better to carry out a full review of how S4C should be constituted, with the aim of finding a long-term solution, whether that be a model of full funding from Westminster, a partnership model along the lines proposed currently, albeit with a stronger guarantee of independence, or even a channel funded by the Welsh Government in the event of broadcasting being devolved.
All four party leaders in Wales wrote to the Culture Secretary in support of such a review. The Select Committee on Welsh Affairs report on S4C stated that this haste was “regrettable”, and the Select Committee on Culture, Media and Sport said that it found it
“extraordinary that the Government and the BBC, which is fiercely protective of its own independence, should find it acceptable to agree a change in the funding and governance arrangements for another statutorily independent broadcaster, S4C, without the latter having any involvement, say or even knowledge of the deal until it has been done.”
It strikes me that this is the respect agenda in reverse.
It is of great concern that very little consideration seems to have been given to an holistic way forward. On a matter as important as Welsh language broadcasting, that is obviously not good enough, and I would welcome it if the Minister provided an assessment of the current situation regarding negotiations over the future of S4C, and say whether the Government would consider removing the provisions relating to S4C until all the possible alternatives have been pursued. In the other place, a great deal of concern was expressed about Channel 4’s inclusion in the Public Bodies Bill and the uncertainty that created. Channel 4 has now been removed from it, and I believe S4C should also be removed.
Members on the Government Benches have spoken about Citizens Advice and the new functions it would assume from Consumer Focus. Again, in Wales this issue is particularly pressing because the current structure of Citizens Advice does not lend itself to Welsh governance. There is a separate structure in Scotland, which allows for Scottish matters to be looked at differently, but that is not the case in Wales, where policy work is led from London. Consumer Focus Wales wants an amendment led by the Department for Business, Innovation and Skills to give Assembly Ministers the power to determine the structure they want—a power not to acquire new powers, but to determine a Welsh structure.
I have focused on the concerns that still exist, but I do not want that to detract from what is a necessary measure. The Bill represents a step forward, but there are considerable—
Mr Bob Ainsworth (Coventry North East) (Lab)
I shall confine my remarks to the proposed emasculation of the office of the chief coroner. In the three years during which I had the honour to serve as both Minister of State for the Armed Forces and then Secretary of State for Defence, a high priority for me and the entire ministerial team was to improve the service we gave to the bereaved of our fallen. We did so not to waste public money, but because it was absolutely necessary and absolutely deserved.
Our proposals were supported by Members on both sides of the House. We created the Defence Inquests Unit to examine, chase and dig out problems within the Ministry of Defence and the individual armed forces themselves, and to make certain that failings were reported to Ministers so that progress could be made. In partnership with the Royal British Legion, we created the defence advisory service, which has just completed its first year of operation and is highly respected by those who, sadly, have to use its services.
During the years I served as a Defence Minister, I read many transcripts and followed many inquests, and I have to say to the Government and the entire House that there are wide variations in both the manner and quality of coronial inquests. From time to time—too often, I am afraid—they let down our armed forces and the bereaved. I would single out for particular praise Mr Masters, the Trowbridge coroner, who was unsurpassable in his dedication and ability. He certainly exposed failings within the MOD with regard to the XV179 Hercules crash, when we lost 10 personnel. We also lost 14 in the XV230 Nimrod crash, and we had to employ the services of Mr Haddon-Cave to get to the bottom of the problems. That was not a waste of money; it was an absolute necessity that that inquiry was carried out.
Mr Kevan Jones
My right hon. Friend and I had dealings with some of the families of those who served in Afghanistan and Iraq. Does he agree that what they want are inquiries that are not only thorough but conducted in a timely fashion, and that they also want the role of the chief coroner to be independent of the Ministry of Justice, not part of it?
Mr Ainsworth
Independence is absolutely essential, and if inquests are not carried out in a timely fashion, but instead unnecessary delay is caused, that leads to huge distress. Most important, however, is the quality of the investigation, because when people have lost their loved ones they want to know that lessons are being learned and others will not unnecessarily be subject to the same error that caused their loved one to lose their life.
From my experiences in this area, this is what I would say, with the greatest of respect, to the Government: Ministers cannot advise or train or lead an independent coronial service. It is preposterous for the Government to suggest that the functions of the office of the chief coroner should be rolled into some ministerial committee. They will not con the Royal British Legion in that regard.
In the course of my responsibilities, I met many bereaved families, who went through their bereavement with great dignity and very ably dealt with the problems they faced. None were more impressive than Mr and Mrs Dicketts—Priscilla and Robert. Robert Dicketts spoke in this House a few months ago, and he recognised the improvements that had been made, but he also said:
“However, until there is a Chief Coroner, through whom good practice can be driven through the coronial system, it is likely bereaved Armed Forces families will have to go through a system which is often inconsistent and desperately in need of modernisation.”
Sooner or later, Ministers will listen to the voice of the Royal British Legion and of people such as Robert Dicketts, and they will drop their proposal.
Robert Flello
As ever, my right hon. Friend is making a passionate and thoughtful speech. Would he like to comment on what Chris Simpkins, director general of the Royal British Legion, has written in today’s Daily Telegraph in response to comments from the Ministry of Justice about the chief coroner not being justified financially in the current climate? He said:
“This feeble cost argument should fool no one.”
Mr Ainsworth
I do not believe the cost argument would bear any scrutiny in any case, because I believe the creation of the office of the chief coroner will save money, not cost money, and that it will save heartache as well as money.
I have to say to Ministers that all their attempts in recent times to muddy the water in this regard and pretend that they have effectively dealt with the objections they have rightly received from those who seek to represent our armed forces and the bereaved will be of no avail and they will sooner or later surrender to the inevitable. They will do it this side of Remembrance day, and for their own sake they will do it sooner rather than later.
I say to the Government: remove this provision from the Bill; accept the setting up of the highly necessary office of the chief coroner; and honour the military covenant. That is what is required from this Government. It is also what both coalition parties agreed. The Deputy Leader of the House is sitting on the Government Front Bench, and he was suggesting earlier that this was not necessary and that the arguments in favour of the establishment of an office of chief coroner were spurious. That is not what he was saying in opposition and it is not what his party was saying in opposition. It is a disgrace that he has crossed the Floor of the House and changed his tone in the manner in which he has. Their own Back Benchers will force both parties to do this sooner or later, and the House of Lords will force them if that does not happen, but I say to them that they must remove this provision from the Bill and allow the establishment of the chief coroner. They will not get away with this.
Glyn Davies (Montgomeryshire) (Con)
Thank you, Mr Deputy Speaker, for calling me to speak in this important Second Reading debate. The Bill gives the Government of the day the power to set alight a bonfire of the quangos. Over recent decades, I have been involved in a few of these bonfires. I particularly recall one such bonfire in the early 1990s, when I was very much part of “quangoland” and I painfully ended up on top of one of the bonfires. I was heavily singed, but no real harm was done.
Another bonfire of the quangos that I was involved with was carried out by the Welsh Assembly Government a few years ago, when I was a Member of the National Assembly for Wales, and I wish to comment on how that was conducted in order to draw a comparison with the democratic and consultative excellence of the processes being followed here at Westminster. That bonfire represented a major change in the governance of Wales, as it included the abolition of the Welsh Development Agency and the Wales Tourist Board, among other bodies. No discussion took place on this; the First Minister simply addressed the Chamber on the last day before the summer recess and announced abolition, without warning, debate or discussion. The debate about the consequences of that bonfire is not for today, except to say that it highlights the way in which our democratic system works in the UK Parliament.
The Minister for the Cabinet Office put forward his proposals last October. They have since been significantly amended in the upper House by their lordships and they have been further amended by a written statement tabled only yesterday about S4C, prior to their being debated at great length by us in the Chamber today. I suggest that the Bill is far better for its amendment and it demonstrates just how effectively our second revising Chamber functions in its unamended form. I wish to say in passing how much I greatly enjoyed reading and learning from the powerful speeches made by Lord Wigley, Lord Roberts of Conwy and Lord Elystan-Morgan in the other place.
Non-departmental public bodies play an important role in our democratic system and the Bill does not challenge that principle. Its main purpose is to increase accountability and transparency, and to limit the role of public bodies to that which is needed for good governance. My right hon. Friend the Minister considered more than 900 of these public bodies currently in existence and applied the appropriate test of value to them before deciding on their future. It is important to recognise and to say that many of these public bodies are hugely valuable to society, bringing private sector and voluntary sector expertise into the process of government and often facilitating much of what might be referred to as “the big society”. The Bill is about identifying which public bodies bring value to the governance of the UK and which do not.
I particularly wish to refer, as many others have before, to Sianel Pedwar Cymru—S4C—which is one of the bodies mentioned in the Bill. S4C is a unique body that is of great importance to Wales. It is not just a TV channel; it is the cultural backbone of Wales and its success is inextricably linked to the recent success of the Welsh language. The long-term decline of the Welsh language has been halted over recent years, but without S4C that decline would resume. The Welsh language is fundamental to what makes Wales the proud and distinctive nation that it is.
I enjoyed what Lord Elystan-Morgan said about Welsh in the other place so much that I wish to quote from his speech. He said:
“A living language with a living literature is a jewel in the treasury of human culture, and the Welsh language no more and no less than any other living language is such a jewel. It is 1,500 years old and was in existence at least 500 years before the French language came into being. The French language came into being only at the end of the first millennium; up till then it was a patois of Latin. That shows something of the pedigree of the language that we are talking about.”—[Official Report, House of Lords, 9 March 2011; Vol. 725, c. 1628.]
S4C is crucial to the language’s cultural preservation.
I am pleased that the Secretary of State for Culture, Olympics, Media and Sport has recognised the concern expressed in the debate in the upper House, throughout Wales and in the Chamber today, and has removed S4C from schedule 4 to the Bill. That is a very welcome move but, as we realise from today’s debate, there will be much discussion about the future of S4C and that has yet to be settled. We seek to ensure its operational and editorial independence in the long term, along with its long-term financial security. I look forward to taking an active part in the consultation that there will be on the governance arrangements for S4C over the next few months.
This Bill is hugely important, as it will ensure a greater level of accountability and transparency within our democratic system, and I look forward to seeing it passed into law.
Mr Iain Wright (Hartlepool) (Lab)
I wish to confine my remarks to the issue of the office of chief coroner. Successive reviews and inquiries over many years have highlighted the need for a chief coroner to oversee standards and handle appeals to deal with unsatisfactory decisions. There are currently no performance management procedures and no appraisals of the performance of individual coroners. There is no culture of mandatory continuing professional development, as there is in the medical, legal or accountancy professions; some coroners may choose simply not to undergo further training and development, and no one is there to pull them up about it. There seems to have been, certainly over the past couple of years, almost universal consensus that having the post of chief coroner would bring about real progress in raising standards, and would provide leadership, direction and a degree of accountability. It is disappointing that we do not have that consensus now.
The truth of the matter is that in my part of the world, the Teesside area, we need the coroner to improve and we need a much better service for families. For the best part of a decade, performance measures for the Teesside coroner have been significantly below the average for England and Wales. Eight years ago, the Teesside coroner, Mr Michael Sheffield, had a backlog of about 200 cases, and bereaved families had a wait of about 35 weeks—double the national average at the time—for an inquest to be completed. The then Lord Chancellor, Lord Falconer, responded to calls from local MPs of the time, such as Dari Taylor, the late and great Ashok Kumar, and Vera Baird, as well as from my hon. Friend the Member for Middlesbrough (Sir Stuart Bell), by launching an inquiry. Mr Sheffield claimed at the time that he welcomed an inquiry, stating, somewhat bizarrely:
“I hope that the terms of the inquiry will enable the cause of the backlog of inquests to be inquired into.”
That raises the question: if the coroner himself did not know the reasons for the delays, why did he not know and how could others hold him accountable for that?
In the aftermath of the inquiry, performance measures for the Teesside coroner improved, but over the past few years they have grown steadily worse again. Last year, the average time taken in England and Wales to complete inquests was 27 weeks—just over six months—whereas the equivalent figure for the Teesside coroner’s district was 43 weeks. The coroner’s office took more than 12 months to complete inquests into 76 deaths—a quarter of all the deaths it investigated in 2010—and three quarters of all cases it investigated took more than six months to conclude.
By contrast, the coroner for my Hartlepool constituency —Hartlepool and Teesside have traditionally had separate judicial administrative arrangements, and long may that continue—was able to conclude inquests in a significantly better time scale than the national average. The average time that the Hartlepool coroner took to investigate deaths in 2010 was only 20 weeks, and no investigation took more than 12 months to conclude. The Hartlepool coroner has consistently over-performed in terms of the time taken to conclude inquests. Why is there such a difference? Why is the difference in performance so striking? Why does Hartlepool do so well compared with the national average, whereas the Teesside district lags so far behind?
Robert Flello
Does my hon. Friend think that taking such matters in-house in the Ministry of Justice, hiding them away so that they are the responsibility of some civil servant one week and of some department the next, will improve things and make them better?
Mr Wright
No, I think it will make them much worse. That sense of accountability, which we do not have at the moment, would arguably be lost for ever.
Is the contrast I just mentioned a question of resources, particularly at a time of local authority cuts? Is it a question of competency? Is it a question of needing additional training? We do not know, because the whole process is opaque and shrouded in mystery. In the modern age, that is not good enough. Why can families in Teesside who have suffered through the death of a loved one not have some help and support and see the efficient and swift conclusion of the inquest? That is the very least that they deserve.
Mr Kevan Jones
Does my hon. Friend agree that because we will not have a chief coroner who can improve standards, we will get more appeals? The only way to go forward at the moment is a judicial review, so will the cost of dealing with such cases not increase rather than decrease?
Mr Wright
I absolutely agree. It will not be value for money for the public purse. There will be additional costs, and one of the virtues of a chief coroner’s office would be to help provide an overview of work allocation. I think the establishment of a chief coroner could provide a more rational and therefore more efficient allocation of work, perhaps through the creation of specialist coroners who could provide specific expertise. We could save money and provide a better service for bereaved families.
It is impossible, or difficult at the very least, for Members of this House to hold coroners to account for their performance. I recently asked a parliamentary question to the Lord Chancellor about the grounds on which an individual holding the post of coroner can be removed from that office, only to be told by the Minister that the only ground for removal was personal misconduct or behaviour, but the Minister could not provide a definitive list of possible offences. The Lord Chancellor can remove a coroner only with the agreement of the Lord Chief Justice. There is simply no transparency in the matter and no criteria by which the House or the public can hold a local coroner to account and determine whether he or she is providing an unsatisfactory service and should be removed. In this day and age—particularly when, as we have heard from the Royal British Legion, servicemen and women are falling for our country—bereaved families in Teesside and elsewhere deserve better. They deserve greater clarity and transparency.
I have written to the Lord Chancellor about the matter of poor time scales in the Teesside district and I am awaiting a response, but let me reiterate in conclusion that families in Teesside deserve to see inquests into the deaths of loved ones concluded with sympathy, professionalism and swiftness. They are not getting that at the moment and are not being provided with an adequate explanation on why and how matters will be improved. The Bill does not help; in fact, it makes things worse.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I am most grateful for the opportunity to speak at this stage in the debate.
The Bill is significant by any standards and represents the Government’s plans to implement their reform of public bodies as a result of the review they carried out in the second half of last year. The Select Committee on Public Administration, which I chair, inquired into the review at the time and published a report last January. Somewhat to my surprise, the report was more controversial than I had anticipated, but I emphasise that it was unanimously agreed by all members of the Committee of all political parties.
We expressed concerns at the time about the way the review was conducted, and we have heard some of them in the Chamber this afternoon. We found that the tests determining whether a public body should be retained or reformed were poorly designed and not applied consistently, and that Ministers had failed to consult adequately about them. The Government have suggested that they intend to hold triennial reviews of non-departmental public bodies and I urge them to reconsider the tests to see how they can be reviewed.
The tests in the Bill are different from the tests applied in the review. I invite the Minister to explain why that is so. As the Minister for the Cabinet Office and Paymaster General pointed out earlier, there are effectively four tests in the review: the first is existential; the second is whether the body concerned carries out a highly technical activity; the third is whether it is required to be impartial; and the fourth is whether it needs to act independently to establish facts. That is a good stab at the tests required, but funnily enough those are not the tests in the Bill. Clause 8, entitled “Purpose and conditions”, gives four tests: “efficiency”; “effectiveness”, which is a very broad term and is not defined; “economy”, which we presume means value for money; and
“securing appropriate accountability to Ministers”.
Again, I do not know what “appropriate accountability” is, and these are very subjective tests to have in legislation.
Clause 8(2) suggests that any reform of a non-departmental public body should
“not remove any necessary protection”,
whatever that means, and should not
“prevent any person from continuing to exercise any right or freedom”,
which is quite specific and probably an important protection. In our report, we suggested in paragraph 23:
“There should be a single set of tests that covers: whether a function needs to be performed”—
the existential test—
“whether it is appropriate for it to be performed independently by a public body”,
which is surely the impartiality test,
“and how it can be delivered most cost-effectively (value for money).”
I hope that that recommendation might be better reflected in the Bill. Perhaps the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), could address that later.
The Committee also considered the Government’s claim that abolishing bodies and transferring their functions back to Departments would improve accountability, and I submit that the Government are applying a rather narrow test of what constitutes accountability. Of course, Ministers want to retain influence over decisions for which they are ultimately accountable, but our conclusion was that to focus exclusively on that traditional form of ministerial accountability ignores other ways in which bodies are held to account. In particular, we are all aware of how stakeholder groups and civil society play an important role in providing challenge and criticism to public bodies from day to day so long as they have a clearly identifiable focus for that challenge. I do not wish to denigrate civil servants in any way, but a civil servant in a Department is a far more anonymous entity than a named public body. The Committee proposed that converting public bodies into executive agencies could ensure that Ministers remained responsible for clearly identifiable bodies within their departmental responsibilities without losing that public focus.
We also considered a number of other topics that we felt were important to make the reforms a success, including how Departments sponsor their public bodies and how the transition should be managed. The Government’s response was somewhat critical of parts of our analysis, particularly the comments on cost savings, and I was glad to hear ministerial clarification earlier this year of how cost savings will be made. To the Government’s credit, they accepted a number of our recommendations, including the conversion of some public bodies into executive agencies.
This is a controversial Bill, because we do not have an Armed Forces Minister or a Justice Minister at the Dispatch Box to answer all these problems. It is that shortcoming in the Bill that led the other place to make substantial amendments to it. It is much improved and much more acceptable and I shall certainly support it, but we could make improvements to ensure that these controversial changes to bodies that were, after all, brought into being through primary legislation are not simply ticked off by Ministers with a stroke of the pen.
Paul Goggins (Wythenshawe and Sale East) (Lab)
I have particular concerns about two bodies that were taken out of the Bill by the House of Lords but that the Government intend, as the Minister for the Cabinet Office and Paymaster General has suggested this afternoon, to put back into the Bill in Committee. I remain hopeful that Ministers are still listening and are prepared to change their minds.
The Youth Justice Board has brought leadership and coherence to a system that was deeply fragmented. The creation of youth offending teams has been very impressive, as has the reduction in the number of young people going into custody: a 30% reduction over the lifetime of the board. I would expect the Government to be interested in that if for no other reason than because it represents a saving, in relation to the places that have now been decommissioned, of £38 million a year. If the Youth Justice Board is abolished, that might lead to a saving of a few hundred thousand pounds, but if the Government lose their grip on the youth offending system, and particularly of youth custody, because the board is not in place to grip it, that could produce incredibly high costs in future.
I am also deeply worried about the Government’s intention to dilute the office of the chief coroner. I hope that the House will forgive me for setting out the history so that Members and Ministers can appreciate the depth of betrayal that many individuals, families and organisations are feeling. In 2003, I was given ministerial responsibility for death certification and coroners’ services. One of the first things I did in that role was to receive the report of the independent review of coroner services led by Tom Luce. He found that the system was outdated, inconsistent and unsympathetic to families, and he proposed fundamental reform. A little time later, the then Home Secretary and I received the third report of the Shipman inquiry, which was the product of painstaking work by Dame Janet Smith into the failure of the death certification system to identify and stop the murderous activities of Harold Shipman. Dame Janet concluded that coroners and the coroner service must be independent of Government and that it was simply unacceptable for the coroner service to be administered from within a Government Department. That conclusion is hugely relevant given what the Government now propose.
Jon Trickett (Hemsworth) (Lab)
Does my right hon. Friend agree that quite frequently the Government may be judged as culpable in contributing to a death and that it is therefore bizarre that a member of the Cabinet—the Lord Chancellor—should have some responsibility for the coronial service?
Paul Goggins
My hon. Friend makes a very important point. In December, when this matter was debated in the other place, Lord Lester made the important point that unless there is a properly independent system of investigation of deaths, the Government cannot be confident about satisfying their article 2 obligations on the investigation of deaths. That is particularly relevant in relation to deaths in prison and police custody.
In March 2004, I set out proposals for reform in which the bereaved and their families were to be placed at the heart of the system. Ministers should be reminded of the importance of putting those people at the heart of the system. Under the proposals, a chief coroner was to be appointed with complete judicial independence to lead a streamlined and modernised service, to ensure training and high standards and to carry responsibility for undertaking appeals and presiding over more complex inquests. Eventually, the Coroners and Justice Act 2009 enacted those proposals. I pay tribute to Bridget Prentice—a good friend and very able Minister—who with characteristic energy and determination turned the countless words of the public inquiries, reviews and consultations into legislation, which was passed with the support of all parties in the House, including those that now turn their backs on it.
The need for a chief coroner is even greater now, with inquests becoming ever more complex and high profile. Only recently, we have had the Tomlinson and 7/7 inquests—cases in point. Another change since 2003, which my right hon. Friend the Member for Coventry North East (Mr Ainsworth) referred to in his very powerful speech, has been the experience of bereaved families of the servicemen and women killed in Iraq and Afghanistan. Their experience screams out for a system that is sympathetic, that understands the circumstances they face and that has their confidence.
The Government’s arguments about costs do not hold water and cannot be justified. Ministers should not simply accept the figures in the impact assessment but should challenge them. There is not one Member of this House who does not believe that the set-up and running costs of the office of the chief coroner could not be reduced. It is the business of Ministers to get those costs down, not to hide behind what was in the impact assessment. Of course, they are not counting the costs of failing to implement the reforms that were agreed in the last Parliament, such as the £500,000 or more that is spent every year on judicial reviews—not to mention the costs that will be incurred by transferring some of the functions of the office of the chief coroner to the Lord Chief Justice. Those matters will still need to be overseen by judges, and judges do not come for nothing—they cost money. Those costs still are not being counted.
Mr Kevan Jones
Is it not remarkable that although the Government have announced that they will transfer the powers of the chief coroner to the Ministry of Justice and others, they have not yet laid out what that will cost to administer?
Paul Goggins
I agree entirely with my hon. Friend. It really is a shabby case. The Government are relying on old figures, which have not been challenged, and bringing forward proposals that have absolutely no work behind them whatever. My hon. Friend makes an important and powerful point.
In failing to follow through on these reforms, the Government are not considering the human and health costs that will be incurred by our not learning the lessons of unfortunate and tragic deaths—information that could help to prevent deaths in future. Ministers have no proposals to monitor timeliness or to introduce an appeals system. Other hon. Members have made the point about the importance of that issue.
What the Government are doing to the office of the chief coroner is a betrayal. If they proceed with this reform they will be turning their back on six or seven years’ worth of patient consultation and policy development, which led to legislation that was agreed by all parties in the House. They will be turning their back on Tom Luce, Dame Janet Smith, the families of the victims of Harold Shipman and the bereaved families of the service personnel who have lost their lives in Iraq and Afghanistan. They will be turning their back on many vulnerable people who have had to pick their way through our outdated coronial system. But the Government still have a chance: they have the rest of this evening and Committee proceedings finally to do the right thing and drop these proposals.
Alun Cairns (Vale of Glamorgan) (Con)
Thank you for giving me the opportunity to contribute to this debate, Mr Deputy Speaker. Although, as been said, the Bill is a piece of enabling legislation, it goes to the heart of the Government and their objectives. It will enable Ministers to make the necessary changes to reform public services and bring organisations to democratic accountability, and it paves the way to bring significant savings.
It is ironic that the Bill is being opposed by the Labour party. In his memoirs, Tony Blair made several references to having regretted the delays in reforming public services during the early years of his government. There are several quotes that I could mention, but it is worth highlighting his thoughts about his previous comments that it was not complex institutional structures but outcomes that mattered. He said:
“Unfortunately, as I began to realise when experience started to shape our thinking, it was bunkum….How a service is configured affects outcomes.”
It is also worth noting that much of his frustration related to the time and delay involved in making reforms. This Bill would have met Mr Blair’s calls in hindsight.
John McDonnell (Hayes and Harlington) (Lab)
We’re all Blairites now, are we?
Alun Cairns
I will give way to the hon. Gentleman if he wishes.
It is unlikely that Mr Blair and I would agree on the nature of reforms, but this legislation paves the way for Ministers to make necessary changes with appropriate scrutiny—without the delay that Mr Blair talked about—by giving them the mechanisms to do so. I am sure that hon. Members will have a soft spot for one or two of the bodies listed in the schedules, despite wanting to see the reform of such public bodies. We might even be drawn into trying to defend those institutions. Such an approach would be fair if schedule 7 of the original Bill remained and if the amendments made in the other place had not been accepted by Ministers. To give the Government credit, they have sought to listen to concerns and have accepted the threat that schedule 7 posed to lack of scrutiny. However, there must always be a balance between the Government having their way and the opportunity for appropriate scrutiny. The original schedule 7 did not necessarily achieve the equilibrium that we are looking for; I am pleased that it has been removed.
It is hard to believe that the quango state had grown to 901 bodies under the previous Administration. In their desire to manage controversies, a new agency would often be established to show that something was being done. Some might even argue that the agencies were useful bodies to which to retire former colleagues. The case for winding up or reorganising their numbers and purposes is overwhelming.
Mr Kevan Jones
I agree with the hon. Gentleman, but the worst culprit for packing quangos was the previous Conservative Government. If he cares to do his homework, he will find that one quango we invented, with which I have had a few run-ins, is the independent Appointments Commission. It took out of politicians’ hands altogether the appointment of people to quango boards.
Alun Cairns
I am grateful to the hon. Gentleman for his intervention, but it was the previous Conservative Government who cleaned up the appointments process to ensure that there was transparency in selection. I point to the Independent Parliamentary Standards Authority as one of the worst examples of a Government merely reacting to public concerns without thinking through the consequences in a proper, deliberate way; it has given rise to many complaints from this House, and there is also the issue of the additional costs of that agency.
Alun Cairns
I am grateful for the hon. Gentleman’s intervention, and I accept the point about all-party support, but the point is the knee-jerk reaction of the Prime Minister of the day, who took the decision without providing for appropriate scrutiny. The proposal was rushed through the House without the then Opposition having an opportunity to make their case. I need to make progress, because of the time. I want to come on to some of the points made earlier.
A word of caution: merely merging individual bodies with a Government Department is not necessarily the right thing to do. There must be reform and enhancement. I am grateful to my right hon. Friend the Minister for the Cabinet Office and Paymaster General for talking about the need for reform when he opened the debate. I speak from experience of the so-called bonfire of the quangos in Wales some years ago. For purely political reasons, the Welsh Assembly Government abolished the Welsh Development Agency and the Wales Tourist Board, among many other organisations. That was welcomed by Labour, Plaid Cymru and Liberal Democrat politicians at the time. The claim was that there would be better democratic accountability, but the reality was very different. Simply merging the organisations without reform meant that agency staff became civil servants, and the expertise gained over many years was stifled by the bureaucracy of the civil service. Those events started almost seven years ago to this day, and those very people who were the strongest cheerleaders for the winding up of those bodies are now calling for their re-establishment.
I am certainly not opposed to the lists in the schedules, or to the need for Ministers to reform and reorganise. I strongly agree with the objectives of the legislation, but caution against winding up for winding up’s sake. I would also underline the need to make reform part of the process. There must be a wider reforming agenda to improve services.
In the final couple of minutes available to me, I want to talk about S4C. The hon. Member for Clwyd South (Susan Elan Jones) made a pretty disingenuous contribution. To talk about a 96% cut to funding certainly is not accurate. S4C will receive a 6% funding cut per annum over the next four years. That is very different from the sort of figures that she talked about. Furthermore, all the demands made by supporters of S4C have been met by the Secretary of State for Culture, Olympics, Media and Sport. I shall go through the primary ones in turn. The first was about the importance of long-term funding. I was delighted that in the written ministerial statement published on Monday, the Government said:
“The Government are committed to ensuring that S4C will be funded at a level sufficient to ensure that it can fulfil its statutory remit and we intend to put this expectation on the statute book so that it is a legal requirement.”—[Official Report, 11 July 2011; Vol. 531, c. 2-3 WS.]
Certainly, that issue has been resolved.
Secondly, the need for independence, both operational and editorial, has been accepted by the Secretary of State for Wales. Thirdly, on the issue of the arrangements with the BBC, of course the provisions have to be in the Bill to secure the very independence that we have been talking about, and the long-term funding arrangements for which everyone has called. Those who are critical on the subject of S4C, and the strongest champions of the channel, are not equally critical when it comes to Radio Cymru, for which the BBC is also responsible, so there is significant inconsistency in the argument that is made.
Finally, it is ironic that the retail prices index link was part of the fault. Many S4C Authority members have shown arrogance over the past year; they felt that they had the right to do things irrespective of the attitude of viewers, whose numbers have been falling for the past five years or more. It is time to act, and I am delighted that the Government are doing so.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I want to concentrate on the very worrying impact that the Bill will have on S4C, an institution of paramount importance to my country. I regret to say that I have a slightly different opinion from the hon. Member for Vale of Glamorgan (Alun Cairns). There is no doubt that the UK Government have dealt with the issue in a haphazard manner. They clearly failed to understand the importance of S4C to Wales. Twenty-four bodies from Welsh civil society have written to the UK Government, asking them to change their plans; thousands of people have protested on the streets; and hon. Members from Wales have had countless pieces of correspondence from concerned constituents.
The position of my party is that S4C should not be included in the Bill at all, and that the arrangements should be dealt with in a future broadcasting Bill, following an independent review. That was the position of all four political parties in the National Assembly for Wales, including the Conservatives and Liberal Democrats. Even at this late stage, that would be our preferred outcome. However, we are where we are, and I will endeavour to attempt to improve the Bill before us, as will my hon. Friend the Member for Arfon (Hywel Williams) in Committee.
Ministers will be aware that the Select Committee on Welsh Affairs undertook a detailed investigation into S4C. It is right and proper that I pay tribute to the Chair of the Committee, the hon. Member for Monmouth (David T. C. Davies), who managed to produce a report on which there is substantial consensus across all four parties on the Committee. We await the Department’s reply, but I would like to concentrate on the issues that are of critical importance. S4C will face substantial cuts to its budget over the spending review period. If my sums are correct, the Department has managed to reduce its liability by more than 90%.
Jonathan Edwards
I will answer the hon. Gentleman’s question before he asks it: S4C’s funding will fall from around £100 million this year to £83 million by 2014-15; £76 million of that will come from the BBC, and £7 million from the Department.
Alun Cairns
I am grateful to the hon. Gentleman for giving way, but does he not accept that the outcome leaves S4C in a pretty strong position, financially? It will receive a 6% cut over each of the next four years, which is a much lesser cut than those to most spending Departments across Government. Furthermore, independent television producers have welcomed the outcome, saying that the cuts are certainly achievable, within the sums in question.
Jonathan Edwards
I am grateful for that intervention, and the hon. Gentleman leads me on to my next point, which is about one of the key recommendations of the Welsh Affairs Committee report. I would like the Government, as part of the Bill—and the future funding formula for S4C, which was announced yesterday—to state clearly that cuts will be comparable to those for other public service broadcasters. That would appease many in Wales.
The Select Committee report also called on the UK Government to safeguard the funding for the channel beyond 2014-15. We argued that without long-term certainty of funding, the channel would not be able to plan its future commissioning strategy. We called for a long-term funding formula enacted in primary legislation. I therefore welcome the written statement yesterday as a positive step forward. The devil will be in the detail, but my colleagues and I look forward to working constructively to build on yesterday’s announcement, which in our view would have to be based on some sort of calculation inflation.
As a party we have major concerns that S4C will mostly be dependent on funding via the licence fee. Our preference would be for a direct funding stream. If the Department is intent on funding S4C via the BBC, the licence fee should be top-sliced. As my right hon. friend Lord Wigley said during the passage of the Bill in the other place:
“He who pays the piper calls the tune.”—[Official Report, House of Lords, 28 March 2011; Vol. 726, c. 1005.]
If S4C does not have total control over its own budget, its financial independence will be shot to pieces.
Ministers might be aware that the Broadcasting Entertainment Cinematograph and Theatre Union, the National Union of Journalists, the Writers Guild of Great Britain, Equity, the Musicians Union, and Cymdeithas yr laith Gymraeg have all jointly called for the resources available to S4C to be increased by raising a levy on private broadcasters, drawing on best practice in other countries.
Guto Bebb (Aberconwy) (Con)
The hon. Gentleman mentions the need for funding to be raised from other broadcasters. Does he accept that the Select Committee report indicated that the Welsh Assembly could play a part? The Welsh Assembly claims that it wants the channel to be accountable to it, yet it is not willing to put any money into the pot.
Jonathan Edwards
I am grateful for that intervention and I look forward to the day when broadcasting is devolved to the Welsh Government. In light of events of recent weeks, I expected support from across the House for the innovative idea of a levy on private broadcasters to support public service broadcasting in the UK. I hope Ministers are actively pursuing the idea.
That brings me to operational independence. The Committee called for assurances that operationally there would be no role for the BBC in the day-to-day management of S4C. I for one cannot see how anyone can claim that S4C is an independent broadcaster if it has personnel from another channel running its day-to-day affairs. I hope the Department will make a clear statement on the issue as the Bill progresses.
The ability of a public service broadcaster to hold Government to account is essential if it is to retain the confidence of its audience. Therefore we view the inclusion of S4C in schedule 3 as particularly worrying. The schedule enables the Department to make significant changes to the management and organisation of S4C without recourse to primary legislation.
I shall deal briefly with other consequences of the Bill for Wales. Much of the rest of the Bill refers to powers over environmental bodies being devolved to Wales. These bodies are listed in clause 13 as being the Welsh devolved functions of the Countryside Council for Wales, the Environment Agency, the Forestry Commissioners and Welsh flood and coastal committees. I seek clarification of clause 18 and the requirement of consent from UK Ministers. How is this to be operated, and in what situations do Ministers expect this to take place? I am also confused by the reference to the Secretary of State in clause 20(11). Does this mean that any order made by Welsh Ministers will be subject to a veto by the Houses of Parliament? That would clearly go against the result of the referendum in March. We will test these clauses in greater detail in Committee.
Finally, on consumer advocacy in Wales, the Bill proposes that Consumer Focus be abolished and its functions transferred to Citizens Advice in Wales and England. There is broad support for distinct consumer advocacy for Wales. There seems to be strong support among key stakeholders for advice and advocacy in Wales being brought under one body. I am glad that the UK Government have stated that they are open to making different provisions for Wales and Scotland following discussions with the devolved Administrations. I understand that current consumer bodies such as the CAB movement in Wales are adapting their governance structures in light of anticipated changes, and I urge the Department to work closely with Welsh Government Ministers and stakeholders to develop a solution that is client focused and best able to respond to the needs of the Welsh people.
Elizabeth Truss (South West Norfolk) (Con)
It is more than 50 years since the term “quango” was first coined in the United States, during which time a rising number of such bodies have emerged from Government. As some of them have served their purpose, they lie in the governmental universe like abandoned satellites and pieces of space debris that no one can quite manage to get rid of.
David T. C. Davies (Monmouth) (Con)
Will my hon. Friend join me in saying that Governments of left and right over the past few years have called for an end to the quango state? One hopes, therefore, that Members in all parts of the House will give their utmost support to the Bill, which will allow us to get rid of some of the space debris that is no longer required.
Elizabeth Truss
I entirely agree with my hon. Friend. I also agree with my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), who said that such bodies are often set up because Government believe that something ought to be done and to give some plausible deniability to difficult and controversial decisions that the Government do not want to own. It is only right that we should make it easier to get rid of bodies that no longer serve their purpose and that lie in a twilight zone, subject neither to proper democratic accountability nor to the rigours of the market, with consumers having no choice on whether to use them.
Quango chiefs are often paid more than senior civil servants. The chief executive of Partnerships for Schools is paid £215,000 a year for the botched job that was Building Schools for the Future, the chief executive of the Higher Education Funding Council is paid £230,000 a year for administering university places, and the chief executive of the London Probation Trust is paid £240,000 a year. There are other bodies that rely heavily on Government funds but are not actually quangos, and their chief executives and directors general can command even higher salaries. For example, the director-general of the BBC is paid £615,000, the vice chancellor of Birmingham university is paid £390,000 and Network Rail’s chief executive, whose new salary we do not know, was previously paid £1.25 million, even though that relied mainly on income streams that come from the Government.
Gavin Shuker
Of the six bodies that the hon. Lady has just mentioned, will she explain which are in the Bill?
Elizabeth Truss
The point I am making is that we have a huge universe out there, which this Bill seeks to address. We are seeking to reduce the number of bodies and make them more accountable. My speech is about the importance of accountability, which the Bill lays out.
I believe that organisations and people that take real risks and put their homes and businesses on the line deserve real rewards and to make a profit. That is what motivates people in our economy and helps allocate resources. It is the invisible hand that has served this country well over generations. I think that we need more honest profit in this country, as that is what will get us out of the hole we are in. We will not get out of that hole by spending more money on bodies for which the rewards are many, but the risks are few. My complaint about executives in the twilight zone is that they do not risk their own money and instead have a technocratic role. I think that their maximum pay should be that of a senior civil servant, and the most senior civil servant in the Home Office is paid £200,000. Private companies in competitive markets carry out research, investigate their customer loyalty and try to get people to buy their products. They have a real market and real consumers to respond to.
I am pleased to see the Bill go ahead. We are finally seeing the bonfire of the quangos that the previous Prime Minister and those before him talked about. It is of course difficult to make these things happen, so I am pleased that the Government have persisted. I want to talk about two late and lamented quangos that will disappear, the Legal Services Commission and the Qualifications and Curriculum Development Agency. The Legal Services Commission presides over one of the most expensive legal aid systems in the world, costing £120 million. It was attacked by the National Audit Office for failing to hold lawyers to account and by lawyers for not understanding what they do.
The QCDA presided over some of the worst-quality exams in this country and an incoherent curriculum. Of its eight board members, only one has been a teacher and none has higher education experience. The rest were professional quangocrats who created such abominations as the A-level in the use of mathematics, which was of a far lower standard than the actual mathematics A-level, and the pick and mix of modular qualifications that has been developed in this country. We should compare the QCDA’s approach with what the Department for Education is now doing on the curriculum review: having public discussions, making the decisions publicly accountable and being open to scrutiny and accountable to Back Benchers during Education questions. That is far preferable to those decisions being taken behind closed doors in a quango. Ministers can be lobbied and the finances of the organisations can be scrutinised, and we do not hear this nonsense about commercial confidentiality.
Too many bodies have been making decisions that do not have due regard for electors or consumers. These organisations have little incentive to save money, and they have high rewards where the job is essentially technocratic. We should have a system where no public money is spent without proper accountability and there are no excessive rewards without taking a risk. This Bill is the right step forward in reducing the size of the twilight zone that has been created in British politics. I hope that the Government use this opportunity to bring even more of the space debris out of the twilight zone and into the sunlight.
Mr Kevan Jones (North Durham) (Lab)
I rise to return to an issue that has been raised—the role of the chief coroner. Like my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), I congratulate Bridget Prentice, who steered the legislation through when she was the Minister responsible,. She did a fantastic job and deserves credit for it. The chief coroner’s office was going to be created to improve national standards and to monitor compliance with what is, as we have heard, an archaic and shambolic system. It would also have introduced the role of medical examiners, who would be able to scrutinise medical certificates, and ensured, for the first time, a bespoke appeals system to save people the lengthy expense of going through judicial reviews.
As my right hon. Friend the Member for Wythenshawe and Sale East said, it is important to state how we got to this point—it was not by accident. He referred to the Luce review, which reported on death certificates and improvements in the service. He also mentioned the very important Shipman inquiry chaired by Dame Janet Smith. If we agree to what the Government propose in their amendments to take out what the Lords put into the Bill, we will go against Dame Janet Smith’s recommendation, as stated on page 492 of the report:
“The body which is to provide that leadership and support must be seen to be independent of Government. In my view, it would no longer be satisfactory for the coroner service to be administered from within a Government Department.”
However, that is what is being proposed in place of the chief coroner, and that is not acceptable.
The Government have changed their position. Today I looked at the Hansard report of the debate on the Second Reading of the Coroners and Justice Bill in 2009, when the current Attorney-General said:
“We agree that reform of the coroners’ system is long overdue.”—[Official Report, 26 January 2009; Vol. 487, c. 46.]
The hon. Member for Old Bexley and Sidcup (James Brokenshire), who was then the Member for Hornchurch, said:
“We all welcome the establishment of the chief coroner”
and
“the modernisation of the coroner’s powers of…investigation”.—[Official Report, 26 January 2009; Vol. 487, c. 111.]
He said that that was well overdue. In his winding-up speech, the hon. Member for North West Norfolk (Mr Bellingham) said:
“Reform is, therefore, long overdue…I welcome the creation of the posts of chief coroner and deputy chief coroner.”—[Official Report, 26 January 2009; Vol. 487, c. 117.]
So what has changed since? The Minister, in opening the debate, said that it was all about money. If it is, then the Government need first to identify the costs of setting up and running the chief coroner’s office. They seem to miss the point regarding taking these functions in house when they say that no cost is involved in that process at all. That is clearly not the case. The figures that have been suggested include about £1 million a year as a contingency—for what, we do not know. The only thing that has changed is the fact that the Government are using this argument about cost. If they are going to make the big mistake of deleting the post of chief coroner, they will have to justify every single penny of costs, and the civil servants in the Ministry of Justice will have to justify every single thing they do in terms of costs.
Clearly, we will not get what Dame Janet wanted, and what the Conservative Government and the Liberal Democrats in the previous Parliament wanted, which is an improvement in the coroner service. That is an opportunity missed. We will still be stuck with the system that we have had for many centuries, which is not only not fit for purpose but outdated and bureaucratic. It also leads to delays in the hearing of coroners’ inquests, which is unacceptable.
The Royal British Legion has stated that it does not support this reform and it argues strongly for the role of chief coroner. It is also important to record that the organisation Cardiac Risk in the Young—I chair an all-party group on the issue—is vociferous in arguing that what is needed to improve the coroners service and the inquest service for the families of young people who die of sudden cardiac arrest is the role of the chief coroner.
We need to improve the system and stop the untimely delays for those who die in action serving this country. It is all right for the Government to say that they support the covenant; that needs to be supported in practice by establishing the role of the chief coroner. I agree totally with my right hon. Friend the Member for Coventry North East (Mr Ainsworth) that the Government will be forced to back down on this issue. I suggest that they do it sooner rather than later.
In closing, although I do not usually agree with Viscount Slim, he summed up the issue well in the Lords last week in the debate on the Armed Forces Bill, when he said that the deletion of the position of chief coroner is
“mean, short-sighted and rather stupid.”—[Official Report, House of Lords, 6 July 2011; Vol. 729, c. 299.]
Mr Dominic Raab (Esher and Walton) (Con)
I welcome the opportunity to speak in this important debate.
Two key objectives for the coalition are to tackle irresponsible Government spending and to deliver reform of the public sector. The Bill will help to achieve both those aims.
It is worth saying at the outset that some public bodies do important work and are a necessary response to the complexity of modern government. However, they have become massively overused. When the Government came to office, there were 901 quangos. In 2009, executive quangos alone—those that take decisions and do not just advise—employed 111,000 people at a cost to the taxpayer of £38 billion. Governments of all political persuasions share the blame for adding to this problem, but the previous Government certainly added to it in abundance. Funding for executive quangos leapt by 59% between 1997 and 2008.
It is right that the Government are cracking down on the inflation of the quango state. They are doing so first and foremost through greater transparency in the exercise of public functions and powers. In the current economic climate, in which value for money is even more imperative than usual, transparency and ministerial accountability are especially vital. Government policy is also welcome because abolishing and merging quangos and cutting their programmes will save £30 billion over the spending review period, as Ministers have reiterated yet again today. Given the difficult spending decisions that have inevitably been made elsewhere, it is essential to streamline Government as much as possible. Nowhere is that more important than in the sphere of quangos.
It makes sense to merge bodies with comparable functions, as set out in clause 2. For example, the proposed merger of the Office of Fair Trading and the Competition Commission is designed to deliver more effective regulation. It will also realise annual cost savings of between £3.5 million and £6.8 million. It is right, as Members across the House have done, to look at and question the practical impact of these changes. On that particular merger, will the Minister say any more in his winding-up speech about the institutional separation of powers between the initial investigation and the final enforcement decision? I have spoken to a number of competition lawyers and experts about that, and it is a key feature of the current competition regime. How will it be retained in the combined competition and markets authority?
Most of the savings will come not from mergers, but from cutting waste. Some quangos have been guilty of the most appalling waste of taxpayers’ resources. The right hon. Member for Dulwich and West Norwood (Tessa Jowell) made a spirited defence of the Equality and Human Rights Commission. However, auditors have refused to sign off its accounts for three years running. Last year, it breached Government pay guidelines and spent more than £1 million without due authorisation. It presided over a botched website launch, which eventually saw almost £1 million written off. Members do not need to take my word for that. The National Audit Office damningly concluded that
“there is little general financial understanding or competence in the organisation, and that many managers have limited experience of the effective management of public money.”
I discovered that for myself last week when I was informed through a parliamentary answer that a single agency worker at the commission was paid an astonishing salary of £200,000 last year. How can that possibly be justified? In the light of that, it is right that the commission is listed in schedule 5 to the Bill, allowing its functions to be modified or transferred by the Government, subject of course to the consultation on its future.
Other quangos that are to be scrapped in the Bill should probably never have been created in the first place, and I make no apology for listing as chief among them the eight regional development agencies, a pet project of the last Government that proved an expensive failure. The RDAs were established in 1999 but did little to stimulate growth. Job creation in the five years before their creation was higher than in the five years that followed despite the continued boom economic conditions. They also failed to reduce regional imbalances, which was one of their main aims, as figures from the Office for National Statistics amply demonstrate.
The RDAs made a range of poor spending decisions. Between 2007 and 2009, for example, 62% of all grants went to predominantly public sector organisations, while the trade unions were awarded more than £3 million. That is not a spending pattern that inspires confidence, nor is it one to drive a private sector-driven economic recovery. The RDAs will not be missed by those trying to drive jobs and growth in the private sector, especially as scrapping them will save three quarters of a billion pounds in administration costs alone between now and 2015. It is high time to shed light on quangos’ activities and cut down on waste.
Looking ahead, I also welcome the commitment made by the Minister for the Cabinet Office in his statement in October to triennial reviews of the purpose of the remaining quangos. They will be an important part of ensuring that the number of quangos does not balloon again in future, but that provision for them does not appear in the Bill. I ask the Minister to explain why it will not be made a statutory requirement. Equally, Ministers have previously talked about a role for the Public Administration Committee in vetting any new quangos. It would be interesting to know what the status of that proposal is.
Ultimately and overall, the Bill is a big step in the right direction towards strengthening transparency and accountability while delivering savings for the taxpayer, and it has my full support.
Jack Dromey (Birmingham, Erdington) (Lab)
In that great hymn to England, “Jerusalem”, we celebrate our “green and pleasant land”, and our England is indeed a country characterised by a beautiful coast and countryside, from the craggy cliffs of Cornwall through the heart of England to Hadrian’s wall. Although we celebrate it, that beauty historically concealed an ugly reality of rural poverty, of exploitation of farm workers and of an industry—agriculture—that is the most dangerous in Britain. At its most obscene, there is the modern-day slavery practised by ruthless gangmasters.
Labour is a friend of our countryside. That is why we fought to defend our forests and why we amended the Localism Bill to protect our national heritage. We believe in a fair deal for our countryside. That is why we have supported the work of the Rural Advocate. We believe in fairness in the countryside—fair treatment for the backbone of the rural economy, the farm workers and those who work for gangmasters.
For a hundred years agricultural workers fought against exploitation, then in 1948 we saw the establishment of the Agricultural Wages Board. It has set standards in the industry for 60 years and more on pay, sick pay, overtime, bereavement leave, protection for under-16s, apprenticeships and accommodation, and it has evolved to meet the modern methods of agriculture with a system of six grades. They are settled and sensible arrangements, covering 140,000 workers in the countryside and ensuring both fairness and fair competition. It is an historic institution that not even Mrs Thatcher dared to abolish, but now that vital voice is to be silenced. Inevitably, that will be followed by a race to the bottom in the countryside.
A second vital voice is to be silenced. The Rural Advocate, an independent voice for villages, is being abolished by a Government who preach localism but intend to establish in its place a rural communities policy unit based in Whitehall.
There is a third voice that is to be muzzled. Recent disturbing developments and the powers contained in the Bill threaten the future of the Gangmasters Licensing Authority. I co-ordinated the coalition of support that brought the GLA into existence—a remarkable all-party coalition, including, from plough to plate, the National Farmers Union and the supermarkets. All in the coalition were determined to work together so that never again would we see another incident such as that in Morecambe bay, where 22 young Chinese cockle pickers died a terrible death in the freezing sands, ringing home to their distraught families to say farewell.
David T. C. Davies
Is the hon. Gentleman seriously trying to suggest that that terrible tragedy results from the current Government’s policies, when they were not the Government at the time? Was it not actually the fault of the previous Government’s lax immigration policy, which this Government are doing everything they possibly can to tighten up?
Jack Dromey
However a person is in a country, they do not deserve to die a death like those young Chinese did.
The GLA has been an outstanding success. Together with the president of the NFU and on behalf of the industry, I appointed its chairman, Paul Whitehouse, a former chief constable, under whom the GLA has tackled some of the worst abuse in the world of work in the countryside. For example, intelligence-led operations with Her Majesty’s Revenue and Customs recovered millions in unpaid tax, and the GLA worked with the police to put away a gangmaster armed with a gun. With others, the GLA has combated money laundering and tax avoidance, and it now combats human trafficking. Paul Whitehouse and the GLA worked with the good, tackled the bad and made examples of the worst, driving out of business disgraceful rogues, and raising standards across the industry, supported by the Association of Labour Providers and reputable employers, who welcomed at last not just fairness, but fair competition.
The Government have refused to reappoint Paul Whitehouse. A new chair, with no history in enforcement, has been appointed. She says that she is on a steep learning curve and that she will have to learn all about the sector, and she has downplayed the role of enforcement of the law. I fear for the future.
Finally, the abolitions of the Agricultural Wages Board and the Rural Advocate, and the threat to the GLA, are, taken together, an attack on the countryside. Our green and pleasant land should not be scarred by exploitation. For the powerful to strip the vulnerable of protection is shameful. That is why the Opposition will oppose the Bill and stand up both for our countryside and for fair treatment in our countryside.
Richard Harrington (Watford) (Con)
The hon. Member for Birmingham, Erdington (Jack Dromey) mentioned the tragedy of the Morecambe bay cockle pickers and, in his opinion, the disastrous consequences of losing the GLA and other organisations in rural England. However, I do not understand Opposition Members and members of the previous Government. They have spoken a lot about saving money from quangos. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) spoke of £500 million, which the shadow Minister, the right hon. Member for Dulwich and West Norwood (Tessa Jowell), confirmed earlier. On the one hand, Opposition Members accept that we need to cut because money is being lost, yet almost every organisation that is mentioned seems to be a front-line service that it would be a disgrace to remove. I find that a difficult contradiction.
I must tell the House—and in fear of Opposition Members’ mirth—that I have not worked in a quango or experienced them on close terms. However, I do know about organisations. Organisations, be they in the private sector, the public sector or the quasi-public sector, have certain things in common. One is that they all started with perfectly good intentions, but they have a habit of growing like Topsy, until they get to the stage when people think, “Well, how can we possibly do without them?” That happens a lot in the private sector, and it has clearly happened in the public sector. Whether we are talking about new management in a business or a new Government running the country and the public sector, the feeling is the same: when times get difficult, measures have to be taken to reduce the number of organisations. It is well known in management, and there is management speak for it—management cuts, rationalisation and so on. There seems to be consensus on that.
The shadow Minister said that every Government needed to reassess the role of these organisations. In her view, it needed to be done “systematically over time”, but I am not sure whether that means two years, five years, 10 years or longer. The fact is that a new Government have entered office, carried out a comprehensive review and decided to proceed in this way predominantly—as far as I can see—on the grounds of accountability and transparency, with the peripheral object of saving money. I do not understand her logic in saying that it can be done over a lengthy period. These organisations are growing up all the time.
The right hon. Lady seemed to agree that measures have to be taken to rationalise the number of bodies. However, I want to move on to the questions of accountability and transparency, which are the main thrust of the debate. There are arguments about whether organisations are better controlled directly—from within Departments—or indirectly. I have experience in Watford of bodies that have been spun off and that are effectively quangos. For example, the Community Housing Trust, which was part of the local council, is now a third-party organisation and quasi-controlled by the council. In that respect, it is much the same as a Government quango. Management teams grow up, outside consultants are used all over the place and very high salaries—in many cases higher than in the private sector—are paid, but I have not seen the accountability. Having a couple of non-executives on a board does not mean accountability and responsibility in the same way that direct control by the Government or—as in the case of my local authority example—a council does.
The idea, once mooted for quangos, that some organisations work better independently—so that Ministers cannot meddle—was admirable, but I have not seen accountability. In fact, I have seen the contrary. I would like to use regional development agencies as an example because I have experience of them from my business life. It seemed to me that not only were they not accountable to, or directly controlled by, the Government—they had an independent board and claimed some sort of independence—but because their funding was controlled by Governments, they could say to their consumers, who effectively were businesses in the area, “You don’t own us. We’re independent of you and funded by the Government.” For the life of me, I cannot see how running an RDA as a quango is an excellent way of running an organisation when compared with direct involvement from the Department for Business, Innovation and Skills or with the local enterprise partnerships. The latter are at least community organisations in business terms. I very much support the Bill.
Mark Lazarowicz
The hon. Gentleman is making some interesting points. However, does he not see the apparent contradiction between his theory of greater state control and bringing everything into the centre on the one hand, and the policies of the big society and handing power down to people on the other?
Richard Harrington
Yes, I think that the hon. Gentleman has made a valid point. Some organisations are much better off in the voluntary sector and as part of the big society. It is a question of assessing, as the Cabinet Office has done, which organisations are suitable for which sector. My argument is that the quango is neither one thing nor the other. However, I agree with him; he made a valid intervention.
John McDonnell (Hayes and Harlington) (Lab)
I want briefly to make two simple but related points. Elected Governments—even unelected coalitions—have the right to determine the administrative arrangements they consider best suited to implementing their policies. However, there is such a thing as good governance. As the Public Administration Committee’s original report set out, good governance involves undertaking a proper review of structures, consulting the organisations and individuals involved, clarifying objectives and then having good, clear drafting of the legislation.
The hon. Member for Harwich and North Essex (Mr Jenkin) is not in his place, but I think that he hid his light behind a bushel, because last December’s PAC report was one of the most hard-hitting reports that I have ever seen in this House. It referred to the review process as “poorly managed”, and said that “no meaningful consultation” had been undertaken, that the criteria and tests set for the reform were “not clearly defined” and that the Bill was “badly drafted”, so it is no wonder it received a mauling in the House of Lords. In addition, the Committee said—I have never seen this sentence in a Select Committee report before—that the Government had
“failed to recognise the realities of the modern world.”
One element of that was the need for thorough consultation, a point that I want to discuss in relation to the staff.
Whatever the structures of government, whatever they determine those structures should be and whatever reforms to those structures they want to undertake, any Government will need an essential ingredient: well trained, professionally competent and motivated staff. However, in this Bill the staff are barely mentioned or considered, if at all. I chair the PCS trade union group, which involves Members of all parties in this House. The PCS has 30,000 members in non-departmental bodies, many thousands of whom are affected by this Bill. Many of those staff are facing compulsory redundancy, forced relocation, a deleterious impact on their terms and conditions and their pensions, an almost certain increase in their work loads and the end of job security—all in a situation of absolute uncertainty. The most common thing that I have heard from members of staff whom I have met in those bodies is that they are completely in the dark about their futures. There is a complete lack of clarity about what role their organisations and they as individual professionals will be playing, and they are worried about the future of the services that they deliver.
Jon Trickett
Will my hon. Friend confirm that redundancies are taking place now, before the Government have even taken these legal powers, which is damaging the capacity of those bodies to perform what continue to be their statutory duties?
John McDonnell
I can confirm that. Redundancies are taking place, and there is near chaos in some organisations, not only because of jobs being lost and redundancies being forced on people, but in the organisation of the services that they deliver. A number of staff are worried about the impact that the proposals will have on the users of their services. I refer in particular to those who manage the independent living fund and the 300 workers involved with the Youth Justice Board, whose jobs are likely to go. Morale is understandably at rock bottom in those services, so the important thing is consultation. However, I see that consultation with staff unions is not even listed in the Bill.
Also, there is an agreement stemming from the last Government—an agreement that I thought this Government had signed up to—on TUPE. The Cabinet Office statement of protocols adopted by the last Government and inherited by this Government, which I thought this Government had also signed up to, states that where TUPE does not apply—for example, in the transfer of staff into the public sector, which includes most of the bodies in this Bill—an explicit reference should be added to the Bill. That is the agreement that was signed up to, but all that this Bill contains is a reference in clause 24 to transferring people on conditions similar to TUPE. The legal advice provided to the union is blindingly obvious: conditions that are similar to TUPE are not TUPE. Therefore, a whole range of conditions of service and protections that staff now enjoy will be put at risk. I believe that this is an act of bad faith on the part of the Government. The least that they could do now is add TUPE to the Bill. It was included by the last Government in the Apprenticeships, Skills, Children and Learning Act 2009, and by this Government in the Localism Bill. In that way, staff gained some security for their futures.
Let me conclude. There is a view in many of those bodies that there is near chaos when it comes to what the future will hold for the staff and what the implications for delivering the service will be.
Richard Harrington
Assuming for a moment that the employment side of the Bill was altered as the hon. Gentleman suggests—actually, it will probably not be—would he then be satisfied with the new arrangements, or would he prefer the existing bodies to perform their functions as they are?
John McDonnell
The hon. Gentleman might not have heard me say earlier—I might not have made myself clear enough—that when a new Government are elected, they are perfectly entitled to introduce the administrative arrangements that they think appropriate for the implementation of their policies. There will be debate in the Chamber about the rights and wrongs of those administrative arrangements. As we have heard today, there are sharp differences of opinion between Members on either side of the House on the Youth Justice Board, the coroners service and the Commission for Equality and Human Rights.
There should, however, be one common feature across all parties, and that relates to the protection of the staff. They should not suffer as a result of the changing whims of Governments or of the changing directions of political parties’ policies. They should at least be afforded the opportunity of full consultation and of the legal protections that have been provided in the past, specifically through TUPE. I very much regret that there is no commitment to TUPE in the Bill. The commitment in clause 24 to something similar to TUPE will not give the staff the security that they need. Any Government, of whatever political hue, should have respect for the civil servants who serve them. On that basis, I urge the Government to think again about this issue.
The Cabinet Office Statement of Practice on Staff Transfers in the Public Sector—COSOP—principles were signed up to by the previous Government, and by this one, and they have been referred to at length in some of our debates. They are now being broken by the Bill. That has been interpreted by the trade unions as an act of bad faith, which is contributing to the present poor industrial relations climate in the public services. This is a critical issue. I welcome the opportunity for the PCS parliamentary group to meet Ministers to discuss how we can amend the legislation in Committee, so that when it comes back to the House on Report, we can debate the real principles behind the Bill, rather than being encumbered by this attack on the staff.
Gavin Shuker (Luton South) (Lab/Co-op)
I rise to speak about a couple of the bodies concerned with rural communities that were mentioned by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who is no longer in his place. It was interesting to hear Conservative Members expressing disdain for his view that Labour had made a valuable contribution to rural communities under the last Government. That goes to the heart of why I want to talk about these bodies. It is perhaps inevitable, as Labour Members tend to represent the more urban seats and Conservative Members the more rural ones, that a certain reputation in that regard is picked up. I fear, however, that this Government will run down the huge amount of good will felt towards them in rural communities if they ignore the question of the Agricultural Wages Board and the Commission for Rural Communities. Taken together, those are very important organisations.
I have some sympathy for the Government’s position in wanting to change the constitutional arrangements of certain bodies, but the Minister himself said earlier that it is difficult to maintain an overview of every single body that a Bill of this size deals with. I hope that the Government will be willing to listen on this particular point, because rural communities run the risk of getting a very raw deal.
Richard Harrington
As I understand it, agricultural workers are protected by the same rules as everyone else. The minimum wage, which the Labour Government brought in and which, I must confess, has proved very successful, would protect agricultural workers just as it would any other kind of worker. Can the hon. Gentleman think of any reason why one group of workers should be treated differently from the others in this regard?
Gavin Shuker
The hon. Gentleman has asked a straightforward and honest question. I shall go into this in more detail a little later, but one reason would be that agricultural workers are more likely to find themselves in a changeable labour market. The Agricultural Wages Board takes into account six bands for agricultural workers, and only 20% of the people who receive funding from their employer that is moderated by the board receive a level around about the minimum wage. Essentially, we could end up bringing the other 80% down to that level in a wage race to the bottom. Let me explain why it is important to take the special character of rural communities into account.
Guto Bebb
I have heard this terminology of a “race to the bottom” used twice by Labour Members. Was not the decision of the previous Labour Government to allow unfettered immigration from eastern Europe another case of contributing to a race to the bottom when it came to wages in the agricultural sector?
Gavin Shuker
We need a framework in which all workers are treated on an equal level. The hon. Gentleman makes an astute point—that in a market without any regulation, people will work for the smallest amount of money. If we had more time, I could discuss the issue at greater length, but the hon. Gentleman’s point deserves more scrutiny.
The Commission for Rural Communities has been an independent advocate since the time of Lloyd George—surely a reason why Conservative Members suggest that it is well beyond its time—but we should bear in mind the important point that the cost of living can be 10% or 20% greater in rural communities than in urban areas. If I were a Minister on the Government Front Bench and I wanted to get on with implementing my programmes—something would have to have happened for that to be the case—I would probably not want a very strong independent voice for rural communities. I think that that is a shame, because when we release people to become strong advocates for their own communities, it serves us all well.
The Rural Advocate appointed by Tony Blair in 2000, Lord Cameron of Dillington, said:
“All too often—in fact, almost always—urban civil servants ignore or are unaware of difficulties of delivery in the countryside…It would be a tragedy if the countryside were to lose that independent voice.”—[Official Report, House of Lords, 23 March 2011; Vol. 726, c. 767-8.]
I think he put it very well. It is easy for us here in Westminster to ignore some of the major problems that rural communities face—in housing, broadband and public transport, for example. How do people in the countryside, especially the young, get to work? Those are real issues. I believe that the Commission for Rural Communities continues to have a valuable voice to articulate—independently of Government but to the Government. I also believe that the changes advocated in the Bill will not strengthen that independent rural voice, which, as I said before, has been around for about 100 years.
The hon. Member for Watford (Richard Harrington) anticipated some of my points. The Agricultural Wages Board is key to ensuring that the additional cost of living that rural communities face can be met by showing a greater responsibility to those who work in the countryside. The board was put in place after world war two. That might be used as an argument to get rid of it, but it is really a poor argument for dismissing the present board. It represents a partnership among the industry, the unions, landowners and all interested parties in the countryside. Those groups come together and a deal has to be hammered out on the different wage bands, just as we have to hammer out deals in this place.
Richard Harrington
When the Agricultural Wages Board came into being in the late 1940s, lots of other industries were similarly regulated with their own boards. Most of those have gone—not just as a result of Conservative Governments but by general consensus. I do not understand why the Agricultural Wages Board is different.
Gavin Shuker
I appreciate the point, but additional costs of living and the ability for different groups of workers to be exploited within that industry are relevant. I believe that those require us not to weaken the regulations, but to keep them in place.
Let me offer two further specific points about the abolition of the Agricultural Wages Board. Without the AWB, each individual business will have to negotiate its own individual terms and conditions. Far from reducing red tape for farmers, we will increase it. Many of them just want to get on and farm; many just want to run their business; many are not experts in the area of human resources or employment law.
Secondly, without the AWB, I believe we will see a dramatic decrease in wages across the industry. As I said before, only about 20% of those regulated by the AWB receive round about the minimum wage; there are six bands above it. The industry needs a sense of career progression and a credible ladder of opportunity in order to attract more people into it to strengthen food security. The Minister will obviously say that the minimum wage remains a safeguard. That is true, but I believe that there will be a race to the bottom without the AWB. The Bill will restrict the amount that can be charged for accommodation, an area in which people may be exploited. It will also affect agricultural sick pay, which is very important to manual labourers.
I sympathise with the Government’s wish to make reforms, which is their right. They will present more proposals, and they have already made amendments to the Bill, such as the removal of the clauses relating to forests. However, they risk making a serious impact on rural communities that are already suffering. For that reason, I ask them not to poison the well from which they draw much of their support, and to reconsider their position.
Guto Bebb (Aberconwy) (Con)
I will be brief, but I want to say a little about S4C. As the House may know, the Welsh Assembly is responsible for most of the quangos in Wales, but S4C is one Welsh organisation that will be affected by the Bill.
I well understand the strength of feeling about the Bill. I am possibly the only Member present this evening whose office has been vandalised as a result of it. Members of the Welsh Language Society decided to take direct action because of their fears for the future of S4C. However, I want to record the fact that, along with the other members of the Welsh Affairs Committee, I am fully committed to its future. Our report demonstrated strong cross-party agreement that, notwithstanding concerns about some elements of the Bill, the funding settlement could offer it a way forward.
Let me explain why I think the Bill is important. Several Members have referred to accountability. One of the problems that we experience with quangos such as S4C is a distinct lack of accountability. After all, they receive a huge amount of taxpayer funding. Last August, for example, the chief executive of S4C was dismissed without notice. At the time she was earning about £160,000 a year: £160,000 a year of taxpayers’ money, and a salary that most people would consider extremely high in a Welsh context. As yet, we have not been told why she lost her position. We need to ensure that such organisations are accountable to, and respond to, the taxpayer.
As I have said, I believe that the funding arrangements that the Government are introducing offer S4C a way forward. The funding is being reduced from £100 million to about £83 million a year, which, miraculously, was described by the hon. Member for Clwyd South (Susan Elan Jones) as a reduction of 94%. Members may wish to try to explain how a reduction from £100 million to £83 million equates to a 94% reduction, but I am at a loss.
I believe that the link between S4C and the BBC presents S4C with a future. Indeed, the BBC’s experience and its ability to provide base funding for the channel, coupled with the skills and expertise of the independent television sector in Wales, give it the chance of a prosperous future. I am confident that, despite all the concerns that have been raised about the changes proposed in the Bill, there is good will in the Department for Culture, Media and Sport and in Government generally, and a real possibility of building a new and more accountable S4C that will serve the people of Wales well.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I want to speak about just one of the Government’s proposals: the suggestion that the Disabled Persons Transport Advisory Committee may be abolished. As I am sure the House knows, the consultation on the committee’s future has not been completed. In fact, it will not end until 21 July. I hope that the Government will confirm that, although the Minister has said he is minded to abolish the committee, a genuine consultation process is taking place. I hope it will also be confirmed that if that process reveals a negative view of the Government’s proposal, they will reconsider it.
I make the case for this committee to be retained because for some time I have been interested in how we can make public transport as accessible as possible to people with disabilities. As it happens, one of my constituents, Alan Rees, is the secretary of the Scottish Accessible Transport Alliance. He has campaigned on this issue for many years and has provided me with some powerful arguments against the closure of the committee, which I hope the Minister will ensure are considered by his Department and his colleagues in the Department for Transport. Mr Rees has said that the continuation of the committee
“in its present form is vitally important. It is a statutory body made up of disabled people forming a majority. It has been behind most of the recent improvements in transport access and mobility for disabled people but there is still much to do. Its loss or reduction in status and influence would be a savage blow.”
It is a cross-border body, although some transport matters in Scotland are devolved. Issues to do with international travel, travel between Scotland and England, long-distance rail and many aspects of road travel, and many other issues are still reserved matters. The committee therefore plays an important role. That is why there is a lot of concern about its proposed closure.
Over the years, the committee has produced many reports and recommendations, and, importantly, they have resulted in action. In that regard, I would refer to the committee’s work on low-floor buses, its advice to taxi drivers, its promotion of disability awareness training for transport staff and, perhaps most importantly, its efforts to ensure that the consumer view—the view of the disabled traveller—is ascertained and then taken into account by Government at all levels and, indeed, by transport operators.
That serves to highlight two crucial aspects of the current committee. First, it has a right to be consulted; its views must be listened to. Secondly, it is a voice for disabled people themselves. As I have said, there is a majority of disabled people on the committee, which gives it authority and credibility, and an understanding of the issues, and I believe the Government, and specifically the Department for Transport, have drawn great benefit from that. If the committee is abolished, there is a great risk that the voice of disabled people on transport issues will be weakened. I therefore hope that the Government will think again about their proposals to wind up the committee, and give proper consideration to the findings of the consultation process when that is completed.
If the Government decide to go ahead and abolish the committee, I hope that the alternative arrangements they set up will not result in there being just an occasional meeting with stakeholders, which is one suggestion, or arrangements that lead to the employment of highly paid consultants to take on the work of volunteers on the committee. I also hope they give disabled people and their organisations a genuine voice, as they are entitled to be consulted on major transport issues and issues of concern to the disabled traveller.
I hope that the Government will give those assurances and, above all, I hope they will confirm that they are open to the consultation process producing different recommendations. I trust that there will be a recognition on both sides of the House that the Government should take on board these interests and concerns, and that if they are going to abolish this committee, they need to come up with a genuine and acceptable alternative.
Jon Trickett (Hemsworth) (Lab)
This has been an interesting debate, but at certain times Members walking into the Chamber might have wondered whether they had accidentally walked into a discussion on Welsh affairs, because so much of the debate focused on S4C—a mystery to me, as an MP representing a Yorkshire constituency, until I was allocated to this Bill. I can assure the House that by the time we reach Committee stage, I will be as expert as everybody else. However, the real reason for the contributions from so many Welsh Members might be a certain boundary review that will be taking place in Wales in due course, but perhaps that is idle speculation.
The sub-debate about S4C was ably led by my hon. Friend the Member for Clwyd South (Susan Elan Jones). Other contributions were made by the hon. Members for Ceredigion (Mr Williams), for Montgomeryshire (Glyn Davies), for Vale of Glamorgan (Alun Cairns), for Carmarthen East and Dinefwr (Jonathan Edwards) and for Aberconwy (Guto Bebb). They all made interesting speeches, although it seemed to me that some of the points made by Government Members were hardly supportive of the Government’s position on S4C. The Opposition can assure the House that this matter will be explored in great detail in Committee.
Many other matters were raised, often with great authority, including the Government proposal to transform the chief coroner post. Very significant contributions were made on that matter by my right hon. Friend the Member for Coventry North East (Mr Ainsworth), my hon. Friend the Member for Hartlepool (Mr Wright), my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) and my hon. Friend the Member for North Durham (Mr Jones). There is a significant problem with the Government’s proposals, which suggest that the coronial service, in part at least, should be made responsible to the Lord Chancellor, who, as we know, is a member of the Government. From time to time, a death that has been examined by a coroner may have been caused, in part at least, by the Government’s actions—we can all think of examples where a Government failure contributed to the death of a fallen hero in Afghanistan, Iraq, Libya and so on. If the coroner has to report to the Lord Chancellor, would that not immediately raise questions about the independence of the coronial service in investigating the deaths? Deaths at war are as tragic as any other, and they obviously involve people who were fighting for our country. Those people are entitled to an independent coronial service, and I do not believe that the Government’s proposals give us that independence.
Powerful points were also made strongly on behalf of rural communities by my hon. Friends the Members for Luton South (Gavin Shuker) and for Birmingham, Erdington (Jack Dromey). They discussed not only the beauty of our rural countryside, but the need for fairness. The Government are proposing to abolish the Agricultural Wages Board for England and Wales, and that retrograde step, again, needs to be debated very carefully in Committee. My right hon. Friend the Member for Wythenshawe and Sale East also spoke about youth justice, on the basis of his great experience, and the House listened carefully to the point he made.
What was striking about the debate was the fact that few Government Members were wholly in favour of the Bill and that they did not make the case for the Bill in the terms used by the Minister for the Cabinet Office. He made a case on the basis of democratic accountability—I shall address that in a moment—but his right hon. and hon. Friends largely chose to make an argument on financial grounds. They said that we should simply be taking an axe and making financial cuts to the service, irrespective of whether the service being provided is good or bad. For example, the hon. Member for City of Chester (Stephen Mosley) referred to the financial imperative to cut services. We accept that there is a degree of financial imperative, particularly in relation to waste, where that is identified. However, I do not believe that the argument made by the hon. Member for Esher and Walton (Mr Raab) that we should abolish any quango where even a small amount of waste has been established necessarily provides the correct answer. Notably, the Minister for the Cabinet Office did not make that case.
The hon. Member for South West Norfolk (Elizabeth Truss) gave an extraordinary motive for cutting quangos, basing her argument on inequality of pay. Those of us on the left, who have long argued for greater equality, welcome her as a recruit, but her case was that we should abolish quangos on the basis of the size of the chief executive’s salary, and that is a bizarre argument. The hon. Member for Watford (Richard Harrington) was the star of the show. He began his speech by saying that he had no experience whatsoever of any quango, ever. He felt that that gave him the basis for making a speech to say that quangos should immediately be reformed, abolished and so on.
The Government rested their case on the need for greater democratic accountability, and we agree that the quango state should be tackled on those grounds. However, they would be well advised to listen carefully to the case made by the hon. Member for Harwich and North Essex (Mr Jenkin), who chairs the Public Administration Committee. He pointed out that in a modern society accountability takes many forms. I have just discussed the coronial service and it may be that rather than the coroners being made accountable to the Lord Chancellor, as the Government would have it, they should be accountable to the relatives of the dead. In that sense, I agree entirely with the point made by the Public Administration Committee.
Considering that it dealt with such important bodies, the process the Government entered into was incredibly rushed. There was little or no consultation in advance with the interested parties, with the bodies themselves or even with Parliament. The reform of these bodies through proper legislative processes is clearly one thing that the Government are entitled to do, but instead, as we heard from my hon. Friend the Member for Hayes and Harlington (John McDonnell), they are already proceeding effectively to abolish or at least to weaken through underhand administrative methods those very organisations that the Bill is intended to reform, even before it has gone through Parliament. The Equality and Human Rights Commission, for example, has already had its budget cut by 68%, yet it still exists in law. The staff numbers have been cut by 66%. Only one in three staff remain in the EHRC yet it still has statutory duties imposed on it by Parliament until this Bill becomes law. That is no way for a Government to proceed. It completely ignores the need for parliamentary assent and is once again reflective of a Government who are unwilling to listen or consult.
What we have here is a Government who are simply not listening, so much so that that they are not allowing witnesses to appear before the Public Bill Committee as part of the Bill’s scrutiny. We were told that this would be a listening Government. Why then will they not allow witnesses to appear before the Public Bill Committee when the Bill goes upstairs? The Government do not want to hear the voices of the Royal British Legion, who will defend the rights of fallen heroes to a proper inquest. They do not want to hear the voices of low paid workers in the agricultural industry who will be affected by the changes to the Agricultural Wages Board. They will not allow the voices of witnesses from the disabled community, mentioned by my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz), to be heard on the EHRC or the Disabled Persons Transport Advisory Committee, which is to be abolished. We will therefore oppose what we regard as a gross misuse of Government authority in seeking to prevent witnesses appearing before the Committee. I therefore urge the House to reject the programme motion, which does that.
On top of all those things, the Bill fundamentally alters ministerial powers to control quangos. It will concentrate far more authority in the hands of the relevant Ministers, who could merge bodies, transfer bodies or even abolish them without proper reference to Parliament and without listening to witness statements. The costings on which the Bill relies are also riddled with incompetence. The Minister for the Cabinet Office has made outlandish claims in The Sun newspaper that are totally unfounded. We have tabled freedom of information requests and parliamentary questions that show that rather than the £30 billion he claimed, the actual savings will be a fraction of that: £2.6 billion at most. When we considered individual Departments, we found the Government’s claim was often twice as high as the savings that they will make. Our research, for example, demonstrated that although the Government claimed that they would save £18 million from the Department for Work and Pensions, they will save less than £500,000.
Finally, the proposals will have a human cost both to the millions of people who receive services from the quangos and to thousands of employees, to whom my hon. Friend the Member for Hayes and Harlington referred. Let me ask the Parliamentary Secretary, Cabinet Office, a straightforward question, which I would like him to answer in his reply. What will happen to those whose jobs may be transferred into the private sector, the voluntary sector and elsewhere in the public service? What will happen to their rights? Does he envisage that their rights under TUPE will be properly protected, as they ought to be?
Hon. Members’ contributions today have revealed that the Government have not considered staff, have not listened to the users of services, have not produced proper costings and certainly have not listened to the millions of vulnerable people who will be affected by the Government’s actions if this Bill is passed. The Government do not realise that when they are taking decisions, they need to see the big picture—on which we can agree: that quangos should be reduced—but equally the detail. Government is about making decisions but it is also about listening and the Government simply do not have the humility to listen, the patience to debate or the ability to implement the detail properly. We will be voting for the reasoned amendment and fighting the Bill line by line in Committee, and we reserve the right to vote against the Bill on Third Reading unless there are substantial improvements to it.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
This has been a short debate on a Bill that my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) rightly described as being very significant. It is significant in its potential impact on a large number of organisations, many of which perform significant functions and employ a large number of people. My fellow Hillingdon MP, the hon. Member for Hayes and Harlington (John McDonnell), was quite right to remind the House of the impact of the changes on human beings. Let me reassure him that I am extremely happy to meet him and the PCS group to clarify any confusion that might exist in relation to TUPE. I give that undertaking in good faith.
The debate was interesting in that it launched the Labour party’s campaign to “Back the Apple”—this from the party that introduced the cider tax! The irony has been lost on them. More seriously, it is clear that there are still profound concerns about some of the proposals on the table and that there is more need than ever for Ministers’ continued engagement regarding the Bill during its progress through Committee, should it get its Second Reading, and through the consultation processes that will have to flow in anticipation of the orders that will in turn flow from the Bill. Many arguments will be made, won and lost in that process. That is quite clear from the debate.
In the time available I will try to address some of the specific concerns that have been raised, but it is important to register that no one in the debate has, as far as I could tell, argued for the status quo. The case for reform appears to have been won, although, having listened to Opposition Front Benchers I am not entirely convinced. The truth is that when they were in power they were a lot better at moving quangos around than at abolishing them. Frankly, at the end of the Opposition spokesman’s remarks, I was no clearer about what on earth they would do if they were in power. There continues to be a complete fog about that. It is all very well talking about the case for reform, but sometimes one has to get up and do something.
The case for reform was made extremely powerfully by my hon. Friends the Members for South West Norfolk (Elizabeth Truss), for Esher and Walton (Mr Raab) and for Watford (Richard Harrington). The case was made particularly eloquently by my hon. Friend the Member for City of Chester (Stephen Mosley), who talked about the need to shine a light of accountability and transparency, with which I entirely agreed. My observation from my constituency is that people are deeply frustrated by how complex and expensive government has become. They would like it to be simplified and for it to be easier to find out who is in charge. They would like us to bear down with much greater discipline on waste and cost inflation, not least on salary inflation. That point was well made by my hon. Friend the hon. Member for South West Norfolk.
Given the cluttered and confused landscape that is quangoland, it would have been quite irresponsible for a new Government not to have embarked on a review of public bodies. We believe very strongly that by substantially reducing the number of bodies, returning functions to central Government where appropriate, and establishing a legislative framework for the outcomes of future reviews, the Bill takes a major step towards a simpler, more accountable approach to Government. The Bill will support the delivery of administrative savings from public bodies, as part of the Government’s commitment to delivering the effective, value-for-money systems that taxpayers rightly expect. Those principles should enjoy widespread support across the House, and I am very disappointed by the position of the Opposition in that respect.
There was consensus across the House that the Bill had been improved by the deliberations in the other place; I am happy to confirm that that is our view, too. There were questions, not least from my hon. Friends the Members for Harwich and North Essex, for City of Chester, and for Esher and Walton, about the triennial review, which is an important part of the new process that we are setting up. I assure them all that further detail will be forthcoming on how that review will work.
There was very little controversy, as far as I could tell, about the structure of the Bill, now that it has passed through the other place. Where there were concerns, they tended to focus explicitly on the ideas for particular bodies. I should like to focus on those that are clearly more controversial. I start with the office of chief coroner. We heard powerful speeches from the right hon. Members for Coventry North East (Mr Ainsworth), and for Wythenshawe and Sale East (Paul Goggins), and from the hon. Members for Hartlepool (Mr Wright), and for North Durham (Mr Jones). I pay particular tribute to the speeches of the right hon. Members for Coventry North East, and for Wythenshawe and Sale East, because they had the benefit of drawing on direct ministerial experience, some of which was clearly very powerful and difficult.
Mr Hurd
The hon. Gentleman was not bad, either. There are clearly arguments to be made, and won or lost. The Government clearly have to listen very hard, but the point that I would make to Members who have understandable concerns about the proposal is that there is no argument about the need for reform. As the hon. Member for Hartlepool said, we all recognise that a much better service is required for families. There is a problem around variation in quality; he made that point well. Nor is there any argument about the need for the functions of the chief coroner; the proposal is that they be transferred, not abolished. The question is: can we have reform without the person—or without the person right now, because the Government are retaining some flexibility on that point? The concern is about whether the reforms can be delivered without incurring what, on the face of it, are significant set-up and running costs—costs that were effectively ratified by the previous Government, because they commissioned the impact assessment.
Mr Jones
The Minister for the Cabinet Office and Paymaster General told us when he opened the debate that the reason behind the decision on the chief coroner’s office was money. Is the Parliamentary Secretary comfortable going against one of the main recommendations made by Dame Janet Smith in the Shipman report—that the coroner’s office be independent of Government?
Mr Hurd
Cost is a significant factor in the circumstances that we face, and we should not underestimate its importance as a consideration for the Ministry of Justice. It is committed to reform; the question is: how can those reforms be delivered in the most cost-effective way? It is clear, as I said, that the arguments will have to be made through the processes that lie before us.
Mr Ainsworth
There are processes that are to be performed, and if consistency is to be applied, there will be costs. Either the processes will be undertaken by an independent person who is part of the coronial system or, under the monstrous proposal from the Government, somehow Ministers will do them under a coronial system. It cannot be done that way.
Mr Hurd
It is obviously the responsibility of the Government to consider all the costs, but the right hon. Gentleman is ignoring the role of the Lord Chief Justice. I come back to the point that the Government recognise, as we all do, the need for reform; the question is how those reforms can be delivered in the most cost-effective way. That is the debate that will roll through Committee and beyond. Clearly, feelings run high on the issue in this House and the other place.
Mr Jenkin
My hon. Friend is making an emollient and helpful speech, but the real question is not how these issues will be dealt with during the passage of the Bill, but how they will be properly debated and adjudicated on by Parliament after the Bill is on the statute book. Will he give the House a general undertaking that these contentious issues concerning bodies that were established by primary legislation will be the subject of proper and reasonable consultation and debate when the orders come before Parliament, and that there will be an opportunity for Parliament to exercise the influence it would have exercised had we been confronted with primary legislation?
Mr Hurd
My hon. Friend’s question goes to the heart of the debate about how the Bill is structured. He understands that if this enabling Bill is enacted, it will be the responsibility of Ministers to come to this place with orders, having consulted where that remains appropriate, and make their case, with appropriate safeguards in terms of scrutiny and the capacity of the House to require the enhanced affirmative procedure. There was no serious discussion of this during the debate, but, with reference to the safeguarding procedures, I think we are in a much better place than when we started and when his Committee examined the Bill.
John McDonnell
On the point about process, because some aspects of the Bill are more contentious than others and the Government have moved from the affirmative procedure to the enhanced affirmative procedure, there may well be the opportunity on some issues to move to the super-affirmative procedure, which allows room for further amendment.
Mr Hurd
That has been considered and rejected. The enhanced affirmative procedure is considered to be adequate and proportionate. That seemed to be accepted by the other place.
I shall move on in order to give proper space for the other most contentious issue, which concerns S4C. Again, we heard powerful speeches from the hon. Member for Clwyd South (Susan Elan Jones), who is in her place, the hon. Members for Ceredigion (Mr Williams) and for Carmarthen East and Dinefwr (Jonathan Edwards), and from my hon. Friends the Members for Vale of Glamorgan (Alun Cairns), for Montgomeryshire (Glyn Davies) and for Aberconwy (Guto Bebb). My hon. Friend the Member for Montgomeryshire expressed the deep passions that the proposal has aroused. We heard from my hon. Friend the Member for Aberconwy that his office had been vandalised or attacked as a response to the Bill. My hon. Friend the Member for Montgomeryshire described S4C as the cultural backbone of Wales—a powerful phrase. The debate is about how we sustain S4C as an independent service that retains its own brand identity.
Glyn Davies
The one issue that still concerns us is the arrangements for future governance. We seek an assurance that there will be genuine consultation and opportunity for the people of Wales to have an input into that consultation. We are looking to the Minister to give us a commitment on that.
Mr Hurd
I am happy to give my hon. Friend the reassurance that the Department is extremely sensitive to concerns. As he knows, the funding settlement reduces S4C’s funding by the same amount as the DCMS’s, at about 25% over the comprehensive spending review period. We consider that fair. I do not think there is an argument about the unsustainability of the current funding arrangements for S4C. The proposed amendment described in the written ministerial statement—it was reassuring that many colleagues took great comfort from the statement—makes it clear that S4C will be funded for the long term to deliver its vital statutory functions. Everything we are proposing is about how we protect S4C, not undermine it.
Let me touch on the Agricultural Wages Board. The hon. Members for Luton South (Gavin Shuker) and for Birmingham, Erdington (Jack Dromey) were eloquent on the subject. The Agricultural Wages Board was set up to represent agricultural workers and ensure that they are paid appropriately. That is an example of a body that is no longer needed, as pay for all workers is protected by the national minimum wage, so there is no longer a need for separate representation for agricultural workers, a point made by my hon. Friend the Member for Watford (Richard Harrington).
Andrew George
I lead on DEFRA matters for the Liberal Democrats and hope that the Minister understands that I oppose the abolition of the Agricultural Wages Board. Rural workers are exceptionally isolated and in an exceptional position that I think justifies exceptional protections.
Elizabeth Truss
Farmers in my constituency certainly want less regulation, rather than more, which will enable them to be more productive and export more crops, and surely the minimum wage is effective cover for protecting workers. We need to ensure greater exports from Britain, which we will not achieve through further regulation.
Mr Hurd
I will not, with great respect, because I have given way a great deal and have limited time in which to draw my remarks to a close.
I would like to return to the core issue of why we believe the Bill is needed and deserves a Second Reading: the benefits it will deliver for good government in this country. My right hon. Friend the Minister for the Cabinet Office announced the results of a radical review programme, as a result of which we proposed that almost 500 bodies should be reformed, and in many instances those reforms are already complete or in progress. However, a large number of those bodies have a statutory basis, so legislation is required to turn the Government’s proposals into reality. In some cases departmental Bills provide an appropriate vehicle for the changes, but where that is not the case the Public Bodies Bill represents a sensible legislative solution. It gives the Government the necessary powers to take forward these much-needed reforms without Departments having to wait for primary legislation, preventing unnecessary delay where the case for change is clear.
The Bill achieves that by giving Ministers a series of powers, outlined in clauses 1 to 5, to make changes to public bodies through secondary legislation, subject to a number of safeguards, the completion of a consultation process and the approval of Parliament. I emphasise that those powers are strictly limited in scope. The powers to make orders apply only to the bodies and offices listed in the corresponding schedule to the Bill, to which bodies can be added only through primary legislation, meaning that Parliament will remain the ultimate arbiter over when the use of those powers is appropriate.
Following a review by the other place, important changes have been made to the Bill. Specifically, we have arrived at mechanisms to include a number of proportionate restrictions on the use of the powers set out in the Bill. On independence, we have introduced provision in clause 7 to prevent the Bill from being used in a way that prevents important public functions, such as those of a judicial nature, from being amended in a way that stops them being exercised independently of Ministers. On consultation, we have required that Ministers consult on their proposals before laying a draft order before Parliament. The Bill now provides the option of selecting an enhanced scrutiny procedure for any draft order, giving Parliament and its Committees 60 days to consider a proposal and make representations to Ministers. Clause 12 sunsets the contents of the schedules after five years.
In summary, the reforms we have proposed and that have been debated again today will produce a leaner and more effective system of public bodies centred on the principle of ministerial accountability. We have listened intently to the comments and concerns expressed during the debate and recognise that there are areas where the Government can helpfully produce further clarity and assurance, and the Deputy Leader of the House and I look forward to continuing to engage with hon. Members in Committee and elsewhere.
However, I reiterate my hope that the House can come together in support of the belief that ministerial accountability for public functions and the use of public money should be at the heart of how we conduct ourselves. The Government believe that the proposals embodied in the Bill and in our plans for a regular comprehensive review of all public bodies will set a new standard for the management and review of public bodies, and on that basis I commend the Bill to the House.
Question put, That the amendment be made.
Business without Debate
Delegated Legislation
Mr Speaker
With the leave of the House, we shall take motions 7 and 8 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Charities
That the draft Charities Act 2006 (Changes in Exempt Charities) Order 2011, which was laid before this House on 12 May, be approved.
That the draft Charities Act 2006 (Principal Regulators of Exempt Charities) Regulations 2011, which were laid before this House on 12 May, be approved.—(Miss Chloe Smith.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Equality
That the draft Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011, which were laid before this House on 13 May, be approved.—(Miss Chloe Smith.)
The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 13 July (Standing Order No. 41A).
Mr Speaker
With the leave of the House, we shall take motions 10 to 13 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Offender Management
That the draft Co-operation in Public Protection Arrangements (UK Border Agency) Order 2011, which was laid before this House on 23 May, be approved.
Electronic Communications
That the draft Communications Act 2003 (Maximum Penalty for Contravention of Information Requirements) Order 2011, which was laid before this House on 23 May, be approved.
Energy
That the draft Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011, which were laid before this House on 20 June, be approved.
That the draft Renewable Heat Incentive Regulations 2011, which were laid before this House on 20 June, be approved.—(Miss Chloe Smith.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Equality
That the draft Equality Act 2010 (Specific Duties) Regulations 2011, which were laid before this House on 27 June, be approved.—(Miss Chloe Smith.)
The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 13 July (Standing Order No. 41A).
European Union Documents
Motion made, and Question put forthwith (Standing Order No. 119(11)),
European Semester of Economic Policy Co-ordination
That this House takes note of European Union Documents No. 11491/11, relating to a Commission communication on concluding the first European Semester of economic policy co-ordination, No. 11196/11: relating to a Draft Council Recommendation on the UK’s National Reform Programme 2011 and a Council opinion on its updated Convergence Programme for 2011-2014, and No. SEC(2011)736, relating to a Commission Staff Working Document on the assessment of the UK’s 2011 National Reform Programme and Convergence Programme; welcomes the Commission’s support for the Government’s efforts to reduce the deficit, which is consistent with the conclusions reached by the IMF and the OECD in their recent reviews of the UK economy; welcomes the conclusion of the first European Semester, but notes the Government’s maintenance of the scrutiny reserve at Council and European Council as part of its concerns about a timetable which has not permitted proper Parliamentary scrutiny; welcomes the Government’s intention to press for more timely publication of these documents in future; and welcomes the Government’s policy of securing assurances that the UK cannot be subject to sanctions in respect of the Stability and Growth Pact under existing Treaty provisions or proposed new legislation on economic governance.—(Miss Chloe Smith.)
Question agreed to.
Political and constitutional reform committee
Ordered,
That Yasmin Qureshi be added to the Political and Constitutional Reform Committee.—(Miss Chloe Smith.)
Youth Unemployment (Walsall)
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Before I ask the hon. Member for Walsall North (Mr Winnick) to rise from his seat, I appeal to Members leaving the Chamber to do so quickly and quietly, in order to afford the same courtesy to the hon. Gentleman that they would wish to be extended to them in the same circumstances.
Mr David Winnick (Walsall North) (Lab)
Thank you, Mr Speaker.
I applied for this debate in view of the serious youth unemployment in the Walsall area and particularly in my constituency. The latest figures show that, in my constituency, just under 16% of people in the 18 to 24 age group are claiming jobseeker’s allowance. I am pleased to see the Secretary of State for Work and Pensions on the Front Bench tonight, as well as the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling). I should point out to them that that rate of just under 16% is the third highest in England. The situation in the other parts of the borough is not much different, and it is certainly still higher than the national average.
Let me state what should be obvious: unemployment is a curse to all those seeking work, and no less so to young people who want to get started in life. I emphasise again, as I have done in this House over the years, that we ourselves do not wish to become unemployed through losing our seats at any stage, and that we are always anxious to find work, and the same applies to the overwhelming majority of those who are registered unemployed.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
indicated assent.
Mr Winnick
I am glad to see the Secretary of State nodding in agreement. There is understandably considerable concern over the position locally. I fear a return to the situation in the 1980s, when two major recessions had a devastating effect not only on the borough but on the black country and on the west midlands in general.
Let me give the House an illustration of the situation nearly 26 years ago. In September 1985, more than one fifth of the age group that I am referring to were on unemployment benefit in the borough of Walsall. The situation improved over a period of time, and it certainly did so in the first years of this century. In May 2004, the youth unemployment percentage in Walsall was down to 7%. Even then, however, it was higher than the national average. I ask the Ministers to tell the House when we are likely to see the percentage go down to that figure that pertained seven years ago. Last year, youth unemployment rose in the three constituencies of Walsall North, Walsall South and Aldridge-Brownhills.
I do not challenge the fact that as the global recession took effect from 2008 onwards, unemployment grew. It is clear; the figures show it. I am not going to dispute what is, after all, quite obvious. There are bound to be continuing debates about how to deal with the recession and, indeed, about how it came about. My purpose tonight, however, is not to engage in that wider debate—there will be many opportunities in which I am sure I will participate—but to concentrate on the borough and the particular constituency of Walsall North that I represent and on what can be done to provide more opportunities for those without employment. That is the purpose of tonight’s Adjournment debate.
The sharp decline in manufacturing—what is sometimes referred to as metal-bashing—is clearly an important factor, not only for Walsall, but for what are usually described as the four black country boroughs. Walsall council’s latest review, looking at the overall employment situation in the borough, noted that in 2009, quite a number of new enterprises arose. That was very good. Unfortunately, however, there were quite a significant number of job losses. The net loss in 2009 was somewhere in the region of 285 jobs. Yes, jobs come in, but too many also go out.
As for vacancies, the figures show that 10.8 people—I use the exact figure—go after every job. I hope that there will be no disagreement about the fiction that there are jobs here and jobs there, so that those registered as unemployed—whether in the 18 to 24 age group or older—are not particularly keen to get work and are not willing to try to get it. All that is absolute fiction. I have seen reports in the paper on many occasions that when a vacancy occurs, there are sometimes as many as 40, 50 or even 100 people applying for it. As I said at the start, if we take the view, with which Ministers agreed, that those who are unemployed are keen and want to work, it is not surprising that people chase after vacancies and take every opportunity to try either to get into work for the first time or to get back into work.
What I want to find out tonight is what steps the Government intend to take, particularly in boroughs like mine. Let me point out again that this borough is the third highest in England for youth unemployment. What measures are the Government going to take? What feeling can people in my constituency and in the borough have for the fact that the Government recognise the urgency of the position and are willing to act on it?
I know that a number of measures have been publicised. Insofar as they are positive and will bring work and bring down unemployment, I will obviously welcome them. It would be strange otherwise. However, I ask Ministers when these measures that have been mentioned and published are going to come into effect. Have any of the measures on youth unemployment yet come into effect? Moreover, what priority will the Minister give in his reply to areas of high youth unemployment? It is important for him to answer that question.
There is no doubt that we need more apprentices. It is unfortunate that, more in my part of the country than in other areas, too many leave school at the first opportunity. Here we are talking about the under-18s. In a debate on education maintenance allowance that I initiated in January, I demonstrated that the percentage who received the allowance in the borough and in my constituency was very high indeed.
As the House knows, EMA is paid to those who stay at school after the age of 16 when the income of their households is relatively low. Unfortunately, the Government took measures to undermine the allowance. I do not know whether that is a controversial thing for me to say in a debate in which I have tried to avoid controversy, but I do know that the steps taken by the last Government through EMA to encourage 16-year-olds to stay at school were very useful. It is clear that more training opportunities are needed, so that those who leave school at 16 or 17—which I think we all agree is too early—can obtain the necessary skills and need not spend years, perhaps the rest of their working lives, in unskilled work with all the insecurities that that involves.
I said that I had applied for the debate because of the seriousness of the situation, and it is indeed a serious situation. As a constituency Member, I have a duty to do what I can to highlight the difficulties and bring them to the attention of the House of Commons, which, after all, is one of the responsibilities of a Member of Parliament. I have done that in the past, and I shall continue to do it for as long as I sit in the House. I hope that the Minister will be able to satisfy me that the measures announced by the Government will be effective, and will come into operation soon.
The Minister of State, Department for Work and Pensions (Chris Grayling)
We meet again, Mr Speaker, although not quite as late as the last occasion on which we debated youth unemployment in the Chamber.
I congratulate the hon. Member for Walsall North (Mr Winnick) on securing the debate, and also on the measured way in which he addressed what I regard as a very serious issue. We have had quite a few debates about it, and I must say that his approach was commendable in comparison with that of some Members to whom I have listened.
I share the hon. Gentleman’s concern about the issue, and about the future of young people in his constituency. Let me tell him about the measures that we are taking to address the problem. It is a long-standing problem, not simply a problem of the recession years. During the past decade, from 2003-04 until the present day, there has been a steady increase in youth unemployment in this country—even during what have been relatively prosperous times economically—although the national figures for the last two months show a significant drop, which is of course welcome.
The hon. Gentleman was right to focus on the number of young people in his constituency who receive jobseeker’s allowance. All too often people focus on the number of unemployed people according to the International Labour Organisation measure, which includes a substantial number of full-time students and somewhat distorts the true picture. As the hon. Gentleman will know, in his constituency there has been a small increase—small in comparison with the previous position—in the number of unemployed young people receiving JSA over the last 12 months, but there was a much bigger and fairly steady increase over the previous decade.
There is indeed a problem that we must address, and to which we must deliver solutions. One of those solutions involves stimulating economic growth in what are still challenging times economically. We are particularly concerned about regions where there have been significant economic changes, where there is a smaller private sector than we might wish and higher public sector employment than in other areas, and where there is a particular labour market challenge. The regional growth fund—we announced the first tranche of RGF projects recently, and will announce further projects in due course—is designed to stimulate and support manufacturing, research and related areas of business in parts of the country where we need to build up and strengthen the manufacturing base, the research base and the skills base.
I would argue—I suspect this might be a point of difference between the hon. Gentleman and me—that the measures we are taking to address the deficit, challenging though they may be, are a necessary part of creating a stable economic environment where businesses will grow and invest and create jobs. Over the past 12 months there has been good growth in private sector employment in the UK. About 500,000 new private sector jobs, the majority of them full-time, have been created over that period, but it remains a concern that, despite that, there has been very little change in the numbers on jobseeker’s allowance. That is certainly the experience for young people in the hon. Gentleman’s constituency.
Job opportunities have been created, therefore, but we are not seeing people move into those jobs, so what do we do about that? There are three particular steps that we are taking. The hon. Gentleman asked when some of the measures we have proposed will be put into action, and my answer is that they are in place now. They are relatively new—they are in the early stages—but they are there, and we are working hard now to address some of the concerns that the hon. Gentleman raised.
Let me now describe those three key parts—they are not the only parts—of our strategy. The first issue is how we might provide support for the shorter-term unemployed young people, to get them into the workplace. The vast majority of young people who sign on to JSA are in work within a few months. Of those who have been out of work for nine months, only a small proportion of those who signed on on day one are still out of work. For that first group who get into work in the shorter term, we want to accelerate the process and make sure they move into work without spending those first few months on JSA looking for work.
Crucially, that is where our work experience scheme comes into play. It has its origins in an e-mail I received from the mother of a teenage girl shortly after I was appointed to my post last year. She said her daughter had just sorted out a month’s work experience for herself, and that it was clearly the right thing for her to do, but that she had been told by the jobcentre that if she did that work she would lose her benefits. That is clearly a mad situation, and we swiftly moved to address it. What we have done is turn that on its head, by saying that it is a good thing for young people to do work experience, as it gives them a first taste of the workplace and a period of time to prove to a potential employer that they have skills that that employer might wish to retain, and so we are now allowing young people to do up to eight weeks of work experience while continuing to claim JSA.
Furthermore, our Jobcentre Plus employer relations teams around the country are actively looking for work experience opportunities for young people. At the last count, we had about 35,000 committed placements over the next year. We have already placed many thousands of young people into work experience opportunities, and we are starting to see some of them move into employment as a result of that, some staying with those who provided the work experience. It will take time for the programme to build right across all the young people who could potentially benefit from it, but I am very keen about this, particularly this summer when another generation of school and college leavers will be coming into the labour market. Our team in Jobcentre Plus will be working hard to give those young people a rapid opportunity to gain real work experience, and not for one week or two weeks, but for an extended period with the hope that in many cases the employer who takes them on will take a look at that young person and say, “Actually, they’re rather good. I’d like to be able to keep them, and we’ll offer them a position.” That has certainly been our experience so far; that is what has been happening in a number of cases. Even if there is not a job opportunity for the young person, we hope that that couple of months of experience—and, I hope, a positive reference from the employer—will give them a leg-up in applying for a further vacancy.
The second part of the equation is also crucial to our strategy to help young people. It is the big increase in the number of apprenticeships. We took a decision very early on, because we think apprenticeships are a better path to help young people down than some of the schemes we inherited from the previous Government. I know that there has been great debate about the future jobs fund, but our view is that a big increase in the number of apprenticeships, with almost 100,000 extra over the past year, is a better way of providing long-term opportunities. This is not simply about the training that people gain as apprentices; the skills they gain in the workplace over an extended period lasting one, two or three years are much more likely to give a young person the foundation for a long-term career. The increase in the number of apprenticeships that we have seen over the past few months will be sustained over the course of this Parliament. These apprenticeships will be available to the young people leaving school and college this summer, and it is very much my hope that many young people who go through those two months of work experience will then be able to stay on as apprentices. I am absolutely of the view that the increased number of apprenticeships is a crucial part of dealing with the issues in the hon. Gentleman’s constituency, which he rightly raises.
Mr Winnick
I am listening carefully to what the Minister is saying, but it does not alter the fact that the number of apprenticeships in my constituency remains very small compared with elsewhere. I am still wondering how extensive the concentration will be on the areas—this is not just about my constituency, by any means—where the level of unemployment is so high among young people.
Chris Grayling
This is very much about us collectively, by which I mean the hon. Gentleman, as a Member of Parliament, and Ministers in overseeing Jobcentre Plus and in our work to try to engage employers in the work experience scheme. One of our key goals has to be to encourage employers to get involved in the apprenticeship scheme and take on apprentices. I think that taking on a good apprentice is a very good way for the employer to add skills at a relatively low cost to their organisation, and we can all play a part in helping that to happen. I give him an absolute commitment that we in the Department for Work and Pensions, in partnership with the Minister for Further Education, Skills and Lifelong Learning in the Department for Business, Innovation and Skills, will work extremely hard to engage employers, including in the hon. Gentleman’s area. I know that his area contains some very good employers and some employers who have recruited from overseas in the past. I would much rather see them recruiting local apprentices, developing them and giving them opportunities. We are very happy to work with him to do anything we can to help engage and involve employers in his constituency. If he is not already in discussion with the employer outreach team in Jobcentre Plus in his area, I would be happy to arrange for such discussions to take place.
The third and newest piece of our jigsaw puzzle to deal with this problem is the introduction of the Work programme, which began in mid-June in the hon. Gentleman’s area. We have a good team of providers in the Birmingham area, who will have centres all around the west midlands—there will be centres in Walsall, Wolverhampton and Birmingham. I strongly believe that the Work programme provides the additional piece that is needed to deal with longer-term youth unemployment and, in particular, to help those who have come from the most challenged backgrounds. I have no doubt that some of the jobseeker’s allowance claimants in his constituency, to whom he refers, are young people who have come out of some of the most challenging backgrounds, and who have left school early without proper skills development and without qualifications. They may well have come from workless households, where they have not had experience of a parent going out to work in the morning. They represent one of the biggest challenges we face in the labour market. Helping them, motivating them and guiding them towards an entry into the labour market is an extremely important challenge for us, and I see it as a central part of what the Work programme providers are there to do.
The Work programme is very clearly intended to be a revolution in the way in which we deliver welfare to work, and I have been visiting providers today in the east midlands to talk about what they are doing. That revolution is most clearly to be found in two things. The first is the freedoms we are giving private, voluntary and public sector organisations involved in the Work programme and working together in teams to decide what works best, to adapt to change and to pursue best practice but, above all, to find the best way of helping people to move into the workplace and stay there. The second crucial part of this revolution is the fact that the scheme is based on payment by results. For the first three years of seven-year contracts, the providers will get a small up-front payment and after that no up-front payment at all; the next money they see will come when someone has been in work for six months. They will have a real incentive to find the best practice and particularly to match individuals to the right vacancy to help them stay in work over a sustained period.
Mr Winnick
I asked the Minister when we were likely to return to the situation we faced in 2004. In my remarks, I have tried to avoid controversy so far as it is possible for me to do so, but he will know that I disagree with the Government’s overall economic policy as I think it is deepening the economic downturn. Having said that—I very much mean it, too, as I think the present economic policy is far too severe—may I ask when my part of the world is likely to see the same sort of situation with youth unemployment, if not adult unemployment, as we did in 2004?
Chris Grayling
I would love to get a crystal ball out for the hon. Gentleman, but sadly I am not an economic forecaster and I would not want to try to make such an estimate. The official forecasts from the Office for Budget Responsibility, however, expect an increase in employment over the next four years, even after we take into account job losses in the public sector, of just under 1 million positions. Over the past 12 months, private sector employment around the country has increased by about 500,000.
Our key goal should be to ensure that young people in the hon. Gentleman’s constituency and their counterparts elsewhere who are on jobseeker’s allowance and who are struggling to get into work get all the help they need to take advantage of those jobs as they are created. The OBR will continue to publish forecasts and it is our intention to pursue a growth agenda that fosters and encourages business growth and the creation of jobs. I hope that as the OBR reflects circumstances and the impact of our policies, we will get closer to being able to give him an answer, but I fear that I cannot do that tonight.
I will say, however, that the increase the hon. Gentleman has seen is not simply down to the recession. It is a longer-term trend and problem. Employers are reluctant to take young people straight from school, college and university and sometimes it is easier to recruit from overseas. Our job, as well as that of the teams delivering the work experience opportunities, those delivering apprenticeship opportunities and those working extremely hard on the Work programme, is to ensure that those young people take advantage and get into the vacancies as and when they arise. That will give a generation of young people a genuine opportunity to move into work.
I do not want to see a large number of young people stranded on benefits for years and years and I share the hon. Gentleman’s aspiration to tackle the youth unemployment problem. I am happy to continue to work with him to discuss the issues in his constituency and to encourage our Jobcentre Plus teams to work with him to address those problems. I give him a commitment that youth unemployment in his constituency, and around the country, is a priority for us and we will do everything we can to ease it. We believe it should be at the very top of the Government’s agenda and it will continue to be there until we have cracked it.
Question put and agreed to.
Ministerial Correction
(13 years, 5 months ago)
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Defence
(13 years, 5 months ago)
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Mr Llwyd
To ask the Secretary of State for Defence how much money MOD Bicester has paid to (a) Palletways (3PL Contract), (b) Pertemps Employment Agency and (c) City Sprint and other private couriers since the decision to implement the closure of regional distribution centres; and if he will make a statement.
[Official Report, 28 April 2011, Vol. 527, c. 569W.]
Letter of correction from Peter Luff:
An error has been identified in the written answer given to the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) on 28 April 2011. I regret that because of an administrative error, some of the figures for payments to private couriers were omitted.
The full answer given was as follows:
Peter Luff
[holding answer 26 April 2011]: The total payments made to Palletways, Pertemps Employment Agency and private couriers (including City Sprint) since late 2007 when the regional distribution centres were closed, are provided in the following table:
Company | FY2007-08 (3 months) | FY2008-09 | FY2009-10 | Total |
|---|---|---|---|---|
Palletways | 0.547 | 1.917 | 2.134 | 4.598 |
Pertemps | 0 | 3.439 | 2.731 | 6.170 |
Private couriers | 0.880 | — | — | — |
As a direct result of the decision to close the regional distribution centres and centralise distribution activities at Bicester and Donnington with greater use of third party logistics contractors, annual net savings of around £4 million have been achieved.
The correct answer should have been:
Peter Luff
[holding answer 26 April 2011]: The total payments made to Palletways, Pertemps Employment Agency and private couriers (including City Sprint) since late 2007 when the regional distribution centres were closed, are provided in the following table:
Company | FY2007-08 (3 months) | FY2008-09 | FY2009-10 | Total |
|---|---|---|---|---|
Palletways | 0.547 | 1.917 | 2.134 | 4.598 |
Pertemps | 0 | 3.439 | 2.731 | 6.170 |
Private couriers | 0.880 | 2.179 | 1.440 | 3.707[Official Report, 11 August 2011, Vol. 531, c. 13-14MC.] |
As a direct result of the decision to close the regional distribution centres and centralise distribution activities at Bicester and Donnington with greater use of third party logistics contractors, annual net savings of around £4 million have been achieved.
Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Train-building Industry
(13 years, 5 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Roger Gale (in the Chair)
We commence with a one and a half hour debate on the future of the UK train-building industry. Six hon. Members in addition to the securer of the debate have indicated that they wish to speak, and I propose to call the Front Benchers at half-past 10 o’clock. Hon. Members may wish to do the maths and work out that if they allow themselves not more than six minutes each, we should accommodate everybody who wishes to participate.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to serve under your chairmanship, Mr Gale. I shall try to be relatively brief on this important topic. I am grateful that we have the chance to debate and question the Minister on the future of the UK train-building industry, especially with reference to the recent award of preferred-bidder status for the Thameslink contract to the Siemens consortium, rather than the Bombardier one. It is of great interest to people in the whole Derby area, not least in my constituency of Amber Valley, that we get to the bottom of how the contract came to be awarded to a German rather than a UK-based manufacturer.
Anna Soubry (Broxtowe) (Con)
I congratulate my hon. Friend on securing the debate in what has been a very difficult time for Derby and Derbyshire. Does he agree that the decision also has an impact on constituencies such as mine, which are as far from Derby as I think Amber Valley is? It has had a profound effect and caused a lot of anger among my constituents, as well as, no doubt, my hon. Friend’s.
Nigel Mills
I am grateful for that intervention. I suspect that part of my constituency is a bit nearer to Derby than my hon. Friend’s, but I accept that we are all in the same area and that we have people who commute to work at the Bombardier plant and work in the many support industries in the area and who are threatened by the decision.
It is worth starting by saying that the area has a proud history with the railway industry, ranging back to the beginning of the industry in the early 19th century—I believe that production began in Derby in about 1839. The Midland Railway Centre is in my constituency. It is a tremendous attraction and I urge everyone to come to visit it, but the last thing we want is for our whole railway industry to become a museum. We want a thriving and growing train-building industry. We have had a thriving and growing train-building industry. Passenger numbers have been up year on year for ages and we expect that growth to continue. There is no reason why we cannot have a viable industry in the UK if the Government support it.
I want to cover two areas in my speech. The way to help to preserve and enhance the train-building industry would have been to give Bombardier the Thameslink contract in the first place. I want to talk about whether there is any way that the Government can still reconsider that decision. We are only at the preferred-bidder status stage and have not signed on the dotted line for the whole contract, so I think there is still scope for that to happen. I also want to look at how we can go forward in a better way to procure such contracts more sensibly, so that there is a level playing field and our only UK train-building company has a fair chance of winning contracts. That may not be how we see the current process.
The award of preferred-bidder status on the Thameslink contracts to the Siemens consortium rather than the Bombardier one has led many of my constituents to think that the Government have taken leave of their senses. We have rightly spent the past year talking about the need to focus on the manufacturing sector to provide the skilled jobs we need and to rebalance the economy away from London and the south-east. My constituents have told me that they thought that that meant the midlands and the north, not Germany.
The industry is very skilled, with a huge number of skilled jobs of exactly the kind that we want to attract. The award of this huge £1.4 billion contract to Siemens rather than Bombardier means that we are talking the talk, but not walking the walk. Frankly, my constituents cannot understand why we do not spend taxpayers’ money in a way that produces the overall best benefit to the economy of the UK as a whole and the Derby area. We now risk losing not only the 1,000-plus jobs at Bombardier, but the jobs in the supply chain, which are much harder to quantify at this stage.
My first question for the Minister is this: can the Government reconsider the decision? If not, would she help us to understand exactly why not? We know from Government answers and statements that their view in simple terms is that all they could do was open the submitted bids, compare them to the tender specifications drawn up by the previous Government, work out which one was the most economically advantageous and award the contract. The Secretary of State for Business, Innovation and Skills has commented that the specifications were very narrowly defined and there was almost no doubt who would win.
We understand now that weighting for overall socio-economic considerations was not included in the specifications. Had that been included, it may have allowed the Government to take into account the overall impact of the job losses, the loss of tax revenues, the benefits they will need to pay out and the overall knock-on effect on the economy. We would all much rather that those things were included in the specifications. Can the Minister confirm that that weighting was not included in the contract?
Having realised that, did the Government consider restarting the whole process and saying, “We got the specifications wrong, and if we are to spend £1.4 billion of taxpayer and passenger money, let’s get it right and spend the money properly”? Did they look at doing that? Could they have done it? If not, why not? There is a lot of concern that we are going ahead with so significant a contract, with such significant implications, when the Government do not even seem to think that the procurement process has been handled properly or included all the conditions that ought to have been included.
One reason why Bombardier has concerns is its record with Department for Transport procurement processes. It can win contracts worldwide. It can even win contracts to build trains in Germany. It can win contracts with everybody else in the UK. Out of the 14 bids it made for contracts from operating or rolling stock companies, it has won 11, but out of five bids where the DFT was running the process, it has won none. Is that just bad luck or does it suggest that there is something wrong with how the DFT procures the contracts? Do the Government think that huge DFT contracts are the right way to go about train procurement or should we look at letting the operating or rolling stock companies, which have great experience running such things, be in charge of the process? There is a suggestion that the very structure of the tender process made it hard for Bombardier to win. The phrase used was “bundled design, build, maintenance and finance” commercial structure—I find it difficult to get my head around that mouthful.
It was not a case of looking for someone to build trains and sell them, but a case of awarding a contract for someone to build, provide and maintain trains and keep them on the tracks for the best part of 30 years. It is a hugely complex financing exercise. I am not sure whether we were looking for a train-builder or a bank. One suspects that it is much easier for a huge multinational, diversified conglomerate with a brilliant credit rating to produce the cheapest bid, rather than the group that can build the best trains. I do not know about other hon. Members, but I am not sure that I can predict where I will be in 2045. I will be 70 years old, and I hope I will be getting a state pension by then, but I am not totally convinced of that. It is scary to think that these train carriages will be retired after me, but that is how long we are talking about.
The contract is to maintain the trains and keep them on the rails until 2045 or thereafter, which is a hugely difficult thing to do. How many of us can predict what the currency of many EU nations will be even in a year’s time? How many of us can predict how many major banks will still be solvent in a year’s time? And yet, we are asking the train-builders to come up with a finance package that in effect runs for that long period. How can they do that cost-effectively? The process started in 2008 and the state of the banks was even worse then than it is now.
Many hon. Members are concerned that the private finance initiative resulted in taxpayers paying people to borrow far more expensively than the Government could, and we ended up having to pay for that for 30-odd years. Is there not a risk that that is what we are doing with this? We are in effect locking people into a hugely expensive way of financing something, but if we did it better there might be a cheaper way.
I looked at some of the original tender documents from 2008, and there was an interesting presentation to interested parties in the “Commercial and Financial Overview”. On the financing side, it states:
“Consistent with HMT best practice, the Department will reserve the right to hold a funding competition”.
Have the Government considered that? If the financing costs made it hard for Bombardier to compete in the award of preferred-bidder status, did the Government think, “Actually, financing is a very risky thing for anybody to try and do for this long period. Should we take that out of the process and tender it separately?”? That might have been worth considering.
The same presentation outlines that the accreditation process structure had a weighting of 40% for business excellence and approach, and 60% for technical capability and experience. I do not know whether those weightings were used in the final process, but if they were, it would be interesting to understand how. We would all like to understand exactly how close these bids were. Where was Siemens stronger and where was Bombardier stronger? I fear that the answer to that probably involves hugely sensitive commercial data that the Minister cannot release today. We want people to understand why we are spending taxpayers’ and passengers’ money in this way, but it is hard to explain the process when we cannot access the full details.
One matter that has been raised—it would be helpful to have some clarification on this—is the lightweight bogie that will be used in the contract. For a contract that Siemens won in Germany, it had to use Bombardier’s bogie, and there is a joint contract in place for that. I understand—I cannot find any evidence for this on the internet—that Siemens has not managed to produce, test or bring into operation anywhere a lightweight bogie. The German train industry was not desperately keen to have its trains experimented on and tested, and therefore Siemens has used the Bombardier-made bogie to ensure that it gets the reliability from scratch. Frankly, such a situation seems a little perverse. The Germans give a contract to a German train company but they are not willing to have their trains experimented on, and we end up awarding a contract to a German train company for our trains to be experimented on rather than awarding it to the UK company that could have used its bogie, which it knows works.
Anecdotally, one of the attractions for Siemens was mentioned by the UK chief executive of Siemens rail industry operations, Steve Scrimshaw, in an interview with Rail Professional in March this year:
“A lot of the DfT’s scoring is around deliverability and our trains work straight out of the box.”
Interestingly, that same article goes on to talk about the problems that Siemens has had delivering trains into Scotland, where they have not worked straight from the box and their entry into service was delayed by ScotRail until it could resolve some of the technical issues. It is not the case that Siemens delivers and works perfectly every time, and that Bombardier does not. The fact that Bombardier can win contracts in the UK and around the world shows that it probably has a similar quality of delivery to Siemens.
In light of those issues, the key question for the Government is this: can they and will they reconsider this decision before the contract goes to final status? Some of the concerns about the procurement process that I have set out have led my hon. Friends the Members for Mid Derbyshire (Pauline Latham), for South Derbyshire (Heather Wheeler) and for Erewash (Jessica Lee)—she sadly cannot be here today—and I to ask the National Audit Office to review this procurement process and examine whether we are getting the most economically advantageous position for taxpayers and passengers.
There are doubts whether the DFT is very good at handling these processes based on its experiences with the intercity express programme contract and this one. Let us be honest: this project was originally called Thameslink 2000, but these carriages might hit the tracks in 2015. That is not a tremendous procurement record. Is it right for the DFT to be handling these contracts? My hon. Friends and I have fundamental concerns about whether the right requirements were in the tender specification and whether we can come to the right decision. Therefore, there seems to be a strong prima facie case to have another look at the matter and ensure that we are spending £1.4 billion of taxpayers’ money in the right way.
We can talk about the history of the process and this contract for as long as we like but, whatever happens on that, we need to get these things right in future. The fact that the past two major contracts have not gone to a UK manufacturer is bad enough but, if we are to sort this process out and keep the train-building industry in the UK, we need to start getting such things right and ensuring that there is a level playing field. Let us be clear that no one is suggesting that we want Bombardier in the UK to be a new British Leyland. Bombardier does not want that and absolutely no taxpayer would want that. We have a company that can build high-quality trains for the right price, and it should get the chance to do that. We want a process that creates a level playing field, and for a UK manufacturer to have a fair opportunity to win contracts to build UK trains in the same way that German manufacturers can build trains in Germany and French ones can build trains in France.
What kind of message are we giving to the people we want to invest and manufacture in the UK? It seems that if someone wants to win a contract to build trains for the German rail industry, they must build them in Germany, and that if someone wants to win a contract in France to build trains for the French rail industry, they must build them in France. However, if someone wants to win a contract to build trains for the UK rail industry, they can build them where they like. If an investor is short of money and considering which countries to invest in, what will their conclusion be? They cannot close the French or German plants because they know that they will not win contracts in those huge markets, but they could close the UK one.
Duncan Hames (Chippenham) (LD)
I congratulate the hon. Gentleman on securing the debate. I hope he recognises that the issue goes beyond just rolling stock and that it relates to the whole of the rail supply chain. Does he agree that the key question is this: why does the German industry not have more penetration in the French market, and indeed, why does the French industry not have more penetration in the German market, if both those countries are interpreting EU procurement law in the same way as us?
Nigel Mills
I am sure that all our constituents are asking that question. If Germany and France do not open their markets, why do we open our markets so much? We all want a level playing field. If Germany and France are going to reward their industries, we may have little choice but to go the same way. The issue is not new, because the previous Government considered it in 2003. They commissioned a report on how the EU procurement processes were working to see whether there was unfairness or any inappropriate activity. As usual, the conclusion was that there was no clear illegality, but there appears to have been a slight distortion in the results. Interestingly, that report was written by the then UK chief executive of Siemens, Alan Wood. It is amazing how things come back round to bite.
Lorely Burt (Solihull) (LD)
I congratulate the hon. Gentleman on securing this important debate. On the parochial protectionism of other countries, is it not the case that the UK is exceptionally successful in winning EU bidding contracts elsewhere? In fact, we come after only Germany in terms of the number and value of contracts that we win throughout the EU, so it works both ways.
Nigel Mills
I think that Germany wins 26% of the time when it bids, and we win about 14%. However, I am not sure that those statistics work when we are talking about major infrastructure projects that are of huge overall significance, rather than about some of the smaller ones. Frankly, across the EU as a whole, we are a hugely advanced economy, with all the high skills and the value added. Therefore, we expect the UK to be able to do things that other economies cannot yet do, and to be winning contracts. The key point is that thousands and thousands of jobs are at stake. We are risking those jobs by playing by the rules, but it seems that the Germans, French and others are not.
Let us consider the Eurotunnel procurement. That contract was awarded not to Alstom of France, but to Siemens of Germany, which must be doing something right. The French went mad and had a judicial review to try to challenge that contract, because they were so surprised that it had not been awarded to one of their domestic companies. We have to send out the message that we want to encourage our UK train-building industry, which is of huge value to us, and we want the Government to support it.
Perhaps we need to consider again how we go about procuring these train-building contracts. For many years, Bombardier has questioned how sensible it is to have a feast of contracts and then a famine. How does that enable it to be a sustainable, viable business? How does having to recruit and skill up to fulfil one contract and then lay people off and start again make a company cost-effective and ensure that we are getting the best price for our trains? How can Bombardier continually develop in the UK and improve its processes if it does not know from year to year whether it will have a viable manufacturing business in the UK?
Let us not set any hares running. We all hope that Bombardier will retain a strong manufacturing presence in the UK and that this will not be a fundamental threat. However, it is a significant contract, especially on the back of its not winning the intercity express programme contract. It would be helpful if the Government set out what other contracts they expect to award in the rest of this Parliament, and how significant their value may be. We know that Crossrail should be one contract. Many have raised the question whether the Government can now bring forward that Crossrail procurement in the hope that Bombardier can win it and try to protect jobs in the Derby area.
Some have suggested that the Crossrail contract is very closely linked to the Thameslink contract. The amount of cross-savings between the two might make it very hard for a company that does not have the Thameslink contract to deliver Crossrail competitively. Will the Minister confirm that that is not the case, and that it is open to the Government to award the Crossrail contract to a different provider?
Andrew Griffiths (Burton) (Con)
I congratulate my hon. Friend on securing the debate. Bombardier is a major employer in my constituency, too. He has discussed the success of Bombardier and its ability to win contracts. Is he aware of the statistics that show that of 14 contracts that Bombardier bid for that were not related to the Department for Transport, it won 11, yet of all of the contracts it has bid for with the Department for Transport, it has won not a single one?
Nigel Mills
I am grateful for my hon. Friend’s intervention. Had he been here from the start, he would have heard me quote those very same statistics. His point is valid, however, and he reiterates the question whether the Department for Transport is handling those procurements in the most effective manner.
I conclude by asking the Minister some questions about future procurement processes. Do the Government think that there is a need for improvement? Should the Department for Transport be handling them? Will the Department guarantee that the socio-economic benefits will be given some weighting in that process? Can the contracts be structured so that UK manufacturing industry has a chance of a sustainable, viable future? Can we look to structure those contracts in a way that gets trains built, and not look for the biggest bank we can find to underwrite 30 years’ worth of financing?
No one should doubt that the train-building industry is of great importance to the Derby area and the UK economy as a whole. We have a proud heritage of train building. We can and should have an exciting future of train building. I urge the Government to do their bit to ensure that that is what we get.
Margaret Beckett (Derby South) (Lab)
I congratulate the hon. Member for Amber Valley (Nigel Mills) not only on securing the debate, but on his excellent speech. In fact, my only criticism would be that he has left the rest of us with not very much to say. He has, effectively and well, used all the ammunition. Significantly, I think I am right in saying that—perhaps not so unusually in this Chamber, but unusually in this place in general—almost every hon. Member present is not here to attack or disagree. We are all here for the same purpose: to raise the concerns so ably set out a moment ago by the hon. Gentleman. If the Minister’s Department and her ministerial colleagues were nurturing the illusion that this is a decision that would go away, that might be an error.
Cross-party interest in this issue has been clear this morning. All the Derby Members here—perhaps almost every hon. Member, as the hon. Member for Broxtowe (Anna Soubry) indicated—have constituents with considerable expertise in the rail industry. The plant in Derby is in my constituency, but we all know from our own constituents, wherever they may live, of the very real astonishment among rail industry aficionados. The people who know and understand, who have experience and expertise, are at a loss to understand and explain the decision, and the hon. Gentleman is entirely right to ask for an explanation.
The hon. Gentleman talked about the weight given to the different elements in the procurement process. Like him, I have seen the references that have been made—I believe that the Secretary of State for Business, Innovation and Skills made one of them. There was a story in the Daily Express over the weekend suggesting that this was a decision based on finance, rather than on the kind of trains in which, as the hon. Gentleman rightly identified, our constituents will be travelling for many a year to come. He identified the fact that in the original procurement process in 2008, the Department reserved the right to hold a funding competition. My understanding is that there were two further opportunities—in March 2010 and January 2011, when further steps were taken in the bidding process—when the Department could have triggered the right, which it had reserved, to look again and separately at the issue of funding, but it chose not to do so. That is a concern to all of us.
The hon. Gentleman asked whether we are looking for a train builder or a bank. As I understand it, Siemens has actually become a bank, which indicates the strength of its balance sheet, but is that what we are looking for? Certainly not, if we are talking about whether there is a future for the train-building industry in this country.
Heather Wheeler (South Derbyshire) (Con)
I congratulate my hon. Friend the Member for Amber Valley (Nigel Mills) on securing the debate. We are talking about the future of train building in this country. The decision to make Siemens the preferred bidder is incredibly disappointing for all our constituents who work at Bombardier, but surely the most important thing is the way forward. The chairman of Bombardier is going out to South Africa with the Government to look at securing contracts out there. It is asking the Government to bring forward tube contracts by a couple of years, so that there is a future for train building in this country, and the college is opening up in Derby for rail contracts. We have great expertise in the area, and in the north-west too. That is where we need to go with this conversation. I am sure that, having heard my hon. Friend’s conversation with the Minister, answers will be given, but we want to talk about the future, and the future will be train building in this country.
Margaret Beckett
I agree in part with the hon. Lady. I take her point entirely that we are really interested in the future, but let us not overlook the fact that we have barely started. The procurement process has not concluded. All that has happened is that a preferred bidder has been identified and negotiations have been opened. The hon. Member for Amber Valley referred to the intercity express programme contract. In the hands of the Department for Transport, that went to Hitachi, but the contract for that has not yet been signed. Indeed, just before the election the previous Government ordered a review of that contract, and this Government have substantially renegotiated it. We are very far from the conclusion of this bidding process, so although I share the hon. Lady’s view entirely that we should look to the future—I will come to that issue in a second—to secure that future we must not abandon the prospect of changing the present circumstances and the award of this contract.
One concern about the attitude that the company is likely to take relates precisely to the issue of opportunities for the future. If this procurement goes ahead, we may lose the opportunity of an offer made by Bombardier. As I understand it, it has decided at the highest level to establish a worldwide centre of excellence for the design and manufacture of new cars for high-speed trains, for future procurement—of exactly the kind referred to in the debate. Bombardier was prepared to site that worldwide centre of excellence in Derby. That offer was, in effect, thrown back in its face. That concerns me greatly. We would be talking about more jobs—jobs with even higher skills levels than we see now, and with the potential for new technologies. Although I and many in my party applaud what the Cabinet and the Prime Minister said in my Derby constituency about manufacturing, skills and the need to rebalance our economy, the skills base in our city is not just Bombardier; it is also Rolls-Royce. We are a strong manufacturing base, but that base depends on the interaction between those two companies, among others, on the supply chain, and on their ability to work together to establish and maintain that skills base.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
Does the right hon. Lady acknowledge that the Government of which she was a member set the criteria for the procurement, and that there is no way for this Government simply to ignore the Siemens bid and give the contract to Bombardier? We are bound by the criteria and by European Union rules and we cannot simply rip up the process. Is she advocating that we stop the procurement altogether and start afresh? That would delay considerably the Thameslink programme—which we inherited from the previous Government already running 16 years late—and we would still have no guarantee of Bombardier being the winner at the end of the new procurement process.
Margaret Beckett
I am sorry that the Minister decided that this was a good time to make that party political point, when all of us are present to get her and her Department to change their minds and look afresh at all the implications. We all know from our constituents that there are very real questions about whether the right decision has been made and whether proper account has been taken. We have talked about the financing so far, but we have also touched on whether the vehicle is fit for purpose and whether Siemens—although it is a fine company with a great engineering tradition—has the capacity to supply the trains needed.
I am genuinely quite sad that the Minister made that point. As the storm has arisen, not only in the Derby area but in the north-west and elsewhere, we have been inundated with requests from people throughout the country, with other Members and members of the public asking, “What can we do to help? This is a mad decision and none of us agrees with it.” However, for some days I have had the feeling that, to get the Government off the hook on which they so far seem determined to impale themselves, some have been saying, in effect—I am prepared to exempt the Minister—“If we can palm off the blame for this on to the previous Government, then we don’t need to look again at the decision.” I am sorry, but that will not wash this time, because of genuine concern about how the financing was handled, about the train, about the lost opportunity for new manufacturing in the UK and about the knock-on effect on Rolls-Royce. This is not a done deal.
The hon. Member for South Derbyshire (Heather Wheeler) referred to the chair of Bombardier in the UK going to South Africa with the Prime Minister to promote British exports. I would not blame him for viewing the journey with some irony. In South Africa, they will be travelling on new trains, made by Bombardier for South African Railways, which felt able to award that contract. We can all ask why Bombardier could win that contract, but not one in this country.
We are very much at the opening stage in the process of negotiating the contract. The Government have only recently taken delivery of the McNulty report, which also considers the supply chain; we have hardly touched on that yet this morning, but the implications throughout the country are enormous. Genuinely, I say to the Government that this decision is a mistake. I do not accept the simple case that they have put because, as I pointed out, there were opportunities for the Department to look at the financing, but let me take a step back from that. They can blame it on us if they like, but they must change the decision—that is what matters.
Pauline Latham (Mid Derbyshire) (Con)
It is a great pleasure to serve under your chairmanship, Mr Gale.
I echo everything that my hon. Friend the Member for Amber Valley (Nigel Mills) said, and much of what the right hon. Member for Derby South (Margaret Beckett) said, because this issue is not party political but about the welfare of people in all our constituencies. Everyone present today, especially from Derbyshire, is touched. However, there are particular worries over the border in Staffordshire, as well as in Nottinghamshire. Although Bombardier is in the right hon. Lady’s Derby South constituency, the situation affects every single one of us. There is a huge knock-on effect on not only the supply chain, but where people spend their money. If people are redundant and therefore do not have money, all the knock-on industries will have to make reductions, and that will have a big impact on our area’s towns and cities. I know that Derby is not doing as well as we come out of the recession as it could have done had the contract been won. People have a huge lack of confidence about their future and how much money, if any, they will be able to spend.
Over the months during which we have been waiting for the decision, I personally lobbied the Secretary of State for Transport on several occasions. Unfortunately, he told me every single time that I was not to worry because Bombardier was fine and was not going to pull out of this country—I mentioned that that was a possibility—as the company had lots of orders and would have no problem going forward. That is clearly not the case, so he misread the situation. I hope that he feels somewhat apologetic about the decision because he was clearly not looking at the wider situation in Derby and the surrounding areas.
When Hitachi of Japan and not Bombardier won a train order, did the Government review the procurement process and look at why we did not get it? If that did not happen, why not? Clearly, if we could not win that contract, other questions would be raised. As we heard earlier, Bombardier has not won five out of five of the important contracts going forward, so what can the Government do now?
I am as disappointed as every other Member in the Chamber today. We all get campaigning e-mails on things such as forests and the NHS. However, of the issues that affect real people in my constituency, I have had more e-mails and letters about this one than on all the rest put together since I was elected in 2010. That says something about people’s depth of feeling—not necessarily of those who work for Bombardier, but of those concerned about their neighbours, friends or relatives. Some people have three or four relatives working with Bombardier who are all being made redundant. That will have a devastating impact on people in my area. The situation is perhaps the worst we have faced since the crash of Rolls-Royce in 1971—I clearly remember how devastating that was for Derby. It took us a long time to come out of that recession, although Rolls-Royce is now a successful business.
I commend the city council for talking to Bombardier and trying to make it understand the devastating impact on the area. Unfortunately, the company had already made redundancy decisions, which I understand that the Secretary of State received a letter about as far back as March or April. Bombardier was going to make those redundancies anyway, but however much we say that, it does not help the people with the redundancy notices in their hands. Whether they were made redundant three months ago or now, they are still redundant and have an uncertain future.
My hon. Friend the Member for Amber Valley mentioned that we have been talking a lot about coming out of the recession on the back of manufacturing. Well, it does not look like that from where I am sitting in Mid Derbyshire. If we do not do so with firms such as Bombardier, we will never do it, and we will not come out of recession anywhere near as quickly as we might have done had we got this contract in Derby.
I agree with my hon. Friend about the Department for Transport: is it the right organisation to handle such procurement? It does not seem to be able to get it right. Obviously, I agree that there must be competition and, as the right hon. Member for Derby South said, we do not want one contract and nothing else. We do not want a monopoly, but competition must be fair, and it does not seem to my constituents that there has been any fairness whatever.
It is ironic that, not many months ago, the Secretary of State for Business, Innovation and Skills came up to Rolls-Royce to open a new apprenticeship school. Some 50% of those apprenticeships are with Bombardier. He congratulated Rolls-Royce on the facility and congratulated Bombardier on sharing it, but that sounds hollow now. What is the future for those apprentices? They do not seem to have one. Will half that facility now not operate? That would probably mean redundancies.
The implications for the supply chain reverberate not just around Derby, but much further afield. What will happen to companies in the supply chain? Will they be able to take up opportunities to supply Siemens, or will Siemens procure everything from Germany or somewhere closer to it, instead of our excellent businesses? The Secretary of State and the Minister need to answer many questions about what swung the decision for Siemens and why Bombardier did not get the contract. Bombardier is an excellent production company. We have seen that it can win orders from other people, but not Government contracts, and that seems to be nonsense.
We must look to the future to see what the Government can do to bring forward procurement. There is Crossrail. We also need more tube trains and other rolling stock needs to be replaced. Will the Government consider urgently bringing that forward—not just by a year or two, but as far forward as possible—to give Bombardier the opportunity to win some contracts and save jobs in the Derbyshire area? The position is devastating and we need some answers, but I am sure that the Minister will be able to give them today.
We are asking the Office of Fair Trading to examine the procurement process and we are seeking a meeting with the Prime Minister. We must go to the very top and exhaust all possibilities. Can the contract be looked at again? Can we seriously change the decision? I believe that the decision was wrong, but we must bring forward opportunities for Bombardier to get back on its feet and to save jobs in Mid Derbyshire, Derby city and the rest of the area. I urge the Minister to do all that she can to bring forward such opportunities for the future of Bombardier and this country’s train industry. If it goes, we will not have a train industry and it will never ever return. The country will then be left without a train industry of which we can be proud.
Mr Roger Gale (in the Chair)
Order. Five or six Members wish to speak. Some 15 minutes remain for Back-Bench contributions, so I urge hon. Members to keep their speeches brief.
Chris Williamson (Derby North) (Lab)
I will try to be brief, Mr Gale, and it is a great pleasure to serve under your chairmanship.
I congratulate the hon. Member for Amber Valley (Nigel Mills) on an excellent speech. I agreed with almost everything that he said, although I shall come on to a point with which I took slight issue. I agreed with what the Prime Minister and the Chancellor of the Exchequer said when they came to Derby just three months ago. The Prime Minister said:
“The point of the Cabinet today is to ask one fundamental question: what is it that we can do in government to help the economy to rebalance, to grow and for businesses to start up, to invest and employ people?”
The Chancellor said:
“Derby’s a great example of what Britain’s economy should be in the future. And a strong endorsement of the importance of manufacturing industry.”
I could not agree more.
The train-building and railway industry has been a cornerstone of British manufacturing since the 19th century. It is a vital industry in the Derby area, and it would be a sad irony, would it not, if 2011 turned out to be the last year when a British train rolled off a British production line? However, that is where we might be if the Government are unwilling to reverse their decision. Derby gave the world the railways, and I want Derby to continue to have a future in the railway industry long into the 21st century.
The hon. Member for Mid Derbyshire (Pauline Latham) referred to the Rolls-Royce crash of 1971. Derby has not faced a crisis of such proportions since then. Not for 40 years have we faced the possibility of losing so many jobs in one go. I remember that, at the time, the then Government were initially unwilling to intervene, but ultimately they did the right thing by Rolls-Royce, the workers, and the families who relied on Rolls-Royce for their livelihood. Since then, Rolls-Royce has gone from strength to strength, and it is now the largest employer in Derby. It is a world-leading company and a top aerospace company in the world.
I come to the matter raised by the hon. Member for Amber Valley with which I slightly took issue. He referred to a future for the train-building industry if the Government are unable to change their decision on the Thameslink rolling stock programme. My fear is that if that decision is not changed, the train-building industry in our country might not have a future. Let us be clear. From the autumn, Bombardier will have work for barely 300 workers to finish off a contract for sub-surface trains for the London underground, which means that 3,000 people who are employed directly by Bombardier, and at least a further 12,000 in the supply chain, could lose their jobs within the next 12 months. That would have huge knock-on implications for the city, and not just for the individuals who lose their jobs, devastating as that would be, but because the wider implications for Derby’s economy would be massive.
I agreed with what the hon. Member for Mid Derbyshire said when she made that point and also referred to the apprenticeships that will be lost at Bombardier. I know that that is an area of priority for the Government—I share that view—so I implore the Minister to consider the training and employment opportunities for countless young people and future generations in the city of Derby. They will be denied such opportunities if the decision is not reversed.
As I said, the train-building industry is a cornerstone of British manufacturing. Surely we cannot allow such a situation to develop on the spurious grounds that awarding a contract to Siemens represents value for money for taxpayers. How can that possibly be true when 15,000 workers might lose their jobs? That would lead to a huge loss of tax revenue to the Exchequer, a loss of VAT because of reduced spending power, and the payment of increased unemployment benefit.
I shall present a petition to the House next week. It already has 27,000 signatures and the number is growing by the day. It demonstrates the strength of feeling not just in Derby, but further afield, as my right hon. Friend the Member for Derby South (Margaret Beckett) pointed out. The issue is national, not just local.
I shall conclude with three specific questions to the Minister. What legal advice did the Department take on changing the terms of the original invitation to tender? What assessment has been made of how Germany and France have managed to stay within EU procurement rules when, in the past 10 years, 98% of train contracts in Germany have gone to German companies, and 100% of such contracts in France have gone to French companies? Finally, will the Minister publish the results of the value-for-money assessment applied to Siemens?
I will conclude with a quotation from the Chancellor’s Budget statement:
“Manufacturing is crucial to the rebalancing of our economy.”
He continued:
“We want the words…“Made in Britain”, “Created in Britain”, “Designed in Britain” and “Invented in Britain” to drive our nation forward—a Britain carried aloft by the march of the makers. That is how we will create jobs and support families.”—[Official Report, 23 March 2011; Vol. 525, c. 958-966.]
I could not have put it better myself, so I urge the Minister and the Department to look carefully at the decision and to change it to ensure that British train building has a future.
Lorely Burt (Solihull) (LD)
I shall preface my comments by saying that any job loss is a tragedy for the family of the person involved. The hon. Member for Derby North (Chris Williamson) made a point about the supply chain, which is hugely important. Every job lost in British manufacturing has a knock-on effect on three or four jobs in the supply chain.
I want to address three issues. First, did the UK make the best use of EU procurement rules? Secondly, I will speak about open competition because we must not lose sight of the fact that we do well on that in Europe. Thirdly, we must ask what we can do now and what the best way forward is.
Will the Minister tell us, if she can, who interpreted the EU procurement rules? Were the rules interpreted in a way that might inadvertently have favoured Siemens as opposed to Bombardier? Were the rules gold plated and was our interpretation of them too strict? Why did the procurement rules not take account of the socio-economic impact of the decision’s devastating results? I hope that the Business, Innovation and Skills Committee will conduct an inquiry into the matter. We were legally bound by the procurement rules established by the previous Government, and had we acted differently, we would have been open to legal challenge, although I take no pleasure whatsoever in saying that.
On open competition, the UK wins 17% of all EU contracts and comes second in Europe when it comes to winning European tenders. Protectionism is a harmful road down which to go for all countries in Europe.
Duncan Hames
My hon. Friend is right to make that point. Invensys Rail in my constituency produces world-class signalling technology and has worked on seven out of the eight most recent high-speed lines in Spain, and nine out of 12 of the metro lines in Beijing. When we have such exceptional engineering talent in our country that wins contracts abroad, some of us may wonder why we are not more successful at winning contracts at home.
Lorely Burt
My hon. Friend makes an excellent and important point that has also been raised by a several hon. Members. We must be savvier when setting procurement criteria. In Italy, specifications have been known to include the requirement that the same work has been done previously in the same area, although how it gets away with that I do not know. A study by Francesco Grillo concluded:
“In Britain, there are lower barriers to entry”
than elsewhere in the EU. We desperately need to look at that.
A balance must be struck, and there are some mitigating factors. Bombardier preannounced its intention to create 1,000 redundancies, regardless of the loss of the Thameslink bid. The growth review initiated by the Government will look at how business can be supported and at how UK manufacturing companies can meet our strategic needs, the importance of which was raised earlier. We must look at whether the UK makes the best use of our procurement strategy. On the bright side, the Business Secretary has announced a taskforce headed by Margaret Gildea OBE that will work with Bombardier to help to sustain a long-term manufacturing base in the UK—we are in this for the long term.
One or two hon. Members alluded to the fact that Bombardier is Canadian-owned rather than British-owned. Siemens will create 2,000 jobs as a result of being awarded the contract. Indeed, Bombardier has just won a £354 million contract to provide signalling for the London underground. It is therefore not all doom and gloom, but we must do everything possible in Derbyshire to help people to revitalise their manufacturing base.
Jack Dromey (Birmingham, Erdington) (Lab)
I, too, pay tribute to the hon. Member for Amber Valley (Nigel Mills) for initiating this debate. My father was a train driver for 15 years and he was proud to drive British trains. British trains were at the heart of a thriving manufacturing base that at its peak employed more than 8 million people. Successive Governments have presided over the decline of manufacturing in Britain. On one hand, the previous Conservative Government saw 3 million jobs lost in manufacturing during the 1980s, while on the other hand the Labour Government were slow to learn painful lessons. They eventually arrived at industrial activism, but only after 10 years, after our economy had become unbalanced, with too much emphasis on the financial sector and not enough on the manufacturing sector. There was too much financial engineering, and not enough real engineering.
Throughout that period, I fought many battles for procurement contracts. In 1992, I was involved with British Rail engineering works in York. We successfully won an order for Networker trains for the southern region, which kept that admirable world-class establishment open for three further years. In general—I hope you will excuse the bad pun, Mr Gale—the direction of travel has been depressing, with consequences for our country and especially the midlands. Some 30 years ago, the midlands had one of the two strongest economies in Britain; it now has one of the two weakest.
The country is recovering at a painfully slow pace compared with Germany and France, which had the wisdom to sustain a strong manufacturing base. Bombardier is right when it says that the situation we are now in could not have happened in Germany or France. In recent years we have embraced industrial activism, and the Government have said that they wish to rebalance the economy as part of the growth strategy. I welcome that, but profound lessons must be learned from this sorry saga. Why can the Department for Transport not seem to get backing British industry right? Will the Government recognise the immense leverage that exists in more than £100 billion of public procurement funds, and will they use that in an intelligent way to underpin our manufacturing economy as part of the strategy for growth? The Government must use their power to help manufacturing with a determination equal to that of France or Germany.
Will the Government look again at how contracts are procured? The process was fundamentally flawed. As hon. Members from all parties have said, there was no proper concern for the socio-economic consequences of the contract decision, or for the consequences on the supply chain and the long-term impact of such a loss of capacity in Britain. That includes contracts that could be won both in Britain and internationally, since the trains will no longer be manufactured in Britain.
Finally, it is not too late for the Government to think again. I have been impressed by the excellent contributions made by hon. Members from all parties during the debate. We must learn lessons for the future, but for the here and now we need the Government to state that only preferred-bidder status has been allocated and that it is not too late to change. Where there is a will, there is a way. The voice of people in the midlands is clear: they want the Government to back Britain and to back Bombardier.
Mr Edward Timpson (Crewe and Nantwich) (Con)
It is a pleasure to serve under your chairmanship, Mr Gale, and I will be as brief as possible. I congratulate my hon. Friend the Member for Amber Valley (Nigel Mills) on securing this important debate and on his well-argued and thoughtful speech. I endorse all that he has said.
I have made no secret of my feelings about the fact that the Government contract to build trains for Thameslink will go to a German company and that the trains will be manufactured in Germany. Although the decision does not directly impact on the Bombardier plant in Crewe, it is none the less a hugely disappointing and deeply frustrating outcome to what has ended up being a long and drawn-out saga. As my hon. Friend has said, we must go back 16 years to the inception of what was then termed the Thameslink 2000 project—I guess it is now the Thameslink 2018 project—to realise how long the decision has been left hanging.
The procurement process has gobbled up more than £13 million in consultancy fees, and the Thameslink project is now £600 million over budget. That does not make the decision any easier to swallow for Bombardier workers and raises a number of questions about procurement. What is clear is that the outcome of Thameslink is a hangover from decisions made some time ago at the inception of the tendering process. It appears that the EU procurement directive was adhered to to the letter. That slavish adherence to European directives needs to be remedied. Some of those directives have value, but others serve only to damage British industry and, more specifically, industry in Crewe and Derby. Why should we stick so rigidly to those rules when they are so flexibly interpreted in other European countries? It is no accident that the Italian police drive Fiats.
We cannot afford to make mistakes such as this. Companies such as Bombardier need to survive and thrive in the UK, or we will be reliant on overseas assistance to manage essential national infrastructure. It simply does not make sense to go for the cheapest contracts if that means that hundreds of skilled engineers end up forming part of the dole bill.
Maria Eagle (Garston and Halewood) (Lab)
I congratulate the hon. Member for Amber Valley (Nigel Mills) on securing the debate. He will have noticed not only that everyone has congratulated him on that and on the way in which he made his remarks, but the great agreement among all the speakers.
If rail were in decline in the UK, the loss of our rail manufacturing industry would be a tragedy, but it would at least be understandable. We have seen industries decline because of technological or social change, but in the case of rail, there is no excuse for letting the industry wither and die in Britain. In fact, the reverse is true. Rail is thriving in the UK. More people are travelling now than at any point since the 1920s—1.3 billion journeys are now made every year. There has been growth of an additional 1 million journeys in the past five years alone. Every prediction suggests that demand is continuing to increase and that it could double in the next 30 years. Rail is therefore a priority for investment for the foreseeable future.
The Minister and I may have our differences over spending, not least on the speed and scale of cuts, but there is consensus that as a country we will be investing in rail for many years. Whether the investment is in track and signalling, stations or trains, we will be spending billions of pounds in the years to come. That investment should benefit the UK economy. It will lead to faster journey times and additional capacity. Why cannot it also lead to our supporting, improving and growing our manufacturing industry, instead of our watching it leave the country? It could lead to significant increases in the numbers of manufacturing jobs, which it has done in the past decade.
Sadly, Bombardier is the last train manufacturer left in the UK, but under the previous Government it won successive orders, including £3.4 billion-worth of London underground trains, as well as trains for the London Overground network, London Midland, Chiltern Railways and the Stansted Express. Therefore, the decision by the current Secretary of State for Transport to award the £1.4 billion Thameslink contract to the German-based Siemens-led consortium puts at risk 3,000 British jobs at Bombardier and very many more in the supply chain, as right hon. and hon. Members on both sides of the Chamber have said.
Our train manufacturing industry is at a crossroads. We can see it either follow other sectors and become yet another assembly line, or remain a major manufacturer, taking advantage of the significant investment and orders that the success of rail in the UK will guarantee for years to come. We can ensure that we carry on building trains in this country, but by awarding the Thameslink contract to a company that will build the trains abroad, the Government have given us their view of the future of rail manufacturing in the UK. Today, they have heard calls from right hon. and hon. Members on both sides of the Chamber, which I echo, for them to think again and be very clear that that is what they want in the future.
Siemens is a major British employer in its own right, with more than half its 16,000-strong UK work force involved in manufacturing and engineering. The contract that we are discussing will lead to jobs. There is a dispute about just how many, but there will be jobs in the supply of train components and in maintenance. Some will be substituted for jobs that Bombardier would have had if it had won the contract, while others will be new. I welcome the commitment of Siemens to a new UK rail training academy, supporting the national skills academy for railway engineering. However, none of that good takes away from the fact that the Thameslink trains will be built by a work force in Germany. The reality is that the jobs that will be created would have had to have been in the UK whatever the result of the procurement.
The decision is undoubtedly a body blow for Bombardier, as right hon. and hon. Members who represent constituencies in the immediate area, such as my right hon. Friend the Member for Derby South (Margaret Beckett) and my hon. Friend the Member for Derby North (Chris Williamson), have said. The fact that 446 permanent and 983 contract staff already face redundancy is a severe blow, not only to the east midlands but to the whole of our manufacturing industry. The Government have tried to suggest that those jobs would have been lost anyway, but that has been strongly denied by the company, which has said that not one permanent position would have been lost had it secured the contract.
The Government’s response so far to the uproar has been to wash their hands of the process and try to blame the previous Government. That might be understandable, but it does not take us very far forward. We have even seen the nonsense of the Transport Secretary writing to the Prime Minister to complain about the decision that he himself has made.
I hope the Minister today will come forward with some rather more constructive ways in which she can tackle the crisis that the decision has created. It is clear that the Department for Transport has not secured the most economically advantageous outcome either for the local community or for the country as a whole, despite it being perfectly permitted to do so. It is also clear that there has been a particular problem in the Department for Transport, which was referred to by right hon. and hon. Members on both sides of the Chamber, including the hon. Members for Amber Valley and for Mid Derbyshire (Pauline Latham). The DFT has awarded not a single contract to Bombardier since it has been in charge of letting them, yet Bombardier won more than 70% of orders for new trains for the UK rail industry when procurement was led by the rolling stock leasing and train operating companies. The company has been incredibly successful around the world—another point made by all who spoke in the debate—yet the DFT has not placed an order with a British-based company since it took over procurement. There is an issue to be addressed by the Minister and there are serious questions to be answered.
Opposition Members have called for a full independent review of the procurement. We are clear that the review must consider the social impact on the UK’s work force, both for those directly employed by Bombardier and for those in the wider supply chain. It must consider the likely impact on the sector as a whole and the impact on future procurement. Despite what Ministers say, the Government are perfectly entitled to do just that. The Secretary of State’s predecessor, Lord Adonis, commissioned an independent review of the entire intercity express programme after the preferred bidder had been announced, and the new Government carried out a further review following the election. Both reviews led to substantial changes to the project, not least the agreement that Hitachi would commit to Newton Aycliffe as the preferred site for its planned European rolling stock manufacturing and assembly centre, generating at least 500 new jobs in the north-east.
There are things that Ministers can do. As someone who was a Minister for nine years, I confirm that it is never the case that Ministers cannot do anything. Today, I urge the Minister to think again and agree to a review of the decision. Labour Members accept that we need to learn lessons from our own time in government. In view of the cross-party consensus among Back Benchers in today’s debate, I hope that we can reach a cross-party consensus on how rail procurement will be carried out in the future, particularly as these decisions inevitably cross Parliaments.
I shall offer three specific suggestions for a way forward. First, we need to consider how we operate these contracts under the European procurement directive—a point made by a number of right hon. and hon. Members. We must examine why France and Germany manage procurement whereby their home-based companies in almost all cases secure the work. Only in April this year, German national rail operator Deutsche Bahn placed a €5 billion order for 200 high-speed trains with Siemens. A major contract such as that being awarded to anyone but a domestically based company would be greeted with outrage and shock in Germany.
Secondly, we need to look at a longer-term capital investment programmes and not just stop-start, feast-and-famine programmes, as several Members have said. Manufacturers are left unable to plan ahead. Why must Bombardier have so many agency workers? It is nonsense for trains to be built by agency workers, when train building is such a skilled job. Those who build the trains should have training, a proper career path and guaranteed employment extending into the future, and they could have that if we organised our procurement better. The lack of certainty created by stop-start procurement hits investment in skills. Network Rail believes that a fifth of all procurement costs could be eliminated if there were continuity of orders. It is 800 days since the last new rolling stock order was placed. The feast-and-famine approach to rolling stock procurement, which has blighted the sector for almost 20 years, must change, and there is no reason why it cannot, given the investment in this country’s rail industry in the coming years.
Thirdly, we need to reduce the number of train designs to enable longer continuous orders, economies of scale and interoperability. Network Rail has recommended reducing the 64 different rolling stock classes that operate on the network to just three. The Competition Commission calculates the average cost per vehicle at more than £1 million, with 8% of procurement costs associated with the development of different bespoke models. Passenger rolling stock costs in Britain are 15% of the industry’s running costs. The three changes that I have outlined would make a significant difference to not only reducing that cost, but enabling British-based manufacturers to plan properly, skill their work forces adequately and secure the large, long-term, ongoing work that is achieved in sectors such as the defence industry.
In the meantime, the Government must not sit back helplessly as yet another UK manufacturing sector is lost. It is not too late to look again at the Thameslink decision. As my right hon. Friend the Member for Derby South, the hon. Member for Amber Valley and others have said, this is not a done deal. Siemens has been named as the preferred bidder, but the contract has not been signed. While that remains the case, there is still a chance to look at the issue again and to take some action.
Interestingly, the Minister for Housing and Local Government said in a written statement to the House on 16 June that Bombardier’s bid
“also presented an attractive proposal and it is our intention to retain them as the reserve bidder.”—[Official Report, 16 June 2011; Vol. 529, c. 86WS.]
If the proposal is attractive and would protect a large number of British jobs, it must surely be right for the Minister for Transport to have another look at whether the right decision has been taken.
I want to ask the Minister a number of questions. Will she confirm on precisely what date DFT Ministers were first informed of the result of the procurement? For what reason did she reject the option of holding a funding competition, which my right hon. Friend the Member for Derby South has mentioned? On a couple of occasions, that option could have been taken forward. Why was it not? Why, as late as the start of this year, were bidders, including Bombardier, asked to supply a range of new information if, as the Government have stated, the decision simply came down to a balance-sheet comparison? If that was the determining factor, it could have been done at an early stage in the procurement.
The Minister will be aware that Deutsche Bahn recently rejected the Siemens bogie design for the new generation of its high-speed trains and that it required the company to use the Bombardier FLEXX Eco instead. What consideration was given to that element of the contract? Will she take this opportunity to accept that it was wrong for her Department to brief the media that Bombardier would have made job losses regardless of the decision on the contract, because the company has firmly denied that claim?
Heather Wheeler
I do not know whether the hon. Lady has seen the letter involved, which was dated 23 May, but I have, and I am surprised that she has said what she has said.
Maria Eagle
The hon. Lady is entitled to her opinion. I am reflecting on what the company said publicly after the Government had made their claim, which it utterly denied.
Finally, will the Minister agree to look at the procurement process for Crossrail trains? That process is at an earlier stage than Thameslink was at when she inherited it. Will she look at Crossrail again, review the contract and the procurement process and bring forward a revised proposal that includes the lessons of Thameslink?
In addressing the Chamber at the end of this excellent debate, I hope the Minister answers the questions that have been put to her. Of course, she will not have time to answer them all, because there have been very many, but it would perfectly acceptable for her to write to us with detailed answers to the questions that she does not get around to answering.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
It is a pleasure to serve under your chairmanship, Mr Gale. I congratulate my hon. Friend the Member for Amber Valley (Nigel Mills) on securing a debate on this important issue. I welcome the contributions that he and other right hon. and hon. Members have made on this issue, which is important for Derby and the UK. I emphasise that the Government fully understand the concern that is felt. We, too, deeply regret the job losses that are under way in Derby, and we, too, are determined to do what we can to help Derby and Bombardier.
We recognise that Bombardier was hugely disappointed not be made the preferred bidder for Thameslink, but the procurement was set up and designed by the previous Government. Although we were left to open the envelope on preferred-bidder status, they set the criteria against which bids had to be judged. We are legally bound by the criteria set by Labour at the beginning of the process.
We are also legally bound by European law to judge bids on a completely blind basis. Under EU law, domestic and overseas suppliers must be judged impartially and on a wholly equal footing. Against the published criteria we inherited, the Siemens bid clearly represented better value for money.
We cannot make the location for the proposed manufacturing part of the criteria. Contrary to what the shadow Secretary of State, the hon. Member for Garston and Halewood (Maria Eagle), said, it was not a criterion for preferred-bidder status in the IEP contract that Hitachi set up a factory at Newton Aycliffe, although it has chosen to do so.
In response to a number of points made by different hon. Members, I should say that we could not simply rip up the procurement started by our predecessors. That would leave the Government at risk of facing damages in the courts and lengthen the delivery of Thameslink, which, as I have said, and as hon. Members have acknowledged, was already running 16 years late when we inherited it from the previous Government. There was no legal way we could simply ignore the Siemens bid and hand the contract to Bombardier; it simply is not in our legal power to do that.
Maria Eagle
Is the Minister really saying she has no power in this matter? She is the Minister.
Mrs Villiers
I am saying that, as the Minister, I need to abide by the law and by our obligations under the European Communities Act 1972 and the treaty of Rome; I am afraid I have no choice in that. Going forward, we of course recognise the need to examine wider issues about whether the UK approaches the application of EU procurement rules in the right way and achieves the right balance of risk. Similarly, I agree with my hon. Friend the Member for Amber Valley that we need to see whether our approach is consistent with those used in other member states. That is why the issue will be considered as part of the Government’s growth review.
Nigel Mills
On that point, I would like to draw my right hon. Friend’s attention to another quote from Mr Scrimshaw, who is the head of Siemens’s train building in the UK. Rail Professional asked whether he would ever look at building in the UK, and he replied:
“I wouldn’t rule it out. Currently, all the tenders from DfT don’t include requirements for UK manufacture. We have a model that works quite well.”
It seems that Siemens did not entirely rule out the possibility that such a requirement might exist. Perhaps the Department could look at that in future.
Mrs Villiers
Even if we had designed the criteria, it remains the case that we could not have made the location of the manufacturing process a condition of successfully achieving the contract; that is simply not permitted by EU law. However, I totally deny the allegation that the Government are sitting back and not taking action. I agree that we need to take action to help Derby and Bombardier. The reality is that Bombardier advised the Department for Transport that it expected to make more than 1,000 redundancies, regardless of the outcome of the Thameslink procurement, because several of its orders are about to reach completion. However, whatever the reason for the redundancies, we want to try to help Derby and the surrounding area at this difficult time.
As a result of the review by Bombardier of its UK rail operations, the Business Secretary has set up an economic response taskforce. It will he headed by Margaret Gildea and its remit will be to mitigate the economic impact of job losses at Bombardier, in its supply chain and in local communities. It will draw on representatives from Derby city council, the county council, Derby college and the Skills Funding Agency. Jobcentre Plus will also deploy its rapid response service, to support workers who will be affected. That is in addition to the work on skills that the Government have been involved with in Derby in partnership with Rolls-Royce and Bombardier, and the support that the Department for Transport is giving to the National Skills Academy for Railway Engineering, which my hon. Friend the Member for South Derbyshire (Heather Wheeler) mentioned. We shall do our best to help Bombardier to get the overseas contracts it is bidding for, such as in South Africa. That is one reason why representatives from Bombardier will accompany the Prime Minister on his visit to South Africa, which is coming up.
Margaret Beckett
I should not be a bit surprised if those representatives make the point that it will not help them to gain confidence overseas if they cannot get contracts at home.
I want to raise a point that has been made in several quarters, about the job losses. I, too, have seen the letter from Bombardier to the Secretary of State. It makes two things clear, one of which is that, indeed, as no one has attempted to deny, there were temporary, short-term contract jobs that were due to come to an end, which is a pity. However, it is also clear that more than 400 skilled engineers and designers are being made redundant now because of the loss of the Thameslink contract. Also, I know that the Department has been aware for some time, as I hope Ministers have, that Bombardier has made it crystal clear that if it did not get the Thameslink contract, not only would the new jobs not be coming, but those 400-odd would be the start of the process. It is not right for the Minister to pretend that all those jobs were going to go anyway. That is just not true.
Mrs Villiers
As I have said, whatever the reason for the job losses, it is important that we should work together to help Derby in this difficult time.
Mrs Villiers
No. I am afraid I have only a few more minutes, and a long list of points to get through. I want to try to respond to my hon. Friend the Member for Amber Valley.
My hon. Friend was concerned that in some way the Department for Transport discriminated against Bombardier. Absolutely not. We fully respect the excellence of the engineering facilities at Bombardier. We are determined that it should be judged on an impartial basis, so there is no question of any predisposition against Bombardier, or any discrimination.
Several hon. Members have expressed concern about the combination of long-term funding and maintenance and whether we should take the approach to procurement in the future of judging each procurement on its merits. It was not possible to sever those elements of the bid process from the criteria we inherited from the previous Government. They combined long-term maintenance and funding, and it would not have been possible for us to sever those criteria and start again, for the reasons I have given.
My hon. Friend the Member for Amber Valley thought that there was a case for leaving more procurement decisions to the train operators and the rail industry. I agree on that. He also asked about the margin between Siemens and Bombardier. I am afraid that that is commercially confidential at the moment and I cannot share it with the House. It would not be in the interest of Bombardier, Siemens or the taxpayer for me to do that. Several hon. Members, including my hon. Friend and the shadow Secretary of State, have expressed concern about the Siemens bogie. That has been evaluated. The bogie is based on proven technology used elsewhere. Its development began in 2007 and it is expected to have undergone about 1 million miles of testing before it goes into passenger service. As to concerns about peaks and troughs in rolling stock orders, yes, we need to consider that in future, and we shall do so as part of our consideration of the McNulty review.
My hon. Friend the Member for Mid Derbyshire (Pauline Latham) spoke passionately and movingly about the impact of job losses. She asked about a meeting with the Prime Minister, and he has asked the Business Secretary to meet Councillor Philip Hickson of Derby city council. In answer to the question of the hon. Member for Derby North (Chris Williamson) about assessment of the position in Germany and France, we looked carefully at their approaches, and will also do so as part of our growth review. As to whether we will publish the results of the value for money assessment of the Siemens bid, it is not possible at this point, as I have said, to publish such commercial details, because they are commercially sensitive. The hon. Gentleman asked what legal advice the Department obtained on changing the invitation to tender. As I have made clear, we are legally bound by the criteria we inherited from the previous Government, and those were thoroughly assessed by our legal advisers.
Mrs Villiers
No, I am sorry. I have a lot of points to make, and I propose to make them.
My hon. Friend the Member for Solihull (Lorely Burt) rightly emphasised the benefits of open markets and highlighted the dangers that going down a protectionist route might have. The hon. Member for Birmingham, Erdington (Jack Dromey) talked about how the Government could use their £100 billion public procurement programme to underpin economic recovery. Of course we will consider that as part of our growth review. My hon. Friend the Member for Crewe and Nantwich (Mr Timpson) was concerned about the amount spent on consultancy. The bulk of that happened under the previous Government, but I agree that we need a more efficient approach to spending on consultancy in relation to procurement in the future. Since the general election the consultancy spend has been considerably reduced.
It is important to recognise that Bombardier, alongside other train manufacturers and train and component supply chain businesses in the UK, will have the opportunity to bid for a range of contracts in the future. We are reforming the franchise system to incentivise train operators to invest in new rolling stock. We have given the go-ahead for the tube upgrades. We have secured funding for Crossrail. We are going ahead with a consultation on high-speed rail. Bombardier is a highly successful global company, with a proven record of winning big contracts for its Derby works and elsewhere. It has done so in the past; we see no reason why it should not be well placed to do so again in the future. In recent years it secured orders for nearly 1,400 carriages for London Underground’s sub-surface line, 376 for the Victoria line and 232 for London Overground. It has been shortlisted for the Crossrail order. Its striking success rate on tube-related contracts must put it in a strong position for when London Underground next needs to procure new carriages, which, thanks to the securing of funding for the tube upgrade, will happen in due course. Only a few weeks ago, Bombardier won a £354 million signalling contract for London Underground.
For all those contracts we are determined to ensure that domestic suppliers are treated entirely impartially and given a fair chance of getting them. The fact that the coalition Government have secured funding for such a major programme of capacity enhancement will result in major opportunities, not just for Bombardier but for other train component and supply chain manufacturing businesses in this country. Following its nomination, for example, as the preferred bidder for the intercity express programme contract, Hitachi has announced that it is locating its train manufacturing services for Europe at Newton Aycliffe in County Durham. That will provide significant opportunities for UK component manufacturing. As has been said, if the Siemens Thameslink bid proceeds to conclusion, it will involve the creation of 2,000 jobs in the UK. It has indicated that it intends to use elements of the UK supply chain to supply its bid.
This has been a difficult debate, and it is a difficult time for Derby. We are determined to help.
Chris Williamson
Will the Minister at least give an undertaking to take legal advice on the possibility of calling in the decision and reviewing it, with the possibility of reversing it, as has happened with previous contracts?
Mrs Villiers
We have looked extensively at the contract and have done the numbers very carefully. As I have said, it is not legally possible for us to rip it up. We need to ensure that in future, Bombardier and all our domestic suppliers will be well placed to compete effectively for bids and competitions that will be made possible by the coalition’s commitment to investing in our railways.
Housing Market Renewal
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Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I am delighted to have secured this debate on behalf of all hon. Members who share my concern about the cancellation of the housing market renewal initiative, and the terrible impact that that will have on those affected by it. I shall give an overview of the problems faced by all pathfinder areas and highlight how the cancellation of HMRI will affect some areas of Liverpool.
The Government’s plans for house building over the course of this Parliament can at best be described as conservative. Between 2005 and 2010, Labour delivered 256,000 affordable homes in England, including 142,000 additional homes for social rent. Over the five years of this Parliament, however, the Government are planning to deliver only 150,000 affordable homes—100,000 fewer than Labour achieved in the previous Parliament. HMRI was originally envisaged as a 10 to 15-year programme, but it was abruptly ended eight years in, when many of the schemes were reaching fruition.
In March, an Audit Commission report estimated that the HMRI had generated about £5.8 billion of economic activity across the UK, which created 19,000 jobs in the construction and related industries, and sustained more than 2,600 jobs in the construction industry each year. Thousands of homes have been built and more than 108,000 have been refurbished.
At the neighbourhood level, HMRI has helped to stabilise market conditions and provided a strong sign of change. Private sector resources have been leveraged in to the projects, and more than 15,000 new homes have been built in areas where no properties had been built for a long time.
In Merseyside the pathfinder scheme known as NewHeartlands delivered 2,297 new builds, refurbished 18,263 homes and made 65% of its planned acquisitions. Shelter, the housing and homelessness charity, said:
“The Housing Market Renewal pathfinders have brought much needed investment to parts of the North and Midlands experiencing low demand for housing and long term economic decline.”
The decision to cut £120 million of funding and to end HMRI has been tough on Liverpool. There are thousands of people on the housing waiting list across the city. Many families live in overcrowded or unsuitable homes. The decision puts an end to the good work being done to alleviate these problems and makes future work difficult, and it is clear from the mixed messages coming from the Minister for Housing and Local Government—I am sorry that he is not here today—that there is no clear exit strategy.
Rather than putting in place a phased withdrawal that would allow local authorities to manage the axing of funds, the Government have stopped the scheme dead, which has created confusion, uncertainty and bitter disappointment. The lack of strategy is evident, given the situation that the Government have left behind.
Robert Flello (Stoke-on-Trent South) (Lab)
I congratulate my hon. Friend on securing this most important debate. Will she join me in raising the fact that other areas must have suffered, including areas such as Stoke-on-Trent? The Renew North Staffordshire pathfinder scheme cleared many properties in that area and demolished great swathes of the city, often taking a long time to piece together the ownership of the various lots of land. It was ready to start the next phase when, all of a sudden, it found itself with derelict land and nothing to build.
Luciana Berger
We have had similar experiences in Liverpool. It is devastating for the cities and towns concerned, as there are literally acres of flattened land with nothing on them. Near Smithdown road in Picton, there is nothing but green-grey grass, but people know that houses once stood there.
In Kensington and Picton, which are two wards in my constituency, some dilapidated housing stock sits mostly empty and boarded up. Some people live in what have become ghost towns. Eight out of nine houses are unoccupied. The people still living in those areas feel desperate and let down. They put up with living in decaying conditions because they were promised that they would be rehoused. People across Liverpool knew that if they lived in an area in a certain phase—one of phases 1 to 8—at some point they would be moved out their housing and the area would be regenerated. They now face the disappointment of having to stay.
If progress is not made on demolition, the shell of these properties will rapidly deteriorate, and that will increase the risk of collapse, which could endanger residents. Worse still, the land next to the residents lies idle. As I said, new homes were meant to be built there, but that will not happen because the funding has been withdrawn. The majority of people remaining in the clearance areas are vulnerable, elderly or have health problems. Residents would like to stay in the local area, but they do not have that choice because there are no new or alternative houses.
This is happening not only in Liverpool, as I am sure we will hear from other hon. Members, because it is a familiar story in the other pathfinder areas. The Audit Commission report into HMRI states:
“At this stage there are too many isolated and vulnerable residents still living in poor housing”.
Mike Gahagan, the former chair of the Transform South Yorkshire pathfinder, has said that
“the sudden termination in HMR funding has left many families in distressed surroundings”.
Stuart Whyte, the former chair of Gateway Hull and East Riding of Yorkshire pathfinder highlighted the fact that the areas have increasingly become a magnet for crime and antisocial behaviour.
These residents are already vulnerable and living in these areas for an extended period is likely to have a major impact on their health and well-being. Empty homes attract the theft of valuable metals and lead. The other weekend, I visited Ben Kwonko, a constituent who lives in an area where eight out of nine homes are tinned-up and unoccupied. His home is damp and lead has been stolen from his roof numerous times. He and his family are desperate to move out of that property, but he has no choice. There is also an increased likelihood of arson attacks in these areas.
The Minister might have realised the damage that ending HMRI has done to these areas, as he announced in May that a £30 million transition fund would be made available to the five most deprived HMRI areas— Merseyside, east Lancashire, north Staffordshire, Hull and Teesside. I welcome that announcement as a first step. Liverpool has been comparatively lucky by being able to access some of that money, but the reality is that such figures are a drop in the ocean when compared with the scale of the challenge. The money will not deal with all the outstanding housing renewal problems in some the neighbourhoods in Liverpool.
I refer to an example in Anfield, which is in the constituency of my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), who I am sure will reinforce the point. In his constituency, areas in phases 6 and 7 do not meet the transition fund criteria for occupancy, and there is a requirement that the fund should not open up new phases of redevelopment. However, people are stuck in those areas. The funding decision also leaves four pathfinder areas with no extra funding and no clear idea of why that is.
Will the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), share with us how the figure of £30 million was arrived at? How was the decision reached over which pathfinder areas are to receive money from the transition fund? What were the criteria and who set them? What support, if any, does he plan for those pathfinder areas not eligible for the transition fund? The transition fund does not address the fact that a large amount has already been spent on pathfinder schemes—thus far for nothing. We have seen £2.2 billion of taxpayers’ money invested in housing market renewal since 2002. What assurances can the Under-Secretary give that these areas will not regress, and that money already spent will not be wasted?
It is not only taxpayers’ money that is in danger of being wasted. Ros Groves is chair of the Anfield and Breckfield housing and physical regeneration group in Liverpool. The Minister for Housing and Local Government—I keep referring to him because I was expecting him to answer the debate—was in Liverpool when he announced the transition fund in May. Ros Groves said that he
“went on about how we need to get private sector involvement and I said: ‘We’ve got that. We’ve had £207 million spent here by businesses. What do you do with that? Just throw it in the bin?’ And he didn't have an answer because there is no answer.”
I hope that the Under-Secretary will be able to answer that today.
As well as a clear lack of a strategy on how to deal with residents living in pathfinder areas, there has been complete confusion over what funds will be available to finish the planned development in these areas. In October 2010, the Housing Minister said:
“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work.”—[Official Report, 21 October 2010; Vol. 516, c. 1114.]
That gave hope to pathfinder areas that they would be able to maintain funding for these projects—albeit on a reduced scale, but still at a reasonable level. However, the Minister’s commitment was left in tatters just over two weeks ago when Lord Heseltine, the chair of the independent advisory panel for the regional growth fund, told the Communities and Local Government Committee:
“The regional growth fund is not in any way a replacement for the housing market renewal funding...There is no way in which we are doing housing renewal.”
That is a complete rejection of what the Minister said to the House in October and of what he told my hon. Friend the Member for Liverpool, Walton and me in a meeting in Liverpool. He gave false hope to those in Liverpool and other pathfinder areas that a solution may be found.
We are left with a lot of unanswered questions, so I hope that the Under-Secretary will answer some of them today. What discussions has he or his colleague had with Lord Heseltine regarding using the regional growth fund to develop the HMRI pathfinder areas? When was the decision made not to allow regional growth fund money to be used for housing? Who made it and when did the Housing Minister find out? Did the Under-Secretary or the Housing Minister know in advance of Lord Heseltine’s Select Committee appearance that he was going to veto the use of regional growth fund money for housing market renewal? When the Housing Minister gave his commitment to the House in October, had an agreement been reached to provide funding from the regional growth fund, which has subsequently been breached, or was he hoping that the funding could be used, but had not yet received concrete assurances that it would?
In addition to explaining how the Government made the decisions that have got us into this mess, I hope that the Under-Secretary will finally give us some clarity and provide an indication of how we can move forward and complete the housing projects, which is ultimately what we all want to see. I believe that the Housing Minister is interested in finding a solution.
Annette Brooke (Mid Dorset and North Poole) (LD)
I am here simply out of interest. Will the hon. Lady give us some indication of how much money is needed to complete the projects in the way in which she is talking about?
Luciana Berger
The transition fund that was announced was £30 million. If the projects had continued in Liverpool alone, £120 million more would have been needed over the next seven years. However, there are another eight pathfinder areas. We expected some scaling back, but there are areas in my constituency and others across the pathfinder areas in which people are living in dilapidated housing. Those people were supposed to be decanted in a few years’ time. Their properties were expected to be regenerated and rebuilt, thus bringing much needed jobs to local areas and improving people’s surroundings, as they all deserve.
Robert Flello
On that point, let me just say that while £120 million might sound like a large amount—indeed it is a very large amount for just Liverpool alone—does my hon. Friend accept that if the cuts were not being made so deep or so fast, it would not be such an issue? Does she also accept that the economic benefit to not just Liverpool but the country would be huge and would far outweigh the investment required?
Luciana Berger
I thank my hon. Friend for his helpful intervention. Of course, if the cuts had not been so deep or fast, we could have had that money. As I said, it was another seven years before the HMRI was due to be completed. I do not have the figures in front of me, but I have seen some astounding numbers detailing the economic benefits and multiplier effects of having those houses built in all the areas. The knock-on effects would benefit the NHS, and people would find work and also live in better areas. As I said, there would be many more local construction jobs. On an annual basis, there would be nearly 3,000 sustainable jobs in the construction industry, and such jobs are much needed up and down the country. Although it is clear that the HMRI has ended, there is still a window of opportunity—albeit one that is rapidly closing—to build on the work done under the initiative and to utilise the expertise and partnerships that were built up during the course of the scheme.
In Merseyside, all the NewHeartlands authorities are trying to maintain momentum. Other sources of funding to finish regenerating these neighbourhoods are being thoroughly investigated. I have spent several hours meeting the housing market renewal teams at the council, and they are dedicated to doing everything they possibly can to leverage in that funding.
Liverpool is actively market testing refurbishment-based solutions for three of its neighbourhoods—Arnside road, Granby Four Streets and Webster Triangle. Initial indications are that there may be interest from partners to deliver in some of those areas. Meanwhile, in the renewal areas, new homes are being delivered by lead developers and are popular. I live on a former housing market renewal site. Examples of other such sites include the Parks in Anfield and the former Easby estate, both of which are in north Liverpool, where historically there has been little or no private sector house building.
Will the Under-Secretary commit to working with councils such as Liverpool and local communities to develop plans and identify funding for developing the pathfinder areas? So far, little support has been extended by the Government to make up for the complete cut in HMRI funding. The reality is that while councils are doing their best to find innovative solutions to this problem, their efforts are a drop in the ocean compared with the level of funding previously committed under HMRI, so they need more support from the Government.
As Elaine Stewart, the head of housing renewal services at Liverpool council, has said:
“We have to forge more relationships with the private sector although, in housing market failure areas, private sector rules don’t apply and we have to be realistic about the amount of private sector funding coming in. Without some public sector funding, it won’t work.”
At the final oral evidence session of the Communities and Local Government Committee inquiry into regeneration, the Minister for Housing and Local Government hinted that the Government may bring forward new funding. He said:
“This is not a policy launch, but I have an idea in mind where communities will be able to access further sums of money through a local process which will enable them to regenerate in ways that suit them locally.”
I would love to hear about those proposals. It is a shame that the Housing Minister is not here to tell us more about what he meant. However, until the Minister comes forward with something other than an idea—he did refer to it only as an idea—we will not be any closer to a solution.
On behalf of all my affected constituents and all those across Liverpool and the other pathfinder areas who live in intolerable conditions, I urge the Under-Secretary to go back to his Department and revisit the decision to end HMRI. Some £790 million has already been committed in Merseyside. We want a solution that will mean an end to thousands of people being forced to live in out-of-date, decaying and dangerous housing.
I thank you, Mr Gale, for your stewardship this morning. I hope that the Under-Secretary will address the issues that I have raised, and I am sure that my hon. Friends will raise other concerns during the rest of the debate.
Mr Roger Gale (in the Chair)
Order. I imagine that Mrs Riordan will wish to call the Opposition Front-Bench spokesman at 12 o’clock. A significant number of Members wish to take part in this debate so, once again, brevity is the order of the day.
Joan Walley (Stoke-on-Trent North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gale. I am sure that you will give us all an opportunity to contribute to this important debate, which I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing. The point that I want to get across to the Minister, who has a strong belief in local government, is that the housing market renewal programme, of which north Staffordshire was one recipient, was an important means by which capital funding came to areas where there was economic failure. The whole programme was intended to restore the balance between the south-east and other places where there is no economic failure and areas such as ours, which, for well-documented reasons, need to deal with issues such as absentee landlords. There are whole blocks of homes the purpose for which has now gone.
It has been well documented that in the early stages of the housing market renewal programme many MPs had real concerns; indeed, many MPs in Stoke-on-Trent had concerns. My hon. Friend the Member for Stoke-on-Trent South (Robert Flello), Mark Fisher, the former MP for Stoke-on-Trent Central, and I challenged the officials who were introducing that programme in the city, because it did not seem to us that they were working with or alongside local communities, or that there was a master plan to consider the kind of bottom-up regeneration that we wanted for our communities. In the early days, the officials’ proposals were all about the large-scale demolition of a large number of houses, which had no place in our local regeneration strategies.
Through careful, long-term lobbying, we did our best to change that approach. Across Stoke-on-Trent, there was a sea change where the housing pathfinder programme took place. In some places, the change was too little, too late, but in other places there was a major change. The programme was late in getting off the ground in north Staffordshire—it was about three years late in getting together all the different proposals—so we were behind where we should have been. Once the programme got off the ground, however, it started to make an impact.
The problem that we now face is the sudden and unprecedented withdrawal of funding by the Government in the comprehensive spending review, with no clear detail being given about what will be put in its place. My hon. Friend the Member for Liverpool, Wavertree has outlined the concerns about the regional growth fund. There was an assumption that that fund would provide some of the capital investment that we needed, but that did not happen.
We are now left, once again, with the huge disparity between the parts of the UK where there is no economic failure whatsoever and those parts where there is economic failure and where we are trying to remedy that failure. What we desperately need is a cocktail of measures, whereby everything works alongside everything else to get economic investment, restructuring and strategic planning in line with what local communities want, which means the homes where people live. We need homes side by side with jobs.
I know that the Minister cares passionately about the issue, but it is wrong that the funding was removed just like that with no time for people to prepare for its removal, and it is also wrong that the transitional funding of about £30 million, which would allow only for the further demolition of properties, should have been put in place without addressing the real capital needs for investment in our areas. It might seem to the Minister that the demolition of the remaining acquired sites is the best use of that transition fund of £30 million. However, if we consider the ongoing costs of vacant sites, which have no maintenance budgets whatsoever, it is not the right way forward to restrict the criteria on how that transition funding can be spent in the five most distressed areas to paying for demolition. Will he work with those five areas, which are represented here today, and officials in those areas? More importantly, will he look in a cross-cutting way at other Government policies? When he replies to the debate, I hope that he will indicate to hon. Members who are present today how the Government’s post-comprehensive spending review policies on housing market renewal relate to the Government’s economic policies on local enterprise zones and to the work that is coming out of the Treasury.
In Stoke-on-Trent, we hope that the Minister’s Department will support our application to establish a local enterprise zone. If that local enterprise zone goes ahead, it will border one of the areas for which we are seeking these transitional payments for housing market renewal, which is the Middleport area of my constituency. The same point applies to other areas on the periphery of what we hope will be the local enterprise zone. Will he look at how the investment that we need in housing in those areas can be provided—perhaps through a ring-fenced amount of money—to help us to deal with the absolute void that has been left by the Government pulling the plug on finances for housing market renewal?
I want to discuss the regional growth fund. It is extraordinary that the Government have indicated that what has been taken away with one hand will be provided with the other through applications that meet the criteria for the regional growth fund. Those of us who have attended meetings with Lord Heseltine know that the regional growth fund is already stretched and that it will not be ring-fenced in any way for housing investment, but without the homes to go alongside the jobs that we hope will come from the regional growth fund, people in our areas will not be able to get back on their feet in the way that was envisaged when the housing market renewal programme was first introduced.
There is another cross-cutting issue, which is the local government finance relocalisation of business rates. It is a huge issue. If the Minister thinks that what the Treasury does about relocalisation of business rates and the consultation about those plans that will take place throughout the summer recess—perhaps away from media attention—will have no bearing on areas where we are fighting to get back economic prosperity after economic failure caused by structural reasons that we know only too well, I urge him to think again. Can he tell us how the proposal for the equalisation of business rates, and the giving of powers and funding to local authorities to meet the genuine needs of their areas, will have any chance of success when it appears that, as a result of the coalition agreement, areas such as the City of London will carry on receiving huge amounts of money? Such areas do not have economic failure—if their money goes into the pot, they get to keep it for themselves—but what about areas such as Stoke-on-Trent, which stand to lose money? Stoke-on-Trent stands to lose £26 million, which is on top of the £36 million in local government funding that has already been taken away from our area by the CSR.
I have already been in touch with the Department for Communities and Local Government about this issue, but will the Minister ensure that his officials work with those of us who are on the ground and who are in touch with the local enterprise partnership, local authorities and local communities to find, by some means or other, a way in which legitimate funding for legitimate regeneration and investment, which meets the needs of local communities that have been left stranded high and dry by the sudden decision to remove the money for housing market renewal and to allow transition funding only to be used for demolition, can be provided?
In Middleport, the Prince’s Regeneration Trust has now purchased the Middleport pottery; we have a Burslem master plan; and local people have a huge desire for housing renewal. I ask the Minister to work with the hon. Members here today, who care so much about their areas, to find a way forward.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gale. I remember with fond affection that you had to endure my ramblings in Committee during the passage of the Housing and Regeneration Act 2008, alongside your co-Chairman at that time, my hon. Friend the Member for Bootle (Mr Benton), whose constituency, like mine, is a recipient of housing market renewal funding. I feel like we are all back together for a nice reunion.
I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing this important debate on an issue that affects many thousands of decent residents in the north and in the midlands. I have a pathfinder project in my constituency. It extends throughout the Teesside area and incorporates sites not only in Hartlepool, but in Gresham, Middlesbrough and South Bank, which is in the borough of Redcar and Cleveland.
Between 2007 and 2009, I was the Minister in the Department for Communities and Local Government responsible for housing market renewal. I travelled across all the HMR areas when I was a Minister. I met residents in Stoke-on-Trent, Liverpool, Birmingham and Sandwell, and I was struck by their enormous enthusiasm and ambition. They were determined to see a reversal of the slow and painful decline in their neighbourhoods.
Robert Flello
My hon. Friend will no doubt recall walking down the high street of what was Coalville and is now Weston Heights in Stoke-on-Trent and seeing the phenomenal transformation that was taking place to turn what was a very run-down estate into one where people are still flocking to buy and rent properties. What a transformation that was, especially when combined with the other transformations in Stoke-on-Trent, such as the brand new hospital and the fantastic regeneration of our schools, and what a damn shame that it has ended.
Mr Wright
I agree with my hon. Friend. Alongside our hon. Friend the Member for Stoke-on-Trent North (Joan Walley), we are pushing on behalf of north Staffordshire. I remember seeing the huge ambition in that area, among others.
It is worth going back to the basics of what HMR was trying to achieve. It was trying to stem and reverse long-standing decline in areas characterised by acute housing market failure. In many respects, that was due to an imbalance of one particular type of property in an area. For example, about 37% of all the housing stock in the entire borough of Hartlepool—14,500 properties—is terraced housing. On any measure, that is too much of one particular type of stock, so there is a need to rebalance the stock the town provides to residents—both now and in the future. That was true of other HMR areas.
What struck me most when I had responsibility for this matter—more fundamentally than acute housing market failure—was the disconnect between those areas and economic activity. The areas were blighted by low skills and, often, virtually no employment. To succeed, I felt that housing market renewal had to be linked explicitly to economic success, and that was why, when I was able to announce in 2008-09 an extra £1 billion of funding for housing market renewal, I wanted to link it explicitly with the possibility of securing extra funding and with injecting skills and employment into those areas, with a particular emphasis on apprenticeships for young people.
It is also important to recognise that this was deliberately a long-term programme. Those areas in the north and the midlands were built in the Victorian era to house workers in heavy manufacturing industries. When those industries declined in the post-war era, their economic raison d’être was often lost, and areas have struggled to adapt. Those big social and economic changes cannot be solved overnight, so HMR was deliberately a 15-year programme to put those areas back on a sustainable footing. The abrupt cancellation of the programme, without any other suitable replacement, undoes all the good work that has been done, and sets those neighbourhoods back decades, as my hon. Friend the Member for Liverpool, Wavertree so eloquently said. More taxpayers’ money than was originally planned for HMR will be needed to sort out the social and economic problems caused by the cancellation of the programme.
Since 2006, for every pound of HMR funding in Teesside, we have levered in an additional £1.06 of other public sector investment and 61p of private sector investment. For Hartlepool in particular, the figures are actually much better. Hartlepool has received about £4.5 million of HMR funding between 2006 and 2011, but that has been complemented by £13.7 million of other public funding and an astonishing £20 million of funding from the private sector, so that is more money coming in from private companies as a result of public sector investment. As many as 2,500 private sector jobs in the construction industry have been created or safeguarded as a result of that initiative. If private companies see the Government losing faith in those areas and failing to maintain investment, it is difficult to envisage how private sector money will stay and grow there.
That is frustrating, because Hartlepool has shown how good progress can be made. We have seen the complete redevelopment of Trinity square by a good Hartlepool house builder, Yuill Homes, and it is now a thriving and welcoming area in the centre of town. At the Headway site close to Chester road, 280 terraced properties have been demolished and work on 170 high-quality, mixed-tenure homes has begun. A second of four planned phases is now progressing. The development agreement for the Headway site made provision for raising employment, skills levels and training opportunities, including the provision of apprenticeship places.
Last month, alongside Bob Farrow, a long-standing tenant of the Belle Vue area, I opened the first modern homes in the area, which replace 50 pre-fab and terraced properties. Bob has lived his entire life in the Belle Vue area, having been born in Borrowdale street. With other residents, he has been closely involved in the planning of the new development. It is a myth—if the Minister is going to suggest this—that the programme has had a top-down approach. It has been bottom-up, with residents actively involved in planning the future of the areas. At the opening of the new homes, Bob said:
“I knew when I first saw Housing Hartlepool’s plans for the new Belle Vue estate that it was going to be wonderful, but these fantastic homes have exceeded expectations. Hartlepool residents have been closely following the progress of the new homes and it is great to see them become a reality.”
In the Perth, Hurworth and Grainger streets part of Dyke House, a compulsory purchase order is in process, meaning that several hundred residents, who have been living with uncertainty, are now seeing some progress. Credit for that must be given to Damien Wilson, Hartlepool borough council’s assistant director of regeneration, who alongside me, the three ward councillors—Mary Fleet, Stephen Thomas and Linda Shields—and officers, Amy Waller from the council and Helen Rooney from Housing Hartlepool, have been going to the Hartlepool Rovers quoit club every Friday at 5 o’clock to keep residents up to date with developments.
However, I am concerned that this progress of breathing new life into disadvantaged areas is incomplete, and that people will be left in limbo for years. As the Audit Commission stated in its review of HMR in Teesside:
“This is a particular risk…where so many schemes are at a relatively early stage. There are a number of areas where a large number of properties have been acquired that are awaiting demolition. This has the potential to leave communities living in a very poor quality environment…The slowing down or stopping of interventions will undermine commitments made to communities and damage community confidence in neighbourhoods.”
Through all their policies, the Government are damaging the communities in my constituency and the wider north-east. Economic policy, social and welfare initiatives, and public sector cuts all disproportionately affect my area and focus on neighbourhoods that least have the tools to battle those challenges. Areas such as Hartlepool, Middlesbrough and Redcar and Cleveland are less likely than anywhere in the country to be able to withstand economic recession and public sector cuts. HMR was starting to turn round decades of neglect, economic inactivity and housing failure to provide neighbourhoods with the housing and hope that they deserve. The Government have taken that away without putting anything in its place. For the first time in many years in this country, we have no dedicated urban regeneration funding programme. I hope that the Minister will reflect on what his Department has done, and do something for my constituents and other decent residents across the midlands and the north of England.
Graham Jones (Hyndburn) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gale, and I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing a debate on an important issue to my constituents, the axing of HMR.
HMR was overall a successful scheme, although I admit there were some problems, which I will address later. I want to address how the ending of the scheme affects my constituency and low-demand areas; some of the misleading statements put out by the Government; and the Government’s £30 million transitional fund.
Let us be clear where we are now: facing human misery. People were given assurances that the HMR red line around their neighbourhood would be a 15-year programme. It was not to be one that would first encourage disinvestment and degeneration and then, at the bottom of that regeneration trough, have the funding pulled to leave streets abandoned, in the worst cases looking like ghettos.
The regeneration did have cross-party support. The Minister himself was once a fan and, from reading Hansard, I note that he was a supporter. The Prime Minister made unequivocal promises back in 2006, when he took the then shadow Cabinet on a visit to Liverpool. While walking along some of the terraced streets, he observed,
“Run-down areas become a magnet for dumping and littering.”
He laid out this Government’s political ambitions, saying of regeneration,
“It’s a huge task. I want the Conservative party to be the party of urban regeneration. The aim is to make our cities better places for people to live in.”
People rightly feel badly let down; that the Government and the Prime Minister have broken their promises. That can be best summed up by Peter Latchford, the former chair of Birmingham and Sandwell pathfinder:
“I am particularly concerned at the message sent to people living in complex and deprived areas when a programme like this is terminated so abruptly. In Birmingham and Sandwell, we showed that the best results come from involving local people; from investing in long-term relationships of trust; from holding ourselves properly to account locally. There is no better way to disillusion such people, who have seen a succession of ‘interventions’ come and go, than to pull the plug halfway through the promised period.”
HMR was successful; it made good progress in some of the most deprived areas. That is according to the Audit Commission, Shelter and the chairs of the former pathfinder areas that oversaw the regeneration. The Audit Commission report published this March showed that the decision to abolish the housing market renewal programme was ill-advised. My hon. Friends the Members for Liverpool, Wavertree and for Hartlepool (Mr Wright) mentioned the benefits identified by the Audit Commission, including £2.2 billion invested in the HMR programme since 2002, £5.8 billion in economic activity and 30,000 new property sites cleared. The HMR kept 19,000 jobs in the construction industry. In Newcastle Gateshead, £60 million in HMR funds, along with contributions from the council and the Homes and Communities Agency, secured £400 million in private investment and delivered more than 4,000 new homes. The Housing Minister is keen to say that we need new homes, so he should be aware of those facts.
I want to put on record the Audit Commission’s summary, as it is important:
“The HMR programme is making a difference to the communities it serves, with fewer empty houses, reduced crime, and more jobs and training opportunities, especially in those neighbourhoods that are more advanced in their programmes.”
It goes on to discuss the Government’s current proposals for a £30 million transitional fund, essentially to fund the evacuation of residents in what, in my opinion, is an attempt to remove the personal misery involved from the broadcast and news media in order to assist the Government politically. The Audit Commission’s summary says that
“the emphasis must be on completing current key interventions; not least to ensure that promises made to communities are met and to reduce the risk of previous investments being undermined by leaving a legacy of uncompleted projects. At this stage there is…a significant risk that neighbourhood regeneration projects stall, leaving communities living in a poor quality environment indefinitely.”
There seems to be no exit strategy and a lot of waste. The sudden withdrawal of funding has left local authorities unable to complete projects that were already under way. The Government should have considered a phased withdrawal from the programme, and the scheme’s management should not have been based on the five reasons the Housing Minister trots out so frequently, all of which I will dismiss.
The first reason is deficit reduction. The Government are ignoring the plight of the areas involved, the promises made and the investment so far. As my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) said, we had the opportunity not to introduce such a great deficit reduction programme. We are going too far too fast, and it is hurting our communities. The second reason is future funding, to which I will come, and the £30 million in relief, particularly the regional growth fund, which my hon. Friend the Member for Liverpool, Wavertree discussed, and the new homes bonus, to which the Housing Minister keeps returning. The third is waste, the fourth is top-down targets and the fifth is a conflation of over-supply and under-supply in housing markets.
There has been waste in HMR areas, but I remind the Minister responding to the debate that of the five areas for which he is providing funding, Hull, Liverpool and Stoke were Liberal Democrat-controlled, East Lancashire was Conservative and Liberal Democrat-controlled, and Tees Valley had no overall control. It is not a Labour issue. In East Lancashire, Hyndburn’s Conservative council was handing out full market value payments plus relocation grants plus a cash handout of £30,000, and undertaking group repairs at £55,000 a property, which was more than the full value. Significantly, the council never engaged with estate agents or architects on added value or the redesign of properties, nor did it seek the best investment value. I am told that in Liberal Democrat Pendle, £1 million, not including acquisition, was spent converting eight houses into four. Another issue is the lack of Government intervention in Liberal Democrat and Tory-controlled councils.
My hon. Friend the Member for Hartlepool mentioned top-down targets, another issue to which the Housing Minister keeps referring. A pathfinder, as the name implies, is a housing programme in which local authorities were told to find a path. There were no top-down targets that anyone is aware of except the Housing Minister, who said in a reply to my right hon. Friend the Member for Birkenhead (Mr Field):
“Some pathfinder schemes were successful; however, others attracted controversy due to an over-reliance on demolition, in part encouraged by top-down government targets.”—[Official Report, 20 January 2011; Vol. 521, c. 901W.]
The Housing Minister has made that assertion repeatedly. Can the Minister here today name a single top-down target imposed under the HMR programme? I cannot and nor can anyone else—including the Housing Minister, who has failed to provide a single meaningful example so far.
Turning to my constituency, Hyndburn has unfunded areas like those mentioned by my hon. Friends. The future of Woodnook and Peel in Accrington is now unfunded, and I will assert to the Minister the sheer scale of the problem. Residents in the area were consulted in 2005 by the Conservative council. Plans were drawn up and presented that included details such as houses to be demolished and trees to be planted. The Conservative council scrapped those plans and then went into “spend, spend, spend” overdrive in West Accrington. In 2010, the council repeated the process, covering some 70 terraced blocks with 15 houses a block, a considerable number of properties. The hon. Member for Rossendale and Darwen (Jake Berry) was courteous enough to visit last month and recognised the true scale of the problem, but the Housing Minister has yet to come through on his promise to visit Hyndburn and see the HMR-related problems in Accrington.
Residents of 70 blocks in red-line areas believed that their area would be regenerated, but since the cuts in the comprehensive spending review and the axing of HMR, the council has scaled back its plans to include just five blocks. In many blocks outside the area where transitional money will be spent, occupancy rates are between 30% and 80%. A press release from the Department for Communities and Local Government on 9 March this year stated:
“This coalition Government is committed to helping vulnerable people and will not stand by when residents are stranded in derelict neighbourhoods through no fault of their own.”
Five out of 75 blocks are being done and 70 blocks are being neglected, some of which meet tier 1 and tier 2 criteria for the £30 million and have less than 50% occupancy.
As my colleagues have said, £30 million is grossly insufficient. Four blocks that I have looked around make me think of the misery on those streets. Surely the Minister must recognise that that cannot carry on. In effect, even with the £30 million, we are abandoning people in HMR areas. Worse, although some blocks qualify for match funding under the Government scheme, it is ridiculous to think that a local district council could afford to match Government funding to deal with such areas, even though they meet the criteria. We will be abandoning and neglecting people who meet the criteria, despite two previous plans. Such is the desperation of the district council to do something that it is prepared to say whatever it takes to the Government in order to get any crumbs that might help people. The council knows that it is abandoning residents because it has been shorn of Government funding, and the private sector does not want to know. We risk facing blight compensation notices.
The Housing Minister conflates over-supply and under-supply, trotting it out as a reason for the shortage of housing in the UK. He said on 17 January:
“The housing market renewal programme was responsible for demolishing a large number of homes—so many that there are fewer affordable homes after the 13 years of the previous Government than there were when they got into power in 1997.”—[Official Report, 17 January 2011; Vol. 521, c. 535.]
A conflation of the south-east and the north-west is imaginary and unhelpful, as it belittles the truth. There are more houses than people in significant parts of the north. Is the Minister not aware that Liverpool’s population used to be 1 million but is now nearer 450,000? East Lancashire’s population has fallen. There are more houses than people; demand is low.
Is the Housing Minister so lost from his brief as to be unaware that there are 750,000 empty properties, most of them in the north? People do not want those homes, the private sector does not want them and hard-pressed councils have no money to deal with them. Is he really suggesting that the cure for low demand is for people from the south-east to move to the north? If so, is that official Government policy, and what is he doing about it? That is what he seems to be suggesting. How else will we fill those houses? If not, he should refrain from suggesting that there are more people than houses, for that embarrasses his own position.
My hon. Friend the Member for Liverpool, Wavertree touched on the regional growth fund. The Housing Minister told the House of Commons one thing that seems to be totally untrue, and he needs to address the fact that he has misled the House. As my hon. Friend said, the chair of the regional growth fund said that it will not accept funding bids, so for a long time those communities were led to believe that there would be a future, but there is none. I am sure the Housing Minister will be haunted by his words:
“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work”—[Official Report, 27 October 2010; Vol. 517, c. 1114.]
I want to address a second point that the Housing Minister touched on—the new homes bonus—because it is not only on the regional growth fund that he has misled the public. He has repeatedly confirmed that the new homes bonus will supplant HMR, yet figures distributed by the House of Commons Library show that my constituency received just £62,000. Is the Minister aware that the average price for acquisition is £77,000 in West Accrington and £45,000 in East Accrington? The difference is that one has had intervention and the other has not. That £62,000 will barely buy one house. When we find out that the new homes bonus will buy so few bricks, stones and slates, is the Housing Minister not embarrassed by his comment that the new homes bonus will assist HMR areas?
It is not only a Hyndburn issue. East Lancashire has some of the worst housing in the country, yet its five HMR local authorities are recipients of the lowest new homes bonus payments in the UK. All five feature in the bottom 27 out of 350 authorities and receive less than 90p per head in new homes bonus payments. Hyndburn receives 78p per head, while leafy Uttlesford receives £9.30 and conservative Tewkesbury £6.47. How is that fair? How is that consistent with the Housing Minister’s extravagant funding claims?
Given that there are more properties than people, it is no good the Minister saying that we will be rewarded for filling empty homes and that there is an empty homes budget. How? How will we get people into those houses? Empty properties are a revolving door. The Housing Minister is making ridiculous arguments. I presume he is suggesting that people leave delightful Tewkesbury and Uttlesford, where they want to live and where there is high demand, and move to Woodnook, Peel or Accrington, where there is little or no demand. When he makes those generic comments, I would like him to explain how he will square that circle.
Crime hot spots and human misery are key issues. Families remain trapped in deserted streets where projects have been abandoned. Those areas attract crime, with several experiencing arson attacks, which makes it very dangerous for those living there. Stuart Whyte, the chair of Gateway Hull and East Riding of Yorkshire pathfinder, said:
“The areas have increasingly become a magnet for crime and anti-social behaviour. Beyond this human misery the sudden withdrawal of funding has a major impact on the willingness of the private sector to invest in the areas.”
Mike Gahagan, former chair of Transform South Yorkshire pathfinder, said that
“the sudden termination in HMR funding has left many families in distressed surroundings”.
The Government have an obligation, and forcing local councils to accept liability will not make the problem go away, particularly in lower-tier district councils, which cannot raise the finance. The Liberal Democrat leader of Burnley council, Charlie Briggs, said:
“£30 million remains insufficient to meet the area’s needs. We need a policy and funding that gives us a bridge to Mr Shapps’ new world. We are in touching distance of a revitalised housing market. It will be disgraceful if the government now pulls the rug on us and, more importantly, our communities.”
That is a Liberal Democrat leader—it does not even come from the Opposition.
The Government are nowhere on regeneration. Their own document, “Regeneration to enable growth”, is an embarrassing three pages long, followed by some cut-and-pasted tables. Is that their position on regeneration—three pages? When the Prime Minister visited Liverpool, he put Lord Heseltine in charge of regeneration, stating:
“I am delighted to be here and announce the setting up of a Cities Task Force which Heseltine has agreed to chair. He has a great record in helping with urban regeneration and is a great friend of Liverpool’s.”
Questioned at last week’s Select Committee on Communities and Local Government, Lord Heseltine had this to say on regeneration: there is a paper out on regeneration; it
“is called ‘Going for Growth’ or something.”
It is actually called, “Regeneration to enable growth”. It is clear that the Government have abandoned regeneration and HMR. Those the Prime Minister has made responsible for it know so little and the Government do not care enough to do something about it. Perhaps the Minister has recognised that the Government have conveyed confusion and misinformation, and will eventually come back to the nub of the issue. The problem will not go away.
In closing, I note that last Tuesday the Housing Minister announced that he would look at a new fund. My hon. Friend the Member for Hartlepool has put the questions—where is that new fund and what will it do? Will it include the existing HMR areas? Will it be part of a strategic plan including public and private finance? Crucially, in my constituency, will it be more than the embarrassing £62,000 the Government provided in the new homes bonus fiasco? I close my comments there, Mr Gale. Thank you.
Mr Roger Gale (in the Chair)
In the light of that lengthy contribution, the Front Benchers have indicated that they are willing to curtail their speeches slightly. Mr Rotheram, you have about seven minutes.
Steve Rotheram (Liverpool, Walton) (Lab)
It is a pleasure to serve under your chairmanship for the first time, Mr Gale. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing the debate and my hon. Friend the Member for Hyndburn (Graham Jones) on tenaciously pursuing the issue of housing market renewal.
Hon. Members will, I hope, be aware of early-day motion 1970 on housing market renewal, which I sponsored not only because it affects huge swathes of my constituency, but because we need to secure a fair deal for all the former HMR areas. The Chancellor once told us that we are all this together, and perhaps that is partly true in this case—at least, “we” on Labour Benches representing ordinary, working-class constituencies might be in this together, but certainly not “we”, as in the royal “we”, representing leafy suburban areas such as Tatton, Witney and South West Surrey.
[Mrs Linda Riordan in the Chair]
Despite the unbelievable transformation of our city during 13 years of Labour Government, Liverpool’s socio-economic problems are common knowledge and have been touched on by my hon. Friends. The problems are disproportionately concentrated in north Liverpool and their consequences correspondingly magnified. There is a complex and historical mix of issues, such as low educational attainment, a low skills base, high welfare dependency, poor housing, low or unskilled and often casual employment, and poverty of aspiration. Those factors have made for a potent, self-perpetuating, cyclical cocktail of disadvantage and marginalisation. I have spent more than two decades working hard for Liverpool, and I am determined to continue that fight here today.
In the 12 pathfinder areas, there was demonstrable market failure in the housing sector and the £2.2 billion housing market renewal initiative essentially recognised what we needed to do to tackle poor housing conditions. Despite some justifiable criticism that it was not always sufficiently focused or sufficiently geographically specific to meet Liverpool’s needs, it started to address one of the multiplicities of interconnected problems that areas such as my constituency face. It was housing market failure that created neighbourhoods with a large number of vacancies, owners trapped in negative equity and the unwelcome attention of speculators. I concede that the scheme was not perfect, but, much like the future jobs fund, it was at least a programme to address specific needs. For that reason, moderate reform rather than radical abolition would have been the sensible thing to do, but, no, not for this Government.
Despite what I am sure were its best intentions, the previous Lib Dem city council in Liverpool got things disastrously wrong, and now the Liberal Democrats and their Tory partners are trying to finish us off completely. Instead of taking a break, as they did with the health care reforms, to consider all the options available, the coalition Government have simply turned off the regeneration tap in areas such as Walton. In this very Chamber, only two weeks ago, I led a debate on the construction sector and highlighted the damage that the scrapping of HMR and other initiatives was doing to the industry. It is generally accepted that HMR alone has generated £5.8 billion-worth of economic activity and created 19,000 construction jobs. So the Government’s decision to scrap HMR was devastating not only for residents trapped in properties in areas that look like they have been bombed, but for the construction industry in general. It would not have been so bad if the Government had recognised the serious socio-economic problems of HMR areas, but instead they have once again hit the most deprived parts of the country hardest.
Government Members are desperate to blame the previous Labour Government by using the tired old mantra that it is all our fault, but the economic argument is that for every £1 invested in construction, £3 is generated and a further £2 is generated in the wider economy. So, instead of paying benefits to building workers who are desperate for jobs but who are forced to sit at home, the Government could have invested in construction to ensure a return on their investment and the creation of jobs and apprenticeships. The Government chose not to do that; instead, they chose to cut and run.
It is disappointing that the Minister for Housing and Local Government is not responding this morning to our serious questions—metaphorically speaking, this is not the first time that a Lib Dem has taken a bullet for his Tory master. The Minister will be keen to lay the blame squarely at the door of the previous Labour Government. However, whether or not there was money in the Exchequer, there appears to be an ideological motive for this callous and cynical decision, which has caused so much distress in areas such as Liverpool.
Alison Seabeck (Plymouth, Moor View) (Lab)
Thank you, Mrs Riordan, for your chairmanship—albeit rather briefly—of the debate. I draw hon. Members’ attention to the entry in the register made by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) in which I have an indirect interest. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing the debate. It has been marked by excellent contributions and a strength of feeling expressed by my hon. Friends, whose constituents are most affected by the Government’s complete volte-face on funding for the housing market renewal programme.
The Minister should not be surprised by the anger and frustration voiced today, when the messages from his colleagues indicate yet again that the left hand does not know what the right hand is doing. The decision to cut half the money promised by the Government at the Dispatch Box by the Minister for Housing and Local Government as recently as October 2010 has been devastating. Many hon. Members have commented on his absence today. I can tell hon. Members that, as we speak, he is busy tweeting about holding a round table on social mobility. In that round table, I hope that he is talking about HMR and the impact of his policies on social mobility.
It is worth noting and repeating the precise words that the Minister for Housing and Local Government used:
“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work.”—[Official Report, 21 October 2010; Vol. 516, c. 1114.]
Is that not pretty unequivocal? He then confirmed the position in a letter to local authorities, in which he said:
“we will also provide access to the Regional Growth Fund to fund capital projects which could support housing growth”.
I suppose we should be getting used to Ministers saying one thing in Parliament one day and then changing it the next. Most recently in fact, just a couple of weeks ago in a debate on social housing in this Chamber, the Minister for Housing and Local Government made a number of statements that he has subsequently had to correct or elaborate on. There were seven such instances in all, including one policy change. I hope that the Minister responding today will not find himself having to come back with a stream of corrections. There is a question of competence here.
It is therefore a shame that Lord Heseltine, who has been tasked with heading up the independent approval panel for bids to the regional growth fund, does not appear to be singing from the same hymn sheet. Perhaps he is as confused by the Government’s constant chopping and changing as the rest of us. When he was pressed by the Select Committee on Communities and Local Government, he was very clear indeed that the regional growth fund is not in any way a replacement for housing market renewal funding. What happened to the circular that the Minister put out? Did Lord Heseltine simply ignore it, or perhaps the status of the edict from the Department for Communities and Local Government was simply lost on the chairman of the approval panel. To his credit, Lord Heseltine has a considerable understanding of regeneration projects and, after the Toxteth riots, he got heavily involved in trying to make significant changes and improvements to some of the country’s most run-down communities through regeneration. There were, of course, two housing-related bids in the first round of bidding with one in Hull and one in Wakefield, but since then the emphasis has clearly changed.
It is telling that the Localism Bill does not mention the importance of regeneration to some of our poorest communities. However, let us be honest. That is not the Government’s vision for the new powers that the Bill will introduce. The bids already in for neighbourhood forums support the view that those powers are largely for affluent areas in the south-east or in the suburbs of our major towns. Neighbourhood forums are not being set up in Hyndburn, for example. Perhaps those marooned local residents should be thinking about setting up a neighbourhood forum in order to try and have a say in how their community might be shaped in the future—not, I hope, under a Tory Government.
Why did the former pathfinder chairs feel the need to press the case for the full £60 million to remain committed? They know, because they have worked on the ground, just how important it is to rebalance and invest in these communities. They also know the cost of not proceeding and the waste of investment that has already been put in. Perhaps the Minister should read his own Department’s discussion papers in which it is clear that in order to tackle worklessness the lack of aspiration needs to be dealt with. Part of that is about people feeling valued. Someone’s home and their wider environment play a significant role in that. Let us imagine waking up every morning in a semi-derelict landscape, where all the community facilities and local shops are closed. It is almost impossible to conceive how dispiriting and demoralising that must be. If the Government are serious about the private sector stepping in to support new jobs, they need the conditions for that to happen. The private sector will not move into derelict sites where no one, including their potential workers, wants to live. There needs to be some pump-priming.
My hon. Friend the Member for Hartlepool (Mr Wright)—a former very respected Housing Minister, who understands the nature of the problem—set out clearly the reasoning behind the scheme and, most importantly, the economic benefits. The Government have taken a number of decisions that have impacted seriously on house building, regeneration and, as we have heard, the construction industry. This Government’s decision arbitrarily to select just five areas for continued investment and to allow councils to ignore the regional house building targets resulted directly or indirectly in plans for more than 200,000 homes being dropped.
My hon. Friend the Member for Liverpool, Wavertree has highlighted the problems and has mentioned some of the excellent work using previous funding to try to lift some of the affected areas. During the recess, I hope to see at first hand some of the problems that she has described so vividly. My hon. Friend the Member for Hyndburn (Graham Jones) gave a wide-ranging and expert analysis of HMR and its importance to the area that he represents.
My hon. Friends the Members for Stoke-on-Trent South (Robert Flello) and for Stoke-on-Trent North (Joan Walley) described how the scheme was just starting to have an impact. Clearly the rug has simply been pulled from under the feet of those concerned. My hon. Friend the Member for Stoke-on-Trent North made a plea for a cross-cutting approach. Sadly, I have to tell her that the Government are simply doing the cutting part. She also touched on business rates, which are extremely relevant. That was a point very well made. I hope that the Minister will take that away, because the impact on areas such as hers could be significant if, again, the decisions taken are the wrong ones. My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) is an assiduous debater on this and related issues. He flagged up an alternative, more pragmatic approach that the Government might have followed and pointed out that they simply chose not to do so.
Labour Members have tried hard to clarify this matter and have raised the issue on the Floor of the House. My hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who is in this Chamber today, has—I hope he will forgive me for saying this—been like a dog with a bone. He, too, has written to the Minister for Housing and Local Government, most recently on 29 June, but there has been no answer. Perhaps the Minister for Housing and Local Government has been too busy writing corrections to the previous debate. My hon. Friend asked some straightforward questions in his letter, many of which have been asked again today by my hon. Friend the Member for Liverpool, Wavertree, and I shall add to her list. Will the Minister make it absolutely clear whether Lord Heseltine is correct in saying that the regional growth fund will not cover HMR or anything of that sort?
Importantly, my hon. Friend the Member for Liverpool, Wavertree also asked whether bids, which have been prepared at some cost to local authorities, will be considered at all by the approval panel. If not, will local authorities be reimbursed, given that they were quite clearly sold a pup by the Government? Perhaps in the absence of a written reply from the Minister for Housing and Local Government, the Minister can, in summing up, answer all those questions, because he will have adequate time to do so. I hope that we get good, full, oral answers and that we do not have to wait for updated written answers.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)
It is a pleasure to serve under your chairmanship for what I think is the first time, Mrs Riordan. I congratulate the hon. Member for Liverpool, Wavertree (Luciana Berger) on bringing this subject to the Chamber. I should perhaps say that my right hon. Friend the Minister for Housing and Local Government recently met the hon. Lady to discuss regeneration in her constituency. He also took the opportunity to visit Merseyside in May to see the work being undertaken in both Liverpool and Sefton. I have also visited Liverpool, so I have seen successful, and perhaps less successful, schemes and their outcomes.
Luciana Berger
I just want to reinforce a point that I made earlier. One reason for securing the debate is that while the Housing Minister did come to Liverpool, during a meeting there that was attended by a wide range of people from the local communities affected by the cut to HMR, he said that we in Liverpool could apply for money from the regional growth fund. As that has now been proven to be not the case, further to the evidence given by Lord Heseltine in the Communities and Local Government Committee, it is really important that we receive answers about that today.
Andrew Stunell
I certainly intend to give answers about that.
Perhaps I should say something about the baggage that I bring to the debate. I first secured elected office in 1979, having run a successful local campaign to prevent the wholesale demolition and redevelopment of homes in Chester. I am happy to say that those homes are still there and are now seen as highly marketable assets. We all bring different stories and different perspectives to the debate. I am well aware that good regeneration work has been undertaken in Merseyside and elsewhere, and I am also well aware of the challenges that have been faced in the area. The hon. Member for Liverpool, Wavertree mentioned the Picton and Kensington renewal areas in her constituency.
Several contributors to the debate have acknowledged that not all housing market renewal schemes got off on the right foot. Not all of them were pursued in the right way and, in fact, not all of them were appropriate. A number of them certainly generated significant local controversy and failed to engage properly with local communities. Quite often, the renewal process divided local opinion. Amid the understandable passion that has been brought to the debate, it is important that we keep some perspective on that particular point.
I shall start by responding to some of the specific points that were raised before going on to deal with several of the broader points that I think need to be set out. The hon. Member for Stoke-on-Trent North (Joan Walley) asked for several specific assurances. Officials from my Department are more than ready to work with Stoke-on-Trent council and others on the future direction of the north Staffordshire regeneration area. Indeed, officials are already in discussion on the basis of the bids and applications that have been put in for the £30 million match funding that has been referred to, so I am happy to give her that assurance. I have visited Stoke-on-Trent and looked at some of the situations that she described.
Joan Walley
My concern is not just about the transitional fund and securing our share of it, because that is geared towards demolition. I want to see how all the different funding can be aligned so that we can get investment in homes, communities and local regeneration. If the Minister can help with that, I will be very happy to do whatever I can to facilitate it.
Andrew Stunell
At the risk of having to issue a correction—I do not have a magic wand—I can say that those discussions will be wide-ranging. Of course, they can be as wide-ranging as Stoke chooses to make them.
I want to move on to something that I am sure the hon. Lady will want the official discussions to cover. She mentioned the link between enterprise zone applications and regeneration. She is absolutely right to say that there should be as much synergy as possible in public investment, or in public stimulation of private investment, in both of those. It is entirely right and proper that discussions range across the boundaries and that we should not put these things in separate silos.
The hon. Lady also asked specifically about the local government resource review and the Government’s announced, albeit not yet detailed, proposals for returning business rates to local authorities. I do know the answer to her question; indeed, it has been given from the Dispatch Box. However, she will have to wait for the detail of that answer for one or two weeks, when we actually publish the proposals—the correct civil service word for that is probably “imminently”. I assure her that neither Stoke-on-Trent nor any other local authority will find themselves at a financial disadvantage in the first year of the operation of the scheme. It is central to the proposals that we are bringing forward that that should be the case.
Joan Walley
I realise that time is short, but our concern is not just about being disadvantaged in the first year; it is about the level on which future decisions are made. We could well find ourselves falling severely behind after three years. Will the Minister please feed that back into the final version when he announces it in two week’s time?
Andrew Stunell
The hon. Lady’s point is thoroughly understood. I do not think that she will be disappointed, but she is tempting me on to territory on which it really is not right for me to advance.
Alison Seabeck
Just for absolute clarity, I would appreciate it if the Minister would clarify something that he said. He stated that authorities would not be disadvantaged in the first year. Given that many of these housing and regeneration projects are much longer programmes, I think that we would all have serious worries if, after the first year, those authorities were disadvantaged as a result of the changes.
Andrew Stunell
I was responding to the suggestion that Stoke-on-Trent might lose £26 million. Stoke-on-Trent will not lose £26 million. I think that I have already made our intentions clear. There have been some other statements, but the detail of the scheme will be well debated when it is published, so I think it is best if I go on to respond to several of the other points that were made in the debate, if I may.
It is way over the top for the hon. Member for Hartlepool (Mr Wright) to say that the Government’s decisions have set areas back by decades. That is absolutely not the case. Investments have been made and, even in this debate, reports have been given of their success. It might be said that there is a greater belief in the successes among Opposition Members than Government Members. It is absolutely not the case that such work will be set back as a result of the decisions that have been made.
I want to link that to what the hon. Member for Hyndburn (Graham Jones) brought to the debate. I leave aside his dismissal of deficit reduction, because that sensible Government aim underpins our whole financial strategy. The hon. Member for Hartlepool must be well aware of the deficit problems found by the incoming Government. However, the hon. Member for Hyndburn cannot have his argument both ways: it seemed to be that the fundamental difficulty in east Lancashire was too many homes and not enough people, in which case it can hardly be wrong if the new homes bonus generates more houses in places with more people than it does in places with an excess of houses. I want to tell—
Andrew Stunell
I might give way in a moment, but not until I have finished my sentence at least.
I want to tell the hon. Gentleman that the £62,000 is the first payment in six years of payments on the homes brought into use in his area in the past year. That will be augmented by the homes brought into use in successive years. That £360,000 is real, additional money that Hyndburn would not otherwise have received. Some local authorities—Sefton metropolitan borough council, for instance—have used the incoming income as an underpinning guarantee to raise loans and finances in order to proceed with regeneration. That was one of the projects that my right hon. Friend the Housing Minister visited in Merseyside a few weeks ago.
Graham Jones
I was clear about what I said: if there is an oversupply of houses—more houses than people—there is low demand, and therefore, naturally, less from the new homes bonus. Hence we end up with the figure of £62,000, which is the 11th lowest in the country. The argument is perfectly logical, but it falls down when the Housing Minister says on the Floor of the House that we should not worry about losing housing market renewal because we will get the new homes bonus. That is where the argument falls down; the rest is linear with all the ducks lined up—that is my point. On the Under-Secretary’s mention of extra money, the new homes bonus is being top-sliced from the formula grant after year two, and it is also being taken from the planning delivery grant, so I do not accept his point.
Andrew Stunell
First, my right hon. Friend the Housing Minister has certainly not said that regeneration will be funded by the new homes bonus—his point was that it is an important contribution. The example of Sefton shows that local authorities are well able to exploit that and to benefit.
Jack Dromey
Clarity on the issue of the regional growth fund is of the highest importance in circumstances in which the Minister for Housing and Local Government has treated the House with contempt by not being here today and by not replying to my letter of 29 June. The Housing Minister has said on the Floor of the House and in a letter to local authorities that the regional growth fund can be accessed for capital projects to support housing growth. However, Lord Heseltine has said that housing renewal is not being addressed through the regional growth fund. He went on to say:
“perhaps any minute now I’ll get a letter”.
Perhaps any minute now we will get an explanation or a letter—or both.
I have a final point to make while I am on my feet. Earlier, following powerful representations from Members of Parliament affected by the cruel cutting short of a visionary programme, the Minister described what they said as “sob stories”. Will he take the opportunity to withdraw what he said?
Andrew Stunell
Let us focus on the regional growth fund because time is limited. The spokesperson for the Opposition said that round one of the regional growth fund supported bids in renewal areas in Hull and Wakefield, so it is absolutely not the case that regeneration projects are not being funded by the regional growth fund.
I was not privy to the evidence of Lord Heseltine, but I have seen the reports and heard the quotes, and he said that the terms of reference of the regional growth fund are to promote—funnily enough—growth in the regions. There is no automatic link to housing market regeneration projects although, as hon. Members have mentioned, there are employment, environmental and social benefits to successful regeneration. I take it as clear that the bids accepted from Hull and Wakefield must have met the criteria of supporting growth, as well as the social and environmental criteria about which hon. Members have spoken today.
The bids for round two of the regional growth fund have been submitted and are, no doubt, being evaluated by Lord Heseltine’s advisory committee. The bids are signed off by the Government.
Jack Dromey
We need absolute clarity: are we therefore returning to the original position? In the Housing Minister’s letter to the local authorities, he said:
“we will also provide access to a Regional Growth Fund to fund capital projects which could support housing growth”
and housing renewal. Are the Government now saying that the regional growth fund can be used for such purposes?
Andrew Stunell
Not only that it can, but that it has. In Hull and Wakefield, it has been used for such purposes. All bids must be evaluated, their strength must be measured and their contribution to growth must be considered. It is therefore not the case that a large slice of the regional growth fund is diverted into social and housing regeneration. However, when social and housing regeneration can contribute to growth, a project will be not only eligible but, as in the cases of Hull and Wakefield, successful.
I will now make some progress—
Andrew Stunell
No, I will not give way. I have made the point absolutely clear and I am moving on.
On the former renewal programme, the reality of the fiscal deficit means that we have had to take tough decisions about where savings can be made and to ensure that we focus on growth. The previous Government’s programme was far too centrally driven from Whitehall and, by proxy, sometimes too centrally driven from town halls. It included targets for demolition and, in that sense, it was all too literally top-down, as the hon. Member for Stoke-on-Trent North acknowledged. It resulted in imposed schemes that were often resented by local communities and created as many problems as they solved. That approach has not worked, and has often resulted in blighted areas in which large-scale demolition and clearance projects have come to a standstill.
In my last minute, I shall speak about the sum of £30 million, which is to be matched by other funding. Bids have so far been received from all five eligible areas and the indications are that the match funding will be available, thus allowing £60 million to be spent. That £60 million is the assessment of what is needed to get the existing schemes into a shipshape position—viable environmentally and locally—so that the next stage of development in those areas can happen. There is a process, and I can tell the hon. Member for Liverpool, Wavertree that Liverpool city council has submitted a substantial bid. Officials will consider it and, no doubt, will make recommendations to Ministers in due course. We are ensuring that, at the national level, £261 million is available for market renewal in 2010-11, which is a substantial amount. Also, the reason why the five were chosen was not arbitrary, but because of the improvement in those areas—
Drivers and Diabetes
(13 years, 5 months ago)
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John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I rise to raise the matter of type 2 driving licences for public service vehicles and large goods vehicles, particularly disqualification as a result of having insulin-dependent diabetes. I raise the matter primarily because a constituent, Mr Donald Campbell, has brought it to my attention, having had his licence removed in curious circumstances, which I will come to. However, I would like to say at the outset how grateful I am to Diabetes UK and other people who have been in touch to brief me on this debate.
May I say at the outset that I do not for one moment question that it is absolutely correct that, when medical conditions may cause a safety issue, they should be proscribed? A range of conditions are taken into account, and people who suffer from them, whether they hold group 1 or group 2 licences, may be prevented from driving. I do not for a moment question that. Having been a transport spokesman for my party two Parliaments ago, and having been a member of Standing Committees on various legislation, I am well aware of the importance of road safety and of this country’s extremely good track record. We obviously want to keep the number of deaths and injuries to an absolute minimum; we have a good track record compared with many other countries, and nothing should be done to prejudice that.
At the same time, although it is proper that people with some medical conditions should be prevented from driving, others—with proper supervision and consultation, perhaps with annual or periodic check-ups—should properly be permitted to drive. The other question is whether it is right to remove someone’s livelihood in the case of a group 2 licence when the example of other countries and, indeed, medical advice suggest that that is unnecessary.
I will give a rapid history, which I am sure the Minister is as well aware of as I am. The regulations precluding insulin-dependent diabetics from obtaining vocational licences were introduced in 1991, and annex III specifies that for drivers of LGVs and PCVs,
“driving licences shall not be granted or renewed for applicants or drivers who are diabetics needing insulin treatment”.
Since 1 April 1991, insulin-dependent diabetics have been barred by law from applying for such a licence, and indeed from renewal thereafter. A point in parenthesis is that those who held a licence under certain conditions had grandfather rights, and some people may still be driving with those rights. I will come to why that is important.
In August 2009, following reports from three medical working groups, the European Commission adopted an amending directive, 2009/113/EC, on the driving licence rules covering eyesight, epilepsy and diabetes. The change to the rules allows member states to issue group 2 licences to drivers with insulin-dependent diabetes when, in the opinion of a qualified medical practitioner, the condition is properly controlled and they pose no risk to themselves or other road users. That change should have been in force by August 2010, but the UK was unable to meet that deadline, and a consultation paper was eventually put out in February this year. The consultation has now closed, but I understand from a reply from the Minister to a parliamentary question that the Government are now saying that further input from some of those who have responded may be necessary. That is the situation at present.
My constituent, Donald Campbell, has type 2 diabetes. He was diagnosed in 2000, but was not treated with insulin until 2005, when he was advised by doctors to change his medication to slow-release insulin to protect his long-term health. Since then, his health has improved considerably, for which I am grateful, and at his annual check-ups his consultant tells him he is going from strength to strength. Mr Campbell notified the Driver and Vehicle Licensing Authority of his use of insulin in 2005, and his LGV licence was immediately withdrawn. However, two years later, in August 2007, the licence was reinstated. Mr Campbell was obviously extremely pleased about that, and returned to full-time driving with no problems. He renewed his licence in 2008 and 2009, so he had three years of driving. Not until last summer did the DVLA recognise that under the present regulations, it had reissued Mr Campbell’s group 2 licence wrongly. While Mr Campbell was driving, he experienced no problem whatever, and he has been driving alongside those with grandfather rights—hence their importance—and those from other EU countries who have already been given the right to drive on such licences. At the moment, his job is being held for him pending the possibility that the UK will catch up.
This is an opportunity for the Minister to right a long-standing wrong perpetrated by the EU. Had there been no original directive, undoubtedly the traditional elements of British fair play would have come into effect, and the sort of rules we are now contemplating would almost certainly have been those that Her Majesty’s Government adopted. It has come to pass that the EU, having seen the error of its ways, has put in place that which will allow the Minister to correct an obvious wrong—I know how much that will appeal to him. The change is open and available, and has been adopted by other EU countries, so it is peculiar that we are dragging our feet; perhaps the Minister will address the reason for that, and the safety aspect. Why are we content that drivers from all sorts of other countries enjoy that relaxation and are considered safe, but we do not extend that to our own people? Are there are any statistics showing whether insulin-dependent drivers are more likely than others to have an accident?
Mr Adrian Sanders (Torbay) (LD)
I congratulate my hon. Friend on securing this debate, which is not the first time in the last 15 years that the House has discussed the matter. I have had a similar debate. I suffer from diabetes, and I know people who can win gold medals, and others whom I would not trust to drive my lawn mower. The reality is that the decision should be based on an individual medical assessment, and I hope my hon. Friend agrees.
John Thurso
I entirely agree with my hon. Friend. The whole point of my case is that the medical profession can, with considerable accuracy, state when people should be taken off the road—I am sure that they apply a precautionary principle—and when they may be allowed to continue to drive. I am particularly concerned about group 2 licences—commercial licences—and my constituent. I received a recent e-mail from him which sums up the situation:
“I am sorry to be such a pain”—
he is no pain at all, I hasten to add, and has been extremely patient—
“but I am so exasperated with the whole issue—every time they take my licence away I am left trying to keep things going financially and this time they have wiped me out…Between the worry of keeping the bank off my shoulders and the boss needing to know when I’m coming back to work, I am drained.”
That shows the personal impact on my constituent. Given that the rules may be about to change and that the Government have put forward proposals that would permit him, subject to medical examination, to get back on the road and back to work, I suspect that he feels a little like a mouse that is being toyed with by a cat. The Government owe their citizens better than that. I throw myself at the feet of the Minister, whom I know is an honest and honourable man, and plead with him to lift that burden from my constituent.
The Parliamentary Under-Secretary of State for Transport (Mike Penning)
It is a pleasure to serve under your chairmanship for the first time, Mrs Riordan, as either a Back Bencher or as a Minister of the Crown. I hope to provide a little good news for the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso)—it is easier to say Hemel Hempstead, but I mean no slight on the hon. Gentleman’s constituency and congratulate him on securing this debate. I have been a Minister a little longer than some others who have held the post over the years—the average life expectancy of a Minister in my job is eight months, so a year and a bit is an exception. I have taken a particular interest in the case of Mr Campbell and, as I am sure the hon. Gentleman realises, in the involvement of the European Union in this great country of ours.
I will summarise the details of the case mentioned by the hon. Gentleman and endeavour to address some of the issues, particularly those relating to Mr Campbell. At the moment, the law is specific, which was not done on my watch—although it is my Department and the buck stops with me. When the Driver and Vehicle Licensing Agency gave the licence back to Mr Campbell, it messed up. I know that it wrote to him, and I have a copy of the letter, which could have been worded better and showed more empathy and understanding about the effect that the decision on his licence would have on Mr Campbell, his family and the company for which he worked. I apologise for that, and if Mr Campbell were present today, I would apologise to him personally. We need to address problems as we go forward. I cannot right the wrongs of the past, but we can try and ensure that they do not happen again. We must look at how best to address such situations, and avoid the foot-dragging to which the hon. Gentleman—probably quite rightly—has alluded.
The law in question concerns epileptic fits, diabetes and visual impairment. The consultation by the DVLA has been well taken up and a lot of work has been done. However, the situation is complicated, because the law includes those three areas. The areas of visual impairment and of fits are more complicated than that of diabetes, but all three issues have been rolled into one. The hon. Gentleman is right: ideally, we would have produced proposals to address all three areas by now, but, if I am honest, we will be unable to do that by the October deadline. As I have said to my officials, we will produce proposals on diabetes, which will be based on clinical advice. I will be subject to criticism from those involved in the other areas on which we are not yet ready to introduce proposals. My view, however, is that if we are ready to introduce proposals in one of those areas—by October, we should have a proposal on diabetes—we should go ahead and remove the blight that affects not only the hon. Gentleman’s constituent but many other people around the country.
It is imperative that we do that that without affecting road safety and, as the hon. Gentleman said in his opening remarks, that is the principle from which we start. The UK has a good record on road safety—indeed, we have the safest roads in the world. A new report on the number of people killed or seriously injured on the roads last year indicates that we are now doing even better. Over the years, we have struggled in some areas of road safety to get the right results, particularly concerning serious injuries for motorcyclists, but—as a biker, I declare an interest—we did particularly well in that area last year.
Of course, there are too many deaths, and we need to look at the core of the issue, which we are doing in the road safety strategy. It is, however, absolutely imperative that we do not use a sledgehammer to crack a nut. Medically, the treatment of type 2 diabetes has moved on in leaps and bounds to say the least. I was a shadow Health Minister for three and a half years and I took a particular interest in the public health side of things. Soon, we will be moving away from injections altogether, because there will be aspirators, and we can make it much easier for diabetic patients to get on with their lives and address their insulin issues.
The issue of hypos is important, as are other matters such as visual impairment. My point of view as a non-medically trained Minister is that a clinician must decide whether someone in the groups that we are talking about—particularly group 2—is fit to drive. Hopefully we will bring forward proposals on diabetes in October. We are further behind in the other two areas and, as the hon. Gentleman said in his remarks, we need more consultation on those issues, in particular on the control of epileptic fits.
There is some concern from the road safety lobby that we will be reliant on people addressing their need for insulin treatment themselves. Two members of my family are reliant on insulin—one is a type 1 diabetic; the other is a type 2 diabetic. They sometimes get it wrong, and everybody understands that. We must have full confidence that if diabetes is controlled by insulin, the condition is stable and the clinicians are happy with the situation. If that is the case, we should be able to agree in October that after medical assessment and agreement—which will be continually assessed as things progress—we will allow insulin-reliant diabetics in the classes mentioned by the hon. Gentleman, and particularly those in group 2, to drive. I said that there is some good news.
That will not, however, address the problems experienced by Mr Campbell. Under the present rules, the DVLA was right to take his licence away and fundamentally wrong to give it back and not to pick up the mistake sooner. Everybody makes mistakes, but it is crucial to ensure that such things happen as little as possible, because they have such dramatic effects on people’s lives.
The hon. Gentleman asked whether statistics are available to show whether diabetics who are reliant on insulin are more likely to be involved in an accident. As I understand it, we do not have such statistics and when the European Commission looked into the matter, it used the fact that there was no evidence available to change its mind. As hon. Members will realise, I am ever so slightly Eurosceptic, so it is great news that UK plc is again allowed to be in control of procedures and safety on our roads. Our borders are open to anybody from the European economic area or the EU who wishes to drive in this country, which is right and proper.
I fully accept that other countries have moved faster than us, but they do not have roads that are as safe as ours. Many of their Ministers and officials come to see me to see how we manage to have such safe roads. If they were slightly more vigilant in how they enforce road safety, the position might be different. In the area that we are debating today, they may have got things right a little more quickly than us. I fully accept that there is an anomaly between on the one hand drivers with grandfather rights and overseas drivers and on the other hand UK citizens who are being penalised. I think that we will be able to wipe that away very soon—in October, I hope.
John Thurso
I am extremely grateful for the reply that the Minister is making, in terms of both the tone—I am sure that my constituent will have noted his remarks and be grateful for them—and the good news in respect of diabetes. The Minister has mentioned October. Will that be when the Government promulgate the change to the regulations? Am I therefore accurate in saying to my constituent that he might look forward to being able to take the medical exam in October, permitting him to go back to work shortly thereafter?
Mike Penning
I think that Mr Campbell should be at the front of the queue in October—I think that that is the least we can do for him. I hope that he sees that the Minister understands what went wrong and is trying to address the matter as soon as possible. Yes, we will move the relevant orders in October, when the House returns from recess. The process will start in October in relation to the particular area of diabetes, and more work is required in the other areas. I hope that people understand that I need more time on the other two medical conditions.
Mr Sanders
I want the Minister to be under no misunderstanding about this. It is critical that whatever change is brought in enables people with diabetes to be confident about declaring to the licensing authority that they have the condition, because we do not know how many people there are with the condition who, fearing the loss of their licence, do not declare it.
Mike Penning
The hon. Gentleman has touched on an important point, which is one of the reasons why I have moved as quickly as I can on this issue. I want members of the public, after they have been diagnosed with diabetes and start treatment, to be confident about coming forward and saying that they have been diagnosed with type 2 diabetes—or whatever the condition is—and about being assessed fairly, so that either they can carry on driving in whatever categories they are designated as being able to drive in or they understand why, at that moment, their licence needs to be revoked and withheld from them. That will happen in some cases.
I can refer to my own experience with my father-in-law; I am sure that he will not mind my doing this. He was a complete scallywag about admitting that he was a type 2 diabetic in the first place, despite what all the doctors were telling him. He said that he could address the situation through his food intake or with tablets. Eventually, we convinced him that he had to go to insulin injections. In fact, it was not me; it was his daughters who eventually convinced him. They said, “You’re going to kill yourself if you’re not careful.” At the time, his medication had not been got right to the point where he could be allowed to drive. His diabetes was not controlled, so he had regular hypos.
People need to be able to have confidence that once their condition is addressed—if it can be—the independent medical practitioner assessing them will either allow them to drive or indicate to them what levels they need to be at to get their licence back. At the moment, there is a grey area. People think, “What do I need to do? Where do I need to be? Will I ever get my licence back?” The issue of fairness is fundamental. I think that that is what the hon. Member for Caithness, Sutherland and Easter Ross, who secured the debate, was saying. I will use an old-fashioned term—natural justice. I use it as much as I can as a Minister. There is an ex-Minister in the Chamber now for the next debate. I hope that all Ministers, when they look at the effect that they are having on a constituent anywhere in the country, look at whether justice is being seen to be done.
Licences are often taken away for the right reasons. I understand why they are taken away, but I do not think that we explain particularly well either the rationale for that or the likelihood of the situation changing. As I have said, the Government will produce new proposals in October. We want there to be an open, clean discussion in which things are explained. We want people to be told, “This is where we need you to be to get your licence back. You can’t have your licence back at the moment because you haven’t reached that point.” However, there is a link between visual impairment and diabetes, so in some circumstances people would be unlikely to get their licence back. My father-in-law is now registered blind, because of his diabetes. It was not treated early enough; he admits that that was his fault and nobody else’s. As a result, he will never get his licence back. We need to be honest with people, which is where natural justice and fairness come in.
I hope that I have been open and honest. We are proceeding as fast as we can. The representative groups for the other two medical conditions will criticise us for not moving as fast on those conditions as I have just announced that we are on diabetes. That is simply because I do not yet have the evidence base behind me to be confident enough from a road safety point of view—I am thinking of the driver as well as their loved ones and other road users—to move forward. As soon as I can move on the other categories as part of the review and the consultation, I will do so, but I hope that in October Mr Campbell will have some control over his future income and his life.
Public Spending (Coventry)
(13 years, 5 months ago)
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Mr Geoffrey Robinson (Coventry North West) (Lab)
I am grateful to you, Mrs Riordan, for chairing the debate and to Mr Speaker and his office for agreeing to it. It is a very important debate, in the course of which I may be joined by two other MPs. I think that both were meant to have approached the Chair to say that if time permits—I hope it does—they would like to say a few words. We will of course leave adequate time for the Minister to reply.
The occasion of the debate arises from some work done two or three months ago, shortly after the Budget came out, by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). She sought to show that the Budget measures, far from being progressive, as the Government had tried to imply, and far from being gender-neutral, were in fact very regressive and would impact much more severely on women than on men. The work she did initially in pursuing those points to great effect against the Government was then taken up and taken further in some excellent research work undertaken at Warwick university by two senior researchers there, Mary-Ann Stephenson and James Harrison. I am sure their work will increasingly be seen as a landmark in taking forward the points that were made by my right hon. Friend shortly after the Budget came out.
Coventry was a very suitable place to use as a test case for examination of the impact of the Budget measures on women, because in Coventry the pay gap between men and women—between the genders—is already 10 points higher than the national average. Also, as we all know, the bulk of the cuts in the immediate future must come in the public sector, and in Coventry no fewer than 78% of the city council staff are women. We can therefore measure in a very significant way, across a major part of the economy in the west midlands—the local and the regional economy—what the effect of the cuts will be. I would like to deal with each point in turn, quantifying things in so far as that is possible. We can then look forward to hearing exactly what the Minister has to say in response. But if we take the cuts as a whole, it is obvious, given that 78% of the city council staff are women, that the impact will be worst on them; they will feel it most. That is a simple fact. The cuts will disproportionately fall on women.
The child care tax credit is being cut from 80% to 70% of child care costs. Obviously, women will also suffer disproportionately as a result of that. Together with increased child care costs, that might lead to lower rates of employment for women and further increase the pay gap. That has not been quantified yet, but work is continuing. Such is the interest in the issue at the national level that when a colleague and I co-hosted a meeting to discuss it, the Members who joined us in the Committee Room came not only from the west midlands, but from all parties right across the spectrum. The room was full to capacity, and there was standing room only; it is not often that that happens in a public meeting in a Committee Room.
The second issue is housing. Single women are the main recipients of housing benefits; again, that is pretty obvious. In Coventry, about 4,360 single women and 2,085 women in couples claim local housing allowance for private rented accommodation. LHA coverage has been cut and now applies only to the bottom 30%, rather than the bottom 50% of households. It will also be linked to the consumer prices index, rather than to local rents, which will almost certainly mean—this is why the Government have also chosen CPI for their pensions calculations—that its value will go down over time. Again, women make up by far the greatest proportion of those who take up this benefit, so they will, yet again, suffer disproportionately.
This time, we can put a figure on the cost, and perhaps the Minister can confirm or contradict my figures in her reply. In the short term, the changes will cost those who are affected in Coventry between £8 and £15 a week. If that is not right, perhaps the Minister will correct me. Again, however, those are hidden effects, and they are not spelled out in any of the Government’s background notes to the Budget or anywhere else in their calculations. Those hidden effects, which the Government have tried to cover up, are impacting directly on women in Coventry and, therefore, on their families.
On incomes and poverty, it is pretty obvious that women are poorer than men—that is a statement of fact. As I have discussed, they also get a higher percentage of their income from benefits. For example, 33,595 households in Coventry receive tax credits, and 35,000 receive out-of-work benefits. The proposed changes will, once again, impact on women. The changes include cuts to benefits to pregnant women and families with new babies, the freezing of child benefit, cuts to child care tax credits and cuts to the numbers who are eligible for tax credits. Lone parents will be required to seek work once their eldest child is just five. Those changes will have big impacts, and I will quantify them in a moment.
Disability living allowance is being cut by 20%. Someone claiming for a person who loses DLA will also lose carer’s allowance. It is a pretty heartless Government who attack the most vulnerable in our society in that way. It almost seems that the Government have zeroed in on women to prove the point made by my right hon. Friend the Member for Normanton, Pontefract and Castleford.
The benefit and tax changes in the 2010 Budget will cost women in Coventry £29 million, which is an awful lot of money. On a broad calculation, that is more than £180 per woman per year, so the Budget will have a significant impact. However, the impact on the budget of the average family and the average woman was set out nowhere in the Government’s figures. The cost to men will be half the cost to women. Again, I would be happy for the Minister to try to challenge my figures—if she can.
On education, many women have to balance a job with looking after the kids and getting them to school. Like most authorities—I do not think Coventry has been unduly affected in this respect—Coventry has had its schools grant cut. The 24% cut to the schools budget has resulted in a cut to special needs and mental health support in schools—that is where the impact will be most heavily felt. In no sense is that to be taken as a criticism of the council. Indeed, I am pleased to say that in certain parts of the report, the authors go out of their way to say just how responsibly the council is trying to carry through the cuts. The council appreciates that the cuts have to be made and is trying to make them in the least regressive way it can to protect children, women and other vulnerable sectors of society. It is not picking out those with special needs, and nor is it in any sense exaggerating the cuts that have to be made; it is simply making the cuts that are necessary to stay within the law.
In passing, I have heard it said—I hope the Minister can discount this at once, and she probably can—that the Government could be in breach of Equality Act 2006 and, on an individual basis, the European convention on human rights, given the effects of so much of the 2010 Budget. I am not clear whether test cases are being brought, although I did try to find out. However, it would be interesting to learn from the Minister whether any are being brought and if so, how far they have got, because some of the Government’s measures are clearly so discriminatory—as well as being at least questionable under the terms of the 2006 Act—that they could be subject to judicial review, as I hope they will be.
On violence against women, the report produced a figure that shocked everybody—from my researchers to the report’s researchers. Let me give the numbers, shocking though they are. Some 30,397 women in Coventry are likely to have been raped or sexually abused at some point in their lifetime. If we remember that there are 310,000 people in the whole of Coventry, and we divide that by half or slightly more to reflect the percentage of women in the total population, it is clear that that statistic for the likely number of women who will face some form of sexual abuse at some point in their lifetime is frightening and really rather offensive. Some 38,537 women are likely to experience some level domestic violence in their lifetime. Again, I do not think the researchers wanted to attach any undue importance to the exactitude of their estimates, but the broad measure is shocking.
The provision that was made to deal with that situation was already inadequate, although heaven knows we pushed for a higher level of support from the council and the Labour Government—I am not pretending that the Labour party did a marvellous job. There are eight specialist domestic abuse officers to deal with the situation I have described.
Mr Bob Ainsworth (Coventry North East) (Lab)
I have been waiting for my hon. Friend to get on to the section of the report that deals with violence against women, because it really is most disturbing. Organisations such as the Coventry rape and sexual abuse centre are worried about funding, although the council has agreed to give it part-time funding, which is not secure. However, it is not just a matter of the sharp end of abuse against women. If women become more dependent on men as a result of the cuts, some will be inclined to stay in homes where they are potentially vulnerable and where they may be abused. That is clearly brought out in the relevant section of this first-class piece of work.
Mr Robinson
I am grateful to my right hon. Friend, who is spot on. The cuts to housing benefit will make it harder for women to move from the area to get away from their attacker. That is precisely the point made in the report, and my right hon. Friend rightly emphasised it recently in the press in Coventry.
Mr Jim Cunningham (Coventry South) (Lab)
I apologise for having been a minute or two late, although the debate might have started early. My hon. Friend and my right hon. Friend make a valuable point. For a long time, the rape crisis centre in Coventry has struggled, to say the least, to get resources, and the cuts will make the situation worse. Do the figures for women who are abused or raped in Coventry—or anywhere else for that matter—not call into question the Government’s policy on cutting legal aid and funding for citizens advice bureaux, because vulnerable people, and particularly women, will often use those agencies?
Mr Robinson
My hon. Friend is exactly right. Perhaps I may take a second to say that I think my hon. Friends want to say a word, if they are able to catch your eye, Mrs Riordan, and if we have time, about the wider aspects of the issue. After all, if more women are trapped in violent relationships there will be greater mental, physical and sexual health problems for them as a result, with an increased cost to the taxpayer. The NHS will have to cope when it is already under tremendous pressure and its budget is being dramatically cut. The issue is wider than just the reduction, although the Minister needs to explain how anyone can justify cutting the number of Coventry’s specialist domestic abuse officers from eight to two and reducing rape support resources, at the same time as other measures will clearly increase the likelihood of the problem that those staff and resources are meant to deal with. It seems crude and harsh, and we wonder whether it is strictly necessary to go along that path.
I want to mention the women’s voluntary organisations. Overall, the council, in line with other councils, faces cuts of about £38 million in its grant from central Government. A number of streams from that are for voluntary organisations, and those are due to end; some have already ended. Those voluntary organisations face increasing demand from the communities they serve, for the reasons we have been analysing. As hardship increases and cuts bite in all the areas I have mentioned, demand will increase. As resources are cut there will be greater pressures on hospital services and the police, which are also being cut. There will be a double whammy—cuts on one hand and increased need on the other.
Women’s voluntary organisations appear from the study to be particularly vulnerable, with some expecting cuts of up to 70% of their funding next year. I can inform the Minister, if she wants to deal with them individually, of the types of voluntary organisations that are particularly badly affected. Can that be looked at again? We do not expect answers to everything today, but we would like some undertaking from the Minister to check out the research funding and reconsider Government policy in the light of that. She could then tell us, “Yes, that is indeed our policy, and although we did not intend the consequences, those are the consequences and you will have to live with it.” If that is the Government’s message, they should be straightforward with the people of Coventry—the women of Coventry—and say, “This is the price that we are asking Coventry women to pay to put right the faults, and the massive irresponsible financial borrowings.” That is all, of course, in the context of reducing the deficit caused by private sector bankers.
That seems a pretty harsh message to send to the women of Coventry, and if that is the best the Government can offer, I warn them now that the people of Coventry will not be impressed. They will in due course have occasion to express their own opinion about a Government who have been as hard-hearted and indifferent to the cause of women and children as the present Government appear to be.
Mrs Linda Riordan (in the Chair)
I remind any other Member who wishes to contribute that the Minister will need time to reply, so perhaps they can keep their comments brief.
Mr Bob Ainsworth (Coventry North East) (Lab)
I shall keep my comments brief because the speech made by my hon. Friend the Member for Coventry North West (Mr Robinson) was very thorough and comprehensive. I want to make only one point in addition to his, and that is about funding for the Coventry rape and sexual abuse centre.
It is well known that the conviction rates for rape in this country are abysmally low. However, it has been proved beyond doubt that when an area has an appropriate service that provides support from the start, the propensity for victims to go through with an allegation, and for the conviction rate to rise considerably, is massive. We are well served by the centre in Coventry, but its funding is in crisis. It is constantly dependent on temporary funding. Despite the massive cuts that are being imposed on the council, it has agreed, for a time, to maintain some of centre’s funding on a temporary basis. However, we are really struggling to continue to provide such a vital service. Were we to lose it, the impact on women in the city would be huge.
The Economic Secretary to the Treasury (Justine Greening)
It is a pleasure to serve under your chairmanship, Mrs Riordan, in what we would all agree is an important debate in relation to the difficult challenges that we face. I congratulate the hon. Member for Coventry North West (Mr Robinson) on securing the debate, and I understand why he has raised the issues. In the time available, I shall do my best to respond. If I feel that I have not done so, and if there are specific points on which he would like further clarification, I may well also drop him a line.
We all understand that the backdrop to the debate is the need to get the economy and public finances back on to a sustainable footing over time. As a country, we were always going to have to do that. The hon. Gentleman, for whom I have a lot of respect, talked about the deficit being caused by the private sector. We would all accept that there has been a banking crisis, but many people also recognise that something more fundamental was going wrong with the working of our economy and public finances, and that was due to the fact that we had a structural deficit. Even in the boom times—the good times—when tax revenues were rolling into the Treasury as fast as they were ever going to, that money was still not enough to cover the country’s outgoings.
The Treasury Ministers dealing with public finances in the present Government are therefore in a position in which I assure the hon. Gentleman that we never wanted to be. We had to take the decision that it was in everyone’s interest to get the problem sorted out during the course of this Parliament. When we look at the problems in countries in the rest of Europe—we need only look at Greece—we see that there is still an economic crisis, and our country needs to stay out of it. Our deficit reduction plan is critical in enabling us to do that.
The hon. Gentleman raised the question of what is the fairest way to approach the situation. How can we achieve a balance between getting our public books back into order and making sure that the process is fair—that is one of the key points of the spending review and the Budget—while stimulating growth at the same time? The hon. Gentleman will be aware that one thing that we chose to do in the emergency Budget was to reduce corporation tax, and we built on that with a further cut in the most recent Budget. We tried to strike a balance between cash-flow issues—the money side—and putting ourselves in a position to ensure growth in the economy, particularly in parts of the country such as Coventry and the midlands that suffered in the recession.
Some research now shows that the west midlands in particular suffered disproportionately, and that gives us a double challenge. When I was an Opposition MP, I would have argued that, during the boom years preceding the recession, parts of the country outside the south-east did not do well enough. According to statistics, between 2002 and 2006, for every 10 jobs created in the south-east and London, just one in the private sector was created outside.
Justine Greening
I will give way in a second.
What I have described was a big problem. In addition, because of the continued hollowing-out of manufacturing in the previous decade, the west midlands suffered particularly, and I recognise that women also suffered as part of that.
I shall now give way to the hon. Gentleman, but I assure him that once he has intervened, I shall speak about some of the matters that he raised, particularly in respect of women.
Mr Robinson
I am sorry to interrupt the Minister. On this occasion, I am not going to disagree terribly about whether things are regressive, not fair or not sufficient, nor about whether they are too fast. The point here is to have a close look at the effect on women, as my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) has stressed—the Minister herself has a keen interest in the matter. If we could consider the impact on women, I would be very grateful.
Justine Greening
We were careful in the spending review not only to consider its impact on women, but to understand its impact across the deciles. The hon. Gentleman asserts that the spending review and the Budget were regressive. However, research shows that it is the very richest people in our country who are bearing the brunt—they bear the biggest load—of tackling the deficit.
We have tried to ensure that we provide support for women through tax measures and several of our public spending measures. The hon. Gentleman spoke about the difficult decisions that Coventry city council is having to make. He has doubtless raised the matter with local councillors and the council leader, and discussed especially whether the deficit reduction piece that has fallen on Coventry is being carried out locally in the right way to deal with the local people’s priorities.
I take seriously what the hon. Gentleman said about particular issues, such as rape and support for women. As a local constituency MP, I have taken a particular interest in ensuring that refuge and support are in place for women. Many of these women who need such support are not from my community, but come to it because they must get away from difficult situations. The hon. Gentleman was absolutely right to raise the matter.
The Government have allowed councils more freedom in how they spend their money. A lot of ring-fencing has been removed precisely to enable councils to take more locally focused decisions in these difficult times about where money goes.
The hon. Gentleman also spoke about voluntary organisations. I assure him that we are committed to supporting them—not because of the difficult spending review settlement and the difficult situation with public finances in which we find ourselves, but because it is the right thing to do. One of the less publicised parts of this year’s Budget was the big package on philanthropy and there was also a package in support of gift aid. We need to consider what can be done to help voluntary organisations. We also changed AMAPs—approved mileage allowance payments—to help voluntary organisations in terms of volunteers and passengers.
We have taken further equally important steps. For the first time, we published an overview of the impact of the spending review on groups protected by equalities legislation, including women. The increase in personal allowance will help 880,000 of the lowest-paid workers—they will stop paying tax altogether—and we know that the majority of those at the bottom end of the low-income scale are women. We are also pushing the personal allowance higher. One thing that we have in the back of our minds is the fact that many of those workers were hit by the withdrawal of the 10p tax rate. In a sense, my challenge to the hon. Gentleman is whether he was making such points when the Labour Government were withdrawing that rate, as that change affected a number of women.
We have also tried to support families. The hon. Gentleman mentioned the House of Commons Library research, and if I have time—no, I shall make time—I shall say why we do not agree with its analysis, although it clearly made an important contribution to the debate. We increased child tax credits because we were particularly concerned to ensure that we did not go backwards on child poverty, even in these challenging times. As he pointed out, the change will be important for the many women in single-family households.
As for pensioners, we have re-established the earnings link and put back the triple guarantee. We know that women are far more likely to rely on a state pension than men, and of course they are also likely to live longer, so that will help them, too. Those are the sorts of things that were missed in the research carried out by the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper).
Mr Ainsworth
The Minister talks about the impact on women of the pension changes, but does she not feel that the speeding up of the equalisation will be disproportionately onerous on those women in their mid to late 50s who will have no chance of making up for the now increased burden of providing for their own pensions? Put simply, they do not have the time to improve their pension pots.
Justine Greening
I recognise the debate that is taking place about that, but I also recognise that we have to be fair to everybody, and that means ensuring not only that our state pension system is fair to women today, particularly those nearing pensionable age, but that it will be fair to women of my age and to younger generations. They deserve to know that they can rely on state pension into which they pay through national insurance and any occupational pension that they might set up. For the women of the future who are now in our primary schools, the huge problem of our deficit and the public debt needs to be sorted out so that it does not fall on their shoulders later.
I now turn to the important point of what the hon. Member for Coventry North West said about the Library analysis. As a Government, we disagree particularly with its assumptions about where benefits go and who actually benefits from them, which were understandable but not necessarily accurate. For example, the research made the broad assumption that only the person who received a welfare payment would benefit from it. The hon. Gentleman mentioned housing benefit, but that is meant to help the whole household, not just the person who receives it.
On child benefit, the research apparently showed that the spending review and the Budget hit women particularly hard. Child benefit and child tax credit—the latter went up this year and will increase again next year—are designed principally to help the child, and the child can be of either gender, so it is not particularly accurate to say that our approach would necessarily hit women.
I recognise the hon. Gentleman’s statistic on the proportion of lone parents who are women. However, the analysis missed out the fact that in some of the areas that we have protected, such as health, women particularly benefit. We are taking steps to improve the amount of breast screening for cancer. At the moment, the breast screening programme offers screening every three years for all women in England aged 50 and over. Women aged between 50 and 70 are invited for screening routinely, while women over the age of 70 can request free three-year screening, but we are extending that programme to include women aged 47 to 49.
Mr Robinson
We have reached the interesting part of the debate—I wish we could have got on to it earlier. The debate is obviously about Coventry, but the points being raised are of general significance—they are major policy matters throughout the country. Will the Minister tell us on which particular points the research is weak, because I do not agree that it is? Lone parents is an obvious area to consider, because they are mainly women, and the disproportionate impact on women is precisely what we are discussing. We will not have time for that today, but will the Minister reply to the point about the research?
Justine Greening
I shall write to the hon. Gentleman to elaborate on those points that I cannot answer now.
We cannot consider only one aspect of the decisions taken in the spending review and ignore the weight of the rest of those decisions. They affect not only women, but everyone. I assure the hon. Gentleman that we are committed to ensuring that the difficult decisions that we have to take—they will be difficult—are fair. We have produced more analysis with the emergency Budget, the spending review and this year’s Budget to help people to understand how those decisions fall across our communities, and I hope that that is helpful to the hon. Gentleman.
Benefits (EU Nationals)
(13 years, 5 months ago)
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Mrs Anne Main (St Albans) (Con)
It is delightful to serve under your chairmanship this afternoon, Mrs Riordan. This is an important debate. I have a brief time in which to speak—I wish that it were longer—but I will allow my colleagues to make brief interventions, if they need to make a particular point.
Can British taxpayers, with a massive budget deficit of £143.2 billion, afford to be so generous with their benefits payment system to everyone who tries to claim? Are we the benefit pot for the EU or the UK? Do we, through our lax approach, encourage benefit tourism?
Under EU rules governing non-discrimination against other EU member citizens, many of our benefits are ultimately available to many of the citizens who have decided to join us from other EU member states with only a few exceptions for some accession countries. The amount of benefits being paid has risen enormously, and our own Chancellor, in his spending review, is looking at ways in which to bring down the welfare bill. I suggest that we start with EU benefit tourists and by closing some of the loopholes that have been exploited by the canny.
My colleagues will not be surprised to hear that I am no fan of the bloated, greedy, meddling Euro-state. I did not vote for it, and the power-creep that has gone on over the years is abhorrent to many older citizens who voted for a common market based on trade. In 2004, 10 countries joined the EU, and their citizens are afforded the same rights as those of other EU member states. Transitional measures for up to seven years restricted the right of freedom of movement for labour for eight of the 10 new accession states. Often called the A8 countries, they are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. Ireland, Sweden and the UK were the only EU member states to grant full labour market access to the A8 nationals. Other member states maintained their existing work permit arrangements or implemented a modified work permit regime.
At that time, we foolishly implemented a transitional set of arrangements covering a workers’ registration scheme. These arrangements have lapsed for the A8 group as of this year. That category of EU migrant worker will be able to claim jobseekers’ allowance, council tax benefit and housing benefit on top of other benefits such as child benefit. If the Migration Advisory Committee’s report of 2009 is anything to go by, we can expect an even greater call on our benefits now that the transitional arrangements have lapsed. The MAC report looked into extending the transitional arrangements for EU migrant workers until April 2011.
In 2008, the MAC reviewed the evidence on drivers for migration. Relative income levels—GDP per capita expressed in purchasing power standard—in A8 countries demonstrated the strongest relationship to immigration rates. We must learn from history. If there is a direct link, as outlined by the MAC in 2009, that people from poorer countries are more likely to come to work and claim benefits in Britain, then we must expect that when the current transitional arrangements for Bulgaria and Romania lapse this year, or in 2013 if we achieve an extension, many thousands of them will come over, too. We cannot walk into a potentially burgeoning welfare commitment with our eyes closed, and we must act to protect our public finances. We cannot castigate the previous Labour Government for massively underestimating the number of Polish migrant workers who would come to the UK and then put the blinkers on our own eyes when it comes to the A2 countries.
The MAC report showed that, relative to other A8 countries, Poland had a much lower GDP per capita than Britain, and so many Poles came to the UK to seek work. As the right hon. Member for Birkenhead (Mr Field), in his capacity as poverty tsar, has been advising the Government, it is no secret that nearly 90% of the newly created jobs have been filled by migrant workers, many of whom have dependent families back home. With an even worse GDP per capita for both Bulgaria and Romania, we must expect them to react to their circumstances in the same way and to seek a more affluent lifestyle on our doorstep.
We should have learned a lot from the failure of the previous Government to protect the coffers of the UK from EU migrants seeking, very understandably, to better their economic lot and that of their families, many of whom will have stayed behind in their mother country. I do not blame them; they are simply working within a set of rules that we have stupidly put in place.
Mr Andrew Smith (Oxford East) (Lab)
This is an important subject, and I congratulate the hon. Lady on securing the debate. Does she not accept that in judging this in the round, we also have to take into account the benefits to our economy and to other economies of freedom of movement? Should we also not take account of the benefits that accrue to British citizens through having rights of movement to other EU countries?
Mrs Main
There are undoubtedly benefits, but we are talking about countries with different levels of affluence. Although we benefit from some hardworking migrants, we also have to open up our benefit pot. It is no good expecting our country to withstand massive cuts in benefits and services to try to tackle a budget deficit while, at the same time, handing out largesse elsewhere. I want to examine those failures and learn from them, especially as Romania and Bulgaria will soon enjoy full accession rights.
There is no point in any of us wringing our hands, berating the shortcomings of the previous Government and moaning that our hard-earned taxes are being sent abroad if we are not prepared to tackle this. I urge the Minister to take note and, hopefully, take action.
Child benefit is a notable example that has caught the eye of hon. Members in all parts of the House. I pay particular tribute to my hon. Friend the Member for Witham (Priti Patel) for her sterling work in uncovering recent data that show how our child benefit is being transferred by EU migrants and their families.
In 2007, the Secretary of State for Transport, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), who was then shadow Treasury spokesperson, said:
“There are 200,000 more British children living in poverty than a year ago. Child benefit is a vital weapon in the fight against child poverty. So why is Gordon Brown sending thousands of pounds of benefits every week to children who do not live here and who may never have even visited the UK.”
I totally agree, so why are we still doing it and why will we keep on doing it in ever greater amounts when the new A2 countries will equally want a slice of our benefit pie? We cannot just hope that other countries may not know about the apparent advantages of seeking benefits in our country.
At the time my right hon. Friend made his comments, the biggest Polish newspaper in Britain, The Polish Express, ran a story headlined “Benefit Hunters”, which claimed:
“The longer we are in Britain, the more rights to social security we are given and the better we are taking advantage of them.”
It gave advice on how to claim and described the case of one Polish migrant who was given a two-bedroom house shortly after applying to a housing association without any need to join a waiting list. The paper said:
“The formalities concerning an application for social security are extremely simple. Do not delay in submitting an application.”
Sarah Newton (Truro and Falmouth) (Con)
Does my hon. Friend agree that the NHS should also do more to reclaim the costs of treating EU nationals? Those costs can be a very great burden on hospitals such as mine in Treliske.
Mrs Main
My hon. Friend makes a valid point. I will touch only on some of the benefits, but the actual list is almost endless. We cannot delude ourselves and think that people will not know about the loopholes or the benefit pots. According to Martin Beckford and Matthew Day, writing in The Daily Telegraph in November 2008, jobcentre staff in Poland encouraged returning migrants in Poland to continue to claim jobseeker's allowance from Britain, rather than sign on for Polish unemployment benefit, which pays much lower amounts. A quick trawl on the internet shows how EU migrants can get a myriad of advice on how to claim a range of our benefits. We must be under no illusions. We are seen as a soft touch, and we will be exploited by those who have the full might of EU law behind them.
Perversely, we are expecting our own citizens to bite the bullet on cuts in order to help slash the massive budget deficit, yet at the same time we are widening the pool of foreign EU families who are eligible to make a claim from the UK benefit pot. What we save in one corner we pay out in another. Benefit payments to newcomers from eastern Europe and other parts of the EU are not specifically recorded by the Department for Work and Pensions, but unofficial estimates put the bill at a very conservative £200 million a year—that probably does not include the NHS—and growing. Teasing out firm data on this has been difficult. In a series of questions, I have been told by the DWP that the data are not recorded or are not available due to cost. However, I was pleased to be assured by the Secretary of State for Work and Pensions on 20 June that he has commissioned his officials to look at alternative ways of making the information available.
The child benefit bombshell has been widely covered in the media from The Daily Telegraph to the tabloids. I find it hard to look ordinary middle-class families in the eye, particularly families with a mum who stays at home, and say, “Apparently, you are so wealthy with one of you earning just more than £44,000, you must give up your child benefit so that a family in Poland, and ultimately Bulgaria, Romania or wherever within the EU, can claim it for children who do not even live here.” They are furious and so am I. It is estimated that 1.2 million British families will lose out under the new benefit rules. I am not happy that we are looking at this issue in this way.
Although in theory there is reciprocation, other EU countries have far lower benefit rates, and many EU countries also have tougher qualification rules. All those EU countries have some form of family allowance. If children qualify for benefits in their own country, why should our taxpayers be expected to support them? If we could afford it, I would rather that every family in Britain had child benefit as a right that was not means-tested—as used to be the case—instead of rationing it, especially since it now appears that any money that is saved is then swallowed up in our burgeoning welfare bill, which must include payments for EU children and families who do not even live here. If we are expected to make cuts, I want to cut back on this scam, which takes the UK taxpayer for a fool.
Mr Philip Hollobone (Kettering) (Con)
I congratulate my hon. Friend on her excellent speech. I do not believe in the free movement of labour across the EU. However, if we are to have this system and if we are to have reciprocity between nations, would it not make sense that, when someone moves from Poland to this country, they should be entitled to receive the same child benefit that they would get in Poland? In other words, they should receive the rate of benefit that they would receive in their home country. That way, we would have reciprocity across the EU, but we would not have to shell out billions to other EU nationals.
Mrs Main
My hon. Friend has anticipated my next point, but I think that he will be shocked at what he will hear. The figures speak for themselves. I have taken the case of one three-year-old child, because I know that there are various rules and regulations, depending on whether a child has a disability and so on. In the UK, child benefit for one three-year-old child is £87.97; in Poland, it is £14.99; in Bulgaria, it is £15.87; and in Romania, it is £8.67. Those are the equivalent figures for euros at today’s rate. We should ask ourselves, “If you could claim at a higher UK level, why wouldn’t you?”
Hon. Members might be surprised to learn that we are not only paying child benefit here, at our rate, if an EU worker is eligible to claim it, but apparently we are also topping up dependants in countries whose largesse does not meet the standards of our own largesse. We should be asking ourselves, “Why are we paying top-ups to less generous countries where the level of child benefit has obviously been set at one that the country deems acceptable?” When conducting research for this debate, I was staggered to be told only yesterday by the international child benefit team, which is part of Her Majesty’s Revenue and Customs, that the rules allow for top-ups to be claimed to top up lower rates elsewhere. So, when one EU migrant worker is in the UK with a spouse working in their country of origin, such as Poland, and with their children receiving that country’s child benefit, we will top it up to the level of UK child benefit. That is madness.
Loopholes exist in the current benefits system to such an extent that EU migrants can always find a way around the system, if they are resourceful. As has been reported widely in the Daily Express and other newspapers, by declaring themselves self-employed Bulgarians and Romanians get around our weak transitional arrangements on restricting access to the labour market simply by selling The Big Issue and paying a nominal contribution of £2.50 in national insurance per week, which then opens up a lucrative stream of other benefits. The TaxPayers Alliance has described that system as a scam, and it is right to do so. We are the politicians; what are we going to do about this situation? It is a ridiculous state of affairs that I believe will foster social unrest, discrimination and most importantly resentment.
I know that fairness works both ways. The fact that so many newspaper editorials are addressing this thorny issue shows the depth of public concern, and I pay tribute to those newspapers and urge them to keep up the pressure. With their help, we can hopefully give Britain a strong voice when we stand up to this nonsense.
Let us not forget that we have the poor, the young and the elderly living in increasing poverty in our own country. According to the Poverty Site, some 13.5 million people in the UK—around a fifth of the population—exist on or below the poverty line, and yet we are rationing money to send it to even poorer citizens elsewhere in the EU. Sadly, poverty is always relative, and so our citizens will lose out.
A staggering case of opportunistic lifestyle enhancement was recently reported in The Economist under the headline, “Keeping the coffers shut”. The Economist reported how Galina Patmalniece came to Britain after 40 years working in Latvia’s factories and kitchens with only her Latvian state pension to support her, which was as little as £50 a month. She applied in the UK for a means-tested pension top-up of £133 for a single person. She was denied that top-up, but meanwhile she got council housing. To cut a long story short, she appealed to the Court of Appeal, which said that the Government were entitled to withhold benefit. The basic issue at stake was whether the conditions that Britain imposes for giving out pensions were compatible with the rule of EU law, which prevents discrimination on grounds of nationality. Broadly speaking, an EU national must be able to support themselves, so with no family or work and only her Latvian pension to support her, Ms Patmalniece had no right to reside here, although we made no effort to deport her. It is a common theme that Britain does not remove EU migrants who cannot support themselves, even though we are allowed to do so.
On 8 March this year, the Supreme Court found in the case of Ms Patmalniece that the British requirements amounted only to indirect discrimination. A majority of the Supreme Court judges agreed that our approach was reasonable. However, the European Commission might decide that it wishes to challenge that ruling and bring an infringement action against Britain in the European Court of Justice. The Commission has already written to our Government expressing unhappiness about our approach in this case as well as about other restrictions on the access of EU nationals to benefits. I believe that that letter has been described as being of quite a threatening nature. Will the Minister update us on that case? I believe that Britain will be firmly behind him in resisting dishing out benefit payments to EU migrants such as Ms Patmalniece.
I am sure that my constituents and hon. Members here in Westminster Hall today have read with interest articles in the Daily Mail and other newspapers covering the Dutch approach to pulling up the drawbridge on workless and benefit migrants amid angry allegations that labour migrants in the Netherlands are abusing the benefits system. In many countries, there is a rising tide of disquiet over EU migrant tourism. I hope that the Minister takes note and joins Holland in saying no to this sloppy and misplaced altruism. If that sentiment catches on across Europe, perhaps a bit of collective common sense will prevail.
Our national autonomy is being eroded by the EU, which must stop. There is an old adage that good fences make for good neighbours. How much more important is it for us to reclaim our boundaries and our borders? Tackling this benefits time bomb must now be a priority for the Government. There is no Government money, only taxpayers’ money, so give us back our say over how we spend taxpayers’ money, whom we can help and how we can do it. I am sick of having to find wriggle room within regulations that we find incomprehensible and that disadvantage ordinary hard-working families in the UK, who pay their taxes to fund services in this country and not to dish out benefits to some cash-strapped EU member country that has its hand out.
I know that I have given the Minister a lot to think about today and I am happy for him to write to me about any of the issues that I have raised. However, I want to hear that the Government are stiffening their resolve to tackle this problem, which I believe will only get worse and worse.
The Minister of State, Department for Work and Pensions (Steve Webb)
I congratulate the hon. Member for St Albans (Mrs Main) on securing this debate on what she rightly says is an important issue, which I know is of concern to the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling). He has responsibility for employment issues and ordinarily, he would have responded to this debate, but unfortunately he is unable to do so. As I shall explain, he is already taking steps to address some of the issues the hon. Lady raised today. As she knows, as things stand the Department for Work and Pensions’ benefit payment systems do not record the nationality of people receiving benefits. The reason for that is that nationality per se is not a condition of entitlement, and the system records conditions of entitlement such as being available for and actively seeking work, in the case of jobseeker’s allowance, or meeting contribution conditions for contributory benefits such as the state pension. So a person’s nationality is not, of itself, an entitlement condition.
The hon. Lady gave a figure—I think it was £200 million —but the truth is that we do not know what the figure is, which is a matter of concern. I assure her that Ministers are concerned about the lack of data, and we know that other Members share that concern. We consider it right that we should know the extent to which people from other countries are claiming benefits in the UK. I am therefore sure she will be pleased that the Minister with responsibility for employment announced at oral questions last month that he has commissioned work to find means of making information available about the nationality of benefit claimants. That information would help to inform debate on this subject.
To provide some context, I will discuss immigration more generally. The right hon. Member for Oxford East (Mr Smith), who is himself a former Secretary of State for Work and Pensions, talked about the positive impact that inward migrants can have. We fully recognise that positive impact, and we will continue to encourage the brightest and the best to come to the UK to promote growth and enterprise here. However, we will reduce the degree to which we currently rely on migrant workers through a radical shake-up of the welfare system and by improving the skills of the British work force. Our goal as a Department is to ensure that people are better prepared, have more incentive and face more requirements to take up work in the UK, which will mean that demand for migrant workers can be reduced. Clearly, although immigration has enriched our culture and strengthened our economy, it must be properly managed.
Mrs Main
The Minister is making a valid point. However, when I looked at the statistics on this issue, I was shocked to realise that some of these migrant workers are hugely overqualified for the jobs they come here to do. I am not disputing that we are attracting well qualified people, but they are not qualified to do the jobs they are doing; if anything, they are overqualified for them. We have a problem, in that we have a dearth of people who want to do those low-skilled jobs, so we have qualified people coming in to do them. That is the problem and I do not see how we will solve it.
Steve Webb
No, I do not see how we can solve that, in the sense that, if we have a single labour market we cannot constrain individuals who bring particular skills and prevent them from doing jobs that are, as it were, less demanding than the skills they bring in. That is correct.
The hon. Lady raised the question of benefits claimed by the nationals of other EU member states working in the UK. I shall explain what they are. In preparing for the debate, I had to find out how the system works and was surprised by some of what I learned.
Under the freedom of movement rules, as we have just heard, many UK nationals are living and working in other EU countries and have reciprocal rights. Free movement of persons is fundamental to Community law; indeed, it is an essential element of European citizenship. However, the rights are not unlimited. Those who wish to live in the UK for longer than three months must be exercising a treaty right as a worker, a workseeker, a self-employed person, someone of their own means and self-sufficient, or a student. If EU citizens do not meet one of those requirements, they will not have a right to reside in the UK, and may be liable to removal. The Government are clear that EU citizens who benefit from the right to free movement must adhere to the responsibilities it brings and abide by our laws.
Mrs Main
The problem is that that list covers just about everything. As I have said, anybody who cannot do a particular thing can declare themselves self-employed by doing a menial job such as selling The Big Issue or another such publication. That is the problem: the list does not seem to prohibit anybody.
Steve Webb
When I looked at the list I wondered whether someone could say, “Oh, I am looking for a job.” That is not sufficient. The definition of a workseeker would be similar to the requirements placed on someone claiming jobseeker’s allowance, for example. I take the hon. Lady’s point that there may be loopholes that need to be looked at. However, if someone says they have come here to look for a job, it not enough merely to assert it; they have to provide evidence that they are actively doing so. Let me now make a bit of progress, as I am keen to respond to the points the hon. Lady has raised.
The failure of past policies has left many people continuously on out-of-work benefits for more than a decade, 90% of them on incapacity benefits. Many of our fellow citizens want to work but have not been provided with the help and support they need. The crucial point is that one reason why employers take on EU migrants is that many of our fellow citizens have not been effective participants in the labour market. The Secretary of State is determined to change that through the Work programme and universal credit, to try to ensure that when employers are looking at a list of potential employees, the UK citizen—the domestic worker—is a credible alternative to the EU migrant. We believe that the success of those policies will reduce the demand for EU migrants in the situation described by the hon. Lady.
On access to benefits, EU nationals have rights under the European treaties to enter and remain in the UK, including the right to seek and take up work. Where EU nationals are here in exercise of a treaty right, the UK, through its obligations under both European and international law, allows them access to income-related benefits. As the hon. Lady says, EU nationals who are working here have access to in-work benefits, such as housing benefit, council tax benefit and child tax credits. If they are unemployed and looking for employment, they may also claim income-based jobseeker’s allowance. There will, however, be some who have no intention of seeking work—benefit tourists, as the hon. Lady says—and they may try to access benefits. We do not believe, on the whole, that that is the main reason why people come here, but we accept it is a danger and it is one of our concerns.
That is why we have rules in place to prevent the abuse of the benefits system and benefit tourism. The principal measure is the habitual residence test, which ensures that income-related benefits are paid to people with reasonably close ties to the UK and who intend to settle here. Its underlying principle is that the taxpayer should not have to subsidise people with very tenuous links to this country.
Steve Webb
Will the hon. Lady allow me to make a bit more progress, as she has raised a lot of points and I have got only seven minutes to respond?
To be eligible for an income-related benefit of the sort listed, claimants must satisfy the two-part habitual residence test—I may be coming to the point the hon. Lady was going to raise. That requires the individual first to demonstrate that they have a right to reside here and, secondly, to show that they are habitually resident. Anyone who does not have a right to reside is not habitually resident, and is not entitled to any income-related benefits.
To clarify, the term “habitual residence” is not defined specifically in UK social security legislation. To determine actual habitual residence, decision makers look at a range of things that we think should rightly be taken into account, such as whether the person is returning to resume past habitual residence; attachment to and intentions in the UK; reasons for coming; employment record; and length and continuity of residence in another country. The information is gathered by interviewing the claimant, and decision makers must be satisfied on objective grounds that a person who claims income-related benefits after arriving in the country has genuinely adopted the UK as his or her place of habitual residence.
Steve Webb
Although the hon. Lady is right to say that a month enables someone to be considered, I have listed the criteria that the decision makers have to apply, and I suspect a lot of those would be hard to satisfy after a month. So, although that is technically true, I suspect that in many cases people have been here for a lot longer.
Child benefit, which has been mentioned, is clearly quite cyclical in terms of foreign nationals coming to the UK. The hon. Lady was right to praise the hon. Member for Witham (Priti Patel), who established through a written question that the number of families getting child benefit for children in Poland was, in October 2009, just under 23,000. However, the answer to that question showed that that figure fell to 17,000 in July 2010. I can provide an update today—the figure fell again to just over 16,000 in June 2011. There has been a 29% fall in the number of Polish people working here and claiming child benefit for children at home. I am sure the hon. Member for St Albans would say that that is 16,000 too many.
However, it is worth stressing that such situations are not static. They change, and in this case there has been a fall of more than a quarter. The reason for the payment is that it is only made in respect of UK national insurance contributions. That is an important part of the mix. We are paying the benefit to somebody who is putting money into the UK Exchequer through national insurance. We have a legal duty to pay at the higher rate. In his intervention, the hon. Member for Kettering (Mr Hollobone) asked whether we should pay at the Polish, rather than the British rate. The courts have determined that we have to pay at the higher rate. The logic is that the entitlement is based on UK national insurance contributions, which will be based on UK wages and taxes. Therefore, the parallel entitlement is to a UK benefit. I understand the emotional reaction that we probably all have when we hear that.
In the few minutes remaining I should move on to the question of EU citizenship and access to benefits—what is called benefit exportability. Since the UK joined the EEC in 1973, it has been part of the system for co-ordinating social security for people who move between member states. The rules protect UK citizens abroad as well as EU citizens who come to the UK. Every EU member state has exclusive responsibility for organising and financing its national social security schemes, and for setting out the conditions governing entitlement, provided that they comply with the principles of equal treatment and non-discrimination on grounds of nationality. However, there are EU regulations on the co-ordination of social security to ensure that, where someone has earned an entitlement, they do not lose it because they have moved between member states. That is to remove one of the barriers to the free movement of workers, which is one of the basic tenets of the EU’s internal market.
The rules set out under what circumstances a person retains, or can claim, social security benefits when they move between member states. In particular, the rules protect workers who live in one member state and work in another. On the question of adding things together, people coming into the UK may be entitled to benefits on the basis of their social insurance payments in another member state; and people going from the UK can be entitled to benefits in another member state on the basis of their UK national insurance. That is known as aggregation—where a person’s contributions are added together to give them entitlement. The country that pays, however, is still usually the country where the person is working or last worked. Again, that makes the point that the payment that is made is not necessarily something for nothing; it may well be something for something. In the case of a British worker, the contribution may have been made in the UK before they left, or, in the case of a foreign worker, in their home country before they came here. There is a reciprocal arrangement.
I turn to the question of topping up child benefit and child tax credits paid, for example, in Poland. Let us take the example of a family in which dad is in the UK and mum is at home with the children. If dad is paying national insurance and mum is at home, we would pay full UK child benefit to the family, in return for his national insurance. That is what he is paying for. However, if mum was working and therefore earning some Polish benefits, we would top up. Funnily enough, although people say it is strange that we are topping up Polish benefits, when we do so we are paying less money than when we are not topping up but paying the full amount.
These are clearly complex and difficult issues. Once there is a single labour market with free movement, a lot of things follow that are difficult to disentangle. However, I can reassure the hon. Lady that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell is seized of the importance of the issues and, I hope, will be able to make progress on them in due course.
Question put and agreed to.
Written Ministerial Statements
(13 years, 5 months ago)
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Alignment of Prosecutions (DEFRA and CPS)
(13 years, 5 months ago)
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The Attorney-General (Mr Dominic Grieve)
My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I have agreed the forthcoming arrangements between the Department for Environment, Food and Rural Affairs (DEFRA) and the Crown Prosecution Service (CPS) for the conduct of prosecutions.
Currently DEFRA prosecutions are conducted by an in-house prosecutions team that is part of DEFRA’s legal team. The forthcoming change is that the conduct of such prosecutions will be assigned by the Attorney-General, with the agreement of the Secretary of State for Environment, Food and Rural Affairs, to the Director of Public Prosecutions under section 3(2)(g) of the Prosecution of Offences Act 1985, and DEFRA legal’s five prosecution posts will transfer to the CPS.
The transfer will take place on 1 September 2011.
DEFRA and the CPS have considered carefully the benefits of the changes and agree that the new structure will provide a better strategic fit for prosecutions. The new arrangement will provide greater resilience in the conduct of DEFRA prosecutions, and the team conducting those cases would have improved access to the range of specialist teams in the CPS that are not available in a small in-house team. The team would also have access to the CPS’s network of advocates serving courts locally.
The new arrangements provide for strong liaison, partnership and accountability between DEFRA and the CPS.
My right hon. Friend is also pleased to announce that with effect from 1 September 2011 the remainder of DEFRA’s legal team will transfer to the Treasury Solicitor’s Department. This transfer will provide greater resilience, flexibility and efficiency in the delivery of legal services to DEFRA.
National School of Government
(13 years, 5 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The 2010-11 annual report and accounts for the National School of Government was laid before Parliament today. The report has been placed in the Library of the House for the reference of Members and copies will be made available in the Vote Office.
Crown Estate Leases for Offshore Renewables Projects
(13 years, 5 months ago)
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The Secretary of State for Energy and Climate Change (Chris Huhne)
For some years, Crown Estate leases for offshore renewables projects, and agreements for lease, including leases and agreements for lease for the cables transporting the electricity to land, have contained a clause allowing the Crown Estate to determine the lease, in whole or in part, at my request, where this is necessary to enable an oil or gas project to proceed. The clause does not however make any reference to the provision of compensation to the lease holder, and this has become a matter of concern, particularly as regards the prospects of attracting finance for offshore renewables projects. Following discussions by my Department with Renewable UK and Oil and Gas UK, I would therefore like to clarify my approach on the question of my giving consent under the Petroleum Act 1998 for any oil and gas development (that is, for the drilling of any well, for the installation of production facilities, or for the construction of a pipeline), where it appears that the development can proceed only if the oil and gas clause in a renewables lease, or agreement for lease, is invoked.
First, as regards the granting of consent in general, I should note that there have been instances in which proposals for new oil and gas developments have been potentially in conflict with the development intentions of others who have existing rights in the same or in an adjacent area. It is clearly of great importance that oil and gas licensees, in planning their exploration work, and where relevant in working up proposals for producing a new field, should take full account of any potentially conflicting interests. Where it appears that the envisaged oil and gas development may in practice conflict in any degree with activities already permitted, the licensee should consult with the other rights holders and so far as possible seek an agreed way forward acceptable to both sides. Some aspects of these consultation processes are already covered by advice and guidance issued by my Department to petroleum licensees. But I have asked for advice on what further guidance on these matters, and on the procedures by which licensees have to apply for my consent under the Petroleum Act, would be appropriate in today’s circumstances. I note in this context that the Petroleum Act, as amended by the Energy Act 2004, provides that in making such a consenting decision, I may have regard, specifically, to activities for or in connection with the generation of electricity, or proposals to carry on such activities.
Secondly, in any case in which an oil and gas licensee seeks consent for a development, and it appears that the development can proceed only if the oil and gas clause in a renewables lease, or agreement for lease, is invoked, I would not be prepared to request that action by the Crown Estate, or to give consent to the proposed development, unless payment of appropriate compensation to the lease holder for the loss of value of his interests had first been assured by negotiation and commercial agreement between the two parties. In such circumstances, I would seek confirmation from the affected leaseholder that agreement had been reached on acceptable terms, before reaching any decision on consent under the Petroleum Act for the oil and gas development.
Exceptionally, where the licensee has exercised all reasonable endeavours to reach such a negotiated agreement, but has been unable to do so, I may be prepared to consider requesting determination of some part of the lease or agreement for lease if the appropriate compensation for loss of value has been assessed by an independent third party and the licensee commits to appropriate arrangements to secure the payment of that compensation. The prospective loss to the lease holder should be valued by the independent third party, on the general principle of equivalence as applied in circumstances of compulsory purchase, which aims to put the claimant in the same position, so far as financial compensation can do so, as if the lease or agreement for lease had not in fact been determined.
For clarity, I reiterate that in the absence of either a commercial agreement between the parties, or of the provision of independently assessed compensation for the renewables leaseholder, I would not be prepared to request the determination in whole or in part of any renewables lease or agreement for lease, or to grant consent to the proposed oil and gas development. The lease holder would remain free to take forward his project as previously envisaged.
My officials will discuss with the interested parties suitable practical arrangements to give effect to this policy, including a process for appointing a suitable person or body to undertake the independent third party valuation where that might be necessary. Suitable guidance will be developed in consultation with leaseholders or prospective leaseholders and the oil and gas industry.
The Crown Estate are considering how this policy can be appropriately reflected in the suite of documentation for individual leases, and how the documentation of existing leases can be updated.
I should add that I do not see these issues as impacting on the granting of oil and gas licences, as these do not convey any consent for development. As at present, licence applicants or prospective applicants will have access to-up-to date information on consented developments, and on areas leased or zoned for other types of development, so that their acceptance of any licence can be based on an up-to-date understanding of potentially conflicting development intentions in the area in question.
Agriculture and Fisheries Council
(13 years, 5 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon) who is responsible for natural environment and fisheries represented the United Kingdom at the Agriculture and Fisheries Council in Luxembourg on 28 June. Richard Lochhead MSP also attended. This was the final Agriculture and Fisheries Council under the Hungarian presidency.
Commissioner Damanaki spoke about the Commission’s proposed framework for setting catch levels for 2012 and beyond via the total allowable catch (TAC) and quota regulation (TQR). Against a backdrop of the poor state of many EU fish stocks and the continued issue of overfishing, the Commission announced its aim to ensure that all fish stocks should be fished within the threshold of maximum sustainable yield (MSY) by 2015 and where there was insufficient scientific advice or data the precautionary approach should be adopted and a cut of 25% should be applied to the TAC. Commissioner Damanaki also explained that she intended to split the TQR into two parts this year in order to improve the process: “internal” stocks to be decided at the November Council and “external” (those subject to international negotiations, principally joint EU-Norway stocks) in December.
There was near universal opposition to the idea of the 25% cut for data-poor stocks with 19 of the 22 fishing member states (and Austria) explicitly opposing this. There was concern that this approach would merely increase levels of discarded fish in many cases and that a more targeted approach, using all available data or advice, even incomplete, would be preferable.
There was widespread concern among all fishing member states about aspects of the MSY principle. Nearly all noted that 2015 was the target for all fisheries and that this should be achieved on a gradual basis. The UK, along with Ireland, Spain, Belgium and coastal state in the Baltic expressed concern about how individual species MSY targets could be identified correctly in a multi-species environment.
The UK, Spain, Denmark, France, Ireland, Belgium, Portugal and Austria also expressed concern about the idea of splitting the TQR decision-making across two Councils, creating administrative inefficiency.
In response Commissioner Damanaki emphasised the need to follow scientific advice and in the absence of such advice there had to be a precautionary approach. MSY had to be achieved by 2015 and this could be done on a gradual basis up to then, but could not be delayed. She was open to look at the November-December split to ensure that stocks related to the EU-Norway negotiations were not set in November but she wanted to stick to deciding things as early as possible.
There were three points raised under any other business. The first item saw Ireland express serious concerns about unrestricted mackerel fishing by Iceland and the Faeroe Islands. Setting autonomous quotas significantly higher than scientific advice threatened to damage one of the EU’s most valuable, and previously sustainable stocks. Ireland pressed for EU action in the form an immediate ban on all mackerel landings and all imports of mackerel products. The UK supported these concerns and emphasised the possibility of high-level international action to find a political solution. France, Sweden, Denmark, Netherlands, Germany, Spain and Portugal also supported Ireland. The Commission agreed that action was needed but noted that it could only act within the appropriate legal framework. Commissioner Damanaki said she was talking to Trade Commissioner De Gucht about finding a more effective legal instrument and she hoped to be able to propose something in the autumn.
The second item was a report back from the Netherlands on the high-level conference on common fisheries policy reform that took place in Noordwijk in March 2011. The final fisheries item was a declaration from Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Romania asking for appropriate levels of funding for fisheries as part of the new structural funding arrangements. In particular they emphasised the need for modernisation, research and innovation and small-scale fisheries to be sufficiently funded in the context of CFP reform. There was also a demand for a greater focus on aquaculture. Slovenia, Malta and Slovakia also broadly supported the declaration. Italy, France, Spain, Belgium, Portugal and Ireland drew attention to a declaration that they had recently sent to the Commission which was largely similar, but which also emphasised the need for the economic and social objectives of the CFP to be properly funded. The Commission said that the new funding instrument would prioritise sustainable fishing, research, aquaculture (inland and marine) and would be administratively simpler.
On agriculture, the main item concerned the Commission’s response to the E. coli crisis. Commissioner Dalli updated the Council on the public health aspects of the crisis. He also explained the actions taken to get Russia to lift its export ban on EU fruit and vegetables; an agreement had been reached, although some implementation action was still needed, and exports were resuming. Member states welcomed the agreement with Russia, and wanted to see its full and rapid implementation. All agreed on the need to review the operation of EU food safety alert systems and learn lessons from the outbreak. The UK stated that the protection of consumers must be the first priority, and noted that the EU alert systems had worked well in the recent French outbreak, allowing supply chains to be rapidly traced across several member states.
Commissioner Ciolos (Agriculture) explained the measures he had put in place to support affected growers, amounting to a budget of €210 million. Member states needed to provide the necessary verified data rapidly to ensure good audit standards, and decisions on how to apportion the money would be made at the Management Committee on 22 July. He argued that this reinforced the case as part of CAP reform for giving the Commission more scope to intervene in such crises. The Commission also stated it would find an extra €5 million to support promotional campaigns over the coming years. The main grower member states welcomed the Commission’s action, and the increased budget, while bemoaning the bureaucratic difficulty of securing the necessary information to support claims. Belgium, Italy, Portugal, Greece, Austria wanted more products adding the list of those eligible for compensation or the criteria loosened to allow compensation for having sold at a low price but there were no loud calls for a bigger budget. The UK stressed the importance of restoring consumer confidence to allow producers to get their returns from the market not subsidies. The Commission noted the need to act quickly and simply meant an EU-wide approach, although member states could add national mechanisms (state aids) on top if they so wished. He stressed that proper audit was essential to ensure appropriate financial management.
There were three agricultural items under any other business. The first related to the food for deprived persons programme. Italy called for rapid action to ensure the food for deprived persons programme could continue at its planned level of funding (€500 million a year) following the recent European Court of Justice ruling that would heavily restrict it. Belgium, Slovenia, Cyprus, France, Hungary and Poland agreed. The Commission stated that the European Court of Justice ruling would limit funds to what was available from intervention sales, about €130 million for 2012 and nothing in 2013, but there was a Commission proposal on the table to resolve the difficulties and allow the full spending to proceed, should the Council agree it. Germany, the Netherlands and UK all said they did not agree—this was a social programme, for national Governments, not something for the CAP. Poland indicated they would bring the issue to the Council for decision under their presidency.
The two final items under any other business were reports back from the French on the recent G20 meeting of agriculture ministers, and from Hungary two conferences they had held on the future of livestock sector and on organic farming. There was no further discussion.
Health Act 2006 (Post-legislative Assessment)
(13 years, 5 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
I have today laid before Parliament “Post-Legislative Assessment of the Health Act 2006”, Cm 8115, the Government’s memorandum to the Health Select Committee, which provides a preliminary assessment of the Health Act 2006. The main purposes of the Act are to ensure protection from the health dangers of second-hand tobacco smoke; to provide a statutory footing to reduce levels of health care associated infection; and to provide for safer management of controlled drugs, and improvements to pharmacy and ophthalmic services, as well changes to the administration of the NHS.
Copies of the memorandum are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
UK Threat Level
(13 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
Yesterday, 11 July, the Joint Terrorism Analysis Centre (JTAC) changed the UK threat level from international terrorism from severe to substantial. This means that a terrorist attack is a strong possibility.
The change in the threat level to substantial does not mean the overall threat has gone away, there remains a real and serious threat against the United Kingdom and I would ask the public to remain vigilant.
The decision to change the threat level is taken by JTAC independently of Ministers and is based on the very latest intelligence, considering factors such as capability, intent and time scale. “Substantial” continues to indicate a high-level of threat; and that an attack might well occur without further warning. The threat level is kept under constant review.
Contest (UK Strategy for Countering Terrorism)
(13 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
I have today published a revised version of Contest: The United Kingdom’s strategy for countering terrorism. Copies will be available in the Vote Office.
International counter-terrorism work has made very significant progress over the past 10 years. Al-Qaeda is weaker than at any time since 9/11. It has not conducted a successful attack here since 2005. It has played no role in recent political change in north Africa and the middle east. Its ideology has been widely discredited and it has failed in all its objectives. Continued international pressure can further reduce its capability, and the UK must work with other countries to seize those opportunities in the coming months and years.
But al-Qaeda continues to be a significant threat and other terrorist groups, some affiliated to al-Qaeda—notably in Yemen and Somalia—have emerged over the past two years to be a substantial threat in their own right. The threat from Northern Ireland related terrorism has also increased. The scale of the threat and of activity to contain it is reflected in the number of arrests and convictions here for terrorist related offences. These figures remain high. The Government will continue to give the highest importance to their counter-terrorism work.
The aim of our counter-terrorist strategy is to reduce the risk to the UK and UK interests so that people can go about their lives freely and with confidence.
The scope of the strategy has been broadened to cover all forms of terrorism and has been changed to reflect the Government’s security and counter-terrorism policies.
Under our “Pursue” work, the purpose of which is to stop terrorist attacks, we have already reviewed the most controversial counter-terrorism and security powers which have been in place here and made significant changes to them. They are now more effective and more proportionate. We will work hard to maintain intelligence coverage of terrorist-related activity here and give the intelligence and security services and the police the capabilities they need. We will continue to try to prosecute or deport more of those who have been engaged in terrorist-related activity; and we will support foreign Governments in building their capacity to deal with terrorism overseas.
We have revised work on “Prevent”—which aims to stop people being drawn into terrorist activity—and have already published a comprehensive assessment or work to date and a statement of our future strategy. Like Contest as a whole “Prevent” has increased in scope to deal with all forms of terrorism and also to more clearly tackle extremism which is conducive to terrorist activity and can draw people towards it. We will make a clearer distinction between our “Prevent” work and our programmes to support integration. Our focus will be on challenging ideology, supporting vulnerable people, and working with key sectors where radicalisation may occur.
In our “Protect” work, we will continue to respond to recent threats to aviation security. We will further strengthen our borders—notably through the formation of the National Crime Agency—and the protection of our critical infrastructure. For “Prepare”—our contingency planning—we have learnt lessons from previous terrorist attacks. We will continue to build our capabilities to respond to a Mumbai style attack; to address the highest impact terrorist risks, including an attack which might make use of unconventional weapons; and to resolve issues of interoperability between the emergency services.
The London 2012 Olympic and Paralympic games will be the biggest sporting event in our history. Terrorism poses the greatest security threat to the games. Ensuring the security of the Olympics will be an absolute priority over the coming year.
The threat endures but al-Qaeda is significantly weaker than it has been for 10 years. There are opportunities for us and our allies to seize the opportunities we have now to further enhance our security and reduce the threats we face. This strategy is intended to enable us to do so.
Public Bodies Reform
(13 years, 5 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
Today I have laid before Parliament a public consultation document; “Consultation on reforms proposed in the Public Bodies Bill—Reforming the public bodies of the Ministry of Justice”.
The consultation details our reform proposals in relation to those Ministry of Justice bodies included in the Public Bodies Bill, which is currently before this House. While clause 10 of the Bill requires consultation of certain specified groups, I have decided that this should be a public consultation to ensure details of my Department’s proposals are available to as many interested parties as possible.
Reducing the number and costs of public bodies is a key Government commitment and the proposals in this consultation build on previous announcements relating to public bodies reform. All Ministry of Justice public bodies have been reviewed over the last year. We have considered whether particular bodies and their associated functions are still needed and assessed our public bodies against agreed criteria for reform. These criteria were intended to increase Government accountability; eliminate duplication of activity and discontinue activities that no longer need to take place.
I am confident that the proposed reforms set out in the consultation document will address these aims and enable the Ministry of Justice to make a significant contribution to the Government’s reform of public bodies.
I will carefully consider the consultation responses before bringing forward any order in relation to any of the Ministry of Justice bodies in the Bill.
Immigration Advisory Service
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
It is with regret that the trustees of the Immigration Advisory Service (IAS) decided that the organisation had to enter into administration on Friday 8 July 2011.
This is clearly a sad situation for all involved. The Legal Services Commission (LSC) has worked closely with IAS over the last few years and IAS has received substantial support to help them manage their cash flow and run its business within the LSC’s contracted payment system. When LSC took over responsibility in 2004 for funding IAS, the LSC agreed to more favourable transitional arrangements with IAS than were agreed with other not-for-profit organisations.
However, a recent contract compliance audit by the Legal Services Commission, has provisionally identified that a material proportion (amounting to several millions of pounds) of the £15 million paid annually to IAS is over or misclaimed work. This is often where the work carried out does not have appropriate documentation to prove its validity, most commonly where there is a lack of evidence confirming clients’ eligibility. As well as this, work was conducted which was not within the scope of public funding. The LSC, as a responsible public body, is rightly seeking to recoup this money. It is of course crucial that the Government achieve value for public money and the LSC must be able to demonstrate to the Comptroller and Auditor General that it is in control of the funds it administers and takes appropriate action where the terms of its contracts are not complied with.
There have been extensive efforts on the parts of both IAS and the LSC to negotiate a solution to the current financial position, but the scale of the debt, coupled with projected income levels, has led the trustees to conclude that placing the organisation in administration is a necessary step. The current position reflects the company’s past financial management and claims irregularities and is not a direct consequence of the proposed legal aid reforms, not least because these reforms have yet to be implemented.
The primary concern for the Government and the LSC is now to ensure clients of IAS continue to get the help they need. The LSC expects that the administration of IAS will allow a managed close down process of IAS’s activities and an orderly transfer of clients to new providers. Provisional arrangements have been made to ensure that any emergency cases are dealt with speedily, meanwhile the LSC is identifying alternative advice provision in the areas affected and arrangements for case transfer will follow as soon as possible.
There is a significant long-term interest in this work from other providers, both not for profit organisations and private solicitor firms. The LSC ran a tender round for new immigration and asylum contracts in October last year and there was an increase in the number of offices that applied to do the work and bids for more than double the amount of cases that were available. All immigration and asylum providers are expected to meet the same high-quality standards which include compulsory accreditation schemes for all advisers and supervisors, and as such I believe the interests of the clients being transferred will be protected.
Child Maintenance Reform
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
I have today published the Government’s response to “Strengthening families, promoting parental responsibility: the future of child maintenance” (Cm 7990).
We need to challenge and support families to think about their responsibilities for their children when adult relationships break down, to ensure the welfare of their children comes first. It is unacceptable that more than 50% of children living in separated families have no effective child maintenance arrangement in place. I believe we need to move away from a system where the CSA is seen as the only option for the majority, with many people trapped inside an adversarial statutory system because they have been unable to access sufficient support to help them make alternative arrangements.
In our response, we reaffirm our commitment to establishing a better network of support for parents so they can deal with maintenance issues in the broader context of the emotional and practical issues they face at separation, and to make it easier for them to make family-based arrangements which are in the best interests of their children. We will continue working with experts in the voluntary and community sector, as well as with the Department for Education and Ministry of Justice, to translate this vision into reality.
Sir David Henshaw’s 2006 report into child maintenance recommended charging for use of the statutory service as an essential part of changing the behaviour of parents and encouraging them to work collaboratively to take responsibility for the welfare of their children. We remain committed to implementing the previous Government’s legislation which took forward Henshaw’s recommendation and provided for charging. Within this we will continue to work with interested and expert groups to ensure that particularly vulnerable parents are supported appropriately, and we remain committed to delivering an improved statutory scheme that is accessible. We will consult on specific rates in due course, prior to regulations being laid in Parliament.
As part of our commitment to ensuring that the needs of vulnerable people are protected, victims of domestic violence will be fast-tracked to the statutory service with no application fee. Families on out of work benefits will retain 100% of their welfare benefits entitlement and a heavily discounted application fee to what remains a heavily state subsidised statutory maintenance scheme.
Again, we will consult further on specific details in due course.
We are determined to have more children benefiting from effective financial support and more collaborative parenting post separation. I believe that the approach we are setting out today will bring about real change that will make a real difference to children’s lives.
Copies of the consultation response are available in the Vote Office, and will be available shortly at:
http://www.dwp.gov.uk/consultations/2011/strengthening-families.shtml
Up-rating Private Occupational Pensions (Move to CPI)
(13 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
Today, the Government will publish an updated impact assessment for the move to using the Consumer Prices Index (CPI) as the basis for the statutory minimum up-rating of occupational pensions.
This edition of the impact assessment takes account of research into private pension schemes rules and the likely reaction of employers to the decision to use the CPI published on 16 June 2011, and the latest Office of Budget Responsibility estimates of RPI and CPI inflation rates. It also includes the impact of proposed amendments to the Pensions Bill, which were tabled on the 7 July.
A copy of the updated impact assessment will be placed in the Libraries of both Houses, and will be available on the Department’s website at: http://www.dwp.gov.uk/consultations/2010/cpi-private-pens-consultation.shtml
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (The Countess of Mar)
My Lords, before the Minister moves the first statutory instrument to be considered, could I remind noble Lords that in the case of each statutory instrument the Motion before the Committee will be that the Committee do consider the statutory instrument in question? I should perhaps make it clear that the Motions to approve the statutory instruments will be subsequently moved in the Chamber in the usual way. If there is a Division in the House the Committee will adjourn for 10 minutes.
Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) (Amendment) Order 2011
Lord De Mauley
That the Grand Committee do report to the House that it has considered the Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) (Amendment) Order 2011.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments.
Lord De Mauley
My Lords, I shall also speak to the Immigration (Provision of Physical Data) (Amendment) Regulations 2011.
We are committed to delivering a safe and secure set of Olympic and Paralympic Games in 2012. As part of this pledge the UK Border Agency will operate a proportionate level of its usual security checks on those taking part, supporting and helping to deliver the Olympic and Paralympic Games, who are commonly collectively referred to as Games family members. Games family members are athletes, coaches, support staff, umpires, technical staff, media personnel and other individuals associated with the Games. The regulations and order ensure that the UK Border Agency can indeed operate a proportionate level of its usual security checks on Games family members by amending respectively the Immigration (Provision of Physical Data) Regulations 2006 and the Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) Order 2003.
Before I set out why amendments to the 2006 regulations and 2003 order are required, perhaps I may provide your Lordships with some information about the UK Border Agency’s current use of fingerprints and facial images and the UK’s juxtaposed controls, and also perhaps ask for your Lordships’ patience, because what I have to say is quite detailed and of necessity rather lengthy.
Since 2008, aside from minor exceptions visa nationals have been obliged to provide their fingerprints and facial images when applying for a visa. The collected fingerprints are checked against government databases. Since November 2009 the UK Border Agency has checked the fingerprints of holders of UK-issued biometric visas, entry clearances and biometric residence permits at the UK border to be sure that the passenger seeking entry is the same person who made the application for which the biometrics were collected. The UK Border Agency also uses facial images to facilitate the secure entry of low-risk categories of passengers in to the UK via automated gates, easing their passage through the UK border and allowing agency staff to concentrate on higher-risk categories of passengers.
The agency also collects the fingerprints and facial images of persons already in the UK when they apply for leave to remain in certain categories, where required issuing biometric residence permits and application registration cards. The agency also collects the fingerprints and facial images of persons identified as being illegally present in the country.
By February 2011 the UK Border Agency and its partners have enrolled 8.5 million fingerprints, allowing the agency to match 50,000 people to previous immigration and asylum applications made in the UK and identify more than 6,500 people swapping their biographical details. The UK Border Agency’s use of fingerprints and facial images is therefore vital to assuring individuals’ identities, identifying fraud and securing the UK border.
Now, perhaps I may give some background on the UK’s juxtaposed immigration controls and why they are essential. The juxtaposed controls were first set up in respect of Eurotunnel for shuttle trains operating between Coquelles and Cheriton in 1994. They were then extended to Eurostar terminals in France and Belgium, in June 2001 and October 2004 respectively, to reduce the number of people arriving at Waterloo with inadequate travel documents. Then, in 2004, as part of the agreement to close the Sangatte Red Cross Centre, France agreed to allow the controls to be extended to cover Calais and other French sea ports serving Dover. These arrangements have allowed the UK to shift immigration controls that were historically operated in south-east England to France and Belgium. They have also permitted France and Belgium to operate reciprocal controls in the UK, although the Belgians have not sought to implement any. The French currently operate immigration controls at St Pancras, Ebbsfleet, Ashford, Cheriton and Dover.
The UK’s immigration procedures at the juxtaposed controls complement the immigration procedures of France and Belgium—both part of the Schengen area—and occur just before the passengers depart on the final stage of their journey to the UK. Individuals travelling to the UK via our juxtaposed controls have to seek permission to enter the UK at those juxtaposed controls rather than on arrival in the UK; those requiring leave to enter the UK, such as visa nationals, make their applications to UK Border Agency officers within the control zones of the ports.
The UK currently operates immigration controls in the French channel ports of Calais, Coquelles, Dunkirk and at Eurostar terminals at Calais-Fréthun, Paris-Gare du Nord, Lille and Brussels-Gare du Midi. We are able to exercise full examination powers at all the juxtaposed controls. Additionally, in Coquelles, UK authorities may undertake frontier controls, including customs, health, veterinary and other checks. The juxtaposed controls are vital to UK immigration procedures by allowing us to prevent inadmissible individuals arriving in the UK.
Now let me explain why the 2011 regulations and 2003 order are necessary. Games family members will be required to obtain accreditation for the Olympic or Paralympic Games before participating and will undergo a series of biographical security checks undertaken by the Home Office prior to being granted accreditation and receiving an Olympic or Paralympic identity and accreditation card. Due to commitments given as part of the host city contract for the Games, approximately 20,000 visa national Games family members who would normally require a visa to enter the UK and be required to supply their fingerprints and facial image as part of the visa application process will be able to use their Olympic or Paralympic identity and accreditation card in lieu of a visa during the accreditation period of the Games from 30 March 2012 to 8 November 2012. They will therefore not need to apply for a visa or provide their fingerprints and facial images to the UK Border Agency prior to travelling to the UK, thereby bypassing the fingerprint checks of the visa application process. The UK Border Agency therefore needs to be able to collect and check visa national Games family members’ fingerprints and facial images in the UK and at its juxtaposed controls to operate a proportionate level of its usual security checks on this group of people during the Games.
The UK Border Agency’s current powers to collect fingerprints and facial images in the UK and at our juxtaposed controls are limited and insufficient to collect such biometrics. The agency therefore requires a new power to enable their collection. The 2011 regulations provide this power by providing for the collection of a visa national Games family member’s fingerprints and facial image when they make an application for leave to enter or remain in the UK during the accreditation period of the Games. The 2011 order provides for the collection when a visa national Games family member makes a leave to enter application, as described by Regulation 2(c) of the 2011 regulations, at our juxtaposed controls in the ports of Calais, Boulogne and Dunkirk.
A similar amendment will be made in autumn 2011 to the Channel Tunnel (International Arrangements) Order 1993 and Channel Tunnel (Miscellaneous Provisions) Order 1994 allowing for the same type of collection at our juxtaposed controls at the Channel Tunnel terminal at Coquelles and at Eurostar terminals in Calais-Fréthun, Lille, Paris-Gare du Nord and Brussels-Gare du Midi. All nationals except British citizens, nationals of other European Economic Area countries, those with a right of abode or who are otherwise exempt from immigration control, are required to apply for leave lawfully to enter or stay in the UK. They seek such leave by either applying for leave to enter on arrival to a UK Border Agency officer at the border controls of UK ports, in the UK control zones of the UK’s juxtaposed controls, or if they are already in the UK by making an application for leave to remain.
Linking the collection to an application for leave to enter or remain is therefore the most effective way for the UK Border Agency to collect visa national Games family members’ fingerprints and facial images. In reality the UK Border Agency will only use the 2011 regulations and 2011 order to collect the fingerprints and facial images of visa national Games family members that it does not already hold. Those who are identified as having previously provided their fingerprints and facial images to the UK Border Agency will not have them collected again on arrival in the UK or at the UK’s juxtaposed controls. I hope that noble Lords will unite with me to support these provisions, which will help to deliver a safe and secure set of Olympic and Paralympic Games.
Lord Avebury
My Lords, we are very grateful to the Minister for his careful explanation of the provisions of these statutory instruments, which deal with the immigration arrangements for the 22,000 expected Olympic and Paralympic accredited contestants and their so-called family members, the categories of which he has enumerated, who will be arriving in the UK during the period from March to November 2012. I just want to be absolutely clear that Games family members actually include the family of the contestants. I should be grateful if the Minister will say when he replies that that is so, and that contestants can bring a spouse and children under these arrangements.
As the Minister has explained, the accreditation is by means of a card issued by the International Olympic Committee and the International Paralympic Committee through their contractor ATOS, but the necessary security and immigration checks are to be conducted by UKBA. They will know whether an applicant is recorded on their system as having ever been in breach of our immigration rules, and I ask my noble friend what they will do if a GFM—or, even more sensitive, an athlete—is flagged up by this check. What other checks will the UKBA undertake to confirm that an applicant for accreditation is not a threat to security or a person whose presence in the country would not be conducive to the public good?
Athletes and GFMs who are visa nationals and in possession of an accreditation card will not generally need a visa to enter the UK, as the Minister has explained; but according to the Explanatory Memorandum, there are 2,000 who will still have to apply for a visa in their countries of origin. Will the Minister explain who are these people, and is the position absolutely clear to them, so that we do not get them turning up at a port of entry thinking that they can get in with just the accreditation card? For the remaining 20,000 visa national athletes and GFMs, the accreditation card allows the holder to enter the UK without a visa but these statutory instruments, as the Minister has explained, permit the UKBA to take their biometrics at the port of entry instead of in the country of origin as would normally be the case. That comes into operation at the beginning of the period on 12 March next year.
There may still be some customer resistance to giving biometrics at the port of entry when the Government say that they are facilitating the entry of Olympians and their entourages, even though LOCOG says that it does not object to the process provided that it is communicated very clearly to the applicants in advance. I respectfully suggest that LOCOG cannot be certain that people will not still complain, but there might be one way of reducing the numbers affected. There is a special visa to be created which allows for a longer stay, enabling the contestants and GFMs to come here in advance for training and acclimatisation. Applicants will then be asked to give their biometrics overseas, as non-Olympian visa nationals already have to do. The Immigration Law Practitioners’ Association has suggested that the uptake would be increased if the special visas were free, but the UKBA has not taken up the idea. What is being charged for the extended visas, and has any estimate been made of the extra spending that would be generated in the UK by making the visas free, to offset the loss of revenue that would arise from waiving the fees?
Lord Stevenson of Balmacara
My Lords, I too would like to thank the Minister for the detailed introduction he gave to the regulations. It was interesting to hear the full explanation, particularly regarding juxtaposed controls—touching places I had never heard of, but that I am sure will feature in future discussions now that we know about them.
I understand why this order is necessary, and the noble Lord, Lord Avebury, has covered some of the ground on this. However, I also have some questions about the way in which this was actually brought into being and some of the points raised within the document. I found the document very difficult to read and the definitions a little confusing and elastic—they seem to slip around a little. For example, the Explanatory Memorandum talks about 20,000 people being involved when in fact the impact assessment gives a range of 20,000 to 25,000, with a median point of 22,500. If we are talking about 25,000 people all the proportions and timings will be changed substantially.
The first point I was confused about—the noble Lord, Lord Avebury, also raised this—is that in paragraph 4.2 of the memorandum there is a statement that persons “would usually” have,
“to apply for a visa”.
However, it does not explain why the GFM personnel get ID cards. Did I hear the Minister say that they would also have Home Office involvement at that stage, in terms of taking some of the demographic details which are being talked about? What exactly is the meaning of “usually” in that circumstance? Are there situations when visas would not be so required or, indeed, when the visa would be required but the biometrics would not be taken? “Usually” has no definitional point attached to it and it is not clear who exactly is being talked about there. The noble Lord, Lord Avebury, also asked about charges and it is also not at all clear whether charges are being made in any or all of these circumstances. I would be grateful if the Minister could give some more information about that.
My next point is also on paragraph 4.2. The wording in the documentation suggests that Her Majesty’s Government signed an agreement so that,
“in specified circumstances there would be no requirement for certain holders of,
ID cards,
“to apply for a visa before travelling to the UK”.
That seemed a very straightforward statement. Yet we now understand that it is a bit of a catch because although anybody with a GFM does not need to apply for a visa before travelling to the UK, that does not mean that they will not be required to provide the usual demographic data that are being talked about—the fingerprints and the photographic information. What are these specified circumstances that Her Majesty’s Government are using for this? It seems that we have signed one thing but are doing another. I would be interested to hear comments on that.
The process under which the regulations were consulted upon also seems rather odd. The statement we have been given is that it was thought necessary only to consult LOCOG. As the noble Lord, Lord Avebury, said, it has not objected provided that everybody involved in this knows about it. It seems extraordinary to introduce such a wide-ranging requirement on what might be 25,000 people without having some sense of whether they are going to object to it. Also, although LOCOG obviously has a key part to play in this, it is not the only body involved. There might have been some attempt made by the Home Office to consult more widely, particularly with the Olympic organisations in the various countries concerned.
Another point I want to make is, again, about the process. The documentation that we have been given suggests that the choices before Ministers when they decided to go ahead on this was either to do nothing— in a sense, to rely on such processes as are currently in place for awarding the GFM and not to do anything for those who had been promised by Her Majesty’s Government that there would be no requirement for ID card holders to apply for a visa before travelling to the UK—or to amend the legislation. That rather stark choice does not seem to involve the many other possibilities that could have been taken into account at that stage, including working more closely with LOCOG in making sure that these things are done more properly.
My final point on this issue is that there is mention in the documentation about a possible review but no specification seems to be given about whether a review will in fact be taken. Given that we have the Commonwealth Games coming up very shortly, there would be lessons to be learnt about this process and it might be sensible for the Home Office to carry out a review. Again, it would be helpful if the Minister could explain what is involved in that. In concluding, I thank the Minister very much for his initial comments and look forward to hearing his response. We will of course be back in the autumn to discuss this again, when we do the Channel Tunnel orders.
Lord De Mauley
My Lords, I thank both my noble friend Lord Avebury and the noble Lord, Lord Stevenson of Balmacara, for their questions, which I will now do my best to respond to. First, my noble friend asked whether Games family members will be able to bring members of their families. Certain Games family members will be eligible to bring an accompanying guest as a result of their accreditation, and that guest can be a family relative. The guest will receive his or her own accreditation card and will need to meet the requirements of the Immigration Rules in order to enter the country.
My noble friend asked how accreditation applications will be assessed. Proposals for the policy and process to decide accreditation applications for both Games have been signed off by the Home Secretary. A detailed refusals policy, including criminality thresholds, has been agreed by the Olympic accreditation decision board following consultation with the police, security and intelligence agencies, the Foreign and Commonwealth Office and the Government Olympic Executive. Each application will be determined on its own merits. Particularly complex or sensitive cases will be reviewed at the Olympic accreditation decision board. Police, immigration and counterterrorism databases will be checked.
My noble friend and the noble Lord, Lord Stevenson, asked about only certain Games family members being able to use their accreditation card in lieu of a visa, and who will and who will not. Each Games family member will be accredited under a specific accreditation category code. The International Olympic Committee advises for each Games on which of these codes the host-city country must confer visa-free access to and on which it is not so obliged. The UKBA is keeping under review the codes that do not confer visa-free access. The types of persons to whom the UK Border Agency is not obliged to grant visa-free access include: additional security personnel, such as fire, police and ambulance services; additional members of the entourages and alternate or reservist athletes; and individuals invited by LOCOG, such as domestic dignitaries or national partners. These people will be told by LOCOG that they need to get a visa before they travel to the United Kingdom.
My noble friend asked about delays at the border, which certainly is a valid concern. We are mitigating the risk of delays by reducing the amount of fingerprints and facial images we need to collect at the UK border by offering a special Olympic visit visa to Games family members, which is currently available, and by seeking to collect visa national Games family members’ fingerprints and facial images on a voluntary basis overseas and in the UK prior to the Games. We are also considering the issue he raised about the visa being issued for free.
My noble friend asked what happens if a GFM refuses to give his fingerprints and facial image. If a visa national GFM refuses to provide fingerprints and a facial image we will make every effort to satisfy ourselves about their identity. If, despite these efforts, we are unable to satisfy ourselves about their identities, we will have to refuse their application for leave to enter the UK. Clearly, if it is a very well-known athlete the process will be made a lot easier. My noble friend also asked what criteria we will use to judge each case on its merits, and the answer is whether we are satisfied of the identity. That is the critical thing. If an individual refuses to provide fingerprints or a facial image it gives rise to the question: what are they trying to hide? I think that my earlier answer goes to that point as well.
My noble friend also asked why we are not dealing with the Channel Tunnel orders now alongside the statutory instruments. We are in the process of consultation with the relevant Belgian authorities about collection at Brussels-Gare du Midi and wish to amend both Channel Tunnel orders via a single amendment order as opposed to two orders to reduce the amount of legislation, and to save preparatory work and parliamentary time. The 2011 regulations are being taken forward now because we need to have secured the legal power to collect the fingerprints and facial images in the UK before procuring the collection equipment and to allow sufficient time to test that equipment.
My noble friend asked about in-country collection circumstances. Visa national GFMs will be advised to use one of the UK’s major ports to enter the UK so that their fingerprints and facial images can be collected when they first arrive here. A visa national GFM who has not already provided fingerprints and a facial image to the UK Border Agency may arrive at a small airfield. If the UKBA is unable to deploy to meet the arriving person, officers will grant the GFM 48 hours’ leave to enter and inform them that they are required to apply for leave to remain within 48 hours at a specific UKBA office.
Lord Moynihan
First, I apologise that I was working on other matters Olympic in Stratford and therefore missed the opening remarks. I will place on record, as chairman of the British Olympic Association and as a member of the European Olympic Committee executive, the thanks of many national Olympic committees—205 committees will be coming here—for the professional and courteous way in which the Government, in particular my colleagues in the Home Office, have been receptive to the many concerns that have been raised, particularly about access for Olympic family members to the Games. I will place on record the thanks of all sides of the House and Committee for the hard work that has gone into this. It is of enormous importance that there is smooth entry, in particular for the athletes and their immediate entourage, to ensure a successful Games.
Lord De Mauley
My Lords, I am grateful to my noble friend for raising that point. I share his gratitude to a lot of people who are working very hard to make these Games a success. These statutory instruments will help us to deliver a safe and secure Games by enabling the UK Border Agency to maintain a proportionate level of its usual security checks on visa national Games family members seeking to enter the UK. I commend the order.
Immigration (Provision of Physical Data) (Amendment) Regulations 2011
Lord De Mauley
That the Grand Committee do report to the House that it has considered the Immigration (Provision of Physical Data) (Amendment) Regulations 2011.
Relevant document: 23rd Report from the Joint Committee on Statutory Instruments.
Legislative Reform (Epping Forest) Order 2011
Lord De Mauley
That the Grand Committee do report to the House that it has considered the Legislative Reform (Epping Forest) Order 2011.
Relevant document: 14th Report from the Regulatory Reform Committee.
Lord De Mauley
My Lords, it is now almost exactly one year until the start of the 2012 Olympics, and there is a palpable sense of excitement at the prospect. All of us want the Games to be a huge sporting success. In order for that to happen, there needs to be a well planned and executed security operation. Today, I am asking your Lordships to endorse a legislative reform order that is a crucial element in that.
I acknowledge straightaway that there have been complaints about the way in which this has been handled, not least from your Lordships' Delegated Powers and Regulatory Reform Committee. I apologise on behalf of the Government for the deficiencies and for the error that was made. I will address specific points in a moment, but perhaps noble Lords will allow me briefly to set the context.
A tried and tested approach to ensuring the security of major events is the use of muster, briefing and deployment centres. These are places where large numbers of police officers can be gathered and given a collective briefing before being dispersed for their duties. In London next summer there will be three such muster centres. The most important will be the one in north-east London, which will support the main Olympic park area.
After extensive scrutiny of many possible options, the Metropolitan Police are convinced that the fairground site of Wanstead Flats on Epping Forest is the only real option for this deployment centre. The site in question constitutes just 2 per cent of the total land area of Wanstead Flats. The Metropolitan Police will pay £170,000 in lieu of rent, in addition to all of the costs of making good the site, which will help to create lasting legacy benefits for Epping Forest.
The Government recognise that there will be some disruption for a brief period next summer for those people who use that particular part of Wanstead Flats. However, we believe, and we ask those people to accept, that this is both necessary to the security of the Games and proportionate. I am pleased to say that, despite its criticisms, that view was endorsed by the Delegated Powers and Regulatory Reform Committee.
The City of London, which is the conservator of Epping Forest, is happy to endorse what is proposed, as is the London Borough of Redbridge which granted planning consent earlier this year.
The issue which arises is that the Epping Forest Act 1878 prohibits the enclosure of any part of the forest, even on a temporary basis, hence the need for a legislative reform order to make a temporary amendment to the 1878 Act. The order was recently endorsed in another place without a Division.
The Government have no wish to see any change to the status of Epping Forest nor to the legal protections that ensure that it can be enjoyed in perpetuity. The order is therefore strictly time limited. It disapplies the protections of the 1878 Act only for a specified period of three months next summer. After the Games, the muster, briefing and deployment centre will be removed, the land restored to its former status and the full protections of the 1878 Act will remain intact. No lasting change to the law will be made.
I quote from the Delegated Powers and Regulatory Reform Committee:
“The Olympic and Paralympic Games is a special and unusual event requiring special and unusual policing. We agree with the Government’s view that members of the public cannot reasonably expect to exercise their freedoms over the Centre’s site for the limited period for which the Centre is considered necessary”.
The committee was satisfied that the order meets all the tests in the legislation and is not otherwise inappropriate to proceed.
The order was declared hybrid by the Chairman of Committees the day after being laid. The Hybrid Instruments Committee, having considered eight petitions against the order, concluded:
“Many of the matters complained of in the petitions have been so dealt with, in particular by the normal planning process or in the report to the House by the Delegated Powers and Regulatory Reform Committee … that no further inquiry into them is necessary ... there ought not to be a further inquiry by a select committee into any of the matters complained of”.
Perhaps I may now turn to the criticism of the Government’s consultation process made by the Delegated Powers and Regulatory Reform Committee. The overall proposal has been subject to three separate consultation processes, covering the police proposals to use the site, the specifics of the LRO itself, and the planning permission from Redbridge Council. Every effort was made to involve and consult local people. This included leafleting the streets most directly affected and public meetings in the area.
One of the criticisms of the Government’s consultation is that it did not offer respondents a choice of possible sites, or even details of the sites which had been considered by the police other than Wanstead Flats. The latter was clearly an error, which was remedied during the consultation.
On the former point, let me explain the Government’s stance. The Metropolitan Police considered 29 possible sites for the muster, briefing and deployment centre. Applying objective criteria, they concluded that Wanstead Flats was the only suitable site. That was the clear professional, operational advice from the police. It would have been very difficult and even potentially dangerous for the Government to try to override that advice. The effectiveness and the clarity of the consultation process would not have been enhanced had we sought views on alternative sites which had already been ruled out as unsuitable; indeed, to have done so might have unnecessarily alarmed residents living near those sites.
I absolutely stand by the principle that good consultation requires allowing people to be involved at the earliest possible stage and to be able to influence the eventual outcome. However, I do not believe that it would be practical or desirable to ask people for their views on the details of how something like the Olympics should be policed, so the question of whether or not a muster, briefing and deployment centre is necessary had to be off limits, nor could we reasonably have asked people to substitute their own judgment for that of the police when it came to assessing suitability of the alternative sites.
Another issue raised by the Delegated Powers and Regulatory Reform Committee was the error in the Home Office’s original consultation document, in consulting on removing the burden of Section 34 of the 1878 Act rather than Section 36, as it should have done. The committee said that it was surprised that the Home Office did not engage in further consultation.
If noble Lords look at the responses to the consultation, all of which were placed on the Home Office website, they will see that those who responded were either for or against the principle of what this order seeks to do. I do not believe that the positions which local people took on this issue were affected by the fact that there was an error relating to the 1878 Act in the consultation document. Nor do I believe that the error meant that anyone who feels strongly about the issue was deterred from submitting a response.
I do not believe that had we aborted the consultation at any point and started again or even if we were to rerun the whole thing again today, the results would be any different. The Government are well aware that a small number of people in the immediate area of Wanstead Flats are deeply concerned about what is being proposed and we accept that their concerns are legitimate. They were certainly not prevented from expressing their views by the consultation process and, indeed, were able to petition Parliament direct through the hybridity process.
I am pleased to be able to report that, despite its misgivings, the Delegated Powers and Regulatory Reform Committee concluded on this matter:
“On balance we consider that the information given to those required to be consulted was just about sufficient to enable them to respond coherently to the proposal for the legislative change”.
I confirm for the record that what we are doing does not in any way set a precedent for future development on Wanstead Flats. I hope noble Lords will agree that the Olympics are unique in terms of scale and the policing challenge they present. I can think of nothing else that would require similar arrangements. As we have gone for a time-limited legislative reform order, even if a future Government were minded to put buildings on Wanstead Flats, even temporarily, they would have to replicate these procedures and secure fresh parliamentary approval.
Restoration of the site was, rightly, a point of considerable interest in another place. One of the conditions of planning consent imposed by the London Borough of Redbridge was that the Metropolitan Police should agree a scheme of restoration with both the corporation and Redbridge Council in writing before work begins. I am sure that both those bodies will be vigilant in ensuring that the restoration scheme is comprehensive and that its provisions are properly adhered to. My honourable friend in another place, Lynne Featherstone, is writing to MPs whose constituents will be most directly affected to set out how the restoration scheme will be drawn up.
I respectfully suggest that what we are seeking to do is a sensible, proportionate measure. It will be a vital component in next year’s Olympic and Paralympic safety and security operation while ensuring that those who cherish Epping Forest can have the confidence that the Act that protects it remains fully in force.
I apologise again for the error and deficiencies identified by your Lordships’ Delegated Powers and Regulatory Reform Committee. It concluded:
“The Committee considers that the proposal in the draft Order meets the tests set out for LROs in the Legislative and Regulatory Reform Act 2006; and is not otherwise inappropriate to proceed”.
I ask your Lordships to support this measure.
Baroness Doocey
My Lords, first I declare an interest as a member of the Metropolitan Police Authority and the Home Office Olympic Security Board. For the past three years I have chaired the Metropolitan Police Authority Olympic and Paralympic Committee, and one of our key terms of reference is specifically to examine the security preparations for the Olympic and Paralympic Games.
The issue before us is one in which the committee has been heavily involved. Most of the committee’s work is done through examining all the Met’s business cases for the various elements of the Games. Committee members are very diligent as some of those business cases run to about 200 pages with lots of annexes, but despite that we spend a huge amount of time, and have done over the past three years, looking in great detail at what is proposed and challenging assumptions when necessary.
On this one, members of the committee had lots of representations, as the Minister mentioned, from various groups who had some genuine concerns. Speaking personally and, I think, for most of my colleagues, I would say that many of the concerns arose because people did not fully understand the proposals. One of the difficulties is that when people talk about consultation they are not always entirely clear about the difference between consultation and public information. Like every other noble Lord I am a great believer in consultation, but there comes a time when you have to separate that from public information. Some issues must be put into the public domain to inform the public about what will happen and why and to give all the reasons, whereas others are for consultation. Sometimes the impression is given that when an announcement is made—this happens a lot with the Metropolitan Police Authority in particular because it is such a large organisation—people will be consulted with a view that if they are not happy with the consultation they will be able to get something else done, whereas in fact, as with some of the issues we are discussing here, it is a matter of, “This is what has to be done because …”. You cannot possibly have the public saying, “No, we don’t like site A. We think that you should move to site B”.
Some of the concerns are around the fact that so much will be put on the site. I am sure that many noble Lords have had letters from people about the Metropolitan Police saying that they just need one big major briefing centre. That is not correct because plans for the site clearly show that there is more than one building. So many things will be on the site that it is just not possible not to have more than one building. We are talking about accommodating 3,500 officers every day, so it has to be large enough not just for briefings. There will be armouries because we will have to keep weapons. There will be stables, parking, secure parking, kennels, refreshments, and obviously there will have to be showers, toilet facilities and so on. It was very difficult to find a site that came anywhere near the sort of requirements needed. This site was sourced after a very extensive search. The committee considered all the proposals and the information that the Met provided—they provided everything that we asked for—and we were happy to confirm that their option was the best possible one.
The committee is entirely satisfied that Wanstead Flats in Epping Forest is not just the best way forward but is probably the only area that can provide the range of facilities for the sort of secure location required. It is near enough to the park so that officers can go backwards and forwards not just to the Olympic park but to Victoria Park, Westfield shopping centre, Stratford and to the ExCel centre. We were very happy with that option and I hope that noble Lords will be, too.
Lord Brooke of Sutton Mandeville
My Lords, when I represented the City of London and Westminster as a Member in the other place for well nigh quarter of a century, I worked with the City of London in its capacity as an owner and guardian of many green spaces around the metropolis. Although Epping Forest was outside my geographical remit, I remain interested in the City's role as conservator of the forest and in its work to safeguard this vital green space for the benefit of all Londoners, at no cost to the public purse.
Last month’s debate in the other place on this legislative reform order raised some questions about the City of London's custodianship of the forest in collaboration with the local residents. I speak only for the consultation exercise with which the City was concerned, not for the subsequent exercises that were undertaken by the Metropolitan Police and the Home Office and examined by parliamentary committees.
The local consultation carried out last summer by the City, working with the Metropolitan Police, involved canvassing local residents, 22 resident and community groups, local councillors and MPs. Some 6,400 fliers were distributed in the local area, outlining ways in which the public could engage with the consultation. Five public exhibitions were staged and a public meeting was held in October. Representatives of the City were present at all of these events to listen and to answer questions. The City also engaged activity with a minority of the public who raised concerns about the proposal, by responding to letters and publishing answers to “frequently asked questions” on its website.
During the debate in the Commons, there were calls for a consultation by the City on the possible uses for the £170,000 “rent/fee” that will be available for the improvement of Wanstead Flats following the use of the flats by the police. I am happy to inform your Lordships that the concerns expressed are groundless. Consultation on the issue started last summer, when the City invited local residents to comment on three possible projects to be funded: improvements to the adjacent Jubilee Ponds; landscaping the area south of Bushwood; and improvements to Alexandra Lake. The Jubilee Pond improvements received the greatest support, and the City is committed to consulting local residents again when plans for possible improvements have been developed further, and when it is certain that the muster centre will be located on the flats and that the funds will be available.
Finally, concerns were expressed that the site might not be fully and properly reinstated following the police's departure. The site will have to be reinstated, at the police's expense, in compliance with a restoration plan to be approved by both the London Borough of Redbridge and the conservators, and to the satisfaction of the acknowledged experts employed by the City. The City is—rightly—highly regarded for its husbandry of open spaces all around London, such as Epping Forest, Hampstead Heath, Burnham Beeches and several commons to the south of the City. This should provide the assurance required that Wanstead Flats, that greatly valued green lung for the City, will be restored to its former state once it has played a vital role in delivering a secure 2012 Olympic Games.
I will add a personal footnote. At the end of the second 1974 Parliament, I took a Private Member’s Bill through the House of Commons on behalf of the Corporation of London on the subject of the consequences of the construction of the M25 as they related to Epping Forest. In that capacity, I paid a visit to, and inspected, the forest, which of course lay outside my constituency. It was an era when the proposition that “George Davis is innocent” was being carved or painted in many places, including on a test match cricket ground and likewise at a cricket ground in Epping Forest, beneath which the M25 now thunders. More than three decades later, I believe that I am right in saying that Mr Davis’s innocence has been confirmed. If that is so, this sporting vignette may be a good omen for the Games next year, which of course I wish well.
Lord Moynihan
My Lords, I rise again and in so doing I declare the interests not just of chairing the British Olympic Association but also of having the honour of sitting on the London Organising Committee of the Olympic Games as a director of the board. I again thank the Minister, in particular, and his colleagues for their comments today. I recognise that nothing is more central to the success of both the Olympic and the Paralympic Games than effective security. Here we are talking about effective security which will be provided by a maximum—if the Minister is correct—of 3,500 police officers on this site. But of course security goes far wider. Although this order is not relevant to that wider security, it is important to recognise that before this measure comes into place we will have many of the 205 national Olympic committees here for pre-Games training camps. Their security around the country is of high importance. I have raised the issue on many occasions outside your Lordships’ House but I hope that the Minister will echo it as critical to the success of the security operation. In his opening remarks my noble friend the Minister said that this was relevant to the Games. In that context, I would be grateful if he could clarify, for the avoidance of doubt, that we are talking about both the Olympic Games and the Paralympic Games and that the order is effective from 23 June to 20 September.
On the restoration scheme, I would be grateful if the Minister would let the Committee know over what estimated period of time the restoration process is likely to take place and whether there is any visibility at this stage on the cost of that restoration scheme.
In closing, I again thank my noble friend the Minister for his introduction to this order and for the comments made by my noble friend. In particular, perhaps I may echo the latter comments relating to the sporting success of the Games. I have every confidence that Team GB will be outstandingly successful at these Games. I hope that it will match our aspirational target of fourth place, as we did in Beijing, with a remarkable level of success in more sports with more medals than we have seen in many a decade. That would be very much due to the support services provided by the Government and, above all, to their ensuring the security of the Games and the athletes who will, I hope, have the experience of a lifetime when they come to London in 2012.
Lord Teverson
My Lords, I am here to talk about the renewable heat initiative but I grew up in Wanstead and could never understand why it was called Epping Forest when on Wanstead Flats I could see no trees. In fact it seemed to be part of the western European plain as it stretched out into the distance. As a schoolboy I used to visit the fairs in Wanstead Flats, which was a great experience. One of the few complaints that I can remember about the area and the police was that there was never enough of them. Now, at last, 3,500 have turned up at one time, which is probably good news.
I know that this is not, nor is it meant to be, an amusing subject. However, I was slightly amused at the restoration of Wanstead Flats. When I knew it four or five decades ago, restoration would probably have meant taking it down and making sure that it looked worse than it had before. It was in a very bad state at that time. I know that it is a lot better now and I am absolutely delighted that this restoration will be taken seriously, which I am sure is most important. I am delighted to see Wanstead Flats in the centre of the Olympic Games and how it will be organised. I hope very much that despite some of the mistakes made in this process, Wanstead will play its part in a successful Games.
Lord Stevenson of Balmacara
My Lords, I am very grateful to the Minister for introducing this further legislation and for his explanations. He has certainly tried very hard to give a good account of what has happened. I may have to return to one or two of the points because there are issues here on which we should perhaps dwell before we leave this order. It was also useful to have in front of the Committee the words of the noble Baroness, Lady Doocey, who helped to explain some of the context of the police decision, which is absent from any of the documentation that I have seen. It was also useful to have the background from the noble Lord, Lord Brooke of Sutton Mandeville, who was entertaining as always in his recollections of his times. When will we see the book? Why do we not have it all down at one time? Every time the noble Lord speaks, he seems to have a little vignette of life either as an MP or as a member of the City corporation, which has informed the House, made us laugh and has lightened the tone on many occasions.
Lord De Mauley
I thank all noble Lords for their comments and questions today. I shall do my best to address them. First, I thank my noble friend Lady Doocey for her helpful comments on the need for a distinction between consultation and public information; on the complexity of the buildings required, with which I entirely agree; and for her other helpful comments.
My noble friend Lord Brooke of Sutton Mandeville made some helpful comments, expanding upon mine, on the consultation process and on reinstatement. My noble friend Lord Moynihan commented on the importance of security. This order applies to both Games. He asked how long the restoration process will take and what it will cost. It will take several months for the site to return to its original state, and I say in all seriousness that it will depend to some extent on the weather because the grass will grow better if it rains. The cost is not yet known and will not be known until the centre has been removed and the state of the site is known. The £170,000 is above the cost of returning the site. I thank my noble friend Lord Teverson for his support.
Turning to the comments and questions from the noble Lord, Lord Stevenson of Balmacara, I hope that I have addressed most of the issues that he raised, but I am delighted to return to some of them. He particularly commented on the deficiency of the police consultation. I reiterate that the police leafleted local properties and held five public meetings in the area, so they did everything they could to consult local people. I have apologised. We recognise the mistakes. We will certainly do our best to prevent them happening again, and I apologise again.
The noble Lord asked about traffic. I can confirm that traffic issues were considered as part of the planning process and that Transport for London is satisfied that this is manageable, not least because it is during the school summer holidays.
Lord Stevenson of Balmacara
The point I wanted to make about traffic was not so much on the planning application, as that would be about the site-specific activity, but more about the impact that it would have on patterns to and from the Olympic Games themselves and on those who are commuting, so it is wider than planning.
Lord De Mauley
I am satisfied that that has been taken into account in the process. The noble Lord is right that it will be critical. After all, how will the police react to an incident? However, it has been part of a very comprehensive planning process. I think that the noble Lord asked whether this could have been done through by-laws. I confirm that we could not have achieved the result by amending the by-laws. I think that he also asked about the sufficiency of the £170,000 figure, which I hope I have already addressed adequately.
I am grateful to all noble Lords for their supportive comments today. I appreciate that, despite those comments, what is proposed raises strong feelings in the immediate locality. I remind your Lordships that what is being proposed affects only 2 per cent of the total area of the Wanstead Flats and is entirely temporary in nature. After 90 days next summer, the full provisions and protections of the Epping Forest Act 1878 remain in force. I take note of the points that the noble Lord, Lord Stevenson, made about the consultation exercise; and I reiterate that whatever deficiencies there were, I do not believe that those who have strong views about this matter, particularly those opposed to the proposal, felt inhibited or unable to make their views known. We are satisfied that what is being proposed is proportionate and necessary to ensure the safety of the world's greatest sporting event and I commend the order to your Lordships.
Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011
Lord Marland
That the Grand Committee do report to the House that it has considered the Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011.
Relevant documents: 25th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, there are two sets of regulations before you. The first sets out the details of the renewable heat incentive, which will allow the scheme to start operating. The second enables an amendment to Section 100 of the Energy Act, the primary legislation which underpins the renewable heat incentive. This change relates to our treatment of bioenergy, which I will speak about in more detail later. As with similar financial support schemes the RHI is subject to state aid clearance, which we hope to receive in the next few weeks.
The RHI regulations set out our commitment to provide 20 years’ financial support to eligible renewable generators of heat. This means support for technologies such as solar thermal, biomass boilers, ground-source heat pumps and geothermal, to name a few. The full list of technologies supported and the levels of support are set out in the regulations. These are calculated to bridge the financial gap between the cost of conventional and renewable heat systems. Once in the scheme the level of support for participants will be fixed, changing each year only with inflation. Support under the RHI will be available for renewable heat installations in England, Wales and Scotland through these regulations. However, I am pleased that provisions in the Energy Bill will now allow the Northern Ireland Executive to introduce their own RHI in future.
The RHI represents a serious investment in our future. It will provide financial support to a wide range of technologies and set us on a path towards rapid change. By the end of the decade, we will see 500,000 jobs created in the renewables industry with the RHI stimulating £7.5 billion of capital investment. Once introduced, the RHI will be available to renewable heat generators in the industrial, commercial, public, not-for-profit and community sectors. We want to see a broad range of businesses and organisations take the opportunity that the RHI offers to change the way they generate heat—for example, with businesses such as restaurants or supermarkets using food waste to generate biogas.
Ofgem will deliver the RHI on behalf of DECC. It has significant experience in delivering schemes which provide financial support to renewable energy generators already delivering the renewables obligation and feed-in tariffs. Generators will need to apply to Ofgem to be accredited under the scheme, and the processes they need to undertake are set out in guidance recently published for consultation on their website.
Because Ofgem has experience in delivering similar schemes, it will build on experience and existing structures, such as IT systems, to ensure that the RHI operates as effectively as possible. I am pleased that, subject to parliamentary approval of these regulations, Ofgem will be ready to receive applications for the scheme from 30 September this year.
To receive a payment under the scheme generators will need to commit to undertake certain ongoing obligations—for example, providing meter readings in order to receive their quarterly RHI payments, maintaining equipment and, in the case of biomass installations, providing information on a number of sustainability issues. This is part of a range of measures to ensure the integrity of the scheme. In addition, for small and medium-sized plants, both installers and the equipment to be installed will need to be certified under the microgeneration certification scheme or an equivalent.
I would now like to turn to bioenergy. The second set of regulations amends Section 100 of the Energy Act 2008. This amendment does three things. First, it amends the definition of biogas so that, as well as including anaerobic digestion, it will now also include advanced conversion technologies such as gasification and pyrolysis. The second change prevents the use of peat as biomass fuel. The third corrects a previous omission by adding biogas to the list of eligible sources of energy. These are important changes, as we believe that bioenergy is critical to meeting our renewable energy targets. We expect it to contribute over half of the over sevenfold predicted increase in renewable heat by 2020.
However, we are also aware of concerns that the increasing use of biomass raises, particularly with regard to issues around sustainability and air quality. In the RHI regulations we have addressed these concerns by including sustainability reporting criteria from the outset of the RHI, and will use existing legislation to cover restrictions on air quality for large-scale biomass. For installations below 20 MWth we will introduce emission limits in our RHI legislation when phase 2 of the scheme is implemented.
Finally, I would like to set out our position on the funding of this scheme. Last October, as part of the coalition Government’s spending review, we announced £860 million of funding for the RHI scheme to 2014. We have listened to feedback that previous proposals to fund the scheme through a levy on fossil-fuel suppliers would be unworkable, so instead the scheme will be funded through general taxation.
Therefore I commend these regulations to the Committee.
Lord Teverson
I naturally welcome these regulations. The renewable heat initiative is pretty unique worldwide. The concept was introduced by the previous Government and has been taken on wholeheartedly by the present Government. It is an excellent example of decarbonising the economy. We think that most carbon emissions are around electricity generation, but that only constitutes around half of emissions. That means that our targets for 2020, of 15 per cent of energy being renewable, are tough to meet. That is well illustrated in the Explanatory Memorandum by the fact that the proportion of renewable heat, currently estimated at 1.5 per cent, must rise to 12 per cent by 2020. Given the fact that part of the scheme will be implemented only next year, this is a tall order—but I am sure that it can be met.
I also congratulate DECC on its negotiations with the Treasury, in which it managed to get £860 million-worth of direct taxation at a time when the public accounts are very tight and difficult. I am sure that those of us who argue on green issues would wish for even more, but it is a large and realistic figure and I am very pleased to see it.
I was slightly disappointed by the fact that a domestic RHI scheme will not come in until 2012. I understand that a pilot scheme for domestic RHI starts this year. I would be interested to understand more about how it will help the successful introduction of the full domestic scheme next year.
Finally, my one area of slight regret, inevitably, is characteristic of a market intervention such as this, great though it is. The fact that we have not been able to implement it earlier—I see all the obstacles and why it has not been possible—means that we face the irony of a number of ground heat pump businesses, for example, going out of business while people put off decisions to invest in renewable energy until the incentives come through. Regrettably, there is a generic inevitability about these schemes when people realise that there will be a subsidy but not yet. I very much welcome the RHI and hope that it will have a very successful career not just up to 2020 but well beyond.
The Duke of Montrose
My Lords, after the description given by the Minister I almost think that I need to declare an interest, if for no other reason than that I have a livestock production business. I thought that the present measures were largely to do with commercial production. I also have a small restaurant which, as he said, is possibly in line for a renewable heat incentive grant.
I was reassured by what the Minister said about peat. When I saw that peat was mentioned in the second instrument, I thought that the Government were going to bring it into the definition of biomass. However, it is excluded, which fits in with the other measures that people have taken regarding peat.
Noble Lords will be aware that renewable energy was the subject of a statutory instrument early on in the sequence of devolution legislation for Scotland. The term at that point largely meant wind, solar and marine energy. The Minister described all the other forms of renewable energy that this measure covers. One can presume only that we are now into a further application of renewable energy. Taking the definition used of necessity, renewable heat is now part of the devolution arrangements. All the production systems benefit from financial subsidy. I hope that the Minister will confirm that renewable heat will also receive incentives from Her Majesty's Treasury, even when it is north of the border. This will be a great help to the Scottish Administration's ambition to replace all their atomic power generation with renewable energy sources.
Further to that, and in parallel with the regulation that brings the construction of plants and facilities for coal production within the powers of the planning regulations of the Scottish Government, even though coal is not a devolved matter, I presume that the construction and provision of plant for the production of renewable heat will be subject to Scottish control, even though the measures in the Bill are retained within the United Kingdom.
Baroness Smith of Basildon
My Lords, I was relieved when the Minister came into the Room. Noble Lords of my age may recall a private detective on television called Eddie Shoestring, played by Trevor Eve. Just before he retreated to his programme, he slunk into his chair just in time. I congratulate the Minister on slinking into his chair just in time, given that we have some interesting business for his department before us today. I see that nobody remembers Eddie Shoestring except me.
I was encouraged by the Minister’s enthusiasm for these regulations. We share that support. I will raise three issues of which I have already given him notice. I have some questions and queries on which he may be able to satisfy me. First, on cost control, the Minister mentioned the level of budget. That is subdivided over four years: namely, £56 million in 2011-12, the first year, of which £15 million is, I understand, through renewable premium payments; then £133 million; then £251 million, rising to £424 million in the fourth and final year of 2014-15. Given that the renewable heat incentive is the policy to deliver 12 per cent of heat in the UK being renewable by 2010, will the Minister give an assurance that he considers that this budget is adequate to meet the target?
My main point is the lack of flexibility between those years. Am I correct in thinking that any money unspent or unallocated in one year cannot be rolled over into the next year but will be lost to the programme? It is quite a tall order, particularly for a programme of this kind, for any department to hit the exact budget year on year. Do the Government intend to install some kind of capped grant scheme with all the stop-go inability that that brings with it to plan ahead for a growing industry which the RHI was trying to avoid in the first place?
My worry is that not allowing some flexibility between the years will increase the difficulty of implementing a cost-control mechanism for the programme. It also creates considerable pressures regarding the accuracy of DECC’s modelling of the programme. We have seen already how the modelling on feed-in tariffs was said not to be accurate, and the same could occur in relation to this order. My biggest worry is that it would undermine industry confidence in the scheme. I have two requests for the Minister. First, will he consider allowing full flexibility between the years, although I appreciate that he may not get Treasury support in that? Or perhaps he could allow flexibility in terms of a percentage by which the budget has been underspent or overspent in one year. The budget could vary from year to year while keeping to the overall four-year budget.
Secondly, will he look at amalgamating the budget for the first two years into a single spending period? There is a strong case for that. When the CSR was published in October 2010, the renewable heat incentive was intended to start in June 2011. That start date has already slipped three months. It would be helpful if, alongside the Treasury, DECC could look again at how that money has been allocated between the financial years. The renewable heat premium payments that I mentioned—the interim payments keeping things going until the RHI is in place—are also included in that year one budget. So we can take out £15 million from that £56 million.
An announcement on that was due in May, which we still have not had, so there is less time available to spend the money. In his opening comments the Minister confirmed that the scheme will not start until 30 September—so it will not be for 12 months, but for six. Payments are made quarterly in arrears, which means that only projects that have been accredited by Ofgem by Christmas 2011 will be paid out of the year one budget—so we are now down to three months of the year one budget.
In addition, on a point that might not be quite so serious, and given that it will be the first application, where an application for accreditation to Ofgem does not have all the required information and has to go back again, the start date for the project will be the day on which the further details, not the initial details, were submitted. Projects of any complexity may not complete the process in time even if their first application is made before the end of December. If there is any minor error or mistake or information is left out, it will have to go through again. I think that the Minister will appreciate the problem and agree that that is not an unreasonable request if the scheme is to succeed and achieve its objectives. I have given the Minister notice but, if he wants to consider it further, I would be more than happy for him to come back to me in writing, rather than to rule it out now.
On a further matter, if I understand this issue correctly, the restriction is that the eligible waste is municipal waste only. Page 35 of the March 2011 policy document refers to using municipal waste, but it does not explain why it does not include commercial or industrial waste. I am aware of the balances between higher biomass—I am talking about waste with a biomass content of between 50 per cent and 89 per cent—but can he give me a reason for that exclusion? It would be helpful because Regulation 28(9) states:
“The participant may not generate heat using solid biomass contained in any waste other than municipal waste”.
Lord Marland
As always with the excellent merry band that we have debating this subject of energy and climate change, we have had some very valuable comments. I am always grateful to my noble friend Lord Teverson for his representation of the landscape and for the compliments that he has made. It is a great boost to have him so supportive. He raised one specific issue in regard to the pilot scheme for domestic. That is happening this summer. If he will forgive me, I will not go into the details of it right now but, as always, I will make officials available to explain what is happening and to keep noble Lords in touch with the process as it goes on.
My noble friend the Duke of Montrose, as a true Scotsman, was very keen to check that, as a Scotsman, he was not having to pay the bill but that the English were, and, reluctantly, I have to tell him that HM Treasury is paying the bill.
The Duke of Montrose
I hope it is the United Kingdom that is paying the Bill. I cannot see why it should be England.
Lord Marland
That is a debate for later. I think that the noble Duke roughly knew the direction of travel that I was coming from. However, we were interested to hear about his great estates and restaurant business. When I am up in that part of Scotland, I may pop in to sample the fare. The restaurant probably serves his beef. That would be excellent. We know that he is not involved in the peat business because he was very pleased that peat was excluded. I confirm that and thank him, as always, for his contribution.
I say to the noble Baroness, Lady Smith of Basildon, who described me as slinky, that it takes one to know one. As I have admired her slinky movements round the House, I am delighted to see that she is no longer impeded by having a foot in plaster and has her dancing shoes well and truly on. I thank her for giving me advance warning of some of her questions and for the great support on this subject. That is not surprising as the renewal heat incentive was kick-started by the previous Government and we are happy to take action on it.
The noble Baroness makes a very good point about the budget. She knows as well as I do that dealing with the Treasury is not always the easiest thing on earth. I am grateful to the noble Lord, Lord Teverson, for congratulating us on getting the money from the Treasury. We cannot push our luck too far with the Treasury, but I totally understand where the noble Baroness is coming from. Despite the fact that each year is a cut-off point, people who started after 1 July 2009 will now be able to apply for RHI—we are going back further. There is effectively a six-month period when we can backdate RHI into another financial year, provided that the relevant person has completed his accreditation. It may well have taken five or six months to process but we can backdate the funding to the date of accreditation which, of course, may go back to a previous year. I hope that that gives the noble Baroness hope that there is an element of flexibility, although not perhaps as much as she would like. Reluctantly, I occasionally have to say no to her—I know that she is not used to it—but that is as far as we can go. I wipe the sweat off my brow in relief at not having to go back and challenge the Treasury again on this difficult subject.
Baroness Smith of Basildon
I am sorry to interrupt but I seek clarification. My understanding is that it is the point at which all the information is submitted and accepted—if there were mistakes, it would have had to be resubmitted—that is the date of acceptance. Is the noble Lord now telling me that that is not the case and that the provision would be backdated to when a person first applied?
Lord Marland
No, I am merely saying that it can be backdated. Obviously, it may take time to process a person’s accreditation, and that accreditation may go into a subsequent year. If you complete your accreditation, and then it takes a while to process it, the backdating could go back to the year when the accreditation was first accepted.
I am, as always, happy to pick up comments later but I wish to move on to the subject of waste. We are slightly in the hands of Defra as regards its definition of “waste”. I am glad to say that Defra has recently extended the definition of “waste” to include a number of other types of waste. As was said earlier, the RHI supports some commercial waste. There are doubtless one or two that it does not but we have instructed Ofgem to look at this and to provide a pragmatic solution as regards other waste. Ofgem will be the arbiter of that. I hope that through this process we will embrace as much as possible because, after all, that is our intention. It is not our intention to exclude waste, it is our intention to make it available to as many as possible, and this is a clear way of doing that.
The noble Baroness mentioned Regulation 3(2). I confirm that it is not our intention to exclude chemical plants. The intention is to show that we will not support RHI for open-sided warehouses and similar locations, where it is like trying to heat fresh air. Again, we have instructed Ofgem to clarify this issue through the process. We hope that as we proceed, with further advice from the noble Baroness and her team, in the spirit of co-operation we will come up with a good proposal for the RHI. It is an excellent endeavour started by the previous Government, which we have happily brought into legislation. I therefore commend these regulations to the Committee.
Motion agreed.
Renewable Heat Incentive Regulations 2011
Lord Marland
That the Grand Committee do report to the House that it has considered the Renewable Heat Incentive Regulations 2011.
Relevant documents: 25th Report from the Joint Committee on Statutory Instruments
Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011
Lord Marland
That the Grand Committee do report to the House that it has considered the Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011.
Relevant documents: 25th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, the regulations apply in Scotland as well as England and Wales, and are being made with the agreement of Scottish Ministers. I am sure that my noble friend the Duke of Montrose will be pleased with that.
The regulations transpose into UK law requirements that are part of the EU directive on geological storage of carbon dioxide. The directive requires member states to introduce arrangements that enable third parties to access pipelines and storage sites on a fair and transparent basis. Those arrangements must meet certain criteria. So, for example, we must set up independent arrangements to resolve disputes about access, should they arise. We must also ensure that if access is refused on grounds of lack of capacity or lack of connection, the operator makes the necessary enhancements when a potential customer is willing to pay for them—providing that this does not have a detrimental impact on safety or the environment. The directive also provides for access to be refused where there is incompatibility in technical specifications which cannot reasonably be overcome, or where there is insufficient current or likely future capacity.
We consulted on drafts of these regulations in December 2010. The majority of those responding to the consultation agreed that the regulations represented a sensible approach to implementing the directive’s requirements. However, there was concern about how our approach would apply to storage sites. As a result, we modified the draft regulations to recognise the constraints imposed by the natural characteristics and the environmental permitting arrangements for storage sites.
The approach in these regulations is based on the principle of negotiated access, with the ability to appeal to an independent authority if it is not possible for the parties to reach agreement voluntarily. That authority is either the Secretary of State, or Scottish Ministers where the infrastructure is located in Scotland. This approach has many advantages for carbon capture and storage, not least that it is relatively hands-off and therefore the least burdensome for what is currently an immature industry. It already applies to pipelines conveying carbon dioxide and is the basis on which the development of offshore oil and gas pipelines has taken place for many years. It is therefore familiar to many companies interested in participating in carbon dioxide transportation and storage in the future.
The regulations take as their starting point arrangements that already apply to carbon dioxide pipelines, adapt them slightly for consistency with the requirements of the directive and extend them to cover storage sites. They have effect on the construction of a new pipeline or a storage site, and where a third party seeks to secure access to existing infrastructure. Where infrastructure is being newly created, the regulations enable the authority to impose conditions when granting consents. Those conditions may, for example, require the pipeline or storage site to be constructed or permitted to a greater capacity, or in the case of a pipeline, to follow a modified route. However, those powers can be exercised only where there is evidence of demand and where the parties cannot reach agreement. The authority must be satisfied that the conditions it imposes will not compromise the safety and environmental integrity of the infrastructure or its efficient operation.
The regulations also provide for access and modification to existing transport and storage infrastructure. Again, the parties must first seek to negotiate an agreement. If they cannot do so, the party seeking access can apply to the authority for a notice granting access rights. In reaching a determination, the authority is required to consider a number of factors intended to ensure that the legitimate interests of the owner and users of the infrastructure are taken into account and to avoid a negative impact on safety or the environment. Where the authority grants access rights or requires modifications, it also has the power to determine the charges to be made. We are in the process of developing guidance, on which we will consult extensively before it is finalised, on the principles that the authority will use in coming to such a decision on this and on other powers available to the authority in regulations.
The regulations create an offence of providing false information to the authority in discharging its functions under the legislation. A determination made by the authority will be enforceable through the civil courts, in the same way as if the parties had entered into a contract that had subsequently not been honoured. The directive also requires our third-party access regime to be transparent. The regulations achieve this by requiring information about available spare capacity to be published. In determining this available capacity, the infrastructure owner is able to take account of reasonably foreseeable needs and, in the case of a storage site, against a baseline of the permitted storage capacity of the site. I hope that these regulations will find favour with noble Lords and I commend them to the Committee.
Lord Teverson
My Lords, again I do not know what else one could do. There seems to be an outbreak of common sense; we are implementing a European directive, which I see this as primarily, to ensure that pipeline and CCS companies do as we scold our children to do—to share, rather than keep things to themselves.
I have two questions for the Minister. First, he mentioned a long track record of facility sharing in the oil and gas industries, which there clearly already is, but I suspect that those provisions did not perhaps come in until a lot of the structures in those industries had got going. In this case, it is a new industry and I presume that we do not have any carbon dioxide pipelines going extensive distances. Clearly, they do within existing industrial plants but I wonder whether we might get into a sort of games theory where no one builds the first one because the first mover, in this instance, is the one who has to find all the finance and raise all the money, which is not inconsiderable. All the businesses coming afterwards will have to do is show that independent authority that it would make sense to share, so they miss the whole hurdle that the first people had to get over. I wonder whether that distorts the market somehow, but I am sure that the Minister will have an eloquent reply on that. Otherwise, this is good legislation.
Finally, I take this opportunity to ask the Minister where we are in terms of CCS and when we might see the network of carbon dioxide pipelines under—I was going to say across—our countryside. Where are we on the four schemes that the Government are promoting?
The Lord Bishop of Chester
My Lords, I, too, will ask the Minister one or two questions, perhaps going a bit beyond the immediate area covered by the statutory instrument. However, I will start with that. Do the Government anticipate that the transport of carbon dioxide will be through an entirely new set of pipelines, or will existing pipelines, in particular those used for natural gas, be used when fields dry up? Is it also possible that a given pipeline might have some form of dual use? Are we talking about an entirely separate infrastructure or about an infrastructure that will be available for both uses?
Can the Minister confirm where the expected storage sites will be, and what state of provenance they have? Are we talking simply of oil and gas fields under the North Sea, or are there other geological structures in which it is anticipated that carbon dioxide might be stored? Given that we are talking about a very long timescale for storage, what evidence exists that the carbon dioxide will not escape, through cracks or whatever?
The impact assessment states, on page 8:
“As the main method of de-carbonising fossil fuel power generation, it will be important that CCS, should it prove viable at a commercial scale”.
That is phrased in the subjunctive conditional. It raises the question: what happens if it is proved that CCS is not viable on a commercial scale? On the previous page, the assessment states:
“CCS is not currently commercial without subsidy”.
It would be helpful to have some idea of what level of subsidy the Government consider may be needed to provide CCS. This is important because, if the Government stick with their position of having no more coal-fired power stations without CCS, and if CCS adds so much to the cost that we do not have coal-fired power stations, we then have to ask what form of electricity generation we will use.
I understand that over the past year our coal-fired power stations have been used more than was expected because they proved cheaper, with the price of gas going up. This has shortened the permitted life of some of our existing coal-fired stations. If we cannot go forward with any coal-fired stations because CCS does not prove to be commercially viable, does this not contain a hidden further increase in electricity prices if we cannot rely on any use of coal generation? Perhaps the Minister could put on the record some comments in response to those questions.
Baroness Smith of Basildon
My Lords, first, we welcome these regulations and the new clauses on this issue added in the other place to the Energy Bill. They all lead towards ensuring that we have the available infrastructure in place and that necessary powers will be available. The noble Lord knows that we fully support CCS, and indeed that we made a commitment in government to fully fund the first CCS project. The regulations pave the way to that. However, as the comments from other noble Lords have highlighted, they do not remove the uncertainties that remain. Perhaps, in the light of the regulations before us, the Minister will be able to offer some reassurance on when the investment for the schemes will be available, because we have had no information on that yet. The CCS levy has been scrapped, the Government's argument being that the burden on business was unfair. Instead, the taxpayer is now to be funding the scheme through the Treasury but we do not know when that is going to happen, so any clarification from the Minister would be welcome.
I want to ask two specific questions on the order. I understand what the Government are seeking to do here and I support that. I will talk through this and see if the Minister can follow, as I have not given him notification of this question. My understanding is that an applicant seeking access to or modification of a pipeline can seek the approval of the Secretary of State or another consenting authority—it need not be the Secretary of State—if negotiations fail to secure such access or modifications as are required. The legislation before us allows an appeal to be made if the consenting authority, which will mainly be the Secretary of State, thinks that there has been a reasonable time in which to reach that agreement. I hope that would only be in exceptional circumstances as it seems to me that, more often than not, the problems in reaching agreement will be not on technical issues but on the commercial aspects.
The evidence base for decisions determines the criteria on which the consenting authority will make decisions, and it does not include commercial considerations. What if the stumbling block to agreement is not technical in any way but commercial? What if it is about price? It seems very difficult for the Government or any consenting authorities to intervene, as stated in the order. As I read it, the Government would not have the power to intervene.
There may be an intention that there should be a regulator to ensure that the pricing mechanisms are fair but, unless I am misreading something in the order before us or its Explanatory Memorandum, I do not see that. Indeed, if we look at the evidence base for option 2, which is on page 10, the impact assessment says on these issues:
“If the consenting authority is required to determine the financial terms for access or modification for … pipelines and storage sites … they would be guided by principles similar to those already used in other sectors”.
That implies that there is a role for the consenting authority and the Secretary of State to intervene on financial or commercial matters. It would be helpful to have some clarification because I am not sure I really welcome a Secretary of State intervening in commercial decisions. There could be a potential difficulty or a minefield if they are required to do that without sufficient guidance about which criteria they should take into account and how that should be conducted.
My only other question is: in terms of the time allowed for negotiations before the applicant can make an appeal to the consenting authority, will there be any guidance on what is reasonable? It seems that different kinds of applications could take different amounts of time, as some will be more complex than others. If the negotiation is around price, that could make it even more complex as it could be that company A is trying to preserve a position that it may want to take in the future. While I certainly support the principle, I would like some further information on those points if possible.
Lord Marland
I am grateful to noble Lords. It is a very opportune moment because, as of this morning, I am in the middle of a two-week lock-in negotiation on the first demonstration project. This morning was spent banging heads together to try and make it work further, but I will explain a bit more about that in a moment.
On the specific points raised by my noble friend Lord Teverson and by the right reverend prelate the Bishop of Chester, whom we welcome as always, the first demonstration project will be using existing pipelines owned by National Grid and Shell. They have great expertise and technology and are very comfortable that they can work. In fact, they have exploratory machines working on them at the moment. One has to rely on great companies to come up with the technology, so the likelihood is that a number of the CCS projects will be able to use existing infrastructure. Of course, that will not always be the case and some new pipelines may have to be built to create junctions or things like that.
The plan for the first demonstrator is to force the carbon dioxide, which becomes more liquefied, into the Goldeneye oil well, located in the North Sea. It is a largely Shell-owned platform. The ownership of it has become a bit more complicated but Shell is operating that end of it. On how we know of its ability to keep the captured carbon in storage, the answer is—
The Lord Bishop of Chester
In a previous incarnation, I was a chemist. In all my previous experience of carbon dioxide, it never had a liquid state. It went straight from gas to solid; hence you can buy solid carbon dioxide to keep your ice-cream cold, and so on. Under what conditions do you get liquid carbon dioxide? I have not come across it.
Lord Marland
I did not actually say it was liquid. I said it was more liquid than gas. Denser carbon dioxide will be moved down the pipes. It is readily identifiable as a subject because, as the right reverend Prelate will know as a great scientist, you cannot touch carbon dioxide.
The right reverend Prelate made another point about storage. We are reliably informed that there will not be leakage. We have to take every precaution to make sure that there will not be leakage and must make sure that all adequate precautions are taken. Of course, this is a demonstration project. We are moving into unfounded territory and who knows what the outcome will be. It is very important that we have rigorously tested the programme, but it is a demonstration project. I will not comment on the outcome of the demonstration project at the moment because the intense negotiations finish on Friday. We remain optimistic.
The Duke of Montrose
While my noble friend is on the subject of the demonstration project, I know that oil companies in the United States purchase carbon dioxide to increase the output of their oil wells. Are Shell and other firms gaining a financial benefit from this operation by taking the carbon dioxide in this demonstration project and putting it into an oil field? Is it a win-win situation so far as they are concerned?
Lord Marland
That is certainly not the intention. There may be residual oil in an empty oil well, but it is not the driver for them carrying out this process. However, I am grateful to the noble Duke for informing us of that.
The right reverend Prelate asked whether we know whether CCS will be commercially viable. Until we have done the first demonstration, we do not know whether we can do it on a large scale. If we achieve it on a large scale, economies of scale will come into play, and we hope it will become commercially viable. In answer to his subsidy question, that is why the Government have committed £1 billion of capital expenditure to try to make the first demonstrator work. The right reverend Prelate made a very good point about the future of coal. As he said, we are reliant on coal. It is not our intention to rid ourselves of coal but to make it cleaner within a low-carbon economy. As a scientist, he will know that they will have to put in NOx cleaning systems in 2016 and 2017 to make coal cleaner. He is probably the only person in this Room who knows what the effect is, and I will not pretend to go into detail with him on it.
The noble Baroness, Lady Smith of Basildon, kindly gave me some prior notice of her questions. She made two very good points and, if I am honest, I am not completely satisfied in my mind that I have the right answers to them. At what point does a Minister intervene? Should a Minister intervene? What is the reasonable time that should be allowed? In her own words, let us hope that it does not come to that. However, at some point you have to have an ultimate arbiter. At some point it is reasonable to think that the ultimate arbiter should be the Minister, in which case it is reasonable that at some point the Minister would intervene. Should we put a time limit on a dispute? I tend to agree that we should, but if we are too prescriptive about it, we may force the thing in the wrong direction. I will take away those points to consider in the department to see whether there is a straighter edge to put on those two excellent suggestions.
The Lord Bishop of Chester
On that point, page 8 of the notes states that there should be,
“the opportunity to refer a negotiation to an independent party”,
for perfectly good reasons. I entirely accept that. Is the Minister happy with the description “an independent party”? It seems to me that he will have a vested interest in being the arbiter if in a commercial situation there is no agreement. It would be normal for the Minister to be regarded as independent for those purposes, as described on page 8.
Lord Marland
Where does it stop? At what point is someone independent if the word means that they are able to take an objective and independent view of the problem? I do not disagree with the right reverend Prelate on the conclusion that we are trying to achieve. As I referenced earlier, I think that it needs further thought and a straighter edge. I readily said that we should perhaps try to get a little more detail on it. I do not have a prescription now. I am not necessarily sure that we should have a prescription now, but I am happy to carry on the discussion outside the Committee because it is at the margin of the reality and focus of the issue of CCS. To use the words of the noble Baroness, let us hope that it does not get to the point where we have to.
Baroness Smith of Basildon
I am grateful to the noble Lord and thank him for being very candid about his own uncertainties on this statutory instrument. I do not think that it is unreasonable to say that he does not have an exact time limit in mind for when a Minister or consenting authority should intervene. “Reasonable time” is a matter of judgment. I apologise if I am missing the Minister’s comments, but I am still not clear about the financial side and when it would be appropriate for a Minister to intervene in a pricing or commercial decision. It seems to me that a significant part of the regulations concerns the ability to intervene if things are not going as we would like, and agreement cannot be reached. I would appreciate it if the Minister would give me more detail or write to me, as it is crucial to the statutory instrument.
Lord Marland
With due respect to the noble Baroness, I think that most decisions in which people have to intervene are commercial, so ultimately a commercial decision will have to be intervened on. I can say that it will be a commercial decision. I quite understand that there may be a case for putting a time limit on when the commercial decision is reviewed. Consideration may need to be given as to whether it is an independent authority and when the Secretary of State appoints the independent authority, but these challenges or disagreements always come about through failure to reach a commercial agreement. We are suggesting that the Secretary of State can intervene and bang heads together to make sure that the agreement is sorted out. I am not sure that one can say more than that.
Baroness Smith of Basildon
I know that the Minister is trying to be helpful, but there are four criteria in the regulations on which the consenting authority can make the decision if there is a dispute. None of those is commercial or financial, although it does say in the notes in option 2 that it is financial. I am happy for the Minister to take this away and come back to me. I am still not clear, if the regulations do not state that one of the criteria on which the Secretary of State or consenting authority can intervene is financial or commercial, where the authority to do so will come from, when rather than a technical issue it could be the basis on which the Secretary of State will need to bang heads together, to use the Minister’s words.
Lord Marland
I am very happy to carry on this conversation with the noble Baroness outside the Committee, but the point I am making is that whether this is technical or financial, it is all commercial. That is the reality. Everything is commercial when it comes to negotiating these things. The noble Baroness is in danger of taking things at face value without looking at the realpolitik. As I say, I do not think that we want to get into the nuts and bolts of the definition of commerciality. I am very happy to carry on this conversation with the noble Baroness through officials, as always.
Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011
Lord Marland
That the Grand Committee do report to the House that it has considered the Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011.
Relevant document: 25th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
I feel slightly like something on a treadmill. There is only one more measure after this, noble Lords will be pleased to know. I will try to keep them entertained for as long I can, then we will rush off for a Statement.
I shall speak to the draft Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011 for Great Britain. Noble Lords will recall considering the Warm Home Discount Regulations 2011 on Tuesday 29 March. That instrument enabled the warm home discount scheme to take effect on 1 April this year. The regulations to be discussed today allow for rebates to be targeted at the core group of low-income pensioners that I mentioned in March by allowing information to be lawfully shared between energy supply companies and government. The Warm Home Discount Scheme Regulations 2011 require that these pensioners are provided with a rebate off their electricity bill from their energy supply company. This rebate will be worth £120 this winter, rising to £140 by winter 2014-15.
This winter, we estimate that about 800,000 pensioners will receive this rebate. We estimate that this figure will rise to more than 1 million pensioners for the subsequent three years. In total, rebates worth more than £580 million are expected to be provided to this group over the four years of the scheme. To help energy suppliers to identify which of their customers is a low-income pensioner and to provide them with this rebate, we need to allow the suppliers and the Government to share information. Sharing sensitive and personal information in this way, without seeking individual consent first, requires a legal gateway. The instrument the Committee is considering today is made under Section 142 of the Pensions Act 2008, which confers power on the Secretary of State to make regulations allowing for such information sharing. These regulations also set out what data may be shared and what it may be used for, and put in place robust offences to protect the data and prevent their misuse.
I will explain each of these areas in more detail. In terms of information sharing, this instrument allows the Secretary of State to disclose name and address information of pension credit customers to participating electricity suppliers, and allows participating electricity suppliers to provide name, address and meter point administration number information about their domestic electricity customers to the Secretary of State. These records will then be compared—a process sometimes called data matching. Where there is a match, the Secretary of State will tell each supplier which of their customers to provide with a rebate. Where there is not a match, we will write to those pension credit recipients to ask them to contact a government call centre and confirm their eligibility. If they are eligible, the energy supplier will be required to provide them with a rebate. The key advantage of data matching is that most customers will get the rebate automatically, without claiming. This will help to ensure that the most vulnerable receive the support that they need.
Lord Teverson
My Lords, I remember many discussions in the Moses Room about rationalising this system, and frustration on all sides of the Committee that people in need of help with their energy bills were not being able to take it because it was impossible to share information. This was for good reasons, but we knew that because information was not being shared, a number of the most vulnerable people in our society were not able to take the benefits that they needed in such a vital area of their lives. Therefore, I welcome the regulations, because at last we seem to have a solution that gets around the problem.
That is good, although I think that all of us in this information age are concerned about the sharing of data. Data security is always an area of difficulty, and the fact that this information will be held according to government standards is some reassurance. However, the key issue is what happens in practice and who leaves which laptop or USB where. There are always risks in this area.
The one area where I pricked up my ears was that of data matching. I am lucky enough to be going on holiday to the United States this year, and I almost worry that I will be data matched with an Iranian terrorist and will be unable to come back for the October Session. My Whip would be particularly unhappy about that.
Lord Teverson
I am not going until October—but let us move away from my domestic arrangements to those of the more vulnerable in society. Could the Minister clarify that, once the data-matching process has occurred, if there are “leftovers” the Government will ensure that everyone who is entitled receives their entitlement? How are we going to check that the matchings that have occurred are correct? A number of people may receive these discounts when they are not entitled to them. They will thank their lucky stars that the discounts have arrived and that will be that. The issue is not one of following up the data that have not matched but of ensuring that the matching that has taken place is effective, given that those who do not receive their entitlement are not likely to follow this up for the old reason that they did not know that they were eligible in the first place. However, I welcome this measure as a breakthrough for the more vulnerable in our society.
Lord Whitty
My Lords, I welcome this for the same reason as the noble Lord, Lord Teverson. This has been a long-running saga, but I hope that we will get the ability to match data in the nicest possible sense in order to ensure that the benefit goes to those for whom it is intended and to whom the provision of the warm homes discount applies.
My query arises from a wider concern about the Government’s strategy in relation to fuel poverty. There is no relationship between the warm homes discount and any improvement in the energy efficiency of the home itself. The Government have cut significantly the former direct payment through Warm Front and related schemes and are relying on a variation of the eco-mechanism to redirect money back into energy efficiency. This is distinct from the previous approach of a social tariff—which may have been flawed in many ways—in that there is no mechanism for ensuring that the bills next year, for those people who will benefit from the discount this year, will be any lower, because there has been no nudge in the direction of improving the energy efficiency of their homes.
However, the Minister encouraged me in his closing remarks when he referred to the possibility of using the data to identify those who may be targeted for advice on improving energy efficiency. As long as only a discount is provided, the problem of fuel poverty will continue, and the Government will have to continue to override the tariffs structure by providing discounts, rebates and special tariffs, with all the complexities and requirements to identify individuals that that implies. However, if the policy were linked to one of improving energy efficiency, perhaps through the same supply companies, that would be a more constructive way to go forward.
The question is: beyond the giving of advice, would it be possible to gear some of this discount—on the discretion of the recipient—to improvements through the Green Deal or other provisions fronted by the supply company, rather than providing a straight discount? If that is possible, could it be made apparent to the recipient that this is not just a cash saving this year, but a step towards reducing energy consumption and therefore towards reduced bills in future years? That would be a more coherent approach and would not require any greater disclosure of data or data matching than these regulations require.
Baroness Smith of Basildon
My Lords, we have previously discussed the Warm Home Discount Regulations in Committee at some length and the regulations before us follow from that. When we discussed them before, the Minister was generous enough to acknowledge that the Labour Government were very clear when they brought in the voluntary arrangements that should they be successful, they would bring in legislation for compulsory support. Today’s regulations add to that compulsory support. What we did not envisage was that this would happen against the backdrop alluded to by my noble friend Lord Whitty: a drastic two-thirds cut in warm front grants. The Minister is very aware of our concerns and our opposition to those cuts. As welcome as these discounts are, my fear is that with the very substantial increases in bills for next year that have been announced, next winter’s bills will be so much larger that the impact of the discount, which will be extremely welcome to those who receive it, will be less than envisaged when the level was first set.
I have two questions for the Minister, and I have given him notice of them. One is to seek confirmation on a point which my noble friend Lord Whitty also made. It is about the use for which companies can contact recipients of grants. I want to be assured that when the Secretary of State discloses information to an electricity supplier it can not be used for the purposes of sale or promotion by that company. Sub-paragraphs (b) and (c) of Regulation 5(1) state that the reasons for giving the information are,
“enabling the supplier to so provide that rebate”,
which is entirely reasonable and welcome, and
“enabling the supplier to offer relevant assistance to that customer”,
which is also entirely reasonable and welcome. However, in Regulation 5(3), there is a very broad definition of relevant assistance including:
“energy efficiency measures, thermal efficiency measures and advice and assistance relating to energy and thermal efficiency … advice and assistance relating to the generation of electricity or heat produced by microgeneration or the production of heat produced by any plant which relies wholly or mainly on wood as a fuel”,
and the list continues. Energy companies can contact the recipient on such a broad base, and they may use that to try to promote sales growth. I am not sure that that is what is intended, so if the Minister could be clear that the broad definition is not a sales pitch for energy companies, it would be helpful.
On the previous regulations, we discussed the reconciliation mechanism that will be in place to make sure that the information shared is accurate. I am not clear whether there will be further regulations on that. I understood that second and third statutory instruments will be coming through. If they will not, will the Minister tell us how that will be funded? When we discussed this before, I think there was an issue about who would be responsible for funding the reconciliation mechanism. If he can give us an answer on that today, it will be very helpful. However, we broadly support the regulations with those two caveats on which we would like answers.
Lord Marland
I thank noble Lords, as always. The noble Lord, Lord Teverson, was first in to bat. Funnily enough, Teverson is not a natural terrorist name, I feel. You do not think that with that name—a Cornish name, no doubt—he is going to be immediately arrested at the airport for some data matching. The data-matching issue is very important. There is no great science. Indeed, we have trialled it. We have trialled 340,000 people on the pension credit and, luckily, we hit the jackpot with about 205,000. There is a gap, and it is very important that we follow up the people who we could not access through the matching, but we have made substantial inroads into the number.
The noble Lord, Lord Whitty, has great expertise in this area, particularly on the subject of fuel poverty. We all know that both Governments, particularly our Government, are determined to attack this dreadful feature of our society which is exponentially going off the dial in terms of numbers, despite the best intentions of the previous Government and, indeed, the much better intentions of this Government to try and sort it out. In truth, the House is unified in dealing with this dreadful problem. It is fundamental that we get to grips with it and I know that we will carry it out. As your Lordships will know, we have instructed Professor Hills to carry out a fuel poverty review. It is an independent review and we are looking forward to seeing what suggestions he comes up with.
Baroness Smith of Basildon
My understanding is that the Energy Bill, which has completed its stages in this House, is being delayed in the other place, which has not been having debates on the alternative vote or the House of Lords. In fact, if he is able to enlighten us on why there is no date set for the final stages of the Energy Bill in the other place, that would be gratefully received because many of us in this House, who fully supported so much of that Bill, are very disappointed that it does not seem to be going any further.
Lord Marland
Indeed, no more disappointed than I am. Of course, one has to take into consideration all the legislation going into the other House. We genuinely tried to persuade the other place to allow it to come in, but it is so log-jammed with legislation. I am not sure whether it is entirely true that the other place has not debated Lords reform, or indeed alternative voting. However, I take the noble Baroness’s point and no one is more disappointed than our department in not being able to get the Bill through.
The noble Baroness, Lady Smith, made a very good point, as always, about the parameters. Broadly speaking, this is not to be used as a method of mis-selling.
Lord Marland
Yes, nor of any sales promotion, let alone mis-selling—a subject that we debated extensively on the Green Deal. We must be vigilant that that does not happen. Let me state this absolutely categorically; indeed, I will go through the notes because I do not want to have any doubt. This instrument sets very tight parameters around the use of information, limiting it to requiring electricity suppliers to give their customers an automatic rebate on their electricity bills—it is limited to that—and to being able to offer their customers advice and assistance in specified areas on energy and thermal efficiency. Any other reason, such as sales promotion, is not permitted and would be unlawful. I hope that that clarifies that issue in words of one syllable.
There is not going to be a further order on the subject of reconciliation. We accept that pensioners who will benefit may not be evenly distributed between the energy supply companies. As a result, we have put in place a reconciliation mechanism to allow the costs of the scheme to be distributed fairly between energy suppliers, based on their market share. Regulations to allow for this came into force on 1 July 2011. I hope, with that, I can commend these regulations to the Committee.
Environmental Permitting (England and Wales) (Amendment) Regulations 2011
Lord Marland
That the Grand Committee do report to the House that it has considered the Environmental Permitting (England and Wales) (Amendment) Regulations 2011.
Relevant documents: 24th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, if I were in a football team I would have been substituted a long time ago, but I am still here and I am waiting for Alex Ferguson to send on a replacement but, sadly, that will not happen.
The regulations that we are debating today amend some of the provisions relating to the regulation of radioactive substances in the Environmental Permitting (England and Wales) Regulations 2010 in order to provide a more modern, transparent and user-friendly system for the regulation of radioactive substances, while at the same time strictly applying the best standards of radiation protection. They apply to England and Wales and will considerably simplify the often complex system of regulation, which has hardly changed over the past 50 years.
This will be particularly important for those users of radioactive substances which present a very low risk to people and the environment—for example, the holders of clocks, watches and smoke detectors —while at the same time maintaining the necessary level of protection. We estimate that several thousand users will benefit from these changes. This is a good example of the coalition’s agenda to reduce the burden of regulation on business and I am pleased to say that it has received a green light from the Regulatory Policy Committee.
There has been substantial engagement with stakeholders during the development of the regulations. They believe that the need to clarify and modernise the system is long overdue. The Government have listened to the views of experts, industry, public services, regulators and other interested parties throughout this process and have received strong support for the new regime. Indeed, it has been clear throughout the stakeholder engagement process that there would be decreased confidence by users of the regulatory process if it was not modernised soon.
During the course of development, it became clear that a logical, comprehensive and modern regime could be delivered only if the definitions of radioactive material and radioactive waste were amended, and exemptions from the requirement for permits, which are contained in 18 different statutory instruments, were made more transparent and user-friendly. The main effect of the regulations is therefore to change the boundaries that define whether a particular substance or article is outside the scope of legislation—for example, and I specifically asked for this to be put in, a banana; capable of being exempt from full regulation—for instance, smoke detectors; or otherwise subject to normal permitting, such as radioactive waste from a nuclear site.
These changes, where they have been necessary, have been made for three reasons. The current boundaries are sometimes in the wrong place. The exact position of the boundary is currently vague—I knew that noble Lords were not listening, so that banana came as a bit of a surprise. There are gaps in the boundaries because the current exemption orders are up to 50 years old and technology in this field continually advances. These changes will provide a modern, simplified and proportionate—that is, risk-informed—regulatory regime which will result in efficiencies for users and regulators. The net savings for users and regulators across the UK are estimated to be in the region of £11 million over the next 10 years.
Because we have now more explicitly implemented the levels for exemption from regulation in the relevant EU directive, some exemption levels are more restrictive than in our current system and some are less so. This will not lead to any significant change to disposal practices in the nuclear industry sector, but will be of benefit to the users of radioactive substances outside the sector. For example, there are additional exemption provisions for medical establishments to manage and dispose of their aqueous radioactive waste more efficiently and without unnecessary paperwork.
Radioactive waste is a devolved matter. The necessary legislation to achieve the equivalent changes in Scotland is ready to come into force in October, and Northern Ireland is already in the process of amending its legislation with the intention that this, too, will come into force in October. Consistent regulation across the UK will therefore be maintained, which is very important for operators who work across UK borders.
I turn to another matter addressed in the regulations. My department is working to transpose the EU directive on geological storage of carbon dioxide. Two provisions that remain to be addressed are Articles 32 and 37 of the directive. Amendments to the 2010 regulations to transpose these articles are being made in these regulations. I hope that noble Lords will agree that they provide much needed modernisation and I commend them to the Committee.
Lord Teverson
I was hoping that one of the noble and right reverend Prelate’s colleagues who has a degree in history and physics might be here. We have already dealt with chemistry and we have some very interesting substances listed here such as cosmic nuclides or whatever. In my electoral division in Cornwall, I have a NORM depot for the china clay industry, operated by Imerys, which is about to be replaced. I got involved in some of the issues concerning the oil industry and other areas where there is a small radioactive residue that comes from processing these minerals. I am delighted to say that I have received no lobbying from the Cornish china clay industry on the regulations, and therefore assume that they are a good improvement. Therefore, I congratulate the Minister on this change.
I have never seen an Explanatory Memorandum that has been more complicated and of which I have understood less. However, I am sure that the Department of Energy and Climate Change has our interests at heart.
Baroness Smith of Basildon
My Lords, I am very grateful for the Minister's explanation. I am still thinking about the banana reference, which I did not quite get. If he would elucidate further on that, it would be an enormous help. He made clear the reasons behind the regulations. They are intended to be simpler and more user-friendly, while maintaining standards for the regulation of low-level radioactive substances and complying with EU directives.
As he knows, the regulations were first consulted on by the Labour Government in 2009. As a result of the consultation, a fair number of changes were made. Normally, I would raise concerns about an order coming into force so quickly following its discussion—I understand that it will be the day after it has been signed. However, in this case there should be widespread knowledge and understanding among those groups that are affected by the regulations. For the reassurance of the Committee, it would be helpful if the Minister would state whether he is entirely satisfied that all those who need to know about the regulations do so, and, if there are any gaps, what efforts are being made to ensure that we pick up those who may have missed some part of the consultation process since 2009.
These are very technical regulations. I, too, regret that the noble and right reverend Prelate is no longer with us, because he would be helpful. Few noble Lords will understand Part 3 of the regulations. Table 2, headed “Concentration of radionuclides”, lists various concentrations in becquerels per gram. I confess that I have no understanding of what that means and so in many ways feel inadequate to the task of effective scrutiny. I therefore seek reassurance from the Minister. Can he say whether any concerns were raised through the consultation that the regulations would in any way compromise public safety? I gave notice that I would ask that question. If those concerns were raised, how were they addressed? Those who were consulted would have greater knowledge than I or other Members of your Lordships’ House would have.
Lord Marland
This is hopefully the last statutory instrument before we break—oh no, there is another one. I am always happy to hear the tales of Cornwall from the noble Lord, Lord Teverson, and all about English china clay. It is fantastic. The noble Baroness asked some very good questions, some of which she has given me notice of.
Lord Marland
The noble Baroness did not give me notice of the banana—I had to slip that in.
Baroness Smith of Basildon
I did not expect the noble Lord to mention bananas in today’s debate, so I think that I can be forgiven for that.
Lord Marland
The point of the banana was to illustrate that everything is radioactive. We need to consider that as we embark on anything to do with radioactivity.
There has been extensive shareholder consultation and engagement on this, as you would expect. Naturally, it is fundamental that public safety concerns on anything to do with nuclear radioactivity are given priority. I think the general public believe that, which is why reaction to events in Fukushima has been relatively benign. We are not being complacent but I think that the public understand that we put public safety first. The Health Protection Agency has been consulted and is happy with it. A lot of it is based on International Commission of Radiological Protection recommendations, which underpin the EU basic safety standards directive. Of course, any concerns that are raised in these discussions are taken most seriously and responded to. It is fundamental to our nuclear endeavour that we do so.
Finally, I am in regular touch with Mr Jamie Reid, as I am a regular visitor to Sellafield. I hope that the noble Baroness will join me there at some point. West Cumbria is a fantastic place and we will put in the Library a copy of the response to his very detailed and extensive questions and naturally will furnish the noble Baroness with a copy as well. I commend these regulations to the Committee.
National Minimum Wage (Amendment) Regulations 2011
Lord De Mauley
That the Grand Committee do report to the House that it has considered the National Minimum Wage (Amendment) Regulations 2011.
Relevant documents: 24th Report from the Joint Committee on Statutory Instruments.
Lord De Mauley
My Lords, I am pleased to present the regulations and to speak to the National Minimum Wage (Amendment) (No. 2) Regulations 2011.
Before discussing these regulations it is important that I confirm the coalition Government’s commitment to the national minimum wage. There has been a certain amount of controversy following the recent debate in the other place on the Private Member’s Employment Opportunities Bill, in which it was suggested that people with disabilities should be able to offer themselves for work at below the minimum wage. As noble Lords know, the aim of the national minimum wage is to establish fairness in the workplace and one of its key principles is to protect the most vulnerable workers. The Government support the minimum wage, and we reject any suggestion that disabled people should be able to opt out of it.
I turn now to the two sets of regulations before us. The first regulations—the National Minimum Wage (Amendment) Regulations—do three things. First, they increase the hourly rate of the minimum wage for adults, younger workers and apprentices and increase the maximum amount for living accommodation that is allowed to count towards pay for minimum wage purposes. Secondly, they clarify the circumstances in which individuals taking part in certain government employment programmes are exempt from the minimum wage. Thirdly, they reflect the changes that have been made to the names of certain pre-apprenticeship programmes in Wales. The second set of regulations— the National Minimum Wage (Amendment) (No. 2) Regulations—exempts higher and further education institutions from the accommodation offset rules for full-time students who are employed by that institution.
I shall start with the provisions in the National Minimum Wage (Amendment) Regulations. In April, the Government announced that we had accepted the recommendations of the Low Pay Commission in its 2011 report on the minimum wage rates to come into force on 1 October 2011. These regulations implement that decision. They increase the adult minimum wage rate by 2.5 per cent from £5.93 to £6.08. We believe that this increase is appropriate in the light of the continuing economic uncertainty, while at the same time protecting the lowest-paid workers from falling further behind the average. Both the Government and the Low Pay Commission are concerned about the position of young workers in the labour market. I am sure noble Lords share that concern.
Young people are more vulnerable than they have been previously as they have been hit harder by the recession. That is why the Low Pay Commission’s remit last year specifically referred to the need to consider the position of young people in the labour market. Their position has continued to be difficult and there is evidence that in difficult economic circumstances the minimum wage level may have an impact on their ability to find employment. The commission therefore recommended lower increases for the youth rates than for the adult rate. This is because the youth minimum wage rates have increased faster than young people’s earnings generally since 2007. As a result, the minimum wage as a percentage of median earnings for young workers has increased while the adult rate has remained stable. The commission concluded that it would be imprudent for this to continue and therefore recommended lower increases than for the adult rate. We accept that conclusion. We believe that the increases in the youth minimum wage regulations are sensible and appropriate to protect the labour market position of young people.
The Low Pay Commission has also reviewed the new apprentice minimum wage that we introduced in October last year. It has found that the initial rate was cautious and recommended a higher increase in the apprentice minimum wage of 4 per cent. This will apply only to employed apprentices who are either aged under 19 or who are over 19 and in the first year of their apprenticeship. Other apprentices are eligible for the minimum wage rate according to their age.
There is currently an exemption from the national minimum wage for workers participating in certain government schemes to provide training, work experience or temporary work. At present, workers participating in government schemes provided under the Employment and Training Act 1973 are exempt from the minimum wage. However, there is no such exemption for workers participating in government schemes provided under the Jobseekers Act 1995, such as the Work Programme. Regulation 2 corrects this anomaly so that the exemption applies to all such workers.
I turn now to the third element of the regulations which is in Regulation 4. There is an exemption from the national minimum wage for a small proportion of apprentices on specified schemes who are not employed but who usually receive an allowance paid by the state instead of a wage. On 1 August, the Welsh Assembly Government will be starting two successor programmes to the Skill Build scheme that is currently specified in the regulations. We are therefore making consequential changes to reflect this.
The second set of regulations before us concerns the application of minimum wage rules on accommodation in relation to educational institutions. It is a general principle of the minimum wage that workers should be remunerated in money and not in benefits in kind. The only exception to this general principle is accommodation. However, as a safeguard to protect workers from unreasonable charges, the regulations set a maximum daily amount that an employer can deduct for the cost of accommodation, which is known as the accommodation offset.
Last year, the Government became aware that there was a potential problem with the accommodation offset where a higher education institution provides accommodation to a student who it employs, for example, as a student mentor. The problem arises because the relationship between an educational institution and its students is primarily educational, and accommodation is provided on that basis. Where an institution employs a student part-time, this does not change the basis on which the accommodation is provided. It is not analogous to the circumstances which the accommodation offset was designed to cover; namely, the protection of vulnerable workers whose employers might have sought to avoid paying the minimum wage by levying excessive rent for their accommodation.
We conducted a full public consultation on this issue earlier this year. We received 38 responses from universities, their representative groups and student representatives. There was an overwhelming consensus supporting the principle that we should address this issue. The regulations therefore exempt higher and further education institutions from the accommodation offset rules where the accommodation is provided to a worker who is enrolled on a full-time course with that institution. The overall, consistent response to our consultation was that the test for exemption should be based on the educational relationship that a student has with an institution. We have therefore based the test on whether a worker is undertaking a course with the institution. We have limited the exemption to full-time students as we consider that this approach is in line with the principle behind the exemption.
In summary, the Low Pay Commission’s minimum wage rate recommendations reflect the continued volatility of the economy, the state of the youth labour market and the uncertain prospects for the forthcoming year. I believe that the increases in the minimum wage in the first set of regulations before us balance the needs of low-paid workers against the challenges that remain for businesses. They reflect our commitment to the fair treatment of low-paid workers as well as to business. I believe it is important for the integrity of the minimum wage that the detailed rules are appropriate and, where this is not the case, that we take action to remedy the situation.
The second set of regulations addresses the unintended consequences of the accommodation offset rules as they apply to higher and further education institutions. I ask your Lordships to consider these regulations.
Lord Teverson
My Lords, I thank the Minister for his explanation of these regulations. The reason why I was eventually very much in favour of the minimum wage was not that given in the background papers to this. It was the fact that where we have quite a strong safety net in terms of the welfare state, it seemed to me that we were getting into a situation where companies were able to pay low wages and the state effectively subsidised the corporate sector in terms of its pay. Bringing in the minimum wage allowed us to stop that, at least to a degree. When I looked at the uprating in these areas in relation to inflation, which clearly they are well under, they probably reflect wages in the economy fairly accurately, so perhaps that is fine. I was particularly interested in some of the background notes. I learnt that almost 1 per cent of apprentices are 61 to 70 years old. I thought that was quite an interesting statistic. In fact, only 70 per cent—seven out of 10— apprentices are in the 16 to 20 year-old age group, so we learn something from the notes.
Lord Young of Norwood Green
My Lords, I am pleased to support this important piece of legislation which makes the necessary amendments to ensure that the annual rises are made to the national minimum wage and that they will come into force on 1 October 2011, raising the wages of something like 900,000 workers.
The national minimum wage was introduced by the Labour Government in 1999 in spite of all manner of scaremongering, particularly from some sections of the right-wing press and, as I recall, it was opposed by the Conservative Party at the time. When it was introduced, it raised pay for more than 2 million people, and thereafter the Labour Government ensured that there were regular, above-inflation increases, so that in the first 10 years of its existence, the national minimum wage rose by 59 per cent. There is no doubt that those increases have raised the living standards of the lowest paid and have helped to close the gap between men and women's pay.
I agree with the noble Lord, Lord Teverson, that it did away with what was in effect a state subsidy for those parts of the corporate sector that paid significantly less than the minimum wage. As we know, when those investigations took place, a wage of £1 an hour was not uncommon in certain parts of industry. In 2004, some 50,000 low-paid teenagers received a boost in income when a minimum wage for 16 and 17-year-olds was introduced. When the Conservative Party was opposing the introduction of the minimum wage before 1999, there were claims that it would cost some 2 million jobs. In practice, 3 million extra jobs were created in the following 10 years.
Despite the initial and determined opposition to the national minimum wage, it appears that it is now accepted by the main political parties. I was pleased to hear the Minister state that the Government disagree very strongly with the remarks made by the honourable Member for Shipley two weeks ago when he suggested that disabled people should be required to work for less than the national minimum wage. I welcome that assurance.
During the first 10 years of the national minimum wage, the level of the annual increases in the national minimum wage meant that overall it rose above the level of inflation. In the past couple of years, it has risen more or less in line with average earnings. However, it worries me that we are now seeing some very rapid rises in the price of basic foodstuffs, domestic fuel bills and vehicle fuel, which has a knock-on effect on public transport and many other products. If you are on a low income, food and fuel make up a higher percentage of your expenditure, and therefore you are particularly hard hit by these rises. We have seen some very steep rises in food prices and fuel prices in the past few months, and we may well see further increases in the next few months between now and 1 October 2011, the date when the increases in the national minimum wage that we are discussing today will be implemented. If these trends continue, the additional 15p per hour on the adult minimum wage, bringing it up to £6.08 an hour, which amounts to a 2.5 per cent increase, will soon be eliminated by price rises.
Put another way, this increase of 15p per hour amounts to an increase of £6 per week for a 40-hour week, while we are seeing price rises which will soon invalidate that. If these trends continue, clearly the Low Pay Commission will be taking into account these additional costs as it does its complex analysis and consultation before making its next recommendation. Once it has made its recommendation, it will of course be up to the Government of the day to decide whether to accept it. I urge the Government to accept that proportionately high increases in the national minimum wage may well be needed to ensure that it keeps pace with inflation, given the costs faced by low-income families. If we are to make work pay, which I know is an objective of this Government, it is particularly important that the national minimum wage reflects the reality of price increases that people are encountering.
I very much hope that the coalition Government will continue the policy we had in government of increasing the national minimum wage at or above the level of inflation and that there is no intention on their part to allow its real purchasing value to be eroded by a failure to increase it in line with the actual prices people have to pay to meet their basic needs. I express those fears because we have already seen the coalition Government decide to use the consumer prices index instead of the RPI to calculate rises in pensions and benefits. I note the increase in the apprentice rate from £2.50 to £2.60. I also note the valid points the Minister made about the accommodation offset and the consultation that took place.
The success of the national minimum wage depends in part on the ability to ensure successful enforcement as a deterrent to those employers who attempt to flout the legislation. Can the Minister give us the latest statistics from the Revenue on enforcement and the number of national minimum wage enquiries raised on the employee rights helpline? I understand that since I did not give notice of those questions, the Minister or his team may not have those statistics to hand. I would be happy if he would let me have those answers in writing. They are important to give us an understanding of where we are going on the national minimum wage. That said, the work of today's Committee is to pass the statutory instruments before us, and I am pleased to support them.
Lord De Mauley
My Lords, this has been an interesting short debate and I thank noble Lords for their contributions. The regulations concern important issues that support the Government’s commitment to delivering fairness and supporting business. I believe that the provisions are fair and appropriate.
A number of points have been raised, so let me attempt to address them. My noble friend Lord Teverson commented on the use of the national minimum wage to ensure in the past that employers did not use the welfare state to subsidise their business, and I accept that. He also asked about interns and the Government recognise concerns about the risks of their exploitation. We are working to improve our guidance to clarify when individuals performing work experience, including interns, are entitled to the minimum wage. We will ensure that enforcement of the national minimum wage continues to be effective and that resources are focused where they will have maximum impact. HM Revenue & Customs will conduct a targeted enforcement campaign this year in sectors where internships are commonplace. Work experience as an intern, paid or unpaid, can be a valuable way for young people to gain the experience, skills and confidence that they need to get started in a career, thus improving their prospects. We want as many internship opportunities as possible to be made available to talented young people from all backgrounds, but we are clear that those who are entitled to the national minimum wage should receive it.
The noble Lord, Lord Young of Norwood Green, enjoyed pointing out that the Conservative Party originally opposed the minimum wage. While that is true, the implementation of the minimum wage has shown that it provides a valuable safety net for low-paid employees but that it has not had an adverse effect on their employment. The Conservative Party has therefore supported the minimum wage in recent years. I have sat in the chair opposite, where the noble Lord sits today, and supported the national minimum wage from that Dispatch Box. This support is continued in the coalition commitment I referred to in my opening speech.
The noble Lord also referred to inflation. The aim of the minimum wage is to help as many low-paid workers as possible without having any significant adverse impact on their employment prospects. It is for the Low Pay Commission to consider this in the first instance, as it makes recommendations to Government on the appropriate rate. It would be rash to speculate now on future recommendations. The Low Pay Commission considers a number of issues, including RPI, CPI, average earnings growth, GDP growth, employment and unemployment, and details its findings and the rationale for its recommendations in the reports that it makes to us. We also take these issues into account when deciding whether to agree with the commission’s judgment.
The noble Lord kindly said that he would accept a letter on his final question, and I will write to him.
I commend these regulations to the Committee.
National Minimum Wage (Amendment) (No. 2) Regulations 2011
Lord De Mauley
That the Grand Committee do report to the House that it has considered the National Minimum Wage (Amendment) (No. 2) Regulations 2011.
Relevant documents: 25th Report from the Joint Committee on Statutory Instruments.
Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010 (Consequential Provisions) Order 2011
(13 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Tankerness
That the Grand Committee do report to the House that it has considered the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010 (Consequential Provisions) Order 2011.
Relevant documents: 24th Report from the Joint Committee on Statutory Instruments.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I beg to move that the Committee considers the draft Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010 (Consequential Provisions) Order 2011. I shall also speak to the Adoption and Children (Scotland) Act 2007 (Consequential Provisions) (Amendment) Order 2011. The former order was laid before the House on 9 June and the latter on 10 June. I will provide an explanation of both orders.
The orders are made under Section 104 of the Scotland Act 1998, which provides that the Secretary of State can make such provision as is “necessary or expedient” in consequence of an Act of the Scottish Parliament. The Merits Committee has reviewed these orders and has not noted them as being of special interest.
I begin with the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010 (Consequential Provisions) Order 2011. This order is made in consequence of the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010, which for convenience I shall refer to as the 2010 Act.
The 2010 Act reformed Scots law in respect of persons being questioned by police constables in Scotland on suspicion of having committed an offence. In particular, the 2010 Act enshrined a right to legal advice for suspects prior to and during questioning by a Scottish police constable. It made provision for an order-making power in respect of legal advice and assistance for suspects wishing to exercise this right, and extended the period for which persons could be detained by a police constable in Scotland. The 2010 Act was enacted by the Scottish Parliament in response to the ruling of the Supreme Court in the case of Cadder v Her Majesty’s Advocate, with a view to ensuring that the law of Scotland is compatible with the European Convention on Human Rights.
The policy objectives of this order are two-fold. First, this order brings Scots law, in respect of persons questioned by Her Majesty’s Revenue and Customs and the UK Border Agency on suspicion of having committed a revenue and customs offence in Scotland, into line with the law applying to criminal investigations carried out by police constables in Scotland following enactment of the 2010 Act. The order seeks to deliver this policy objective by, first, enshrining in the Criminal Law (Consolidation) (Scotland) Act 1995 the right to legal advice for persons questioned by HMRC and UKBA on suspicion of having committed a revenue and customs offence in Scotland, and, secondly, by extending the period of time for which a person can be detained by HMRC and UKBA officers under the Criminal Law (Consolidation) (Scotland) Act 1995 from six hours to a 12-hour period of detention, with the potential to extend to 24 hours in certain circumstances with the appropriate authority.
As regards expanding Scottish Ministers’ power under the Legal Aid (Scotland) Act 1986 to make regulations disapplying the financial eligibility criteria for advice and assistance to HMRC and UKBA suspects, this provision will be underpinned by a ministerial agreement and administrative arrangement that the provision of legal aid for HMRC and UKBA suspects in Scotland will be on equivalent terms to the provisions made for legal aid in relation to persons detained by police constables in Scotland. It extends the right to access advice and assistance, without means testing, to HMRC and UKBA suspects by amending the Advice and Assistance and Civil Legal Aid (Financial Conditions and Contributions) (Scotland) Regulations 2011; and by including HMRC and UKBA suspects in the duty which has been placed upon the Scottish Legal Aid Board by the Duty Solicitors Regulations 2011 to ensure the availability of advice.
The second policy objective of this order is to update the law in cross-border cases to bring parity between the powers of the Scottish police, HMRC and UKBA acting within Scotland and the powers of the Scottish police, HMRC and UKBA exercising cross-border powers of arrest and detention elsewhere in the United Kingdom. The 2010 Act amended the powers of Scottish constables only when detaining or arresting suspects in Scotland. The period for which Scottish constables, Her Majesty’s Revenue and Customs and UKBA can detain suspects in cross-border cases is now markedly out of step with the detention period permitted in Scotland following the coming into force of the 2010 Act.
Cross-border detention provisions in the Criminal Justice and Public Order Act 1994 and the Finance Act 2007—which applies, with modifications, the cross-border provisions in the 1994 Act to HMRC and UKBA cross-border cases—allow for the detention of suspects for only four hours where a suspect's detention commences in England or Wales; and for six hours where detention commences in Northern Ireland. This applies regardless of whether the suspect is taken for interview to a police station in England, Wales or Northern Ireland, or is taken back to a police station in Scotland. Cross-border detentions usually arise in relation to the most serious types of cases and the current detention period raises significant challenges due to the need to allow access to a solicitor before and during questioning, which has a negative impact on the time available to conduct effective investigations.
The 2010 Act ensures that suspects are able to obtain legal advice before and during questioning by the police in Scotland. This order ensures that the right to legal advice is available to suspects who are being questioned by Scottish constables, HMRC officers conducting revenue and customs investigations and UKBA designated customs officials conducting customs related criminal investigations in a cross-border scenario as well as in Scotland. This order brings the cross-border detention provisions for Scottish constables, HMRC and UKBA customs and revenue officers into line with the provisions in the 2010 Act, thereby ensuring consistency of approach for the detention and arrest of suspects throughout the United Kingdom in investigations carried out by Scottish police forces, HMRC officers and UKBA designated customs officials.
The order also ensures that when a suspect is to be transported to Scotland for questioning, their right to have another person informed of their arrest or detention arises at the point of arrest or detention. This differs from the position where a suspect is detained in Scotland or questioned in England, Wales or Northern Ireland where the right of intimation to another person arises upon arrival at a police station. It is considered more appropriate and proportionate to grant this right at the point of arrest or detention where a suspect is to be transported to Scotland, particularly where such transportation may take a number of hours. The order will specify that the entitlement to have intimation sent to a solicitor and a reasonably named person, as well as their right to have another person informed of their arrest or detention, arises at the point of arrest or detention. This amendment avoids the provision of these entitlements being delayed until arrival at a police station, as is the current position. This amendment is both necessary and expedient as a direct consequence of the amendments to the 2010 Act. It ensures that a suspect is detained in a manner which is compliant with their rights under the European Convention on Human Rights.
The order will extend the period of time for which a person can be detained under cross-border enforcement powers to 12 hours, with the potential to extend to 24 hours in certain circumstances, with the appropriate authority. As at present, detention will begin on arrival at a police station, either in Scotland or in another part of the United Kingdom, and the suspect must be transported to the police station,
“as soon as is reasonably practicable”.
While the 2010 Act ensured that the system of arrest and detention in Scotland is compatible with Article 6, as expressed by the Supreme Court judgment in the case of Cadder v Her Majesty’s Advocate, the Scottish Cabinet Secretary for Justice also announced a review of Scottish criminal law and practice, which is being led by Lord Carloway, a senior High Court judge. He is expected to report later this year.
In the context of Lord Carloway’s review into this matter, the United Kingdom Government consider that it is sensible to do all that they can until Lord Carloway reports and his findings can be acted on, and to ensure that reserved bodies carrying out reserved functions in Scotland can continue to do so effectively and in compliance with the Supreme Court judgment in Cadder.
Once the Carloway Review Reference Group reports its findings, it is likely that the provisions of the 2010 Act and this order will need to be reviewed. However, in the interim, this order will amend powers of detention to ensure that HMRC, the UKBA and the Scottish police can continue to effectively carry out their functions to investigate serious crime, both in Scotland and in cross-border cases, in compliance with the Supreme Court’s judgment in Cadder v Her Majesty’s Advocate.
Perhaps I may now set out the details of the second draft order we are considering, which is made in consequence of the Adoption and Children (Scotland) Act 2007—the 2007 Act—and regulations made under that Act. The 2007 Act restates and amends the law relating to adoption in Scotland. It also makes further provision in respect of the care of children in Scotland. The process for adoption is updated to allow unmarried and same-sex couples to make an application jointly to adopt a child. The process of assessing prospective adopters and placing children for adoption has also been updated and is now regulated by new regulations made under the 2007 Act.
In addition, the 2007 Act introduces the permanence order to create greater flexibility for children who are looked after away from their home or who require local authority supervision. This new order replaces parental responsibilities orders and freeing orders. Both those orders removed all parental rights and responsibilities from the child’s parents and vested them in the local authority with sole responsibility for the child.
The permanence order now gives the authority the right to determine where the child shall reside allowing authorities to place the child with foster carers, for example. But, at the same time, the courts may vest parental responsibilities and rights in other individuals—for example, foster carers or even the child’s parents. The permanence order will therefore be tailored to meet the needs of each child.
This order therefore makes amendments to legislation for England, Wales and Northern Ireland to ensure that the new orders and procedures introduced by the 2007 Act will be given the appropriate recognition and effect. It does not make any new substantive policy changes: it simply updates existing legislation to take account of the changes in Scottish adoption law. The aim is to preserve the effect of current legislation in England, Wales and Northern Ireland and current cross-border processes. For example, many of the amendments relate to social security legislation which relies on references to Scottish adoption legislation to determine the status of claimants. It is appropriate therefore, that benefits legislation is updated so as to include the status of prospective adopters or adopted children under the new legislation where appropriate.
In order to ensure that existing cross-border arrangements are preserved to allow orders affecting adopted or looked-after children to be recognised and given effect where appropriate, the order proposes amendments to legislation for England, Wales and Northern Ireland in respect of the adoption and care of children. Again, the amendments are purely consequential on the changes made by the 2007 Act and its accompanying regulations. This ensures that, where an adoption application is being heard by an English court and the question of parental consent to adoption has already been determined by the Scottish courts, the English court may be satisfied that this part of the adoption process has already been dealt with. Parallel provision allowing the Scottish courts to recognise a decision of an English court on the issue of parental consent in advance of an adoption application is provided for in the Scottish 2007 Act.
I should also make reference here to the previous Section 104 order which modifies provisions in the Adoption and Children Act 2002 and the Northern Ireland adoption order to allow courts to give effect to Scottish permanence orders pending the textual changes which are made in this draft order. This order now makes the necessary textual amendments, which will allow those orders to have effect where appropriate.
Both these orders demonstrate the Government’s commitment to working with the Scottish Government and the Scottish Parliament to make the current devolution settlement work successfully for Scotland as part of the United Kingdom. I hope that your Lordships will agree that these orders are a sensible use of the powers in the Scotland Act and that the practical results are something to be welcomed. I therefore commend both these orders to the Committee. I beg to move.
Lord Maclennan of Rogart
My Lords, I begin by welcoming the clarity of my noble friend's explanation of the two orders. I also thank him for the very helpful Explanatory Memorandum that sets out their purposes and consequences. There are, consequentially, very few questions that I will raise, because most of the points have been very clearly made.
On the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010 (Consequential Provisions) Order 2011, have the recent United Kingdom changes in the proposed availability of legal aid affected, or will they affect in any way, the availability of legal aid to those who are suspected of serious crimes such as those mentioned in the Explanatory Memorandum? I note that powers to make regulations disapplying the financial eligibility criteria are referred to, as well as the criteria for giving advice and assistance to such suspects. It is also stated that the provision will be underpinned by a ministerial agreement and an administrative arrangement, and that the provision of legal aid to HMRC and UKBA suspects will be on equivalent terms to the provisions made for legal aid in relation to persons detained by police constables in Scotland. Will the Minister explain whether that agreement has been arrived at and is waiting for its effectiveness only on the passage of this order, or whether it has yet to be agreed—and, if so, with whom? The provisions on detention seem to be eminently sensible. It would be of some interest to know whether they are reciprocal. Does this mirror what happens if suspects are taken into custody by police constables in England?
So far as concerns the second order, again there are very few questions that have not been addressed. I would be interested to know what gave rise to the awareness of the desirability of making this change, which will result in orders being made under the 2007 Act to clarify that the 1978 Act does not apply in present circumstances. Whereas in the case of the first order there was a passage merely of weeks before it was laid, in the case of the other there has been a passage of four years. How is that explicable?
I will ask a procedural question. When changes are made by the Scottish Parliament or Government, is it automatically part of the dialogue between the Scotland Office and these institutions to consider any consequential changes that ought to be made by this Parliament under the provisions of the Scotland Act? Did this have to be drawn to someone's attention? Is it the sort of issue that the Scottish Law Commission might consider on a continuing basis or is it such a relatively minor matter—although the consequences are not unimportant—that difficulties became apparent only in seeking to take into account particular cases of adoption that arose after the law was changed? I recognise that this procedural question does not in any way take exception to the outcomes, which seem eminently sensible.
Lord McAvoy
My Lords, after 24 years in the Houses of Parliament I find it a bit of a shock to the system to be the Labour Party spokesperson on anything. I was expecting the doors to open and folk to come from miles around to have a laugh, but there we are. First, I thank the Minister for offering the services of his staff in briefing me on the orders. I would have taken that up, but I felt a twinge of conscience and a bit guilty that the Minister was prepared to inflict that on his staff. I am not sure what they have done to him, but I am grateful for the offer.
I start in reverse order with the adoption and children order. I certainly agree with the noble Lord, Lord Maclennan of Rogart, about the clarity of the Minister’s explanation. Even though I read the Explanatory Notes and the other literature, hearing the Minister speak was first class in getting a better and fuller understanding of what was being approved. However—as the saying goes—I have some questions. I realise from being here this afternoon that there is a practice of giving notice of questions. I was not aware of that or I would have done so. There are no trick questions; they may come on other occasions but not this evening.
This order brings consistency to the situation vis-à-vis Scotland and its part of the United Kingdom, so it seems routine, but no legislation should be rushed because mistakes happen. It seems to me that the Government are in such a state with their legislative programme that there is a heavy element of rush in the preparation and submission of legislation, but perhaps not the delay of months and years referred to by the noble Lord, Lord Maclennan of Rogart. Nevertheless, mistakes happen, and it seems that we have had a conveyer belt this afternoon. If anyone cares to look, a Written Answer to the noble Lord, Lord Grocott, in last week’s Hansard illustrated the number of times that the Government have broken conventions in terms of time. There seems to be a bit of a rush. Although paragraph 8 of the Explanatory Notes refers to “UK Government Departments” being consulted, there was no consultation elsewhere. I should have thought that on the issue of adoption there could and should have been wider consultation with professionals in the field. I was formerly a councillor in Strathclyde Regional Council which had one of the best social work departments in the whole of Europe. Nevertheless mistakes were made and incidents happened. I should have thought that there could have been more consultation.
One of the curiosities is that on pages 14 and 17 of the order there are Welsh language extracts. Is it because that is how it is presented by the Welsh Assembly or has it been inserted by the Government here? It would seem that there is a gap when it comes to Scottish matters; Scottish Gaelic should have been incorporated there as well. I am not a fanatic about Gaelic, but it is a recognised second language in Scotland, and if it can be encouraged, it should be recognised. The order is almost entirely technical and has our support.
Turning to the criminal procedure order, I have had some advice from the Law Society of Scotland. David Mundell MP advised the other place:
“The current detention period raises significant challenges due to the need to allow access to a solicitor before and during questioning, which has a negative impact on the time available to conduct effective investigations”.—[Official Report, Commons, Delegated Legislation Committee, 6/7/11; col. 4.]
I have heard from one or two others, as well as the Law Society of Scotland, who seem to maintain that the extension of the detention period from six hours to 12 hours with the option of a further 12 hours is disproportionate. This extension was argued on a number of grounds, one of which was that additional time would be required to secure solicitor access. The Association of Chief Police Officers in Scotland published data last month which showed that 83.5 per cent of detentions are for six hours or less, 15.7 per cent are for more than six but less than 12 hours, and 0.8 per cent are for more than 12 hours. I ask the Minister to outline the consultation process that came up with this time and to say whether it matches anything else so that I can make some kind of a judgment about whether it is standard, justified or just plucked out of a hat. I do not think that it was: it would be wrong to say that. Nevertheless, in the interests of transparency, it would be useful to have a response on that.
Another part of the Law Society of Scotland’s briefing echoes much of what the noble Lord, Lord Maclennan of Rogart, said about remuneration and the difficulties for solicitors who get involved in this type of thing. However, I will leave the lawyers to cry on somebody else’s shoulder, not mine.
Lord Wallace of Tankerness
My Lords, first and foremost, I congratulate the noble Lord, Lord McAvoy, on his maiden speech from the Labour Front Bench. He distinguished previous Labour Governments, but in a non-speaking role as a Whip. I welcome him to his post, and I am sure that, as he says, there will be many future occasions when we will engage in debate. I also thank my noble friend Lord Maclennan of Rogart and the noble Lord, Lord McAvoy, for their general support for the orders and for the important questions they raised.
I will pick up some of the procedural points with regard to this order in relation to the 2007 Act. It has taken so long—it is four years since the passage of the Act—because the Act was not brought into effect for some time after it was passed by the Scottish Parliament. Looking at the order, we see the amount of work that has gone in to trying to make sure that all the different pieces of legislation which are covered by it have been brought together. I am aware that a considerable amount of work has been done on that.
In my opening remarks, I referred to a stop-gap, temporary measure that was passed using the negative procedure earlier this year. That is repealed by this order now that we have the full provisions in place. A considerable amount of work goes on between the lawyers in my department, the Office of the Advocate-General, and the Scottish Government legal department, looking at issues when legislation comes forward. There is also a programme of work on Scotland Act orders to identify priorities in co-ordination between the United Kingdom and Scottish Governments. Both Governments feed into that programme, which leads to the orders that we take forward. Indeed, I think this morning an order was debated in another place that we will have the pleasure of looking at when we return in the autumn.
With regard to the point made by the noble Lord, Lord McAvoy, about Wales, it is my understanding that under the Welsh Assembly, some legislation now is in the Welsh language. It is reflecting that provision from the Welsh National Assembly that these provisions are in this order in Welsh. I have no doubt that if, at some stage, the Scottish Parliament passes a measure in Gaelic—that is on the heading of the primary or secondary legislation—that, too, would find its way into our orders.
I hear the point about the consultation and the Law Society. It has been a matter of routine that the Scotland Office was not consulted on orders which have been taken under the Scotland Act 1998. The majority of them are consequential to legislation which has been passed by the Scottish Parliament. Of course, the 2007 Act was well consulted on, deliberated on and debated as it went through its procedures in the Scottish Parliament. Substantially, this order gives it effect in a number of different ways in relation to United Kingdom legislation, which it was not possible for the Scottish Parliament to do. But the policy matters which are at the core were dealt with by the Scottish Parliament when the Bill went through and became an Act.
On the criminal procedure, publicly funded legal systems will be made available. The 2010 Act includes provisions to amend the Legal Aid (Scotland) Act to confer an order-making power on Scottish Ministers to make legal advice available to any person detained under the amended detention provisions. In such circumstances they may provide without reference to Section 8 of the Legal Aid (Scotland) Act 1986, which sets out the financial eligibility criteria for advice and assistance. The aim of the order-making power is to ensure that financial eligibility requirements would not act as an impediment to the availability of legal advice as a fundamental requirement of the new procedures. It is very obvious that if someone is brought in for detention and needs immediate access to a solicitor, suddenly to start filling in forms could act as an impediment to what is being sought to be achieved. It was considered to be impractical for a solicitor to have to try accurately to verify a suspect’s financial circumstances while they were detained. Of course, there was a need to ensure that all suspects can obtain legal advice. The ongoing, continuing discussions on the detail of the agreement to be reached between Scottish Ministers and the United Kingdom Government—it was agreed in principle that it will happen with the detail—is still to be worked out. When it is concluded it will follow on to this order when it goes through.
My noble friend Lord Maclennan of Rogart and the noble Lord, Lord McAvoy, raised the period of detention. It is perhaps useful to remind ourselves that the 2010 legislation was emergency legislation in the Scottish Parliament—I think that it was passed in a day. Prior to introducing the emergency legislation in the Scottish Parliament, the Scottish Government consulted with a number of stakeholders, including the Law Society of Scotland, the Crown Office and Procurator Fiscal Service, the Association of Police Chief Officers in Scotland, the Scottish Police Services Authority, the Scottish Legal Aid Board and the Scottish Court Service.
In particular, the Scottish Government consulted with a number of these bodies in respect of the decision to extend the period for which suspects may be detained by the police. During the consultation, ACPOS, the Scottish Police Services Authority and the Crown Office and Procurator Fiscal Service considered that an extension of some form was required, although the Law Society considered that any extension should not feature in the emergency legislation. Instead, the Law Society argued that options for change should be considered by a judicially led expert review. This matter is being considered by the Carloway review but the Scottish Government took the view that they did not consider that waiting until such time as the review reports, and reforms coming from the review are passed into law, was a viable option when there was already evidence that the six-hour period of detention in some cases would be too short, particularly in complex cases where a solicitor had to be brought in and, therefore, that underlay the decision to extend the time period.
This order seeks to put in terms of reserve functions, the UKBA and Her Majesty’s Revenue and Customs in exactly the same position with regard to the provisions as is the case with Scottish police officers. The purpose of the order is consistency, which is why we have used and adopted the same time periods as there are for the Scottish police. It is important that there is one set of rules which apply to the questioning of suspects in Scotland. Indeed, it may well be a joint investigation with the police and it would become very complicated if one body was operating under a different set of rules from the other. At the end of the day, the one prosecuting authority—the Lord Advocate and the Procurator Fiscal—will lead and take forward the prosecution.
Adoption and Children (Scotland) Act 2007 (Consequential Modifications) Order 2011
(13 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Tankerness
That the Grand Committee do report to the House that it has considered the Adoption and Children (Scotland) Act 2007 (Consequential Modifications) Order 2011.
Relevant documents: 24th Report from the Joint Committee on Statutory Instruments.
House of Lords
Human Rights: Kashmir
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hussain
To ask Her Majesty’s Government what is their assessment of the human rights situation in Kashmir.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, we recognise that there are human rights concerns in both Indian and Pakistan-administered Kashmir and we followed the widely reported violent unrest in lndian-administered Kashmir last year. Indian Prime Minister Singh has since said that human rights abuses by security forces in Kashmir would not be tolerated. We are following the work of the three interlocutors appointed to help resolve the situation in Indian-administered Kashmir.
Lord Hussain
I thank my noble friend for his response. Is he aware of the Amnesty International report, A Lawless Law, which gives horrific accounts of human rights abuses committed by the Indian forces in Kashmir? Draconian laws such as the Public Safety Act allow the authorities to arrest and detain people for up to two years, and in some cases up to 20 years. According to the report, some 16,000 people have been arrested under the Public Safety Act in Kashmir so far. Will the Minister or the Foreign Secretary raise the human rights abuses in Kashmir with their Indian counterparts at their next meeting?
Lord Howell of Guildford
We are of course aware of the Amnesty International report. As with human rights questions in any part of the world, we are concerned, as would be all responsible citizens and responsible countries. Our high commission officials have visited Kashmir and discussed the issue with human rights groups but I have to emphasise that it is not for the United Kingdom to prescribe solutions to these matters. That is for the Indian-administered authorities to deal with and it is for India and Pakistan together to find a lasting solution to the overarching issue of the Kashmir situation.
Lord Ahmed
My Lords, is the Minister aware that a US-based international people’s tribunal on human rights and justice in Indian-administered Kashmir uncovered hundreds of mass graves and thousands of unidentified graves? Will Her Majesty’s Government support Amnesty International in its call for an independent and impartial inquiry into these mass graves? Will Her Majesty’s Government encourage both India and Pakistan in a dialogue where Kashmiris can also take part to resolve this outstanding issue?
Lord Howell of Guildford
We take the view that the three investigators appointed to help resolve the situation and look into these details must proceed with their work. We will clearly follow this very carefully and closely but it is a matter for investigation by the three appointees. That is what is now occurring.
Lord Hylton
My Lords, will the Government with our Commonwealth friends encourage as a background to the Kashmir dispute the maximum possible détente between Pakistan and India, for example, over land crossings and exchanges of all kinds between the two countries?
Lord Howell of Guildford
That is of course something that we want to see but I repeat that it is really not for the UK to prescribe on the situation or to prescribe solutions. It is for India and Pakistan to find a lasting solution. Any support, help and encouragement from outside that the United Kingdom, or any other country, can give, we will certainly be ready to offer, but that lasting solution must come from the two countries concerned.
Lord Tomlinson
My Lords, the Minister has expressed his concern for breaches of human rights wherever they occur. Will he once again turn to the problems of the European Court of Human Rights, which has a backlog of more than 100,000 cases, and take the opportunity of the British presidency of the Committee of Ministers to do something about this appalling neglect of the symbol of human rights in Europe?
Lord Howell of Guildford
The noble Lord has boldly and bravely raised this question a number of times. It is one that I am ready to call to the attention of my colleagues and it has been noted. There is clearly a backlog problem; there may be other problems as well. Those are a matter for close concern.
Lord Naseby
Will my noble friend confirm that Her Majesty’s Government will resist the temptation to put pressure on the three who have been appointed to investigate and give them sufficient time, without external pressure, to come up with their findings?
Baroness Falkner of Margravine
My Lords, does my noble friend accept that the rule of law is completely within the ambit of the Commonwealth Ministerial Action Group, alongside democracy, and while Her Majesty’s Government may not have the leverage they seek through bilateral talks, they are able to address the issue through the forthcoming Commonwealth Heads of Government Meeting? Will my noble friend therefore seek to do so as he has great interest in the Commonwealth and leverage within it?
Lord Howell of Guildford
The precise agenda will be governed by CMAG collectively and by our Australian hosts at the Commonwealth Heads of Government Meeting, but all aspects of human rights abuse around the world are the concern of the Commonwealth, particularly those occurring in Commonwealth member countries. While I cannot guarantee that these matters will come to the fore, they are certainly something that we would like to see, along with all human rights issues, examined in an understanding way, recognising the sensitivities of particular situations such as this one, which is very sensitive indeed.
Baroness Tonge
My Lords, the noble Lord will, I am sure, remember that many decades ago the people of Kashmir on both sides of the line of control were promised a referendum on self-determination. Can he tell us what has happened to that and whether any progress has been made?
Lord Howell of Guildford
I do not think that there has been progress. This is again a matter for the Indian and Pakistani authorities. My understanding is that, at the moment, there is no progress on that front. If I am wrong about that I will write to my noble friend.
Employment: Market and Coastal Towns
Lord Knight of Weymouth
To ask Her Majesty’s Government what action they are taking to increase employment in market and coastal towns in England.
Lord De Mauley
The Government are committed to increasing employment in all areas of the country, and national policy initiatives to boost growth and jobs apply, of course, to market and coastal towns. The rural economy growth review and the seaside resorts action plan are examples of current initiatives in support of that commitment, which will benefit market and coastal communities.
Lord Knight of Weymouth
My Lords, I thank the noble Lord for that reply. Our market and coastal towns are the economic and service hub for many of us in rural England. Yet without the economies of scale and transport links of cities, our market towns too often become victims of market failure in employment, retail and housing. The protections in planning are now being weakened in the Localism Bill; and the regional development agencies, and with them the market and coastal towns initiative, are being abolished in the Public Bodies Bill. How will the local enterprise partnerships fill that gap when there is market failure in market towns, given that attracting inward investment is not in their remit? What about the many rural areas not covered by the LEPs?
Lord De Mauley
My Lords, the noble Lord asks a number of questions. At this stage, let me say that our national policy initiatives to boost growth and jobs, which, as I have said, apply to market and coastal towns, include local enterprise partnerships, the regional growth fund, budget support for SMEs and measures in the Localism Bill. The important thing is that they can be applied to reflect the local context. Training and skills are also vital, and greater flexibility has been given to colleges and other training providers to offer the training that reflects the needs of the local labour market.
Baroness Trumpington
My Lords, would the Minister agree that the south-east corner of Kent has been and is a deprived area? Dover is frankly a disgrace as the place of entry to this country. My name is “of Sandwich”, so my heart is very close to that place, which will suffer tremendously with the closure of Pfizer. What are the Government going to do to help that part of the world, which for a very long time has been a deprived area from the point of view of trade?
Lord De Mauley
My noble friend makes a very strong point. The Government are committed to helping to rebalance the economy by supporting programmes to promote long-term private sector-led jobs and growth, including in the area that she mentioned.
The Earl of Courtown
Would my noble friend agree with me that SMEs are the backbone of economies in market towns and coastal resorts? Would it not be advantageous if the Government could put further pressure on the banks so they release funding for further expansion in these businesses?
Lord De Mauley
My Lords, I certainly agree with my noble friend that funding is a key point, and the Government are doing what they can to nudge the banks in that direction.
Lord Beecham
My Lords, in the light of last week’s announcement that the Homes and Communities Agency will take over the majority of the regional development agency assets—those, at any rate, that have not been sold off in the current fire sale—will the Minister indicate whether there have been any discussions with that agency, and whether any guidance has been given on the need to ensure that some of those assets at least are deployed in the interests of coastal and market towns?
Lord De Mauley
My Lords, I agree with the noble Lord’s point about the need for affordable housing, for instance. The Government are well aware of the need for affordable housing in rural, and indeed coastal, communities, and are looking to address this by returning decision-making powers to local councils, giving them greater control over the allocation and tenure of social housing.
Baroness Sharp of Guildford
My Lords, my noble friend the Minister mentioned local enterprise partnerships and local colleges and the importance of the skills agenda. Is he aware that in many cases local colleges are being excluded from local enterprise partnerships?
Lord De Mauley
My Lords, I am not, and I will follow that up with my colleagues.
Baroness Farrington of Ribbleton
My Lords, would the Minister care to comment on the savage cuts in local authority spending for areas such as Blackpool in the north, where the reduction in public expenditure is far greater than the Government have made either in the south of England or in Civil Service and government spending?
Lord De Mauley
My Lords, I know that the noble Baroness takes this issue very seriously. The Government are especially aware of some of the northern coastal towns—she mentioned one. A question was asked earlier about local enterprise partnerships. They now cover all northern coastal towns. As locally owned and genuine business civic partnerships, they are taking the strategic lead for economic growth and creating the right conditions for private sector growth along the coast, supported by budget measures to help small and medium-sized enterprises.
Lord Brookman
My Lords, I feel a bit frustrated by this Question, which is about coastal towns in England. Many of us are from the regions of the United Kingdom. Job creation is essential not only in coastal towns in England, as listed in the Question, but all over the country. Does the Minister agree?
Lord De Mauley
Yes, my Lords, and perhaps the noble Lord would like to take this up with his noble friend who asked the initial Question.
Lord Roberts of Llandudno
My Lords, I am so glad that the noble Lord opposite has mentioned the United Kingdom. I am sure that the Question about England, although it may not embrace Wales, includes Wales. However, is it not true that the demise of many of our town centres, and of employment in the centres of market towns, is because of out-of-town shopping malls and large-scale shopping centres? What are the Government doing to regulate this move out of town, which is making the centres of our market and coastal towns most uninviting places?
Lord De Mauley
My Lords, my noble friend makes an important point. Town centres are key to sustainable growth and local prosperity and are at the heart of neighbourhoods, giving communities easier access to shops and services. However, we must be clear that town- centre planning policy is not pro or anti supermarkets, and planning cannot seek to restrict lawful competition between retailers.
Coroners’ Inquests
Baroness Miller of Chilthorne Domer
To ask Her Majesty’s Government how, under the arrangements which they have announced in lieu of a chief coroner post, they will ensure that inquests are not subject to unreasonable delays.
Baroness Northover
My Lords, the new arrangements announced on 14 June will allow the Government to take forward most of the provisions in Part 1 of the Coroners and Justice Act 2009, including those intended to reduce delays in the inquest process.
Baroness Miller of Chilthorne Domer
I thank my noble friend for her Answer. Does she agree that one of the worst things for bereaved, grieving families is to have to wait one, two or even three years for the inquest, and that that has an added cost to the NHS in all the stress and grief that those families naturally experience? Could my noble friend tell me why the Written Statement of 14 June to which she referred was silent on who would pick up the responsibility for overseeing what delays happen and why, and on what the criteria are for assessing what is an unreasonable delay?
Baroness Northover
The noble Baroness is absolutely right that this is a very difficult process for any family to go through, and anything that we can do to expedite inquests while holding them thoroughly is of key importance and should help the families. Section 16 of the Coroners and Justice Act 2009, which was introduced in response to the noble Baroness’s amendments, did place a duty on a senior coroner, when an investigation has not been completed within a year, to pass that information through and for there to be a register of that. As she knows, the plan is that the functions under that office will be transferred to the Lord Chancellor. This area will indeed be addressed. With the spotlight on military inquests and with the delays that used to occur, it is notable that things have improved enormously, so there is a lot to be said for getting things out into the open.
Baroness Thornton
My Lords, my noble friend Lord Bach and I have been campaigning together on this issue, and I won the toss to explain how disturbed we are on these Benches. The Royal British Legion, which has campaigned tirelessly about the inadequacies of the coroners’ service, has been in touch with me about this matter. It is bitterly disappointed with the proposals outlined by the Secretary of State on 14 June, where he says that he intends to persist with the abolition of the office of chief coroner. Given the overwhelming support for the chief coroner across this House, led by the noble Baroness, Lady Finlay, during the passage of the Public Bodies Bill, and indeed the overwhelming support from all parties for the reforms to the Coroners and Justice Act 2009, why are the Government persistently denying bereaved Armed Forces families a reformed, effective and well led coronial system that would provide them with the respect and support they need when they are at their most vulnerable and are grieving?
Baroness Northover
As I have just mentioned, military inquests have improved over the past couple of years or so, and that is very welcome. The noble Baroness refers to the position of chief coroner and to the actions of the noble Baroness, Lady Finlay, in defending it. It was clear that there was great concern about this in your Lordships’ House. Many of the provisions in the Statement of 14 June were negotiated with concerned parties, including the noble Baroness, Lady Finlay. They move most of the functions to the Lord Chancellor and the Lord Chief Justice but the position of coroner has not been abolished. It will be reintroduced in the Public Bodies Bill in the Commons so that it is there as a backstop. If the transfer of responsibilities to the Lord Chancellor and the Lord Chief Justice does not work, the provision can be reverted to. However, I make the point that in our current economic situation it was not possible—
Baroness Northover
If you look around Europe at the moment you can understand why it is important that the Government take our economic situation seriously. We have transferred all the key responsibilities here to the Lord Chancellor and the Lord Chief Justice. I am sure that noble Lords will all hold us to account if that does not work.
Baroness Finlay of Llandaff
Could the Government explain why the Statement, which I did not see before it went out and I did not know the contents of, did not contain a transparent costing to justify the abolition of the chief coroner? Why does the Statement contain the line,
“neither the judge nor any other individual will be responsible for the leadership, culture or behaviour of coroners”,—[Official Report, 14/6/11; col. WS 62.]
which makes it clear that the key recommendations of reviews by Dame Janet Smith, Luce and others that highlighted the reforms essential to the coroners system have effectively been abandoned?
Baroness Northover
I dispute what the noble Baroness says. The costings were done in 2009 and they stand. The problem about the proposals that came forward afterwards was that they talked about deferred costs, and we could not go down that route. I remind the noble Baroness, who would know this only too well, that the chief coroner was not going to be a panacea. The chief coroner could do what he or she could to persuade; they did not have statutory rights to interfere with coroners, who are independent judicial officers. They did not have that right any more than is currently the case. We all wish to improve the coroners’ system. There is a lot to be said for turning the spotlight on practices in different areas, as has happened with military inquests, and seeking to drive up standards that way.
Lord Brooke of Alverthorpe
My Lords, will the Minister explain why Governments get themselves into such a pickle? The idea that the amount spent on this is likely to disturb the economy of the country is ludicrous. The public can see that we spend millions on pointless referenda yet, on an issue that affects the whole country and for which there is widespread support right across the party front, the Government dig in unnecessarily. Can the Minister not take this back to her civil servants, make them see some sense and get what the public want in this area?
Baroness Northover
As my noble friend who is absent today often says, “To govern is to choose”. We all know the dire situation that the country is in but no one is suggesting that they short sell in Britain, unlike in Italy and Greece. That is worth bearing in mind when looking at this question. The Ministry of Justice, like all other areas in Whitehall, had to take its share of the cuts. It has had to make a 25 per cent cut in its budget. It was decided that, since most of these tasks could be transferred over and that was cost-neutral, that was what should be done. I point out again that, this having been addressed for military inquests, there have been the kind of improvements that noble Lords wish to see.
BSkyB
Baroness Symons of Vernham Dean
To ask Her Majesty’s Government whether they will suspend consideration of News Corporation’s bid for BSkyB until the conclusion of the police investigation into the involvement of News of the World journalists and those currently in positions of authority in News International in phone hacking.
Baroness Rawlings
My Lords, on 25 January the Culture Secretary said that he was minded to refer News Corporation’s proposed merger with BSkyB to the Competition Commission in the absence of any specific undertakings in lieu. News Corporation duly offered undertakings, on which the Culture Secretary has consulted. Yesterday, News Corporation withdrew these undertakings. The Secretary of State has therefore decided to refer the proposed merger to the Competition Commission. The commission can take up to eight months to report back.
Baroness Symons of Vernham Dean
My Lords, I thank the noble Baroness for that response, and should say that I have given her specific prior notice of my supplementary question, which is as follows. Every day we have fresh revelations of the appalling behaviour of News International, and today was no exception. The real question that the British public want to ask, and the question that I want to put specifically to the Minister, is: how and by whom will the test of whether News Corporation is a fit and proper company to own BSkyB be applied as part of the process of consideration of its bid?
Baroness Rawlings
My Lords, I am grateful to the noble Baroness for the prior notice of this question. She is absolutely right; it is important to realise that the fit and proper person test is not triggered simply by the proposed merger. Ofcom has an ongoing statutory duty to make certain that the holders of broadcasting licences are and remain fit and proper persons. This is a matter for Ofcom, which is taking its responsibility in this area very seriously and is already in touch with the relevant authorities. The Government have no role in its decisions. No doubt the Competition Commission will also want to consider whether Ofcom’s investigations raise any further points relevant to its assessment of the effect of the merger on plurality.
Lord Marks of Henley-on-Thames
My Lords, are the Government entirely satisfied that their hands are now tied to the issue of media plurality, despite News Corporation’s failure to disclose its own nefarious activities? If so, does Section 67 of the Enterprise Act need urgent amendment? Might a way forward be to encourage Ofcom—there is no reason why it should not be so encouraged—to consider the fair and proper person test for continuing to hold a broadcasting licence under the Broadcasting Act 1990 as soon as the current investigations are sufficiently complete for it to form a view, and to delay a final decision on the acquisition until then?
Baroness Rawlings
My Lords, my noble friend makes some important points. I am sure that the Government will look at several amendments. The Secretary of State has returned this matter to the Competition Commission, and the review can take between 24 and 32 weeks, depending on the complexity of the case. The Competition Commission, confusingly for some, does not deal with actual competition. The European Union decided on 21 December 2010 that there was no competition problem. The Competition Commission’s decision, as my noble friend Lord Marks rightly says, will be based purely on plurality.
Lord Lloyd of Berwick
I am still puzzled by the timing of yesterday’s Statement. Were the undertakings offered by News International ever accepted by the Office of Fair Trading? If not, what was there to stop the Secretary of State at any time since 25 January referring the matter to the commission? Why did he wait until after the undertakings had been withdrawn to do so?
Baroness Rawlings
Because there were so many letters to him, the Secretary of State extended the period of consultation until Friday 8 March. He will be looking at all the answers. He is still looking at the answers. There will be quite a long delay. He does not know how long, but he does not want to be pushed into any quick decision because this is a very serious matter which everyone is quite rightly upset about.
The Lord Bishop of Chester
My Lords, there seems to be a difficulty in this matter, because if the Competition Commission has to report within this relatively short time span, the prospect of the police investigation being finished in that time is zero, especially if we are to reach the conclusion of whatever prosecutions take place. Indeed, the judicial inquiry cannot do its work until after that process is completed, so it would be difficult for the inquiry by the Competition Commission to reach a balanced and wise conclusion because so much of the matter has to run on beyond that time. How will Ofcom take a view until the judicial matters are completed?
Baroness Rawlings
My Lords, the right reverend Prelate makes an extremely good point. At the moment there are six inquiries, including a police investigation and several others on which it is not possible to comment, that of the Home Affairs Select Committee and the two inquiries that the Prime Minister has announced. All those will have to be gone through. There is a timescale. As I said, the Competition Commission review will take between 24 and 32 weeks. Ofcom will then take a decision and make a recommendation to the Secretary of State, who will make the final decision.
Baroness Anelay of St Johns
My Lords, I regret that we have reached 30 minutes.
Arrangement of Business
Baroness Anelay of St Johns
My Lords, our first business today is the Second Reading of a fast-track Bill, the Police (Detention and Bail) Bill. I understand that none of those down to speak at Second Reading propose to table amendments to the Bill. With the agreement of each of those speaking and with the agreement of the usual channels, I therefore propose that the remaining stages of the Bill be taken formally immediately after Second Reading, unless any noble Lord objects now or during the Second Reading debate. We will therefore proceed with the Second Reading and the remaining stages of the Police (Detention and Bail) Bill, followed by a further day in Committee of the whole House on the Localism Bill. As we have seen from the Annunciators, at a convenient point after 5.30 pm, my noble friend Lord Howe will repeat as a Statement an Urgent Question from the other place on the future of Southern Cross care homes. That will be followed immediately by my noble friend Lord Marland repeating a Statement on electricity market reform. We will end the day, I hope, with the notification of Royal Assent on the Police (Detention and Bail) Bill.
Lord Campbell-Savours
Might I ask the noble Baroness whether the usual channels have agreed to a debate on BSkyB? Could we have a Statement on that?
Baroness Anelay of St Johns
My Lords, since I have made a business statement, the noble Lord, Lord Campbell-Savours, is of course in order to ask a question on a different matter. I assure him that productive discussions are going ahead within the usual channels on just that matter.
Police (Detention and Bail) Bill
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Office (Baroness Browning)
My Lords, I am sure noble Lords are aware of the circumstances in which this Bill comes to us from the other place. However, I will summarise the position in an effort to assist the House in its unavoidably brief examination of the Bill.
Since the Police and Criminal Evidence Act 1984, known almost universally as PACE, came into force in January 1986, it has placed an upper limit of 96 hours on the period of pre-charge detention for a person arrested on suspicion of having committed a non-terrorist offence, provided that detention past 36 hours is authorised by a magistrates’ court. That period of detention could be interrupted by one or more periods of bail, and detention time would run up to the time limit only when the person was in police detention; the clock would be paused during any period or periods of bail.
That understanding of the limits on detention was shattered last month when the High Court, sitting in Manchester, issued its written judgment in the Hookway case. The court held that, as a matter of statutory construction, the maximum period of 96 hours runs from the time that a person’s detention is first authorised and is not paused by a person’s release on bail. Once the police service had the opportunity to consider that judgment, alongside advice from some of the most eminent members of the Bar, it advised my right honourable friend the Home Secretary that the judgment posed major operational difficulties for it and that the judgment needed to be reversed at the first available opportunity.
Let me make it clear to the House that we had to wait until we had the written judgment, so that we could understand its scope, and had also tested with ACPO whether it could continue to protect the public, including victims and witnesses, within the detention and bail framework as redefined by the ruling. ACPO’s very clear advice on 30 June was that any mitigating action it might take could endure only in the short term. That is why my right honourable friend the Minister for Policing and Criminal Justice made an Oral Statement in the other place that very same day, setting out the issue and promising urgent legislation to give certainty to all those involved in the process of pre-charge detention and bail.
That urgent legislation is of course the Bill before us today.
Lord Clinton-Davis
My Lords, have there been any discussions with the Bar Council and the Law Society concerning this matter?
Baroness Browning
My Lords, there have certainly been exchanges of correspondence with the Law Society. I am not sure whether that included the Bar Council, but the Law Society is certainly aware and has exchanged correspondence.
The Bill has only two clauses and a single effect: to return the law to where it was commonly understood to have been for the previous 25 years. I cannot emphasise strongly enough that all we are doing here is restoring the status quo ante. The Government are quite clear that the Bill in no way widens police powers. So that there is no doubt, it may assist the House if I say a little more about Clause 1, which contains the substantive provisions.
Subsection (1) of Clause 1 has the effect of making clear that all time limits and time periods in Part 4 of PACE are to be read as including time actually spent in detention and excluding time spent on bail. Those limits and periods include initial time limits under Section 41 of PACE, superintendents’ extensions under Section 42 and warrants of further detention under Sections 43 and 44.
Subsection (2) of Clause 1 amends Section 34(7) of PACE. That section provides that when a person returns to detention from bail, whether that return is previously arranged or is as a result of being arrested for breaching bail, the person is to be treated as having been arrested for the original offence and the remaining detention period will have deducted from it the time previously spent in detention. The amendment in subsection (2) makes clear that those calculations also exclude the time spent on bail.
Subsection (3) of Clause 1, as part of the Government’s wish to return the law to its previous position, gives the Bill retrospective effect. I realise that that may be a matter of concern to some of your Lordships as a matter of principle—I will come on to that. As your Lordships will have seen from the Explanatory Notes that accompany the Bill, the Government have considered very carefully the issue of retrospective effect. We have come to the firm conclusion that, if the Bill is to fulfil its objective of returning the law to the position that was commonly understood before the judgment of the High Court in Hookway, it must be expressed as always having had effect. That is because, as the many lawyers in your Lordships’ House will be aware, the Hookway judgment also had retrospective effect. If the Bill were not to apply to the past as well as the future, there would be very real questions as to the legality of many past detentions, both before and since the Hookway judgment.
Lord Thomas of Gresford
My Lords, I wonder whether the noble Minister would help me. She says that we would be going back to detentions in the past, but she referred earlier to restoring the status quo. Well, the status quo of Mr Justice McCombe is right: it was an illegal situation, where people were detained illegally.
Baroness Browning
I can understand why my noble friend makes that point, but the purpose of this Bill is to restore the legislation that comes out of PACE to the understanding that has been exercised for the last 25 years as to the conditions that apply to detention and bail. My point about the need for the Bill to be retrospective is that we are seeking not to add new elements to the Bill but to restore what we believe was Parliament’s intention in passing it, and what certainly has been the understanding for the past 25 years of those who have been engaged in the legal processes from all sides, both lawyers and the police. I would therefore say to my noble friend that, if we were not to make this retrospective, there could be many thousands of claims for unlawful detention, and a similarly large number of claims that evidence gathered after 96 hours had elapsed was no longer admissible. That would be a thoroughly unsatisfactory state of affairs, which could tie up the courts and the police service for thousands of hours.
I would also point to the conclusions of Liberty on this issue, in paragraph 8 of a widely circulated briefing that it prepared on the Bill. Liberty commented:
“We do not believe that the proposals are retrospective in their nature as they do not seek retrospectively to create a criminal offence, sanction or other burden. They would not in our view … fall foul of Article 7 of the European Convention on Human Rights or the common law rule against retrospective penalties”.
I am also aware that the Constitution Committee of your Lordships’ House has commented that it is,
“concerned that asking Parliament to legislate in these highly unusual circumstances raises difficult issues of constitutional principle as regards both the separation of powers and the rule of law”.
While the Government are always attentive to the observations of the Committee, as I indicated in a letter to the Committee yesterday we do not see that the decision to legislate in advance of the outcome of the appeal to the Supreme Court raises any constitutional issues. The sovereignty of Parliament means that it is entirely open to Parliament to legislate at any time in response to a judgment of the superior courts.
I am also aware that, since the Hookway judgment, there has been some commentary from within the legal community—particularly from those acting on behalf of those suspected of an offence—which has sought to express concerns that the Hookway judgment is some sort of warning to the police that the courts will not put up with the way that they use pre-charge bail. We will take account of the wider issues of the way the police use bail, but in this particular case, nothing in the terms of the written judgment indicates that Mr Justice McCombe had any underlying concerns in relation to the operation of police bail; he seems to have reached his judgment purely on the basis of his interpretation of the statute.
Following a lot of discussion and some correspondence —indeed, I have had discussions with noble Lords in the House—I am aware of the concerns that have been expressed, including by Liberty, Justice, the Law Society and others, about excessive duration of police bail in some cases and about unduly onerous conditions attached to the bail. As my right honourable friend the Minister for Policing and Justice indicated in the other place, we are not able in this Bill to deal with any wider issues about the Police and Criminal Evidence Act. Moreover, it would be wrong to make changes to police bail in haste and without proper examination of the issues and consultation with the police, the Crown Prosecution Service, the legal profession and others. However, we will reflect carefully on the debates on the Bill, both in this House and in the other place. In relation to these concerns, it is our intention in autumn this year to consult on matters relating to bail more generally and to the conditions that apply to them.
I also point out, for those who may be concerned about this point, that anyone who is on pre-charge bail can challenge the conditions of their bail in their local magistrates' court. That is an important safeguard against any perceived abuse by the police of their powers to bail those under investigation.
I hope the House will be reassured that we are most certainly listening to people and intend to consult on those wider issues that have come to the forefront as a result of the legislation before us, but the urgent nature of this fast-track legislation means that there will be limited time today for debate on those wider issues. We will of course consider any observations that noble Lords make in that area in the course of our deliberations today and will come back to those at another time. The issue before us today is to correct the situation and restore to the police the powers required to protect the public properly. The Government believe that the Bill does that and no more. The other place agreed unanimously to the Bill when it considered it last Thursday. I beg to move.
Lord Hunt of Kings Heath
My Lords, we on this side of the House support the legislation, which is needed to overturn the High Court ruling in the circumstances described by the noble Baroness. It is clear that the judgment causes serious problems for policing operations, for ongoing investigations, potentially for the delivery of justice and, most seriously of all, for the protection of victims and witnesses.
As the noble Baroness so lucidly explained, it had previously been assumed that releasing a suspect on bail effectively paused the detention clock. It was thought that the clock could then be restarted when the suspect answered police bail and was redetained, even if that point was later than 96 hours after the relevant time. The recent High Court ruling is that that is not the case under the precise wording of the Police and Criminal Evidence Act 1984. Instead, the maximum 96-hour period specified in that Act runs immediately from the relevant time and cannot, as has been common police practice, be suspended by releasing a suspect on bail and be restarted later beyond the 96 hours by redetaining the suspect. The detention clock continues to run even while the suspect is on bail.
Understandably, Parliament has always been concerned to ensure that emergency legislation should be brought only on the basis of very serious considerations, and is never to be done lightly but with a clear understanding of the risks involved. However, Parliament needs to balance that with the risk to the public and to justice if we do not legislate immediately. The situation apparently means that the police are unable to recall people from police bail if they have been bailed for more than four days unless the police have new evidence that allows them to rearrest. The situation also raises serious issues about the application of bail conditions, particularly in domestic violence cases, as those conditions can include important protection for the victim. Such conditions could include someone being prohibited from going to his ex-wife's workplace, the family home or the children's school. Some bail conditions are an extremely important part of protecting the safety of victims and witnesses; and if they cannot be enforced, protection is clearly at risk.
We therefore support rapid action but, unfortunately, rapid action has not entirely characterised the response of the Home Secretary. I noticed that, in her introductory remarks, the noble Baroness emphasised the written judgment. She will know that the oral judgment was given on 19 May and her officials were informed soon after that—certainly before the end of May. The Home Secretary has said that she had to wait for the written judgment, but that has not meant that the Home Office had to suspend any action and judgment of what advice should be given to Ministers until the written judgment was received.
It is now seven weeks from the original judgment, three weeks since the written judgment was put in place, and two weeks, apparently, since Ministers were informed. The gap alone between Home Office officials being informed of the written judgment, the written judgment being published and Ministers being told has put Ministers in a difficult position. Our first concern is about the initial delay before the Home Office received the written judgment. More work should have been done between the oral judgment and the written judgment, and once the written judgment arrived, advice should have been given very quickly to the Home Secretary and the Minister for Policing and Criminal Justice about the risks in this case.
Lord Clinton-Davis
It is common practice for solicitors to note the judgment beforehand, so it is not necessary to await the written judgment as it unfolds.
Lord Hunt of Kings Heath
My Lords, that is a very telling intervention from my noble friend. Surely that is the case. All I would say to the Minister is that I hope lessons will be learned from this matter.
Changing the law retrospectively is in general undesirable and creates great uncertainty. It threatens natural justice if people end up breaking up a law they did not know existed. In this case, my understanding is that the Government are seeking simply to restore the law to what we in Parliament thought it was, to what it had been intended by Parliament at the time to be and to what the police, the CPS and others have followed in good faith for many years.
I noted the intervention of the noble Lord, Lord Thomas of Gresford. Like the Minister, I also noted the comments of Liberty, which are worth emphasising. Liberty does not believe that the Government are seeking retrospectively to create a criminal offence, sanction or other burden, so it would not fall foul of Article 7 of the European Convention on Human Rights.
Lord Thomas of Gresford
Is the noble Lord saying that he can envisage what Parliament meant many years ago, when a High Court judge has determined through the language used what was meant? If anybody disagrees with his interpretation, surely the appeal for which leave has been given should be pursued.
Lord Hunt of Kings Heath
My Lords, of course we shall have to see the outcome of the appeal. I do not know whether the noble Lord has read Michael Zander’s piece on this, which refers back to the debates in Parliament 25 years ago. From my reading of the amendment moved by Clare Short for the Labour Opposition at the time and of the response given by the then Home Secretary—the noble Lord, Lord Hurd—it is apparent that Parliament’s view was pretty clear. In that case, I must endorse the interpretation given by the Minister.
The case for rapid action is clear and that is why we are not proposing amendments today. Equally, the case has raised some important points, both of principle and of detail, which I would be grateful if the noble Baroness would respond to. Some of the commentary since this case came to light has expressed concerns about the possibility of the use of endless police bail. There appear to be cases where people have been left on police bail, including with conditions, long after another suspect has confessed to the offence, or where investigations have run dry but action was not taken to end the bail arrangements. I welcome the Minister’s offer of an opportunity for a wider debate about the appropriateness and proportionality of different lengths of police bail and what safeguards are required.
There are also issues around the fact that the original 1984 legislation has been amended many times. It would be helpful if the Minister could say in the review whether she intends to look at the legislative context in which police bail is enacted, and whether she thinks that it might warrant a review of legislation as well as practice in the fullness of time.
It is also noticeable that in some of the comments that have been made, including those from Liberty, a proposal has been made that Parliament should consider a statutory time limit to restrict the total duration of police bail to no more than six months. I would be grateful if the noble Baroness would say whether that is also a matter that will be considered in the welcome review that she has announced this afternoon.
We have also benefited from the advice of your Lordships’ Select Committee on the Constitution, which drew to the attention of the House one feature of the Bill which the Select Committee felt touches on an issue of constitutional principle. Essentially, the High Court judgment that the Bill seeks to reverse is itself under appeal to the Supreme Court. The noble Lord, Lord Thomas of Gresford, referred to that point. The Select Committee says:
“We are concerned that asking Parliament to legislate in these highly unusual circumstances raises difficult issues of constitutional principle as regards both the separation of powers and the rule of law. We have noted the constitutionally important distinction between legislative and adjudicative functions before. We are concerned that, in the understandable rush to rectify a problem which the police have identified as being serious and urgent, insufficient time has been allowed for Parliament fully to consider the constitutional implications of what it is being asked to do”.
I know that the noble Baroness has responded very rapidly—and it is very welcome that she has done so—by saying that the Government see no constitutional impropriety in the present decision to legislate in advance of the outcome of the appeal to the Supreme Court. She went on to say that it is common ground that the sovereignty of Parliament means that it is competent to legislate at any time, in response to a judgment of a court. I do not disagree with her assessment of that matter, but it seems to me that the Select Committee has raised a number of very important points, which would warrant also being considered within the review that the noble Baroness has promised to undertake.
In supporting this Bill and the actions that she has announced today, I would ask that there be an element of public involvement and input into the review that she has announced. I would also suggest to her, through the usual channels, that it would be opportune if, perhaps in the autumn, we could have an opportunity to debate these matters in this House, possibly as part of an input into the review that she has promised.
Baroness Hamwee
My Lords, I do not want to detain the House by repeating in detail what has already been said. There was a slightly longer speakers list earlier, and it made me wonder how many Silks it took to give a Bill a Second Reading. It also made me note that perhaps as instructing solicitor I should be saying to some of my noble friends that I was briefing them to be as succinct as I know they can be, but in making that suggestion I do not want to pick on my noble friend who is left on the speakers list. It has been agreed that we will dispense with further steps and take them formally, so there will be no refreshers.
I thank the Minister also for her introduction, and I particularly welcome the prospect of consultation. I entirely agree with her that it would not be appropriate to proceed on a wider basis at this stage without a written judgment as distinct from notes taken by people other than the judge, so I welcome this way of going about matters.
I do not think that bail conditions and maximum periods are appropriate in emergency legislation. There are real issues here, but they are difficult and warrant a more measured approach. My initial instinct was that there might be a sunset clause, but again I do not think it would be appropriate for what, in non-technical language, is not a new issue. I hope that the timing of the consultation and wider debate, as the noble Lord has just suggested, will be such that if legislation is necessary—we cannot prejudge that without having the consultation—it might be able to piggyback on other Bills now before your Lordships. We know of the problems in bringing forward fresh legislation.
I am grateful to the Minister and her officials for the time spent briefing noble Lords before today’s debate. I understand that if it is not possible to reach the point of making a charge or deciding not to charge within 96 consecutive hours, the police are trying to look at what is new evidence. I am not making any allegations, but it is clear to me that this could well be open to abuse, so again on that basis I welcome the Bill. My noble friend has picked up the use of “status quo” and I have made a note to say that it is not the status quo; it is what everybody thought was the status quo. My A-level Latin many years ago is not adequate to put the whole lot in Latin, but I do not think the use of “status quo” is quite right. Similarly, on terminology, this Bill is not so much akin to retrospection as akin to rectification, and I support it.
Lord Pannick
My Lords, when the three political parties, Justice, Liberty and, of course, the House of Commons all agree that this Bill deserves support, I am not going to express a dissenting opinion. But I am going to express concerns about the constitutional issues raised by the way in which the Government have proceeded. Parliament is being asked to enact emergency legislation to overturn a decision of the High Court. High Court judges, no doubt regrettably, occasionally make decisions that are perceived to be of enormous detriment to the public interest. But in all previous cases where this happened, an appeal was brought in the hope and expectation that the Appellate Committee of your Lordships’ House, now the Supreme Court, would overturn the High Court judgment, and only if that legal remedy failed was emergency legislation brought forward.
There are good reasons why emergency legislation is contemplated only if the appeal process has been exhausted. First, if the appeal succeeds, the problem disappears and Parliament does not need to become involved. Secondly, if the appeal fails, the judgment of the Supreme Court provides a much more informed basis on which Ministers and Parliament can address all aspects of the issue. Thirdly, and not least, surely constitutional propriety requires that the law should be interpreted by judges, not by Parliament. I understand that to be the point of the interventions made by the noble Lord, Lord Thomas of Gresford. It is all very well to have Members of the House confidently asserting, as they did last week, that Mr Justice McCombe’s judgment was wrong and that the Bill merely returns the legal position to what it was. It is all very well to have the noble Baroness stating today that the Bill returns the law, as she put it, to the status quo ante, but I subscribe to the apparently old fashioned view that it is for the Supreme Court to determine what was the legal status quo. Indeed, this case is even more surprising, because we are engaged in this exercise notwithstanding the fact that there is an appeal; it is pending in the Supreme Court, listed to be heard on 25 July. I shall come back to the timetable in just a moment.
The Minister said this afternoon that the decision to legislate in advance of the outcome of that appeal raises no constitutional issue, because Parliament, of course, is sovereign and competent to legislate at any time. She made the same point in her very speedy response to the report of the Constitution Committee, of which I am a member. I am sure that all members of that committee will be extremely grateful to the Minister for the urgency and speed with which she addressed the issues that we raised; but is it really the Government’s position that no constitutional issue about the respective roles of the judiciary and Parliament is raised when emergency legislation is introduced to overturn a decision of a lower court which is pending appeal to the Supreme Court and when the emergency legislation is being brought forward on the basis that it simply restores the previous position, which has therefore, it is implicitly suggested, been misunderstood by the High Court judge?
Of course, I understand that we cannot now wait for 25 July, because the Supreme Court may, on 25 July or very soon thereafter, dismiss the appeal and by then Parliament will be in recess, but that does not remove my concern about what has happened in this case. The vice is that nobody asked the Supreme Court to hear and determine the appeal more speedily. Appeal courts regularly hear and determine appeals very speedily indeed when it is necessary to do so. The timetable in this case is as follows: Mr Justice McCombe gave his oral judgment as long ago as 19 May. He refused permission to appeal on 25 May and on the same day he certified a point of law which enabled an application to be made to the Supreme Court for leave to appeal. That is seven weeks ago. It was not until 21 June that an application was made to the Supreme Court by the Greater Manchester Police for permission to appeal. For reasons which I still do not understand, the Government appear to have been unaware of the crucial significance of this case until about 30 June, even though Professor Michael Zander published an article pointing out the concerns on 18 June—he must have been aware of the problem some days before that.
The Supreme Court granted permission to appeal and expedited the case so that it will be heard on 25 July, but I have made inquiries of the Supreme Court and been told that neither the Greater Manchester Police nor anyone else asked the Supreme Court to hear the appeal earlier than 25 July because of the urgency and the need for Parliament to consider emergency legislation if the appeal was not to be heard earlier than 25 July. I am also told by the Supreme Court that, if it had been asked, it would of course have considered trying to hear the case more speedily because of the need to do so. That is what should have happened in this case. As soon as the importance of the issues was understood and the possible need for emergency legislation was recognised, an application should have been made to the Supreme Court for it to hear the case last week or at the beginning of this week on the grounds that, if the appeal failed, then and only then would the Government need, or possibly need, to bring before Parliament emergency legislation. There would then have been time to consider the matter before the Summer Recess and after the appeal if it were unsuccessful.
As noble Lords will know, the Attorney-General may intervene in any court proceedings to protect the public interest. The Secretary of State does not appear to have asked the Attorney-General to apply to the Supreme Court to hear the case more urgently. If such a request was made, it certainly was not acted upon. I should emphasise that, although the Supreme Court has very helpfully given me the information that I have recounted to noble Lords—I am very grateful to Jenny Rowe, the chief executive, for that—the views that I express on these matters are mine alone.
My concern is that this Bill is a most unfortunate constitutional anomaly. Parliament should not normally be asked to consider emergency legislation to overturn a High Court judgment when there is a pending appeal on the very issue which is before the highest court in the land. That should not happen unless every effort has been made to persuade the Supreme Court to hear an even more urgent appeal.
There is simply no precedent that I am aware of, and understandably so, for what we are doing today—reversing a judgment of the High Court with retrospective effect on the basis that we are satisfied that we are restoring a status quo, even though a Supreme Court hearing is pending and no application has been made for it to hear the matter more speedily.
I have four questions for the Minister. First, is she aware of any previous occasion when emergency legislation has been brought forward to repeal the effect of a High Court decision without first appealing to the Appellate Committee, now the Supreme Court, and asking that court to hear the matter with considerable expedition? Secondly, can she explain why, before coming to Parliament, the Secretary of State apparently did not ask the Attorney-General to apply to the Supreme Court to hear this appeal with considerable expedition so that it could it take place early in July and so that, if it were dismissed, we would still have time if necessary to consider emergency legislation? Thirdly, what steps has the Secretary of State now taken to ensure that all police authorities—indeed, all other public authorities—know that if the High Court gives a judgment on a matter of public interest which causes general concern it is vital that it is communicated to central government without delay so that steps can urgently be taken, if appropriate, to ensure that an appeal is heard with great expedition? I ask that question—I do not attribute blame—because there appears to have been considerable delays in this case in communicating concerns from Greater Manchester through to Whitehall.
My fourth and final question is this: what is going to happen if the Supreme Court hears this appeal on 25 July and if the appeal succeeds? Will the Government then bring forward in the autumn a short Bill—even shorter than this one—to repeal this emergency legislation as entirely unnecessary and to remove from the statute book a most unfortunate constitutional anomaly?
Lord Thomas of Gresford
My Lords, it is a great pleasure to follow the noble Lord, Lord Pannick, and I agree with everything he said. It may be that the answer to his final question is that Royal Assent should not be given to this Bill until we have the judgment of the Supreme Court, and then there could be no necessity for it to be repealed.
When the noble Lord was speaking I was reminded of the story of the acorn falling on the head of Chicken Licken, who informed Henny Penny, Goosey Lucy, Turkey Lurkey and others that the sky was falling in. Finally, they all told Foxy Loxy, who listened to their panic-stricken warnings and then ate the lot of them. Much emergency legislation is introduced like the fabled acorn. The Hookway case merely declared that the relevant legislation did not allow the police to save up unexpired periods of authorised detention and to use them to detain and question suspects pre-charge at any date in the future—and this is the important point—even though no fresh evidence had been obtained.
If this is what Parliament meant in passing the legislation, as Mr Justice McCombe has held in his complex judgment, which required to be in writing before it could be properly addressed, then it seems to me as a matter of policy a highly desirable result. If the police and the CPS advising the police do not consider that there is sufficient evidence to charge a person today, why should they be allowed to detain and question the suspect in six months’ time, he having been on police bail, on exactly the same evidence? It is lazy policing. Of course, if there is fresh evidence as a result of a more vigorous or deeper investigation—a matter of some topical relevance today—that is a different matter. In such a case, if there is fresh evidence, a power of arrest would arise and a person could be detained and questioned in relation to the whole case, including the fresh evidence.
The problem that arises in this case is that a suspect can be detained again at a later date—six months, or even more, later—and questioned when no further investigation has taken place. He is simply being questioned on what was in the past. If Mr Justice McCombe’s interpretation of the statutory provisions of what Parliament meant—which is what his judgment is and not what the noble Lord, Lord Hunt, thinks from reading an article in a magazine—is correct, then Manchester Police should continue with its appeal, for which, as your Lordships have learnt, it has obtained leave through a certificate that it is a matter of public importance.
The noble Lord, Lord Hunt, did not continue entirely with the Constitution Committee’s point, which the noble Lord, Lord Pannick, has also made, that Parliament would then have the benefit of a considered judgment from the Supreme Court to assist its deliberations if the appeal were allowed to go ahead. We would then know what the Supreme Court thinks about Mr Justice McCombe’s interpretation.
This simple Bill ensures that lazy and possibly oppressive policing can continue but it raises a much more important question: has the practice of indefinitely extending police bail become a genuine abuse? There is no statutory limit when a person is given bail pre-charge and invited to come back at a later date. In Committee on the Criminal Justice Bill of 2003, my noble friend Lord Dholakia moved an amendment to insert a provision that police bail should not extend more than 28 days, as had been recommended at that time by the Home Affairs Select Committee. He said that his amendment would limit the pre-charge period and that:
“The CPS will of course progress the case as fast as possible. However, we have concerns about the unlimited bail periods. Set deadlines go some way to ensure that matters are reviewed and less likely to drag on unnecessarily”.
The then Attorney-General, the noble and learned Lord, Lord Goldsmith, responded that pilots that had been carried out suggested,
“that in most cases a five-week period should be sufficient to enable charges to be brought”.—[Official Report, 14/7/03; col. 683-84.]
He thought extending police bail for about five weeks was appropriate. Consequently, on 29 October 2003, I moved an amendment on Report for a limit of 35 days —five times seven, taking the Attorney-General at his word. He said in response that he did not wish to have a statutory limit but that it would be better for guidance and instructions to be issued by the Director of Public Prosecutions and the Association of Chief Police Officers. Were such guidelines ever issued?
I am indebted to Mr Roger Windsor who has pursued this topic with freedom of information inquiries which reveal that in 2008, in three police areas alone out of 43—West Mercia, Sussex and Surrey—358 individuals spent more than nine months on police bail to which conditions were attached. I have supplied his findings to the Minister. I am also indebted to Mr Csoka QC of Lincoln Chambers in Manchester and Mr Joseph Kotrie-Monson for their views, which I have similarly passed on.
Not only are there no time limits in relation to how long the police can keep a suspect on police bail when no new evidence has emerged but there is no mechanism whereby the degree to which the police are acting with due expedition—or, worse, with bad faith—can be independently scrutinised. One wonders whether the cuts in funding for the police and CPS could be translated into restrictions on the liberty of those who have not been charged with any offence. The conditions that can be imposed on those bailed can include reporting, curfews, travel and residency restrictions. It is my own personal experience and that of others that conditional bail can last for months or even years with no sign of any activity by the police or the CPS. In other words, people can be given bail at the police station and are welcome to walk out of there subject to the restrictions but those can continue indefinitely without any possibility of seeing whether the police are carrying out their functions expeditiously.
When the Police and Criminal Evidence Act was enacted the police could bail only without conditions—there was merely a requirement to surrender on a future date. In 1995, after 10 years of PACE, the police were given the power to impose conditions. The use of those powers has now reached epidemic proportions. It is the experience of defence lawyers that conditional bail is used punitively against suspects who the police believe are criminals but against whom there is no or no sufficient evidence. The police can extrajudicially, by the grant of bail subject to conditions, curtail their liberty for an indefinite period. Additionally, those arrested for public order offences at political demonstrations are often bailed for inordinate periods with a condition; for example, not to enter Westminster or not to attend further demonstrations. Often no charges are ever brought. They have been subjected to a form of control order which is effectively outside the rule of law. This happened in 2009 with protesters planning a protest at the E.ON power station in Nottingham and the arrest, detention and bailing of protesters during the occupation of Fortnum & Mason on 26 March this year.
The simple solution is to bring in a legal framework which imposes time limits on pre-charge bail and gives a right to appeal. Defendants who are remanded in custody have the protection of custody time limits. Extensions of custody time limits—normally six months —can be granted only if there is a good and sufficient cause and the prosecution has acted with due expedition. It is a frequent case in court that the prosecution goes along and explains how its inquiries are going and why there has been a delay. There ought to be similar protection for those on police bail. Extensions of time could be granted by a district judge but only if the police show good and sufficient cause—that there are reasonable lines of inquiry which could not, with due expedition, have been completed within the initial time limits.
Such a system would protect not only the rights of a suspect but also the victim: a rape victim, for example, has the anxiety of waiting months to see whether a charge is to be brought. Time limits will prevent inefficiency, poor staffing or indecision from creating a culture of delay.
Unhappily, the acorn at the moment is too small and this Bill is too light to carry the burden of extensive amendments to deal with these problems. I am grateful to Mr Justice McCombe for leading Parliament to investigate this area and I am extremely grateful to the Minister for indicating that an urgent review will be carried out in the autumn into what is potentially a very considerable abuse of the system, which certainly Parliament never meant when it passed the legislation in 1985 or when it was considered at any later date.
Lord Hunt of Kings Heath
My Lords, that was not the point I was making. The noble Lord asked me where I referred to the supposition in relation to putting it back to where Parliament thought it would be. I quoted from an article, which in turn quoted quite clearly from Hansard of the debates at the time. But that was not the point I was arguing.
Lord Thomas of Gresford
I am grateful to the noble Lord for his explanation. I have made all the points that I wished to make. I look forward to the review. I look forward to participating in a parliamentary debate on that review and we can see whether this abuse, which I believe does exist, can be cured.
Lord Condon
My Lords, I declare my usual registered interest as a former commissioner of police. I support this Bill for all the reasons that have been set out so comprehensively by the Minister. Since 1986 it has been widely recognised by the police, prosecutors, defence lawyers and the courts that time spent on bail does not count towards the maximum period of detention without charge.
The judgment on 19 May in the case of Greater Manchester Police and Paul Hookway has caused serious problems for police operations. More importantly, it has caused very serious problems for the protection of witnesses and victims because of the doubt cast over bail restrictions, particularly in cases of domestic violence, stabbing, and intimidation on estates and in inner cities. Real concerns are being played out hourly, every day since this decision was made.
The police service is trying to manage the investigation of more than 80,000 people who are currently on police bail. I spoke yesterday eveningto Assistant Commissioner Lynne Owens of the Metropolitan Police, who has been tasked with managing the challenge of the impact of the court decision until Parliament decides to deal with emergency legislation—or otherwise. I wanted to be convinced that this was not just an inconvenience for the police service or the creation of further difficulty. After my discussion with Assistant Commissioner Owens, I was convinced.
It is 44 years since I joined the police service. I can think of no other court decision of this nature that has placed in jeopardy the accepted police procedure for dealing with prisoners, and no case that has had the impact of the scale or magnitude of this case. In London alone, 14,000 people are on bail, including 170 people suspected of murder and other grave offences. Given the position that the service is in at the moment, all those cases are incredibly difficult to manage, and I fear that police officers in custody suites up and down the country are being forced to take decisions whereby they do things that either stretch the credulity of the law or detain suspects longer than really necessary, putting witnesses and victims in jeopardy.
I accept all the concerns that have been quite properly raised by all the noble Lords who have spoken today, including concerns about the constitutional impact of this sort of legislation; concerns from the noble Lord, Lord Thomas of Gresford, about the whole operation of bail and police use of it; concerns about the absence of a sunset clause; and concerns about the chronology of actions by the Government and the Home Office in response to this decision. However, we are where we are. The police service needs the certainty and immediacy of the restoration of the law to the accepted position prior to the court decision on 19 May. I believe that the Bill before your Lordships' House will do that and no more; it does not extend police powers in any way, nor does the police service seek any extension of powers.
I accept that there are many other issues relating to bail that need to be discussed and thought through in a measured way, but today is clearly not the day for that measured debate. I am pleased that the Minister has reassured your Lordships' House that that debate will take place, but for today I hope your Lordships will accept that the police service has been left in a parlous state because of this decision. I hope that your Lordships will accept the necessity for the legislation and will support it today.
The Lord Bishop of Chester
I shall add a footnote primarily to the speech made by the noble Lord, Lord Thomas of Gresford, just to give an example of the problems that arise simply as a consequence of police bail without conditions. I know of a clergyman who was arrested and then bailed and told that the police would probably not get back to him for a year. In this particular case, the clergyman was retired. Because of the particular nature of the potential allegation, he clearly could not exercise a ministry in retirement. He was told that it would be most likely a year before the police came back to him at all. That could well have been a serving minister. In many situations, I would have no alternative but to suspend a person in those circumstances for what could be a very long period, so even in the case of police bail without conditions, there are potentially very serious consequences, and in our media-sensitive age these consequences tend to be magnified.
I hope the Minister will say a little more about the review that she has promised, and assure us that it will be published and accompanied by a full set of facts and figures showing how the use of police bail has changed in recent years so that we can see the trends in this area. That said, I of course understand the need for the legislation, notwithstanding the constitutional issues so clearly stated by the noble Lord, Lord Pannick. However, the wider issues surrounding police bail now need urgent attention.
Lord Clinton-Davis
My Lords, I apologise to the House for intervening at this stage, but I went to the Government Whips Office yesterday, and I thought that I had put my name down. It has disputed that, but the Government are very wisely allowing me to speak.
The noble Lord, Lord Pannick, has eloquently raised some pertinent issues underlying the matters that we have to consider today, and I hope the Minister will be able to reply to those points. The noble Lord argued effectively that the Supreme Court should have had an opportunity to consider these matters, and I was very surprised to hear that no one asked the Supreme Court to meet more speedily. I note that the noble Lord spoke without any intervention from the Minister. I presume, therefore, that what he said is borne out. I will listen with great patience to what the Minister has to say.
Despite the questions that have been raised, and despite my own criticisms of the Bill, I remain in support of the Bill’s intentions and urgency. As we have heard, the Bill aims to re-enact the law as we have almost unanimously thought it was; and I, as a lawyer, join that number. I am always somewhat suspicious of emergency legislation because I believe that it puts a particular duty on Parliament to scrutinise it and its future in practice with extreme care. Whether or not there is a sunset clause, which I would support, it is incumbent on us to examine the Bill, or the Act as it unfolds in future. I hope the Government will respond positively to the suggested early consideration of these legislative provisions. If, in the future, there is a clear need for emergency legislation, does the Minister agree that the relevant departments—in this case, the Home Office, Ministers and civil servants—need to anticipate the problems and how they are going to react to them somewhat more effectively and speedily than has been illustrated here?
Mr Gareth Johnson, a Conservative in the other place, made a significant point about bail and the attitude adopted by the police, about which there is still a significant question mark. He argued that the police should not view the Bill as a green light to keep suspects on bail for an inordinate period before any decision on charging is made. I hope that the Minister can assure the House about this point, since the Law Society has also drawn attention to this matter. Whether or not we have a sunset clause, it is incumbent on us to examine this Bill with care. I hope that the Minister—who is in no way to blame for this parlous situation—will be able to reply to these points.
I refer to another important issue. In my view, it is essential with questions of this nature that the Bar Council and the Law Society are consulted forthwith. That has not happened here. Why not? Do the Government intend to consult them now? More importantly, is the Minister able to say that in future, if a situation of this kind arises, there is no doubt that they will be consulted immediately? It is not sufficient for there to be a mere exchange of correspondence; that is no answer to the major point that I raise.
Lord Dear
My Lords, I support the Bill. I had not expected to be able to attend your Lordships’ House today but my diary changed, and I am grateful to the House for allowing me to speak in the gap. I shall be brief.
I, too, declare an interest in that I served in a senior rank in the police service in England for many years. The noble Lords, Lord Pannick and Lord Thomas of Gresford, kicked the Minister’s shins fairly resoundingly with regard to timing and wasting time. I think that we are all concerned about that point. The noble Lord, Lord Thomas, went on to lay it on pretty thick, if I may say so, regarding what he termed lazy and oppressive police conduct in setting bail. I will come back to that in a moment. I would hope that what he outlined is the exception rather than the rule, but I am concerned on those points.
The real point of the debate today is that we are where we are and the police have a substantial problem, as my noble friend Lord Condon has outlined. The provisions of PACE, as they were understood, are still being exercised on hundreds of occasions every single day. They are part of the necessary working practice of any charge room, sometimes called a “charge suite”. Without certainty in this area, that part of the work of the police will grind very slowly—perhaps even to a complete stop.
I am not particularly concerned about retrospection in this extant case. We are trying to put the legislation back to what was generally assumed, rather than bringing in a new set of circumstances that would then impede someone ab initio.
I am concerned that the Minister has, rightly, found it necessary to talk about the review that will look at excessive and onerous conditions of bail that are being set and have been set in the past—a point made by the noble Lord, Lord Thomas—and overdue duration. That has caused me concern for some time, and the review is timely and important. I look forward to a debate, probably in the autumn or shortly after Christmas, on that very point.
On the point that we are considering today, which is putting the world back to what it was assumed to be prior to 19 May, the Bill has my full support.
Lord Rosser
My Lords, this has been an interesting and thoughtful debate, particularly for those of us who are not qualified lawyers. As the Minister has said, until the recent Hookway case it had been widely accepted, not least by the police and the courts, that, while there is a maximum time of 96 hours for which an individual could be detained without charge, time spent on bail did not count towards that maximum permitted period. That has now changed following a decision by a district judge on 5 April, and noble Lords already know the chronology of events since then.
The written judgment of the judge in the High Court was received on 17 June, and appears to have resulted in a shortage of people sharing the view in his oral judgment that the consequences of his ruling,
“are not as severe as might be feared in impeding police investigations in the vast majority of cases”.
The effect of this Bill is to restore the position to what it had been understood to be by all concerned in relation to bail not counting towards the maximum period of detention without charge, prior to the decision by the judge on 19 May. We support the Bill. We cannot await the Supreme Court hearing on 25 July before determining whether legislation is needed as potentially witnesses and victims of crime and not least victims of domestic violence are at risk of harm if the period of time for which suspects can be bailed without charge, with appropriate conditions attached on which action can be taken if they are breached, is now severely limited.
The statement by the noble Lord, Lord Pannick, that the Supreme Court was not asked to hear the case earlier than the 25 July is very interesting indeed. I know the courts can move rapidly. In the 1970s there was an instance of the Court of Appeal sitting on a Sunday, just two days after the decision by the National Industrial Relations Court which led to the appeal. It would not appear that there is quite the same sense of urgency in relation to this case, maybe because of insurmountable problems or maybe because the appropriate question was not asked, despite its potentially devastating and immediate implications.
The High Court has now said that an interpretation of an Act of Parliament that has been universally accepted and applied by all concerned for the last 25 years, including the courts, is incorrect and that, as a result, powers in relation to bail without charge beyond 96 hours are effectively withdrawn and, even more significantly, with almost immediate effect. The situation that has now arisen, as the noble Lord, Lord Condon, has stated, is causing serious problems for policing and for the conduct of investigations as well as the delivery of justice. It also puts at risk the well-being and safety of victims and witnesses.
If the courts have now decided to interpret a law differently from the way in which it has been interpreted for the past 25 years, there must surely be a less disruptive and potentially less dangerous way of effecting that change.
This brings me to the Government’s actions in this case. The original decision by the district judge was made in early April this year, over three months ago. The single judge in the High Court gave his oral ruling on 19 May, which upheld that of the district judge. Bearing in mind the potential significance of the High Court ruling, why was no application made for the hearing to be before three judges, as I understand could have been the case, rather than allowing the decision to be made by a single judge?
Clearly, at that hearing on 19 May this case was recognised to be of real significance. Counsel representing the appellants made it clear to the court that the consequences of Mr Justice McCombe’s decision would be profound and likely to have a negative impact upon the criminal justice process. Regrettably the learned judge does not appear to have accepted that view.
Can the Minister tell us when officials of the Home Office became aware of the substance of the learned judge’s oral judgment and what steps if any they took to prepare for or challenge the consequences of his judgment? The Minister has asserted today that nothing could be done before the receipt of the written judgment. Like my noble friend Lord Hunt of Kings Heath, I find that surprising. Surely, as an interested party it was incumbent upon the Home Office to consider the consequences of the judgment immediately—whether it might be appropriate for it or the Crown Prosecution Service to intervene, and to further consider whether to apply for a stay to the judge, or ask the Supreme Court to hear the case as a matter of urgency. There was a strong issue of public interest at stake and I ask the Minister if any attempt was made to invite the Attorney-General to intervene on behalf of the public interest. I hope the Minister will be able to address these points in her reply.
While I appreciate that the effect of this Bill is to restore the situation to what everyone thought it was prior to 19 May, and by making it retrospective ensure that potentially a large number of people were not able to make a claim for damages for detention on the basis that they had been treated contrary to the law in the light of the judge’s decision, there is now a need to review and consider again the provisions in respect of bail.
Claims have been made that people have been bailed for excessive periods of time without charge, since there is no time limit on how long people can be bailed in these circumstances. It has been suggested that the lack of a time limit is not an incentive for the police to be as expeditious as they might. Whether there is any substance to these points, I do not know. However, the whole question of bail now needs to be reviewed, including, presumably, in light of the Human Rights Act, which was not in play 25 years ago. I hope the Minister will confirm what she said in her opening speech—namely, that this is what the Government intend to do and, therefore, that the Bill we are considering today may well prove to have a sunset clause. Will the Minister confirm that, if needed following the review, new legislation will be brought forward?
It is important that certainty of the understanding of the law in respect of bail without charge for the 25 years prior to 19 May is restored as a first step. On this side we shall support the Bill and, with it, this fast-track legislation.
Baroness Browning
My Lords, this has been a constructive debate. I welcome the support for the Bill from the opposition Front Bench. I am particularly grateful to the noble Lord, Lord Hunt of Kings Heath, for his remarks in his opening speech. He raised some issues that I shall touch on since they were also picked up by other Members of your Lordships’ House.
I shall reiterate something about the scope of the review of bail. This was raised not only by the noble Lord, Lord Hunt, but by the noble Lords, Lord Thomas of Gresford, Lord Clinton-Davis and Lord Dear, and the right reverend Prelate the Bishop of Chester. When we look at pre-charge bail later this year, it will be to consider the issues raised today, including the overall time limit. However, we will need to ground that review in evidence. At the moment, much of what we have heard is anecdotal. Therefore, any and all input to that review in advance of its terms of reference being drawn up will be welcome. I can tell your Lordships’ House and the wider community today that, further to the point raised by the noble Lord, Lord Hunt, about members of the public, there is a wide community of interest in this whole area. We would welcome, even before the autumn, any written submissions that will help us to set the terms of reference for that review, which will be wide and far-reaching. I hope it is of help to the House to know that.
I was asked about what legislation might follow. I say to the noble Lord, Lord Rosser, that it is a bit premature for me to identify any legislation that may come from the review. There might well be something, but until we see the terms of reference, have gathered that information and can see how to take the matter forward, it would be premature for me to say today what legislation might be needed.
A lot has been said about the Home Office and timeframe involved by several noble Lords, including the noble Lords, Lord Hunt of Kings Heath and Lord Pannick. I hope the House will bear with me but it might be helpful, since a lot of attention has been paid to this, if I read out for the record of the House the situation as regards the timeline. To set that in context, the wider consequences of the ruling could not be considered until the judge issued his written ruling, setting out the reasons for his decision. That judgment was issued on Friday 17 June. Most importantly, even at that stage, its wider consequences were not readily apparent. The judge himself reiterated his belief that the consequences would not be as severe as might be feared in impeding police investigations in the vast majority of cases. It was only as the complex ruling was examined early the following week by ACPO, the CPS and Home Office officials that the full consequences became apparent. However, I will, for the record of the House, read out the points in this whole process and those at which the Home Office—both officials and Ministers—was involved.
Lord Pannick
Can the noble Baroness explain why the Home Office was unable to understand the implications and importance of this decision on 17 June, when Professor Michael Zander was able to publish an article on this subject on 18 June and must, therefore, have understood the implications some time before that?
Baroness Browning
If the noble Lord will bear with me, I shall begin at the beginning and work my way through the timeline. Because we have had such a short debate, it is very important to put this on the record so that noble Lords have the full information. I will read it slowly because a lot of dates are involved.
On 5 April 2011, the district judge refused the Greater Manchester Police’s application for an extension to a warrant of further detention in the Hookway case. On 19 May, in a judicial review, Mr Justice McCombe, sitting alone at the Divisional Court in Manchester, upheld the district judge’s ruling in an oral judgment. I should point out that he sat alone because an early hearing was requested, but only one judge was available to sit; so the request was made—a point referred to by the noble Lord, Lord Rosser. On 25 May, the Greater Manchester Police sought initial views from Ann Whyte QC, who stated that the judgment may relate only to specific cases or warrants of further detention. Yet again, the legal advice was that this might have quite a discrete interpretation in terms of its wider implementation. The following day, 26 May, the Greater Manchester Police invited Home Office officials to become an interested party in an effort to seek leave to appeal to the Supreme Court and forwarded papers for consideration. The written judgment was not of course available at that point—26 May.
As I am reading this, I realise that it is all right for me—I have a piece of paper in front of me. For the purposes of clarity, when I have read this into the record I will also place it in the Library of the House.
On 17 June, the Greater Manchester Police, as we have heard, received the written judgment from the High Court and forwarded a copy to the Home Office on that day. That was a Friday. On Monday 20 June, the Greater Manchester Police and Home Office officials studied the written judgment, and the broad scope of the problems presented by the judgment first started to become apparent. Until that point, there had been some consideration—not only because of the QC’s opinion but because of the wording of the judge in his oral judgment—that this matter was not going to be as far reaching as it has subsequently proved.
It was on 20 June that the GMP and Home Office officials started to consider the written judgment. The next day, 21 June, the GMP invited ACPO representatives and the Home Office officials to meet to discuss the implications. Home Office officials agreed with ACPO to convene an urgent meeting to discuss the implications, which took place the following day. ACPO, the CPS and the Home Office officials met at the CPS’s headquarters. The full magnitude of potential difficulties then became quite apparent. The following day—we are talking about one day following the other—ACPO alerted the CPS chief executive, and ACPO issued notification of judgment to all chief constables. On 24 June, the ACPO lead met with the CPS director-general, and Home Office Ministers were informed at that point. ACPO commissioned advice from Clare Montgomery QC, and ACPO issued interim guidance to all chief constables. That was a Friday.
The following Monday, 27 June, Clare Montgomery QC’s advice was received in conference by ACPO, the CPS and Home Office officials. ACPO issued further guidance to all chief constables. ACPO commissioned forces to provide real-life examples of the impact of the ruling to support the case for urgent legislation. On 29 June, ACPO commissioned further legal advice from Steven Kovats QC. The following day, ACPO received that advice from the barrister and presented its case for urgent legislation to Home Office Ministers. On the same day, the Minister for Policing and Criminal Justice made an Oral Statement to the House of Commons on the need for urgent legislation. To pray in aid the words of ACPO lead Jim Barker-McCardle:
“It was only when ACPO received the written judgment on 17 June, and a number of senior people were able to spend some significant time considering the issue, that the seriousness of this became apparent. As the ACPO lead on this issue, I was not going to advise Ministers that the police service needed, in exceptional circumstances, fast-track legislation until I had satisfied myself first that the legislation was necessary and that the police service could not operate effectively in light of this judgment, beyond the very short term”.
I hope that that is helpful to the House and I am sorry if it is lengthy and detailed.
Lord Thomas of Gresford
My Lords, perhaps I may assist my noble friend a little further. Neither the district judge nor Mr Hookway was represented at the hearing before Mr Justice McCombe, and there was a single counsel appearing for the Manchester police. It was clearly very low-key at that point; the respondents to this application were not even there.
Baroness Browning
My Lords, I am grateful to my noble friend for adding that information.
I hope that I have been able to allay some fears that the timeframe needed was a result of the Home Office—or, for that matter, anyone else—being dilatory. Had the judge’s and the initial QC’s advice not both indicated that this was not likely to be as far reaching as it subsequently turned out to be, I might accept some of the criticisms. However, the Government have acted as quickly as possible in the circumstances.
I understand that the GMP did ask the Supreme Court for an early hearing. I gather that it was initially given a date in the autumn and, when pressed, the date was brought forward to July. I will soon come on to some of the points that were made by the noble Lord, Lord Pannick.
I hope that I have satisfied noble Lords about the timeframe and the Government’s intentions with the wider issues that have been spoken to by noble Lords, including particularly my noble friend Lord Thomas of Gresford and the noble Lord, Lord Clinton-Davis, about the need for consultation and a fresh look at bail and its conditions. I can assure the noble Lord, Lord Clinton-Davis, that the Law Society and the Bar Council will, of course, be invited to take part in the consultation. We will make sure that all partners in this matter are fully engaged in the consultation, because I know that they will have a lot to contribute to this.
I am also very grateful to my noble friend Lady Hamwee, who, as ever, brings a very measured response to these matters. We have also heard from the noble Lords, Lord Condon and Lord Dear, who have had many years of experience in policing in this country. I was rather struck by the fact that the noble Lord, Lord Condon, in pointing out the operational difficulties that the police currently have to manage, said that no other court decision has had the scale and magnitude regarding operational policing as the one that is before the House tonight. I say to the noble Lord, Lord Dear, that, again, one of the things that always strikes me, having come from another place to your Lordships’ House in the not too distant past, is that the first-hand experience that noble Lords contribute to these debates is what not only makes them of a very high quality but helps to inform the way in which we legislate and proceed in these very difficult matters.
When the Association of Chief Police Officers presented us with clear evidence of the adverse impact of this judgment on the ability of the police to investigate offences and protect the public by enforcing bail conditions, we had a duty to act as a Government, and I believe we have quickly done so. From the debate, it was evident that your Lordships accept the need for fast-tracking this legislation, for the most part. If anything, this is one of those occasions when, notwithstanding the issues that noble Lords have raised, the House has acted and come together to make some progress and help resolve a very urgent problem.
The House would rightly have been sceptical had we sought to introduce a fast-track Bill on the back of an oral judgment, given that the judge in the Hookway case said at the time that the consequences would not be,
“as severe as might be feared in impeding police investigations in the vast majority of cases”.
We now know that assessment of the operational ramifications of the judgment to be misconceived but, as I explained, that became apparent only after the written judgment on 17 June.
Professor Michael Zander QC has been cited around the House. I understand that Michael Zander is someone whom noble Lords feel confident in citing because of his reputation in the field. I do not want to let go the opportunity to cite him myself. He said:
“The Home Office has been criticized for being a bit slow off the mark. But measured from the date when it received the transcript of the judgment, it dealt with the problem in a little over three weeks—which, as these things go, is not bad going”.
We have all prayed in aid Professor Zander; he sounds a pretty good sort of chap to me. I have not met him, but his judgment is clearly respected on all sides of the House.
Lord Goodhart
I have known Professor Zander for 58 years, and my view of him is very high.
Baroness Browning
My Lords, I do not doubt that for one moment. I shall cite him as often as possible on behalf of the Home Office.
I turn to the noble Lord, Lord Pannick, who talked about there being no precedent for the fast-track legislation in front of us. There is a precedent for this. A High Court judgment in July 2002 in the case of Hwez and Khadir held that the practice of granting temporary release, subject to restrictions, to people detained under the Immigration Acts was unlawful. The Government legislated to overturn that judgment in Section 67 of the Nationality, Immigration and Asylum Act 2002. Subsection (3) provides:
“This section shall be treated as always having had effect”.
The purpose was to avoid a situation where people subject to immigration controls who do not have leave to remain but who cannot lawfully be detained were left at large without there being any way of keeping track of them. Retrospection avoided the need to reassess the cases of persons on temporary admission on an individual basis.
As a member of the Constitution Committee, the noble Lord, Lord Pannick, has raised issues that replicate some of those that the Constitution Committee raised. I notice that the Constitution Committee may return to the issue after the Bill is enacted and the Supreme Court has heard the appeal by Greater Manchester Police. We will, naturally, consider carefully any further report that comes forward from the committee.
The noble Lord also asked what steps are now taken to ensure that police and public authorities report judgments to central government as soon as possible. There is an assumption there that the Greater Manchester Police should have acted quicker in alerting the Home Office to that judgment. As I pointed out in explaining the timeframe, we were aware and officials were engaged, but under a set of circumstances that was perhaps not quite clear to the House under the legal advice at the time. I do not disagree with the principle of what the noble Lord said. Timeliness is very important; lessons can always be learnt. We need to look forward to see things coming over the hill and not just wait to see what happens, when it is too late. That is my understanding of his question. I hope that I have satisfied him by outlining the timeline, but the general principle of what he asked, which is about the timeliness of information-sharing between agencies and authorities, is important, especially in issues as serious as this. I take his point; I know that, in the Home Office, we will endeavour to ensure that it is not overlooked.
On the question of the Supreme Court, although Mr Justice McCombe gave his judgment orally in May and certified the point of law, it was not possible for police counsel to prepare the appeal papers until the written judgment available on 17 June. As I have explained, an early hearing was requested but 25 July was allocated by the Supreme Court. An early date having been allocated, neither the GMP nor the Home Office believed that there was any prospect of an even earlier date being allocated.
The noble Lord also asked why the Secretary of State did not ask the Attorney-General to hear the case earlier in the public interest. The Secretary of State was made aware that the GMP was appealing to the Supreme Court for an expedited hearing. Subsequently the police also requested that the court stay the effect of the Hookway judgment. The court gave an expedited hearing date of 25 July, which, as I have said, is earlier than the original date. The Home Secretary felt there was no reason to think that government intervention would make that hearing even earlier. That is the case and I do not think that I can add any more to that. Clearly the Home Secretary did not feel it appropriate to approach the Attorney-General because a concession had already been given with the date agreed for the hearing.
Lord Pannick
The noble Baroness is being very patient indeed. We do not have a Committee stage on this Bill, so I hope she will excuse me if I press her slightly on this. Does she agree in principle that it is highly desirable, before emergency legislation is brought before Parliament, that every step is taken to try to ensure that the Supreme Court is asked to hear a case with very considerable expedition so as to avoid emergency legislation if at all possible?
Baroness Browning
I certainly do not disagree with the noble Lord on the general principle, and I will take his point back with me.
Lord Clinton-Davis
What I do not understand from what the noble Baroness has said is whether counsel even asked the Supreme Court for an earlier date. All we have heard is that it would have fallen on deaf ears, but we do not know. Why did counsel not ask for that?
Baroness Browning
Counsel did ask for that. The original date was in October or November. Counsel went back and asked for an earlier date, and that was why it was brought forward to July.
Lord Clinton-Davis
If the Supreme Court had understood that Parliament would not be sitting at that particular time, should they not have been made aware that Parliament was going to rise on 20 July?
Baroness Browning
I do know whether or not the Supreme Court, in bringing forward the date to July, was made aware of the date on which Parliament was sitting. The Home Office was clearly actively involved in these things, but of course the GMP was approaching the court, not the Home Office. I cannot specifically answer the particular point raised by the noble Lord, but I will endeavour to find out for him.
I can only reiterate the point that I made in my opening remarks. I know that this is a matter for the Constitution Committee, but we really do not believe that we are undermining the constitutional separation of powers by asking Parliament to legislate to reverse the effect of a High Court decision in advance of the issue having been decided by the Supreme Court. As has already been pointed out, had we waited we would have been in recess when that determination was made. The House will not return until September. We have already heard about the urgency of the need to take action in this matter, particularly from the noble Lords, Lord Condon and Lord Dear; nor has the point been lost on us in our discussions with ACPO that these are really serious matters.
The daily problem of the management of bail and offenders and the impact on victims of crime have rightly been pointed out by the opposition Front Bench, particularly in certain circumstances; the noble Lord, Lord Rosser, raised the question of domestic violence and people going back into the same area where they have previously committed a crime. These are very serious operational matters for the police to have to contend with.
Picking up on points raised around the House, I hope this is something we shall deal with when we have the consultation on bail and bail conditions. The police are between a rock and a hard place at the moment in trying to manage this. They are doing incredibly well, but as has been pointed out they can manage this only in the short term. If we were to ask them to manage it throughout July and August and well into September, before this House could come back to this issue, some of the cases that would come to the attention of your Lordships, and through the legal profession, would give cause for concern, not because of the police deliberately doing things that perhaps are outwith their powers but because of the very difficult position that they are in in having to manage these matters even now.
It remains to be seen whether Greater Manchester Police proceed with their appeal once this Bill is enacted—although I understand that it is their current intention to do so—and if so, what view the Supreme Court will take. The Constitution Committee may well want to consider this legislation in the light of that judgment, whatever it may be, and may well return to this later in the year. We will of course study that and carefully consider any report on the broader issue.
Members have touched on the matter of a sunset clause, although I noted that this has not been pressed particularly hard, and I am grateful for noble Lords’ understanding of it. Given that the Bill does no more than restore the law on the calculation of the detention clock to the position that it was commonly understood to be in 25 years prior to the Hookway judgment, we see no case for a sunset clause in this instance. Indeed, this is one of those instances in which a sunset clause could well have an adverse effect, in that it would perpetuate the very uncertainty about the proper interpretation of part 4 of PACE, which we are seeking to address in passing this Bill.
Finally, let me respond to the point raised by my noble friend Lord Thomas, and touched on by other noble Lords, on the wider issues involving bail and the consultation that we are going to put in place. No hard evidence has been received, but sufficient concern has been expressed from so many quarters that we need to get this right. Examination cannot be rushed; there needs to be an ordinary process, including consultation with the police, the CPS, and legal practitioners. Noble Lords have indicated that there is an understanding in the House that we could not include that in the Bill before the House today. I welcome support from all sides of the House for the Bill.
Police (Detention and Bail) Bill
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Browning
That the Bill be committed to a Committee of the whole House.
Localism Bill
Lord Greaves
“(b) a marine plan authority, or”
Lord Greaves
My Lords, we now move on to an important clause of the Bill, which provides the “Duty to co-operate in relation to planning of sustainable development”. The duty applies to,
“a local planning authority, … a county council in England ... or … a body, or other person, that is … of a prescribed description”.
I should say that, as well as moving Amendment 147FJ, I shall speak to a number of other amendments in my name in this group. They all refer to Clause 95, which will insert new Section 33A into the Planning and Compulsory Purchase Act 2004.
Amendment 147FJ would add “a marine plan authority” to the list of bodies that are under a duty to co-operate. I understand that through regulations the Government intend to give this duty to the Marine Management Organisation, which is the marine plan authority for a great deal of the British seas—essentially, the inshore and offshore seas of England. The term “marine plan authority” is used in the Marine and Coastal Access Act 2009, so it seems sensible to use the same wording here. Subsection (3) of new Section 33A, inserted by Clause 95, lists the activities to which the duty to co-operate applies, which include,
“the preparation of marine plans”.
It is therefore sensible to add “a marine plan authority” to the list of authorities that are under a duty to co-operate.
Amendment 147FK probes what is meant by the third group of bodies to which the duty applies—
“a body, or other person … of a prescribed description”.
Presumably if the Government wish to prescribe people, they must have an idea of who it is they wish to prescribe by description. I want to probe the Government on who they think these bodies will be, at least in the short run.
Amendment 147GA refers to local enterprise partnerships. As we know, these are new bodies which over the past year have sprung into life in most places, although not quite everywhere yet. They are to be responsible for co-operation between local planning authorities and local businesses in the absence of regional planning bodies. The regional planning structure is being dismantled and local enterprise partnerships are taking its place. People have different views on how successful they will be, but that is not the point of the amendment. It suggests that, first, the partnerships should be subject to the duty because strategic planning is what they are supposed to be doing, albeit in general over smaller areas than the regions, and therefore they ought to be included in the legislation. They are also ideal bodies to take a lead in co-operation—in fact, they are all we are going to have—by agreement with local authorities and other named bodies.
If we are going to put LEPs in the Bill, they need to be defined. I am not sure that the Government have officially defined them, so I suggest a definition in the words,
“a partnership of local authorities and businesses in an area, that has been approved of by the Secretary of State”.
That seems a reasonable description of what they are.
The next three amendments refer to the “activities”, as the Bill calls them, to which the duty of co-operation applies. These are the “preparation” of development plan documents, of other local development documents —of course, quite a few of the documents that go in the local plan are not classified as development plan documents as such—and of marine plans. The Bill suggests that the duty of co-operation should apply to the “preparation” of these documents; I have tabled amendments to add the words “and implementation” after “preparation” in every case. Surely the duty of and need for co-operation do not end with the publication of a plan but continue, given that people have to continue to co-operate in a constructive and sensible way in order to carry out what the plan is putting forward. Otherwise, those parts of the plan that require co-operation across boundaries—which presumably will be required, because what is the point of co-operating on producing the plan otherwise?—will be more difficult to achieve.
Amendment 147HE suggests that the duty to co-operate should apply to the preparation and implementation of documents which are not planning documents under planning laws, but which,
“affect the development or use of land and associated activities”.
We have only got to begin to think that there will presumably still be co-operation—perhaps across the LEP areas or county areas or other ad hoc areas—on producing housing documents, which may be more or less strategic housing plans. For example, housing authorities in east Lancashire and across Lancashire will continue to meet, work together and co-operate in this way. It seems sensible that, when this is happening, the duty of co-operation should apply to them. Leisure and tourism facilities, for example, very often require planning and a lot of work across local authority areas or across much larger areas than local authorities, particularly where there are relatively small districts.
I shall miss out one or two of my amendments in the interest of getting on. Amendment 147HM would add to the list of what is a “strategic matter” under subsection (4) of new section 33A. My proposed new subsection (4)(c) would add,
“development or use of land that is of potential strategic importance”.
My proposed new subsection (4)(d) would add,
“development or use of land that is necessary in order to meet the needs of a planning area but cannot be accommodated within that planning area”.
Those are the provisions that I wish to add to the Bill.
In the first of those proposed new paragraphs, the reference to “potential strategic importance” is important, because there may well be development proposals put forward for land which is of potential strategic importance, but the particular proposals being put forward cannot, by their nature, be considered to be strategic. They may just be ordinary planning applications, but the land itself ought, perhaps, to be reserved for more strategic purposes and therefore the co-operation should extend to the consideration of development proposals which, although not strategic in themselves, might involve land which is potentially strategic. That should, at the very least, be discussed and considered.
My second proposed new paragraph would apply where the needs of a local planning authority could not reasonably be met within the authority’s area but could perhaps be met within that of a neighbouring authority. This is certainly the case in small districts which might, for example, be having great difficulty finding new industrial land whereas a district next door might have quite a lot. Planning in those circumstances should take place jointly—it may be for housing, an industrial or commercial development, leisure facilities or even a shopping centre. Such development needs to be looked at across an economic area. If the LEPs are supposed to represent economic areas—it is arguable whether all of them do—it is across those economic areas that such developments and facilities ought to be considered. Natural economic areas may well be larger than the planning areas and in many cases they will be.
The Bill sets out definitions, including the meaning of “planning area”. Amendment 147HN would define “planning documents”, which are not defined in the Bill. The amendment would remedy this omission. The amendment provides that “planning documents” would mean all,
“documents that set out policies … relating to the development and use of land, the English inshore region or the English offshore region”,
under a number of enactments. The list of those enactments in the amendment may not be complete, but the principle of setting them out is sensible.
Amendment 147HQ would strengthen the duty imposed on all the persons and bodies that have to co-operate. The duty to co-operate was strengthened in the House of Commons before the Bill came here, but there is quite a considerable body of opinion that it needs strengthening even further. New Section 33A(6) states:
“The engagement required of a person … includes, in particular … considering whether to consult on and prepare, and enter into and publish, agreements on joint approaches to the undertaking of activities within subsection (3)”—
which relates to the preparation of development plan documents et cetera. The amendment would strengthen the provision so that the paragraph would read,
“to consult on and prepare, and, where appropriate … publish, agreements on joint arrangements”.
In other words, the duty would be not just to consider whether to bother consulting but to actually get on and do it.
Amendment 147JA would place a similar duty on local planning authorities to get on with it, rather than just “consider” producing joint planning documents where appropriate. The word “consider” seems too weak, so I hope that the Government will look at different ways in which they can perhaps strengthen the duty.
Amendment 147N takes us back to statutory guidance and regulations. This may be getting fairly tedious, but there is a great deal in the Bill which is probably not necessary. Here again, we have the Secretary of State bossing people in great detail on how to co-operate. People know how to co-operate. They may not always do it, but if they are under a duty to do so, they will probably get on with it.
The alternative way of dealing with these matters is in Amendment 147P, which suggests that the Secretary of State can intervene, but only if he receives a complaint that one of the bodies that must co-operate is not doing so. This is a better approach. Instead of laying down in great detail how people should do things, in a very rigid, top-down and bossy way, it would provide a fall-back power whereby, if co-operation was not taking place and was clearly not working, the Secretary of State could intervene. This would provide an incentive to change behaviour. It is a failsafe, but it is a better way of doing it. Above all, it leaves open the opportunity for people in an area to co-operate in a way that is most appropriate for that area, providing a lot of innovation and best practice. If authorities simply have to do it in exactly the way the Secretary of State sets out in great detail, innovation and best practice will never take place.
Amendment 147R seeks to amend the Marine and Coastal Access Act 2009 to include a duty to co-operate in that Act. If it is necessary to amend the Planning and Compulsory Purchase Act 2004 for terrestrial planning to include a duty to co-operate in that Act, then surely it is necessary and sensible to do the same in the Marine and Coastal Access Act in relation to marine planning. When the Marine Management Organisation is preparing a marine plan, under this amendment it must have regard to the duty to co-operate set out in the new Section 33A of the Planning and Compulsory Purchase Act 2004. When a person is carrying out an independent investigation into a marine plan under the Marine and Coastal Access Act, the person must determine whether the MMO complied with that new section of that Act.
In many ways these are technical amendments but they will substantially improve, strengthen and make much clearer this part of the Bill. I beg to move.
Baroness Andrews
My Lords, the noble Lord, as usual, has been very assiduous in his amendments. I am grateful to him for tabling, in particular, Amendment 147FK. I declare an interest as chair of English Heritage.
The noble Lord asked the Minister what would be included in the list of bodies referred to in proposed new Section 33A(1)(c). We think it might be bodies such as English Heritage. The Bill raises a serious issue. Obviously, we all understand the need for local authorities to be obliged to assist each other in agreeing cross-border planning strategies, but it is not clear why the loss of the regional spatial strategies gives rise to the need for national bodies such as English Heritage to be obliged to provide advice and information.
Of course, English Heritage and many other bodies—but particularly English Heritage—give advice and assistance to local authorities in the planning system. It is one of our core responsibilities with which we are rightly charged but, as a national body which, like others, may be subject to this duty, we are now concerned that a responsibility may have been written into the law which would oblige English Heritage to advise and assist the 433 local authorities in England in a manner—this is very important—that would commit incalculable and open-ended resources. Clearly this is not what the Government intend but it is what the present clause, as we understand it, threatens to do. It would make us liable, without condition, to be dragged to every council table in the land.
As chair of English Heritage, I am concerned about how this might unbalance the priorities already set by Parliament and the Government. I suspect that the Minister will also be concerned about this possibility. Like the noble Lord, Lord Greaves, I ask the Minister for clarity on how this new burden will be met and qualified and whether he can explain what need this new obligation is now fulfilling. Indeed, what are the bodies not doing now that they should be doing?
I apologise in advance to the Minister because I may not be able to stay for the winding up of this debate, but I shall certainly read Hansard tomorrow with interest.
Lord Cotter
My Lords, in speaking to my Amendment 147H to this section of Bill, I want to emphasise the importance of local businesses in the community. I do not need to say much about the struggle that many local businesses have now, and have had for quite some time, to cope with trading conditions and other matters as this is highlighted, both nationally and locally, on an increasingly frequent basis. In this particular amendment, I am supported by the Federation of Small Businesses and many other business organisations and businesses generally.
Noble Lords will note that my amendment refers to local businesses and to the Government’s introduction of local enterprise partnerships, as referred to by my noble friend Lord Greaves a moment ago. Local enterprise partnerships are intended to sustain and invigorate businesses and the business community at local level. LEPs, as they are known, are there to fulfil that role but a key part of an LEP’s role is to ensure that small businesses have a voice. On this aspect, it is concerning that small businesses are not adequately represented on LEPs everywhere in the country. My information comes from the FSB, to which I referred, the Association of Convenience Stores and also work that I have done directly contacting businesses all throughout regions in the country. The feedback I get is somewhat patchy. Small businesses have a reasonable role in some areas and not much at all in others. I wish to highlight that strongly this afternoon. I hope that the Government will take it on board increasingly as time goes on.
Looking also at the wider aspect, on regional planning we previously had RDAs but, with the different situation we face and organisation now in place, there is a need in the Bill for clarity on how a new, sub-national approach will work. We are looking for a duty recognising the importance of business input into strategic planning and infrastructure policy by requiring local authorities to have regard to the strategic direction by the aforementioned LEPs. It is encouraging that the Minister stated on Report that the Government intend to identify LEPs as bodies that must be taken into account, and other words to that effect.
My amendment looks for more explicit elucidation of the role of LEPs within the Bill, with a formal recognition of them. There will therefore be greater clarity and a strengthening of their position and standing.
Lord Cameron of Dillington
My Lords, I speak to my Amendment 147M. At Second Reading, I expressed my concerns about the proposed duty to co-operate as a replacement for regional strategies. As I then said, I am not particularly enamoured with the whole idea of regions. Particularly in the south-west, where I come from, the region was far too large to be of any real relevance to people on the ground and their lives.
As I am sure we all recognise, we need some form of supralocal planning framework to deal with a whole range of issues for which it cannot and should not be left to each and every local planning authority to come up with the answer all on their own. These issues include areas such as flood defence, where water management in the upstream can impact on flooding and water quality in downstream communities. Equally, unless cross-boundary issues are addressed, pure localism could lead to fragmentation of landscapes and ecosystems. The recent national environment White Paper introduced the concept of nature improvement areas, ecological networks and local nature partnerships to rival or possibly complement local enterprise partnerships. All of these are likely to be transboundary concepts in their application.
Some form of supralocal planning is also needed for a strategic approach to renewable energy. While it is important that all local authorities work towards their own solutions for producing 15 or even 20 per cent of their energy requirements from renewable resources—many of which can be built as small, local ventures—each local authority will have different constraints and opportunities for taking different routes towards whatever technology is most suitable for their area. It will be important for everyone to see the bigger picture.
Supralocal planning will be about more than just the larger sub-regional infrastructure projects; more than just where to site bad-neighbour developments such as waste disposal facilities or even large housing developments. I am not so worried about local authorities co-operating—they always have co-operated and they always will. I do not see any real need for compulsion or threats. What they need, in my view, is a framework which sets out what they need to co-operate on—as I have already explained, this is probably wider than many councillors might assume. They need a framework that sets out who should be involved and most importantly, who should lead; the outputs and outcomes; and furthermore, having co-operated, how the results should be incorporated into local plans and local transport plans and the application of the community infrastructure levy. In that context I refer to my twin amendment on this subject under the CIL clauses, Amendment 148ZZBA, to which I speak in my current remarks.
These amendments require unitary or upper-tier authorities to prepare strategic infrastructure assessments in consultation with planning authorities and other strategic infrastructure providers, including local enterprise partnerships and local nature partnerships. I believe we need to specify these assessments as a necessary result of the duty to co-operate. It is only in this way that the duty would have a clear output that would harness the expertise and capacity of unitary and upper-tier authorities in matching investment with growth and provide a consistent framework to inform sub-regional and local plans.
I want to pause for a minute on the words “consistent framework” because I believe they are vital for any country that wishes to remain progressive. I spoke at Second Reading on the dangers of uncertainty within the planning system as a result of this Bill for everyone from businesses, through service providers to environmentalists. They all need some form of consistent framework within which to work, plan and to risk their money through investment. We cannot expect businessmen to invest and house builders to build or, for that matter, environmentalists and landscape aficionados to protect what matters if they are all working in a fog of uncertainty. If each development case has to start from scratch, only delays and increased frustration will result. I believe my amendments give clarity as to where the leadership should lie, so efforts can focus immediately on getting on with the work of strategic planning rather than risking delays because no prime mover is identified in the legislation. Obviously, it is platitudinous to say that delays are the enemy of progress but I do not believe that we can afford delays in the current economic climate. Rather, we need a coherent sense of purpose with a simple reference document as a guide for local plans and new neighbourhood plans. I believe my amendments achieve that.
Lord Whitty
My Lords, scattered among this vast group of amendments are four amendments of mine. The Committee will be relieved that I do not need to speak for very long on them since one of them, Amendment 147R on the marine planning side, has already been spoken to by the noble Lord, Lord Greaves, and I endorse everything he said. The other three relate to the area to which the noble Lord, Lord Cameron of Dillington, has just spoken. Amendments 148G, 148J and 148K try to sharpen up the requirement to co-operate. Much like the noble Lord, Lord Cameron, I have particular issues in mind where clearly a development, as distinct from a very high-level strategic approach, will be of interest to more than one local authority and may well be of interest to local and national authorities. I declare an interest, for example, in relation to climate change adaptation as I am a member of the Environment Agency Board. Clearly, flood arrangements need to apply to the whole catchment area, wherever the political boundaries may fall, and there may be an involvement in that of national bodies such as the Environment Agency or Natural England. On climate change mitigation, major renewable energy projects may well involve more than one authority, either because of the location of the plant itself and its connections, whether it is a wind turbine or a biogas plant or whatever, or because there are visual effects thereof which impinge on other local authority areas.
I would hope that the requirement for local authorities to co-operate will be pinned down a little more than is currently the case. My proposals to amend the new section proposed in Clause 95 would give a general subsection (1) duty to co-operate, and a clearer purpose to that, making a specific reference to sustainable development. They would also ensure that the requirement in proposed new subsection (6) to consider a “joint approach”, very much along the lines of the joint framework to which the noble Lord, Lord Cameron, referred, and “joint local development documents”, became a compulsory requirement.
I know that some local authorities are not particularly keen on those provisions being in that form in the Bill and say that they will co-operate the whole time. Regrettably, that has not always been the case in relation to flood defence provisions or to renewable energy projects, when different local authorities may have reached different conclusions coming from different angles. So it is important that the Bill itself puts a requirement so that, as far as possible—and this is mildly framed—they reach a consistent and compatible approach to these matters. This needs to be seen in the wider context of sustainable development, which the Committee debated the other night, when I was unfortunately not able to be here. If we tighten this up a little bit, there will be an extra nudge to local authorities to co-operate and take a more coherent and sensible approach to planning and projects within their areas. I therefore commend these amendments and hope that the Government can at least take the spirit of them on board.
Lord Beecham
My Lords, I listened with great care to the remarks of my noble friend Lady Andrews, who is no longer in her place, because I have an interest— I think that the appropriate adjective would be an historic interest—in the subject that she raised, the position of English Heritage. I served as a commissioner of English Heritage for four years, having been appointed by the noble Lord, Lord Jenkin, and removed by Mr Nicholas Ridley in due course, no doubt for good reasons. My noble friend certainly has a point about not encumbering some organisations with heavy statutory responsibilities.
On the other hand, some agencies need to be involved from the outset in the kind of strategic approach adumbrated in the Bill, and in rather broader terms in the amendment moved by the noble Lord, Lord Greaves. I have in mind, for example, the Highways Agency, which in my experience is not one of the more co-operative government agencies when it comes to its dealings with local government, or the Environment Agency or the Homes and Communities Agency. They have a better track record but, as the noble Lord, Lord Cameron, pointed out implicitly in his reference to environmental matters, they clearly have a key role to play in the development of a joint approach.
I join in inviting the Minister, in replying, to indicate the kind of bodies, though not necessarily adumbrating all of them, that might be included in proposed new Section 33A(1)(c) of the Planning and Compulsory Purchase Act 2004 under,
“prescribed or of a prescribed description”.
It would be helpful to have an indication, though not necessarily on the face of the Bill, as obviously we may need to add or change the description over time.
I also take on board the point about local enterprise partnerships made by the noble Lord, Lord Cotter, when speaking to his amendments. It is not clear to me that they have much power in any event, as presently constituted, but they should certainly be involved in consultations. Whether it is useful to have a duty to co-operate on bodies that may not have the power to do very much is perhaps arguable, but the point is worth exploring, and perhaps the Minister could enlarge a little on the role envisaged for local enterprise partnerships generally and in relation to the position under the Bill, if not today then as a matter for further consideration.
Lord Lucas
I will get around to addressing my amendments in a moment. First, I want to say how much I agree with the noble Lord, Lord Beecham, and my noble friend Lord Greaves that there seems to be some need in this section for an ability to knock heads together. My brother first got involved in local politics when, in the local village, there was an ancient wall with a fast-growing young sycamore next to it. At the same moment, the owner of the wall was served with a notice to repair the wall where the tree was knocking it down and a tree preservation order on the tree. I will leave it to noble Lords to guess which party was in control of the district council at the time. It is hard enough to get a council to co-operate with itself, let alone two councils, particularly in the example that the noble Lord, Lord Beecham, gave of Stevenage, where what is being asked of one council it really does not want to give and the residents do not want it to give. In those circumstances, some higher ability to make the process happen is important.
I have two questions to ask my noble friend on the Front Bench. First, I do not expect him to answer immediately, but how on earth are we going to finish this Bill in the time allotted? Looking at the time that we will take discussing neighbourhood planning, all the bits on housing and all the other bits, how can we accomplish all that is to come in in effect two and a bit days? It just does not seem possible. It must have consequences for how late the House sits. It may well have consequences for what days the House sits on. Thursday appears to be available if we stretch things a bit. I do not know, but it no longer seems possible to fit it into the time that we are supposed to be fitting it into, and I would like the Government to come clean with us as to how we are going to solve this conundrum. My noble friend might come back after the Statement with a long cape and a top hat and pull the proverbial rabbit out of it. Short of that, a plain answer from him via my noble friend the Chief Whip will be much appreciated.
Lastly, I hope my noble friend will not be troubled by my two amendments. Their purpose is to draw attention to the question of how, under this Bill, you have to pick a particular place to install a facility if you want to establish a network. It does not matter much where. It will affect only one local authority, but there is a choice of several local authorities into which it could go. Two examples come to mind. One is a rail head for the transfer of freight from road to rail and vice versa. You can probably put that in quite a number of places on the network, but how are you going to decide where to put it? For a pure road transport network, given current regulations, you need to develop places where lorry drivers can sleep overnight. Again, you have a wide choice along the motorway network of where these things should be. You have to produce several of them. They are quite big facilities these days. They are not just a field with some tarmac in it. They have to be secure, they have to be lit and they will have other facilities; but how are you going to decide where on the network these areas get put? It is important for the national network that these things exist, but local authorities will have to co-operate in deciding where they should be. I see nothing in the definition of “strategic”, at the bottom of page 72, that allows such matters to be included in this part of the Bill.
Lord McKenzie of Luton
My Lords, we have Amendments 147FKA, 147HZA, 147HCA and 147HF in this group, which I will speak to in a moment. I will start with the question put by the noble Lord, Lord Lucas: how are we going to finish this Bill in time? I am sure the official answer will be that it depends on the usual channels and that it is not up to the Minister. However, given what we have to do, I reiterate the noble Lord’s point, which I know is shared by other noble Lords.
Our amendments are concerned with the duty to co-operate. We acknowledge that government amendments in the other place have improved the provisions, which have benefited from the input of the TCPI in particular. Notwithstanding this, we do not see the end result as providing a proper substitute for effective strategic planning for England. Many planning issues play out on a scale beyond local authority boundaries—the noble Lord, Lord Cameron of Dillington, and my noble friend Lord Whitty talked about housing, climate, biodiversity and key infrastructure issues, and the noble Lord, Lord Lucas, made a point about networks. I would say, without seeking to bring them back, whatever the difficulties with regional spatial strategies, they did provide a route to resolving these issues strategically. Is not the fundamental difficulty that the duty to co-operate will not deal with the hard issues that local authorities fall out over, particularly housing? My noble friend Lord Beecham instanced such a situation. This is an issue because there is at best a weak incentive for local planning authorities and others to comply with the duty, which is why I support the attempt of the noble Lord, Lord Greaves, in Amendment 147P to get a quasi-appeal process embedded in the arrangements.
Compliance with the duty is tested when the Planning Inspectorate takes a view on whether the local development plan is sound. It is therefore judged in retrospect. Will the Minister say more about how it is all to work? Take housing, for example. One local authority may have a need for housing that it cannot accommodate within its boundaries but which it believes could be provided in a neighbouring authority. That is not a unique situation; it is certainly one that we face locally in Luton. There might be genuine engagement around the issue but a difference of view about whether the needs should be met. The local authority with capacity might choose to accommodate the housing need of another adjoining local planning authority, or it might wish to use the capacity for a form of development that would not particularly help the restricted authority.
Is the independent examination required by Section 20 of the 2004 Act going to take a view on whether the outcome of the engagement is fair, reasonable or the most appropriate, or is it simply going to take a view on whether there has been an engagement but no meeting of minds, with the duty nevertheless satisfied? Is it not the case that there will be no mechanism in law that can require one local authority to take housing pressures generated by a neighbour? I accept the point that has been made that in many cases local authorities readily co-operate and these issues will not arise in practice, but that is not the case universally. There are real issues that the Government have to answer regarding the duty to co-operate.
We know that there is no spatial boundary and no clear relationship with LEPs, a point that has been raised by a couple of noble Lords. There is no list of key issues that co-operation should include, no key plan or outcome of the suggested co-operation. Our approach will be to support all the amendments that address these shortcomings wholly or in part, and I believe that that is the thrust of pretty much every amendment in this group, particularly those promulgated by the noble Lord, Lord Greaves.
On our own amendments, Amendment 147FKA requires an integrated transport authority and marine plan authority to be specifically included as persons to whom the duty to co-operate applies. This is a probing amendment to inquire whether there is any update of the draft list of public bodies that by order will be subject to that duty. ITAs are included on the list, as is the Marine Management Organisation, a point addressed by the noble Lord, Lord Greaves. I presume, as he outlined, that the latter covers a marine plan authority. What will the position be after the demise of PCTs, which are included in the draft list? Will GP consortia be included in it?
Amendment 147HCA adds to the activities that must be the subject of constructive engagement. They include the local transport plan and the preparation of joint infrastructure planning guidance as well as other activities that support sustainable development. Amendment 147HF expands on the requirements for the preparation of joint infrastructure planning guidance, how it should proceed and what it is to cover. Amendment 147HZA further qualifies that the active engagement should be with the objective of achieving sustainable development, consistent with the ethos that we are seeking to embed within the Bill.
I am conscious that the Minister might argue that a lot of these matters are going to be fleshed out in the NPPF. When we debated this last week, though, there was no enthusiasm for the Government to make this a statutory document. It is therefore just guidance, and anyway the NPPF is not supposed to contain anything like the level of detail necessary to ensure effective strategic co-operation. Generic planning policy does not amount to a spatial plan that shows where things go and how they relate to each other.
Lord Taylor of Holbeach
My Lords, I begin by thanking my noble friend Lord Lucas for raising the whole question of rabbits out of hats. I think that the answer was given to him by the noble Lord, Lord McKenzie of Luton: a question of time is a question for the usual channels. They will indeed ensure that we achieve our aspirations for the Bill—I am certainly determined to do so. The way that the Committee has dealt with this enormous group of amendments is extremely encouraging and suggests that we will be able to meet our task, and I thank noble Lords for agreeing to this grouping.
This is an important part of the Bill. The duty to co-operate will require local councils and other bodies to work together actively and on an on-going basis to ensure that strategic issues are effectively addressed in local and marine plans. The duty will be a key element of the Government’s proposals for strategic planning once the regional strategies are abolished. The noble Lord, Lord McKenzie, pointed to the fact that some issues are on a substantial scale and the region seems the most likely vehicle for their discussion. From my own experience, which is similar to his as we both live on the borders of regions, one of the most difficult aspects of planning on a regional basis in my part of the world was the very fact that the prime focus of economic activity in the area—namely, Peterborough—was in a different region, and the construction of a road between Boston and Peterborough required an enormous amount of convoluted negotiations in order to achieve this objective. In my view, and I have expressed this in debate before, large units create much more inflexible boundaries than do small, active units and this duty to co-operate ensures that the appropriate level of scale can be brought to bear on any particular aspect of planning strategy.
These authorities will be working alongside incentives such as the New Homes Bonus and the reformed Community Infrastructure, as has been said. It will act as a strong driver to change the behaviour of councils and other bodies. We have worked closely with a wide range of external bodies whose advice and expert guidance has helped us shape the duty that we are debating today.
As I move through the amendments and the comments made in the debate, I will do my best to answer the various points. Amendment 147FK seeks to remove the enabling power to prescribe bodies that will be subject to the duty to co-operate. That would just leave local and county councils as bodies that are subject to the duty. We believe this is not enough to achieve the degree of co-operation that is needed to ensure that local and marine plans address strategic matters effectively. Bodies such as the Environment Agency and the Homes and Communities Agency play a critical role on strategic issues and that is why we intend to prescribe them along with others which have an important contribution to make.
As I have mentioned, the list of prescribed bodies will include, for example, the Environment Agency, Natural England, the Home and Communities Agency and the integrated transport authorities. The draft regulations have been placed in the House Library and we will be consulting on them during the summer. I might say in her absence to the noble Baroness, Lady Andrews, that we all appreciate the work of English Heritage but it has an ongoing engagement with local authorities on the whole issue of the preservation of heritage and historic buildings. The expectation under this Bill is that this duty should be applied in a reasonable and proportionate way but should be part and parcel of the existing ongoing relationship between these national bodies and the local authorities concerned.
The noble Lord, Lord Beecham, asked about the Greater Manchester Combined Authority, which we jointly saw through in the Moses Room one afternoon. In effect, each of the local authorities is indeed a planning authority. The Greater Manchester Combined Authority does not have powers as a planning authority but, because it is combining in its activities, it can serve as an exemplar of a duty to co-operate. Indeed, it is a very fine example of that activity. The list is in the House Library and we intend to consult on the regulations over the summer months.
Amendments 147FJ, 147FL and 147FKA seek to add marine planning authorities on the face of the Bill. Amendment 147FK also seeks to add integrated transport authorities but I have covered that point. Amendment 147R seeks to amend the Marine and Coastal Access Act 2009, with which my noble friend Lord Greaves and I were intimately involved, to ensure that the Marine Management Organisation has regard to the duty to co-operate when preparing marine plans. It would also require the Marine Management Organisation to demonstrate compliance with the duty as part of the independent investigation process for marine plans. I can assure my noble friend Lord Greaves and, although the noble Lord, Lord Whitty, is not in his place at the moment, I would like to reassure him, too, that the duty to co-operate will indeed include the marine areas for coastal authorities.
We appreciate the importance of co-operation in relation to preparing marine plans and they are included in the activities on which co-operation is expected under the duty. That builds on current practice where the MMO has consulted widely, including with local councils and organisations like the Environment Agency in preparing the East Inshore and East Offshore Plans. The noble Lord, Lord Cameron of Dillington, will understand that there is a duty under the Flood and Water Management Act, which we considered fairly recently, for co-operation, not only within local authorities but with the Environment Agency, to make sure that proper flood plans are prepared. This is another example of this system working in practice.
We appreciate the important role of the MMO and integrated transport authorities under the duty to co-operate and that is why we have included them in the list of bodies that will be subject to the duty. As a result, Amendments 147FJ, 147FL and 147FKA are unnecessary. With regard to Amendment 147R, the first part of the amendment is also unnecessary because Clause 95 already applies marine planning. It would also require the MMO to demonstrate compliance with the duty as part of the independent investigation process. This process works very differently from the independent examination procedure for local plans, not least because of the inability to make any binding proposals. Therefore, we do not consider this amendment would assist in ensuring compliance with the duty.
Turning to sustainable development, which was mentioned by a number of noble Lords, Amendment 147G seeks to ensure that the preparation of local plans and related activities enables the planning of sustainable development. Amendment 147HZA aims to ensure that the engagement between councils and other bodies will achieve sustainable development. We share a commitment to sustainable development which underlies these. The Planning and Compulsory Purchase Act 2004 includes a duty on councils preparing local plans to contribute to the achievement of sustainable development. That is why we have included sustainable development in the heading of Clause 95 and put it at the heart of strategic matters that we expect to be addressed in local plans.
The duty to co-operate will ensure that councils and other bodies plan for sustainable development by engaging actively and on an ongoing basis on strategic planning matters as they prepare local plans. We think this addresses the concerns but we will look again at it and see whether we have gone far enough.
On the activities that are covered by the duty to co-operate, the noble Lord, Lord McKenzie of Luton, mentioned housing especially as being a big issue. We are going on to discuss housing in the next group of amendments. Amendments 147HA, 147HB and 147HC seek to extend the scope of activities to which the duty applies to include the implementation of local and marine plans as well as their preparation. We appreciate and share the desire to ensure that the strategic priorities of local and marine plans are implemented but we believe that the requirement to co-operate on the preparation of plans is a powerful one. These plans set up-to-date frameworks, which will be implemented by councils through the development management system and the delivery of sites in their ownership. Plans will also set the framework for the investment priorities of other bodies, which will be set out in their corporate plans. The amendment is therefore considered unnecessary.
Lord Beecham
The Minister has artfully described what an LEP is. Can he tell us what an LEP does? That is the thrust of the question.
Lord Taylor of Holbeach
What an LEP does is a subject for another debate altogether. However, it is well worth saying that it brings these local authorities, working together under a duty to co-operate in general terms, together with the local business community for the benefit of that community’s development in all the ways that we wish to see—economic, social and environmental. That, really, is what an LEP does.
Lord Beecham
May I press the Minister a little further? Does an LEP have powers and resources to do these things, or is it a forum for discussion? That has value but it is not quite the same as having functions of the kind I have just mentioned.
Lord Taylor of Holbeach
My Lords, what I am describing is exactly the vehicle through which power is exercised—the duty to co-operate and the construction of local plans. That is exactly what we are engaged in. The interface between the LEP and this process is important. We may have accidentally entered into something that elaborates, I hope, on the force of the Government’s argument in this area. My noble friend Lord Cotter was a little concerned that the membership of the boards of LEPs was perhaps not fully representative. We are not telling LEPs who they should put on their boards, but we expect board members to be drawn from a breadth of experience—from small enterprises through to large businesses and representing key sectors in their areas. My experience of the LEP that covers my area seems to bear this out through the individuals who have got involved and engaged with it.
It is appreciated that the aim of the amendments in this group is to ensure effective co-operation on local economic development issues. We share that objective but believe that it is better to give LEPs the space to innovate, rather than to impose a national statutory model on them. Effective co-operation on economic development issues can be achieved through an enabling power, which requires bodies that are subject to the duty to have regard to the activities of other bodies when preparing their local plans and related activities. We intend to prescribe local enterprise partnerships, which will represent local business interests in local planning regulations, for this purpose. We have placed the draft regulations in the House Library and will consult on them later this month. The approach that we are taking will support growth and strengthen local economic co-operation under the duty, but it will leave LEPs the freedom to innovate and work flexibly.
Lord Greaves
I hear what my noble friend says with interest. First, will he reflect on having just described LEPs as representing business interests? Surely the whole purpose of LEPs is that they are a partnership between business and local authorities, and therefore represent both those interests, not just one of them. Secondly, could he explain how merely putting a duty on LEPs to co-operate and promote co-operation amounts to a rigid national statutory framework?
Lord Taylor of Holbeach
I am sorry if I misled the Committee. I am well aware that LEPs are joint bodies, representing the interests of local government and business. I think that is what I described earlier. If the syntax of what I just said implied that that was not the case, I withdraw that. However, I think I said that we intend to prescribe local enterprise partnerships, which will represent local business interests in local planning regulations for this purpose. My point is that they represent business interests as well as community interests.
There are several amendments that I would loosely describe under the heading “Engagement under the duty to co-operate”. They include Amendments 147J, 147K, 147HP, 147HQ and 147JA. They seek to strengthen the engagement required under the duty to co-operate by requiring actions, rather than giving councils and bodies the flexibility to consider whether to undertake these actions. I refer again to the contribution of the noble Lord, Lord Cameron of Dillington. The key point is that strategic planning needs to be flexible to allow councils to decide how to co-operate effectively. This will depend on the issues that they face. As I have already described and as the noble Lord himself said, flood and water management requires a totally different combination of interests from, say, highways or housing policy, which are founded in different ways. That is the great advantage of this structure. Prescribing a specific outcome, such as a joint infrastructure assessment, would not allow for the flexibility that is needed to make this an effective vehicle.
Moving on, Amendments 147L and 147M address similar concerns about engagement. They seek to establish a specific document—a joint strategic infrastructure assessment—to be produced as evidence of effective engagement under the duty. Amendment 147HF addresses similar joint infrastructure planning guidance, which it implies should be included in the activities to which the duty applies. It sets specific requirements in terms of the purpose and content of these documents. The amendment seeks the involvement of councils that are part of a local enterprise partnership and requires that the objective of the bodies preparing these documents should be the achievement of sustainable development.
We share the objective of having a duty to co-operate that will ensure effective co-operation by councils and other bodies. However, strategic planning is not a one-size-fits-all approach. It needs to be a flexible process led by councils that allows them to respond to particular issues and local circumstances. Flexibility is essential to allow them to decide how best to work to serve their local communities, businesses and interested parties. We agree that strategic infrastructure plays a critical role in supporting the delivery of economic growth and housing, and that is why we have included it in the Bill.
Clause 95 requires councils to consider whether to work jointly on policies and activities related to strategic cross-boundary and county issues. It gives local planning authorities and county councils flexibility on how to fulfil this responsibility, rather than forcing them to produce specific documents. That strikes the right balance by ensuring that co-operation will result in effective local plans and by strengthening accountability to local communities, businesses and interested parties.
Councils that are part of a local enterprise partnership will already be subject to the duty to co-operate, and there is no need to refer to them separately. I have received assistance for the noble Lord, Lord Beecham, on the functions of LEPs. We do not want to be precise on their roles or functions. They should follow local priorities that they and their communities consider important. We want LEPs to leave development proposals to local enterprise. That is their task and their role. They are not public bodies and are not reliant on grant funding, but they provide a forum and an agency to start up funding, if that is part and parcel of the proposals. LEPs are therefore facilitators rather than providers, if I may describe them in that way.
Amendment 147J would also remove the requirement on councils and other bodies to consult on agreements on joint working approaches. However, we believe that this is an important element of co-operation in local planning that will allow all the relevant parties to suggest the most effective ways of working.
A number of amendments in the group seek to describe strategic matters, and would delete the reference to sustainable development and focus on development that impacts on at least two planning areas and projects forming part of a strategic network. Amendment 147HM focuses on development needs that cannot be accommodated within one planning area and the development of potential strategic importance. One might say that the issue of the housing requirements of Stevenage that the noble Lord, Lord McKenzie, brought to our attention is relevant.
It is appreciated that there are many ways in which strategic matters could be defined for the purpose of the duty to co-operate. We recognise that the concern behind these amendments is to ensure that the duty effectively captures strategic matters that affect more than one authority. We share this concern but believe that the duty should capture strategic matters in a way that is flexible and allows councils to respond to particular local circumstances. We wish to retain the reference to sustainable development because of the importance that we attach to it, as I highlighted earlier.
Some concern was expressed about statutory guidance. Amendment 147N deletes the requirement on councils and other bodies to have regard to any guidance that the Secretary of State may issue about how the duty to co-operate should be complied with. Such guidance, should the Secretary of State decide that it is necessary, will be important in helping councils and other bodies to understand how to discharge their responsibilities under the duty to co-operate. It will therefore be important that they have regard to it.
Lord Beecham
To take the Stevenage situation again as an example—there will be others—one authority may say, “We are not going to have housing in our borough to accommodate you”. There are two distinct points of view, and there is no real sanction. If a plan does not get approved, that suits the authority that wants to keep the status quo. Therefore, there is no recourse for the Stevenages of this world in that situation. Is that not the problem? There will be no co-operation and no plan, and there will be no solution to the problems that one of the authorities might have.
Lord Taylor of Holbeach
The process of co-operative working actually requires co-operation and a sense of shared purpose in serving the communities that the local authorities represent. There may well be tensions. There may well be situations where there is difficulty in seeking agreement. The law will place on local authorities a duty to seek to resolve these differences. If they show that they have not considered the outcomes of a co-operative process in formulating their local plans, those plans will be rejected. There is, therefore, gentle coercion. However, as with all circumstances where power is being devolved down to local authorities, the public interest is being vested in those democratically elected bodies—namely, the local authorities concerned. That is the purpose of this legislation. I do not need to lecture the noble Lord, Lord Beecham, on the virtues of democracy and the accountability that comes with it. What is missing is the sense that Whitehall is looming large over the whole process and is seeking to put pressure to achieve a particular outcome through this process. It is important to emphasise that.
Lord McKenzie of Luton
The noble Lord has been generous in speaking to all the amendments, but I want to be clear on the housing issue that the noble Lord, Lord Beecham, described. We have a similar issue in Luton. One authority with a desperate need for affordable housing that cannot be accommodated within the borough may look across the boundary and see opportunities there, but the other authority may take the view, “We don’t want any of this affordable housing encroaching upon our villages”. How is that situation to be resolved? You might have one authority that has genuinely gone through a consultation exercise, has taken a view, and has said, “We don’t want that form of housing here”. Another authority may have a desperate need for that housing. When the soundness of the plan is due to be judged, will the inspector involved just see whether or not the processes and so on have complied with what is required under the co-operation duty, or will there be some value judgment that the inspector can make, and say, “In all the circumstances, this was an outrageous position for you to take, and you have therefore not complied with the duty to co-operate”?
Lord Taylor of Holbeach
It may be easier to consider the detail of the point that the noble Lord has raised when we come to discuss the next series of amendments. In general terms, there will be evaluations not just of the outcome of the local plan but of the way in which evidence has been collected together in order to provide that plan. That is perhaps a safeguard that we might have. We will have an opportunity to talk about housing in particular, so I hope that the noble Lord will forgive me if I seek to move on—I have been talking a long time, but there were a lot of amendments.
In winding up, let me deal with Amendment 147HN, which seeks to define planning documents by referring to town and country planning and marine planning legislation. However, the term “planning documents” is not used in the provision. As it stands, the duty covers all local planning authority documents that set out their policies in relation to the development and use of land. It also covers marine plans. This amendment is therefore unnecessary.
Amendment 147LA, which seeks to require the bodies subject to the duty to co-operate to have regard to the activities of prescribed bodies, is also unnecessary as this is already provided for in Clause 95, in new Section 33A(2)(b).
I now come to an exciting point in bold type that says that Amendment 147Q addresses a typographical error in Clause 95. We are happy to accept this amendment when it is moved by the noble Lord. I hope that noble Lords will remind me when that particular amendment is called.
I will close by saying that I am satisfied that the duty to co-operate will ensure that local councils, county councils and other bodies work together in the spirit of constructive and active dialogue. That will maximise effective working in the preparation of local and marine plans in relation to strategic cross-boundary issues and county matters. With these reassurances, I hope that the noble Lords are willing to withdraw the amendments.
Lord Lucas
My Lords, perhaps the solution to the difficulty of the noble Lord, Lord McKenzie of Luton, is to reach back into the history of local government and reinstate single combat between neighbouring chiefs, who would then be seen to be earning their salaries at least.
In that great Gladstonian oration that we have just heard, I missed the answer to my question. How does the wording in Clause 95 permit the duty to cover the sort of situation that I was discussing, where there is a national network to be looked after and it needs to be discovered where the burden of that falls between various local authorities? I do not see how that is dealt with. I would be happy if the noble Lord would write to me between now and Report.
Lord Greaves
My Lords, I thank the Minister for the great care that he has taken in responding to these amendments. We might get on a bit quicker on one or two of them if the people providing him with his briefings understood that, often in Committee in this House, we put down “leave out” amendments in order to find out what things mean and how they will work, rather than delete them. We are not actually always trying to get rid of them. I realise that sometimes they have to guess which it is, but that is the case.
There is a difference of approach. Some of us would like to have a much clearer high-level duty placed on local authorities and other bodies and far less detailed regulations on how to do it. Some of us would like to rely on that, rather than have a weaker duty and then masses of detailed regulations. The duty to co-operate is a classic case of that. On the central issue of whether the duty in this part of the Bill is as strong as it needs to be, some further discussion will be required before we are finished with the Bill. There is a feeling in quite a bit of the Committee that perhaps it would be a good thing if we could find ways of strengthening the duty a bit further without resulting in even more reams of detailed rules and regulations. I hope that the Minister would be open to discussion of that, in so far as we are able to have discussions over the summer.
On that basis, I thank the Minister and everybody who took part in this debate, and I beg leave to withdraw Amendment 147FJ.
Lord Greaves
Southern Cross Care Homes
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I shall now repeat as a Statement the response given earlier today by my honourable friend the Minister for Care Services to an Urgent Question tabled in another place on Southern Cross Healthcare. The response was as follows.
“As the House will be aware, Southern Cross has been working with its landlords and lenders to agree a restructuring process to secure a viable way forward for the future. The Government have made clear, as I set out to the House on 16 June, that our overriding concern is the welfare and safety of the 31,000 residents in Southern Cross’s care, and we expect all parties to work together to secure a consensual, solvent restructuring of the business that meets their collective responsibility to secure the welfare and care of those residents.
When I last updated the House on 16 June, Southern Cross, its landlords and its lenders had announced the previous day an agreement to work through, over a period of four months, arrangements for a consensual, solvent restructuring. Yesterday’s announcement was one step in that ongoing process, and discussions continue to resolve the remaining steps.
I know that there has been some concern about what yesterday’s statement may mean, and that residents and their families—as well as staff—are anxious to know what will happen. Let me repeat the assurance I have given to this House before: whatever the outcome, no one will find themselves homeless or without care. We will not stand by and let that happen. We have worked and will continue to work with the Association of Directors of Adult Social Services, the Local Government Association, the Care Quality Commission and others to ensure that there is an effective response to any potential disruption to the continuity of care, and that all residents are protected. A consensual restructuring that assures a smooth transition to new arrangements will mean that those contingency arrangements will not be needed, and that is what we want to see.
Let me reassure the House on some of the questions that I know honourable Members may have. First, yesterday’s announcement—which stated that at the end of the restructuring process the Southern Cross corporate entity would cease to exist—has no effect on the provision of care or the operation of care homes. Southern Cross remains in operation, and will continue to operate all its care homes until any transfer to new operators takes place.
Secondly, the transfer of care homes to alternative operators will be a managed process that ensures the continuity of services. Yesterday’s statement makes clear that care home staff will transfer on their current terms, and the service that residents receive should be unaffected by the transfer. All parties involved in the negotiations have given a clear commitment that continuity of care will be paramount in this process. Local authorities are already working to ensure that they can assist in the smooth transfer of arrangements of homes in their area, and the department has been working with ADASS and the LGA to support that.
Thirdly, no transfer will take place without the new operator being approved and registered by the Care Quality Commission. There has been speculation that companies with no experience in the care sector will take over the running of homes. That will not happen. Alternative operators will need to be reputable and experienced companies which are able to satisfy the CQC that they are capable of delivering high quality care and meeting all regulatory standards. The CQC will not drop its standards in ensuring that requirements are met. I understand that each of Southern Cross’s landlords are settling their arrangements as to which care home operator to work with, and that is an essential part of the discussions that are ongoing. That will cover all landlords, so that there is a clear way forward for all homes.
Finally, I can assure the House that the Care Quality Commission has been working with Southern Cross, landlords and other stakeholders for several months to ensure the smooth transition of services and has processes to deal with re-registration and undertake the essential checks needed as a priority. It is having ongoing conversations with Southern Cross, landlords and other providers on the timing of applications.
Our priority as a Government is to ensure that the current problems with Southern Cross are resolved and that a sustainable way forward can be secured. But as the Prime Minister has previously stated to the House, we are also clear that we will take action for the future to ensure there is proper oversight of the social care market. The Health and Social Care Bill allows us to extend to social care—if we decide that it is needed—the financial regulatory regime we are putting in place in the NHS. However, regulation is not the only solution. We will approach this in a measured way and as part of wider reform in the social care market to ensure that we do not face a similar problem in future.
I said that yesterday’s statement from Southern Cross was one step in an ongoing process over the coming weeks and months. Until all future arrangements are settled, Southern Cross will continue to operate and provide care in all its care homes. It is only at the end of the process, when all transfer arrangements have been completed, that Southern Cross as an entity will cease to exist. By then, all homes will have a clear plan for future operation and for the continuity of services into the future.
What we now want to see is a swift conclusion to these important discussions, to offer reassurance and certainty to residents and their families. I want to reassure the House that the Department of Health has been and remains fully engaged, and senior officials are in daily contact with all the parties to ensure that the interests of residents are at the forefront of all discussions. The Government will continue to keep close contact with all involved in the process, and I will continue to keep the House informed”.
My Lords, that concludes the Statement.
Baroness Thornton
My Lords, I thank the Minister for repeating the Statement. Although we had a discussion about Southern Cross two weeks ago, it is an ongoing sorry tale which seems to get worse by the day for the residents, their families and the staff of Southern Cross. I think the Minister will accept that Southern Cross’s announcement yesterday that the responsibility for managing the 752 homes will pass back to the 80 landlords who own them will almost certainly cause a vacuum that is bound to be the source of great uncertainty and anxiety among residents and their families.
I am reassured that the Government are very active on the matter, but there are questions that we need to have answered. Southern Cross is not being informative and there are things that we need to know about the situation. My questions concern what happens next and how the Government will manage this difficult situation. Can the Government publish a list of all 80 landlords? I have read in the media rumours that some landlords still have to be identified. Yesterday, it was further announced that control of 250 of the homes would be handed back to their landlords immediately. What does immediately mean? Does it mean tomorrow? What will happen? What is the process?
The House needs to know which homes those are and who is running them. Is a list available? It is certainly not available on the Southern Cross website. It is also likely that many of the landlords will have little or no experience of running care homes. For example, does the Minister have any information on the intentions of property-owning companies such as London & Regional, which owns 90 Southern Cross homes, or Prestbury, which owns 21? In the previous Statement in the House, the Minister assured the House, as he has again, that the Association of Directors of Adult Social Services is trying to support its members, who will have a key role in ensuring that the new operating companies are able to provide good quality care and that they know how to perform financial stress tests to ensure that their business models are sound. What support and assistance are the Government providing to ADASS?
I read from my press cuts that Downing Street has said that public money will be used to ensure that those in the homes can stay. Is that true and how would it be achieved? Would money be made available through local authorities? If the Government intend to provide additional resources, they will need to do so to hard-pressed local authorities if they are expected to help. What advice are the Government giving to local authorities if the property company or landlord for any of the home-owning companies is offshore?
I am reassured that new operators taking control of the homes will need to be registered with the Care Quality Commission and that plans are in place to ensure that that happens, but given the pressure on the CQC, I wonder how it will be able to achieve that within the timescales that we seem to be facing. Will the Government make more resources available to the CQC to deal with that worsening situation?
What can the Minister tell the House about the terms and conditions of the 44,000 employees of Southern Cross? Does the Minister know how many homes are likely to close? What is the timetable for such closures likely to be? What will happen to those residents? We know that, for the very old and very vulnerable, a move such as that can result in their death or hospitalisation. That is an extremely distressing matter.
Turning to the care home sector more generally, it would seem that although Southern Cross is definitely the most urgent, it is not alone in the sector in its struggles. The UK’s second largest care home provider, Four Seasons Healthcare, has amassed debts of £730 million that have to be repaid by September 2012. What will happen to the Lloyds properties, as this landlord is in administration? NHP, which owns 250 homes, is at a standstill with its bondholder. Indeed, my honourable friend John Speller MP, in his question in another place to the Secretary of State for Business, Innovation and Skills, pointed out that it is not just old people we are talking about here. For example, Craegmoor provides residential care services for adults with mental health problems or learning disabilities. It has 3,300 places, 174 care homes and a debt of £37.8 million. Care Principles provides similar services. It has 450 places in 17 care homes and secure hospitals; its debt is £45.77 million. Care UK runs care homes and services for the elderly. It has 3,100 places in 57 homes and a debt of £127 million.
Clearly these problems have to be addressed. I do not expect the Minister to answer questions about those homes. However, I am asking the Minister whether there is a plan and, if so, what is it? It seems to me that Southern Cross is actually the beginning of this process and solving its problems may not be sufficient.
Earl Howe
My Lords, I am grateful to the noble Baroness for her comments and questions. She asked a number of the latter. I hope I can answer most of them. It is important to appreciate that this is a managed process. The announcement that the Government made last month of a four-month restructuring window still applies, and we are at the first major stage of that process. Therefore, anxieties about the welfare of residents are misplaced because this is not a case of the collapse of Southern Cross. It is still very much a managed and solvent restructuring that is going on.
The noble Baroness asked me about the landlords. It is not for the Government to liaise with all the landlords directly but they are all represented on the restructuring committee, working to develop a plan for the future. Local authorities and the CQC will link as necessary with all the landlords as they take through their plans for the future management of homes. I am advised that the CQC understands that the Southern Cross landlords’ committee wants the handover of care home properties to take place at the end of September. The CQC is co-ordinating its activities to ensure that regulation does not prevent the handover across England. I hope that reassures the noble Baroness that nothing is going to happen tomorrow. It is very much part of a planned and structured process.
The noble Baroness asked about care homes that were in debt. Many companies, in all sectors, may have some degree of debt, quite obviously—this is a normal part of business, not necessarily a concern. We are clear that Southern Cross’s particular business model—not owning but leasing nearly all its properties—is a unique model and that is what has given rise to its particular problems.
The noble Baroness asked about the consequences of the landlords taking back their properties. The department is very clear that it expects all parties to maintain service continuity and quality of care while the restructuring process is ongoing. Our principal concern, as I have said, is for the safety and well-being of the residents. CQC will pay particular attention to any care homes where there is a concern that quality may be at risk or inadequate. It does have the resources to do this. It has indicated that there is not a problem in that sense. CQC has regular dialogue with Southern Cross at corporate level in addition to the attention it gives to individual services. We have emphasised to CQC the importance of ensuring that Southern Cross homes continue to comply with regulations and safety and quality requirements. Of course, we expect CQC to take the necessary action if it finds, for example, that staff reductions are affecting safety and quality of services.
The noble Baroness asked about government money for Southern Cross. Southern Cross is not asking for a bailout. It is looking to resolve its problems and it is for the company, its landlords and those with an interest in the business to put in place a plan that stabilises ownership and operation of the care homes. That process is happening and we must let it continue.
A number of providers that will acquire Southern Cross homes are already registered with the CQC as care providers in their own right, such as Four Seasons. There are established processes in place to allow these providers to extend their current registration to take on additional care homes. That process, assuming that it occurs, is relatively straightforward. Providers who are not known to or registered with the CQC will require a full application that will be subject to full scrutiny and a determination of fitness to provide the service. This cannot be a case of companies registered overseas suddenly becoming care home operators—that will not happen. Any new operator must demonstrate that they are fit and proper people to conduct this type of business and prove that to the CQC. Each landlord will be required to ensure that it has arrangements with a reputable and capable operator which can meet the CQC’s requirements. This is what the companies are now resolving as restructuring discussions continue.
It is also important to emphasise that while the CQC is committed to ensuring continuity of care, it will not lower the regulatory bar or reduce the rigour of registration. CQC’s principal concern is the safety of service users and it will not compromise on the standards that are required. At the same time, we expect that local authorities will ensure that any transfer or new arrangement to provide care for residents takes place smoothly and with continuity of care for service users assured. We are talking to the Association of Directors of Adult Social Services, the Local Government Association and, of course, the CQC, as I have mentioned, to ensure that robust local arrangements are in place.
Finally, the noble Baroness asked about the staff and their legal position. This is not a matter that the department can comment on directly, but staff are protected by the relevant employment law. I understand that Southern Cross has undertaken in a letter to care staff that they will be transferred under their existing terms to new operators under TUPE. That is our understanding of the position.
Earl Attlee
My Lords, perhaps I may remind the House of the benefits of short questions which will enable my noble friend the Minister to answer as many questions as possible.
Baroness Barker
My Lords, first, I wish to return to the issue that I raised with the Minister on 16 June when we last discussed this matter: the inequalities in geographical distribution of the problem. In particular, will help be given to local authorities in the north-east, where Southern Cross was the major provider? There are not vast numbers of other providers and the problem is far more acute because there is no surplus residential care into which people can be quickly fitted.
Secondly, will the department put in place a monitoring programme for all the residents of Southern Cross, to be carried out over the next two years to monitor the welfare of the individuals who are in the midst of this crisis? The noble Baroness, Lady Thornton, mentioned a fact that has been borne out by research over many years, which is that when people in residential care are subject to stress of this kind it has a very detrimental effect on their health. I wonder whether, in the midst of this, the Government might take that duty upon themselves.
Earl Howe
My clear understanding is that many homes will continue in operation with the same staff, and that the residents of those homes will therefore not be required to move. We hope most earnestly that no resident of any Southern Cross care home will be required to move. I am not aware of the precise situation in the north-east of England, but my noble friend’s comments suggest to me that there is no undue cause for concern in that part of the country. The plan certainly would be, as far as possible, to maintain the residents in their current homes, and they should notice no difference in the quality of care that they are receiving.
To the extent that residents are required to move—and as I have said, we hope that that will not be necessary—yes, of course there will have to be a process of monitoring the welfare of those people in those circumstances. The duty to do that falls primarily on local authorities, where they are the commissioner of the care, but I have absolutely no doubt that the CQC will wish to add to that oversight. I believe that it is too soon to speculate—because we are not sufficiently far down the restructuring process—on the extent to which residents will be disrupted, but the number of homes that do not in the end prove viable as businesses will emerge in due course.
Lord Campbell-Savours
My Lords, first, I noticed that the noble Earl did not respond to the question asked by my noble friend on the publication of the names of the property companies that stand behind many of these homes. Will a special regime be introduced by the CQC of random unannounced visits for homes managed by property companies? It is important that we get an assurance that it will carry out random unannounced visits as against other forms of visits which are possible. Secondly, given that Regulation 13 of the CQC registration regulations 2009 requires a service provider to,
“take all reasonable steps to carry on the regulated activity in such a manner as to ensure the financial viability”,
of the operation, who then is going to monitor compliance with Regulation 13? Should we not now have—set and enshrined in some regulatory arrangement —some authority given the power to seek to secure compliance, or are we simply going to leave it to an offence, as the noble Earl has referred to in an Answer he has given to me, whereby no one is actually monitoring these matters?
Earl Howe
First of all, the CQC is an independent body; it is not under the jurisdiction of Ministers, and it must be free to organise itself as it sees fit. I cannot undertake on its behalf that it will perform random unannounced visits. It does, however, do that as a matter of course, and it generally does so on a risk-based basis so it would surprise me if, where the CQC saw that there was an enhanced risk to residents, it did not make it its business to perform inspections. Looking ahead into the medium term, should the Health and Social Care Bill pass through Parliament, as the Government propose, local HealthWatch will be in a position to enter and view care homes, as LINks are at the moment, but I believe that HealthWatch will be, in most areas at least, in a better position to undertake such inspections on a random basis.
The financial liability will of course not be the province of HealthWatch, but any concerns about the welfare of residents would be subject to the powers of HealthWatch to refer up to HealthWatch England, and in so doing, through HealthWatch England to the CQC. The financial viability of care homes is of course a live issue. I have commented on this in the past, and we are certainly considering whether Clause 57 of the Health and Social Care Bill could be used to extend the regulatory regime that we are proposing for the NHS to care homes. That is something that we will need to discuss because it would amount to a regulatory burden on care homes. Nevertheless, I do not belittle the issue. My ministerial colleagues in the Department for Business, Innovation and Skills are looking at the issue of private bodies that provide publicly funded services and whether there are implications in the sense that the noble Lord has indicated.
Lord Elystan-Morgan
My Lords, has the Minister considered the legal question of fraudulent trading, which seems to be apposite not only to the case of Southern Cross, but indeed—according to the comments made by the noble Baroness, Lady Thornton—to other care companies as well? Does the Minister recollect that exactly 50 years ago, in a case called Wellfield, this House, sitting in its judicial capacity, defined fraudulent trading as a situation where the directors of a company continue trading, knowing that there is a risk that debts will not be able to be cleared as they arise? Bearing in mind that as far as Southern Cross is concerned, many months ago, it announced that it would not be able to pay its tax liabilities, nor indeed to pay more than 70 per cent of the rents due to lessors, would it not seem that there was a clear breach of what is now Section 993 of the Companies Act 2006?
Earl Howe
My Lords, my advice is that Southern Cross is not insolvent in either sense of the word. Its assets, I am told, exceed its liabilities, and it is able to meet its commitments as they fall due, thanks to the agreement reached between the company, its landlords and its bankers. The process announced on 15 June is the key to this: the company’s restructuring committee is developing a plan to stabilise the ownership and operation of Southern Cross care homes. We expect, as I have said, that there will be an orderly process of reassigning homes to landlords and new operators. That process will take place between now and October, during which time continuity of care will be maintained. Nothing that I have said changes the outlook for the medium term, and I believe that we can say, and that the company can say, that insolvency is not an issue at present.
The Lord Bishop of Manchester
My Lords, for all the assurances that the Minister has given, and for all his obvious sensitivity to the issues that many residents face, the truth remains that a lot of people in these care homes feel themselves at present to be in an extremely vulnerable position. In these circumstances, does he feel that the level of salary and bonuses that some directors have is appropriate, and would he like to comment, in the light of what he said earlier about financial implications, on whether or not that is an area that in future he would feel needs to be examined more carefully?
Earl Howe
I am grateful to the right reverend Prelate. I do not think any of us feels comfortable if the directors of struggling companies take substantial bonuses. I have to say that I do not have a briefing on whether the directors of Southern Cross have taken substantial bonuses in recent months, but I shall make it my business to try to ascertain that. But of course the right reverend Prelate is right to say that we must be clear that the stability of care homes, looking after frail, vulnerable, elderly people, should not be put at risk by mismanagement. I am afraid that Southern Cross has been a story of mismanagement since it was established in its present form.
Lord Beecham
My Lords, my noble friend Lady Thornton referred to the fact that the owners of many of these properties are offshore companies. Is the Minister comfortable with the fact that according to a claim by the GMB union, some 336 of these care homes—just under half the total—are owned by companies outside the UK, with 325 of them registered in tax havens? Does the Minister agree, as I asked yesterday of his ministerial colleague about the Statement on the White Paper on public service reform, that the high proportion of residential care places managed by Southern Cross—some 18 per cent of the total of places, with roughly a further 18 per cent managed by another five companies—does not represent diversity of provision and increases the risk of things going seriously wrong on a large scale, as has happened in this case? Does that not lead to the possible conclusion that to talk about diversifying without any indication of a limit on the number of places that might be operated in a field like this needs to be rethought?
Earl Howe
I think the noble Lord and I are at one in wanting to see diversity of provision. The restructuring that I suspect we are likely to see emerge from this will result in just that, as a matter of fact. It appears that Southern Cross is to be split into a number of smaller enterprises, and that in itself should, we hope, lead not only to a more diverse arrangement but a more secure one. However, I do not take issue with the thrust of the noble Lord’s remarks at all.
On the issue of the ownership of some of these care homes, our concern as Ministers is not so much where the shareholdings lie as on whether that in itself has implications for the quality of the care that residents receive. I am not aware that that has been a factor. As long as the ownership of these care homes is legal and we are not seeing tax evasion as opposed to tax avoidance, to an extent it is not an issue for the Government. But it is something that is likely to be examined quite closely as the restructuring takes place.
Lord Sutherland of Houndwood
My Lords, I welcome the way in which the Minister’s Statement has given reassurance to those in care homes and their families. It is immensely important that we continue to do that. There is, however, a further area of reassurance that I hope the Minister will be able to say something about. We have reassured staff through TUPE that perhaps there is some protection for their terms and conditions, but speculation in the press today suggests that the cost of care in these homes might rise significantly because of a period of underinvestment. I hope that we can at least monitor any such rises to ensure that they are gradual rather than sudden and therefore financially debilitating.
Earl Howe
My Lords, the noble Lord, Lord Sutherland, makes a very good point. The advice I have been given is that during the restructuring process, the cost of care should not be a factor. While local authorities may have to revise their budgets, that should not result in disruption for residents.
Lord Popat
My Lords, does my noble friend agree that most of the landlords of these care homes were the former operators themselves, and therefore the transfer of registration by the CQC will be a very smooth process? However, we will end up with a few homes where the landlords might not want to take them back. Should we not have contingency plans for local authorities to rent such premises on a temporary basis until a permanent solution is found?
Earl Howe
My noble friend is quite right to say that it is indeed possible that landlords may not wish to take the properties back, but in that scenario it has been agreed that those landlords will look to partner with a reputable care home operator. So it might well be that a care home will join a consortium run by one of the major care home operators which is now in discussions.
Lord Bilimoria
My Lords, the Minister said that Southern Cross’s business model was unique, but surely it is not since so many care homes have been following the Opco/Propco model. Does the Minister therefore agree that it was possibly not just mismanagement that was responsible for this situation, but the fact that the business model which worked in the good times—the previous owners did very well out of it—is not working now? As the noble Baroness, Lady Thornton, said, several care homes are in difficulties. Does the noble Earl think that the cuts that are being made might have a role to play as well? Have the Government made a full analysis of the dire situation in the care home sector?
Earl Howe
Clearly, my Lords, before the Government produce a White Paper on social care a thorough analysis will be done, and we have the Law Commission report that will guide us in part. Southern Cross developed a business model that worked during times of increasing prosperity, when property values were buoyant and occupancy levels were similar, but it entered into contracts with its landlords which are proving unsustainable in the present climate. Demand for residential care is reducing generally. Not only are councils purchasing fewer care home places, but people are also opting for greater personalisation and more innovative approaches to providing care services, including being looked after at home. My advice is that the Southern Cross business model is unique. That may be—the noble Lord has considerable knowledge in this area—an overstatement and perhaps there are some care homes which are similarly structured, but it is certainly the largest and most significant model of its kind that we are aware of. From the advice I have received, I do not think we should be unduly concerned that other instances on a par with Southern Cross are likely to occur.
Lord Hollick
My Lords, I welcome the Government’s decision to prioritise sustainability because the demise of Southern Cross is a stark example of the dangers to sustainability of overly aggressive financial engineering: too much debt, too many unwise property deals and too many gullible banks; in short, too much avarice and not enough prudence. As the Government contemplate how best to regulate the financial aspects of this industry, how will they ensure that the new operators of Southern Cross care homes will be financially sustainable?
Earl Howe
My Lords, we are reverting to the question asked by the noble Lord, Lord Campbell-Savours. The CQC already has some duties to ensure that the care homes it registers are able financially to sustain their business, as well as simply providing a quality service. But this is clearly an issue that needs to be looked at. As I have mentioned, we are taking powers in the Health and Social Care Bill which potentially could see the care-home sector subject to the kind of financial regulation that we are applying to the NHS. This is a work in progress.
Electricity Market Reform
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, with the leave of the House, I shall now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Energy and Climate Change. The Statement is as follows.
“With permission, Mr Speaker, I would like to make a Statement on the reform of the electricity market.
Since privatisation in 1990, our electricity market has served us well, delivering reliable, affordable electricity, but in the years ahead we face unprecedented challenges. The existing market was not designed to meet them. Over the next decade, around a quarter of our existing power stations will close, threatening the security of our energy supplies. Some £110 billion of investment is needed to replace them and to upgrade the grid. That is twice the rate of investment of the last decade and the equivalent of 20 new power stations. At the same time, demand for electricity could double over the next 40 years as the population increases and we increasingly turn to electricity for heat and transport. We also face ambitious carbon emission and renewable energy targets, as we seek to build a cleaner energy future for Britain and the world.
In order to achieve our goals we need to take decisive action now to increase low-carbon electricity generation, including nuclear, renewable energy and carbon capture and storage. None of these challenges can be met for free. We will have to pay to secure reliable, clean electricity for the future and we cannot ignore the long-term trends in electricity prices. Increases in wholesale costs and in the carbon price are likely to lead to higher bills in the future, even without factoring in the huge investment needed in new infrastructure. So it is vital that we put in place market arrangements that deliver this investment as cost-effectively as possible. The current electricity market is simply not up to the job. It cannot deliver investment at the scale and the pace we need.
Without reform, our reserve capacity—the power plants we can call on when demand surges—will fall to uncomfortable levels. We would face a much higher risk of blackouts by the end of this decade. We would also be locked into a worrying reliance on fossil fuel imports, putting us at risk of rising and volatile prices. Consumers could end up paying even more. That is why I am putting before the House today a series of measures to reform the electricity market, diversifying our generation mix and boosting investment in secure, sustainable and home-grown, low-carbon technologies. There are five key elements to our reforms.
First, the Chancellor announced in the Budget a new carbon price floor to put a fairer price on carbon, reduce uncertainty for investors and provide a stronger incentive to invest in low-carbon generation now.
Secondly, we will send a clearer message that low-carbon electricity is a key part of our future energy mix. We will introduce a new system of long-term contracts in order to remove uncertainty for both investors and consumers and to make low-carbon energy more attractive. Contracts for difference will be introduced for all forms of low-carbon generation, lowering the cost of capital and allowing clean technologies with high up-front and low long-run costs to compete fairly against traditional unabated fossil fuels. This will build on the carbon price floor, providing the additional clarity and certainty that investors need.
Thirdly, we will introduce an emissions performance standard to send a clear regulatory signal on the amount of carbon new fossil-fuel power stations can emit. This will reinforce the requirement that no new coal-fired power stations are built without carbon capture and storage, while ensuring that vital investment in gas can take place. CCS is a key part of our plan to decarbonise electricity generation. It is the only technology that can potentially reduce emissions from fossil-fuel-fired power stations by as much as 90 per cent.
Fourthly, to ensure security of supply in the future we will introduce a new contracting framework for capacity, changing the way we secure our back-up electricity. This capacity mechanism could mean centrally procuring capacity which is set aside from the market and used only when it is needed, or it could mean a market-wide mechanism, in which all providers offering reliable capacity are rewarded. Under both options, we plan to ensure fair and equivalent treatment between all the ways of achieving what we want—demand response, storage, interconnection with our European partners and extra generation. Shifting or cutting demand for electricity is likely to be more cost-effective than simply building more and more power plants. It complements our work to drive down demand through energy efficiency measures such as the Green Deal and smart meters.
Fifthly, we will put in place transitional arrangements to ensure that there is no hiatus in investment while the new system is being set up, and we will create new institutional arrangements to deliver the reform package.
Together, these reforms will tackle the immense challenges facing the electricity market. They will put in place the framework to deliver the capacity and demand-side response we need in order to guarantee future security of supply. They will encourage investment in proven low-carbon generation technologies and they will give investors confidence that there will be a market for electricity generated with commercial carbon capture and storage, confidence that will drive investment in both demonstration and commercial CCS plants.
Six energy companies supply around 99 per cent of customers in the UK. Alongside action by Ofgem to improve liquidity, these reforms will boost competition within the market and make the UK a magnet for low-carbon investment, generating jobs and growth. This will help energy-intensive industries. However, we are also committed to bringing forward a package of measures to ensure our continued international competitiveness.
Finally, the reforms I have set out today will achieve our aims at least cost to the consumer, with bills for households and businesses likely to be lower and less volatile over the period up to 2030 than if we had left this market as it is. They will enable us to build a flexible, responsive electricity system, one powered by a diverse and secure range of low-carbon sources en route to a cleaner, greener future, insuring us against fossil fuel price shocks, ending 25 years of policy dithering and keeping the lights on and the bills down.
Alongside the electricity market reforms, I am also publishing today the renewables road map. For too long, discussion about renewable energy has focused on barriers. Now, for the first time, we have set out a detailed step-by-step plan to overcome those obstacles. The road map sets out a comprehensive action plan to accelerate the UK’s deployment and use of renewable energy. It puts us on a path to increase our renewable energy consumption fourfold by 2020 while driving down the cost over time. Growth on that kind of scale will be challenging, but necessary. The road map identifies eight technologies that have the greatest potential for the UK, such as offshore wind, where we have abundant natural resource and already have the world’s largest market.
Subject to further value-for-money assessment, the department is setting aside up to £30 million over the next four years to support technology development programmes to improve the efficiency and reduce the costs of offshore wind. With industry, we are setting up a task force to drive the work to achieve cost-competitive offshore wind. The recently published microgeneration strategy also outlines the actions that the Government are taking to tackle the non-financial barriers which could prevent microgeneration from realising its full potential. Together, the renewables road map and the microgeneration strategy will reduce costs for consumers and enable mature renewables to compete against other low-carbon technologies in the longer term.
I am also publishing today the final report of the Ofgem review. The review reaffirms the Government’s commitment to a strong, independent regulator, able to give confidence to investors, protect consumers and help meet our energy and climate targets. The summary of conclusions was published in May; this final report provides further detail on how the Government will seek to strengthen the regulatory framework.
The package of reforms that I have announced today will yield the biggest transformation of the market since privatisation. They will create an enduring framework for future investment and secure our electricity supplies for the future. They will provide our consumers with the best deal possible, help us meet our ambitious carbon targets and put us at the forefront of low-carbon technological development, ready to lead the world in the next energy revolution. I commend the Statement to the House”.
My Lords, that concludes the Statement.
Baroness Smith of Basildon
My Lords, I thank the Minister for repeating the Statement. We welcome the fact that Chris Huhne, the Secretary of State, is seeking to address the matter and agrees with his predecessor on the need for reform. We should recognise that he has come a long way on this issue. He no longer describes nuclear as a “failed technology”, but says that it is an essential part of the UK getting off the “oil hook”, accepting its role as part of the energy mix for energy security. I am still unclear on the Government’s position on subsidy for nuclear. Chris Huhne has mentioned on many occasions that there will be no subsidy, but that seems to be interpreted as no subsidy that is different from that for other low-carbon generation.
In his December Statement, the Secretary of State said:
“We have a once-in-a-generation chance to rebuild our electricity market, rebuild investor confidence and rebuild our power stations … this will be a seismic shift, securing investment in cleaner, greener power and delivering secure, affordable and low-carbon energy for decades to come”.—[Official Report, Commons, 16/12/10; col. 1066.]
We agree that that is what this reform should deliver, although I would have put greater emphasis on affordability. That is why this Statement and the legislation that will follow are so important. If we were to get this wrong now, it would be a missed opportunity and would bind future generations to costly and ineffective measures.
So what do we expect from this reform? First, the consumer must be at the heart of any reform. We have to reconcile the interrelated aims of energy affordability to protect the consumer, decarbonisation to protect the environment, and energy security to protect both the consumer and the economy. The Government have recognised that the current energy market structure will not deliver investment in new low-carbon technology and provide the additional capacity that is needed to meet our carbon reduction targets. We welcome that acceptance, because it is clear that fundamental change is necessary to meet these targets, secure energy supply and encourage investment. We will want to be reassured that these proposals add up to a responsible and realistic package that will deliver those interrelated aims
I regret that, to date, despite our seeking to be very constructive with the Government, we consider that they have fallen short in their stated aim to be the “greenest Government ever”. Every time that one firm announces a price increase, the Secretary of State’s advice is to shop around and change energy supplier. We can do that only so many times as one after another company puts up its prices. For the sake of the economy, business and domestic consumers cannot continue paying ever higher prices.
The Energy and Climate Change Committee in the other place has recommended that any reforms need to be accompanied by,
“sound social policy to protect vulnerable consumers”.
Given that the Government have pulled all government-funded energy efficiency programmes, can the Minister say anything today about how these reforms will help both business and domestic energy consumers with their ever-increasing bills?
The Minister’s comment in the Statement that bills for households and businesses are,
“likely to be lower and less volatile over the period … than if we had left the market as it is”,
really is not good enough. If, as predicted, consumers are going to be asked to pay more to deliver this programme, we need to give them far greater certainty. I ask the Minister and his colleagues to reflect on that.
Another concern is that recent ill-judged government intervention in the energy market has already led to a hiatus in energy investment and uncertainty across all sectors. I do not want to labour the point today as we will debate on Thursday the solar feed-in tariffs fiasco that has destabilised the solar sector and sent shockwaves through other renewable sectors, but there are other issues which have had an impact on investment. Companies, including RWE, are considering pulling out of the UK because of the uncertainty caused by the Government on investment. That has been underlined by the Pew Environment Group’s report showing the UK slumping from fifth to 13th in a global ranking of countries for green investment. Constraints on the green investment bank have led the CBI deputy director-general, John Cridland, to say that the bank,
“certainly won't work if it needs the Treasury's permission to blow its nose”.
The Energy Bill seems to have disappeared into a black hole in the other place; it will not even have its final stages before the recess. To date, the Government’s track record is not as good as we would want it to be. In all our interests, with the White Paper before us today, the Government cannot afford to get this wrong.
As the Minister has acknowledged on many occasions, we want to be supportive, and I always approach these issues constructively. We will support measures that achieve the Government’s stated aims and benefit the consumer and the economy. The Government will want to satisfy some key tests if reform is to work. A new market needs to be greener but also create confidence, clarity and certainty for industry; make room for innovation in emerging energy solutions; provide a good deal for both domestic and business consumers as users and taxpayers; and deliver the necessary investment in the UK energy sector for security of supply.
The document before us today is quite lengthy, as are the associated documents published by the Government. They propose a mixed bag of measures. I am not sure that I yet fully understand how they will work together to give us the policy structure that we need to achieve our objectives.
For example, the Energy and Climate Change Committee in the other place considers that the level at which the emissions performance standard has been set,
“would have no material impact and is therefore pointless”.
Since that report was published, have the Government been able to take note of those concerns and make any adjustments before the final White Paper was published today?
The carbon price floor was introduced by the Budget independently of these proposals. DECC seems now to understand the impact of what is seen as a tax grab on industry, thereby potentially exporting businesses and their emissions overseas. What action will the Government take to ensure that this does not disadvantage British business, and what discussions on these issues has the Minister had with organisations representing intensive energy users in industry in the UK?
I certainly welcome the Government’s acceptance that their message that low-carbon electricity is a key part of our future energy mix has not been clear enough and that action will be taken to remedy this. I look forward to further announcements on the detail. As he will appreciate, the renewables road map, to which he referred, can work only if investors can have confidence in the Government’s ambitions.
The detail in the Government’s plans regarding the ongoing consultation on the capacity mechanism and the contract for difference will be crucial. These are complex issues and the devil will be in the detail.
The transitional arrangements to ensure that there is no hiatus in investments while this new system is set up are welcome, but, as I have already said to the Minister, there is a hiatus now and transitional arrangements are urgently needed to restore confidence in the market. Perhaps the Minister could say something about the timing of the transitional arrangements. That would be very helpful.
Our existing “big six” energy companies will undoubtedly need to help to provide our new energy generation, but we need to free up the suffocating oligopoly which stifles real competition from new energy investors. Today’s announcement and publication of the documents is welcome and part of an ongoing process. However, to identify the problems is easy—we have discussed them in your Lordships’ House and the other place on many occasions—but the challenge is to meet the objectives. We will continue to play our part in that.
Lord Marland
My Lords, I am very grateful to the noble Baroness for her comments. She rightly said that meeting the challenge is very difficult. The previous Government found it very difficult. I am happy to say that we have played our modest part by encouraging six new nuclear power stations, setting out a road map and introducing a series of measures that will regenerate the energy and electricity supply market—which, as I said earlier, has not happened for 20 years. We have inherited a legacy of inactivity. It is a major structural problem; it is not one that we welcome, but we in this Government intend to get our hands on it and deal with it.
I note the noble Baroness’s point about nuclear subsidy. I shall continue to remind her that we have always said there will be no subsidy for nuclear other than that available to wider technologies. The wider technologies obtain a subsidy and nuclear is now part of that.
On the noble Baroness’s comment about bills, it is fair to say that bills have risen and are going to rise. I go to my petrol pump and find it costs me £1.33 to fill my car—no, I am sorry, it costs me £1.33 per litre. That is more than £1.33 to fill the car—it is about £1,033. Bills are rising outside our control because we are reliant on fossil fuels and oil coming from different shores, rather than the wonderful security in which a number of noble Lords, including my noble friend Lord Lawson, were able to bathe—an oil supply from our own sources. When you invest in a new infrastructure which needs £110 billion there will be bill increases on the horizon. Do we want to do this? Of course we do not—we want to keep bills as low as possible and to reduce them—and the plans we have set out will enable us to recover that position and to not see the same exponential rises that we have had of late.
The noble Baroness referred to feed-in tariffs, doubtless with the solar photo voltaic debate that will take place on Thursday in mind. Do we think it right that the Government should prioritise billions of pounds to support an industry which is not necessarily climatically suited to this country? The Government have to make tough decisions; they have to establish value for money for the taxpayer when deciding where to allocate funds to support developing technologies. The current Government, of which I am proud to be part, do not consider that this technology requires the same degree of support. The industry is becoming mature and the cost of equipment is coming down dramatically and we have therefore taken a view on it.
The noble Baroness referred to RWE. I believe that RWE is less certain of its future in its home country than it is here. It has various jurisdictional issues in terms of the future of its own nuclear industry that present it with far-reaching problems beyond our shores.
The Government have committed to the green investment bank and we have allocated funds to it. You cannot just click your fingers and establish a funding bank overnight, but in 12 months we have got to grips with the issue and it is well on the path.
We have consulted on the issue of EPS but we have not changed fundamentally what we set out to do. It is important that we have standards for companies that do not comply with a reduced performance format. That is the long-stop part of regulation which will set a clear regulatory path of where people can perform in energy supply.
Clearly we need to take into consideration the energy-intensive industries and we are consulting with them at the moment. We will announce a package of support for them to encourage them towards lower carbon usage. They are major employers in the country and major international exporters. It is important that we recognise that in any regulation we introduce, and at the end of the year we will announce a package of measures to support that.
I hope that that explanation goes a long way towards answering a number of the excellent points made by the noble Baroness. I have a feeling that there will be some more excellent points in a moment.
Earl Attlee
I remind the House of the benefits of short questions in order to allow everyone who wants to get in an opportunity to do so.
Lord Lawson of Blaby
My Lords, this is a most extraordinary Alice through the Looking Glass Statement. Is my noble friend the Minister not aware that almost every single assertion in it is the precise reverse of the truth? Is he not aware that if renewable energy was genuinely cheaper than conventional carbon-based energy, there would be no need for this plethora of measures? Is he not aware that every single energy expert, from Ofgem to all the independent experts in the universities, Professor Dieter Helm and so on, has said that the Government’s policies will lead to a substantial increase in electricity prices?
My noble friend mentioned 2030. Is he not aware that the Treasury has estimated that the carbon floor price alone will lead to an increase in electricity prices of between 60 and 70 per cent by 2030, to the great detriment of the consumer, British industry and the British economy, which—goodness knows—is in a fragile condition as it is? On this issue, the Government’s policies are not the solution but the problem.
Lord Marland
It is always a joy to hear my noble friend—as indeed he is. Let me quote him back a figure on prices. Is he not aware that electricity prices went up 18 per cent in one week? Forget 60 per cent in the time span he is talking about; they have gone up 18 per cent in one week. Why? Because we have been reliant on fossil fuels imported from other countries, with no control over security of supply.
With due deference to his great knowledge and to his great achievements as an Energy Minister and in the Treasury, he must be aware that there has been no investment in the energy infrastructure of this country in the past 20 years. The Government of which he was part and the previous Government were part of that. He must at least give credit for the fact that we are about to embark upon a massive investment and that, in order to establish an investment, you have to set out a pathway on which people have clarity for their investment.
My noble friend has quoted various institutions to me, and I would like to make him aware that we have consulted and discussed this with every energy supplier in the country and with a wide range of people. By and large, as much as one can possibly tell, this has been universally applauded by the industry and those who are seeking to invest. We may be proven wrong but, at the moment, it is all looking quite good.
Lord O'Neill of Clackmannan
The Minister has to take some credit for making another stab at market reform. It is not the first one for 20 years; there were two in the late 1990s—the NETA and BETTA reforms—so he is wrong to say that nothing has taken place in this matter. However, those reforms are now out of date. We need reassurance for investors and I think that, to an extent, we will get that from this document. However, I am not sure whether the social dimension and the cost to the consumer will necessarily be given equal weight.
The emission performance standards rely heavily on carbon capture and storage being realised—taken out of the laboratory, on to the factory floor, produced and then adapted for use in power stations with turbines in excess of 400 megawatts—but that seems to be a long way away. I worry that, come 2015 when we have the large plant directive, we will deny ourselves access to coal-fired power stations and will not have CCS available by that time. We could, therefore, well have a dash for gas on the scale that we had in the 1990s, with all the price implications that the Minister has already stated. When does the Minister expect carbon capture and storage to be available to British power generators, and particularly to the coal-fired industries? Unless we get that assurance, this will be, in large measure, a pipe-dream of the Government. I say that more in sorrow than in anger. We need to have a clearer indication of when we are likely to get carbon capture and storage. My inclination is that it will not come before 2020 at the earliest.
Lord Marland
The noble Lord, Lord O’Neill of Clackmannan, is an expert in his field. He also knows that I am responsible at the moment for leading the negotiation on carbon capture and storage. I am delighted to make the Statement in your Lordships’ House because it withdrew me from the negotiation process where we are in something called lock-in at the moment. I will not venture to suggest the outcome of the negotiations. They are extremely determined and it is a very complex programme. At the moment, we have three energy providers and me in one room at different times trying to bottom out where we can get to. I have been set the task of achieving this in operation by 2016. We may or may not get there. I am not going to predict one way or the other because it is a quantum leap. We must not underestimate the extent of that.
The noble Lord is quite right that a number of our energy policies are predicated on carbon capture and storage—but by no means all of it. The fact is that the EPS provides for gas. As my noble friend Lord Lawson would ask me to say, gas is fundamental to the future. I completely support his view on that. It is much less carbon intensive, will be fundamental to our electricity generation going forward and will be a large proportion of it.
Lord Teverson
My Lords, I generally welcome this Statement and the reforms that are there, in two areas particularly. We have often said in the House that if we had a proper carbon price that managed, in the jargon, to internalise the externalities of the cost of carbon we could then just let the market get on with it. Unfortunately, the EU ETS has not managed to deliver on that sufficiently. I understand that we only have a carbon price floor here for electricity generators. At least that is a move in that way.
I also particularly welcome the emissions performance standard. I have argued for that for ages and could never understand why, if we have emissions standards for cars and various other implements that we buy, we do not have them for the largest energy users such as power stations as well. I am not so concerned by a short-term dash for gas as long as that supply is diverse rather than concentrated in terms of our energy security.
I want to ask the Minister two things. He is absolutely right that the real risk to pricing is fossil fuels but it is also to a degree market concentration. How will these reforms make sure that there is less concentration of market power in the energy industry and how are we going to make sure that there are new entrants that can grow substantially to challenge that existing power? In terms of the market mechanisms, is he confident that there will be enough liquidity in the markets to make sure that these contracts for difference and that whole mechanism will work, so that we are able to deliver the policy objectives as he wants?
Lord Marland
My noble friend Lord Teverson has always asked the apposite question. First, we want to get away from the language of a “dash for gas”. Gas will be fundamentally important. We are not dashing for it. We have to make sure that we separate the price of oil and gas. Gas is now a very competitive energy product, as we have noticed in the USA where shale gas has been discovered. We do not want to call it a dash for gas. It is long-term support for gas.
As to the market mechanism, Ofgem will be tasked with bringing liquidity into the market as the regulator. It has got to show some teeth in generating regulation. You get there by people generating their own electricity and feeding into the market on the one hand, and on the other requiring less from the electricity providers by having energy-saving products such as the Green Deal and smart meters—part of the programme that we have been pretty unified in wanting to adopt.
Lord Jenkin of Roding
My Lords, I will be quite short but can my noble friend answer one or two questions? First, we have waited a long time for this Statement. As I understand it, the reforms will require legislation. When are we likely to see the Bill? Secondly, he referred to the various forms of energy generation but I am a bit disappointed that we have in this White Paper a framework for renewables when we also need a framework for nuclear—my noble friend will realise that the Select Committee is currently looking at this. While I welcome the regular statement that is put out by Ministers on the importance of nuclear, there is huge doubt at the moment about what is going to happen after what they call the interim date of 2025. This is certainly affecting the idea of any investment for the future.
Finally, my noble friend referred to the need for new institutions to administer the FIT with contracts for difference, and also the new capacity payments. Can he give us a little more indication of what form those institutions might take? They are clearly going to perform a very important role in the new market structure that the White Paper foreshadows.
Lord Marland
As ever, the noble Lord, Lord Jenkin, knows the subject. I am slightly disappointed that he does not believe that there is a nuclear framework. We announced that there are to be six new nuclear power stations and reaffirmed that announcement two weeks ago and the sites where they will be located. Realistically, there are a number of issues in terms of the balance sheets of some of the companies wanting to invest—as we have seen from the fall-out in Germany. Having spoken with EDF, Iberdrola and others this week, I know that they are very committed to the cause of the nuclear framework.
As to when the legislation will happen, we are obviously hoping that it will start at the end of this year. There are some timing issues, even with getting the first Energy Bill back to this House—as we all know. The legislation issue will be difficult because there is a certain logjam in the other place.
On who will operate and regulate the supply, this will largely be Ofgem, which will have greater teeth. As we are running a little bit out of time, I am happy to discuss at a later time with the noble Lord the various component parts of that rather than going into it now—if he is happy for me to do so.
Lord Boyd of Duncansby
My Lords, I want to ask one question, relating to the position of the devolved Administrations, particularly Scotland. The renewable obligations are executively devolved to Scotland and that has enabled the Scottish Executive—now the Scottish Government—to shape that as they wish. What role does the noble Lord anticipate that the Scottish Government will be able to play in the new feed-in tariffs with contracts for difference? What will be the relationship between the Scottish Government and the new institutions that he talked about?
Lord Marland
Naturally, we work very closely with the devolved Governments. We are all travelling down the same path. However, HM Treasury, rather than the Scottish Government, will be responsible for the renewable heat incentive funding. That is in the spirit of the union, I think.
Lord Reay
My Lords, this extremely important White Paper sets out to introduce the reforms, if one can call them that, which the Government consider are necessary if they are to meet their targets for extremely high-cost, heavily subsidised renewable energy. I hope we will get the chance to debate it.
I have just one question for now. The Statement mentions offshore wind on three occasions but makes no mention of onshore wind. Can we take it that the Government are lowering their sights with regard to onshore wind and, it is to be hoped, abandoning their targets altogether? It is a deeply unpopular form of renewable energy, it bitterly divides local communities and it is destroying some of our finest countryside.
Lord Marland
I do not think my noble friend can take that from our Statement. The reality is that onshore wind does divide communities—my noble friend puts his finger on it—and it therefore becomes an issue for local communities to decide through the local planning process whether they want it. A large number of local communities in Scotland are embracing onshore wind whereas a number of communities in this country—I am sure my noble friend Lord Reay’s community is one of them—do not want to embrace it. The reality is that the Government have a target. Two-thirds of that target for onshore wind is either met or is in the process of being met so there is a very limited amount of headroom. Our real push is to get offshore wind up to the target we wish to achieve.
Lord Dixon-Smith
My Lords, I hesitate to intervene but there is one thing I need to say and one question I need to ask. We should stop worrying too much about cost. I have said this before but I have seen farm tractor diesel prices rise by well over 4,000 per cent since I started in business. That has been vexing occasionally. It is always difficult to put up with rising costs but we live in a different world. This is an evolution in costs over a similar period. If we can keep the costs down below that sort of increase we shall have done very well indeed. That is a harsh reality which my noble friend Lord Lawson may find uncomfortable. However, when he was Chancellor of the Exchequer, he may have had something to do with what has happened.
The Minister is essentially setting out a programme through until 2030. The difficulty is that the major infrastructure investment he requires will consist in many instances of projects which will still be running in 2050, by which time we shall have to have a carbon-free, or virtually carbon-free, energy industry. There will still be one or two essential uses. What is the Minister going to do if he finds that the 10 per cent of the carbon which still has to be emitted in a coal-fired power station is incompatible with the 2050 target when he is committing a 40-year investment? That is what it will be if he gets someone to build a CCS power station today.
Lord Marland
My noble friend Lord Dixon-Smith asked me what I would do in 2050 if we had not reached our targets. By my calculation I will be about 90 so I will either get on the plane to Switzerland or I will not worry about it because I will not have my marbles to worry about it.
On a serious note, it is very impressive that all of us in this Room are thinking about the next generation and the supply of electricity and how we are going to get to it. I take issue slightly, but not with the sentiment, that we have to stop thinking about prices. We have to think about prices. It is absolutely fundamental that we find ways of keeping the country competitive with the rest of Europe, as we are at the moment in terms of our prices, and that electricity and energy are affordable to the people of this country. However, I think the fundamental point my noble friend is making is that prices are going to go up, they do go up and they have gone up. It is a fact of life, unfortunately, but it is incumbent on government to ensure that the cost to the people of this country is as low as possible and is mitigated as much as possible.
Localism Bill
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Greengross
“Local development: survey of area
(1) Section 13 of the Planning and Compulsory Purchase Act 2004 (survey of area) is amended as follows.
(2) After subsection (3) insert—
“(3A) The local planning authority shall undertake and publish a numerical assessment of the level of housing need and demand for all age groups in its area, together with its proposals for addressing such need and demand including plans relating to the provision of housing across all types and tenures.””
Baroness Greengross
My Lords, localism and the Localism Bill present many opportunities for people of all backgrounds and all ages to be involved in local decision-making and developing their neighbourhoods. I declare an interest as heading up a think tank, ILC-UK, which looks at the impact of demographic change on all our lives. Some of the research ILC-UK carried out showed that opportunities in the Bill may benefit only those who already enjoy an advantageous position in society and may not adequately protect and demonstrate the needs of those who are marginalised, particularly older people. Given that much of the development of new homes and communities is going to depend on neighbourhood development plans, which will be voted in by the local population, there is a danger that these plans may not adequately reflect the needs and wishes of marginalised groups in the local population.
Amendment 148 therefore seeks to strengthen the requirement for local authorities to produce adequate assessments of the housing needs of their local population. If they are to do this, it is essential that they have robust social and demographic data—they are certainly not going to make informed decisions about future housing provision without those data.
Section 13 of the Planning and Compulsory Purchase Act 2004 lists what councils should look for when producing housing need assessments. It states that an authority must keep under review matters that are likely,
“to affect the development of their area or the planning of its development”,
including,
“the size, composition and distribution of the population of the area”.
However, this piece of legislation has had very limited impact—indeed, in some cases it has sadly been completely ignored. One example of the failure to assess adequately the demand for new homes at a local level relates to the housing needs of older people.
I will quote two examples that were outlined in a recent report by the National Housing Federation. The Audit Commission’s review in 2010 of a sample of 112 local authorities’ financial plans showed that only 10 per cent made any estimate of the financial impact of provision for increasing numbers of older people despite a rapidly ageing population, as I think everyone will acknowledge. In October 2010, the National Housing Federation surveyed local councils on older people’s housing strategies—153 councils responded to the survey but 32 per cent of them had neither a strategy nor plans to develop one. This is partly because in many cases local councils do not include in their plans the need for retirement housing, even though the ageing population is rapidly expanding. Certainly the largest provider of retirement accommodation in the country, McCarthy and Stone, believes that is the case. Fulfilling the need for retirement housing would be a very good way of getting underused housing vacated for the use of the younger generations who are having great difficulty in getting on the housing ladder, but in order to do that we have to provide specialist housing for older people.
Localism will rely on the correct evidence base being in place, so it is essential that councils are required to produce those data. Without strong guidance provided by central government, the examples quoted here show that local authorities will continue to struggle to produce robust housing needs data. Amendment 148 seeks to address that problem. I beg to move.
Lord McKenzie of Luton
My Lords, we have Amendments 148ZZA and 148ZZZBA in this group, but they are consistent with the amendment moved by the noble Baroness, Lady Greengross, which we support. They have been proposed to us jointly by Shelter, the TCPA and the National Housing Federation. These amendments would help to ensure that local authorities produce a robust and public assessment of housing needs to inform local plans. Amendment 148ZZA requires housing needs to be addressed in the local development scheme, while under Amendment 148ZZZBA the LPAs must regularly survey their areas and publicise the results.
Local plans must integrate land use planning, housing strategies and delivery. While the national planning policy framework, when it appears, may help to promote this objective, we think that this issue is too important to leave to regulations and guidance. All local authorities should be required to undertake a strategic assessment of housing need and demand to provide the necessary evidence to inform the development of housing strategies and planning policies for their areas—the points raised by the noble Baroness cover this—and the needs of an elderly population that is growing older.
The information should be key to determining the amount of housing required, including affordable housing and housing specifically designed for people with care and support needs and in allocating a sufficient amount of land to meet and identify housing requirements. Bodies such as Shelter, the TCPA and the National Housing Federation have welcomed a more localised approach to planning and see the reforms to the planning system as an opportunity to allow local people to play a more active role in shaping development in their area by helping to shape local plans and hold their local authority to account.
In order to enable local people to play a more active role, it is vital that they have access to data that give them as full a picture as possible of the housing situation in their area and enable them to assess their local authority’s performance. Through local authorities setting out clearly in the local plans how they plan to address housing need, local people will be far better placed to hold their local authority to account on the success that they have achieved. Without clear aspirations being set, local people are likely to find it difficult to assess how well their local authority is performing.
The importance of providing access to good local data was outlined in the Conservative Party’s Open Source Planning paper, which sets out that in developing their local plans, councils will be expected to ensure as a minimum,
“the provision of good data by the local planning authority to the electors in the neighbourhoods, so that they can develop their vision for their community on a well-informed basis … this will need to include analysis by the council of the likely need for housing and for affordable housing for local people in each neighbourhood”.
The introduction of more consistent data sets will also allow local authorities greater opportunities to increase integrated working across areas such as sharing back office staff. That would be particularly useful in some areas of local housing planning, but varying data sets would make the practicalities of joint working more difficult. This will help to deliver the aims of a more localised system by ensuring that local people are able to play an effective role in shaping local plans and holding their local authority to account while enabling local authorities to work together more efficiently.
In Committee in the other place, the Minister stated that the Government would require from local authorities,
“an absolutely clear, transparent, robust numerical assessment of housing need”.—[Official Report, Commons, Localism Bill Committee, 17/2/11; col. 637.]
However, he argued that Section 13 of the Planning and Compulsory Purchase Act 2004 already outlined the necessary duty. In fact, with respect, Section 13 does not consider a critical element of housing need, or other needs, which is a forward projection of future need and demand. In the absence of such a clear duty, it would be easy for some local authorities to look narrowly to immediately presenting housing need and to avoid responsibilities, especially to the next generation and to the wider housing market. It is on that basis that I propose these amendments and support the amendment of the noble Baroness, Lady Greengross.
Earl Cathcart
My Lords, forgive me if I am wrong, but I thought that all councils were already required to make a housing needs assessment under the existing PPS3. If that is the case, I am not sure what the amendments will add other than to make councils do their job better.
Lord Best
My Lords, I give qualified support to Amendment 148 in the name of my noble friend Lady Greengross and to Amendments 148ZZZA and 148ZZZBA tabled by the noble Lord, Lord McKenzie. My support is qualified because the words,
“the local planning authority must”,
are not popular in local government circles. I would find it hard to be entirely supportive of extra obligations being placed by central government on local authorities, but I am supportive because noble Lords are absolutely right that collecting local data on housing markets and making them available, not least to any neighbourhood preparing a neighbourhood plan, as well as to the local authority preparing its local development plan, is more than just good practice; it is essential if housing providers are to meet local needs and demands.
To take the example of the area of interest to the noble Baroness, Lady Greengross, if the local authority’s assessment shows that many thousands of family houses are occupied by one older person or an elderly couple, with the certainty that all those occupiers will grow older in years to come, clear signals can be given to private house builders and housing associations that there is a big market for attractive, manageable, economical apartments that are tailor-made for older people to buy or rent.
I give full backing to the intention behind these amendments and hope that their objective of getting local authorities to do what they should can be fulfilled, not least through the national planning policy framework, even if that objective is not accomplished by a new obligation on local authorities.
Lord Beecham
I hesitate to express a slightly different point of view as a vice-president of the Local Government Association from our esteemed president, but I am not quite as reluctant as he is to see this kind of duty, as proposed by the noble Baroness, Lady Greengross, and my noble friend Lord McKenzie, incorporated into the law, particularly given the state of the housing market in general and the huge unmet demand for housing, particularly affordable housing. It is important that all authorities recognise that there is a need to promote the provision of more accommodation. It is noticeable that since the disappearance of the regional spatial strategy, something like 200,000 houses it is estimated will no longer be built that would have been built had those plans been progressed.
I add one further dimension to the prescription from the noble Lord, Lord Best, for encouraging new building. I entirely agree with him that it is very desirable for private builders and housing associations to help to cater for the needs of an increasingly ageing population and indeed others. To that I would add local authorities themselves. That might be something that they would appreciate. Perhaps as a quid pro quo for having the extra responsibility of drawing up plans for affordable housing, the fact that they might actually be able to provide some themselves might be an additional incentive. I hope that sweetener will persuade the noble Lord, Lord Best, that his qualification might safely be abandoned.
Lord Whitty
My Lords, I support the principles of the amendment proposed by the noble Baroness, Lady Greengross. A whole section of this Bill later on in Part 6 deals with social housing and changes many of the existing arrangements for tenure, what the local authority is obliged to provide and tenants’ rights. Some of them I support and some of them I strongly oppose. However, the whole point of a social housing strategy is that it relates to the totality of the housing need in the area. Unless there is a provision somewhere in this Bill, such as the provision suggested by this and related amendments, dealing with social housing in the abstract is nonsense.
All forms of housing tenure are in crisis. We know that a lot of people who would have got a mortgage by the age of 30 now can no longer get a mortgage until their late 30s or even into their 40s. More and more people are having to rent in the private sector and are being delayed in setting up an independent household. We know that the rate of household formation is growing because of various developments in society, but it is growing at twice the rate of new build housing. We therefore have to have an holistic approach to housing need, area by area. If we are not going to achieve the targets through the regional spatial strategies, which I admit were a bit Stalinist in their approach, we have to ensure that the local authorities themselves take responsibility for looking at housing need in their areas and assessing it against their private sector development plans and the social housing that they and the housing associations in their areas can provide.
Somewhere in this Bill we need to tell local authorities that part of their responsibility from now on must be assessing total housing need against costs, against price and against demographic trends. That is not covered by the 2004 Act in sufficient detail. Given what I would regard as something close to a crisis in the housing market in all forms of tenure, I think it would be appropriate for us to set that out in the Act. Then, when we consider the social housing provisions, we can set them against a requirement for every local authority to assess needs, supply, demand, price, and demographic and employment changes, and to set its social housing targets and provision against that background. Unless we do that, social housing is isolated and is a residual form of housing based on what is already there. It does not relate to the needs of the totality of the community in which local authorities operate. If the Government are prepared to accept the noble Baroness’s amendment here, they need to say that at least somewhere in this Bill, and we need to ensure that local authorities behave accordingly.
Lord Taylor of Holbeach
My Lords, this has been a very useful debate. I do not think that the Committee is very far apart on the essential importance of housing and making housing one of the key ingredients of the planning process. I thank the noble Baroness, Lady Greengross, for the typically intelligent and sensitive way in which she introduced her Amendment 148 and led the group.
The amendments that we are considering include those of the noble Lord, Lord McKenzie, which seek this numerical assessment by a local authority of current and projected housing needs, the balance of affordable housing and proposals for addressing those needs in local development schemes, which are the documents setting out the programme and timetable for producing plans. Also required is the publication of annual reports of the matters reviewed and the changes proposed to implement local plans, and the publication of a review of a range of environmental, social and economic issues specified in the Planning and Compulsory Purchase Act 2004 prior to preparing its local plan. As I said, I do not think that we are a million miles away on the objectives.
Lord McKenzie of Luton
Would the Minister repeat what has been placed in the Library this week? Was this today or yesterday? What notification has been given of that?
Lord Taylor of Holbeach
I am sorry, my Lords, my notes here say that it was placed in the House Library this week for information. Indeed, I think that I referred earlier to draft regulations that have been placed in the Library this week for the information of noble Lords. I hope that that will inform this debate. We are going on to debate housing, though probably not this evening, so noble Lords will have an opportunity to swot up on those.
The noble Baroness, Lady Greengross, mentioned neighbourhood planning. She wanted to know how it would protect minority groups. Neighbourhood plans will be tested at an independent examination and must have regard to the national policy and be in line with strategic elements of the local plan. Everyone has the right to be heard at the examination, and human rights issues can be considered.
I come to the point made before we broke by the noble Lord, Lord McKenzie, about two authorities with some tension trying to deal with an issue that was affecting their neighbourhoods. Compliance with the duty to co-operate is assessed through the independent examination of draft local plans, and failure to demonstrate satisfactory compliance risks the local plan failing the examination. Having no local plan means that councils lose control of how their area will develop. This disfranchises their constituents, who will hold them to account, as I said in my previous comments.
I would like to correct something that I said. When I said that the draft regulations had been put in the Library this week, I meant last week. Unfortunately, we are all suffering from a slight sense of jet lag as the Bill is moving with such rapidity through the House.
The noble Lord, Lord Beecham, mentioned the low housing build. I am sure that noble Lords opposite will reflect on the fact that this extends back into the period of the previous Administration. We must remember that the market for housing has suffered for reasons entirely unconnected with planning. However, the experience is that numbers in regional plans did not provide a reliable indication of the number of homes actually being built. We know that indicative planning at the regional level for housing need caused huge stress within the system.
We will shortly be publishing the new national planning policy framework, which reviews all national planning policy. I know that my ministerial colleagues understand and take seriously ensuring that the new policy framework makes clear the need for local authorities to understand the housing needs of all people in their area and to monitor the effectiveness of their policies. We will shortly be consulting on the draft of the framework, and will listen to all the views on this and other areas to ensure that the policy is as strong as it can be. I hope that that encourages the noble Baroness and that she will feel free to withdraw her amendment.
Lord McKenzie of Luton
Before the noble Baroness answers, can I thank the Minister for alerting us to the regulations which have been posted in the Library? It is very difficult to keep abreast of what is going on in this Bill. We had some government amendments tabled yesterday of which we had no prior notice and it does not help an expeditious focus on the Bill.
Those, together with the NPPF, as soon as we get it, will reassure us on some of these points, although we would like to see this obligation embodied in primary legislation on the face of the Bill. My noble friend Lord Whitty encapsulated a debate which we will have more intensely in due course about the problems and challenges in respect of housing in the UK at the moment. Regional spatial strategies are not necessarily flavour of the month but, if you look at the record, there were years when they were beginning to deliver. If you look at 2007-08, we had the highest levels of house building for something like 20 years, just as that process was beginning to get under way.
I am grateful for the support of other noble Lords who have spoken and I am still unclear about the central issue of when you have a dispute between neighbouring authorities over housing provision and how, in terms of the examination of the plan and whether that plan is sound, those judgments will be made. I reiterate the point so that the noble Lord might reflect on it and possibly write in due course, certainly before Report. If you have two authorities which are at odds and take a different view, does the examination of the plan have to take a view as to which of those two authorities might be the most reasonable in their approach and therefore influence the outcome, or is that process in terms of co-operation just looking at whether each party played the game?
Lord Taylor of Holbeach
One of the things the Bill provides for, as we have just discussed in Clause 95, is the duty to co-operate. It is not a light thing; it is a duty. I mentioned in the précis I gave in response to the noble Lord that there are sanctions against authorities whereby they run the risk of their local plan failing the examiner’s test. If the noble Lord would like me to write to him specifically on that I will do so. I apologise if communications have been such that he has not had the usual courtesies extended in terms of being informed about government amendments.
Baroness Greengross
I thank noble Lords who have supported this amendment and the Minister for responding in the positive way that he has. This is broader than social housing and, although I am really pleased to hear that everybody agrees that local authorities must know the facts in order to meet the needs of the local population, something is not working at the moment, as the examples I quoted demonstrate. Because there is so much good will towards getting this right, I hope that that is going to happen, with the work that is going to be undertaken and with the commitment of the Minister and the Government to get this right. I reserve my judgment as to whether anything needs to be taken further but, in the mean time, I thank noble Lords again and beg leave to withdraw the amendment.
Lord Cotter
“(2) For subsection (3) (requirements as to preparation of schemes) substitute—
“(3) The local planning authority must have regard to sustainable development and Town Centre First Policy, as defined in accordance with subsection (3A).
(3A) The Secretary of State must lay before Parliament an order to define sustainable development and Town Centre First Policy.
(3B) A statutory instrument containing an order under this section may not be made unless a draft of the instrument has been laid and approved by a resolution of each House of Parliament.””
Lord Cotter
My Lords, this amendment addresses the issue of keeping trade local. I am sure many Members, Ministers and others will be aware over a number of years that there have been sustained campaigns on this issue of keeping variety and choice for the consumer, the issue of protecting small shops and the issue for people in business as well as the local community of having choice.
The Federation of Small Businesses carried forward a strong campaign, including coming to Parliament, lobbying and getting a lot of support for this. In the light of this very large Bill, which we are struggling to get through in time, I could speak at great length on this issue, although I will not. However, it is a very big and important issue.
Lord McKenzie of Luton
My Lords, we have tabled Amendment 153AKA in this group. It requires the local authority to prepare and maintain a retail diversity scheme as part of the local development scheme. It calls for a sequential approach to the development of a hierarchy, putting existing centres first, followed by edge-of-centre locations and then out-of-centre sites. This is very much consistent with the amendment of the noble Lord, Lord Cotter. I was interested to hear about his Retail Development Bill, which I must confess I have not studied in detail, although it seems that neither has his colleague who is sitting in front of him. Perhaps he has. Maybe I could borrow a copy during the Recess.
The amendment will be familiar in that it is a rerun of what was proposed in the other place. On reflection, we should have deleted the proposed power of direction for the Secretary of State. We have brought it back because it was spoken to warmly by the Minister, Greg Clark, who said:
“Policy on town centres has always been part of national planning policy … I wish to signal clearly the importance of having robust policy, including the sequential test that is currently in planning policy statement 4. That will absolutely be in place, and it will be clear in the new national planning policy framework”.—[Official Report, Commons, 17/5/11; col. 270.]
It is difficult for us to test that issue because we still do not have the new NPPF, but we live in hope.
The amendment of the noble Lord, Lord Greaves, which he has not yet spoken to, requires there to be an assessment of,
“the vitality and diversity of the shopping areas”,
and makes it necessary,
“to include appropriate policies to promote the vitality and diversity”.
The noble Lord’s amendment states that there must be a consultation, including with the traders. So far as it goes, we can and will support that amendment, but it is vital that there is clarity on the sequential approach. The existing vitality and diversity of shopping centres can dramatically be undermined by inappropriate out-of-town development.
I should recall that I spent a brief time as a Minister in CLG at the tail end of the previous Government, as well as trying to cope with DWP issues. As the noble Baroness, Lady Hanham, will know, you are allocated planning issues to look at when they come forward, one of which stuck in my mind. There was a proposal for a significant retail development in an area, which would have been fantastic for that area in terms of jobs and the retail offering but would have destroyed three or more shopping centres in close proximity. There is an issue about how the duty to co-operate will work in such situations where there is a retail opportunity in one local planning area, which is substantially in the interests of that area, but could be of real detriment to other areas. We will follow with interest these issues around what the NPPF says and the extent to which that overlays local development plans.
The noble Lord, Lord Cotter, referred to the current situation on the high street. It is in a pretty dire state. Some 12,000 shops closed their doors in UK high streets last year, and 85 per cent of people feel less optimistic about the prospects for economic recovery when they see boarded-up shops in their local high street. In the past fortnight, Jane Norman went into administration, Carpetright shut 75 stores, and Habitat put 30 premises outside London into administration. Retailers Homeform, HMV, Comet, Mothercare, JJB Sports and Thorntons have recently been hit. Local Data Company states that 14.6 per cent of retail premises are now vacant. This indicates that approximately 50,000 units are not currently open to business on the UK high street, which shows just how challenging the situation is on the ground.
This matter is particularly relevant at this point for the economy of our country, and demonstrates that we need to do whatever we can through the planning process, as well as through other means, to preserve, protect, encourage and promote development on the high street. That is the purpose of these amendments, and I hope that the Minister will support and accept them.
Lord Greaves
My Lords, as the noble Lord, Lord McKenzie, said, I and my noble friend Lord Tope, have tabled Amendment 153AKC, which proposes a new clause, entitled,
“Health and diversity of town centres and high streets”.
Before speaking directly to that amendment, I should first acknowledge the work of my noble friend Lord Cotter in this area over the years. He has been determined and diligent in pursuing these matters and is to be congratulated on bringing the amendment. It is true to say that the three amendments in the group are all rather different but address the same basic problem. I am sure that if the three of us sat around a table, we might well have been able to come up with an amendment with which we all agreed and which would combine the best of all three amendments.
The amendment that I am proposing is slightly different because, unlike the others, it concentrates not so much on town centres but on town centres and high streets. That is not to say that town centres are not important—they are vital—but the shopping streets that we are talking about are not just in town centres. My amendment, which internally we are calling the “Cambridge amendment”, comes from campaigners in a part of Cambridge called Mill Road—a shopping street that is not part of the town centre but is a district shopping street of great variety that is under threat. It was the suggestion of the campaigners that resulted in us putting this amendment together. It clearly overlaps with the other amendment.
I want to speak to Amendment 153AKC, which relates to Section 19 of the Planning and Compulsory Purchase Act 2004 about preparation of local development documents. I want to include an extra section in that, saying, first, that the duties in putting together the development documents should include,
“a requirement to assess the vitality and diversity of the shopping areas in the area”.
Secondly, that:
“When preparing local development documents and other local planning documents the local planning authority must consider the results of that assessment and consider whether to include appropriate policies to promote the vitality and diversity of those shopping areas”.
Thirdly, that:
“The local planning authority may prepare a scheme for retail vitality and diversity which may be a local development document or other local planning document”.
The policies that we set out are similar to those in the amendment from the noble Lord, Lord McKenzie, but a little different.
The local planning authority may,
“define a network of retail centres in the area … assess the existing character and vitality of those centres … designate the desired retail mix for each of these retail centres … promote sustainability and diversity in the retail mix that is desired in each case”.
In doing this, it must consult with the local community, which includes the traders in each shopping centre, and a shopping area means an area of town centre or high street where the substantial use is retail. So sustainability and diversity, which we are suggesting should be foremost in these policies, means that there is an appropriate balance of independent and multiple traders, of unit sizes, and balances of classes of use.
We are putting the emphasis on what is there now. The Labour Party amendment, if I can put it that way, talks about the importance of maintaining the existing policy of the sequential test. If there is a proposal for a new supermarket, can it be fitted in the town centre, can it be at the edge of the town centre, can it be at the edge of town, or does it have to be in the countryside? It is very important that that is maintained, but it is not the only important thing. If you are having a new supermarket, or even a new relatively small Tesco- or Sainsbury’s-type store, like a Tesco Express, the issue is not just where it is, but the effect it will have on the balance of shopping in its area.
In some areas, it might do more damage if it is in the high street than if it is 10 miles away in the countryside. According to a campaign there, Mill Road in Cambridge is described as having an eclectic range of small, specialist independent retailers; as the most ethnically diverse part of the city; and as Cambridge’s Brick Lane. A Tesco Express opened some time ago to widespread concern, and now a Sainsbury’s express wants to open on the other side of the bridge. The fear is that this will seriously undermine the independent local shops, which are a combination of ordinary food shops and specialist shops. If the food element comes under intense competition, those shops might then become unviable. It is suggested that policy and guidance is changed so that the local planning authority can take much more vigorous action to take these issues into account and, if necessary, turn down planning applications if they are thought to be detrimental to the diversity and vitality of a particular high street, whether in the town centre or elsewhere.
This is not just a Cambridge issue. We all saw on television the remarkable scenes in Bristol, where there were riots at night that apparently were connected with the opening of a similar type of convenience store in a street there. For those who live in relatively small towns, as I do, the vitality of our town centres is a very similar issue. In my own town of Colne, there are a lot of small independent shops, and maintaining that vitality and diversity means that we need the policy handles to be able to resist developments that, even if they are in the town centre and high streets, could be detrimental to their future.
Again, that is a very localist view, because it will put more power in the hands of the local authority and local people. There is no magic answer. Keeping the shopping centre and the high street going requires hard work not just by the traders but by the whole community, but it can be done. There are examples around the country where it is being done, and we need to do what we can to stop that being undermined.
Earl Cathcart
My Lords, I agree with the sentiments of what everyone has said so far. We must revitalise town centres. We have all learnt from the mistakes of out-of-town shopping, with its free car parking. In Fakenham, in Norfolk, when a new shopping centre opened about 15 or 20 years ago, within six months, 26 town-centre shops shut. That was very sad, and it is very difficult to get them back again. The other mistake made is that too many councils charge for town-centre car parking. That is daft. If you want to encourage people to use the town centre, make it as easy as possible for them to pop in there, go to the bank and then go into the butcher, baker and candlestick maker without any car parking charges. That is an irritant. Those who charge are being very shortsighted.
Lord True
My Lords, if my noble friend wants to come to our high street, he can have 30 minutes of free parking. The Mill Road story, to which my noble friend referred, is extremely interesting. Unfortunately, the Tesco Express, which was its original focus, was successful. There are defects with all the amendments before the Committee; I hope that my noble friend will not feel that all of them have to be addressed.
I was very encouraged by what was said in the other place. One difficulty is that not everyone has the same view of vitality. My predecessor as leader of my council from another party said that he would be delighted if he heard that a Tesco was opening in his area, because it would bring people to that shopping area. We must address head-on the nature of the retail multiple and the manner of the high street. Can my noble friend assure us that before we finish examining the Bill, when we have seen the national framework, Parliament will give local authorities real power to deal with the problems which my noble friends, Lord Cotter and Lord Greaves, and the noble Lord, Lord McKenzie, raised? That is all I ask for at this stage, not a detailed commitment. I hope that my noble friend can give that assurance.
Lord Beecham
My Lords, I warmly endorse the thrust of the three amendments. It is clearly desirable to have a proper planning framework to encourage retail diversity. However, although that is necessary, it is not a sufficient condition of ensuring that we get retail diversity. There are other significant considerations, particularly financial considerations and other policies which may militate against the achievement of the aspirations of the amendments—with which I entirely concur.
I can cite examples from my experience. When I was chairman of the development committee in Newcastle, I tried to persuade our partners in the city centre shopping centre—we were partners because we owned a substantial stake in it—to diversify the offer to try to get away from chainstores, which were pretty much all we had there, and provide for some niche retailing. Despite the fact that we were significant shareholders, I was totally unable to persuade them to do that.
In another example of the Tesco influence, in the west end of Newcastle adjoining a street in an ethnically mixed area with a lot of little local shops and one or two other retailers, Tesco has secured planning permission to build a largish store on the site of a former hospital. The hospital is very keen to get the money from it, for obvious reasons. I am afraid that council officials supported the recommendation, and indeed an inspector upheld the recommendation. So we have a Tesco store not far from the town centre that is likely to do serious damage to local shopping.
I fear there are policies that might encourage that kind of trade-off, where you are effectively getting a financial benefit—in that case for the hospital but in other cases for the local authority itself. Most of us welcome the proposal for tax increment financing but that puts a premium on promoting development that will generate significant rateable value on which you are then going to borrow. There will be a temptation, frankly, to push that kind of development at the expense of the kind of development that these amendments are interested in promoting, which is less likely to contribute hugely in terms of rates and certainly is more difficult to put together. So you potentially have a policy that might militate against the thrust of these amendments.
We are also now going to get a range of enterprise zones. I do not know if the Minister can tell us whether there will be any restrictions this time round on retail developments in the enterprise zones. As I understand it, it is pretty much carte blanche for whoever develops these zones. Again, I speak from experience—and there are other Members of your Lordships’ House who will know the kind of damage that was done to city centre shopping in places such as Newcastle, Manchester, Sheffield and Birmingham by some very substantial out-of-town shopping developments in enterprise zones. Enterprise zones were originally designed to promote investment in manufacturing industry and so on. It would be unfortunate if again they were to be captured by the interests of large retail developers, thereby threatening diversity in existing centres.
These amendments are entirely on the right lines and I hope that the Government will consider them very seriously. However, I also ask them to recognise that there is a need to look at the other policies that impinge on this area and try to ensure that there is a sensible look across the piece at the implications of a range of policies on the objectives that these amendments seek to promote. Perhaps that is a debate for another occasion but I do not think that we can look at these things in isolation. We need to bring them together, and I hope that these amendments may help us start to do that.
Lord Taylor of Holbeach
My Lords, I thank all noble Lords for participating in this useful debate on this group of amendments, which has been informed by my noble friend Lord Cotter’s Retail Development Bill and his experience in this area. I am very grateful to him for moving his amendment. As noble Lords, including my noble friend Lord Greaves, have said, the amendments in this group raise similar issues around town centre policy and retail diversity. The noble Lord, Lord Beecham, is absolutely right: a healthy retail economy is the most important thing in maintaining healthy town centres.
We understand and share the concern to ensure that developments should be sustainable. Planning has a key role in achieving this. The coalition’s commitment to this should not be in doubt. We also acknowledge the value to communities of prosperous and diverse high streets. Town centres are key to sustainable growth and local prosperity. They are at the heart of neighbourhoods, giving communities easier access to shops and services. The noble Lord, Lord McKenzie, is right that the Government have already made a clear commitment in debates on this Bill in another place—and, as noble Lords will know, as part of the Budget—that we will maintain strong policies that put town centres first for new retail development.
Perhaps I can address the interest expressed by my noble friend Lord Greaves in Mill Road, which is no doubt an important local area in Cambridge. Local councils have many tools to support local shops—not just planning but business improvements districts and, under this Bill, neighbourhood plans—and to bring complementary developments to the area. There are levers available to assist within the armoury that local authorities have at their disposal.
However, I just caution noble Lords that there is a risk that these amendments are a backdoor attempt to get at supermarkets. We must be clear that town centre planning policy is not pro or anti-supermarkets. Planning cannot seek to restrict lawful competition between retailers; in fact, planning policy is, and has always been—under all Governments and under different controlling administrations of local councils—blind to whether the operator of a retail proposal is a supermarket or an independent. We want the right scale and type of development in the right location to meet people’s shopping needs. That is the issue that we need to be addressing. That is what planning policy can support local councils to achieve in a more practical manner than legislation.
Perhaps I may deal with the point that the noble Lord, Lord McKenzie, made earlier, when he asked about the duty to co-operate in situations where the impact or influence that a development might have crosses local council boundaries. This is analogous to the housing issue. The duty to co-operate is not actually the main safeguard in this respect. Retail developments in one council area must be assessed for their impact on town centres in the catchment area. If catchment areas cross local council boundaries, it makes no difference—the impacts must still be assessed on the basis of the catchment area. This particular safeguard therefore already exists in planning practice.
Lord Beecham
My Lords, I just wonder about the definition of town centres. In an area such as Newcastle, the town centre is obvious, but in an area like Doncaster or Kirklees, where a number of towns are brought together under one unitary authority, what would be the definition of a town centre? I am sure that the Minister understands my point.
Lord Taylor of Holbeach
I think that I can help the noble Lord. Large centres of population have clearly identifiable city or town centres, but the outer suburbs usually have shopping malls and streets that are very important as neighbourhood shopping areas. We really want to be able to strengthen all these traditional shopping areas that people have been able to access. The whole purpose of this is of course to make sure that we do not lose the heart that lies at the centre of all our great communities. The issue applies just as much to a market town—or coastal town, as we were discussing earlier today—as it does to a large city. That is the focus. I will go on to say that the long-expected, shortly-to-arrive national planning policy framework will indeed make clear what our position is on that.
It is really up to the local council to decide what constitutes its view of a town centre and what it wants for the local population. After all, local councils are best placed to set locally relevant policies for the scale and type of retailer they want to see in their area and to integrate them with other policies on housing and economic growth. The best place to do that, then as now, is in the local plan rather than in a separate retail diversity scheme. Earlier, the noble Lord, Lord Whitty, mentioned the word “holistic”. I quite like that word because I think planning should be done on an holistic basis. More widely, local authorities can work with local businesses to help them offer a distinctive and attractive product to consumers using tools such as business improvement districts.
The noble Lord, Lord Beecham, asked a specific question about enterprise zones. Any retail development in an enterprise zone will still be subject to the strong town centre first policy as in national planning policy. I hope that that satisfies the noble Lord that the Government are ensuring that this matter is addressed properly. Further, I hope that my responses encourage the noble Lord to withdraw his amendment.
Lord True
Before my noble friend sits down, may I say that I was disappointed by his absolutely granite remarks about supermarkets? There are serious issues around what is a vital, viable, sustainable and diverse high street. Many factors are involved, both economic and social, and I do not think that Parliament can for ever lag behind public opinion on this matter. We all acknowledge and respect small shops in high streets, but the reality is that, up and down the country, people believe that our high streets are being systematically parasitised in a property grab by a small number of large businesses, which frankly do not worry too much about the profitability of individual sites.
I do not know whether the answer lies in this Bill or in planning, but I would submit that in social terms Parliament must address this matter with some seriousness and urgency. The nature of our high streets is changing. I believe that it is changing too fast and, as I have asked in the course of our discussions on the Bill, we should at least look to see whether there is a way we can do slightly more to protect the diversity of our high streets. That may be through giving grants and setting up business districts, but we do not have the resources to do that kind of thing. However, if we could bar the gate to one or two predators, I believe that that would be extremely helpful.
Baroness Byford
My Lords, before the Minister responds to my noble friend, perhaps I may say that I am certainly a great advocate of variety and choice. However, it worries me that it is actually the shoppers themselves who do not support independent shops. That is why those shops have been squeezed out of many places. We need to resolve that in a philosophical way, and I am not sure how that can be done within this Bill.
I understand the point that has been made all around the Committee and I am sympathetic to it, but what we see, particularly in smaller towns, is that people will use the shops in a minor way but continue to do their bulk buying in a supermarket because that suits them better. This is the dilemma we face. Occasionally I think we ought to put our feet where our mouth is, if I can use such a dreadfully vulgar expression. I am not sure how this is to be done in a Bill. I should like to add a word of caution. I am a huge supporter of independents and we use our local shops whenever we can, but we are lucky in that our village is quite large and still has a variety of shops. In some areas, the shops have disappeared, so the nearest shop is probably in fact a supermarket.
Lord Taylor of Holbeach
Perhaps I might respond because otherwise we will prolong a discussion about something that is not particularly apposite to this group of amendments. I believe that all sides of the Committee have faith in liberal market economies, and one of the effects of liberal market economies is that consumers tend to make their own choices. My noble friend Lady Byford pointed that out. I am really rather sorry that my noble friend Lord True is slightly less enamoured with the market, but I would say to noble Lords that retailing is a highly competitive business. Any noble Lord who has been engaged with retailing in any way will know just how competitive it can be. Indeed, it is changing all the time. The latest development in the area from which I come is not a shop but a shed, where people go to collect their orders that they have placed online.
I am sorry, but we live in rapidly changing times. It is a great challenge to local communities and a great challenge to those who are trusted by election to run local authorities, but the Bill is designed to give local authorities power to set the framework in which I suspect noble Lords will all accept that the market has to operate. I hope that it is possible for noble Lords not to press their amendments at this stage.
Lord Greaves
I shall certainly not move my amendment when I come to it, but I want to make a slightly different point. My amendment does not in any way suggest that there should not be supermarkets of any size. It suggests that in any particular place there should be an appropriate balance which ought to be determined by local people in the normal processes of discussion and so on. It may well be that it is unreasonable to keep out a small supermarket from a shopping street. It seems to me that it is not unreasonable to prevent that shopping street being turned over to three or four such shops, or two or three such shops, which then drive the others out—that is not a matter of competition, it is anti-competition, because it is driving out the people who cannot compete at that level. Obviously, we all agree with the market, but I agree entirely with my noble friend Lord True—the Government need to think a bit more about this.
It is absolutely true that it is a very difficult world out there for retailers, but shopping centres, high streets and town centres can, to a degree, make their own fortune. If there is sufficient campaigning desire locally, as there is at Mill Road in Cambridge, that must in itself be a plus factor in keeping that shopping street going as a diverse street. I will refer yet again to my own town of Colne where, over decades, there have been active groups of local councillors, traders, residents, historians and others interested in the town centre who have formed organisations, campaigned and actually rolled up their sleeves and done things to make Colne an attractive place to be. If you have a shopping centre and a high street which is attractive and somewhere local people are proud of, that gives the traders, who are all part of this, a head start. There are a great many towns the same size as Colne across the north of England which have something like 30 per cent or 40 per cent of their properties boarded up and empty now. I dare not say that Colne is thriving, because every time I say that, the local people—
Lord Taylor of Holbeach
May I remind noble Lords that I have responded on behalf of the Government to these amendments and I believe that the noble Lord is reiterating arguments which have been very well laid before the Committee already. We want to get through quite a lot of business and I hope that my noble friend will appreciate my interruption—I hope that I have not annoyed him to the point at which he will press his amendment. Perhaps he will wind up.
Lord Greaves
I shall say one more thing. I apologise if I am going on too long. I invite the noble Lord, who is into flowers, to come to Colne and look at all the flowers in Colne now, done by the wonderful organisation Colne in Bloom as part of the Britain in Bloom system. He would be proud of it and it is the kind of thing that keeps people in the town and encourages people to shop there. I invite him to come to Colne; he would be proud of all the flowers there.
Lord Cotter
I thank the Minister for his responses. I deliberately said, in proposing my amendment, that I did not want to go on too long, because it is a very big issue and we know what pressure we are under on the Bill, so I will try to resist going on too long now. However, I say to the Minister that this is a very big issue. The few of us here this evening, including my noble friends Lady Byford and Lord True, and the noble Lords, Lord McKenzie and Lord Beecham, have come forward with tangible examples. If the House was full, which I do not expect it to be at this time of night—let us say that it was Question Time and everybody was here—I could guarantee that many people would come forward with many more.
I am grateful to my noble friend Lord Greaves for his support and for his example from Cambridge, which encapsulated what has been happening throughout the country for many years. Other noble Lords came up with other examples. Were we to have had a full debate, the number of examples would have been enormous. I shall resist trying to go on too long. It was good to hear the Minister express awareness of many similar problems throughout the country and talk about the need for healthy town centres. He spoke of the coalition’s commitment to high streets and local shops and its desire to strengthen shopping areas. Although it is above my pay grade, he referred to the national planning framework coming along the line, as if that were something we can hope will help in this particular area.
It has been striking that, while the amendments are quite different, their whole thread expresses the same concern. I shall not go on very much longer, because I realise that we are under pressure. I did not wish this to become a discussion about the benefits or otherwise of market forces—we all approve of market forces, and I do not wish there to be a battle between supermarkets and small shops. However, when one goes down that road, one picks up the fact that, if you get a supermarket in an area, it reduces its prices until such time as it drives other competitors out. I shall not pursue that further save to say that very complicated issues surround market forces, competition and such like. Although I shall seek to withdraw my amendment, the concerns remain. I am sure that the Minister has listened to this debate, and will perhaps have a fresh look at my retail development Bill—which addresses a particular aspect of this matter—but also have regard to the points put forward by my noble friend Lord Greaves, the noble Lord, Lord McKenzie, and many others, which tangibly express a major concern for this country. I beg leave to withdraw the amendment.
“Development plan documents: climate change and carbon budgets
(1) Section 19 of the Planning and Compulsory Purchase Act 2004 is amended as follows.
(2) For subsection (1A) substitute—
“(1A) Development plan documents must include policies designed to secure that the development and use of land in the local planning authority’s area—
(a) achieves reductions of greenhouse gas emissions in line with the carbon budgets set under the Climate Change Act 2008; and(b) meets the current national planning policy objectives on assessing the risk of and adapting to climate change in relation to that area.””
Baroness Smith of Basildon
My Lords, I shall speak also to Amendment 150ZA. The amendments were inspired by existing legislation to which the Government have already signed up, mainly the Climate Change Act 2008. The Government have agreed to and supported an overall target of a 60 per cent cut in CO2 on 1990 levels by 2030. That cannot be achieved unless there is real commitment behind it. That commitment cannot be isolated in the silo of just one government department; it has to be a theme across all government policies. If the Government wish to achieve their objective, there must be a culture change whereby all departments and Ministers in them have to be aware of the impact of policies which might seem unrelated on the Government’s commitment. If the Government are truly serious about meeting that commitment, as I believe they are, that is what they have to do.
In many ways, there is nothing new in these amendments, which I hope will make it easier for the Minister to accept them. They do not seek to introduce new policies; they seek merely to assist the Government in making those linkages and connections between this proposed legislation and legislation that is already on the statute book.
Lord Berkeley
My Lords, I support these amendments. In some ways they are no-brainers: it is so obvious that they need to be there to close the gap that my noble friend mentioned.
Proposed new subsection (1A)(b) in subsection (2) of the amendment covers flooding risk, which gets greater all the time. However, many local authorities, sadly, do not take that into account when they allow new developments. Going back 20 years, there was an amazing story in Cornwall where someone wanted to develop a site near the beach in St Austell Bay. The developer produced the plans and everything went fine but the local people said, “The sea will overtop it”—many tens of millions of pounds had been spent on this development by then—but the developer said no and the council said nothing. A week later the sea did overtop it and flooded a large area. It was a high tide, which happens every now and then. Five years on, planning permission was finally obtained for this enormous development but with a very much higher sea wall. The amount of money and time wasted by people not taking into account the risks of climate change are tremendous.
I remind the Committee that proposed new subsection (1A) means including policies to encourage walking, cycling, public transport and much less use of the car; and the location of schools, hospitals and other such places where there is so often a consolidation which means that people have to travel much further to use them through no fault of their own. These issues never seem to come into the assessment. I hope that when the Minister responds he will support the amendment or come back with one in his own words if he thinks it is defective in its drafting, which I have heard him suggest before.
Lord Boyd of Duncansby
This is the first time that I have spoken in this stage of the Bill so I declare an interest as a solicitor in private practice, mostly in Scotland but also to some extent in England. I want to make two quick points. First, the Climate Change Act establishes legally binding objectives and targets for the reduction of carbon emissions by 2050. The development plan is the way in which the built environment is shaped for the future. It is really important that we ensure a seamless see-through in meeting these targets. The development plan is an important element of that.
Secondly, the national policy statements on nationally significant infrastructure projects all have within them considerable sections targeted at climate change. The Government are to be congratulated on taking forward those national policy statements in that way. There is an argument that, if the national policy statements make such a priority of ensuring that developments meet the carbon target, surely the development plan fulfils a similar function.
Lord Taylor of Holbeach
I share the concern of those wishing to be ambitious in meeting the challenges of climate change. I also agree that planning has a big part to play. We have underlined this in the carbon plan, our response to the Environmental Audit Committee’s report on adaptation and—as the noble Baroness, Lady Smith, will know—the renewable energy road map published today. The national planning policy framework, which we will publish very shortly for consultation, will make tackling climate change a priority for planning.
We already have a climate change duty on plan-making which was introduced by the previous Government. That duty seemed to them to be sensible and I agree—let me explain why. The current, existing duty expects a local council’s development plan documents, taken as a whole as their local plan, to include policies designed to contribute to mitigating and adapting to climate change. Neighbourhood development plans will need to be in general conformity with the strategic policies in local plans, including policies on climate change. The national planning policy framework will be clear on planning’s important role in rising to the climate change challenge. On the point of the noble Lord, Lord Berkeley, the NPPF will be clear on the need to cut carbon emissions and properly adapt to the impacts of climate change, including flooding.
Local planning authorities must have regard to national policy in preparing their development plan documents, as well as in determining planning applications. Neighbourhood development plans will need to be appropriate, having regard to this national policy. The current duty is a sensible approach—I hope that the noble and learned Lord, Lord Boyd of Duncansby, will accept that. It reflects that places are different and will be able to make different contributions to tackling climate change. It also recognises that not every development plan document, as a component of the local plan, can make the same contribution. One of the anxieties I have about these amendments, for example, is how every local planning authority would ensure that development in their area achieves reductions of greenhouse gas emissions in line with the national carbon budgets. Places are very different. Some are able to make big contributions, others less so however hard they try. For instance, some have natural energy resources, be it geothermal or wind in more exposed rural areas, that other areas just do not have.
While I understand the direction of travel intended by the two amendments in this group, I do not believe it will help get us to where we want to be in a trouble-free way. For that reason, I cannot support these amendments. I reassure the noble Baroness, Lady Smith, that the combination of the existing duty and planning policy within the framework provided by the Planning and Compulsory Purchase Act 2004 makes this amendment unnecessary and I hope she will feel able to withdraw it, because I do not think there is any disagreement between us on the objectives we are seeking to achieve. It is just whether these amendments achieve that objective.
Baroness Smith of Basildon
I am grateful to the noble Lord and, if I understand him correctly, he is saying the amendments are unnecessary because such provisions are already included. I suppose I had hoped that the temptation of joined-up government would have been irresistible and he would have wanted to accept these amendments to the Bill to make it absolutely clear that this is a thread that runs through all government policies.
I will take away and listen to what he has said. I am not for one minute suggesting that in every case the same contribution should be made to neighbourhood plans, but there should be some consideration of these issues at every level of the planning stage. I am grateful for his explanation. There is not much between us in terms of what we are seeking to do but I will look at that and be happy to withdraw my amendment at this stage.
Lord Greaves
Lord Greaves
My Lords, the numbering is getting bizarre but the content of the amendments makes up for it. I will also speak to the other amendments in this group. We are now on to the fairly short section of the Bill that deals with local development schemes and Clause 97 about the adoption and withdrawal of development plan documents. The purpose of these amendments is to set local authorities free, once again, to make their own decisions in a considered way, following independent examination by an inspector.
Individual documents make up the local development framework, the local plan, under the Planning and Compulsory Purchase Act 2004—the Act that was going to deliver our new streamlined planning system but has not quite worked out that way. Before then, the local plan was put to inspection—a public inquiry and an examination by an inspector. He or she made recommendations to the local authority and the local authority then had the freedom to accept those recommendations or not, modify them, or accept them in part or whatever they wished to do.
In 2004, the system was changed so the local authority, in effect, has to adopt what the inspector says. If the inspector says it is okay it has to be adopted; if the inspector recommends modifications they have to be accepted exactly as proposed. The local authority can decide not to follow the inspector’s decision but if it does it is back to square 1 and has to produce its plan all over again.
I remember my noble friend Lady Hamwee opposing the changes in 2004 with some eloquence and we can all go back and read her speeches and others from then, so you do not need much more from me. However, there is a principle here—local authorities are elected and they should be responsible for agreeing their own plans. Nobody is objecting to the process of inspection and examination and most authorities in the past adopted most of what the independent inspector proposed, but they did not have to and could make up their own minds.
There was a promise, which I thought the coalition Government were going to deliver, of freeing local planning authorities to make up their own minds once again. However, what we have in front of us in this Bill is a very weak relaxation of restrictions, which does not fundamentally change the position. Under the Bill, local authorities can make additional modifications to those proposed by the independent examiner, but only if they do not make material changes to the policies in the plan. In other words, they can tidy up a few loose ends but that is about that. The purpose of these amendments is, essentially, to remove Sections 21 and 27 of the Planning and Compulsory Purchase Act 2004 in order to free local authorities to make up their own mind. I beg to move.
Lord Taylor of Holbeach
My Lords, I thank my noble friend for introducing these amendments. I understand his purpose, but we are not minded to accept them. We are concerned particularly about the first two amendments, Amendments 148ZZZZBB and 148ZZZZBC, because they would reintroduce regulatory bureaucracy by restricting councils from making small text edits, such as correcting mistakes, page numbers and notation, before adopting their development plan documents. We do not see that that can possibly be justified.
If noble Lords are concerned that councils are being given powers to adopt or change policies without proper public debate, I reassure them that this is not the case. The Bill makes sure that councillors can adopt plans only when they are considered suitable by the inspector. We trust councillors to prepare plans that reflect local needs and bring forward sustainable economic growth.
Amendment 148ZZZZBD seeks to remove the Secretary of State’s existing powers to direct withdrawal of a council’s local plans during examination. We disagree with my noble friend on this issue, and we think that this is bottom-up. We have introduced Clause 97(5) to retain the existing backstop power in exceptional circumstances only, alongside our proposals in Clause 97(4), which will allow councils to withdraw their plans at any time before adoption. We believe that that is the right approach.
Amendments 148ZZZZBE, 148ZZZZBF and 148ZZZZBG collectively seek to remove sections from the 2004 planning Act that allow the Secretary of State to intervene in the preparation of local plans. These are existing long-standing measures that have not been used by this Government. In a practical sense, the powers are simply existing safeguards, which a future Government may consider it appropriate to use in the highly exceptional circumstance when a council is unwilling or unable to develop plans for their area. It acts as a useful reminder for local communities that their own councils should plan properly on their behalf and that they can hold them to account. I hope that with those assurances the noble Lord is prepared to withdraw his amendment.
Lord Greaves
My Lords, I am prepared to withdraw my amendment. I did not think I would get anywhere, but it is still very disappointing. The Minister said that the Government trust local councils to produce plans that will produce sustainable development, and so on. The truth of the matter is that no Government nowadays trust local councils at all unless they do what the Government or the inspector want, or follow the detailed rules and regulations. It is a very sad state of affairs, but it is clearly going to continue for some time. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
“( ) In section 23 (adoption of local development documents) after subsection (3) insert—
“(4) Subject to subsection (5), if a development plan document has not been adopted by the date that this subsection is brought into force, it cannot constitute a reason for refusing planning permission.
(5) Subsection (4) does not apply in relation to a replacement or revision of an adopted development plan document that is sustainable.””
Lord McKenzie of Luton
My Lords, this is a probing amendment, prompted by the National Housing Federation. It specifically focuses on an authority that has not adopted its local plan document and provides that this cannot constitute a reason for refusing planning permission. In a sense, this picks up just part of the federation’s proposition, which sets this in the context of a statutory definition of sustainable development and the presumption in favour of sustainable development. We have already discussed definitions of sustainable development and whether they should be enshrined in primary legislation, and we touched on the Government’s draft presumption in favour of sustainable development. We will doubtless return to these points on Report.
In the mean time, we have the demise of regional spatial strategies, no agreement—as the noble Lord, Lord Best, said last week—to preserve for at least a limited period related policies that are not directly incorporated into LDPs, and no draft official NPPF. Perhaps the Minister could spell out for us how things will work when local planning authorities have not yet adopted a local development plan. It must be right that the absence of a plan cannot automatically be used to deny an application for planning permission. However, is the Minister’s position that, where a local plan is not yet complete, it is necessary to look just at the NPPF, given that the Government have heralded this as a framework that sets out government priorities only to the extent that it is relevant, proportionate and necessary to do so? Do they not envisage distinctive local and indeed neighbourhood issues that are clearly outwith the NPPF?
Clearly the answer to all this is for local authorities to get on and approve their LDPs. However, we should acknowledge that they are faced with challenges on resources—challenges faced generally by local authorities—that are not made easier by the requirement to support neighbourhood planning and not helped by the hiatus caused by the actions of the Secretary of State when coming into office. Nevertheless, I stress that this is a probing amendment, and I would be interested to hear the Minister’s response to this issue.
Lord True
My Lords, I am conscious of the need to make haste and I am perhaps making too much. There are a lot of “nots” in this amendment. Obviously where local development frameworks are in place, local authorities are consistently working on development plan documents. In any clarification that may be being made, we would not want to arrive at a situation in which an emerging policy of an authority, which is traditionally given some weight by planning committees and often by the inspector, is disallowed because the final plan has not yet been formally adopted after the hearing by the inspector. I do not expect my noble friend to respond in detail on that point, but it is an extremely important point because emerging DPDs are very often the reflection of the latest thinking of local people and a response to localist pressure.
Lord Taylor of Holbeach
My Lords, the noble Lord, Lord McKenzie, is quite right in moving this probing amendment to emphasise that the preparation of plans is a great challenge for local authorities. It is central to the Localism Bill and is certainly very important for them. We believe in a timely plan-led system, free from unnecessary targets imposed by central government. We trust local councils and their communities to choose to prepare plans where they feel that they need to shape development in their areas as quickly as they can. This is why we have been careful to retain the basic process of developing local plans, including public examination, and we are trying to make them work better in the interests of transparency and accountability.
The noble Lord’s amendment, which I accept is probing, would penalise councils without adopted plans in place by the time the Bill is enacted. I think we would all accept that this would not achieve good, responsible local planning. Perhaps I can help the noble Lord, because we agree that councils should get on with their plans. Our presumption in favour of sustainable development would be the right tool to ensure that planning applications are considered. We are clear that the presumption should be that councils should say yes to development if their plans are out of date. While we share the previous Government’s ambition that the plans should not be delayed, we know that their approach of top-down deadlines imposed in the 2004 Act just did not work.
In addition, the amendment also comes across as an unnecessarily centralising measure. Instead we want to use positive incentives, such as the new homes bonus and the community infrastructure levy, to encourage councils to plan properly. We are clear that councils will be expected to say yes to development where their plans are out of date. There is a steady flow of plans coming through and we do not believe that legislating for deadlines is the right approach. The aforementioned NPPF and a policy presumption in favour of sustainable development are the right tools. Together they are more immediate and effective levers that will incentivise the same behaviour.
The amendment would also undermine a fundamental part of the system by removing the discretion from the decision-maker to determine what issues should be material considerations to an individual case. With those assurances, I hope that the noble Lord, Lord McKenzie, is in a position to withdraw his amendment.
Lord McKenzie of Luton
I am grateful to the Minister. I will certainly withdraw the amendment, but I am still a little unclear about the situation in which the local planning authority has not yet gone through the processes and got its local development plan in place. What will determine the acceptability of planning permissions that are sought in the interim? Very soon there will be the NPPF but I understand that it will be written at a fairly generic level—necessarily, as this is the virtue that has been made of it by the Government—so it will not pick up a lot of detail. How will those issues be settled, with the lacuna of no current plan? On what criteria will planning applications be made?
Lord Taylor of Holbeach
I think I gave the noble Lord the answer to this when I said that the presumption would be that the planning should be in accordance with the NPPF and any other material considerations. Outside that, the presumption must be that approval is given, so there is an incentive for local authorities to get these plans in place.
Lord Berkeley
Could the Minister clarify that? Is there not going to be a sort of bonanza before the LDP is finally approved? Before that, all the applicants will have to do is comply with the NPPF, which must be a very high-level document. Will there not be a flood of planning applications that, as the Minister said, the local authority will probably have to approve?
Lord Taylor of Holbeach
My Lords, there is an incentive for local authorities to get these plans in place—I think I have made that point throughout our discussions on these amendments—and all other material considerations have to be met, so it does not happen totally in the void. Local authorities must have regard to their own circumstances when taking other matters into account, which is all the more reason for them to be working on these plans at the present time.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister again. I think that my noble friend Lord Berkeley has articulated the issue more effectively than I did. I would like to read the record on this. In the mean time, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
“( ) In section 205 (the levy), at the end of subsection (2) insert “without prejudicing the provision of affordable housing in accordance with the development plan”.”
Lord McKenzie of Luton
My Lords, in moving Amendment 148ZZZBB, I will also speak to the other amendments in my name, namely 148ZZZBC, 148ZZZBD and 148ZZBAA. I will comment on the other amendments in this group after they have been spoken to.
Amendments 148ZZZBB, 148ZZZBC and 148ZZZBD deal with the community infrastructure levy and its consequences for the provision of affordable housing. The amendments, which were prompted by the National Housing Federation, seek to ensure, first, that the need for affordable housing is taken into account when setting the CIL and, secondly, that the CIL charging schedules contain a provision that allows for the CIL to be waived if securing the entire amount would prejudice the provision of affordable housing.
The NHF says that the community infrastructure levy will be in most cases mandatory on new developments. With 40 per cent of social housing having traditionally been delivered through Section 106 agreements, it is vital that the CIL is set at a level that does not prejudice the delivery of levels of affordable housing in accordance with local plan policy. It is also important that, where the combination of the CIL and affordable housing makes development not viable, there is a clear mechanism that allows the CIL to be waived in whole or in part so that levels of affordable housing do not fall automatically.
In the debate in the other place, all parties agreed that the CIL should not prejudice the provision of affordable housing. The Minister was explicit about this and said that the present arrangements in the Planning Act 2008 and the CIL regulations offered sufficient protection, though he did commit to return to the issue. The Minister suggested that the requirement in Section 211 of the 2008 Act to have regard to the economic viability of development meant that proper scrutiny would be given to the effect on affordable housing.
Regulation 14, which gives practical effect to Section 211, requires a balance to be drawn between the desirability of securing funding from the CIL and the effect on the economic viability of development across the area. However, this type of balancing exercise does not protect affordable housing and it cannot do so if, as is often the case, there is no clear numerical target for additional affordable housing units. It would be far better to legislate to make the position explicit that the CIL is not meant to lead to a reduction in levels of affordable housing or land for affordable housing. There is no evidence that affordable housing requirements have genuinely been taken into account in the emerging CIL charging schedules to date.
The document Community Infrastructure Levy—An Overview, which was published by DCLG in May of this year, appears to make two things clear. First, it states:
“The regulations rule out the application of the levy for providing affordable housing”.
In relation to planning obligations, the document says:
“The levy is intended to provide infrastructure to support the development of an area rather than to make individual planning applications acceptable in planning terms. As a result, there may still be some site specific impact mitigation requirements without which a development should not be granted planning permission. Some of these needs may be provided for through the levy but others may not, particularly if they are very local in their impact. Therefore, the Government considers there is still a legitimate role for development specific planning obligations to enable a local planning authority to be confident that the specific consequences of development can be mitigated”.
However, the document then goes on to say in a sense that the planning obligations proposals had been drawn tightly by circular 5/05 and that is now enshrined on a statutory basis in the regulations.
Therefore, I have a fundamental question for the Minister. Given that the CIL cannot be used for affordable housing and the Section 106 agreements cause its focus to be narrowed, what will happen to the vital source of funding for affordable housing that came from the Section 106 stream? I stress that this is not a trick question. There is a genuine inquiry here; I am trying to understand how this should work and what the Government’s intentions are. Funding generally for affordable housing has been heavily restricted. I know that the Government are looking at so-called affordable rents or intermediate rents as a means of generating resources for affordable housing. However, if that Section 106 stream is to be reduced, and potentially overshadowed by the CIL, how will that all work? How will it help the delivery of affordable housing? I beg to move.
Lord Greaves
My Lords, I have some amendments in this group, which I shall try to rattle through as quickly as possible. I start by saying that we support the broad thrust of what the noble Lord, Lord McKenzie, has just said.
Amendment 148ZZBBB is a kite-flying amendment that would include building improvement and renovation of housing. The noble Lord has spoken more eloquently than I would have done, so I shall say no more about that. However, this is a very serious problem with the new system.
Amendments 148ZZBBA and 148ZZCA, are very similar to amendments that were tabled in the House of Commons by my right honourable friend Simon Hughes. He asked us to table them again here, since he was given a fairly sympathetic response by the Minister when he talked to him about the amendments—they were tabled in the Commons but they were not debated there. They would widen the possible use of the CIL. Amendment 148ZZBBA leaves out the words “providing infrastructure to support” and inserts the word “supporting”. The proposed provision refers to the development of an area. In other words, the amendment would allow the CIL to be spent on projects that support the development of an area, and not just what might be narrowly defined as infrastructure. The amendment would amend Section 205 of the Planning Act 2008.
Amendment 148ZZCA makes a similar amendment to Section 216 of that Act, which at the moment—ignoring the preamble—reads:
“CIL regulations must require the authority that charges CIL to apply it, or cause it to be applied, to funding infrastructure”.
Amendment 148ZZCA would add “or any other matter”. That means that CIL could be used to fund things that are desirable in the area but not necessarily described as infrastructure.
Many areas, particularly big cities, do not necessarily require extra investment in their infrastructure, but that does not mean that local residents are not inconvenienced by development. They might be inconvenienced by noise, dirt or dust, or there may be nuisance from the operation of the development. A supermarket could have people coming in and out all the time, and making noise around closing time. This could be mitigated by investment in, for example, double glazing. However, this is not currently allowed under the legislation; it is not regarded as infrastructure. In reality, councillors with the opportunity of getting CIL will always levy it and will always find ways of spending it. However, they will not necessarily spend it on the best and most useful thing that they could spend it on if they have to stay within the narrow definition of infrastructure.
Amendments 148ZZBBC and 148ZZCC just propose replacing “ongoing” with “continuous”. I regard “ongoing” as being an unpleasant American word that came in probably several decades ago—I do not know—but the English word is, in my view, “continuous”, which would be better and more elegant.
Amendment 148ZZCD refers to regulation-making powers in the Bill that refer to passing CIL,
“to a person other than that authority”.
I am not trying to remove that provision, and I should say that this is a probing amendment to find out what that phrase means and who these other persons might be that the authority would or might have to pass the CIL to.
Amendment 148ZZBAZA relates to the same argument about authorities being able to make up their own minds after a charging scheme has been examined by an examiner and to obtaining their recommendations. It is the same argument that was made two groups ago, and I will not say any more about it. I do not imagine that the Government will agree with me about that, but it is important. The next amendment in the group is about the same matter, so I shall not speak to it any further.
Finally, I speak to Amendment 148ZZZBE. On page 77 of the Bill, proposed new subsection (7A) to Section 211 states:
“A charging authority must use appropriate available evidence to inform the charging authority’s preparation of a charging schedule”.
That seems to be garbage. Why does that have to be in legislation? There are then eight indications of what CIL regulations may make provision for. I shall not read them all out, but only a couple of them to provide a flavour, including,
“provision as to evidence that is to be taken to be not appropriate”,
and,
“provision as to how evidence is, and as to how evidence is not, to be used”.
They are all like this. Finally there is,
“provision as to how the use of evidence is to inform the preparation of a charging schedule”.
They are the kind of quite extraordinary provisions that ought not to be in legislation.
It is insulting that local authorities cannot make sensible decisions on their own without being given such minute and detailed instructions on exactly what to do. If the Government are to respond to all the criticisms made in this Committee about the detailed regulations that are being imposed, I hope that they might look at this provision as being at best redundant and at worst quite ridiculous.
Lord Lucas
My Lords, I wish to speak to my Amendment 148ZZCBA. It proposes to remove subsection (3)(b) of Clause 100, not, as my noble friend might think, in protest at the word “ongoing”, although it is an entirely unnecessary word. Perhaps the clause should refer only to future costs. What costs would be in or out, or out or in, because of “ongoing” being in the clause? The word is totally unnecessary. However, I want to mention this matter because it is a breach in the whole principle of CIL, which should deal with the infrastructure costs that are caused, or need to be contributed to, as a result of the proposed development.
Once you start to allow consideration of future costs, you will allow the whole CIL to be diverted to revenue and you will not get the infrastructure that you are supposed to get, and you will create a large deficit in the provision of infrastructure, because cash-strapped local councils will just hang on as long as they can without building the infrastructure. They will allow the roads to become more crowded and the schools to become fuller until the local authorities have to do something, and spend the CIL money on current costs. This is the sort of budgeting for which we criticised the previous Administration. I am very surprised that we are contemplating it ourselves.
Baroness Hamwee
My Lords, perhaps I, too, may ask a question about the provision of infrastructure on an “ongoing” basis. I entirely sympathise with the search for elegance, as my noble friend put it. My question is whether providing infrastructure on an ongoing basis means maintaining it. If that was what was meant, these lines could simply read “providing and maintaining infrastructure”. Presumably, therefore, it means something else. Does it mean something else excluding maintenance or something else and maintenance? Perhaps the Minister can aid the Committee in the interpretation of the provision.
Earl Attlee
My Lords, the purpose of the CIL is for owners or developers of land to contribute to the cost of providing infrastructure that supports the development of the area. Almost all development has some impact on the need for infrastructure, or benefits from it. It is fair that such development pays a share of the cost of providing that infrastructure. In setting a charge, local authorities must have regard to the actual and expected costs of infrastructure and its other sources of funding. They must also have regard to the economic viability of development, which includes the need to deliver affordable housing.
The noble Lord, Lord McKenzie of Luton, proposes amendments to provide that affordable housing provision will not be prejudiced by any levy charges that an authority may set. As we explained in the other place and to the National Housing Federation, the existing legislation already provides appropriate safeguards to avoid negative implications for the delivery of affordable housing. The statutory guidance issued under Section 221 of the Local Planning Act 2008, to which local authorities are required to have regard, explicitly sets out that a charging authority must take development costs, particularly those for affordable housing, into account when setting a charge. The point of the levy is to support and not frustrate the delivery of a local development plan. The statutory guidance is specifically clear that an examiner should consider whether a local authority’s proposed charges would put their affordable housing target at risk. Where the independent examiner considers that it does, they should not approve the proposed charge.
The noble Lord, Lord McKenzie, asked me about the Section 106 funding source for affordable housing. It does not follow that the imposition of a CIL charge will result in lower Section 106 contributions. In setting a charge, a council has to consider the impact on the economic viability, including affordable housing, and ensure that the levy does not put it at risk, which will include affordable housing funds. These amendments are clearly well intentioned. We agree that affordable housing is important and must not be harmed by the implementation of a levy. I can reassure noble Lords that the amendments are unnecessary, as appropriate safeguards already exist.
The noble Lord, Lord Greaves, in his Amendments 148ZZZBE et cetera, seeks amendments that would in effect allow local authorities to implement a charge without first having to remedy any deficiency identified by the independent examination of their proposals. Local authorities are in the best position to know what level of charges will work in their area to support development and encourage growth, but we do not accept that they should have complete freedom to set any charges they like. Instead, we are maintaining proportionate safeguards to prevent unreasonable levy charges, which could put development at serious risk. Our proposals rebalance the relationship between the examiner and the local authority, to provide that it is the authority that has the final decision on how any deficiencies in their proposed charging schedule are addressed. However, we are clear that any changes made by the authority must be sufficient and necessary to remedy any non-compliance identified by the independent examination of the proposals.
Noble Lords also seek to remove powers that allow for regulations to make provision about the evidence that a local authority must or must not consider in setting a charge. Our experience of similar examination of local plan-making shows that the decisions of independent examiners vary. Councils have tended to give a great deal of weight to previous decisions, and that has sometimes led to restricted local flexibility and freedom. We want to ensure that that does not occur with the levy. The proposed power will enable the Government to respond in a robust and flexible way to practices which threaten to undermine the ability of councils successfully to introduce their local levy charges. Our proposals strike the right balance between ensuring that local authorities have real discretion to set charges in their area while retaining appropriate safeguards to ensure that proposals do not put development of the area at risk.
Amendment 148ZZBBA, tabled by my noble friend Lord Greaves, would widen the permitted use of levy receipts beyond infrastructure to matters that support the development of an area. My noble friend has raised an interesting point. We are clear that the point of the levy is to support growth and new development. Infrastructure is of course central to supporting new development and unlocking growth, but it is not the only matter necessary to enable and incentivise development. We want to reflect on whether continuing to limit spending solely to providing infrastructure restricts local authorities’ ability to support and enable development of the area. We want to consider whether widening permitted uses of the levy would make the instrument more effective and better placed effectively to promote, support and enable new development.
My noble friend Lord Greaves also proposes Amendment 148ZZBBB, which would do two things. First, it would alter the purpose of the levy so that it is focused on supporting communities rather than development. We have set out proposals to pass a proportion of the funds raised in an area to the parish council for that area and for those funds to be spent on infrastructure to support the development of that area. Control over the remainder of the funds is to be retained by the charging authority—normally the unitary, district or borough council—to provide the infrastructure needed to support the development of the larger area. The point is that the impact of the development and the infrastructure needed to support it are not confined to the geography of the community. Some will be, and our changes to direct a meaningful proportion of funds to the communities where development takes place will deal with that. Other matters, such as transport, span communities—and, indeed, charging authorities.
Secondly, the amendment proposes to allow funds to be used for the building, improvement and renovation of housing. That is unnecessary, as existing primary legislation in the Planning Act 2008 already contains the power to allow for levy receipts to be spent on affordable housing. However, regulations currently prevent that. Allowing such spending is therefore not a matter for the Bill, but the treatment of affordable housing is relevant to the amendments sought. I can confirm that we will consult during the summer on making that change through regulations.
In Amendment 148ZZCB, my noble friend Lord Greaves seeks to remove the provision for regulation to set out the ongoing costs to be funded by the levy. The powers we propose mirror existing ones in the Planning Act 2008, which allow for regulations to set out the works, installations or other facilities to be funded by the levy. The existing powers are currently used to specify that the Mayor of London must use receipts to fund strategic transport infrastructure. London is unique in that the London boroughs may also levy charges in their area, but are free to spend the receipts on any infrastructure to support their areas. We have no plans to use the power to specify the ongoing costs to be funded, but we envisage that it is necessary to deal with similar exceptional circumstances.
Lord Berkeley
Can the noble Earl clarify what is covered by “future ongoing costs”? Is it maintenance of housing or maintenance of a road? It is a bit of an open-ended commitment. You can understand a capital cost but if it is maintenance for roads or housing forevermore, it seems a bit odd.
Earl Attlee
My Lords, perhaps it would be helpful if I first answered the question from my noble friend Lady Hamwee on whether ongoing means maintaining the infrastructure or excludes it. Clause 100 sets out that this includes maintenance and operation of infrastructure.
Amendment 148ZZBBC seeks to allow the levy to fund the provision of infrastructure on a continuous rather than ongoing basis. We do not believe that this amendment would have a material effect. Our changes clarify that levy receipts can be used to maintain the ongoing costs of providing infrastructure but such spending will still have to satisfy the requirement that it also supports development of the area. The reason for our change is that the current provisions are being construed as limiting spending only to the initial costs of providing infrastructure. This could prevent infrastructure that is wanted and needed from being provided where the funds necessary to maintain and run it are not available. This is a perverse outcome and we are making sure that councils have the flexibility to deliver what is needed to support development of their area.
My noble friend Lord Lucas seeks an amendment that would prevent regulations allowing levy receipts to be reserved for future ongoing costs. I have explained that our proposals are concerned with ensuring that local authorities have real flexibility to spend the funds on the matters that are needed to support development in their area. We believe that this amendment would constrain this flexibility and could result in inefficient and ineffective spending by requiring funds to be used now rather than retained for future strategic projects that are planned.
Amendment 148ZZCD, tabled by the noble Lord, Lord Greaves, and others, proposes to remove provisions that provide for regulations to place a duty on charging authorities to pass all or some of any community infrastructure levy received to other persons. Alongside the physical barriers to new development, growth can be slowed or restricted by local concerns about its impacts. We intend to use the powers conferred by Clause 100 to require charging authorities to pass a meaningful proportion of receipts raised from new development in an area to a parish, town or community council for that area where there is such a local council. The local council will be required to spend the funds to provide infrastructure to support the development of its area.
When communities understand that new development is directly contributing towards the cost of the demands that it places on the infrastructure of their area, and see that they will be given real control over how these resources are used to address those demands, they are more likely to accept and indeed support it. Our reforms to the levy will make it genuinely pro-growth. Addressing the demands that new developments place on infrastructure will enable development to happen and it will incentivise communities to accept it. Using receipts to invest in the local area will ensure that growth is supported and sustainable, which will in turn unlock new development and growth.
We want to reflect on the amendments proposed by my noble friends Lord Greaves and Lord Tope to allow the spending of the levy on matters other than infrastructure. It is essential that the levy operates in a way that helps drive growth as effectively as possible. We will carefully consider whether permitting spending on other matters can improve the instrument’s ability to support and enable development. As ever, I am very happy to discuss these matters privately between this stage and Report. I hope that noble Lords will feel able to withdraw their amendments at the appropriate point.
Lord Greaves
My Lords, I am grateful for the fairly positive response to some of the amendments I moved. I look forward to further discussions, and I hope that the Government will have completed their reflection by the time we get to Report.
The specific question I want to ask is on the payment to other persons. The Minister twice referred to the intention of paying over a proportion of the levy to parish town councils and community councils in Wales. Is it the intention that it would only be to parish and town councils, and to no other persons? If so, that would mean that in areas without parish and town councils no levy would be passed over to the community, which is a minority of the land in the country, but a clear majority of the people who live in England who do not have town and parish councils. Can the Minister also give us an indication of the proportion of CIL which the Government are thinking of requiring to be passed to parish and town councils?
Earl Attlee
My Lords, that is quite a detailed point. It would probably be safer if I wrote to the noble Lord on that.
Lord Lucas
My Lords, I would certainly like to take up my noble friend’s offer of conversations between now and Report. I think I heard three different answers to the question posed by my amendment, and I hope that I will end up with one answer by the time we get there.
Lord McKenzie of Luton
My Lords, I, too, thank the Minister for a full and indeed very positive, or broadly positive, reply. Certainly at this hour, I should like to read the record and perhaps revert to those who pressed this particular amendment on us to talk it through with them in detail. I am grateful to the noble Lord, Lord Greaves, for the thrust of his support. These issues around who else the levy should be paid to are certainly important ones, and I would be happy to be included in that correspondence if I may. It is also important that it is done by diktat of the Secretary of State rather than being the local authorities’ decision.
Can I just check: did I hear the Minister correctly when he said that he thinks it is right that the legislation provides for affordable housing to be included within infrastructure—the regulations currently preclude that? Did the Minister say that he was looking to consult on that later this year to change that rule, so affordable housing could be included? Was that what he said?
Earl Attlee
My Lords, I think the noble Lord will have to read the Hansard, but what I said was quite clear and the words in my speech will make that clear. The short answer is yes.
Lord McKenzie of Luton
In which case, I am most grateful to the noble Earl.