House of Commons

Tuesday 12th July 2011 Commons Chamber

Tuesday 12 July 2011

The House met at half-past Two o’clock

Prayers

Tuesday 12th July 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 12th July 2011 Commons Chamber

The Secretary of State was asked—

[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.

[Ms Stuart]

The Minister said that he was engaging fully with stakeholders. Does that include the Treasury, given reports that the Dilnot proposals are being strangled at birth?

[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 Burns]

My hon. Friend has hit on an important issue. The answer is clarity of purpose and vision on the part of my right hon. Friend the Secretary of State not only to talk the talk, but to walk the walk and achieve dignity for patients in the NHS in England.

[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?

[Mr Burns]

Yes, I can give the hon. Gentleman a categorical assurance on that.

[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 Speaker]

Order. We must have short questions and short answers.

[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

Tuesday 12th July 2011 Commons Chamber

15:34

[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.

[Several hon. Members]

rose—

[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?

[Paul Burstow]

Yes.

[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.

[Mr Speaker]

I am grateful to the Minister of State and to colleagues.

Electricity Market Reform

Tuesday 12th July 2011 Commons Chamber

16:20

[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.

[Several hon. Members]

rose—

[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

Tuesday 12th July 2011 Commons Chamber

17:11

[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.

[Mr Speaker]

If it is on the same matter, I call Mr Oliver Heald.

[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—

[Oliver Heald]

rose—

[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 William Cash (Stone) (Con)]

rose—

[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

Tuesday 12th July 2011 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

17:19

[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.

17:28

[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—

[Mr David Ruffley (Bury St Edmunds) (Con)]

There’s no one behind you, John!

[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

Tuesday 12th July 2011 Commons Chamber

17:34

[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.

17:40

[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.

17:45

[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.

17:47

[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.

17:50

[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.

17:53

[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.

[Several hon. Members]

rose—

[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.

18:01

[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.

18:05

[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.

18:12

[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.

18:14

[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]

Tuesday 12th July 2011 Commons Chamber

[Relevant documents: The Fifth Report from the Public Administration Select Committee, Smaller Government: Shrinking the Quango State, HC 537, and the Government response, Cm 8044.]

Second Reading

[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.

18:19

[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 Jones]

You don’t know.

[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 (Gillingham and Rainham) (Con)]

rose—

[Mr Maude]

I will give way to my hon. Friend, and then I will make progress. I am conscious that this is going to end up being a rather short debate on Second Reading of a large Bill, and I know that a lot of Members want to contribute.

[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 (Vale of Glamorgan) (Con)]

Will my right hon. Friend give way?

[Mr Maude]

I will give way once more; then I really will need to make progress.

[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’s point simply amplifies the case for the presumption that we are instituting in the Bill that there needs to be a really compelling case for a state function being carried out in a way that is not accountable. That is the purpose of the Bill.

[Charlie Elphicke]

Will my right hon. Friend give way on that point?

[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 Kevan Jones]

rose—

[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?

[Mr Maude]

I will give way once, if the intervention is on scrutiny.

[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 (Luton South) (Lab/Co-op)]

rose—

[Mr Maude]

If the hon. Gentleman will forgive me, I will make progress.

[Gavin Shuker]

rose—

[Mr Maude]

Oh, well, I give way to the hon. Gentleman’s blandishments.

[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.

18:50

[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.

[Mr Maude]

Does the right hon. Lady accept that the biggest reduction in the number of public bodies came through their devolution to the Scottish and Welsh Governments?

[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.

[Andrew George]

rose—

[Tessa Jowell]

Let me turn briefly to the Commission for Equality and Human Rights—

[Andrew George]

rose—

[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—

[Andrew George]

rose—

[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.

[Several hon. Members]

rose—

[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.

19:20

[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.

19:27

[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.

[Paul Flynn (Newport West) (Lab)]

Will my hon. Friend give way?

[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.

19:34

[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?

[Mr Williams]

I have only four and a half minutes, but I will 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 Deputy Speaker (Mr Lindsay Hoyle)]

Order. Time is up.

19:43

[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.

19:50

[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.

19:56

[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.

19:59

[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.

20:08

[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.

20:17

[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.

[Mr Jones]

If the hon. Gentleman will cite examples, I wish he would do his homework. IPSA was supported by Members in all parts of the House; the strongest advocate for it was the current Prime Minister.

[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.

20:25

[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%.

[Alun Cairns]

Will the hon. Gentleman give way?

[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.

20:33

[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.

20:40

[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.]

20:46

[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.

20:52

[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.

20:57

[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.

21:04

[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.

21:12

[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.

21:20

[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.

21:23

[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.

21:28

[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.

21:40

[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 Kevan Jones]

What about me?

[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.

[Mr Hurd]

I think that the House understands, as the Government certainly do, that the hon. Gentleman is opposed to the abolition, but I do not think that that changes our view that separate representation for agricultural workers is no longer needed.

[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]

My hon. Friend is right that the abolition of the Agricultural Wages Board is not about driving down wages and conditions for agricultural workers, but about removing regulatory burdens on farm businesses and allowing them to focus on the business of farming.

[Jack Dromey]

Will the Minister give way?

[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.

21:59

Division 321

Ayes: 231

---

Labour: 225
Social Democratic & Labour Party: 3
Plaid Cymru: 3
Alliance: 1
Green Party: 1

Noes: 307

---

Conservative: 259
Liberal Democrat: 46

Question put forthwith (Standing Order No. 62(2)), That the Bill be now read a Second Time.

Question agreed to.

Bill accordingly read a Second time.

Public Bodies Bill [Lords] (Programme)

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

That the following provisions shall apply to the Public Bodies Bill [Lords]:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13 October 2011.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Stephen Crabb.)

22:15

Division 322

Ayes: 304

---

Conservative: 258
Liberal Democrat: 44

Noes: 229

---

Labour: 223
Social Democratic & Labour Party: 3
Plaid Cymru: 3
Alliance: 1
Green Party: 1

PUBLIC BODIES BILL [LORDS] (MONEY)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Public Bodies Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—

(a) any expenditure incurred by a Minister of the Crown in consequence of the Act or an order under the Act; and

(b) any increase attributable to such an order in the sums which under any other Act are payable out of money so provided.—(Miss Chloe Smith.)

Question agreed to.

PUBLIC BODIES BILL [LORDS] (WAYS AND MEANS)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Public Bodies Bill [Lords], it is expedient to authorise the making of provision under the Act in relation to income tax, corporation tax, capital gains tax, stamp duty, stamp duty reserve tax or stamp duty land tax in connection with a transfer of property, rights or liabilities by a scheme under the Act.—(Miss Chloe Smith.)

Question agreed to.

Business without Debate

Tuesday 12th July 2011 Commons Chamber

Delegated Legislation

Tuesday 12th July 2011 Commons Chamber

[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)

Tuesday 12th July 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Miss Chloe Smith.)

[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.

22:31

[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.

22:41

[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.

22:58

House adjourned.

Ministerial Correction

Tuesday 12th July 2011 Ministerial Corrections

Tuesday 12 July 2011

Defence

Tuesday 12th July 2011 Ministerial Corrections

MOD Bicester

[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:

[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:

Westminster Hall

Tuesday 12th July 2011 Westminster Hall

Tuesday 12 July 2011

[Mr Roger Gale in the Chair]

Train-building Industry

Tuesday 12th July 2011 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mrs Villiers.)

09:30

[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.

09:31

[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.

09:52

[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.

10:03

[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.

[Several hon. Members]

rose—

[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.

10:13

[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.

10:20

[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.

10:25

[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.

10:29

[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.

10:31

[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.

10:44

[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.

[Chris Williamson]

Will the Minister give way?

[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.

[Chris Williamson]

Will the Minister give way?

[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

Tuesday 12th July 2011 Westminster Hall

11:00

[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.

[Several hon. Members]

rose—

[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.

11:18

[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.

11:27

[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.

11:36

[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.

11:55

[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.

12:01

[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.

12:10

[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—

[Graham Jones]

Will the Minister give way?

[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—

[Jack Dromey]

Will the Minister give way?

[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—

[Mrs Linda Riordan (in the Chair)]

Order.

Drivers and Diabetes

Tuesday 12th July 2011 Westminster Hall

12:30

[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.

12:40

[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)

Tuesday 12th July 2011 Westminster Hall

12:56

[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.

13:09

[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.

13:15

[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.

[Mr Robinson]

rose—

[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)

Tuesday 12th July 2011 Westminster Hall

13:30

[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.

13:46

[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.

[Mrs Main]

Will the Minister give way?

[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.

[Mrs Main]

I have had all that information from a series of questions I have tabled. I was shocked to realise that people need to be resident for only a month or possibly even less, which is open to interpretation by the individual doing the interview. That is a very low bar.

[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.

13:59

Sitting adjourned.

Written Ministerial Statements

Tuesday 12th July 2011 Written Statements

Tuesday 12 July 2011

Alignment of Prosecutions (DEFRA and CPS)

Tuesday 12th July 2011 Written Statements

[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

Tuesday 12th July 2011 Written Statements

[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

Tuesday 12th July 2011 Written Statements

[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

Tuesday 12th July 2011 Written Statements

[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)

Tuesday 12th July 2011 Written Statements

[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

Tuesday 12th July 2011 Written Statements

[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)

Tuesday 12th July 2011 Written Statements

[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

Tuesday 12th July 2011 Written Statements

[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

Tuesday 12th July 2011 Written Statements

[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

Tuesday 12th July 2011 Written Statements

[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)

Tuesday 12th July 2011 Written Statements

[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