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Oral Answers to Questions
(12 years, 11 months ago)
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Julian Smith (Skipton and Ripon) (Con)
1. What contribution his Department has made to the cross-government review of employment law.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
As part of the cross-government review of employment-related law we have implemented a number of easements for employers’ automatic enrolment following independent review, which will save small employers about £90 million a year, including increasing the earnings level at which automatic enrolment applies, introducing a simpler way for employers to check their existing pension schemes meet the required standards and introducing an optional waiting period of up to three months.
Julian Smith
The Secretary of State’s Department is responsible for a huge amount of employment law. May I urge him to work closely with the Department for Business, Innovation and Skills on its review to ensure that the Government make a cross-departmental effort to free small businesses up to take on staff?
Mr Duncan Smith
My hon. Friend definitely may. We are working closely with BIS in all it tries to do and my Department is doing quite a lot to help small employers. We listened carefully on auto-enrolment, we made a change to give a little more time and that helped small businesses enormously.
Richard Graham (Gloucester) (Con)
2. What steps he is taking to address incentivised transfers out of defined-benefit pension schemes.
The Minister of State, Department for Work and Pensions (Steve Webb)
We recognise that employers need some flexibility to manage their scheme liabilities and that well-managed transfer exercises can be a useful tool, but we are concerned about scheme members being offered cash inducements to encourage them to take a transfer that might not be in their best interests. We have discussed the issue with a number of industry groups and we are actively looking to see what action needs to be taken to combat any bad practice.
Richard Graham
As the Minister knows, I support him on the principle that enhanced transfers do not necessarily advantage many members of pension schemes. What does he think about the other side of the equation, however? In my constituency of Gloucester, we have at least a dozen very successful family-owned manufacturing firms whose ability to grow is impeded by the residual liabilities of their closed DB schemes. How does the Minister think we can balance our responsibilities to members of the scheme with the desire to help such companies grow?
Steve Webb
I enjoyed my visit to my hon. Friend’s constituency, when we discussed pension issues with local employers. The important consideration is fairness, as he says. We have no problem with people transferring out of such schemes in a fair exchange, but because these are complex and difficult financial transactions we must ensure that people have the proper advice and information on which to make such choices.
Kelvin Hopkins (Luton North) (Lab)
The reality is that most occupational schemes are disappearing, private pension schemes are often not good value and are subject to stock-market vagaries, and millions of people will not be in any kind of pension scheme in the future. Is not the real long-term solution a compulsory state earnings-related pension scheme for everyone?
Steve Webb
We believe that both the state and the private sector have an important part to play. We have published Green Paper proposals for state pension reform that would provide a firmer foundation, perhaps of the sort that the hon. Gentleman has in mind. We also believe that many people could be in decent-quality workplace provision with an employer contribution and that is why we will begin auto-enrolment as planned next year.
Karl MᶜCartney (Lincoln) (Con)
3. What recent progress he has made on delivering the Work programme.
Jeremy Lefroy (Stafford) (Con)
5. What recent progress he has made on delivering the Work programme.
The Minister of State, Department for Work and Pensions (Chris Grayling)
The Department for Work and Pensions completed the launch of the Work programme by the end of June and it is now operational in all parts of the country. I have now visited a number of the providers and their centres and I am pleased to see the progress they are making.
Karl MᶜCartney
I welcome the Government’s measures to help unemployed people in my Lincoln constituency, but what assurances can my right hon. Friend give me that the Work programme will provide my constituents with sustainable, meaningful and long-term employment?
Chris Grayling
There are two things about the Work programme that will help my hon. Friend and his constituents. First, the providers are free to deliver whatever solution works for the individuals—a crucial difference to past programmes—and, secondly, they are rewarded not simply for getting people into work but for sustaining them in work for periods that can be as long as two years and three months. I hope that will deal with the challenges in the labour market in my hon. Friend’s constituency.
Jeremy Lefroy
On Friday, we welcomed the Minister to the Stafford jobs fair and the Shaw Trust in the Stafford constituency. How extensive is the role he foresees for the voluntary sector in providing the Work programme?
Chris Grayling
The voluntary sector has a crucial role to play in two ways. First, we have a wide range of voluntary sector organisations contractually involved in the Work programme, delivering support to the long-term unemployed. I also believe that a local community activity such as the excellent jobs fair that my hon. Friend organised in his constituency, together with Stafford Works, is an ideal example of how Work programme providers and the local community can work together to deliver real back-to-work support for the unemployed.
Dame Anne Begg (Aberdeen South) (Lab)
Early indications would suggest that the numbers being referred to the Work programme are much higher than many of the providers expected under the contracts they signed. What guarantee does the Minister have that people will not sit on the Work programme without any intervention for some time until the providers gear up to have the staff to deal with the numbers they face?
Chris Grayling
The hon. Lady is absolutely right. It is a marked contrast to the start of the flexible new deal under the previous Government when providers went for weeks and weeks without people being referred. I am very encouraged by the start of the Work programme and by the response of providers, which are contractually obliged to provide minimum levels of support to people who are referred. As far as I can see, that is precisely what is happening: support is starting and is working well. There are courses, support and learning taking place up and down the country.
Mr Frank Field (Birkenhead) (Lab)
Should we hold out much hope for the Government’s Work programme if the Government are not successful in meeting their immigration target?
Chris Grayling
The right hon. Gentleman has raised the issue of migrant labour on many occasions. It is a challenge for Work programme providers to make sure they can deliver a work-ready work force to potential employers in areas such as his constituency to take advantage of the excellent opportunities that exist in companies such as the Contact Company, for example, which I visited recently. I strongly believe that if providers get local workers ready for the work force, they will be taken up eagerly by local employers.
Robert Halfon (Harlow) (Con)
Does my right hon. Friend agree that one of the best ways of getting people back into work is through apprenticeships? Will he ensure that the Work programme is linked carefully into the Government’s apprenticeships scheme?
Chris Grayling
I absolutely agree. One of the most important steps the Government have taken has been significantly to increase the number of apprenticeships available, particularly for young people. It is absolutely clear under the Work programme agreement that a successful placement in an apprenticeship counts as a job outcome under the Work programme. I hope that will mean there is a clear link between the two.
Barbara Keeley (Worsley and Eccles South) (Lab)
Steve Kerr of the London Voluntary Service Council has questioned whether the Work programme
“will succeed…or simply make matters worse through sidelining the voluntary sector.”
What action is the Minister taking so that the voluntary sector does not continue to feel sidelined through the Work programme?
Chris Grayling
The hon. Lady is absolutely wrong. The voluntary sector is not being sidelined. On Friday in Stafford I visited the Shaw Trust—a major voluntary sector organisation that is already delivering support to people under the Work programme. There are many other organisations such as Groundwork delivering support right across the spectrum and there is specialist help available from some of the specialist groups. The Work programme has been designed to attract best practice, of which there is much in the voluntary sector. That is why it is such an important part of the Work programme.
Stuart Andrew (Pudsey) (Con)
6. What recent steps he has taken to increase employment opportunities for disabled people.
Mark Lancaster (Milton Keynes North) (Con)
14. What recent steps he has taken to increase employment opportunities for disabled people.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
15. What recent steps he has taken to increase employment opportunities for disabled people.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
The Government are absolutely committed to ensuring that disabled people have the same opportunities as everybody else to reach their potential in work. The Work programme, Jobcentre Plus, Work Choice and Access to Work provide a range of support to do that. I announced on Monday 11 July the Government’s response to Liz Sayce’s review of specialist disability employment programmes. We have a consultation running until 17 October and I urge everybody to participate in it.
Stuart Andrew
I am grateful to my hon. Friend for that answer. Will she confirm that the budget for specialist disability employment is being protected and that it will be spent more wisely than it was in the past?
Maria Miller
I thank my hon. Friend for that very good question and I can confirm to him absolutely that the budget is being protected. I also urge him to look at Liz Sayce’s report, which suggests that perhaps 35,000 additional disabled people could be supported into work from the same budget. That is something we would like to consult on and look at some more.
Mark Lancaster
I am sure that the Minister will join me in commending the work of the Spinal Injuries Association in Milton Keynes. Indeed, she might like to visit it the next time she is passing by, as a visit there would show that many of its employees are disabled. It gives a clear example of how tailored work programmes are the best way of getting disabled people back into work. Is that an approach that the Government will pursue?
Maria Miller
I thank my hon. Friend for drawing my attention to such good work in his constituency. I shall certainly consider trying to visit if I am able to. He is absolutely right that we should focus on the individual rather than on the institution—that is a common theme coming out of the Sayce review.
Eric Ollerenshaw
May I ask the Minister something that the disabled in my constituency ask me? Once the disabled have got jobs, what support and advice will there be for employers so that they can maintain the disabled in those jobs?
Maria Miller
We already have in place Access to Work, which provides just the sort of support that my hon. Friend is talking about, but all too often that support is, perhaps, focused on the job rather than on the individual. One of the reforms that the Sayce review is talking about is how we can make sure that Access to Work is focused on the individual and not just on particular jobs. In some instances, however, employers are involved in co-funding, so this issue needs to be looked at with care. We are looking at it in our consultation.
Paul Goggins (Wythenshawe and Sale East) (Lab)
On Thursday I will be visiting the Remploy factory in my constituency and meeting some of the 20 staff who work there. Over the past year they have invested in new equipment and through hard work have won new business. What does the Minister suggest I say to them?
Maria Miller
It is excellent that the right hon. Gentleman is visiting his factory and showing staff support, as he clearly is. As he knows, we are consulting, through the Sayce review, about the future of Remploy. We want to make sure that Remploy factories are successful in the future. At present every single one is loss-making, and half the employees in Remploy across the board—I am not sure of the position in his constituency—do not have work to do. That is not an acceptable situation. We need to look for ways of remedying a situation that we inherited and through the Sayce consultation we hope to do that.
Ann Clwyd (Cynon Valley) (Lab)
Is it not unfortunate that the future of Remploy is once again in the melting pot? May I remind the Minister—we had a conversation about this—that in 2008, the last time people went through voluntary redundancy in Remploy, only a quarter of those made redundant got new jobs? In my own Remploy factory in Aberdare, only one person is at work. Surely it is better to keep disabled people in work, doing jobs that they have done satisfactorily for a long time?
Maria Miller
We have indeed had some important conversations about the matter. It is not for me to answer for the record of the previous Government, although I point out to the right hon. Lady that 40% of disabled people who left through the 2008 redundancy scheme retired. The figures that she quotes need to reflect that. I can assure her that we will do everything we can to make sure that people affected by any changes in the future are given the support that they need.
Mr Nigel Dodds (Belfast North) (DUP)
Has the Minister had any discussions with the Department for Social Development in Northern Ireland about some of the excellent initiatives that it is undertaking, particularly in relation to young people coming out of school and college?
Maria Miller
We have many conversations with the devolved Administrations. I cannot recall anything about that subject particularly, but I will pick that up later.
Jake Berry (Rossendale and Darwen) (Con)
7. What steps he is taking to prevent disagreements between parents in their dealings with the Child Support Agency.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
The current child support schemes can entrench conflict and they do not encourage parents to work together in the best interests of their children. We are taking steps to draw on a range of support to help parents collaborate to reach family-based arrangements for child maintenance wherever possible, which we believe will help the ongoing involvement of both parents in a child’s life after separation.
Jake Berry
People in Rossendale and Darwen who deal with the CSA tell me that they find that the CSA’s approach creates trouble in what is already a strained relationship. Will the Minister please update the House about the practical steps that are to be taken to introduce a more conciliatory approach?
Maria Miller
My hon. Friend is getting to the heart of the reform that we are looking to put in place under the future scheme, which is to make sure that parents such as his constituents get the right support up front from specialist organisations that can help them with their parental relationship post-separation. There is a growing body of evidence to show that that is one of the main determinants of whether people have an effective child maintenance regime in place after separation.
Sheila Gilmore (Edinburgh East) (Lab)
Does the Minister believe that £30 million over four years over the whole of England will be sufficient to achieve her aims? That is the £30 million from the Department for Education which is for all sorts of relationship counselling, not just in relation to the Child Support Agency?
Maria Miller
The hon. Lady is right: finances are tough, but she is well aware of the situation that we inherited. The Department for Education is not the only Department to invest in parental relationship support. The Department for Work and Pensions already invests well over £5 million a year in the options service, which does an excellent job, as far as it goes at present, in providing some of the support that I would like to see augmented in the future.
Jenny Willott (Cardiff Central) (LD)
Some parents with care had spent years trying to get money out of absent ex-partners with no success before the CSA imposed a deductions of earnings order. The Government propose to close all existing cases when the new scheme is up and running, including those with deduction of earnings orders in place. Although I welcome the Government’s emphasis on parents working together to solve problems, can the Minister reassure me that where there is a long history of non-payment, cases will not be closed and families left with no money at all?
Maria Miller
My hon. Friend raises an important point, and that is just the sort of detail we are working through. It is absolutely our intention to ensure that transitional arrangement are in place to help parents in the situation she describes to have continuing payments into the future, and I am certainly making that a priority.
Thomas Docherty (Dunfermline and West Fife) (Lab)
8. What the terms of reference are of his review of the mobility component of disability living allowance.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
We have announced that we would not remove the DLA mobility component from people in residential care from October 2012 and would consider the issue as part of our wider reform to introduce the personal independence payment. It is only right that we consider carefully the needs of this particular group to understand their current circumstances before we come to any final decision on how best to address their needs in future.
Thomas Docherty
If that is the case, perhaps the Minister can explain why these savings still appear to be in the Chancellor’s Red Book. Has she discussed the matter with her colleagues in the Treasury?
Maria Miller
The hon. Gentleman has probably raised this matter with me before. The Red Book reflects the current position, which is that support for care home residents is being reviewed alongside the broader reform of DLA. The figures in the Red Book make it clear that those savings will be made as part of the Government’s overall reform of the programme, which is very consistent with what I have said, and will be part of the reform of PIP.
Margaret Curran (Glasgow East) (Lab)
I take it from the Minister’s answer to the previous question that the loss of £160 million for disabled people will continue. I draw to her attention the launch today of an independent review of the mobility component of disability living allowance, led by Lord Low of Dalston CBE and overseen by the charities Leonard Cheshire Disability and Mencap. It has been launched because they have lost confidence in the Government’s review. Unlike the Government’s review, the Low review includes clear terms of reference, calls for evidence and representations from disabled people themselves. If the Minister is sure of her ground on this matter, and in the interests of transparency, will she commit today to participating in the Low review?
Maria Miller
I thank the hon. Lady for her question—I think. The deficit does not go away, and I think she needs to remember that. We have to ensure that we have sufficient money to have a sustainable disability living allowance or personal independence payment into the future, and I look forward to working with her on ways of achieving that. With regard to the additional evidence that will be put forward as part of the Low review, I obviously welcome any additional information that will help us, along with the 5,500 submissions we have received as part of the DLA consultation. This is a really important issue and I am glad that the hon. Lady is getting involved in finding the right solution, because obviously that is important for us all.
Duncan Hames (Chippenham) (LD)
9. What plans he has to issue guidance to prospective applicants on the evidence required from them to receive employment and support allowance.
The Minister of State, Department for Work and Pensions (Chris Grayling)
ESA claims are normally made by phone. A statement is then sent to the claimant setting out any additional evidence necessary to support the claim. If claims are made using a clerical form, notes are provided about evidence that may be required. There are no current plans to issue further guidance, but this is constantly kept under review.
Duncan Hames
I thank the Minister for that answer and am pleased to know that this is under review. Answers to my written parliamentary questions show that in Chippenham nearly half of all unsuccessful applicants who appeal win their cases at tribunal, in some cases by presenting evidence that they did not know they were to produce when they first made their application. Does the Minister recognise that these successful appeals are a costly process that do not represent value for money for the taxpayer and cause unnecessary heartache and hardship for the people concerned?
Chris Grayling
I absolutely agree with my hon. Friend and want to see fewer cases going to appeal. This is one reason why we have stepped up the reconsideration process in Jobcentre Plus, so after the initial decision is made we actively seek out further evidence, if such evidence exists, and use it to reconsider our decision. I hope and expect to see the number of successful appeals reduce significantly as a result.
Ms Karen Buck (Westminster North) (Lab)
Local Jobcentre Plus officials have advised me that there is already a significant delay in the work capability assessment test in my local area because the assessments are taking around twice as long as was originally predicted. Can the Minister reassure the House that this is not the situation across the whole country and that there is no backlog in the work capability assessments, with all that that would imply for claimants and for the service?
Chris Grayling
We have remained on schedule to start the process for individuals. It is not the case that assessments are taking twice as long. There is an early element of bedding in for the personalised statement, as was recommended by Professor Harrington, but we are not aware of any long-term factors that would change the timetable for the whole reconsideration process.
Mike Crockart (Edinburgh West) (LD)
10. What assessment he has made of the effectiveness of user groups in assisting people with disabilities to obtain work through the Work Programme.
The Minister of State, Department for Work and Pensions (Chris Grayling)
I regard the role of specialist organisations and specialist user groups as extremely important for the delivery of the Work programme. They, above all others involved, will be able to provide the specialist support that individuals with particularly serious challenges in their lives face in trying to get into the workplace.
Mike Crockart
I thank the Minister for his answer. However, given that only 230 disabled people secured work through residential training colleges last year, at an average cost of £78,000 per person, will the Secretary of State commit to implementing the recommendations as set out in last week’s Sayce review on allowing such colleges to develop as centres of excellence and to adapt their provision to operate directly in provider markets—for instance, as subcontractors in the Work programme?
Chris Grayling
We are considering the Sayce recommendations and have not yet formally responded about our decisions on whether to adopt most of them. However, my hon. Friend makes a sensible point. I have visited the Queen Elizabeth Foundation for Disabled People near my constituency in Surrey, where I said to people that I would encourage them to look to see whether they can enter the Work programme to provide specialist support as subcontractors. I hope that all the colleges will consider taking such an approach.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
11. Whether key suppliers to his Department are required to consult him on any planned relocation of jobs abroad.
The Minister of State, Department for Work and Pensions (Chris Grayling)
Let me start by saying that we will not offshore any DWP jobs. I share the hon. Lady’s concerns regarding work being done offshore by suppliers. Many of the Department’s subcontractors began using some offshore staff under the previous Government. The Department is exploring how future offshoring can be minimised and whether jobs currently offshored could potentially be moved back to the UK in future.
Chi Onwurah
I welcome the Minister’s reply. As he no doubt knows, the north-east has some of the highest unemployment rates in the country. Hewlett Packard’s decision to offshore jobs in Newcastle supplying his Department with IT will not help matters. Santander recently announced that it is bringing all its call centres back to the UK following pressure from customers. As Hewlett Packard’s customer, what concrete steps is the Minister taking to achieve the same result?
Chris Grayling
I have already had a meeting with Hewlett Packard to discuss the issue, and I expect to have another such meeting shortly. The hon. Lady refers to call centres. All the Department’s call centres are sited in the UK. We have the biggest virtual contact centre in Europe, and it is very good, I believe; I applaud the professionalism of the staff who work in it. I would expect to see many similar offshore centres return to the UK in future, because, in my view, British-based staff are the best contact centre staff.
Jessica Morden (Newport East) (Lab)
12. When he plans to publish proposals for supporting childcare through universal credit.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I made a commitment to provide more detail during the passage of the Welfare Reform Bill and am still on track to do so in time for its scrutiny in the Lords. We are considering the advice and suggestions raised in productive discussions held with MPs, peers and lobby groups, along with recent written responses submitted by attendees. It is going very well and we are learning a lot from those responses.
Jessica Morden
Will the Minister guarantee that the Government’s stated aim that universal credit will always pay will be in place for all families where child care costs are taken into account?
Mr Duncan Smith
That is absolutely our intention. That is why we are listening carefully to what people have proposed. The whole point about child care is that it should be there to support particularly women going into work who have caring responsibilities. We are reviewing this to make sure that that continues to be the case under universal credit. That is the whole point about the consultation. In other words, where we may be wrong, we can get that corrected and make sure that we come forward with a really good package in time for the debates in the other place.
Stephen Timms (East Ham) (Lab)
What is now the Government’s policy on the benefit cap in universal credit? The Secretary of State has told us that the policy is not changing, but press reports from Liberal Democrat sources contradict that by saying that the issue is far from settled and that the cap might not apply to existing benefit recipients. Then, last week, the Minister with responsibility for employment confirmed in a letter to me that “easements” are indeed being considered for existing recipients. So was the Secretary of State mistaken, and is the policy changing or not?
Mr Duncan Smith
The policy is not changing. The right hon. Gentleman should have written to me and my colleague at the same time, and we would both have given exactly the same answer. We have always said that in the course of the cap, we will look at any difficult cases. [Hon. Members: “Ah!”] We have always said that. One would always do that in a transition, just as we are doing with housing benefit. I remind the right hon. Gentleman and his colleagues that the cap will come in at a gross level of £35,000 a year. I would very much like to know what their position is on the cap, because so far we have heard absolutely nothing about whether they support it or are opposed to it. Perhaps they will tell us now. Most people out there are in favour of it.
Peter Aldous (Waveney) (Con)
13. Whether the mobility component of the personal independence payment will be available to people living in residential care.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
We are reviewing the existing evidence and gathering more to determine the extent to which there are overlaps in provision for the mobility needs of people in residential care homes. The work is continuing and we will make a final decision on the way forward when it is complete.
Peter Aldous
For the residents of Shaftesbury Court in Lowestoft in my constituency, the mobility component plays an important role in enabling them to lead active lives in the local community. Can the Minister confirm that the PIP will be sufficiently well designed and funded so that that can continue?
Maria Miller
I note my hon. Friend’s assiduous support for his constituents in Shaftesbury Court. He also raised this issue on Third Reading of the Welfare Reform Bill. I reassure him that we will consider the needs of people who are in receipt of DLA as we move forward with PIP, regardless of their place of residence. We are doing a great deal of work to ensure that there is sufficient support so that people get the mobility that they require.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Minister realise that in the good society—I do not know about the big society—we care about the disability mobility component? It would destroy people’s lives, including the lives of people in the Leonard Cheshire home in Huddersfield, if it was taken away, because the ability to get out and see something of real life is an essential quality of the good life and the good society.
Maria Miller
That is why, as we announced, we are not removing the mobility component from DLA in October 2012. We will ensure that people who live in care homes get sufficient support under PIP.
Pat Glass (North West Durham) (Lab)
I recently met constituents in my local Leonard Cheshire home in Crook who are very concerned about losing the mobility element of DLA. The Minister subsequently wrote to my local newspaper, The Northern Echo, advising that those people were wrong to worry about this and that they would not lose it. Is that the Government’s position or is it subject to the review? Are the Government just not sure yet?
Maria Miller
I, too, have visited Leonard Cheshire homes, and I have met Leonard Cheshire representatives to discuss this issue. I assure the hon. Lady, as I just said to the hon. Member for Huddersfield (Mr Sheerman), that we are not removing the DLA mobility component in October 2012. We will look at the needs of care home residents alongside the needs of all other recipients of DLA as part of the broader PIP reform. Perhaps she can take that message back to her constituents. It would be great to get some good information out there.
Brandon Lewis (Great Yarmouth) (Con)
16. What steps he is taking to support young people into work.
The Minister of State, Department for Work and Pensions (Chris Grayling)
We are doing three things to help young people into work. Our work experience scheme will provide an opportunity for up to 100,000 young people to get their first taste of the workplace over the next two years. We have launched tens of thousands of new apprenticeships that are designed to build a career for young people. Through the Work programme, we are providing specialist back-to-work support for those who are struggling to get into work, the longer-term unemployed and those who come from the most challenging backgrounds.
Brandon Lewis
In an area like Great Yarmouth, which has above average unemployment and in some cases third generation unemployment, those projects are hugely important in getting young people back into work. To help promote the opportunities for businesses, will the Minister outline how many people have undertaken and will undertake work experience this year?
Chris Grayling
The latest figures show that at the end of the first quarter, give or take, about 10,000 young people had so far benefited from our work experience scheme. Employers have so far committed to provide about 35,000 places. I am very optimistic that the scheme will deliver real opportunities for young people, some of whom have started to get into work through the placements.
Julie Hilling (Bolton West) (Lab)
Unemployment in the ’80s and ’90s was devastating for young people and gave us a generation with no jobs, no hope and no future. Has the Minister evaluated how much long periods of unemployment for a young person cost the UK economy?
Chris Grayling
There is no doubt that long periods of unemployment for young people are damaging both economically and to them personally. The hon. Lady will therefore welcome the fact that youth unemployment is lower today than it was at the time of the general election. I hope and believe that the specialist support that we are providing through the Work programme, the placements that we are providing through our work experience scheme and the extra apprenticeships for young people will make further inroads into that total.
Jason McCartney (Colne Valley) (Con)
I had the pleasure of visiting a small engineering business in Meltham a week ago. It has a big contract for making the suspension for the Ocelot Land Rover, and it is going to employ an extra 50 people over the coming 12 months. Can we learn lessons from the previous Government, who left power with 250,000 more young people unemployed, so that we can ensure that as private companies expand and take on workers, they give real emphasis to employing young people?
Chris Grayling
My hon. Friend is absolutely right, and that is why the extra apprenticeships that we have launched are so important. His experience is the same as that of my hon. Friend the Member for Stafford (Jeremy Lefroy)—who is no longer in his place—at whose jobs fair several leading engineering companies were looking for young people. If we deliver the apprenticeship opportunities, the private sector is out there ready to create the jobs for young people.
John Robertson (Glasgow North West) (Lab)
With people living longer and being employed in jobs longer, with people coming in from outside this country and taking up the cheap labour jobs, and with there being no law in effect that means that anyone taking up an apprenticeship has to be below a certain age, what is the right hon. Gentleman going to do in the years ahead to ensure that young people get employed?
Chris Grayling
The hon. Gentleman is, of course, describing some of the failings of the previous Government. What we have to do is ensure that we have a work-ready, well-trained work force of all ages, ready to take advantage of the opportunities that arise, when they arise. We can do that through more apprenticeships, through the specialist support in the Work programme, and through work experience placements that give young people their first taste of the workplace. I am delighted to say that youth unemployment is lower today than it was when his party left office.
Gavin Barwell (Croydon Central) (Con)
17. How many people have entered employment as a result of the Work programme.
The Minister of State, Department for Work and Pensions (Chris Grayling)
The Work programme was launched last month and has long-term goals. Sustained jobs, not quick fixes, are what will change people’s prospects, particularly for those who are long-term unemployed. That is what the Work programme will pay for. The Department expects to release statistics on referrals to the Work programme from spring 2012, and on job outcomes lasting three or six months from autumn 2012.
Gavin Barwell
During the last recess I spent several days in my local Jobcentre Plus office and saw for myself the contribution that a number of small voluntary organisations are making to getting unemployed people back into work in my constituency. Can my right hon. Friend assure me that, as part of the Work programme, there will still be a role for such small local voluntary organisations?
Chris Grayling
I absolutely can give my hon. Friend that assurance. There are about 500 organisations from the voluntary sector involved, large and small, ranging from the Prince’s Trust and similar-sized organisations through to local projects such as a walled garden project in Yorkshire. There is space for any organisation that delivers excellence in getting people back to work, and those that are really good at doing it have every reason to become involved in a payment by results approach.
Hywel Williams (Arfon) (PC)
What steps are the Government taking to respond to the local variability in job opportunities, so that people are not penalised in the benefits system merely because jobs are not available in their area?
Chris Grayling
One of the things that we expect the Work programme providers to do is match individuals to vacancies. Even in Wales, as we know from the debate that the hon. Gentleman and I had last week, there are a significant number of vacancies. There has been private sector growth in the past few months, and unemployment has fallen. We have to ensure, through the work of Jobcentre Plus and the Work programme providers, that people on benefits take advantage of opportunities when they arise.
Richard Harrington (Watford) (Con)
Several Members have mentioned jobs fairs in their constituencies. We had one in Watford two weeks ago, to which 5,000 people came and at which more than 600 jobs and apprenticeships were on offer. As we speak, three weeks later, 50 jobs and 30 apprenticeships have been offered, predominantly to young people. As the fair was organised with Jobcentre Plus and seems to be a formula that helps, at no cost whatever to the taxpayer, is the Minister prepared to circulate the idea to other Jobcentre Plus offices and assist in organising such events?
Chris Grayling
Absolutely, and I pay tribute to my hon. Friend for his work. There have been a series of successful jobs fairs in Enfield North, in Stafford, in Reading East and now in his constituency. I would say to Members on both sides of the House that they are a really good way of bringing together local employers, local unemployed people and others who can help them, and Jobcentre Plus and the Department will help any Member of Parliament who seeks to get such a fair up and running.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
18. Whether he plans to review his proposal to extend the personal independence payment qualifying period from three to six months.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
A key principle of our welfare reforms is simplification of the complex benefit system, and that proposal is a simplification by bringing the qualifying period for personal independence payment into line with other disability benefits, while providing the sort of supports that people need with their long-term disability problems.
Catherine McKinnell
As chair of the all-party parliamentary group on multiple sclerosis, I am very aware of how concerned many organisations are about the Government’s proposals. Will the Minister outline how she expects extending the qualifying period will impact on those with fluctuating conditions, especially when many of them will simply not be able to receive any support elsewhere?
Maria Miller
I do not think that the qualifying period will particularly adversely affect individuals with fluctuating conditions, because this is about distinguishing between long-term and short-term disabilities. To qualify for PIP, a person will satisfy a six-month qualifying period, and be expected to meet the overall qualifying period of 12 months. That adopts the common definition set out in the Equalities Act 2010, for consistency.
Graeme Morrice (Livingston) (Lab)
19. What steps he is taking in respect of women affected by proposed changes to the state pension age.
The Minister of State, Department for Work and Pensions (Steve Webb)
While the Government remain committed to treating men and women equally in state pensions sooner, and to equalising at age 66 sooner, as my right hon. Friend the Secretary of State for Work and Pensions said on Second Reading of the Pensions Bill:
“I recognise the need to implement the change fairly and manage the transition smoothly…I say to my colleagues that I am willing to work to get the transition right, and we will.”—[Official Report, 20 June 2011; Vol. 530, c. 50.]
Graeme Morrice
I thank the Minister for his answer, but 1,300 women in my constituency will have to wait up to two years to receive their state pension following the changes made by this coalition Government. Indeed, I have received a huge amount of mail on this issue, in which constituents have described the Government’s plans as unfair, unbelievable and cockeyed, among other things. Notwithstanding transitional relief, will the Secretary of State think again and give those affected enough notice to plan adequately for their retirement?
Steve Webb
Clearly, there is a balance to be struck between catching up with the very dramatic improvements in life expectancy, which are moving ahead faster and faster, and recognising the need for fairness and notice. We are trying to strike that balance. We recognise that we need to refine the Bill’s proposals to do so, and we will come back with proposals.
Miss Anne McIntosh (Thirsk and Malton) (Con)
May I thank the Minister for his answer in that regard? Will he give some reassurance to those in Thirsk, Malton and Filey who have written to me? Successive Governments, and the Turner report, have said that it takes some 10 years to plan for retirement. Will that be reflected and recognised in the Government’s transition proposals?
Steve Webb
As my hon. Friend will be aware, if we were to delay the whole transition for 10 years we would need to find an extra £10 billion of savings out of the £30 billion in the Pensions Bill. We believe that many of the people who are affected by the transition are affected by a lot less than the two years that the hon. Member for Livingston (Graeme Morrice) mentioned. We are therefore trying to tackle those who are most adversely affected, and I am confident that we will be able to do so.
Rachel Reeves (Leeds West) (Lab)
May I take this chance to wish the Pensions Minister a happy birthday?
The House knows that changes to the state pension age mean that 500,000 women in their mid-50s will have their pension delayed by more than a year, and 33,000 will have to wait an extra two years. We all welcomed what the Secretary of State and the Minister said about transition on 20 June, yet in Committee the Government tabled no amendments to their legislation, and we have heard not a word from the Minister or the Secretary of State on what those transition arrangements will look like. With the recess starting this week, what hope can the Minister give to those 500,000 women that the Government will put in place some transitional arrangements for a fairer timetable that gives people the chance to prepare, and gives them some certainty as they look forward—they hope—to their retirement?
Steve Webb
I thank the hon. Lady for her good wishes for my birthday, and reciprocate by offering her good wishes for her wedding later this summer.
On the specific issue that the hon. Lady raises, she and I have spent the best part of 20 hours debating such things in Committee over the last couple of weeks. The Government wanted to give the Opposition the chance to bring forward some fresh thinking, and we were therefore rather disappointed when they simply retabled the amendments that they had tabled in the House of Lords. We were looking for some fresh thinking—but as it has not come from the Labour party, we will have to do it ourselves.
Bill Esterson (Sefton Central) (Lab)
20. What estimate he has made of the number of people diagnosed with cancer who are in the work-related activity group of employment and support allowance and have claimed it for over one year.
The Minister of State, Department for Work and Pensions (Chris Grayling)
In November 2010, the latest month for which we have figures available, there were 1,730 people receiving employment and support allowance for over one year in the work-related activity group where the primary condition was recorded as neoplasms—that is, people diagnosed with cancer.
Bill Esterson
Many cancer patients receive treatment for more than a year, and face losing their employment and support allowance while still receiving treatment. How many people receive cancer treatment for more than a year, and would therefore lose ESA under the Government’s plans?
Chris Grayling
Under the changes that we have introduced, more people suffering from cancer will be in the support group receiving ongoing unconditional support than was the case under the previous Government. The changes that we have made to contributory ESA are a direct consequence of the previous Government’s financial mismanagement. We have had to take some tough decisions on budgets, and this is one of them. We have formed the view that if people have other financial means available we cannot continue to pay them ESA indefinitely. That is a natural consequence of the failings of the hon. Gentleman’s party, not a choice we would have wished to have to make.
George Hollingbery (Meon Valley) (Con)
Will the Minister reconfirm his commitment to examine whether people on oral chemotherapies should automatically be placed in the support group, rather than in the work-related activity group as they currently are?
Chris Grayling
I am pleased to tell my hon. Friend that we have now received proposals from Macmillan Cancer Relief and Professor Harrington that contain some valuable suggestions and ideas. We have not finished our consideration, but we hope to make an announcement shortly.
Caroline Nokes (Romsey and Southampton North) (Con)
21. What steps he is taking to prevent disagreements between parents in their dealings with the Child Support Agency.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
I refer my hon. Friend to the answer I gave earlier to my hon. Friend the Member for Rossendale and Darwen (Jake Berry).
Caroline Nokes
Does the Minister agree that one of the causes of conflict between both resident and non-resident parents is the unacceptable delays that their cases face when being processed by the Child Support Agency, and has she any plans to bring measures forward that would reduce those delays?
Maria Miller
The average wait at the moment is more than two months for a new application to be processed, and that can lead to non-resident parents unavoidably accruing arrears—a problem that we inherited with the present very difficult system. We have plans to undertake a fundamental reform that will considerably improve this, and lead to a much shorter time for processing claims, which will bring considerable benefits.
Mr Jim Cunningham (Coventry South) (Lab)
Has the Minister had any discussions with the Secretary of State for Education about the future of Sure Start? The Conservatives, before they were elected, gave a solemn commitment to retain Sure Start, yet in Coventry the cost is being passed on to the local authority.
Mr Speaker
Order. That question was extremely tangentially related to dealings with the Child Support Agency—but I am sure that the Minister’s ingenuity means that she will adroitly cope.
Maria Miller
The hon. Gentleman makes a good point about the potential importance of Sure Start in child support. Indeed, we are talking to our colleagues in the Department for Education about possible opportunities for Sure Start to work with the Child Support Agency. We already have a trial—set up under the previous Administration—looking into that issue, and Ministers in that Department have ensured that sufficient funding is in place to keep the Sure Start network working.
Annette Brooke (Mid Dorset and North Poole) (LD)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I wish to take this opportunity to thank the hon. Member for Nottingham North (Mr Allen) for the tremendous work on early intervention that he has delivered to us. The report highlights the vital importance of early intervention for the prospects of today’s children as well as outlining recommendations for making early intervention happen through growth on the social investment market.
Annette Brooke
What assistance should Jobcentre Plus staff be giving to people with dyslexia, and what monitoring does the Department carry out to ensure that such people are not discriminated against?
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
I thank my hon. Friend for her question; it is important that we deal with people’s jobs needs in a very individual way. Jobcentre Plus has disability advisers who have special knowledge of dyslexia, and it is something that requires continued support.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
On 11 July the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), confirmed that his Secretary of State had seen analysis by the Department for Communities and Local Government suggesting that his benefit cap could make 40,000 people homeless, and actually cost more than it saved. I do not mind who answers this question, but will someone please confirm whether the Minister himself also saw that analysis?
Mr Byrne
This was a piece of analysis with enormous implications for the way in which the policy was implemented. This piece of work was so important that it was sent to the Prime Minister, the Chancellor of the Exchequer, the Deputy Prime Minister, the Chief Secretary to the Treasury and the Secretary of State. What was it that was so important about that analysis that it was not given to the Minister actually putting the legislation through this House? Will he now ensure that the analysis is produced before the House of Lords reaches the relevant debate?
Mr Duncan Smith
The right hon. Gentleman has written to me about this point and I have written back—but there is nothing like re-exercising the exchange—so he will know that the figures to which he refers were internal, not verified and out of date. Since then, as I have said to him, the DCLG and my Department agreed the impact assessment that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) stood on at the time of the Welfare Reform Bill and which we still stand on today. We should bear in mind the fact that—I do not know whether the right hon. Gentleman is aware of this—there are huge behavioural changes involved. The whole idea behind the cap—we still have no idea whether the Opposition support it or are against it—is that we believe that capping those benefits at gross £35,000 a year is reasonable. Instead of trying to dance on the head of a pin, perhaps he would like to give some leadership and tell us whether his side actually supports the cap.
Iain Stewart (Milton Keynes South) (Con)
T2. Following the decision by the Payments Council not to phase out personal cheques, may I ask my hon. Friend whether he intends to change his Department’s plan to phase out payments of benefits and pensions by cheques, which is causing concern to blind and visually impaired people?
The Minister of State, Department for Work and Pensions (Steve Webb)
We believe that the current DWP cheque service does not well suit people with a visual impairment. For example, a cheque is sent by post with no distinguishing mark on the envelope and we ask blind people to sign for the payment. We are working with customer representatives, including the Royal National Institute of Blind People, to design a simple payment system that works better for people. However, I can assure my hon. Friend that there is no plan to require a personal identification number as part of that process.
Yvonne Fovargue (Makerfield) (Lab)
T4. In 2010-11 there was an increase in incapacity benefit and employment and support allowance appeals of 167% on 2008-09 figures, and 50% of incapacity benefit appeals were decided in favour of the appellant. What steps is the Minister taking to ensure that independent welfare benefit advice is available equally across the country, so that the figures do not reduce simply because claimants have no access to advice?
Chris Grayling
I hope that the figures will reduce because the quality of decision making within Jobcentre Plus improves as a result of the recommendations made to us by Professor Malcolm Harrington. As the hon. Lady will be aware, we have strengthened the reconsideration process and are telephoning rather than writing to claimants, particularly to ensure that we get better medical evidence. I do not want cases going to appeal; I want them resolved properly, satisfactorily and accurately within Jobcentre Plus.
Graham Evans (Weaver Vale) (Con)
T3. One of my constituents living in Murdishaw, one of the most deprived estates in Runcorn, recently contacted me about the current housing benefit arrangements. My constituent believes that it is deeply unfair that people living on low incomes in areas such as Murdishaw are paying through their taxes for unemployed Londoners to live in multimillion pound houses in trendy parts of the capital. Will the Minister stand up for my constituents and ensure that housing benefit is capped at a fair level?
Steve Webb
My hon. Friend is right to highlight the fact that the Government do not want people in low-paid work put at a disadvantage relative to people who are unemployed. We believe that they should face no worse a situation. That is why we have introduced a housing benefit cap that will particularly affect central London and reduce the local housing allowance from the 50th to the 30th percentile—to make things fair between those who are on benefit and hard-working people in low-paid jobs.
Mr William Bain (Glasgow North East) (Lab)
T6. Does the Secretary of State accept the analysis of the Joseph Rowntree Foundation that, with child benefit being frozen and child care support through the tax credit system being cut by 10%, families with children will need to earn 20% more this year than last to meet the soaring costs of child care? What will he do about universal credit to ensure that lone parents, in particular, do not face an unacceptable financial burden because of his changes?
Mr Duncan Smith
The whole purpose is to ensure that lone parents have an opportunity to get back to work and to support themselves through work. The hon. Gentleman referred to the work of the Joseph Rowntree Foundation. We do not always accept everything that comes forward; there are often analyses that we do not accept. He will understand that from his time in government. As far as we are concerned, reducing to five the age of a lone parent’s child at which the lone parent goes back to work—following the Labour party’s age reduction to seven—is the right thing to do. Getting lone parents to take control of their lives through work has to be good for them.
Mr Rob Wilson (Reading East) (Con)
T5. In April I held a successful jobs fair in Reading, with nearly 2,000 people in attendance and 40 companies offering 1,500 jobs. I will be repeating it in September. What specific improvements in the service offered to them will my unemployed constituents get from the Work programme?
Chris Grayling
I congratulate my hon. Friend on being another author of a successful jobs fair project. The Work programme will offer the long-term unemployed in his constituency, including those from the most challenged backgrounds, much more tailored and specialised support, as well as infill training and other support, which will enable them to get into work on a scale and of a quality not seen before. Not only that, but they will be supported to stay in work too.
Gavin Shuker (Luton South) (Lab/Co-op)
T7. When will the Minister announce the so-called transitional arrangements for the women most affected by his accelerated timetable for introducing changes to the state pension age?
Steve Webb
Any changes that require primary legislation will be considered when the House considers the Pensions Bill on Report later in the year.
Mr John Leech (Manchester, Withington) (LD)
T8. The overall cap on benefit will result in some larger families living in expensive rented accommodation through no fault of their own being expected to live on £100 a week. May I suggest to the Secretary of State that the solution to that problem is to have two completely separate caps—one for housing benefit and one for the rest of benefits—so that families will not be left in poverty simply because of which part of the country they live in?
Mr Duncan Smith
The purpose of the cap is not to make people homeless or put them in difficult situations; the purpose is to try to restore the balance, so that when people enter work they do not suddenly have to lose their house because, owing to the withdrawal of housing benefit, they can no longer afford to pay for it. It is not a kindness to leave somebody in a house that they cannot afford and then put them through all that difficulty when they go to work. We are certainly looking at all those transition issues, and we will discuss them further with my hon. Friend.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
During his last outing at DWP questions the Pensions Minister undertook to respond to me imminently about Sure Start maternity grant for parents of multiples. Can he tell me how imminent is “imminent”?
Steve Webb
I am grateful to the hon. Gentleman for assiduously pursuing that issue. Following oral questions I had discussions with Ministers on the point that he raised, and I hope to come back to him shortly.
Amber Rudd (Hastings and Rye) (Con)
I recently led a competition in Hastings to find a young entrepreneur to set up in business, and was amazed and delighted at the quality of the young applicants. Can the Minister assure me that the new enterprise allowance providers will also focus on young people who might not consider themselves to be entrepreneurs, but who often have the energy, commitment and ideas to set up in business?
Chris Grayling
I congratulate my hon. Friend on the support that she has been providing to young entrepreneurs in her constituency. It is not simply the new enterprise allowance that will provide support for young people on benefits to set up businesses; many of the Work programme providers are also introducing specialist support, including one that is setting up a microfinance fund for new entrepreneurs. Self-employment is an important route out of unemployment, and we will continue to do what we can to support it.
Naomi Long (Belfast East) (Alliance)
Over the last 15 months I have been dealing with a constituent who has raised a complaint against the Child Support Agency about a flawed calculation that it made of payments due. Can the Minister say what the Government will do to address both the opaqueness of the CSA’s processes for dealing with such complaints and the length of time that they take?
Maria Miller
I thank the hon. Lady for raising that issue. As she and many other hon. Members will know, the Child Support Agency has administration problems. That is why we are looking at fundamental reform, particularly of the computer systems, which we hope will address the problems that her constituents are still having to endure.
Jake Berry (Rossendale and Darwen) (Con)
Unlike prisoners, those detained under the Mental Health Act 1983, including Ian Brady and Peter Sutcliffe, are entitled to receive incapacity benefit. Will the Minister tell the House what the Government intend to do about that?
Chris Grayling
I agree with my hon. Friend that that is an anomaly. It is also something that the Department is reviewing as we speak, and we will give more details in due course.
Mrs Madeleine Moon (Bridgend) (Lab)
Incapacity benefit reassessments have been causing great distress, and even suicides, among those with mental health problems. Some 95% of those polled said that they did not believe that they could trust the assessment to take their mental health condition into account. What changes will be made to ensure that people with mental health problems will have them taken into account in the work capacity assessment?
Chris Grayling
As the hon. Lady will be aware, that was one of the key questions that we put to Professor Malcolm Harrington last year. As a result of his recommendations we have introduced a number of mental and cognitive champions among the providers in the assessment network. We are also considering a range of further recommendations from mental health charities, and we have instructed our decision makers to take careful account of evidence of mental health problems when reaching their decisions.
Robert Flello (Stoke-on-Trent South) (Lab)
North Staffs Remploy in my constituency is so successful that it has had to put on an additional shift to meet demand. Indeed, if it were not for the layers of senior management drawing funds out of Remploy like some leech, it would be very profitable indeed. Will the Minister look carefully again at the Sayce report, and at what happens during the consultation, so as to ensure that my constituents who use Remploy, and who say that it is definitely fit for the 21st century, can continue working for it?
Maria Miller
The hon. Gentleman will know from reading the Government’s response to Liz Sayce’s consultation that we are looking for new ways to run Remploy. If he feels that there is a way in which we could run it better in his constituency, I ask him please to contribute to the consultation.
Barry Gardiner (Brent North) (Lab)
Does the Minister think it acceptable that, in chasing an outstanding payment of more than £30,000 for a mother in my constituency, the CSA sent just one letter to the father’s known address, and accepted the result when it came back marked “Moved away”?
Maria Miller
The hon. Gentleman is absolutely right to suggest that the CSA should be doing much more to ensure that both parents are responsible for their children’s financial future, post-separation. That is at the heart of our reasons for reforming the CSA and the approaches that it takes. We want to put that responsibility at the heart of the service that we are delivering.
Dame Anne Begg (Aberdeen South) (Lab)
It was the Government who created the anomaly of half a million women being affected by the acceleration in the increase in the pension age, and it was the Government who said that they would make transitional arrangements. I was therefore astonished to hear the Pensions Minister say earlier that he was looking to the Opposition to come up with ideas for those arrangements. The Government have dug this hole, and it should be the Government who get themselves out of it.
Steve Webb
My right hon. Friend the Secretary of State said on Second Reading of the Pensions Bill that while we stand by its principles, we will indeed consider those who are most affected. We had hoped that the way to listen to the views of the House would be to listen to some fresh views in Committee, but unfortunately none was forthcoming.
Future of the British Train Building Industry
Chris Williamson (Derby North) (Lab)
Mr Speaker, you will probably be aware from press reports that the British train building industry hangs in the balance because of a Government proposal to build trains in Germany for the Thameslink rolling stock programme, rather than at Bombardier in Derby. Feeling in the city is running extremely high. I have secured more than 50,000 signatures for the petition, calling on the Government to look again at the proposal to award the contract to Siemens in Germany, not least because the Prime Minister visited Derby only three and a half months ago and said that he was committed to rebalancing the economy in favour of the manufacturing industry. The citizens of Derby are hoping that he and the Government will take the same course of action that we saw in 1971 when Rolls-Royce went bust and the Government at the time did the right thing.
The petition states:
The Petition of citizens of the United Kingdom,
Declares that they are concerned about the future of the British train building industry. Their concern is a consequence of the decision to appoint Siemens as the preferred bidder for the new fleet of trains for the Thameslink Programme. The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to reverse this decision.
And the Petitioners remain, etc.
[P000941]
Consultation on Electricity Transmission in Somerset
Tessa Munt (Wells) (LD)
I rise to present a petition from the residents of Wells and others who are concerned about the standard of National Grid’s consultation relating to 152-feet high pylons that are proposed to go across the Somerset levels, which would spoil beyond belief the Somerset countryside and damage incredibly the tourism on which most of Somerset is dependent. The people of Wells and others have asked that National Grid consider a choice of various forms so that they can see the cost and other factors that are involved in using alternatives to pylons and overhead lines—in particular, that it should consider undergrounding using an under-sea route through the Bristol channel or a version alongside the M5 corridor. The petition includes the signatures of over 1,500 residents of Wells and the surrounding area.
The petition states:
The Petition of residents of Wells and others,
Declares that the Petitioners believe National Grid’s consultation on proposals to erect 152 ft high pylons is flawed; that the proposal would blight the beautiful unspoiled Somerset countryside; and further declares that the Petitioners accept that electricity transmission is essential but the Petitioners are concerned that National Grid is offering consultees a choice between two unacceptable routes, chosen by National Grid solely on the basis of cost, to the exclusion of other viable options such as undergrounding, under the Bristol Channel or along the M5 corridor.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to encourage National Grid to stop the current consultation into electricity transmission in Somerset and consider other viable options.
And the Petitioners remain, etc.
[P000943]
Licensing of Mobile Home Parks
Nicky Morgan (Loughborough) (Con)
I wish to present a petition on behalf of the residents of Palma park homes in Loughborough that has been signed by 284 people. The House will be aware of concerns that have been expressed by Members of Parliament in all parts of the House about the way in which many park homes are managed. Such homes are often occupied by older and more vulnerable people. In Loughborough—I know that this experience is shared in park homes across the country—there are high maintenance and management charges and difficulties in selling these homes. At Palma park we have also recently had alleged incidents of violence between the former owner and the current owner of the park.
The petition states:
The Petition of the residents of Palma Park Homes, Loughborough, Leicestershire
Declares that the Petitioners are concerned about the standards of conduct exhibited by the owner of Palma Park Homes.
The Petitioners therefore request that the House of Commons urges the Government to introduce a fair, clear and simple licensing system for those owning mobile home parks, so that licence holders must show that they are fit and proper persons to hold such a licence, and that any regulations or legislation should set out how a licence may be revoked if a licence holder is found by the local authority to no longer meet the fit and proper criteria.
And the Petitioners remain, etc.
[P000945]
Points of Order
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Sir George Young)
On a point of order, Mr Speaker. I know that this is an unusual time to seek to catch your eye on a point of order, but in view of the fast-moving events surrounding the allegations about phone hacking at News International, I thought that it would be helpful for the House to have clarity about any additional business this week. Ministers are minded to make representations to you that that the House should be recalled on Wednesday in order for my right hon. Friend the Prime Minister to come to the House to update Members on recent developments, and for hon. Members to have an opportunity to hold a full day’s debate on these issues. Mr Speaker, given that we want Parliament to remain at the centre of this debate, are you able to give an indication of whether you would be minded to grant such a request?
Mr Speaker
I am, and I will be. The Leader of the House has indicated that the public interest requires that the House should meet this Wednesday. It might be helpful to the House to say that, if I receive a formal request from the Government after the House adjourns tomorrow under Standing Order No. 13, I will appoint 11.30 on Wednesday as the time for the House to meet. The business to be taken at that sitting will be set down by the Government, and the Leader of the House has given a helpful indication of what that will be.
Hilary Benn (Leeds Central) (Lab)
Further to that point of order, Mr Speaker. First thing this morning, the Leader of the Opposition called for the House to meet on Wednesday, so I welcome the confirmation that we have just had from the Leader of the House that the Government will seek the recall of the House. However, given that events are indeed moving at a very fast pace, can we be clear on three matters? First, given the large and growing number of questions that now need to be answered by the Prime Minister concerning his judgment, it is essential that he lead the debate on Wednesday. Mr Speaker, have you been given any indication that he will do so, and of what form the debate will take?
Secondly, the Home Affairs Committee and the Culture, Media and Sport Committee will tomorrow take very important evidence from Sir Paul Stephenson, Rebekah Brooks, James Murdoch and Rupert Murdoch. If those Committees produce reports overnight, can you confirm that the House will have a full opportunity to debate those reports and any recommendations as part of Wednesday’s business?
Thirdly, as there may be issues of parliamentary privilege that arise from Lord Leveson’s inquiry—for example, whether Parliament was lied to, or about the disclosure of material—have you had any indication from the Government, Mr Speaker, as to how they propose to handle matters of privilege in the inquiry’s terms of reference?
Mr Speaker
I am grateful to the shadow Leader of the House for that point of order. First, as far as the Minister fielded by the Government is concerned, that is a matter for the Government. The Leader of the House will have heard what the right hon. Gentleman has said, and will be at liberty to respond, after I have finished saying what I am about to say, if he so wishes.
Secondly, so far as the content of the business is concerned, I wait for the Government to decide upon their motion. Once again, it is for the Leader of the House to indicate, as and when he is ready to do so, to the House the proposed terms of the debate. Thirdly, I would say to the right hon. Gentleman that I again await further and better particulars from the Leader of the House, but I should certainly have thought that the reports and the consideration preceding such reports to which the shadow Leader of the House has just referred would be obvious material for consideration in that debate. If the Leader of the House wishes to say anything further at this stage, he is free to do so, but he is not obliged to do so.
The House should also be aware that at any stage between now and Wednesday, further and better particulars could be provided, and there will be a statement on Wednesday—and statements can come at a variety of times. The House will want to be conscious of that and be alert to the possibilities.
Mr Speaker
I was not proposing to take a long sequence, but I shall take a short sequence.
Mr Peter Bone (Wellingborough) (Con)
Further to that point of order, Mr Speaker. Is this not a rather unusual way of dealing with business when the House has not adjourned? Is it not normal to have a business of the House motion—on whether Parliament was going to extend its sitting—for the House to debate?
Mr Speaker
There are all sorts of things that are normal. [Laughter.] The hon. Member for Wellingborough (Mr Bone) might well see himself as the very national embodiment of normality and therefore a suitable judge of what is an example of the genre, but the fact that something is normal does not preclude alternatives. The Leader of the House is the person to judge these matters, and he has made his own judgment. If the hon. Gentleman wants a chat or a cup of tea with his right hon. Friend the Leader of the House, that is a matter for them and not for the Chair.
Bill Esterson (Sefton Central) (Lab)
Further to the point of order. On 13 July, I received a reply to two parliamentary questions about meetings between Ministers and News International representatives, in which I was told that
“information relating to internal meetings, discussions and advice is not normally disclosed.”—[Official Report, 13 July 2011; Vol. 531, c. 340W.]
In his statement on the same day, the Prime Minister said that he would be
“consulting the Cabinet Secretary on an amendment to the ministerial code…to record all meetings with newspaper and other media proprietors, senior editors and executives, regardless of the nature of the meeting.”—[Official Report, 13 July 2011; Vol. 531, c. 313-14.]
What advice can you give me, Mr Speaker, about the contradiction between the answers to my parliamentary questions received on 13 July and the statement made by the Prime Minister on the same day?
Mr Speaker
My answer to the hon. Gentleman’s attempted point of order, which is really a point of debate, is that he should ensure that he is in his seat, perched and primed and ready to pounce with his question to the Prime Minister and, possibly, to make a contribution to the debate that will follow. That is a question and that is a speech that the House will eagerly await.
Mr Speaker
Order. I am taking people on trust here. Normally, points of order and further points of order would be taken later. I am rather anticipating that points of order will narrowly relate to the matters to which the Leader of the House has just referred. I know the hon. Member for Wrexham (Ian Lucas)will not disappoint in that regard.
Ian Lucas (Wrexham) (Lab)
I never cease to disappoint you, but this does indeed relate to named day questions that I put forward, to which I did not receive satisfactory responses from the Prime Minister’s office. Those responses contrasted with statements made direct to the press concerning meetings that the Prime Minister had. Is it in order for the press to receive details of meetings that are not provided to Members of Parliament in answer to parliamentary questions? Is that not something that the Prime Minister should come to the House to explain on Wednesday?
Mr Speaker
The business of the House for Wednesday is gradually becoming clearer and clearer, and I have a feeling that the hon. Gentleman will want to raise the matters that perturb him on that occasion. I think we will leave it there for now.
Metropolitan Police Service
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Mrs Theresa May)
With permission, Mr Speaker, I will make a statement on the resignations of Sir Paul Stephenson and John Yates, the Metropolitan police investigation into phone-hacking, and allegations of police corruption. I apologise to the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), for the late receipt of the statement. As I am sure she will appreciate, events have been changing rather rapidly through the day.
As the House will know, last night Sir Paul Stephenson resigned as Commissioner of Police of the Metropolis. As I told him last night, I am sorry that he took that decision. He has led the Met through difficult times, and, although current circumstances show there are still serious issues to be addressed, the Met is stronger operationally today than it was when he took over. I will turn to those difficult circumstances in a moment, but first I wish to update the House on today’s developments and on the next steps for the Metropolitan police.
I have already started work with the Mayor of London and the Metropolitan police to arrange an orderly transition and the appointment of a new commissioner. I have agreed that Sir Paul Stephenson will leave his post as swiftly as possible. In the meantime he will remain commissioner, in post at New Scotland Yard and in operational command. Sir Paul will be replaced by Tim Godwin, who will again become acting commissioner, a role that he filled very effectively during Sir Paul’s illness between December and April this year. With Tim Godwin as acting commissioner, the Mayor and I are clear that additional resilience is essential from outside the Metropolitan police. I am therefore pleased to announce that Bernard Hogan-Howe has agreed to take on the responsibilities of deputy commissioner on a temporary basis. We are seeking to expedite the process for selecting and appointing the next commissioner.
The House will know that within the last couple of hours Assistant Commissioner John Yates has also resigned. I want to put on record my gratitude to John Yates for the work that he has done, while I have been Home Secretary, to develop and improve counter-terrorism policing in London and, indeed, across the whole country. I can confirm to the House that Assistant Commissioner Cressida Dick will take over his role.
I want hon. Members, Londoners and the whole country to know that the important work of the Met—its national responsibilities such as counter-terrorism operations as well as its policing of our capital city—must and will continue. That important work includes the related investigations Operation Weeting and Operation Elveden.
Operation Weeting, the investigation into phone hacking led by Deputy Assistant Commissioner Sue Akers, is now going through the thousands of pieces of evidence relating to the allegations. Unlike the original investigation into phone hacking, Operation Weeting is proceeding apace, with officers interrogating evidence that was neglected first time round, pursuing new leads, and—as we saw once again at the weekend—making arrests.
Operation Elveden, also led by Sue Akers, is investigating allegations that police officers have received payments from the press in return for information. This investigation has independent oversight by the Independent Police Complaints Commission. At this stage, it is a supervised investigation—which means that the IPCC sets the terms of reference and receives the investigation report—and as soon as individual suspected officers have been identified, IPCC investigators, overseen by an IPCC commissioner, will take over and lead a fully independent investigation of those officers.
In the future, both these matters will be considered by the Leveson inquiry established by the Prime Minister. In the meantime, I can tell the House that Elizabeth Filkin, the former Parliamentary Commissioner for Standards, has provisionally agreed to examine the ethical considerations that should in future underpin relationships between the Metropolitan police and the media, how to ensure maximum transparency and public confidence, and to provide advice. The management board of the Met has agreed a new set of guidelines relating to relationships with the media, including recording meetings and hospitality and publication of information on the internet.
These allegations are not, unfortunately, the only recent example of alleged corruption and nepotism in the police, so I can tell the House that I have asked Her Majesty’s inspectorate of constabulary to consider instances of undue influence, inappropriate contractual arrangements and other abuses of power in police relationships with the media and other parties. I have asked HMIC to make recommendations to me about what needs to be done to address that.
There is nothing more important than the public’s trust in the police to do their work without fear or favour, so at moments like this it is natural that people should ask who polices the police. I have already asked Jane Furniss, the chief executive of the Independent Police Complaints Commission, whether she has the power and the resources to get done the immediate work at hand. She has assured me that she does, but additional resources will be made available to the IPCC if they are needed.
I can also tell the House that I have commissioned work to consider whether the IPCC needs further powers, including whether it should be given the power to question civilian witnesses during the course of its investigations. Given that the IPCC can at present only investigate specific allegations against individual officers, I have also asked whether the commission needs to have a greater role in investigating allegations about institutional failings of a force or forces.
Finally, I want to say one last word about the future of the Metropolitan police. The Met is the largest police force in the country, and has important national responsibilities beyond its role policing our capital. The next Metropolitan Police Commissioner will lead thousands of fine police officers, community support officers and staff, the great majority of whom have spent their careers dedicated to protecting the public, often at risk to their own safety. Just three nights ago, hon. Members will know that in Croydon an unarmed Metropolitan police officer was shot as he tried to arrest a suspect. I know that the whole House will agree with me that it is for the sake of the many thousands of honourable police officers and staff, as well as of the public they serve, that we must get to the bottom of all these allegations. Only then will we be able to ensure the integrity of our police and public confidence in them to do their vital work. I commend the statement to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I thank the Home Secretary for her statement, and also for her apology; I understand the timing pressures she faced. May I also join her in paying tribute to the Metropolitan police officer who was harmed during the course of duty in Croydon?
The Home Secretary rightly paid tribute to the work of Sir Paul Stephenson. He has done excellent work in London, backing neighbourhood policing and taking action to cut crime in the capital. The Home Secretary also recognised the vital work of John Yates on counter-terrorism. She referred to Sir Paul Stephenson’s decision to resign. It was an honourable decision, to protect the ongoing operational work of the Met from the ongoing speculation, but his departure raises very serious questions for the Home Secretary and the Prime Minister.
Yesterday, Home Office Ministers told the press that the Home Secretary would make a statement today on her concerns about the appointment of Neil Wallis. Today she has been completely silent on that issue in this House. The truth is that the Met commissioner and the head of counter-terrorism have now gone because of questions about this crisis and about the appointment of the former deputy editor of the News of the World, yet the Prime Minister is still refusing to answer questions or apologise for his appointment of the editor of the News of the World. The judgment of the Met has been called into serious question for appointing Neil Wallis, but so has the judgment of the Prime Minister for appointing Neil Wallis’s boss, Andy Coulson. People will look at this and think there is one rule for the police and one for the Prime Minister.
The Prime Minister agreed with that this morning. He said this morning:
“The situation in the Metropolitan Police Service is really quite different to the situation in the Government, not least because the issues that the Metropolitan police are looking at, the issues around them, have had a direct bearing on public confidence in the police inquiry into the News of the World”.
But the Prime Minister runs the country. The issues that he is looking at and the judgments that he makes have a direct bearing on public confidence in the Government’s ability to sort this crisis out.
The Home Secretary is right to have had serious concerns about the appointment of Neil Wallis, but it would have been better if she had told us what they were today. She is also right that she should have been told about the potential conflict of interest in the Met. This does raise serious questions for the force, but the Met commissioner has said that he could not tell her or her boss because of the Prime Minister’s relationship with Andy Coulson. So how did it come to this? The most senior police officer in the country did not feel able to tell the Home Secretary about a potential conflict of interest for the force because of the Prime Minister’s compromised relationship with Andy Coulson—it was an ongoing relationship, as they met at Chequers in March, months after the new police investigation began. This morning, she refused to defend the appointment of Andy Coulson and today the London Mayor refused to defend the appointment of Andy Coulson. They all seem to have forgotten rather quickly what Andy Coulson used to say—they are “all in this together”.
The Home Secretary has been absent from this crisis, despite the serious allegations that have been made about phone hacking potentially affecting criminal investigations, the serious questions for policing and the growing cloud over the national and international reputation of British policing as a result of this crisis. She has said nothing and done nothing for two weeks. We welcome many of the announcements that she made today, but they are precisely the things that we called for last week.
I called last week for five things, three of which the Home Secretary has now done. First, I called for new standards for the Met to govern the relationship between officers and the press. Secondly, I called for a review by Her Majesty’s inspectorate of constabulary into the wider concerns about leaks of information, payments for the press and corruption in other forces too. Thirdly, I called for work to strengthen the Independent Police Complaints Commission and an independent complaints procedure to deal with failed investigations in future. We welcome those, just as we welcome her agreement to the judicial inquiry that we called for too, but she should have announced two further things that we also called for.
First, the Home Secretary needs to call for immediate openness and transparency across the Met in respect of all the dealings between senior officers and members of the press, including those at the News of the World—that needs to cover private as well as public meetings. Secondly, she needs to review her decision to go forward with elected police and crime commissioners. The nearest that Britain has to an elected police chief is the London Mayor, and that did not stop the problems at the Met—instead it made them worse. Boris Johnson described the phone-hacking allegations as “codswallop” and said that it
“looks like a politically motivated put-up job by the Labour party”.
What backing does the Home Secretary think Sir Paul Stephenson and John Yates would have expected from the Mayor if they had decided to reopen an investigation that he had described as “politically motivated”?
Instead of their tackling this problem, we have had an AWOL Home Secretary, a “codswallop” Mayor and a compromised Prime Minister. There is a problem—it is one of leadership. The work of police officers across the country is too important to be tarnished by her failure to get a grip of the problems now. The Home Secretary will not answer all the questions, so I leave her with just one. She knows the importance of leadership to get the country through this crisis and she has criticised the misjudgment of the Met in taking on Neil Wallis, so will she now apologise to the House for the Prime Minister’s misjudgment in taking on Andy Coulson, so that the Government can now move forward, exercise some leadership untarnished and sort the crisis out now?
Mrs May
I say to the shadow Home Secretary that from the response she has just given one could have been forgiven for thinking that the Prime Minister had not been anywhere near the House of Commons in the past week, but he stood at this Dispatch Box last week, he answered questions in this House, he answered all the points that the shadow Home Secretary has made and he will be in this House again on Wednesday.
The right hon. Lady asked a long list of questions. She asked why I had not said anything about openness and transparency across the Met, as I had promised to. I made specific reference in my statement to the management board decisions taken by the Metropolitan police to publish details of meetings held by senior officers with members of the press, and they will be available on the internet.
The right hon. Lady asked about the difference between the Met and the Government. Of course there is a difference. The Metropolitan police were investigating allegations of wrongdoing at the News of the World, and it is absolutely right that there should be a line between the investigators and the investigated. The issue I raised with Sir Paul Stephenson—which she is aware of because it was made public last week—was the fact that I had concerns that he had not informed us about a conflict of interest. The police in this country should be able to act against crime and criminals without fear or favour, but when they think there is a conflict of interest that should be made transparent.
The right hon. Lady asked about the impact of elected police commissioners. I think everything that has happened shows not that we should be going slow on reform of the police but that we need to ensure that we reform the police.
We then have the extraordinary situation in that the shadow Home Secretary appears in one breath to be saying that I have been absent and doing absolutely nothing and in the other breath saying that I am doing everything she asked for. She cannot simultaneously claim that I am doing nothing and doing something—that is the have-your-cake-and-eat-it opportunism of Opposition politics to which I note that both she and the shadow Chancellor belong.
Finally, let me remind the shadow Home Secretary of a few things—[Interruption.]
Mr Speaker
Order. Mr John Robertson, calm yourself. It is very injurious to your health and I do not want to see the effects. That is very undesirable.
Mrs May
Finally, let me remind the shadow Home Secretary of a few things. In 2002, the Select Committee on Culture, Media and Sport reported that the press were making illegal payments to police officers and called on the then Home Secretary to take steps to review, and overhaul if necessary, the guidance and measures aimed at preventing such behaviour by the police and media. Labour took no action. In May 2006, the Information Commissioner reported that the trade in confidential personal information was
“a pervasive and widespread ‘industry’”.
Labour took no action. Just two weeks ago, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) revealed that he had thought about getting Her Majesty’s inspectorate of constabulary to carry out an independent investigation into the Met’s handling of phone hacking, but Labour took no action. And, if the shadow Home Secretary wants to keep talking about Andy Coulson, she will have to expect to answer a lot of questions about the Labour party’s communications director, Tom Baldwin.
Mr Speaker
Order. In calling the right hon. Member for Carshalton and Wallington (Tom Brake), I congratulate him on his elevation to the Privy Council.
Tom Brake (Carshalton and Wallington) (LD)
I, too, pay tribute to the officer shot in Croydon and to all officers who put their lives on the line to keep us safe.
Will the Home Secretary join me in urging the Metropolitan police to move urgently to rebuild their senior team to focus on next year’s Olympics and security concerns surrounding the games? Will she strengthen the proposed checks and balances that will apply to elected police and crime commissioners to ensure that neither elected police and crime commissioners nor chief constables can get embroiled in any scandals of any nature once those commissioners are elected?
Mrs May
My right hon. Friend talks about checks and balances. As he will know, we have strengthened the checks and balances that will be provided by the police and crime panels to the police and crime commissioners as the Bill has progressed through the House of Commons and House of Lords. We have made important improvements to those checks and balances.
As regards the senior leadership of the Met, it is entirely right that we move quickly to reinforce it. The additional resilience of bringing in somebody from outside in Bernard Hogan-Howe is important and the immediate step was to ensure that the counter-terrorism post is filled. I can assure the House that the work on the security and safety of the Olympics carries on under Assistant Commissioner Chris Allison, in particular, and he has been doing an extremely good job.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
If the allegations in relation to the hacking of the phones of victims of the 7/7 attack in London are true, the editor of the News of the World at the time was working in 10 Downing street, while his deputy, Neil Wallis, was working in New Scotland Yard, just at the time when the quest for the truth became more intense. I did not know, as Home Secretary, that Neil Wallis had been appointed. Did the Home Secretary know, did anyone at the Home Office know and did anyone in 10 Downing street know?
Mrs May
The first I knew of the appointment of Neil Wallis was when I heard from the Commissioner of the Metropolitan police and from the Mayor last Thursday that this had been brought to the Mayor’s attention. It was at that time that I wrote to the commissioner and expressed my disquiet and concern that this issue had not been raised earlier, at a previous stage. I indicated last Thursday that that was a concern, and it remains a concern.
Mr David Ruffley (Bury St Edmunds) (Con)
The IPCC is renowned for the long, drawn-out nature of its inquiries. Those of us who are interested in restoring public confidence in the police would like to know from the Home Secretary when she expects the IPCC to report.
Mrs May
I have asked the IPCC to undertake a number of reports. It will report to me by the end of the summer on the report I asked it to undertake last week into allegations it has received about corruption in the police force previously and any lessons that need to be learned in relation to that. It will, of course, pursue investigations against any individual officers who have been named. I am sure that my hon. Friend will agree that it is right and important that that is done properly and fully. I understand the point he is making, but I am sure that none of us would want the results of those inquiries to be in any way jeopardised by a desire to do them speedily rather than fully and properly.
Mr Jack Straw (Blackburn) (Lab)
May I underline the comments that have been made about the reputation of Sir Paul Stephenson, who was a very fine chief constable of Lancashire police before he moved on to be deputy commissioner and then Commissioner of the Metropolitan police, which he pursued with similar very high standards? Will the Home Secretary explain the point about conflict of interest? Was it not entirely proper and consistent with Sir Paul’s level of integrity that, unusually, he decided that he could not disclose information to the Home Secretary because of what he perceived to be a conflict of interest at the heart of government? Why is she trying to shuffle off responsibility for this when it is at that point that the conflict exists?
Mrs May
As I said earlier, I believe that the police should be able to investigate every allegation and to chase evidence as far as it takes them without fear or favour. When a conflict of interest arises—if the Metropolitan police feel there is a conflict of interest—that should be made transparent and that is why I believe I should have been told earlier. However, I say to the right hon. Gentleman that the Metropolitan police did not make the appointment of Neil Wallis known to previous Home Secretaries—notably previous Labour Home Secretaries—either.
Mr John Whittingdale (Maldon) (Con)
Does my right hon. Friend accept that some of the biggest questions during the whole of the phone-hacking saga relate to the failures on the part of the police to investigate, as well as to what has been going on in newsrooms, particularly why the police appeared never to interview a single journalist who was named as a client of Steve Whittamore in the Motorman case and why they did nothing to look at the enormous amounts of material seized from Glenn Mulcaire? Does she agree that it would be unsatisfactory if these matters could not be looked at until the beginning of the second part of the judicial review? Will she consider inviting the IPCC to begin examining these questions now?
Mrs May
My hon. Friend makes an important point. As he says, part of the inquiry that is led by Lord Justice Leveson will involve looking at the first investigation by the Metropolitan police. It is not impossible for it to start doing some work while the current investigation is going on, but that would have to be done carefully in order not to jeopardise the current investigation. I am sure that we all want to see a proper investigation and a proper inquiry with answers about what happened in that first police investigation and about why matters were not taken forward in a way that people now feel they should have been. We also want to ensure that the current investigation is not in any way prejudiced by that work because we want people who have been guilty of criminal offences to be brought to book.
Glenda Jackson (Hampstead and Kilburn) (Lab)
What pressure did the Prime Minister exert on the Home Secretary and the Mayor of London to bring about the resignations of both the commissioner and the assistant commissioner, which today, apparently, the Home Secretary regrets?
Nicholas Soames (Mid Sussex) (Con)
Does my right hon. Friend agree that the Labour Government’s failure to do anything about the Information Commissioner’s report in 2006 was compounded by the fact that they backed down under the lobbying of the Society of Editors over clause 77 of the Criminal Justice and Immigration Bill, which means that a fine of £150 is the average fine for someone found guilty of stealing personal information? Will she review the section and see whether the offence should be made punishable by imprisonment?
Mrs May
My right hon. Friend makes an important point and reminds us that at stake are some very serious issues, not just about the operation of the police and of the press, but in relation to personal information. I will certainly look at the issue he raises. As I said, the trade in personal information was raised previously by the Information Commissioner as something that should be looked at, and we should take that forward.
Mr David Hanson (Delyn) (Lab)
Will the Home Secretary ask Elizabeth Filkin, as part of her investigation, to report to the House of Commons on how many occasions the Chief Commissioner of Police did not brief the Prime Minister or herself because of information relating to the Prime Minister’s relationship with Mr Coulson? Can she confirm that News International began to co-operate with the police inquiry only after Mr Coulson’s resignation from Downing street?
Mrs May
In relation to Elizabeth Filkin and how she will undertake the role that she will be performing for the Metropolitan police, it is up to her to decide what she wishes to look at and how she wishes to undertake that. I detected, when I announced her name, a certain murmuring in the House. The reputation that Elizabeth Filkin has for challenging the establishment, challenging practices and ensuring that practice is appropriate and proper, and what she did here in Parliament, are such that she is an excellent choice as a candidate for the role.
Mark Pritchard (The Wrekin) (Con)
Does my right hon. Friend share my concern about the serious allegations concerning a royal protection officer selling personal and private details of members of the royal family, including our Head of State, Her Majesty the Queen? What conversations has the Home Secretary had with the director of the Security Service concerning this incident? Is it not the case that the Security Service should have known about this? If it did not know, why not, and if it did know, why did it not do something about it?
Mrs May
Matters relating to appropriate royal protection are dealt with by a committee chaired by Sir Richard Mottram, which sits in the Home Office. All those considerations are undertaken independently by Sir Richard Mottram and his committee in relation to how royal protection should be carried out. Obviously, the issue will be looked into to see the truth or otherwise of those allegations.
Keith Vaz (Leicester East) (Lab)
As the Home Secretary knows, both Sir Paul and Mr Yates are due to appear before the Home Affairs Select Committee tomorrow, when Members will explore their resignations further. I welcome the appointment of Tim Godwin and Bernard Hogan-Howe, but will the right hon. Lady confirm that Mr Hogan-Howe was the only applicant for the post of head of the National Crime Agency? Will she now have to look for a new person to head that organisation? Will she answer the question that I put to the Prime Minister last week? This information is coming out because of Operation Weeting and the excellent work by Sue Akers. Could we please give her the resources she needs in order to go through the 12,870 names that are still on the books but have still not been contacted?
Mrs May
I will make an announcement on the appointment of the head of the national crime agency when appropriate. In relation to resources for Sue Akers, as has been made clear and as the Prime Minister has made clear at the Dispatch Box on a number of occasions, this is one of the largest investigations taking place in the country. I am sure that everyone would agree that Sue Akers is pursuing the investigation with the appropriate degree of vigour, and I am sure that the Metropolitan police are ensuring that she has the necessary resources.
Mr Robert Walter (North Dorset) (Con)
The commissioner placed great emphasis on the word “integrity” in his resignation statement, and yet in the eyes of some of my constituents payments and hospitality to police officers are no different from the £12,000-worth of hospitality that Sir Paul received. Was the commissioner in breach of the Metropolitan police code of conduct, and if not, what steps can we take to restore the integrity of the Metropolitan police?
Mrs May
Of course, Sir Paul made reference to this issue in the statement he published yesterday. As I indicated in my earlier response and in my statement, the Metropolitan police have been looking at the code that should be followed by officers and strengthening it in relation to the information that should be made available and should be publicly available.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Since Sir Paul Stephenson said in his resignation statement that he could not speak to the Prime Minister about Neil Wallis because of the Prime Minister’s employment of Andy Coulson at No. 10 Downing street, and since the Prime Minister took Andy Coulson into his employment after Coulson had confessed to the Culture, Media and Sport Committee that he had committed criminality—namely, making payments to the police—ought not the Prime Minister be considering his position?
Mrs May
No, I have made very clear the difference between the Metropolitan police and the Government in relation to these matters. The right hon. Gentleman premised his question with the fact that the Home Secretary and the Prime Minister had not been told about the conflict of interest within the Metropolitan police on Neil Wallis, but he will note, as I said earlier, that former Labour Home Secretaries were not told about the decision to appoint Neil Wallis either.
Mr Ben Wallace (Wyre and Preston North) (Con)
Time and time again the Metropolitan police have failed to deal successfully with sensitive issues ranging from cash for peerages all the way through to the phone-hacking scandal. Is it not perhaps time to split the Metropolitan police between the day-to-day duties of policing London and those of carrying out more complex and detailed investigations, such as those that the special operations directorate conducts every day?
Mrs May
I thank my hon. Friend for his innovative approach to these matters. I have to say that there is no intention to split the Metropolitan police. It has been able to take on their national responsibilities, and it has those responsibilities not simply because of the issues that it is responsible for across the country, such as counter-terrorism, but because, as the police force of the nation’s capital, it has of course national responsibilities that are greater than those of any other police force. I must say, as I said earlier, that the thousands of police officers and staff who day by day go about their duty protecting the public and fighting crime are doing a good job, and we should encourage them and ensure that they can continue to do so.
Mr Dennis Skinner (Bolsover) (Lab)
Is it not a fact that the fire-storm that the Prime Minister referred to a few days ago has turned into a raging inferno around the Government’s head? Murdoch’s people are resigning and people are being arrested all over the place, and yet only one area remains intact: millionaires’ row on the Government Front Bench. When is dodgy Dave going to do the decent thing and resign?
Mr William Cash (Stone) (Con)
The Home Secretary referred to the interaction between the inquiries she has set up and the Leveson inquiry, and her references to the relationship between the police and the media are the right approach. Does she agree that, in the interests of clarity and accountability, to refer merely to the press in the Leveson inquiry would be unsatisfactory and that 17 Select Committee Chairmen, the chairman of the 1922 committee, the chairman of the parliamentary Labour party and the leaders of Northern Ireland, Scotland and Wales have all said that the Leveson inquiry should be extended to the media as a whole?
Mrs May
The terms of reference for the Leveson inquiry which my right hon. Friend the Prime Minister announced last week were agreed not only by the Government but in consultation with the Opposition and, as I understand it, with the Leader of the Opposition, and of course with Lord Justice Leveson himself.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
In her statement, the Home Secretary said that she is asking the chief inspector of constabulary to look at some serious issues at the Met, namely “instances of undue influence, inappropriate contractual arrangements and other abuses of power in police relationships with the media and other parties.” That must involve a number of illegal actions and/or misconduct. Any chief officer who is aware of such things—illegal actions or misconduct—is legally obliged to refer the matter to the Independent Police Complaints Commission. Why is the Home Secretary not referring these matters there, where they can be properly investigated?
Mrs May
I think that the right hon. Gentleman might have slightly misunderstood the reference I made in my statement. I have asked HMIC to look widely across policing—not just at the Met—at issues of, as he says, “undue influence, inappropriate contractual arrangements and other abuses of power”. As he says, if any officer is aware of an individual officer who has undertaken something that is an abuse of power, a complaint should be made to the IPCC, which will investigate complaints against individual officers. It does not currently have the power to investigate complaints about wider issues in relation to forces as opposed to individual officers. As well as asking HMIC to look at these issues more widely, because there are other examples of this sort of concern in other constabularies, I am asking the IPCC whether it needs further powers and what we should be doing to ensure that it can investigate more widely across forces rather than just individual officers.
Dr Andrew Murrison (South West Wiltshire) (Con)
By any reasonable international comparison, the probity and integrity of our policemen and policewomen is unsurpassed, and the Home Secretary rightly paid tribute to them today. Does she agree that we should lose no opportunity to articulate our support for them since their morale and self-confidence are likely to be severely dented by this crisis?
Mrs May
Indeed. My hon. Friend makes a very important point. As I said at the police bravery awards a couple of weeks ago, we have the finest police officers in the world—I believe that—but it is our duty to all those honourable, hard-working police officers and staff across the country to ensure that we get to the bottom of these allegations and sort this all out.
Paul Goggins (Wythenshawe and Sale East) (Lab)
The year 2012 was always going to be a very challenging one for the Metropolitan police, with the Olympic games, with convicted terrorists returning home from prison, and with relocated suspects being allowed to go back to their own homes. Given the events of the past 24 hours, will the Home Secretary now give urgent consideration to delaying the implementation of the new, weaker terrorism prevention measures in order to reduce risk and give the new commissioner time to prepare properly?
Mrs May
The right hon. Gentleman knows that the package that was agreed involves not just the TPIMs—terrorism prevention and investigation measures—but extra money, with tens of millions of pounds for the Security Service and the police to put in place extra surveillance so that they are able to mitigate any risk that has come about through the change in those orders. Yes, next year will be a challenging year. The Met police have themselves accepted and said publicly that it will be a very challenging time for them in having to ensure the security and safety of the Olympics. That has been worked on for several years—it is under the very competent leadership of Assistant Commissioner Chris Allison—and extremely good work has been done, but we continue, of course, to ensure that we are putting in place what is necessary to do what we all want to do, which is to ensure that everybody can enjoy a secure and successful games.
Dr Julian Huppert (Cambridge) (LD)
For decades, all across the country, the media have had the uncanny ability to show up at an arrest or another police incident. While I am sure that most of the police would never take part in this, can the Home Secretary assure me that we will be looking across the country, wherever this happens, and keeping an eye out for other such suspicious coincidences of a TV camera showing up just in time?
Mr Nigel Dodds (Belfast North) (DUP)
At this time of unprecedented chaos within the Metropolitan police, and given the Met’s national responsibilities for national security, are not the public right to feel concerned that it has taken its eye off the ball when it comes to protecting citizens against terrorism? What is the Home Secretary going to do to reassure people that the Met is on top of its game in terms of protecting the public against the threat of terrorism both here in the United Kingdom and from abroad?
Mrs May
The work that has been done by the Met, indeed led by Assistant Commissioner John Yates, on counter-terrorism policing has been important. Counter-terrorism policing has improved over the years and extra resources have been put in, which has been beneficial in keeping this country safe. The Metropolitan police have moved quickly to ensure that there is an immediate appointment to replace Assistant Commissioner John Yates in Assistant Commissioner Cressida Dick. I am sure that she will take this work forward every bit as effectively as has been done previously. I assure people that the eye has not been taken off the ball; we are very conscious of the duty to protect the public, be it from criminals or terrorists.
Nicola Blackwood (Oxford West and Abingdon) (Con)
I thank the Home Secretary for her statement and welcome her comments about strengthening the powers of the IPCC. However, given that the circumstances surrounding these resignations will have further undermined public confidence in the police, will she tell the House what steps the Met will be taking to put things right as we await the outcome of the public inquiry?
Mrs May
Indeed. When Tim Godwin takes over as acting commissioner, he will obviously want to consider the steps that the Met can take, as he already has been doing, such as being more transparent about relationships with the press. Crucially, Elizabeth Filkin is being brought in to advise the Met on such matters, so that it can show the public that it has changed the way it deals with these things and increase the public’s confidence. It is also important to have the additional resilience that is brought by somebody coming in from the outside, so Bernard Hogan-Howe will take on the responsibilities of a deputy commissioner to enhance that work.
Mr Michael Meacher (Oldham West and Royton) (Lab)
The Guardian produced abundant evidence several months ago that in handling phone hacking at the News of the World, the police had cut short their original inquiry, suppressed evidence, misled the public and the press, concealed information and broken the law. Why did the Home Secretary not take action then, when it was already perfectly clear that something was going terribly wrong at Scotland Yard?
Mrs May
The initial Guardian story that required investigation actually came in July 2009 under the last Government. That was looked at to see whether there was fresh evidence and a decision was taken that there was not. In September 2010, a question was raised about stories that had appeared in the American press. Again, that was looked at to see whether there was fresh evidence. At the time—[Interruption.] The right hon. Member for Oldham West and Royton (Mr Meacher) asks what I did. I will tell him what I did. At that time, I came to this House and said that it was up to the police to investigate the matter and that it was not for politicians to tell police officers who or what to investigate. I said that the police should investigate any evidence, wherever it took them, and ensure that anybody who was guilty of criminal offences was properly brought to justice.
Claire Perry (Devizes) (Con)
This scandal has run over two Governments and three Prime Ministers. Does the Home Secretary agree that the focus of every Member of this House should be on trying to get to the truth and to find a solution to this problem—we are on the front foot finally—rather than on playing the clapped-out political blame game so beloved by the Labour party?
Mrs May
My hon. Friend makes an important point. She reminds the House that our prime duty and responsibility is to restore confidence in the police so that people feel that the police are doing their job appropriately and properly. There are thousands of honourable policemen and women who are continuing to do their job and we should support and encourage them. We need to get to the bottom of these allegations so that the public truly can have full confidence in what the police are doing.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Given the Home Secretary’s fulsome praise for Assistant Commissioner Chris Allison, should I assume that she will back his call for a delay in cuts to specialist posts, particularly public order posts, until after the Olympics?
Mrs May
Of course we have reviewed the requirements for Olympic security, and we did an audit of it when we came into government. In the run-up to the Olympics we will continue to ensure that the resources that are available and the measures that are taken will provide a secure and safe games.
Mark Reckless (Rochester and Strood) (Con)
Is the Home Secretary aware of the statement that Sir Paul made at the conference of the Association of Chief Police Officers in July 2009, which suggests that it was not John Yates who limited the review then to less than a day but the commissioner himself?
Kate Hoey (Vauxhall) (Lab)
Does the Home Secretary have any concern that the basic principle that someone is innocent until they are proven guilty in a criminal court has been thrown out of the window?
Mrs May
That is an important principle on which we must base what we do. That is why I try not to comment on things until I have seen the evidence on matters of concern. It is of course true that these investigations must be followed through properly and fully, so that those who are guilty can be brought to justice and any speculation about those who are innocent can be cleared up.
Charlie Elphicke (Dover) (Con)
The allegations that payments were made improperly to the police were first made in 2003. The House needs to know what action was taken by the Home Office and by successive Ministers over the period since that date. Will the Home Secretary do a review and make a report to Parliament?
Chris Ruane (Vale of Clwyd) (Lab)
The Metropolitan police have had the names of thousands of UK citizens whose phones have been hacked into for a very long time. Have all the people who have had their phones hacked into been informed of it by the police?
Mrs May
I simply say to the hon. Gentleman that the Metropolitan police’s current investigation has made it clear, as I understand it, that it is going through the names on lists. I caution him on his assumption that everybody whose name appears on a list has necessarily “had their phone hacked into”, in his terms, but that is being looked into by the current investigation. It is clear that it is alerting people when it finds evidence.
Michael Ellis (Northampton North) (Con)
In May 2006, five-plus years ago, the Information Commissioner issued a report stating that the trade in confidential personal information was “pervasive and widespread”. In view of the rather self-righteous tone taken by the Opposition, is the Home Secretary surprised that the then Government did not order an inquiry into the matter?
Mr Gerry Sutcliffe (Bradford South) (Lab)
Returning to the security of the Olympics, is it not time that a pause was taken, given the evidence presented to the Terrorism Prevention and Investigation Measures Bill Committee by Assistant Deputy Commander Osborne that it would take 12 months to get the resources in place to deal with the new TPIMs? Is it not time, now that we have lost the two most senior officers in counter-terrorism, to call a halt to those measures until after the Olympic and Paralympic games?
Mrs May
We have of course been discussing with the Metropolitan police and the Security Service the arrangements that will be in place as a result of the extra finances available for surveillance when the TPIMs come in. I can assure the hon. Gentleman that we have discussed the matter with the Metropolitan police, and it is clear that measures will be in place for an appropriate transition from control orders to TPIMs.
Gavin Barwell (Croydon Central) (Con)
I thank my right hon. Friend for paying tribute to PC Wayne Stevens, who was shot while on duty on the streets of Croydon on Friday night.
As a London MP, my concern is that the Met has sufficient resources to do the job of patrolling the streets of London, and that the two investigations are robustly pursued so that we find out exactly what happened and anyone guilty of a crime is brought to justice. Can my right hon. Friend assure me that, working with the Mayor, she will ensure that that is the case?
Mrs May
I can assure my hon. Friend that we do of course talk to the Metropolitan police about the resources that it has available and the way in which it chooses to police the streets of London. If I may say so, one thing that Sir Paul Stephenson did was significantly to increase the amount of time available for patrol by moving to single patrols, which has been a very important step in improving the time for which officers are actually out on the front line.
I again pay tribute to the police constable who was shot three nights ago. It is very easy for the House to forget the danger that police officers put themselves in day in and day out to keep the public safe, and we should thank them for it.
Jeremy Corbyn (Islington North) (Lab)
In the Home Secretary’s statement, she said that she was sorry that Sir Paul Stephenson had to resign. Does that mean that she thinks he should not have resigned and that he should have carried on, despite this cloud around his head? Could she explain what her thinking behind that is, or is it crocodile tears to cover the fact that she asked him to resign?
Mrs May
On the last point, can I assure the hon. Gentleman that I did not ask Sir Paul Stephenson to resign? As far as I am concerned, nobody asked him to resign: the decision was taken by Sir Paul Stephenson. I am sorry that he decided to resign—I have said that several times, and have made that clear. Under his leadership, the Met has done excellent work in protecting the public, and in cutting and fighting crime. He led the Met through some very difficult times. He took it over at a difficult time, and I think he has made the force operationally stronger.
Duncan Hames (Chippenham) (LD)
In the light of the concerns raised by this issue, what action does the Home Secretary expect of police authorities outside London to root out inappropriate practices and to restore public confidence in the independence of their forces?
Chris Leslie (Nottingham East) (Lab/Co-op)
The Home Secretary says that she did not know about the appointment of Mr Neil Wallis to the Metropolitan police. Did Andy Coulson know, and did the Prime Minister know?
Graham Evans (Weaver Vale) (Con)
The whole House will remember when Damian McBride planned to smear the wives and families of Opposition Members. Does my right hon. Friend the Home Secretary agree that those who live in glass houses should be more careful about throwing stones?
Mike Gapes (Ilford South) (Lab/Co-op)
In view of the remarks of the Mayor of London—he said that the phone hacking allegations were “politically motivated” and “codswallop”—does the Home Secretary believe that he is a fit and proper person to be involved in the appointment of the commissioner of the Metropolitan police?
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Given that Sir Paul and Mr Yates resigned from the Metropolitan police, will my right hon. Friend the Home Secretary clarify whether they can take up any other policing position, including with ACPO or any other policing agencies?
Malcolm Wicks (Croydon North) (Lab)
May I first echo the words of my neighbour, the hon. Member for Croydon Central (Gavin Barwell)? Obviously, our thoughts are with our police officer from Croydon and his family at this difficult time.
May I put it to the Home Secretary that many Londoners are confused about the respective roles of the Home Secretary, the Mayor and the Metropolitan Police Authority? Who in our democracy is ultimately responsible and accountable for the conduct and integrity of the Metropolitan police?
Mrs May
I say to the right hon. Gentleman that the legislation under which Londoners are confused was introduced by the Government in which he was a Minister. This Government are now clarifying the position under the Police Reform and Social Responsibility Bill. We will streamline the arrangements that exist in relation to appointments and the position of the police and crime commissioner in London. However, the appointment of the commissioner and deputy commissioners will remain, as it is today, a final decision of the Home Secretary.
Bob Stewart (Beckenham) (Con)
As I understand it, Lord Justice Leveson’s terms of reference are restricted to phone hacking. I wonder whether it is possible for the inquiry to look also at hacking into e-mails and the illegal acquisition of information such as medical documents.
Mrs May
My hon. Friend is not the first to raise the issue of the remit of the Leveson inquiry. It will cover the culture, practices and ethics of the press, as well as the relationship of the press to the police and issues of regulation. So I would expect that it would indeed be able to look wider than just the issue of phone hacking.
Mr Chuka Umunna (Streatham) (Lab)
I note that the Home Secretary did not answer the question from my hon. Friend the Member for Nottingham East (Chris Leslie) about whether the Prime Minister knew that Neil Wallis was working for the Met and/or whether Andy Coulson knew the same. Could she perhaps respond and let us know that answer to that question?
Jason McCartney (Colne Valley) (Con)
An experienced columnist from The Guardian said on the BBC yesterday that to the best of her knowledge she believed that the passage of information between journalists and the police was common and widespread. Does the Home Secretary agree that the police investigation should go wherever it leads and follow through all leads on that matter?
Mrs May
My hon. Friend is absolutely right. It is important that, whatever the evidence shows, the police investigation is able to follow the leads to the rightful conclusion without fear or favour, and that they ensure that wherever it leads proper action is taken and people who have committed criminal offences are properly brought to justice.
Hywel Williams (Arfon) (PC)
The Mayor of London said this morning that Sir Paul had taken a very brave individual decision. Is the Home Secretary confident that that is the most accurate, appropriate and apposite description of the events leading up to that resignation?
Mrs May
I have made my position on Sir Paul Stephenson’s resignation absolutely clear. In his time in office at the Metropolitan police he has strengthened the force operationally, and under his leadership it has been effective and done excellent work in cutting crime and protecting the public.
Nia Griffith (Llanelli) (Lab)
Given that the Mayor of London actively discouraged the reopening of the police inquiry by referring to the phone-hacking allegations as “codswallop” and a Labour plot, what inquiries will the Home Secretary make into what advice the Mayor took before making those views known and using his influence in that way?
John Mann (Bassetlaw) (Lab)
When did Mr Ed Llewellyn pass on the Guardian dossier to the Home Office?
Mrs May
I am not aware that there was a Guardian dossier. There was information that was generally available to the public, as I understand it. There is an issue here about the role of the Home Office that Opposition Members sometimes fail to grasp. It is not the job of politicians to tell the police who to investigate or arrest. It would be a very sorry day for our police and our democracy if we ever went down that road.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Did the Home Secretary raise any concerns to anyone about bringing Andy Coulson into the heart of Government and, if not, does she now regret that failure to speak up?
Mrs May
I have made clear the difference between the Metropolitan police and the Government. The Prime Minister has answered the point about Andy Coulson. He did that last week and he made it absolutely clear that he gave Andy Coulson a second chance. That did not work out and Andy Coulson resigned again.
Toby Perkins (Chesterfield) (Lab)
The Home Secretary finally made us aware that she was not told if the Prime Minister knew about Neil Wallis’s employment. Can she confirm whether Andy Coulson knew about the employment of his former deputy by the Metropolitan police?
Mr Denis MacShane (Rotherham) (Lab)
Before Wednesday’s debate, would the Home Secretary have the kindness to place in the Library details of all communications, in writing or by phone or e-mail, between Andy Coulson and her private office since she took up the post of Home Secretary?
Mrs May
The right hon. Gentleman, like a number of his colleagues, is seeming to focus purely on Andy Coulson. I say to him and Members of the House that we have a serious job to do—to ensure that we restore confidence in the Metropolitan police and the police generally and to deal with allegations over the operations of the police. We owe it to the public and to the honourable police officers in the Met and other forces in the country to do that seriously, to consider all the allegations and to ensure that they are followed through and dealt with.
Kevin Brennan (Cardiff West) (Lab)
Were there any meetings between Neil Wallis and Andy Coulson while the latter was working for the Prime Minister at No. 10 Downing street? If the Home Secretary cannot give us that information now, will she undertake to give it to us later?
Mrs May
No, I cannot give the hon. Gentleman that information. It is not the sort of information that is available to me. I would point out to him that for the first part—considerable part—of the period when Neil Wallis was in his advisory capacity to the Metropolitan police, the Labour party was in government.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
May I make a statement of the obvious? The Home Secretary has been chasing this issue from day one. She got it wrong on phone hacking, she got it wrong on a judge-led inquiry and it has taken two high-profile resignations to place just a semblance of respectability on an affair that every dog on the street knows stinks. Is it right that Sir Paul Stephenson resigns for Neil Wallis, but the Prime Minister gets off scot-free for hiring not the monkey but the organ grinder, Andy Coulson?
Mrs May
I am not sure that there was actually a question in all that. I remind the hon. Gentleman that, as I said earlier, in 2002, the Culture, Media and Sport Committee reported that the press were making illegal payments to police officers and called on the then Home Secretary to review and, if necessary, overhaul the guidance and measures aimed at preventing such behaviour by the police and media. The Labour Government did absolutely nothing.
Chris Bryant (Rhondda) (Lab)
I am afraid that I welcome the two resignations today because I think that Assistant Commissioner Yates, by his own admission, misled Parliament; because the relationship between the News of the World and the Metropolitan police became so close as frankly to be collusive; and because we had this ludicrous situation in which Andy Hayman was leaving the employment of the Metropolitan police to work for News International and Neil Wallis was leaving News International to work for the Metropolitan police. That cannot be good for the Metropolitan police in the end. I know that the Home Secretary cannot tell anybody what investigations to undertake, but will she ensure that there is a proper investigation into the Surrey police and what happened between the police officers in charge of the investigation following Milly Dowler’s disappearance and death and News of the World and other journalists at the time? I do not think that the collusion was only in the Metropolitan police.
Mrs May
A number of concerns have been raised about issues in other forces relating to contractual arrangements, employment arrangements and other matters. That is why I am asking HMIC to look at these issues more closely across policing, including at issues of abuse of power.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
The Home Secretary rightly said in her statement that confidence in the police—for both the public and serving police officers—must be of paramount concern in getting to the bottom of these allegations. She has just shared with the House information about other police forces, but has she had any contact with the Scottish Justice Minister, Kenny MacAskill, about how these types of inquiry can range across Scottish police forces as well as those for which she is directly responsible?
Mr Wayne David (Caerphilly) (Lab)
Looking ahead to Wednesday, may I urge the Home Secretary to have a word with the Prime Minister to ensure that as well as making a statement he will also lead the debate?
Barry Gardiner (Brent North) (Lab)
The right hon. Lady has sought to distinguish the probity of the appointments made by Sir Paul Stephenson and those made by the Prime Minister on the grounds that there is a proper distance between those being investigated and those doing the investigation. Does she agree that there should also be a proper distance between the law-makers in this country and those suspected of lawbreaking?
Mrs May
I say what I said earlier about the difference between the Government and the Metropolitan police. The Metropolitan police were in the process of investigating —or had been investigating—the News of the World for alleged wrongdoing. It is right, therefore, that we should look at drawing a line between the investigators and the investigated.
Helen Goodman (Bishop Auckland) (Lab)
There seems to have been an exchange of staff between the Metropolitan police and News International. Last week, I asked the Minister of State, Cabinet Office whether former police officers were subject to the rules of the Advisory Committee on Business Appointments. He has written to me saying that he does not know. Can the Home Secretary say what the current rules are and whether Mr Hayman followed them?
Bill Esterson (Sefton Central) (Lab)
If Sir Paul Stephenson was right when he said that he made an error of judgment in his appointment of Neil Wallis at a time when he had not been implicated in phone hacking, what does that say about the Prime Minister’s judgment in appointing Andy Coulson at a time when he had already resigned once over the very same issue?
Mrs May
I suggest that the hon. Gentleman could have listened to the answer that I have already given—on a number of occasions now—about the difference between the Government and the Metropolitan police. Of course, the point is that the Metropolitan police are responsible for investigating allegations of potential wrongdoing at the News of the World.
Mrs Madeleine Moon (Bridgend) (Lab)
The stench that arises from the rotting drains underneath this Chamber seems to be an apt background to a lot of the debate that we have had today. Over the weekend, we had the arrest of Rebekah Brooks, ahead of her giving evidence to the Culture, Media and Sport Committee on Tuesday. I appreciate that the Home Secretary says that it is not up to her to say who is arrested or when, but is it not time that we clarified the role of police investigations and investigations conducted by Select Committees for those investigations being conducted in both places?
Mrs May
I think the hon. Lady will find that Select Committees are very clear about the role and the powers that they have. What is important is that police investigations that could lead to criminal charges and prosecution are not prejudiced in any way by other investigations that take place. That is why we are being very careful in relation to the inquiry that is being led by Lord Justice Leveson. The hon. Lady also refers to needing to clear out the drains. Obviously the drains have not been cleared out for a number of years, but this Government are doing it.
Ian Lucas (Wrexham) (Lab)
Which individual police officer made the decision to employ Neil Wallis’s company?
Defence Transformation
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Defence (Dr Liam Fox)
I wish to express my condolences to the family and friends of Lance Corporal Paul Watkins of 9th/12th Royal Lancers, who was killed in Afghanistan on Saturday. My thoughts and prayers—and, I am sure, those of the whole House—are with them at this very sad and difficult time for them.
I wish to make a statement on the next steps in implementing the strategic defence and security review. This Government inherited both a national economic disaster that represented a strategic threat and a defence programme undermined by a £38 billion black hole. Without a fundamental review for 12 years, our armed forces were still largely configured for the 20th century, despite a decade of sustained operations in Afghanistan and Iraq. The failure to set out a coherent long-term strategy for defence or to match commitments effectively to resources is one of Labour’s worst legacies. However, it is not enough to deal with the mess that we inherited; we also need to build something better for the future.
Right from the start, this Government have been determined not to repeat the mistakes of the past, and to make the difficult decisions that were ducked by the previous Government. We are determined to be bold and ambitious and to build formidable, well-managed armed forces structured for the rigours of future conflict and supported by an affordable defence programme. The SDSR has mapped out our long-term goal for Future Force 2020. The report of the defence reform unit that I announced to the House on 27 June was part of that process. Today, I want to set out the next phase of defence transformation, which involves bringing the Army back from Germany, creating a better future for our reserve forces, and delivering on our commitment to agree a 10-year defence equipment budget.
I have written to Members of both Houses and the devolved Administrations whose constituencies and interests are affected by the decisions that we have taken. Commitments must match resources in order to achieve a balanced budget. As part of the preparation for this year’s planning round, we have identified a number of adjustments to the defence programme. This includes rationalising vehicle acquisition to make the best use of those that we have already procured to support operations in Afghanistan, and continuing to bear down on non-front-line costs, where we will aim to deliver further substantial efficiencies in support, estate spending and IT provision.
Against this background, and as part of our overall approach to balancing the programme, I have agreed with the Treasury that the Ministry of Defence can now plan on the defence equipment and equipment support budget increasing by 1% a year in real terms between 2015-16 and 2020-21. I am grateful to colleagues, and particularly to the Prime Minister, for their support in this process. Such a long-term planning horizon will give greater stability and predictability, and stop the old practice of simply pushing programmes into future years. These and other changes will enable us to proceed with a range of the high-priority programmes set out in the SDSR.
I can therefore now give the go-ahead for the procurement of 14 additional Chinook helicopters, the upgrade of the Army’s Warrior vehicles, spending on the joint strike fighter, the procurement of the Rivet joint intelligence and surveillance aircraft, the cats and traps for the Queen Elizabeth class carriers, and the development of the global combat ship. This equipment can now be bought with confidence, ending a decade of uncertainty for our armed forces and for industry. However, similar discipline will be applied in future: we will order only what we can afford to buy.
Today I am placing in the Library the report of the review into the reserve forces, “Future Reserves 2020”. I would like to thank General Sir Nick Houghton, Lieutenant-General Graeme Lamb and my hon. Friend the Member for Canterbury (Mr Brazier) for their excellent report. The report makes it clear, and I fully agree, that our reserve forces make an outstanding contribution to operations but have been shamefully neglected in recent years. For example, by some estimates, the Territorial Army has a trained and active strength as low as 14,000.
I am therefore pleased to announce that the Government will proceed with a £1.5 billion investment package over the next 10 years to enhance the capability of the reserves and consequently increase their trained strength, £400 million of which will be spent during this Parliament. The Government will work with employers and legislate if necessary to ensure that the reserves are more readily useable on operations. This significant investment will also build up the capacity of the reserves to contribute to homeland security consistent with the adaptive posture set out in the SDSR.
As the capability of the Territorial Army improves, this will allow a progressive adjustment of the regular-reserve balance of the Army while maintaining the land forces capability set out in the SDSR. This will include the delivery of the multi-role brigade structure of Future Force 2020. By 2020, if the Territorial Army develops in the way we intend, we envisage a total force of around 120,000, with a regular to reserve ratio of around 70:30. This will be more in line with comparable countries such as the United States, Canada and Australia.
Let me turn to basing. The decisions that we have taken in the SDSR to reduce aircraft types, bring the Army back from Germany and form the Army into five multi-role brigades will enable us to rationalise the defence estate and dispose of high-value sites that are no longer needed. The security of the nation and the requirements of defence were paramount in our analysis, but we have also considered the impact of changes on local communities, the impact on service personnel and their families, and the current pattern of the armed forces in Britain.
Army brigades currently stationed around Catterick and Salisbury will make up three of the five multi-role brigades. The other two MRBs will be based in the east of England, centred on Cottesmore, and in Scotland, centred on Kirknewton, south-west of Edinburgh. The MRB centred in Scotland will require a new training area, and positive discussions are being taken forward with the Scottish Government. Two major units and a formation headquarters will be based at Leuchars, increasing the number of posts there from 1,200 to more than 1,300. Consequently, the Typhoon force due to be built up there will instead be built up at RAF Lossiemouth. Other MRB units will be moved into Glencorse, Caledonia, Albemarle barracks and eventually Arbroath, as we intend over time to bring the bulk of the Royal Marines together in the south-west. We are also planning to place Army units in Kinloss in around 2014-15, continuing its long-term relationship with defence.
Taken together, this represents a significant increase in the defence footprint in Scotland of well over 2,000 posts. This is in line with the Scottish tradition of supporting our armed forces and is a recognition that these are United Kingdom forces under the Crown, protecting the citizens and interests of this United Kingdom. With the move to five multi-role brigades, we have concluded that 19 Light Brigade in Northern Ireland will be disbanded. Other units returning from Germany will move into the vacated bases and we remain committed to maintaining a permanent military garrison in Northern Ireland; 160 Wales Brigade will remain in Brecon.
We will retain St Athan at its current size for now, but intend to increase its usage to take full advantage of the excellent facilities there. RAF Marham will remain as a base for Tornado GR4. The defence technical training programme will move to Lyneham, guaranteeing its future. More details of these and other estate-related decisions are in the written statement I have laid today. The planning work, including the investment required to adapt sites, will now get under way, based on this strategic direction. It will involve consultations with local communities as appropriate and other statutory obligations that we will need to fulfil.
I am very conscious of the uncertainties that these changes will cause for service personnel and their families. Let me reassure them that the majority of the moves I have announced today will take place after 2015. In both basing and reserves, we have sought wherever possible to strengthen the strong and natural links between local communities and the armed forces. I do not underestimate the importance of these ties in underpinning the military covenant.
The overall package I have announced today is good news for our armed forces and means that they can look forward to the future with renewed confidence because the defence programme I have announced is underpinned with real resources. This investment in people and equipment is not the wish list of the past, but certainty for the future. I commend these decisions to the House.
Mr Jim Murphy (East Renfrewshire) (Lab)
I join the Secretary of State in offering condolences to the family and friends of Lance Corporal Paul Watkins, who was tragically killed in Afghanistan over the weekend.
Last week, I offered wide and warm welcome to the Secretary of State for his thoughtful announcements on the Mull of Kintyre. Today, I am afraid, the right hon. Gentleman has chosen to take a different approach. The Government have been grappling with four big policy areas over the past few months: the RAF basing review, reserve forces, the financial settlement and proposed cuts to the Army. Each of those issues is of national importance and each is deserving of a statement in its own right, yet the Secretary of State comes here in what he thought was to be the last full day of Parliament to cram them into one 10-minute speech. This is a shabby way to treat our forces, and a shabby way to treat this Parliament.
The Government have chosen today, at the high point of one of the biggest political crises in decades, to bury this bad news of 10,000 cuts to the Army—a decision that will not take effect for many years to come. Why are the Government again blaming others? These announcements today are their cuts and their choices. The Secretary of State has announced cuts to the Army of 17,000—just under a sixth of the entire force in just 10 short months.
When in opposition, the Secretary of State said:
“In the real world the only logical conclusion you can come to is that the army is already too small”—
and he went on to demand
“A bigger Army for a safer Britain”.
Today, however, he has announced a smaller Army for a country that we can assume he sees as having only smaller ambitions—from a party that promised thousands of extra troops. It is hard to conclude other than this is strategic shrinkage by stealth. Today’s cut in the Army is bigger than the entire current deployment of all UK forces in Afghanistan. Will the Secretary of State explain why he believes it is in Britain’s strategic national security interest to have an Army so dramatically reduced in size? Will he also say whether this announcement is a result of planning round 11 having been completed?
We welcome any additional investment in our armed forces, and the £1.5 billion from the Treasury is good news, as is the announcement about St Athan. Many of the new capabilities were frozen in the Government’s defence review. We will look at the small print with renewed care, which we have learnt to do in recent months. Notwithstanding last week’s trumpeted announcement on the extension of the operational allowance to Operation Ellamy, hundreds of our forces in Libyan operations will not receive a single penny.
Reservists are great patriots, and provide a bridge to our communities at a time when many people have little understanding of or connection with a large number of our armed forces. They serve with enormous bravery, and we should pay permanent tribute to those who have fallen in Iraq and Afghanistan. There would, of course, be concern if bespoke standing units of reservists became the norm, as that could increase the commitment required from civilians. What assessment has the Secretary of State made of the impact of today’s announcement on retention and recruitment, and how does he address the fear that his approach will undermine the “one Army” concept?
Reform of the defence estate is important to ensuring that our armed forces are properly provided for, but there will be fury in Fife. The RAF has been based in Leuchars for more than 70 years, and it is a matter of deep regret that the Government have chosen to break an historic link that has served the nation so well in peace and in war. It is clear that they have not done their homework. They are closing an RAF base to make savings that they have not identified, and are redeploying the Army at costs that they have not quantified. Will the Secretary of State say how much it will cost to convert the RAF base into an Army garrison—because there will be substantial upfront expenditure—and will he guarantee that there will no period without a military presence at Leuchars, which would have a huge impact on the local communities? Will he also commit his Department to detailed research on the defence estates and the industrial footprint of United Kingdom defence in Scotland?
Following the defence review, it is clear that the country is engaged in events that Ministers did not foresee and reliant on equipment that Ministers planned to scrap. We now have a defence policy based on assumptions that are completely out of date. It seems that the Government are starting to face up to the inadequacy of their own defence review. Surely now is the moment for them to think again, and properly to reopen that flawed and rushed review.
Dr Fox
That was one of the poorest attacks on a Government that I have ever heard. It is pretty rich for the Opposition, after calling for the statement for so long, to complain when we make it. They also seem to be utterly incapable of understanding, even now, the appalling financial state in which they left not only defence but the United Kingdom in general. Does the right hon. Gentleman really think that had we been given a choice—had we not faced a national economic emergency—we would be making spending reductions across the board? We are having to do that because of the mess that the Opposition left behind.
When it comes to numbers, yet again the Opposition seem not to have learned any lessons. They talk about total numbers all the time, but they do not talk about deployability. Yet again they have failed to learn the lessons of the mistakes that they made during their time in office. I want to see British forces that can be deployed better, and I want to see them better trained and properly equipped. When they talk about how much they value the TA, the Opposition would do well to remember that it was they who were cutting the reserves during their last months in office. It was they who were cutting reservists’ training and allowances to save small amounts of money. We do not need any lessons from them in that regard.
We are trying to augment the “one Army” concept by ensuring better interoperability between our reserves and our regular forces. We want our reserves, like those in other countries, to be properly used in a way that gives good value for the investment made in them, and gives them a greater say and more respect within the military family.
Investment had already been made in Leuchars, and I fully accept that some of that investment will be lost. However, we felt that—in the broader scheme of things, and if we were to achieve a better rationalisation of the estate—Lossiemouth was the better choice, given that we had an alternative for Leuchars in the form of investment in the Army in the south of Scotland.
The right hon. Gentleman asked about the footprint in Scotland. I should be happy to look at our footprint across the United Kingdom. What we have done is return to Scotland a footprint that is much more akin to what was there when we left office than to what was there when we returned to it.
Nicholas Soames (Mid Sussex) (Con)
I warmly congratulate my right hon. Friend the Secretary of State on his important and impressive announcement. Contrary to what the right hon. Member for East Renfrewshire (Mr Murphy) said, the Army will discover that the RAF bases into which it moves are very much better found than it is used to. Does the Secretary of State agree that the transformation and whole reform of the defence structure needs to proceed at a great pace, otherwise the rats at the Ministry of Defence will get at it?
Dr Fox
I would like to say that I am rat-proof, but that would probably be tempting fate. We have set out a path that we will clearly follow, from the defence reform set out by Lord Levene, through the basing review, which we have set out today, and through the reserves review and the extra investment that goes with that. It is correct that some of that will have to proceed quickly, but it is also correct that some of it can occur only if other steps are met. For example, the assumptions we make about Future Force 2020 and the size of the regular reserve ratio will depend on two things: that we ensure that the training and equipping of the reserves goes to the plan I have set out, and that we withdraw from Afghanistan in the time scale the Prime Minister has set out.
Mr Bob Ainsworth (Coventry North East) (Lab)
Will the Secretary of State not even acknowledge—these words have not crossed his lips—that his announcement today effectively brings the cuts in the regular Army to in excess of 17,000? That comes on top of the cuts he has announced to the RAF and the Navy, and on top of the cuts he has announced to the Royal Marines, because no Minister has been prepared to acknowledge that not only has 19 Light Brigade been disbanded, but so too has 3 Commando Brigade. The Secretary of State is telling the House that we cannot afford—[Interruption.] Well, if Ministers are going to tell us that 3 Commando Brigade still exists, I want the Secretary of State to stand up and say that, because it does not—and if the Minister for the Armed Forces does not even know that, he should not be in his job. Members on both sides of the House worry that it is not the strength that we cannot afford, but it is the weakness that we potentially cannot afford, and we have not had any debate about this massive demise in our military capability. The strategic defence and security review did not provide such a debate, but we surely need it now.
Dr Fox
It defies belief that senior former Ministers of the previous Government can still come to this House and demand that we spend money that is not there. The right hon. Gentleman complains about cuts, but I have to point out to him that we have had to introduce cuts right across public spending because the previous Government left us with a £158 billion annual deficit, and what he calls the equipment programme was no more than a wish list at the MOD; there was no money in the pipeline for it. The programmes I have announced today—the 14 Chinooks, for example—I have been able to announce because there is real money there; they were never able to make such announcements because of their incompetent management of both the Department and the economy.
Sir Menzies Campbell (North East Fife) (LD)
Elements of air defence have been present at Leuchars in my constituency for the best part of 100 years, as part of the continuing obligation of all Governments to preserve the safety of their citizens. Because I believe in that obligation on the part of Government to defend their citizens, I cannot support the decision not to retain Leuchars as a Royal Air Force base. I believe that decision to be fundamentally wrong, strategically inept and likely to increase risk to our citizens. Will my right hon. Friend confirm that his decision to discontinue Royal Air Force use of Leuchars was taken against the advice of the most senior commanders of the Royal Air Force? Finally, the proposals for alternative use of Leuchars by Army units lack dates, details and substance. What cast-iron guarantees can my right hon. Friend give that these promises will be kept and that the money for them will be found?
Dr Fox
First, may I say to my right hon. and learned Friend that, in what has been a passionate debate about basing, few have defended their constituency interests as passionately as he has, and that I know he is bitterly disappointed with the decision that has been taken? Across the services—it was not just a decision of one service—we looked to see what we thought was the best decision for defence as a whole. Because we wanted to bring the Army back from Germany, because we thought this was a suitable place in the south of Scotland to have one of the multi-role brigades and because we thought that this was good for the footprint of our defence forces in the United Kingdom, it made sense to coalesce our air force at Lossiemouth. I understand that some people, including my right hon. and learned Friend, will be disappointed, but the feeling across the services was that, on balance, this was the right decision.
Angus Robertson (Moray) (SNP)
RAF Lossiemouth is to remain an air station and Kinloss will become an Army base, and the whole Moray community and its supporters are to be congratulated on the amazing and successful campaign to retain both facilities. I also thank those who have sensibly, if belatedly, decided to retain the Moray bases.
The victory in Moray is tinged with the sadness that RAF Leuchars will not remain an air base. There has been cross-party support in Scotland for the retention of both Leuchars and “Lossie” as air bases. Sadly, the UK Government have rejected that and have instead made massive and disproportionate cuts to the RAF in Scotland. In addition, the Royal Marines are being largely cut and the welcome return of Army units from Germany is uncertain in its time scale. Will the Government confirm today that RAF personnel numbers in Scotland are being cut by more than 50% and that the Royal Marines are being almost entirely cut in Scotland? Will the Secretary of State confirm that, in addition, Scotland will lose military facilities, including Fort George, Craigiehall, Redford barracks, Dreghorn barracks and the air rescue co-ordination centre at Kinloss? What support will there be for communities that have been suffering and will continue to suffer economic shocks? Lastly, will he confirm what the configuration will be at RAF Lossiemouth in terms of the Typhoon squadrons, the Tornado squadrons, the RAF regiment, the simulators and total personnel numbers?
Dr Fox
This may be the last touch of naivety I have, but I would have thought that on a day when the Government were announcing a substantial uplift of the defence footprint in Scotland, with an extra 2,500 posts in Scotland, the hon. Gentleman might have welcomed something that the Government were doing. This Government have brought stability back to the defence footprint in Scotland and have potentially brought extra investment to parts of Scotland for which he has been clamouring in this House for economic assistance to be given. I thought that, just for once, “Thank you, on behalf of my constituents” might have been words that passed his lips.
Mr James Arbuthnot (North East Hampshire) (Con)
We shall have to examine with great care the consequences of the details of what my right hon. Friend has announced today. Some of it will be welcome, not least the certainty it brings, and some of it will be less so. What assurances can he give that, in rebalancing the Army between the regulars and the reservists, we will begin by building up the reservists and only later will we reduce the Army?
Dr Fox
As I have just said, I have been explicit about the fact that in order to get to the regular to reserve ratio we want we will first have to build up the reserves to create that deployability and we will also have to see the draw-down from Afghanistan. I very much hope that the amount we are spending—£400 million in this Parliament; £1.5 billion on the reserves overall—will be capable of being absorbed in that time, but we will be able to take a look at that during the strategic defence and security review in 2015 to check that the progress that my right hon. Friend rightly says will be necessary has been achieved.
Paul Flynn (Newport West) (Lab)
Does not the disproportionately large size of our Army mean that we take part in an excessive number of wars, with the result that 179 British died in Iraq and 376 died in Afghanistan? Is not the price of punching above our weight that our soldiers die beyond their responsibilities?
Dr Fox
I think the hon. Gentleman doth protest too much on that one.
We should be honouring those who have been willing to make sacrifices in Afghanistan and elsewhere. They do not do so out of a sense of bravado or some bizarre sense of imperialism, as the hon. Member for Newport West (Paul Flynn) would have it, imposed by the UK Government, but because we take our international obligations for global security seriously. We are in Afghanistan because we believe that that is where some of the threats to the United Kingdom came from and we should be thanking our armed forces for the sacrifices that they have been willing to make for our national security.
Mr Speaker
Order. This is an extremely important statement on which a great many Members want to catch my eye, but I am far from sure that I will be able to accommodate the majority. I would like to try, but I will need help in the form of single, short supplementary questions.
Bob Stewart (Beckenham) (Con)
Will the Secretary of State do his very best to restrict the cuts in the Army to those who do not fight and make sure that the people who do the fighting are maintained as much as possible?
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
This is about implementing a strategic defence and security review and today’s statement represents a significant reduction in the military footprint in Northern Ireland, the one region of the United Kingdom that faces the greatest security threat at this moment. The Secretary of State will therefore understand my concerns and those of other Opposition Members about that reduction. Will the Secretary of State assure me that he will reconsider the reconfiguration of the military footprint in relation to Northern Ireland as regards strengthening both the permanent garrison and the reserve footprint?
Mr Speaker
I shall treat that question as a full sentence with a series of subordinate clauses, but it should not be emulated by colleagues. It is not a competition.
Dr Fox
I fear you might be disappointed, Mr Speaker. We have said very clearly that we will maintain a constant footprint in Northern Ireland and that we are committed to that and to using the bases in Northern Ireland for some of those returning from Germany. The House should remember, however, that the purpose of having the Army in Northern Ireland was not primarily security inside Northern Ireland itself.
Mr James Gray (North Wiltshire) (Con)
Unlike others, the people of North Wiltshire, particularly those in Lyneham and Wootton Bassett who said goodbye only last week to the Hercules fleet, will warmly welcome the Secretary of State’s announcement that the defence technical training establishment is to move to Lyneham. That is very good news for the area. Will he confirm first that that will mean 1,500 to 2,000 people moving in; secondly, that it will happen reasonably swiftly; and, thirdly, that it is possible that Lyneham will become a hub for defence training in the future?
Dr Fox
I am delighted that my hon. Friend is so happy at the announcement about Lyneham. I am also particularly pleased that the phenomenal service not only of those who have served in and around Lyneham but of those who live in the vicinity is being fully rewarded. I confirm that there will be around 1,500 posts initially, although that number may rise over time, and that the initial move will be in 2013-14.
Lindsay Roy (Glenrothes) (Lab)
Will the Secretary of State detail in full his strategic reasons for closing Leuchars as an air base?
Dr Fox
As I said, as a whole following the SDSR we needed to reduce from four to three the fast-jet hubs in the United Kingdom. Clearly Marham and Coningsby were not really alternatives in that regard and we therefore decided it was going to be either Leuchars or Lossiemouth for the fast-jet basing in Scotland. The view was taken not just inside the RAF, as I have said, but across all the services that there was an opportunity to move an Army presence into Scotland if we had sufficient bases to do so and, in the south, Leuchars was key to that. That enables us not only to have an RAF presence in the periphery of Scotland but an Army footprint—a military footprint—right in the centre. That offers us potential when we are looking for ways of giving business to small and medium-sized enterprises, for example; having that base in south central Scotland is going to be advantageous.
Patrick Mercer (Newark) (Con)
May I congratulate the Secretary of State on his emphasis on greater deployability? I have been privy today to a discussion in the Ministry of Defence about which regular infantry regiments might face the axe in the near future. Will he assure the House that that is just speculation and that our bayonet power will not be affected?
Dr Fox
Exactly how the Army develops its plans as we go towards 2020 will increasingly be an issue for the Army, not least with the greater devolution that we have inside the armed forces as a result of the announcements I made in June. I know, having had discussions today and recently with the Chief of the General Staff, that that is certainly one of the issues the Army will be looking at extremely closely.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
The Territorial Army regiment based in my constituency tells me that it struggles to recruit people, particularly those who are unemployed, because of the impact that the time spent with the TA as well as the wages have on benefits. Will the Secretary of State look at this issue with the Department for Work and Pensions to ensure that those who are unemployed and who want to serve can do so?
Dr Fox
The hon. Lady makes a very interesting point and I certainly will undertake to do that because I want to diminish any barriers to serving in the Territorials, including those to people in employment, which I mentioned in my statement, and those to people who are out of work. I am grateful to her for that interesting idea and I will take this forward.
Kris Hopkins (Keighley) (Con)
May I thank the Secretary of State for his clear reality check, given the financial circumstances he took over in May last year? In Keighley there is a long-established detachment of the Duke of Wellington’s Regiment—now the Yorkshire Regiment. Can the Secretary of State outline the impact that his statement will have on Territorial units such as the Duke of Wellington’s Regiment unit?
Dr Fox
I cannot make a specific case regarding any one Territorial unit, but I can say that the money we are announcing today, which is unprecedented in terms of the reserves and which reverses a decline of recent years, will be welcomed in all parts of the TA. We will of course be looking at the best way of spending that money, and I guess from my hon. Friend’s intervention that he will be making one of the early bids in that process.
Dan Jarvis (Barnsley Central) (Lab)
The statement referred to what was described as a “progressive adjustment of the regular-reserve balance” of the Army. By my maths, that equates to a reduction in the regular Army of 17,000. This is very surprising to me because just two weeks ago I asked the Secretary of State what plans he had to reduce the size of the Army post-2015, to which he replied:
“Nothing has changed in our assumptions since the strategic defence and security review.”—[Official Report, 4 July 2011; Vol. 530, c. 1222.]
Can he therefore tell the House when exactly the assumptions changed and why?
Dr Fox
Again, the hon. Gentleman misses the point. What we are talking about is the deployability of the Army. I want to see the reserves increased so that they can be more deployable. We have such a low level of deployability at present—about 14,000—and I want the numbers to be built up so that the deployable level of the Army is maintained. Perhaps he should look at the experiences of other countries and ask why they are able to have a regular-reserve balance that is quite different from the United Kingdom’s and yet maintain their deployability.
Dr Andrew Murrison (South West Wiltshire) (Con)
The 2009 TA funding debacle, the ill-effects of which are still being felt, was a result of Labour accepting the easy expedient of cutting reserve forces when cash is tight. Given that our armed forces in the future will have an even greater proportion of reservists, which I welcome, clearly the dangers are enhanced. What will my right hon. Friend do to guard against the TA being cut, as it is relatively easy to cut it, rather than regulars, when funds are tight?
Dr Fox
I have set out that funding today— £400 million in this Parliament and £1.5 billion by 2020. One of the ways in which we can do it is to challenge the Opposition to say whether they would match that funding in the unfortunate event for the country that they ever came back to power.
Hugh Bayley (York Central) (Lab)
Will the headquarters of the Yorkshire-based brigade remain in York? What implication will today’s announcement have for the number of regular soldiers in the Yorkshire Regiment, and what is the future of RAF Linton-on-Ouse?
Miss Anne McIntosh (Thirsk and Malton) (Con)
It is always delightful when neighbouring colleagues take such an interest in one’s own base. Mindful that north Yorkshire and military establishments there have always played a key role in the defence and security of the realm, can my right hon. Friend give me an assurance on the future of Alanbrooke barracks and RAF Linton-on-Ouse?
Mr David Crausby (Bolton North East) (Lab)
How can we be certain that the right hon. Gentleman’s Government, propped up by the Liberals, will deliver and maintain the necessary training and support that our Territorials and reserves require, or is this just another way to cut the Army?
Dr Fox
The big difference between the Opposition and the Government is that we not only say that we believe in the Territorials; we are funding the Territorials, whereas they cut the Territorials. Moreover, we believe that having a stronger reserve is one of the ways of increasing the links between the armed forces and the communities of this country. That community linkage should not be underestimated, and it is not easy to put a monetary value on it.
Mr Mike Hancock (Portsmouth South) (LD)
As the Secretary of State did not say too much about the Royal Navy, can we take it that the bases in Portsmouth, Plymouth and Rosyth are safe from any cuts? Can he give an assurance that the Navy basing, based on the plan announced earlier this year, will be maintained?
Mr Julian Brazier (Canterbury) (Con)
I welcome my right hon. Friend’s determination to tap a wider pool of talent and skills in the nation alongside our splendid professional forces. May I suggest that the most important single recommendation in the commission’s report is that we restore proper governance to the reserves, including giving back to the reserve forces and cadets associations their role as a watchdog with an annual report to the House?
Dr Fox
I thank my hon. Friend for his welcome to my welcome to his report. It gives me an opportunity to say a heartfelt thank you to my hon. Friend, who not only has had tremendous input into the report, but has championed the cause of reserves for as long as I can remember in my time in Parliament and deserves great gratitude. He is absolutely correct that the ideas he has just reiterated, which are contained in his report, will form a central part of the Government’s course for the time ahead.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
The Secretary of State referred a few moments ago to what he described as the potential for independence in Scotland. Will he explain what he meant by that?
Dr Fox
I mean that the Labour party was unbelievably beaten by the Scottish Nationalists in the Scottish parliamentary elections on a manifesto from the Scottish Nationalists that they would hold a referendum on independence. That is what I meant, and there are serious implications for the Union in terms of defence, were that ever to occur.
Dr Julian Lewis (New Forest East) (Con)
Heavy weapons are deployed to theatres from only one military port, that at Marchwood in my constituency. Will the Secretary of State confirm that Marchwood will continue to perform its functions and will not be sold off for a very small amount of money, about a £40 million one-off return?
John Woodcock (Barrow and Furness) (Lab/Co-op)
Can the Secretary of State guarantee that personnel currently serving in Afghanistan and Libya will keep their jobs through these changes?
Dr Fox
Looking almost 10 years ahead, it is impossible to predict what changes might take place. That will be a matter for the Army, of course in consultation with the Government. I can say that no one will be made compulsorily redundant within a year of returning from any combat operations.
Mrs Anne Main (St Albans) (Con)
While saddened by the cuts, I completely understand why the Secretary of State has had to do some of these dreadful things. I urge him to take on board the fact that we need proper procurement so that we do not have the disaster of helicopters languishing, as they did under the previous Government, because of sloppy procurement. I also welcome the 14 new helicopters.
Dr Fox
My hon. Friend makes an important point. There is no point in any Government wishing that they had more equipment or telling Parliament that they will buy things when they have no idea where the money will come from. That is why the things I have announced today, including the 14 Chinooks, now have a proper budget attached to them, which they never had when part of a wish list under Labour.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
These dreadful things feel a bit like rearranging the deckchairs on the Titanic, given the scale of the cuts that the armed forces are facing. How many personnel currently serving in Germany will in future be based in Scotland?
Dr Fox
It is impossible to give an exact number, but I would imagine that between 6,500 and 7,000, or something of that order, of the 20,000 personnel we currently have in Germany will be coming back to the multi-role brigades in Scotland. The precise number and lay-down will be subject to the plans that the Army will bring forward in the months and years ahead, assuming of course that we have the agreement of the local authorities and the Scottish Government.
Mark Lancaster (Milton Keynes North) (Con)
I remind the House of my interest as a member of the reserve forces. I am confident that the reserve forces will step up and meet the challenge they have been set today. Indeed, the investment will be most welcome, in stark contrast to the measly £24 million that the previous Government attempted to save in 2009 when they wanted to cut all TA training for six months. Will the Secretary of State reassure me that the practice of late mobilisation, which prevents some members of the TA receiving full deployment training with their attached unit, will cease?
Dr Fox
I will certainly look at the specific point raised by my hon. Friend, who has considerable experience of these matters. He is right that we face a challenge with the reserves and correctly points to the fact that it will be a major feat for them to reach the time scales and budgetary spend that we have put forward. Like him, I am confident that they will meet that challenge.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
Will the Secretary of State confirm the exact details of the announcement he made in his statement when he said, “I can therefore now give the go-ahead for the procurement of” a list of things, including the “cat and traps for the Queen Elizabeth class carriers”—plural? Does that mean that both carriers will receive cat and traps?
Dr Fox
That is our plan, and I have agreed to my officials now getting involved in contract negotiations. They were not previously able to do so because we were not guaranteed that we would have the budget. When we make decisions of this nature we must ensure that we have the wherewithal to pay for them. Otherwise, as I have said, they are simply a wish list.
Mr John Redwood (Wokingham) (Con)
As the Secretary of State is proposing to close the large Royal Electrical and Mechanical Engineers garrison at Arborfield in my constituency, will he ensure that the officials working on the disposal, who aim to make a substantial capital gain for new housing, will understand that some of the money will be needed for transport and educational facilities for the large new settlement they have in mind?
Dr Fox
I am grateful to my right hon. Friend for his support and understanding on this issue and know that he will be disappointed that the units are being moved out of Arborfield. We intend to achieve that in a measured way by 2014-15. I am sure that discussions will be ongoing with the local authority on the financial implications he has pointed out.
Jeremy Corbyn (Islington North) (Lab)
Can I assure the Secretary of State that the views of my hon. Friend the Member for Newport West (Paul Flynn) are not necessarily those of a tiny minority or completely isolated? Does the Secretary of State not accept that it is time that this country took a reality check on the levels of global reach that the armed forces are expected to be able to undertake and the massive cost that we are bequeathing to future generations? Is it not time for a serious defence and foreign policy review on these matters?
Dr Fox
Only the hon. Gentleman and the hon. Member for Newport West (Paul Flynn) could describe two out of 600-odd as not being a small minority. As a country, we have had a good debate about the defence review, and we think that we should be implementing its practicalities. The understandings and the strategic aim, as set out in the national security strategy, were broadly welcomed on both sides of the House. It is perfectly correct that we have a debate on the ways in which we carry it out, but there is not a huge debate in this country about the strategic direction that we and our allies are taking.
Penny Mordaunt (Portsmouth North) (Con)
Parliamentary questions I have tabled show that there is little understanding in other Government Departments of the contribution that defence, particularly the Royal Navy, makes to fuel security, communications and trade. As my right hon. Friend works to put the defence budget and our defence capabilities on a sustainable footing, will he also make the case that our economic recovery is dependent on increased defence spending?
Dr Fox
Our economic well-being, as an island where 94% of our exports go by sea, is also dependent on the security of the international sea lanes and the Royal Navy’s contribution to that. Some would say that that is not a necessary function because it is outside the United Kingdom, but it is about the protection of UK interests, and I am afraid that in a truly globalised economy it will continue to be that way.
Mrs Madeleine Moon (Bridgend) (Lab)
In his recent address to NATO, Robert Gates expressed grave concern about NATO’s increasing inability to defend itself and about our unwillingness to pay the true cost of our own defence, relying on America to fund up to 80% of NATO. Does the Secretary of State appreciate that today’s announcement of 17,000 cuts across our armed forces and an increased reliance on a reserve force that is yet to have the capacity to fill a 30% gap will cause great consternation not only in relation to the defence of the UK but across NATO?
Dr Fox
I have of course had discussions with my American counterpart about some of our ideas. For the United States, the idea that we should have such a ratio between regulars and reserves is nothing unusual. When Bob Gates was criticising some of the countries that the hon. Lady mentioned—and when he looked at the United Kingdom, still spending above 2% of GDP on defence, with the fourth biggest defence budget in the world, and investing in the carrier and the joint strike fighter—I do not really think it was us he had in mind.
Mark Pritchard (The Wrekin) (Con)
My right hon. Friend knows more than most that the first duty of any Government is to defend the United Kingdom and the United Kingdom’s interests. Does he accept that if the Treasury subsequently tries to erode the statement that he has made today, and indeed what has been said about planning round 11, that will make it very difficult for this Government to fulfil that very solemn obligation and duty?
Dr Fox
It would be extremely unfortunate were there to be any going back on the uplift that we have had as part of our approach to the next decade. I do not see any chance of that happening given the Treasury’s willingness to engage with the MOD once the MOD was able to show that it could manage its budget better and assess its costs better, and given that the National Audit Office will in future be making a very strict audit of what we do regarding our finances.
Diana Johnson (Kingston upon Hull North) (Lab)
At Hull’s freedom parade on Saturday for 150 (Yorkshire) Transport Regiment, several of the Army vehicles that were going by were plastered with recruitment posters. As my hon. Friend the Member for Barnsley Central (Dan Jarvis) said, the Secretary of State said in the House two weeks ago that there would be no further cuts. When exactly did he decide that he wanted to have an Army that would fill Wembley stadium with probably several thousand seats left over?
Dr Fox
What I want to achieve—I go back to this point again—is a complete Army of reserves and regulars that is genuinely deployable. We have to increase the deployable number because that is what gives us our military effect. There is no point in having bigger armed forces when the budget does not allow us to fully train and equip them, because it is the military effect that we need to preserve. The real betrayal was the Labour party under-equipping our armed forces, as it did so often when it was in government, not the proposals I have put forward today.
Bob Russell (Colchester) (LD)
If the previous Government had made this statement, I do not think the right hon. Gentleman would have welcomed seeing the British Army reduced to the size that it was when Colonel Robert Baden-Powell was involved in the siege of Mafeking in the Boer war. The Secretary of State says that the Army will be formed into five multi-role brigades. Will he clarify where 16 Air Assault Brigade and the Colchester garrison fit into that?
Dr Fox
The five multi-role brigades are the core of what the Army will do, but one air assault brigade and one commando brigade will of course remain separate from that shape, so there will be no real difference to the lay-down that my hon. Friend describes. As for the Labour party having introduced such a programme in government, it would never have done so because it had no idea how bad the economic circumstances were that it was creating.
Mr Mike Weir (Angus) (SNP)
Although the announcement that 45 Commando will move from RM Condor is not unexpected, it will none the less cause sadness in the local community. The Secretary of State said in his statement that other troops would come to Condor over time. Can he give an indication of the time scale and give an assurance that there will be no gap between 45 Commando leaving and alternative troops taking up residence?
Dr Fox
We looked at this as one of the proposals that we could have announced today with dates attached. The costs, however, were prohibitive in making the moves that I wanted to see. This matter will almost certainly have to be looked at in the SDSR in 2015. Therefore, I would not imagine that there would be any change before 2015-16.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Will my right hon. Friend ensure that the welcome additional funding he has announced for the reserve forces will be used specifically for the reserve forces and not by the regular forces for other things?
Dr Fox
That money is earmarked for the reserves, but it is also earmarked for our deployable force. I have said that if we are unable to get the increase in deployability through the reserves alone with the money that I have put in place, there may be a mechanism for an adjustment between the two. We will certainly try to achieve the ratio and the time scale that I have set out today.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I clearly welcome the news that HMS Caledonia will host elements of the Army. I hope the Secretary of State will confirm that a ministerial meeting is possible to discuss the details. Will he confirm which Department will be responsible for funding the transition of those communities from RAF to Army?
John Glen (Salisbury) (Con)
Will my right hon. Friend confirm that the additional funding announced for defence equipment budgets will not be a sufficient uplift post-2014 to achieve the full aspirations of the Future Force 2020?
Dr Fox
We have to look at the defence budget as a whole, not simply the equipment budget, and see where there is leeway. I set out the equipment programmes that we are willing to start spending money on today. I am simply not willing to start to spend on other projects where I can see no budgetary line in the future. After all the pain we have gone through to rebalance the Ministry of Defence budget, we are not going to go back to the bad old habits and recreate the black hole that we inherited.
Mr Denis MacShane (Rotherham) (Lab)
The withdrawal from continental Europe is historic and could be very expensive. Why, then, did the Government turn down the offer of the Polish Government to provide accommodation, training terrain and facilities, all at pretty much zero cost, which would have allowed a permanent alliance there with probably our closest military partner in Europe?
Dr Fox
Although it may appear superficially attractive, I am afraid that none of those things is free. The cost of allowances and of keeping our personnel in Germany amounts to about a quarter of a billion pounds a year to the British taxpayers, and they are pumping about a hundred million pounds a year into the German economy when I would like to see that money pumped into the British economy.
There may well be not only a chance to have joint training with our Polish colleagues but room for continued training in Germany itself, following discussions that I had with the German Defence Minister last week.
Mrs Eleanor Laing (Epping Forest) (Con)
Will the Secretary of State tell the House what would happen to the 2,500 extra jobs that he is creating, and the significant investment that UK forces are about to make in Scotland, if Scotland decided to separate from the rest of the United Kingdom?
Jim Shannon (Strangford) (DUP)
TA soldiers from Northern Ireland constitute some 20% of total TA personnel in the UK, both deployed and operational. Will the Minister commit to increasing TA soldier numbers in Northern Ireland?
Dr Fox
If that is how the Army thinks it can best utilise the increased resources it has, it can make that decision. If, however, it decides that it should increase the quality of its training, the bases from which it operates or its equipment, those will be alternative choices for it. I will certainly make the hon. Gentleman’s point to the chiefs.
Mr Speaker
Order. I can accommodate very few more questions, I am afraid. Time is extremely pressing, and brevity is essential.
Elizabeth Truss (South West Norfolk) (Con)
I am delighted that RAF Marham is to be retained, and I thank the Secretary of State for listening to the strategic and economic arguments put by the “Make it Marham” campaign, which includes 37,000 people of Norfolk and nine local Members of Parliament. Under the plan for the Tornado squadrons, how many will be based at RAF Marham?
Dr Fox
There are no changes whatever to the plans that we have previously announced for RAF Marham. I have to say, it would have been very hard to miss my hon. Friend’s voice on the subject in recent months, when there can hardly have been a single occasion when she did not raise it with me vociferously in the Lobby. I congratulate her.
Dan Byles (North Warwickshire) (Con)
Does the Secretary of State agree that this rebalancing will work only if we can finally stop viewing the reservists and regulars, and the three single services, as separate organisations and start viewing them all as a combined means to an end?
Caroline Dinenage (Gosport) (Con)
My constituents will welcome the news about the 14 Chinook helicopters and the global combat ship, not least because they equate to jobs in my constituency. Will the Secretary of State outline in a bit more detail the delivery times for giving out the contracts and delivering the procurement?
Dr Fox
I hope to be able to do that in the very near future. I hope my hon. Friend will understand that we are now entering a very sensitive period in the negotiations with the company involved, and I would not want to do or say anything that might diminish the MOD’s negotiating hand. However, I will make that information available to her and the House as soon as possible.
Duncan Hames (Chippenham) (LD)
I thank the Secretary of State for his decision on Lyneham, which will be welcomed in Chippenham and right across the north of Wiltshire. Does he still envisage any land disposals from the base there as part of its transition to the new role?
Mr Philip Hollobone (Kettering) (Con)
The welcome step change in TA numbers will require a parallel step change in employer commitment. Given that we have Queen’s awards for business, exports and technology, can we have a Queen’s award for supporting the reserve forces?
Dr Fox
It is very unusual to get two good and constructive ideas for the Government to take away from a session such as this in the House, but I will certainly take my hon. Friend’s idea away. We want to work with employers to make it easier for reservists to be in employment. We want to do that on a voluntary basis, but if necessary we will come to the House with legislation to ensure that it happens.
Mr Laurence Robertson (Tewkesbury) (Con)
Can the Secretary of State give me some assurance about the future of the Defence Storage and Distribution Agency camp at Ashchurch in my constituency?
Mr Speaker
Order. I am afraid that we must move on. We have had contributions from 47 Members. I would like to accommodate everybody, as I usually do, but time is pressing. I am grateful to the Secretary of State for Defence and colleagues.
Local Government Finance
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
With permission, Mr Speaker, I should like to update the House on the Government’s review of local government finance.
The past year has seen the beginning of a long-awaited and much needed shift in power—from national to local, and from Whitehall to the town hall—but if localism is to reach its potential, new legal freedoms must be matched by freedom over finance. That, of course, is not a new idea. Reviews, from Layfield in the 1970s and onwards, have emphasised that increasing local financial control is the key to strengthening local democracy.
Strangely, the previous Government did nothing to reform the system, despite a local government finance Green Paper, a local government White Paper, the balance of funding report, and, of course, the Lyons inquiry. Amazingly, they did not even bother to issue a formal response to Lyons’s 400-page report.
By contrast, the coalition Government are delivering radical change. Over the past year, we have begun the phasing out of ring-fencing, freed up £2.1 billion from restrictions and simplified more than 90 separate funding streams to fewer than 10. That is real progress, but today we are committed to going further still: to restoring councils’ financial autonomy while ensuring a fair deal for all communities, whether in the north or in the south.
In the first phase of our review of local government resources, we have focused on local retention of business rates. As the House will know, the Government have already taken action on business rates. We have introduced a more generous small business rate relief scheme, we are making it easier to get that relief without filling in paperwork, and we have scrapped the unfair and regressive ports tax.
We are now looking at what business rates mean to local councils. Councils in England collect some £19 billion in business rates each year. No sooner does the cash come in than it is gathered up by the Treasury and then redistributed to councils according to a complex formula. That approach has major shortcomings: it denies councils control over locally raised resources; it deprives them of the certainty they need to plan their finances for the longer term; and it creates a disconnection between the success of local businesses and the state of a council’s finances.
Surely it is common sense for the system to encourage councils to boost local jobs and growth. Radical change is needed, and councils themselves agree. In a major step for transparency, my Department is today publishing every representation made in the recent local government financial settlement. There is a common theme. Councils believe that the current system is complex and opaque. They must talk down their successes and talk up their difficulties in order to secure the best possible deal from Whitehall.
To address that, mere tinkering—adjusting the formula here, amending the area cost adjustment there—will not be enough. This Government are determined to repatriate the business rates. Today, I am publishing a consultation outlining our proposals. No more will proud cities or historic counties be forced to come to the national Government with a begging bowl. Councils will have a greater control over cash, helping them to plan for the longer term. Tax increment financing will let them borrow against anticipated increases in rates, giving them a new way to invest in infrastructure, from transport projects to regenerating town centres. Councils should see a direct link between the success of local businesses and their own cash flow. That will create the right incentives for them to work closely with local businesses.
I am determined that the transition to a new scheme will be both responsible and fair. The Government’s overriding priority continues to be deficit reduction. In the spending review, we set out the level of resources available for local government for the next four years. In the interests of financial stability, for the first two years of the retention scheme, we will continue to stick to those spending plans, but we will allow local authorities to benefit from any growth in business rates above forecast levels. Beyond this spending review period, we will look to align more closely local authority functions and total business rate income.
It is also of paramount importance to ensure that our proposals on local government finance are balanced, fair and equitable, creating the right incentives for all areas to grow while protecting the most vulnerable. We propose a number of measures to safeguard them and to achieve that. First, poorer places will share the increase in growth with more prosperous areas. Those places with the greatest dependency should, and will, continue to receive support, while being allowed to keep the products of enterprise, and those places that raise the greatest sums through business rates should expect to make a contribution. A new system of tariffs and top-ups will ensure that we start from a fair base. As my right hon. Friend the Deputy Prime Minister told the Local Government Association last month, we will ensure that no one will be worse off when the new system is introduced than they would have been under the old system.
Secondly, as the House will well know, some areas have strong natural economic advantages, such as high-value industries or concentrations of skilled workers. There will be no cap on the amount of business growth from which such councils can benefit. A council will be better off as a result of growth, but if an area benefits disproportionately from a growth in business rates, we propose to introduce a special local levy to capture a share of that benefit. The money raised should be used in the first instance to fund a safety net, which would protect authorities that experience exceptional shocks to their business rate take.
Thirdly, our proposals include the option of resetting the whole system. If councils no longer had enough resources to meet local needs, the Government could recalculate the level of tariffs and top-ups across the whole system.
Fourthly, support for mandatory and discretionary rate relief will continue. Rate relief to the needy will be unaffected. National discounts and rate relief will continue to be supported, meaning no adverse change for such groups as charities, amateur sports clubs, voluntary groups, those in hardship and those who are eligible for rural or small firms relief.
Finally, we have reflected carefully on what our new system means to business. Businesses—the creators of local jobs and wealth—need stability in this process. They need certainty to plan for the long term, so let me spell this out in no uncertain terms: local firms will see no difference in the way in which they pay tax, or the way in which the tax is set, as a result of these changes.
I am placing in the Library a plain English guide so that hon. Members’ constituents can understand what our proposals will mean for them. We intend that business rates should be repatriated in 2013. We will bring forward a local government finance Bill to give our proposals legal effect. The publication of this consultation begins a debate that I hope will be wide-ranging and constructive. I want to work with all local authorities, representative groups and political parties to build a consensus for lasting change. That consensus will be built on putting power back in the hands of local councils and communities; supporting local jobs and local firms; and creating the conditions for renewed, sustainable economic growth. I commend the statement to the House.
Caroline Flint (Don Valley) (Lab)
I thank the Secretary of State for advance sight of the statement. Obviously, we will look closely at the detail of the Government’s announcement today, because on many policy areas under this Government the devil is in the detail.
Let me make it clear at the outset that we would back a funding system for local authorities that supports jobs and growth and encourages enterprise. In government, we introduced measures such as the small business rate relief to support small businesses and, in consideration of the Localism Bill, we are pushing the Government to go further in devolving powers to cities and councils to enable them to drive economic development. Our amendment is due to be debated in the other place on Wednesday, and I hope that the Secretary of State will confirm today that he will tell his colleagues to support our proposals.
We have been clear that any funding system for local government must be fair. It has to ensure that every authority has the resources it needs to meet the needs of its communities, but today I am afraid that—plain English or not—the Government have failed to spell that out. How does the Secretary of State plan to localise business rates without taking funding from the pockets of our poorest communities? The Secretary of State may just want to talk about year one, but we want to talk about year two and year three, and all the years after that. What will the funding system look like then? And will the Secretary of State be able to guarantee today that no council will be worse off in five years’ time as a result of the reforms that he has announced this afternoon?
It is telling that whenever the Government have been challenged on the long-term effects of their reforms to business rates, they have said that it is up to local councils. What that really means is that, after the first year, the Government are washing their hands of the problem—cutting funding and leaving councils to fend for themselves. We all know how incredibly important this is to local communities up and down the country because, as the Secretary of State knows, business rates make up 76% of the formula grant. Vague, empty assurances just will not cut it. No sleight of hand, temporary transition grants or safety nets can hide the consequences of these reforms. If the wealthiest councils are not giving up the rate they collect locally for redistribution, where will funding for those who rely on redistribution to survive come from?
The Secretary of State referred, very briefly, to the fact that areas that raise the greatest sums through business rates will still, at least in year one, make some sort of contribution to less well-off areas, but a report in this morning’s Times said that councils with large yields would only be required to contribute to a safety net in the form of a regional pot. Will the Secretary of State confirm whether the redistribution that takes place in year one—or beyond—will be on a national or regional basis? If it is on a regional basis, and given the size of the business rates yield in Westminster and the City of London alone, many areas outside London and the south-east will be considerably worse off.
Until the Secretary of State clarifies those points, we will continue to press him on what these reforms might mean. We have heard his assurances before. He assured us that the finance settlement was fair. Then we found out that while places such as Richmond and Surrey Heath were losing less than £10 a head, areas such as Hackney and Liverpool, serving some of the most deprived communities in our country, were losing nearly twenty times as much. He assured us that the cuts to local government funding did not have to mean cuts to services, but even his own councillors do not believe that one. The cuts that we are seeing now, right across the country—to home helps, care services, street cleaning and, yes, to bin collections too—are the consequences of his cuts.
Today, the Secretary of State still seems to expect us to be satisfied by his assurances—to believe that no council will be worse off. If we do not believe what he says, the Deputy Prime Minister told the same Local Government Association conference:
“The new system will start on a level playing field. How far you progress from there is entirely up to you.”
That was backed up by comments by the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell) in response to an Adjournment debate last week. I paraphrase slightly, but he basically said, in answer to a concerned question about what would happen after year one, “You’ll be okay for the first year, but I really couldn’t specify beyond that.” Are those the sort of assurances to give us hope that there will be fair redistribution in the future for those communities in the greatest need?
This proposal just does not add up. The amount of funding going to local authorities over the next four years has already been laid out in the comprehensive spending review. Unless the Secretary of State wants to announce today that he is planning to revisit the level of grant he intends to provide to local authorities, will he confirm that, with a fixed pot of money for any council to gain, other councils must lose? If not, will the Secretary of State tell us where the additional revenue will come from? We know which areas will lose out as a result of these changes. It will be the poorest areas, with the most deprived communities and smallest business base, who will be hit with a triple whammy. First, they saw their area-based grants cut and then they had to deal with the finance settlement, which singled them out for the heaviest cuts; and now, to add insult to injury, the Government want to cut their funding to boost the coffers of the better-off councils by localising business rates in a way that is unfair and that will benefit the best-off at the expense of the most deprived.
However, it will not just be our poorest communities that lose out. Many rural areas and seaside towns—from Southend-on-Sea to Blackpool; in Devon, Somerset and Northumberland—and even Harrow and Enfield in Greater London and Redditch in the midlands will see a loss from these changes.
In government, we were examining the case for tax increment financing, and we will look closely at the details of the Government’s announcement, but however much the Government spin it, it will not be lost on local authorities that the introduction of tax increment financing comes after this Government have already cut local authority capital funding by 45%, and when they have raised the interest rate at which local authorities can borrow. The Government may couch these reforms in the language of localism, but today’s announcement betrays their real intent. Cutting funding to areas with the highest need does not free councils from central control or empower them: it stops them from doing the things their communities need of them.
Yes, we want a funding system that supports jobs and encourages enterprise, but not every area has the same ability to attract investment and new businesses. Not everywhere can be Westminster or the City of London. We will look to support incentives to boost enterprise and put councils and communities in control, but fairness must be at the heart of the system.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Please could Members resume their seats? There is a lot of interest in this statement, so I ask Members to make their questions brief and ask only one question. I also ask Members to rise only if they were in the Chamber for the entirety of the statement. I call Mr Heald—
Oliver Heald (North East Hertfordshire) (Con)
My right hon. Friend the Secretary of State may wish to respond—
Mr Pickles
You can be forgiven for that mistake, Mr Deputy Speaker, as I do not recall a single question in the tirade from the right hon. Member for Don Valley (Caroline Flint).
I am grateful for the right hon. Lady’s welcome, but it seems that it was a pointless gesture to supply her with the statement so far in advance—well in advance compared to what Labour used to do—if she just reads out something that had clearly been typed long before she received it. She should not rely on The Times. She needs to understand what will happen after the first year. The tariff and a levy will continue.
Perhaps we can look at the issue in these terms. If the system is designed to punish our enemies and reward our friends, what will it mean for Doncaster, which includes the constituency of the Leader of the Opposition, the Opposition Chief Whip and the right hon. Lady? Under this system, Doncaster will do particularly well. It will do better under this system than it has for the last five years. Instead of the right hon. Member for Don Valley trying to invent reasons why things will go wrong, she should recognise that this is a way for her to stand up for the people of Doncaster and explain that it is a wonderful place to invest, with a great market and a wonderful rail link. She should get on the side of the people of Doncaster and stop opposing a system that will benefit them.
Oliver Heald
I welcome the message that councils should roll up their sleeves and help their local businesses to create jobs and growth, but can the Secretary of State assure me that the guide and scout hut—I am a guiding ambassador for my area—and all the voluntary bodies that currently get rate relief will continue to do so?
Mr Pickles
I can absolutely give that assurance. My hon. Friend can continue his good work with the guides and scouts safe in the knowledge that the rate relief will remain.
Mr Bob Ainsworth (Coventry North East) (Lab)
I share the concerns of my right hon. Friend the Member for Don Valley (Caroline Flint) that this system will be used to redistribute wealth from the least affluent areas to the more affluent areas—not necessarily in year one but in subsequent years. I listened for an answer to her question but we did not get one.
Mr Pickles
The answer is that roughly £2.5 billion will be transferred from the south to the north of England, and I do not anticipate a significant change to that amount. I was not just picking out Doncaster; places such as Liverpool and Sheffield also do well out of this system—because we are looking at relative growth. The poorer areas will continue to benefit from the levy. Under the present system, any growth or enterprise is immediately siphoned away from the centre. The new system will give places such as Coventry, Liverpool and Doncaster a real incentive by allowing them to keep the extra growth that they generate.
Mr Philip Hollobone (Kettering) (Con)
I declare an interest as a serving member of Kettering borough council. In two-tier authority areas, will it be the borough council that sets the repatriated business rate, and will it be required to give a percentage to the upper tier authority?
Mr Pickles
The rating authority—the district authority —will continue to collect, but the county council and district councils will receive a sum of money equivalent to the existing formula grant and will continue to share in the growth. That means that counties and districts will be able to work in partnership with business, and determine between them a proper relationship. There will be no problem with their ability to determine where the money falls.
Mr Clive Betts (Sheffield South East) (Lab)
I do not think that even the Secretary of State could describe this as a simplification. I am a long-term supporter of the localisation of business rates, but is not the problem that the cut in Government funding to local authorities will mean that by 2013 the totality of that funding will just about equal the business rates, and that if each local authority keeps its own business rate there will be nothing left for redistribution to the authorities with the greatest need, and the least ability to raise money? Is not the fundamental problem the fact that he cannot deliver localisation and fairness in the same agenda?
Mr Pickles
The hon. Gentleman, who is distinguished in these matters—I am rather hoping that the Communities and Local Government Committee, which he chairs, might consider holding a special hearing on it—is entirely wrong. The levy system is there to pick up various authorities that will enjoy extra growth. [Interruption.] If the hon. Member for Worsley and Eccles South (Barbara Keeley) will contain herself, I shall explain. Different parts of the country will enjoy economic growth at different rates. We will ensure that if areas of the country see disproportionate growth—Kensington and Chelsea, the City of London or the authorities next to Lakeside or Bluewater, for example—the money will be distributed. If we did not do that everybody would go and live there, because the pavements would be covered in gold. It is a natural process. Rather than people being on their bended knees, we will ensure that poorer parts of the country not only enjoy the benefits of economic growth through what they themselves achieve, but benefit from prosperity in the wider community.
Mr John Redwood (Wokingham) (Con)
Will the Secretary of State confirm that the increase in the business rate will still be set nationally, in order to reassure business people?
Mr Pickles
My right hon. Friend raises an important point. In order to ensure that the system works, business needs to have certainty and predictability, and because we want growth to be generated, we cannot allow businesses to be used as some kind of favourite cash machine for councils. The rate will continue to be set by formula and from the centre. However, local authorities can work closely with business to bring in new businesses.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
If this is good news, it is certainly a bad day to bury it. There is no doubt that the Secretary of State failed to answer the question asked by my hon. Friend the Member for Sheffield South East (Mr Betts). He has already confirmed that the national business rate will be set by the Government, that growth will be held by the authorities that have encouraged it, and that, somehow, it will also be distributed to authorities that do not get growth. Given that last week the Department answered a question from me saying that it did not know what the spend would be as a comparator between Westminster and Sheffield, how does he think that he can answer this question this afternoon?
Mr Pickles
It would be horrible if businesses had to take the roofs off their factories in order to escape local authorities—as I believe the right hon. Gentleman will recall from his time in office. Sheffield does remarkably well out of this process. Over the past five years it has had above-average growth in its rate base, and I see no reason why it should not benefit from this. Basically, this is about ensuring that local authorities can benefit from growth in their business rates and can be encouraged to work with business. Frankly, it is no good being in favour of repatriating business rates unless we are also prepared to put in place something that is fair and equitable and will look after the vulnerable. I am very sorry that the two hon. Members from Sheffield do not seem to realise that.
Annette Brooke (Mid Dorset and North Poole) (LD)
I welcome the principles behind this proposal—equalisation and incentivisation—but I am concerned about year two. The percentages for how the levy operates and how it is redistributed will be critical. What forms of consultation will the Secretary of State engage in, and what scrutiny of the proposals does he envisage?
Mr Pickles
My hon. Friend raises an important point. She will find waiting for her in the Vote Office a consultation document dealing exactly and precisely with the questions that she raises. It is important to understand that there will be no cliff edge in year two. We need to get away from the idea of dependency and the continuous search for the bottom—whereby local authorities try to outdo each other in saying how bad things are. We should be able to celebrate the places we live in, show things off with pride and give local communities the benefits of growth.
Roberta Blackman-Woods (City of Durham) (Lab)
The Secretary of State will know that the current system of business rates ensures fairness by redistributing income, taking into account levels of need and the differing abilities of local authorities to raise council tax. Will he assure the House this afternoon that authorities such as County Durham that have high levels of need will not lose out under this proposals, beyond year one, to the tune of about £100 million?
Mr Pickles
I am delighted to report to the hon. Lady that County Durham and the north-east have enjoyed rates of growth in business rates above the English average. From what she said, one might think that somehow councils were in general agreement, but if she looks at some of the submissions that we have received she will see—I will take two as examples—that the Association of North East Councils argues that the north-east received a worse deal than the south-east and that deprivation had risen more in the north-east than in London, whereas Brighton and Hove city council disagrees with the area-cost adjustment for Cumbria, Wolverhampton, Wigan, Liverpool and Oldham, but not for its own area. We cannot have a situation where one part of the country is saying, “Give me more money, and take it from them.” What we need is a system of equality that rewards entrepreneurialism and gets local authorities off their knees.
Mr Tobias Ellwood (Bournemouth East) (Con)
I welcome this statement, not least because it dispels many of the myths that have been pedalled by the Opposition. The Secretary of State mentioned in his statement that we would bring in a local government finance Bill. Can he say when it is likely to come to the House?
Mr Pickles
That, of course, is a matter for the Leader of the House and the usual channels. However, my hon. Friend is a perceptive Member, and he will have noticed that we are hoping to introduce the system by 2013, so we are not talking about the long term.
Steve Rotheram (Liverpool, Walton) (Lab)
The American novelist John Updike once said:
“Government is either organised benevolence or organised madness; its peculiar magnitude permits no shading.”
Given that the Government show no benevolence towards Liverpool—perhaps people can fill the in blanks for themselves—can the Secretary of State specifically guarantee that Liverpool will not see a real-terms cut in its funding after the first two years?
Mr Pickles
It is a wonderful thing to be quoting John Updike—but listening to the hon. Gentleman, I sometimes think that he might consider himself to be Master of the Universe, from another novel, “The Bonfire of the Vanities”. Let us be clear: which authority would have benefited the most from this scheme? It is Liverpool, which would have done exceptionally well. If the hon. Gentleman had been paying the slightest attention to what I have been saying, rather than working up some smart quotation, he would have realised that Liverpool does well out of this system, because it—
Mr Pickles
Yes, it is going to do better out of this system, and I hope that the hon. Gentleman will get those on his Front Bench behind the process, because the system is designed to ensure that proud cities such as Liverpool no longer have to rattle the begging bowl. They can bring more money and resources in, and the people of Liverpool are the ones who will benefit.
Bob Blackman (Harrow East) (Con)
Today’s announcement has been long awaited. I commend my right hon. Friend on the steps that he is taking, but will he answer one question? If councils or local authorities want to encourage start-up businesses, will they be able to develop their own schemes to allow payment holidays on business rates, to enable them to encourage growth and enterprise in their areas?
Mr Pickles
The answer is yes—[Interruption]—although, as the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell) says from a sedentary position, they will have to pay for it. My hon. Friend and I have long talked about how to regenerate local authorities, moving them forward and giving them some pride. This is a day to celebrate, and the Localism Bill enables such reform to take place. Indeed, such reform is the clearest example of the other side of the Localism Bill: giving people independence through finance. That is something that we should celebrate.
Heidi Alexander (Lewisham East) (Lab)
The Secretary of State has made great play of linking the fortunes of local businesses to the revenue of local councils. The previous Labour Government had a scheme—the local authority business growth initiative—which did exactly that. Why was one of his first actions in government to get rid of it?
Mr Pickles
The hon. Lady needs to try to remember what LABGI was actually like: it was an absolute disaster. Even the Lyons commission said that it was complex, unpredictable and not transparent. Let us remember that under Labour LABGI was chopped and changed. It was a three-year scheme that was stopped after one year, with the second year payments cancelled, and then it ran for two more years, following two consultations. LABGI totally failed to provide for business growth. The hon. Lady should therefore be rejoicing at the scheme that I have announced, because it does all the things that LABGI promised, without being complex, overbearing and, ultimately, a failure.
Mark Pawsey (Rugby) (Con)
Businesses in Rugby will welcome the news that their payments to the local authority will be used directly to develop local services and attract new businesses. However, will the Minister confirm that provisions will be in place to ensure that other councils do not raise rates too high and drive firms away or out of business?
Mr Pickles
I am pleased to be able to give my hon. Friend that assurance, because for precisely the reasons that he suggested, we are retaining the existing formula, to ensure that councils benefit with real economic growth not increased taxation.
Andrew Gwynne (Denton and Reddish) (Lab)
On 20 June I raised with the Secretary of State the potential impact of localising business rates on Tameside, which could see a drop in its funding of 35.7% a year. He tried to assure me that that would not happen—at least not in year one—but can he explain how the system of tariffs and top-ups will work, at no cost to central Government, if prosperous areas are to keep the proceeds but poorer areas are to be fully reimbursed? The maths just does not add up.
Mr Pickles
I suspect that the hon. Gentleman might not have given my initial statement the attention that he perhaps should have, because we made it absolutely clear that no council would lose out in year one—that funding continues—and local councils such as his will be able to enjoy the benefits of growth. Under the current system his local council might get a “Thank you” from the Secretary of State for showing initiative and bringing in new business, but the Government then immediately take the money back. We think that that money should stay with his local authority.
I remember the hon. Gentleman’s previous question, and I said then that I thought he should defect to us. I still think that he should defect to us, but when he has an opportunity to read the submission document, I suspect that we might be able to arrive at a consensus, because what we are doing is not intended to punish his authority; rather, it is intended to unshackle his authority, for all the potential that it has. If you do not mind my saying so, Mr Deputy Speaker, I really do not think that the counsels of despair from the other side of the Chamber are reflective of the dynamism and entrepreneurialism that exist in local authorities.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I welcome the fact that the Secretary of State has included a significant redistributive element in his proposals. However, may I remind him that it remains the case that those authorities that have to do most to secure more business investment in the way of infrastructure development still have the least money with which to do it? The local government system really needs to take better account of that fact.
Mr Pickles
The local government system ensures considerable redistribution from more prosperous areas to less prosperous areas. One thing that will very much warm the cockles of the Deputy Prime Minister’s heart is TIF—tax increment financing—which will give predictable incomes from business rates, ensuring that local authorities will be able sensibly and prudently to borrow against that.
Mr Iain Wright (Hartlepool) (Lab)
I am concerned that my constituency will lose out by something in the region of £20 million each year, which obviously comes on top of the £5 million following the end of the working neighbourhoods fund, the slashing of council budgets by a quarter and the abrupt cancellation of the housing market renewal initiative. Will the Secretary of State guarantee that funds will flow back into Hartlepool after year two, and that the Government will invest for the long term in my town, rather than embedding poverty and deprivation?
Mr Pickles
The hon. Gentleman should speak up for Hartlepool. [Hon. Members: “He is!”] That is, he should speak up in a way that he did not—or his predecessor did not—when the Labour Government took away area-based grants. When they did that, there was not a whimper from the Labour Benches. It is because of the good services of the coalition that we are able to introduce some kind of transition. The short answer to the hon. Gentleman’s question is yes.
Andrew Percy (Brigg and Goole) (Con)
My right hon. Friend referred in his statement to port rates. The Valuation Office Agency is now going round rating certain berths in Goole as sole-use berths, which means that businesses in my area are going to be significantly affected vis-à-vis other ports on the Humber. Is he going to review the role of the VOA as we move forward on local government finance?
Mr Pickles
Fortunately for the fate of the VOA, it is not accountable to me. It is a constant source of amazement and entertainment, but I hope that it will see reason so far as my hon. Friend’s constituency is concerned.
Clive Efford (Eltham) (Lab)
Can the Secretary of State tell us what local authorities will be doing to generate growth under the new scheme that they are not doing now?
Mr Pickles
God help us if the hon. Gentleman does not understand that. Local authorities work hard to bring new things into their areas and to ensure that there is a balance. The difference between this system and the existing system is that, at the moment, despite everything that the local authorities do, we take the money away from them and it goes back into a central pool. In future, they will keep that money, which will give them an incentive—[Interruption.] The hon. Gentleman clearly does not seem terribly familiar with the entrepreneurial system that exists. His counsel of despair is that we cannot do anything and should not do anything but continue to stand here with our hands out. That is not really a policy; it is a surrender.
Henry Smith (Crawley) (Con)
I very much welcome my right hon. Friend’s statement. Will he confirm that, contrary to the call from the Labour party, business rates will not be raised for small firms in my constituency or elsewhere in the country?
Mr Pickles
My hon. Friend makes a reasonable point. He will recall that we have introduced a simplified system for small businesses, to ensure that in the long term they will not have to fill in forms continuously in order to get the necessary rebate. Another important difference is that, unlike what was promised in the Labour manifesto, we are committed to keeping the formula. We are not going to increase the level of taxation, because to do so would have a disastrous effect for firms across the country and for the small firms in my hon. Friend’s constituency.
Mrs Mary Glindon (North Tyneside) (Lab)
Business rates from retail and commercial developments are at least five times higher than those from manufacturing in the north-east, but manufacturing is worth £7.5 billion to our economy. Is there a danger that manufacturing could lose out as retail and commercial developments are favoured as a better business rate bet?
Mr Pickles
I have obtained the briefing from the Association of North East Councils that the hon. Lady has just cited. It takes no account whatever of the fact that there is a tariff and a top-up. Opposition Members seem to think that we are dealing with some kind of Monopoly board on which local authorities can decide between retail and other developments. The truth is that the market will decide these things. Where the local authorities fit in is by not getting in the way of the market but working with it and deciding to go for growth. Opposition Members cannot honestly believe that local authorities can just sit there and say, “We’ll have a supermarket on every corner.” They cannot seriously believe that that is what the real world is like. Our proposals will remove a lot of the obstacles to growth.
Jackie Doyle-Price (Thurrock) (Con)
My borough of Thurrock currently collects £92 million a year in business rates, but keeps only £52 million. Much of that contribution is generated by two areas, West Thurrock and Tilbury, which also happen to be the least affluent parts of my constituency. Does my right hon. Friend agree that it is much fairer if those communities benefit from the business rates that are generated in their area?
Mr Pickles
My hon. Friend makes a reasonable point. It has been said many times at this Dispatch Box that the problem with the existing system is that it does not take into consideration the difference between poverty and sparsity. There are whole sections of Essex and the Thames corridor where poverty exists but is simply not recognised by the formula. Our system will react very quickly, because the business rate value can show, in year, where things are going right and where they are going wrong. Many elements of the existing formula are rather outdated and very unreliable.
Dr Alan Whitehead (Southampton, Test) (Lab)
I am reminded of Garrison Keillor, the American humorist, who describes Lake Woebegone as a place where
“all the children are above average.”
Does the Secretary of State intend to have a year zero in order to achieve the outcome he has described, perhaps in 2013, whereby the present arrangements for business rates would be frozen and the change would start thereafter? Or is he proposing a change before that date? If he is proposing a change after that date, what does he mean by an area that “benefits disproportionately” from growth? Will he define “disproportionate” for us?
Mr Pickles
Of course I would be happy to do that. I am sorry that the hon. Gentleman’s joke fell rather flat, but it was funny in retrospect. We will be adjusting the figures in 2013, assuming that we have leave to bring in the Bill, and we will provide an update on the latest figures because there are certain problems, particularly with regard to population. Members should understand that the figures will be based on the fact that relative need was increased to 83% so this is a very progressive settlement in terms of proportion, particularly for areas of relatively low income. Once the figures have been arrived at, we will continue with the new system.
Martin Vickers (Cleethorpes) (Con)
I welcome the Secretary of State’s announcements; anything that can be done to incentivise local authorities will obviously be beneficial. May I just query the section of his statement in which he talked about “a special local levy to capture a share of that benefit”? Local levies can of course sometimes be set at such a level as to create a disincentive. Will he elaborate on the level that he is considering?
Mr Pickles
I shall continue to answer the previous question as well, as I forgot to answer the point about disproportion. We need to understand that business rates grow in different parts of the country at different rates. If we did not have a levy, places such as Westminster, and Hammersmith and Fulham, would grow very quickly, and the amount of money coming in would be in the teens and twenties, although we would normally expect growth to be in single figures. We would therefore need to ensure that a levy was taken off, and we would use a sliding scale to achieve that. I always want to be in a position to ensure that, no matter how fast the growth—and even if it was only a tiny few pence in the pound—local authorities would continue to benefit. The more they grow, the more levy they will contribute to other parts of the country.
Helen Goodman (Bishop Auckland) (Lab)
Taken to their logical conclusion, the Secretary of State’s proposals will mean that County Durham will lose £130 million while the City of London and Westminster will gain £1.5 billion at the end of the process. Does not that demonstrate not only that the system is unfair but that the Secretary of State is further rewarding financial services while kicking manufacturing in the teeth?
Mr Pickles
I want to be absolutely clear: that is simply not going to happen. There will be no movement of millions of pounds from one part of the country to another, except in this sense: the north of England will continue to see money moved from the south—not out of charity—to ensure that, as part of England, it enjoys the growth in national wealth. The idea put about by Opposition Members that this means that County Durham is going to lose £x million is risible. Labour Members need to get themselves a policy, because that kind of opposition is simply pathetic.
Dan Byles (North Warwickshire) (Con)
I warmly welcome this proposal, particularly the plain English guide attached to it—would that more Secretaries of State did the same! Is my right hon. Friend aware that the Labour-run Nuneaton and Bedworth borough council in my constituency owns many empty shops in the town of Bedworth? That drags down the town, but the council appears to make no effort to try to fill these shops, get them off the books and get them generating income. Will my right hon. Friend confirm that the measure he has announced today will give the council the incentive to do that and get those shops filled?
Mr Pickles
They will now. The folks of Nuneaton are about to see a lot more shops being filled. This is not unusual for any council anywhere in the world—except for England. Only in England do we have an incentive for our areas to get worse. If we were to look at councils in France, Germany and America, we would see the councillors sit down at the beginning of the year and then at regular intervals to say, “We’ve got empty shops; what can we do to fill them? How can we attract national names to come to Nuneaton to make the difference?” I guarantee my hon. Friend that that is exactly what will happen with his local council very soon.
Diana Johnson (Kingston upon Hull North) (Lab)
I have listened very carefully to what the Secretary of State has said this afternoon, most of which I found to be gobbledegook. The thrust seems to be that everyone is a winner in this process. Let me tell the right hon. Gentleman that, barring an economic miracle in Hull, we will lose about £45 million by 2014-15. That is based on the figures produced in today’s proposal. How is that going to help economic regeneration and lift people in my constituency out of poverty?
Mr Pickles
The hon. Lady should know better. Frankly, there is no point in just hurling vulgar abuse across the Chamber. She knows, and we know, that under this system a proud city like Hull has a better chance of being able to enjoy the fruits of its labour in bringing in investment. The hon. Lady should start speaking up for the city of Hull rather than decrying it. It is a fine city in the mouth of the Humber; it is time that she spoke up for Humber.
Heather Wheeler (South Derbyshire) (Con)
I welcome my right hon. Friend’s announcement. The people of South Derbyshire, with their go-ahead South Derbyshire district council, will be at the forefront of bringing this forward. For four years, we have been saying that we are open for business. This is absolutely excellent; this is what we need in the midlands today.
Mr Pickles
I am grateful for my hon. Friend’s comments. This system was designed for the go-getter that she undoubtedly is, and it will do a lot of good for her council. We will ensure that this system releases local authorities from the shackles of failure.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Every time the right hon. Gentleman utters the words “fair” and “equitable”, we become much more sceptical on this side of the House as we realise what is happening under this scheme. While Westminster will roar ahead over the next few years, councils like mine in Enfield in the outer boroughs of London will do very badly, yet many of the people who live in Enfield work in Westminster, and many of the businesses in Westminster are run by people from Enfield so there is an interdependence. What recognition will there be in the system that although many people contribute to the so-called growth in local authority areas, not all of them live there?
Mr Pickles
The hon. Gentleman raises a very important point. Already the London councils are working on a pooling system for the receipts of the business rate, and are fairly well advanced in their planning. The advantage of having pooling across London is that any growth in Westminster—the hon. Gentleman is right to say that it will indeed be great—will be shared with the people of Enfield. I urge him to look at the part of the consultation paper that deals with pooling. He makes a very reasonable point and something clearly has to be done about it. I would expect other parts of the country also to pool so that rich authorities and poor authorities can both enjoy the benefits of growth.
Brandon Lewis (Great Yarmouth) (Con)
Does the Secretary of State agree that one of the most exciting parts of his statement is the opportunity opened up for local authorities through their freedom so that areas like Great Yarmouth, working with the county council and local businesses, might finally be able to invest in infrastructure and see the development of projects like the third river crossing, which were never possible under the previous Government?
Mr Pickles
That is certainly true, given the ability to have tax increment financing schemes in the projected Bill. That would certainly help my hon. Friend’s constituency, which has not done particularly well out of the current grant system. I think that, with the help of the distribution, this has the potential to provide the good people of Great Yarmouth with an opportunity to develop the front and to look to that additional crossing.
Stephen Mosley (City of Chester) (Con)
One of the advantages of enterprise zones is that businesses based on them will gain from business rates. Will my right hon. Friend confirm that local authorities with enterprise zones in them will not lose out as a result of this proposal?
Mr Pickles
My hon. Friend makes a very reasonable point. It is important for maintaining the advantages brought by enterprise zones that we do not count that money at all so that they get that sum absolutely free of any changes to top-up or tariff.
Gavin Barwell (Croydon Central) (Con)
Can my right hon. Friend clear up some of the confusion of Opposition Members by confirming that the authorities that will benefit relatively from what he has announced today are not those with a large business rate base or those in particularly affluent areas, but those that will enjoy relatively high economic growth in future? At a time when our country is crying out for economic recovery, surely this is a strong and sensible piece of public policy.
Mr Pickles
My hon. Friend absolutely sums up the case for this change. It will ensure that local authorities enjoy the benefits of growth and that they will be in a position to generate more income directly by their actions.
Neil Carmichael (Stroud) (Con)
Does the Secretary of State agree that linking increased yield of business rates to the activities and performance of councils really will help economic growth, particularly when localism too is thrown into the mix?
Mr Pickles
My hon. Friend makes an interesting point. By itself, this change to the way in which the business rate is collected and distributed would not bring about the necessary change. It is only when it is combined with the full effect of the Localism Bill, particularly the power of general competence, that its full importance can be felt.
Mr Marcus Jones (Nuneaton) (Con)
Under my right hon. Friend’s proposals, will councils be given the autonomy to encourage growth within our town centres—for example, by being able to offer incentives on non-domestic rates to fill our empty shops?
Mr Pickles
My hon. Friend raises an important point. The Localism Bill enables local authorities to be able to offer those kind of discounts, clearly demonstrating how the Bill and the reform of local government finance combine. I repeat that, despite the hot air and anger, it is our intention as far as possible to move forward on the basis of consensus. I hope that, when Members reflect and look at the consultation document, our proposals will receive enthusiastic support on both sides of the House.
National Policy Statements (Energy)
21:02 - The House having divided: - Ayes: 267 / Noes: 14 - Question accordingly agreed to.
Madam Deputy Speaker (Dawn Primarolo)
I suggest that, for the convenience of the House, motions 1 to 6 should be debated together, and should be voted on at the end of the proceedings.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I beg to move motion 1,
That this House takes note of and approves the Overarching National Policy Statement for Energy (EN-1), which was laid before this House on 23 June.
Madam Deputy Speaker
With this we shall consider the following:
Amendment (e) to motion 1, leave out from ‘of’ to end and add
‘the Overarching National Policy Statement for Energy (EN-1), which was laid before this House on 23 June, but declines to approve it until it is amended to insert in section 5.14.7 a direction to the Infrastructure Planning Commission to consider the impact on the waste hierarchy of energy-from-waste generating stations of over 50MW.’.
Motion 2—National Policy Statements (Fossil Fuel Electricity Generating Infrastructure)—
That this House takes note of and approves the National Policy Statement for Fossil Fuel Electricity Generating Infrastructure (EN-2), which was laid before this House on 23 June.
Amendment (b) to motion 2, leave out from ‘of’ to end and add
‘the National Policy Statement for Fossil Fuel Electricity Generating Infrastructure (EN-2), which was laid before this House on 23 June, but declines to approve it until it is amended to include energy-from-waste generating stations to the list of covered technologies in section 1.8.1.’.
Motion 3—National Policy Statements (Renewable Energy Infrastructure)—
That this House takes note of and approves the National Policy Statement for Renewable Energy Infrastructure (EN-3), which was laid before this House on 23 June.
Amendment (a) to motion 3, leave out from ‘of’ to end and add
‘the National Policy Statement for Renewable Energy Infrastructure (EN-3), which was laid before this House on 23 June, but declines to approve it until it is amended to omit energy-from-waste plants’.
Motion 4—National Policy Statements (Gas Supply Infrastructure And Gas And Oil Pipelines)—
That this House takes note of and approves the National Policy Statement for Gas Supply Infrastructure and Gas and Oil Pipelines (EN-4), which was laid before this House on 23 June.
Motion 5—National Policy Statements (Electricity Networks Infrastructure)—
That this House takes note of and approves the National Policy Statement for Electricity Networks Infrastructure (EN-5), which was laid before this House on 23 June.
Motion 6—National Policy Statements (Nuclear Power Generation)—
That this House takes note of and approves the National Policy Statement for Nuclear Power Generation (EN-6), which was laid before this House on 23 June.
Charles Hendry
This debate is intended to fulfil our commitment to parliamentary approval of the national policy statements. The motion constitutes a further important milestone in the Government’s programme to secure affordable low carbon energy which will make the UK a truly attractive market for investors in energy infrastructure.
Let me briefly explain the background to the national policy statements and the purpose of each one. I shall, of course, be happy to take interventions as I go through them. Members may find it convenient to concentrate on the subjects individually, but I am mindful of the number who wish to speak in the debate.
The national policy statements do not contain new energy policy or change the standard for consenting projects, but they set out clearly and for the first time the national policy that must be considered before the granting of consent to infrastructure projects that are examined by the Infrastructure Planning Commission and, when the Localism Bill has been enacted, by its successor. The policy statements are critical to the new fast-track planning system that will encourage developers to embark on energy projects without facing unnecessary hold-ups. It will also ensure that local people can have their say about how their communities develop, and that decisions are made in an accountable way by elected Ministers.
We urgently need new electricity-generating infrastructure to replace our ageing power stations. If we are to meet our ambitious carbon targets, we must electrify much of our industry, heating and transport sectors. That could mean doubling our electricity generation, with about 60 GW of new capacity coming on line by 2025. Over the next 10 years, a quarter of our generating capacity will close as old or more polluting plants close. As the reserve margin of spare generating capacity falls, the risk of interruptions to our energy supply rises.
More than half the new capacity that we urgently need should be met with renewable energy, and a significant proportion of the remaining capacity should be met with other low-carbon technologies. That is a real challenge. Business and industry tell us that investment in infrastructure will help them to create growth and jobs. By setting out the need for new energy infrastructure, including a mixed portfolio of electricity generation, the national policy statements will unlock that investment and provide market certainty.
As Members will know, having considered the Energy and Climate Change Committee’s report and responses to the first public consultation in 2010, we made changes to the draft national policy statements and accompanying documents. Given the nature of the changes that we made, we decided to consult on the revised draft national policy statements between October 2010 and January 2011. Alongside our public consultation was parliamentary scrutiny of the revised draft statements. That work was undertaken by the Energy and Climate Change Committee, which considered the changes from the drafts that were consulted on by the previous Administration. The Committee then published a report, setting out 18 recommendations on the revised drafts.
We intend the national policy statements to be approved if that is the will of Parliament. My right hon. Friend the Secretary of State will designate them as quickly as is reasonably practicable. It has been suggested that designation should have been delayed until after we had reviewed them in the light of the electricity market reform White Paper which was published last week, but we do not think that delay is either necessary or desirable, as the policies have been developed in parallel to ensure they are consistent.
Paul Flynn (Newport West) (Lab)
Does the Minister consider it wise to omit any reassessment of the costs of nuclear power, given that many countries have abandoned their nuclear power plans in the wake of Fukushima? Has he thought about a possible increase in costs, especially to guard against a natural disaster or a terrorist attack?
Charles Hendry
The hon. Gentleman, who understands these issues, will be well aware that the national policy statements concern not the costs of different technologies, but the planning consents for them. If companies decide that the costs have risen and are not affordable, and that they will not achieve a return, they will not go ahead with the investment, but that is not the subject of this debate. However, we have conducted a thorough assessment of the lessons that need to be learned after Fukushima to determine whether any adaptation is needed in the policy statements. That is why we have reflected further, and have taken more time to consider them.
The overarching national policy statement, EN-1, sets out the need for each of the different energy infrastructure technologies. It makes it clear that we need a diverse mix to provide affordable, clean energy. It explains the Government’s policy on clean coal with carbon capture and storage and the need for gas and biomass electricity generation plants to be “carbon capture ready”, and sets out the part that renewables and new nuclear power stations will play in meeting our emissions reductions targets.
Albert Owen (Ynys Môn) (Lab)
As the Minister will know, the Select Committee was anxious for wave and tidal generation to be included in the policy statements. When does he intend to produce a national policy statement covering those important new technologies?
Charles Hendry
The hon. Gentleman knows that we attach tremendous importance to the potential of marine technologies. He will also appreciate that the national policy statements relate to major infrastructure projects involving more than 50 MW. There is currently no possibility of any marine technology of that scale. The national policy statements can be adapted in due course and will be reviewed over time, and as technologies of that scale emerge, it will be possible for a policy statement to be established. However, the schemes that we are currently seeing are much smaller, and can therefore be dealt with through the other planning procedures that cover them.
The overarching national policy statement explains the need for transmission networks, which are vital to get electricity into the grid—from locations where there is no existing network infrastructure—and to consumers. It also explains the need for gas and oil infrastructure to ensure that we can take advantage of diverse supply options for gas and oil. Some fear that our policies will lead to a “dash for gas”. We understand their concerns, and we will keep a close watch on the electricity generation that is coming on line. If in the future we decide that our policies are not having the desired effect, we will review them, but the national policy statements are not the place for that review.
John Robertson (Glasgow North West) (Lab)
As my hon. Friend the Member for Newport West (Paul Flynn) pointed out earlier, other countries are giving up nuclear power, and they will make a “dash for gas” to meet their base load. Has it occurred to the Minister that we may have to do the same in relation to our own base load?
Charles Hendry
The hon. Gentleman is right. We have considered that, and I look forward to giving evidence to him and his colleagues on the Select Committee tomorrow morning.
This is a permissive framework, which involves planning consents. It is not a case of people going ahead and building the plants. A range of other investment decisions need to be made in order for the final decision to be made, but at this stage what is critical is the establishment of a structure so that people understand how the planning system will work.
Dr Alan Whitehead (Southampton, Test) (Lab)
The number of gas-fired power stations that are under way, constructed or at an advanced stage of planning substantially exceeds the figures set out in EN-1. Would the Minister be prepared to table amendments to it, in the light of the reality of actual construction as opposed to what is in the document?
Charles Hendry
I hope I can reassure the hon. Gentleman that that will not be necessary. When the decision is finally made, it will be legitimate to take account of the fact that if the disbenefits were considered to outweigh the benefits, consent would not need to be given. If it were felt that consent was being given to too much higher-carbon generation capacity and therefore that environmental issues—low-carbon issues—were seen to be more important, that would be a material factor to be taken into account. That can already be done through the system. The hon. Gentleman is absolutely right to point out that we have a significant amount of consented gas for which there is not currently construction. That also brings us to part of the problem: at the moment, we are not seeing anything like enough investment and construction work in our energy infrastructure.
Mark Tami (Alyn and Deeside) (Lab)
As nuclear stations take 10 years to build and the older stations are closing, and as renewables are not generating as much energy as the Minister would like, is it not inevitable that gas will fill the vacuum?
Charles Hendry
There is a continuing need for gas, and the hon. Gentleman has set out the time scales accurately. We face a challenge: we have to get twice as much investment in our energy infrastructure in every year of this decade as was achieved in the last decade. We need a step change in those investment levels, but as he rightly says, there will be a continuing role for gas as well.
Mr Iain Wright (Hartlepool) (Lab)
Is the Minister worried about China? It is continuing with its nuclear programme, and about half the world’s nuclear generators will be built in China in the next 20 years or so. Skills, capability and resources will therefore gravitate towards the east. Will that place difficulties on our ability to keep the lights on?
Charles Hendry
We all have to be very mindful of the situation in China. In the time it will take us to build one nuclear power station in this country, it will be building dozens. We have to understand the pressure that that creates for the construction process and the skills challenges. However, I have visited the hon. Gentleman’s constituency and have seen, along with him, the investment going into nuclear skills there, and more generally into the low-carbon economy, and I am very encouraged by what I have seen not only in Hartlepool, but in many other places around the country: businesses, councils, trade unions and others are working together to ensure we have the necessary skills to deliver the construction of plant.
This is not the time for explicit single-sector emissions caps. We recently set the level of the fourth carbon budget in line with the Committee on Climate Change recommendation. This amounts to a 50% reduction in emissions against 1990 levels for the period between 2023 and 2027. It would be wrong to introduce new planning conditions for one part of one sector in the national policy statements when we have already introduced legislation on emissions for all sectors together. Each technology-specific NPS sets out particular issues that apply. As the need case in the overarching NPS states, it is vital to have investment in clean fossil fuels to ensure that we have a secure supply of diverse energy generation.
Caroline Lucas (Brighton, Pavilion) (Green)
The Tyndall Centre has said that even the targets of the fourth carbon budget would provide only a 56% to 63% chance of avoiding a 2° C rise in average global temperatures. Is it not therefore the case that even the fourth carbon budget is not setting the right targets?
Charles Hendry
The hon. Lady knows what has happened. The Committee on Climate Change has made recommendations to us, and we have responded to them, and we were widely seen as one of the world leaders in this respect; the United Kingdom is well ahead of most other countries. It would be helpful if she would sometimes welcome the changes and the advances being made, rather than always saying it is not enough. It is appropriate to recognise in the course of these debates that Britain has shown real global leadership. There is cross-party agreement on that, and it should be welcomed.
The fossil fuels NPS—EN-2—explains what drives site selection for power plants and the practical requirements for carbon capture and storage. Together with relevant bits of EN-1, the EU emissions trading scheme and our own policies on an emissions performance standard, it will give developers confidence that there is a stable regime under which they can invest in the fossil-fuel generating stations that are necessary to provide the essential back-up for intermittent generation from some forms of renewable energy, or perform as low-carbon generators themselves, fitted with carbon capture and storage.
Malcolm Wicks (Croydon North) (Lab)
Will the Minister update the House on the progress of the carbon capture and storage programme? When does he expect the first major CCS project to be up and running cleanly?
Charles Hendry
I welcome the right hon. Gentleman’s interest and expertise in these matters. As he knows, we took on some of the work of his Administration by allocating an extra £1 billion for the first full-scale CCS project—the largest amount any Government anywhere in the world had given to a single project. Over recent weeks, we have been negotiating very carefully with the interested parties about how we can deliver what we want in terms of the knowledge transfer and output for the CCS project, based on what they believe is achievable for the funding. Those discussions are ongoing, and we hope that they will be brought to a conclusion with the first plant being operational by 2015.
We have also said there will be three other projects, and we have evolved the policy we inherited from the previous Administration by saying that one of them should be on gas, in recognition of the long-term role gas is likely to play and the significant interest in this country in developing gas technologies. At a time when other Governments are slipping back their time scales for CCS, it is encouraging that the UK programme has been moving forward. I hope the right hon. Gentleman will warmly welcome that.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
My hon. Friend the Member for Hartlepool (Mr Wright) mentioned China. Does the Minister share my concern about the number of coal-fired power stations still being built there, in that the development of that CCS technology may be accelerating in places other than the UK and we may lose out on the opportunity to export some of the skills and expertise that we might otherwise be able to export if things were to move a little faster here?
Charles Hendry
The hon. Gentleman makes an important point. When the original competition was set out by the right hon. Member for Doncaster North (Edward Miliband), the thinking behind it was that we should be developing technology in this country that we could sell to the Chinese. The reality is that the Chinese are rapidly trying to develop technology that they want to sell to us. We have a strong opportunity to lead. We have some of the world’s leading technological and academic experts, and we have fantastic sequestration facilities in the depleted oil and gas fields in the North sea. The UK should be in a position to lead in this area, but we are mindful of the point the hon. Gentleman makes: other countries are equally determined to get there ahead of us. That is why the focus on delivering those four plants has been so important.
The renewables NPS—EN-3—addresses sustainability of biomass, how waste incineration plants fit into the statutory waste hierarchy by using waste that would otherwise go to landfill, and specific impacts of onshore and offshore wind farms, including visual impacts, noise from onshore wind farms and collision risks for birds and bats.
Mr Andrew Love (Edmonton) (Lab/Co-op)
As the Minister has just suggested, incineration is considered in the renewable policy statement, yet it produces significant quantities of CO2. Should it not be redesignated under the fossil fuel category?
Charles Hendry
It is important to put this in its proper place in the waste hierarchy. There is a clear commitment between us and the Department for Environment, Food and Rural Affairs. The waste policy it has recently produced sets out that incineration should be considered for electricity generation only after all other options, such as recycling and reuse, have been looked at. We also recognise, however, that it is better to try to find ways of using it for electricity generation than to put it into a landfill site with the inevitable consequence of the methane gas it will emit, which is many times more dangerous than CO2. This needs to be seen as part of the waste hierarchy, to which we are absolutely committed, but we must also recognise that the generation option is better than going down the landfill route.
Nicky Morgan (Loughborough) (Con)
I am encouraged by what the Minister has just said, but would it not be better if the statement—or the Minister now, on the record—were to make that clear? He will be aware that many constituents throughout the country are very unhappy about the idea of having incinerators located near them, and if we want to move to a low-carbon economy we must take people with us.
Charles Hendry
My hon. Friend makes an important point. There is a strong case for smaller, local waste facilities because people understand the connection between them and their local community and the waste it has produced. We are also seeing a range of new technologies coming on, such as pyrolysis and the gasification process, which are very clean technologies and which we are very keen to encourage. The national policy statements apply only to larger facilities. My concern about any suggestion of taking this element out of the national policy statements is that the Infrastructure Planning Commission would then have no guidance whatever in making a determination on a large plant. That would create havoc; it would be much worse for local communities and it would create many additional anxieties. Therefore, the way in which we have incorporated it in the statements, which are to be read in conjunction with the waste review, is the right way to approach this in an holistic manner.
Jeremy Corbyn (Islington North) (Lab)
The Minister is discussing renewables and technology. Is he not concerned at the relatively weak state of British manufacturing’s capacity for solar generation, either for hot water or for electricity? Does he envisage Government intervention to try to strengthen those necessary and valuable industries in order to take advantage of an very fast-growing market?
Charles Hendry
Again, the hon. Gentleman raises an important point. We have made changes to the feed-in tariff to focus on microgeneration, as was the original intention. The nature of the tariff will drive forward significant investment in solar. We have to recognise that the UK is not a game changer in the pricing structure of solar, because our market will always be smaller than that of countries where there is greater potential for solar. Nevertheless, we want solar to achieve what it can in this country, and we want an industry to grow up to support that and deliver the products.
Andrew George (St Ives) (LD)
The Government have a coherent and ambitious plan for major renewables. In addition to the green investment bank, the energy market reform and the fourth carbon budget, how will the national policy statement aid genuine renewables more than the other energy sources covered by these statements?
Charles Hendry
The purpose of the national policy statements is to facilitate the planning process. What we hear time and again from people keen to invest in different parts of our energy infrastructure is that the planning process is one of the biggest blocks to their being able to make progress—huge amounts of renewable energy are blocked in the planning process. The statements are intended to give greater clarity to investors and to those who are making the decisions, so that our process can not only be much faster and much more constructive, but can provide appropriate engagement for local communities, because we are equally committed to ensuring that their voice is heard in decisions on how their communities evolve.
Charles Hendry
I hope that the hon. Gentleman will understand that, given the number of Members who wish to speak in this debate, it is fair to take only one intervention from each Member.
Mike Weatherley
We have been talking about waste disposal, particularly in the nuclear industry. The statement refers to underground storage, which is unproven but technically feasible. Does the Minister agree that it is pointless going ahead with a nuclear programme unless we have somewhere to dispose of the waste?
Madam Deputy Speaker (Dawn Primarolo)
Order. Before the Minister rises to his feet, this would be a good point for me to inform the House that this debate is due to end at 9 o’clock, there have to be wind-ups at the end and 18 Members in the Chamber have already indicated that they wish to take part. There is going to be a time limit and, at the moment, it is getting shorter and shorter. So those who wish to speak might want to hold back on their interventions.
Charles Hendry
Thank you for your strictures, Madam Deputy Speaker. I will be very observant of them in considering which interventions to take.
My hon. Friend does make an important point. We are working with communities that have volunteered to take forward some of this work to see whether there are appropriate locations for a waste disposal facility, and we are committed to making this happen. We have expressed an ambition that we should have such a facility open 10 years earlier than previously planned—by 2029 rather than at the end of the 2030s. I hope that that will show to him and others our commitment in this area.
On the renewables national policy statement, we do not specify areas in which to locate wind farms, nor have we placed limits on generating capacity in each area, although, as in all cases under the Planning Act 2008, it will be open to the Infrastructure Planning Commission—or, through the Localism Bill, to Ministers—to refuse an application for consent if it considers that the adverse impacts outweigh the benefits. To complement the electricity generation national policy statements, policy statement EN-4 addresses requirements for gas and oil infrastructure and EN-5 addresses those for electricity networks. Changes in the pattern of supply and demand, and shifts in technology mean that we will need more of both those types of infrastructure in the coming decades.
Electricity transmission networks most familiarly mean overhead lines supported on pylons, and it is only that type of connection that requires Planning Act consent. Considerable concern has been expressed about the impact on landscapes of an increasing number of networks. The overarching NPS and the electricity networks NPS make it clear that developers should consider undergrounding or subsea cables for transmission networks. The electricity networks NPS also explains that although it would be preferable for grid connections to be applied for at the same time as the generating infrastructure it is associated with, there are circumstances where this may not be economically sensible. We have also stated that the Holford rules should be followed when developers are planning the routes of proposed overhead lines. That actually strengthens the policy, because before this NPS the use of the Holford rules by developers was voluntary.
Tessa Munt (Wells) (LD)
I hear what the Minister says. I hope that once the IPC has some guidance, perhaps from the failure of the KEMA study, Sir Michael Pitt and the IPC will have some other way of considering the undergrounding and subsea options on the basis of costs that are realistic and that they will be judged against the work that has been done, both in this country and abroad.
Charles Hendry
I could sense that my hon. Friend was going to intervene even before she had risen to her feet, because she has been such an assiduous campaigner on these issues. That work is being taken forward. We want very robust evidence about the alternative costs, and I hope that she is reassured by my words about the need to consider alternatives.
The sixth NPS is on new nuclear power stations. It sets out the issues to be considered as part of the planning process where new nuclear power stations are proposed; a number of other matters are, of course, considered under other regimes. It also identifies the eight sites that we have concluded are potentially suitable for new nuclear development. That provides an important degree of clarity for industry and communities over the next few years. However, any application to build a nuclear plant on those sites still needs to go through the same rigorous processes as any other proposal under the Planning Act. The nuclear NPS also clarifies how the IPC should consider any issues regarding waste during its examination of an application and the role of the regulators and their relationship with the IPC. In addition, we have set out how applications for non-listed sites are treated by the IPC.
Damian Collins (Folkestone and Hythe) (Con)
My hon. Friend knows that my constituents are disappointed that Dungeness was not included on the list of eight sites approved in the NPS. If there were problems with one or a number of those eight sites, would there be scope for allowing a site such as Dungeness to come back into play?
Charles Hendry
We were not limited to eight sites in the process that we went through. We decided that eight of the sites that developers had proposed to us were appropriate and could realistically be developed by 2025. Our concerns about Dungeness related to the special area of conservation, which is protected by law, and we were not persuaded that we could comply in that regard if the site was being developed. We have said that in every other respect Dungeness fulfilled the criteria, so if the special area of conservation issues can be satisfactorily resolved there is no reason why Dungeness could then not come forward separately.
David Mowat (Warrington South) (Con)
Will the Minister give way? Just once more?
David Mowat
I am enjoying the Minister’s comments about nuclear. He may have seen the recent Parliamentary Office of Science and Technology—POST—note on carbon emissions, which stated that over the life cycle nuclear produced one third as much carbon as solar. Is that properly reflected in the thrust of these statements in their entirety?
Charles Hendry
My hon. Friend raises important issues, but they are not addressed in the national policy statements. The statements are about the planning rules—the background to which decisions on new applications should be considered. There is considerable debate, which he will appreciate is being led inside and outside this Chamber, on the relative low-carbon merits of different technologies.
Following events at Japan’s Fukushima plant in March, we asked Dr Weightman, the UK’s chief nuclear inspector, to produce an independent report on the lessons to be learned from the incident and the implications for our nuclear industry. The interim report was published in May and a full report is due in the autumn. We have now carefully considered the planning policy in the national policy statements in the light of the findings of the interim report. We particularly note Dr Weightman’s conclusion that he sees no reason, in considering the direct causes of the Fukushima accident, for curtailing the operation of nuclear power plants or other nuclear facilities in the UK.
The interim report does not identify any implications for the strategic siting assessment of new reactors and we do not believe that the final report will, either. That does not change the guidance within the nuclear national policy statement, which says that the Infrastructure Planning Commission should consider flood risk, including from storm surge and tsunami, and should consult the nuclear regulators as part of that consideration. We are satisfied, therefore, that the nuclear national policy statement can proceed.
Approval and designation of the national policy statements are vital steps on the path towards our 2050 targets. By setting clear and consistent policies on energy infrastructure, development consent decisions can be made on a firm basis that is transparent to all, but this is true only when national policy statements are designated. While they remain in draft, the Infrastructure Planning Commission and other decision-makers can treat them only as “relevant and important”, not as the primary documents they are intended to be. Although the Infrastructure Planning Commission—or its successor—would consider them, until they were designated developers would not be given the confidence in Government policy that would encourage investment. Approval, followed by designation, will make the national policy statements primary documents. They will therefore provide certainty and stability for developers and investors looking to make new infrastructure proposals.
The national policy statements for energy infrastructure are a vital component of the coalition’s programme for government. They will promote investment in energy infrastructure, delivering growth and jobs. They will help us to achieve our carbon emissions targets and they will secure our supplies of affordable low-carbon energy. I commend the motion to the House.
Huw Irranca-Davies (Ogmore) (Lab)
I am pleased we are debating the national policy statements after we discussed them in draft form in December. Our debate then was short and our debate today will be even shorter—I hope the Minister joins me in deeply regretting that fact. We cannot do justice to the number of national policy statements and to the Members present in the Chamber, who will, I suspect, have roughly an hour and a half for debate once I have concluded my remarks, and that is terrible.
The final national policy statements, if they are approved by the House, will be critical in achieving a green, affordable, secure and diverse energy future. The building blocks for that future were, as the Minister suggested, shaped under Labour and we want them to be put in place without any further delay. Much has happened since our debate in December. We watched the terrible incidents in Fukushima unfold and, rightly, across the globe, across Europe and across the UK, we sought to see what lessons we needed to learn. The Minister is right to say that in the UK we did not rush to judge but carefully examined our sites, a process that is ongoing under Dr Weightman, while all countries across the EU carried out their own stress tests. Understandably, and with our support, the Minister delayed the NPSs, including the one on nuclear, to allow proper consideration to be given to those events.
We agree firmly with the conclusions reached in EN-1 and EN-6: nuclear, as a low-carbon proven technology, could play a key role in diversifying and decarbonising our energy and in meeting our climate change objectives. It is a proven low-carbon technology that can be deployed on a large scale and could complement carbon capture and storage, if it is successful, renewables and fossil fuels as part of the mix. The eight identified sites in EN-6 are potentially—I stress potentially—capable of development by 2025. Many in the green movement, although not all of them, now recognise these and other benefits of nuclear generation, although those who have long been opposed to the technology should be respected for their views, too.
Paul Flynn
My hon. Friend will know that there are plans in the document to build new nuclear power stations at Oldbury and Hinkley Point. If those power stations are built, large areas of Wales will fall within the diameter that has been set for the no-go area at Fukushima. Should not the people of Wales be fully consulted on those plans, in the interest of localism, before they go ahead?
Huw Irranca-Davies
I would expect the people of Wales, the Welsh Assembly Government and the National Assembly for Wales to have a full input and I am sure that the Minister, when he concludes, will be able to confirm that that is exactly what would happen. My hon. Friend’s point is very well made: such a decision cannot be made unilaterally and there has to be input from across the regions, too.
I said that those who doubt the technology should be respected, and not long ago the Secretary of State was one of those doubters. Confronted with the evidence and, I guess, with office, he has changed his tune. I must tell the Minister that the manic contortions of the Secretary of State over the financial support for nuclear have surpassed those of a Chinese acrobat in recent weeks. Last week, during the electricity market reform statement, when challenged by his party colleagues, he laid out three financial mechanisms that could support the development of new nuclear facilities alongside other low-carbon technologies. He did that to explain to the House that there was no subsidy for nuclear.
As the Secretary of State has come out of the closet on nuclear, he ought to stop trying to hide his embarrassment. The expansion of low-carbon technologies does not come free and they will all—onshore and offshore wind, biomass, future wave and tidal, CCS and nuclear—require some support and market intervention to drive in the levels of capital required. The medium to long-term protection that that gives through the diversity of energy security is in the interests of UK plc and we support it.
We do not, however, support sleight of hand or the appearance of double dealing. The carbon floor price announced in the recent Budget is a pretty poor way of generating the new low-carbon investment that the documents envisage. It was, in fact, a back-door windfall for existing nuclear and renewables to the tune of £1 billion and a far from stealthy Treasury tax grab of £740 million in 2013-14 rising to £1.4 billion in 2015-16. That decision shook confidence in DECC’s grasp of electricity market reform, shocked some of the big six utilities on which the Minister explicitly depends for the level of new investment required and it hammered the energy-intensive users, risking exports of jobs abroad along with carbon leakage. It gives carbon tax a bad name and shows who is in charge of DECC policy: the Chancellor.
On EN-6, although it is good to see the groundwork physically being dug for the first of the new generation of stations at Hinkley Point, will the Minister tell us when he anticipates that the first such station will be completed and online? Can he give us an indication of the dates for bringing the others online? Will he please not say that it is entirely up to the market, as that would suggest that he has not met any nuclear operators over the past year? He has, as I have, and I am sure he will have some idea of when that will happen.
John Robertson
Is my hon. Friend concerned, as I am, about the grid for some of the new power stations and, for that matter, renewables and about how the energy will get into the system for people to use?
Huw Irranca-Davies
Very much so. That is the benefit of having the package of NPSs to consider tonight, as we need to deal with the grid connectivity, too, to which I shall return in a moment. My hon. Friend makes a good point.
We are also considering EN-3 on renewable energy. Since we last debated the draft NPS on renewables, we have learned that the UK has dropped out of the top 10 global league tables for investment in renewables. That is quite a feat for the greenest Government ever. We have not just slipped out; we have bombed out. We have crashed out from having the fifth highest inward investment according to global rankings at the end of Labour’s Administration to having the 13th, according to the Pew report, in just one year. Today’s NPSs, including that on renewables, are part of the end-of-term report for the greenest Government ever, which states: “Must do better. After early promise, fails to live up to expectations and has gone backwards in many areas.”
The renewables document, EN-3, however, will succeed because it is built on very good foundations. It is welcome that the Government have made good on Labour’s ports competition and have started to build the manufacturing, distribution and servicing base in our ports, which will see a massive boom in our offshore wind. That builds on the consenting regime for offshore that was already under way under Labour. Those measures will provide crucial green jobs in manufacturing, engineering, design and maintenance up and down hard-pressed coastal regimes and in supply chains across the country, so they are to be welcomed. With streamlined planning in place, we will have the potential to create several hundred thousand jobs and to reduce emissions of carbon dioxide by hundreds of millions of tonnes as we head in the direction set by the previous Government.
Huw Irranca-Davies
I understand the sentiment behind my hon. Friend’s question. The difficulty is the broad scope of the term “waste incineration”, as many different types and technologies come under that category. The issue is addressed in some of the amendments, including two tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas), to which I shall return. My hon. Friend makes a very valid point and we have to be very confident that we are not going backwards by including certain things.
Let me direct Ministers’ attention to the bold statement in EN-1 that
“the Government supports a move across the EU from a 20% to a 30% emissions reduction target by 2020.”
That is very good, so can the Minister explain in his concluding remarks why his party’s Members in the European Parliament voted against those same proposals two weeks ago? It is so disappointing that wave and tidal power have taken a back seat in the Government’s plans again despite this national policy statement. Given the slashing of Labour’s marine renewables funds, the shelving of any proposals whatever—big or small—for the Severn estuary, the worrying noises from within the industry, in which people are looking to invest abroad, and the long wait for wave and tidal technologies to be properly recognised in the renewables obligation certificates fund, it is no wonder that the head of RenewableUK described the £20 million, out of a £200 million low-carbon innovation fund, that was given to the Government’s flagship marine scheme as
“a drop in the ocean”.
Albert Owen
My hon. Friend is making a very powerful point about marine technologies. The Secretary of State has said that the mature technologies do not require a subsidy or any Government support, but does my hon. Friend agree that the technologies he is talking about have yet to be developed and will never become mature unless they get the Government support that is needed?
Huw Irranca-Davies
My hon. Friend makes an absolutely key point. If these technologies are to get up to large industrial and commercial scale, they need support; that cannot be done in any other way. Labour showed that with what it did with offshore wind and we need to replicate that in this regard. Hon. Members should look at the way the Scottish Government are driving ahead with these technologies in terms both of consents and of the ROC structure. Wales has immense potential but we also have potential all around the English coast.
In light of the documents, what specific plans do Ministers have to make sure that the maximum possible benefits from the huge and imminent expansion of renewables, notably in offshore wind but also in onshore wind as well as in other renewables such as biomass, large-scale wave and tidal technologies—if we get to that level—and energy from waste, stay in the UK in the form of jobs, skills, training, manufacturing, distribution and economic growth? The Secretary of State’s repeated warm words about green jobs will generate no dividend whatever if all the relevant technology and skills are imported. How will the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) help Mabey Bridge of Chepstow —a company he knows very well from his recent welcome visit to open its new turbine shaft manufacturing plant—to secure contracts from the many multinational companies that are currently sourcing many of their parts, labour and skills overseas?
The same question has to be asked in relation to the other national policy statements about nuclear, carbon capture and storage and all the other technologies in which we could be developing green jobs in manufacturing and a world-leading competitive edge in green expertise and knowledge. The purpose of our amendment (c), which was not selected—I understand why, Madam Deputy Speaker—was simply to remind the Minister to get a move on and do what he promised. We were promised the green economy road map in April, but April came and went, as did May and June, and here we are in July, with the House rising tomorrow or the day after. Did he mean April 2012, perhaps? A year that started with a tragic decision and lost jobs in relation to the Sheffield Forgemasters’ loan was depressed further by the UK’s falling out of the global top 10 for renewables investment and the unseemly mess of the feed-in-tariffs fiasco. It is now ending with the Minister having lost the green economic road map. Perhaps he is waiting for the return of a Labour Government to get us back on the road to green jobs; we would love to oblige. If not, will he just do what he said he would do and show us his road map?
Jeremy Corbyn
My hon. Friend will have heard the point I raised with the Minister about the relative weakness of the British renewables industry. Does my hon. Friend think that a lot more could be done through local planning guidelines on new buildings to ensure the generation of electricity and of course more hot water from solar methods, which would in turn generate industry in this country?
Huw Irranca-Davies
I entirely agree. I have huge support for what my hon. Friend suggests for energy generation in individual houses and on estates—driven by local authorities and with private landlords. It is also about making sure that people benefit from the measures we put in place. It should not be just a one-way channel with the big-six companies providing energy, but with energy being sent the other way.
On carbon capture and storage and carbon capture readiness, the EN-2 document is good as far as it goes, but what is less good is the Government’s progress to match ambition to reality. As the document notes, CCS could potentially scrub as much as 90% of carbon emissions from fossil-fuel power generation. It gives us a real chance to bolster our energy security by maintaining wider diversity in the energy mix. Labour recognised that: as the Minister said, we ran the competition for the first large-scale CCS demonstration project. We also identified £l billion-worth of funding on which the Minister is following through. He is to be commended for holding his Treasury colleagues’ feet to the fire and keeping the £l billion at the ready. We had the announcement on the first CCS project this time last year, early on in the coalition. It was repeated in the emergency Budget, then in the comprehensive spending review and again in the recent Budget statement—it has been announced more times than the spring, summer and autumn sales at DFS—but what have we actually had? What money has been spent or work carried out? The answer is zero, zilch, nowt.
Charles Hendry
Let me give the hon. Gentleman a chance to put the record straight. Will he confirm that under the last Labour Budget there was no funding whatever for the CCS project and that it was only when we came to power that we gave real money to it— £1 billion, which is more than any other Government anywhere in the world have given to this sort of work?
Huw Irranca-Davies
I can put the record straight: not only had we identified the project but we had pledged the money for it.
Huw Irranca-Davies
Indeed we had: the CCS competition was up and running. Instead of having a delay of a year and waiting for some announcement, we would have been getting on with it now.
That is just the first project. We have also, as we have heard tonight, been promised projects 2, 3 and 4, depending, of course, on Mr Chancellor being his usual generous self and/or on European new entrant reserve funding—or perhaps on the tooth fairy at some point. If our amendment on CCS had been selected, we would simply have been asking the Minister to put our money—taxpayers’ money—where his mouth is.
If CCS is successful on an industrial scale, it will help with diversity and security of energy by making gas and coal part of our low-carbon future. Without it, the energy sources in these national policy statements—coal imminently and gas very soon after—are doomed in the UK. It has to work. Without it, the opportunity for Britain to lead the way in research, development and industrial application and to develop a world-lead in the export market will be missed. More to the point, we have a moral responsibility to do this. To all the people who argue that no fossil fuel can ever be clean, I say, “Look at China’s increased generation of energy every year, which is equal to total UK energy capacity. Look at China building one traditional ‘dirty’ coal-generating plant every single week,” because if we are serious about our intent to tackle international climate change, what greater opportunity is there to help others tackle their and our addiction to traditional, wasteful fossil fuel burning and create opportunities to lead in this innovation?
EN-5 deals with electricity networks infrastructure and the multibillion pound investment required. The whole House will want to wish National Grid a happy 75th birthday, but when you are 75, things start to creak a little and things fall off—present company excluded, Madam Deputy Speaker, including yourself. We not only need the investment in maintenance, but we need to link up parts of the country that are currently energy deserts. We need to develop more two-way connectivity to allow the generation that was mentioned to and from new locations, to develop a smart grid over time, and to deal with the potential doubling of electricity demand.
EN-4 anticipates the need for new gas import infrastructure and storage capacity to help avoid the volatility in prices to which we are now subjected and to provide gas security. The national policy statements that we have not touched on cover environmental and other planning issues exhaustively. The Minister’s officials are to be congratulated on their hard work across the board.
Underpinning all the welcome NPSs before us, the EMR last week, the new energy Bill, which we anticipate some time in the coming parliamentary Session, and the current Energy Bill, which seems to have been lost in action temporarily, is the need not only to tackle our energy consumption by demand-side measures and energy efficiency and to have new energy production that is low carbon and increasingly renewables-based, but to resolve the most complex of energy conundrums in the most cost-effective way possible. The Minister and his Secretary of State are in danger of losing the argument for new generation energy before they have even begun. They have lost focus on the need for affordability, for UK plc to remain competitive internationally, and for people to be able to pay their bills without making the choice between eating and heating.
Two of the amendments tabled by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr Havard) have also been tabled by the hon. Member for Brighton, Pavilion. I have spoken to my hon. Friend about my worries that at this late stage, with the need to get the national policy statements completed, any of the amendments could add further delay to the already delayed NPSs. However, I have great sympathy with his desire to see that the waste hierarchy is effectively applied to all energy waste. Although I cannot support his amendments if they cause delay, I join his call for the Minister, perhaps in his concluding remarks, to make it clear that outside the NPSs, the IPC will have to take account of the waste hierarchy and make the right decisions.
I think the Minister will agree that, as I said at the outset, it is disappointing that these national policy statements, which will underpin our energy future in the UK, have so little time to be debated today, but it is good that they exist. As so many hon. Members wish to speak and so little time is available, I simply say to the Minister well done on getting to this point. It has been long awaited and we understand why. We can afford no more delay, dither or uncertainty. Ernst and Young’s recent report stated baldly:
“Compared with the level of ambition, clarity of policy direction and scale of investment being delivered by a number of other countries, the UK is in danger of being left behind.”
The Secretary of State needs to put a bit more of his energy into delivering our energy future.
Madam Deputy Speaker (Dawn Primarolo)
Order. We have approximately 55 minutes left to take 18 speakers. I shall set a time limit from now of five minutes on all Back-Bench speakers. That means that not everybody will get in if every Member takes five minutes. Out of courtesy and consideration for fellow Back-Bench Members, Members might like to curtail their speeches. They can do the maths as well as I can.
Glyn Davies (Montgomeryshire) (Con)
I begin my contribution to the debate by putting my cards clearly on the table. My constituency, Montgomeryshire, is threatened as never before in its history—threatened not by military might, but by energy policy and by an invasion of wind turbines, electricity pylons and substations on a scale that will destroy the natural beauty of mid-Wales and desecrate its landscape. I owe it to my constituents who sent me here to do everything within my power and within the law to limit such desecration. More specifically, I speak with a total commitment to defeating National Grid’s mid-Wales connection project, a monstrous proposal which underpins it all.
The national policy statements are hugely significant documents. I wanted—but I am not able—to spend a considerable amount of time referring to all the positive points in those documents. I shall concentrate on the one aspect that concerns me most. We know that we are facing a huge problem. We must face the reality that the United Kingdom faces on energy. The coalition Government have no choice but to tackle the problems facing future supply. Action has been delayed too long and previous Governments have ducked difficult decisions. Our existing nuclear power generating capacity is nearing the end of its life. We cannot allow ourselves to become dangerously dependent on imported energy from less stable parts of the world, and we have signed up to moving towards a low carbon economy.
Those factors have led many of us to reassess some of the opinions we once held with certainty. After being an opponent of nuclear power all my life, I have recognised now that it is essential. After opposing the Severn barrage all my life, I recognise now that we must encourage the private sector to come forward with a realistic proposal. Perhaps the most important thing of all is that we drive forward with our innovative green deal to reduce energy use. But I do not believe that we should sacrifice the countryside of Britain for a technology that satisfies Government objectives in only the most superficial and short-term way.
To create a massive overdependence on onshore wind would be a short-sighted and costly mistake, driving millions of the poorest people into fuel poverty and costing Britain thousands of jobs for a marginal benefit. Mid-Wales is facing a prospect that it has never thought about before. The National Grid’s mid-Wales connection project envisages a new 400 kW cable stretching from the heart of mid-Wales down one of our narrow valleys to the existing grid in Shropshire, some 30 miles distant. It involves a 20-acre substation and about 100 km of cable, and because it is a connection dedicated to wind farms, it will eventually involve about 600 additional wind turbines. It is an horrendous prospect.
Glyn Davies
No, I am sorry, I do not have time. I cannot give way. I owe it to other speakers.
The project has led to the rising of a people’s protest unmatched by anything in my lifetime’s experience. Even the First Minister of Wales and his Welsh Government have issued public statements opposing the substation and opposing the line. I have time to touch on only two points this evening, and those are crucial. The national policy statements give leviathan-like powers to the Secretary of State through the approval process. My first point relates to the attitude of people towards onshore wind. I suspect that in mid-Wales most people were generally supportive of the concept of onshore wind, until this proposal came forward. Now, as far as I can see, the whole of mid-Wales has turned against the entire sector and is linking up with other organisations across Britain to take on the sector. I have never seen anything so unified.
The second point is about the unity of the United Kingdom. If we manage somehow to force the project on Wales when the people are against it, the First Minister is against it, his Government are against it, and both branches of the coalition parties in government here are against it, we will create an unmatched degree of resentment. I suggest that the Minister Google the word Tryweryn when he goes home, and he will understand that previously we had an occasion when external demands for power would have desecrated Wales. The people rose up in opposition, and they will do so again if the project goes through.
Mr Dai Havard (Merthyr Tydfil and Rhymney) (Lab)
I have tabled three amendments to the national policy statements motions—amendment (e) to motion 1, amendment (b) to motion 2, and amendment (a) to motion 3. I have one minute in which to speak to each one, so I will try to get the end of my speech in first. I say to the Minister that, on the arguments about delay, and if he accepts any changes, I understand the need for clarity, which is partly what I am arguing for, and that the industry needs some sort of certainty on the plan. A supposed delay in the national policy statements would not mean that applications could not be made, proceed and be heard. I know that because an application is currently being heard for a huge incinerator in my constituency that would take 750,000 tonnes of non-recycled waste every year and generate 65 MW of electricity.
That perversity has come about by default, in the sense that the Minister, having decided that waste should be part of the IPC process, has set a minimum requirement of 50 MW, which has almost invited the industry to come forward with applications for huge developments. The industry has decided that it will have various sub-UK regional units, and has used this opportunity to do exactly that. Nothing has been said about the proximity principle.
Local people are trying to decide how best to deal with their own waste locally. Part of the solution might be smaller incineration, and I do not contest that. I contest the scale of the current proposals, which is why I have tabled the amendments. As an hon. Member said earlier, the argument for moving this material into the guidance on fossil fuel is about the fact that it produces a huge amount of carbon. I understand the argument about why methane is better than carbon because it can be captured and used. In fact, the incinerator proposed in my constituency, basically as part of a current open-cast mine, is next to a huge landfill site. So there is a triple alliance. They are capturing the methane from the landfill site and selling it, so to me that is something of a false analysis.
The question is whether such activities are green. In the context of the proximity principle, I fail to understand how it is green to drag waste from one end of the country to another without adding carbon into the calculation. I also fail to understand how it could be carbon-neutral to import waste, because my great fear is that the way this guidance is structured means that it will not be about waste policy, but about opportunities for people to speculate on energy generation, ignorant of a waste policy. The receiving stations for the waste will be at ports, to come by rail and road to be burned. The sustainability of these mechanisms is questionable. If we are to move to zero waste the amount of potential fuel supply will reduce—and rightly so—so how sustainable will they be over 25, 35 and 40 years? They might be sustainable if we were to burn the waste generated by the Camorra in Naples and import it into Newport to do that, but heaven forfend that such a thing should take place. Well, not now.
The waste hierarchy is not simply about local questions of determination. In the longer term it could go much further, so I invite the Minister to choose, of all the amendments I have tabled, to put this method into the IPC’s consideration process. If it is not possible to do it this way, will he please explain how it should be done, because at the moment we have a series of factors that it is apparently not to examine. It seems that the list of what not to examine, including connection and the grid, is more important than the list of things it is to examine. That means that it cannot determine any particular decision in the round, in its proper context—certainly not in relation to energy supply under the waste hierarchy.
I say to the Minister that there are security problems here. If we choose to have a smaller number of larger units, that is not secure. We should be looking for a more distributed process. That is what I thought the Assembly in Cardiff was trying to think about. This trumps anything that the Assembly would want to do. It is a policy that applies across England and Wales, yet it denies the Welsh Assembly Government the opportunity to make a real decision. That is why I proposed to take it out of the processes. That would not have stopped wind energy and all the other things, but it would have given them the opportunity to determine that, so I ask the Minister—with very little time now to speak to the amendments properly—to take account—
Martin Horwood (Cheltenham) (LD)
I rise to speak to the nuclear national policy statement in particular on behalf of the Liberal Democrat party, and to state our clear and unchanged view that nuclear power is unsafe, unaffordable, uninsurable, unpopular, not renewable, not decentralised, not particularly reliable, and not the kind of energy that the greenest Government ever should ever be caught promoting. When we are already paying £1.5 billion a year in nuclear clean-up and decommissioning costs from the previous generation of nuclear power stations, when we still do not know how, when or where we will dispose of the last 64 years’ worth of radioactive waste, and when country after country is abandoning nuclear power, it is extraordinary that one of the national policy statements before us today seriously proposes embarking on a new generation of nuclear power stations.
Mr Jamie Reed (Copeland) (Lab)
I am extremely grateful to the hon. Gentleman for giving way, but he must desist from peddling the myth that the decommissioning costs that this country faces are entirely due to the civil nuclear programme. Does he not accept that most of those costs are due to our military programme?
Martin Horwood
I accept that a percentage of them are—we have debated this at length in relation to the Energy Bill—but the hon. Gentleman must accept that a huge bill is still falling on taxpayers in this country as a result of the last generation of nuclear power stations. Why would we want to risk repeating that mistake?
I acknowledge that nuclear power is a relatively low-carbon energy source, but it is not renewable. Uranium is very far from being a renewable resource, and may prove to be very expensive if more of the world chooses to follow us down this dangerous path, although few would do so if even the insurance costs of nuclear power were accurately reflected in its price. One estimate suggests that French nuclear power might be four times as expensive if the French taxpayer were not the insurer of last resort.
I also acknowledge—I agree with the Minister on this point—that fulfilling our future energy needs is a challenge. The overarching national policy statement sets out the need for urgency, with one quarter of the UK’s generating capacity due to close by 2018, but the nuclear NPS states on page 235 that applicants only have to provide a plan that is
“credible for deployment by 2025”.
It even states that
“a detailed project plan…will not normally be needed.”
The worldwide experience is that not a single nuclear power station has ever been built on time, on budget or without public subsidy. It is very doubtful what contribution nuclear will make to closing the energy gap.
Albert Owen
The hon. Gentleman has made his party’s position on new nuclear very clear, but where does it stand on extending the life of existing nuclear plants so that low-carbon generation can be extended to bridge the gap that he talks about?
Martin Horwood
There is already an issue relating to existing nuclear, as the floor price for carbon will give it an undeserved subsidy for no actual change in behaviour.
Planning for the energy gap pales into insignificance beside the time scales that have to be imagined for waste disposal and site safety. It is those long-term dangers that should concern us most. Politicians are often criticised for a lack of long-term foresight, but certainly not this Government. The historian in me is delighted to report that we are making policy today for the mid-22nd century and beyond. On the very long-term scale there is the moral question of whether material that is likely to be dangerously radioactive for millennia should ever be intentionally created, however safely we plan to store it. We can know as little about societies 1,000 years from now as the Anglo-Saxons could have known about us. To talk of long-term storage, accessibility and monitoring arrangements over such time scales is utterly meaningless. We are leaving a toxic legacy to future generations about which we can know absolutely nothing.
The NPS does not appear to pay any attention at all to those issues, but it does have something to say on rather shorter historical time scales. In relation to those, Ministers are acting not so much like Anglo-Saxons making policy for today, but like Gladstone or Disraeli trying to determine our current waste disposal policy. The NPS states, on page 239:
“Geological disposal of higher activity waste from new nuclear power stations is currently expected to be available for new build waste from around 2130”
That is on the assumption that spent fuel rods kept on site will have cooled sufficiently for disposal in geological disposal facilities. Every decade of activity will add another decade to the end disposal date.
Hon. Members are today being asked to make nuclear waste disposal policy well into the mid-22nd century. Of course, policy making on such a time scale is not remotely practical, and the NPS admits as much. On page 239 it says:
“it is possible that there could be waste on site for longer than the assessment has been able to look ahead. Predictions of potential climate change impacts become less certain the further into the future the assessments are for, and it is not practicable to consider beyond 2100 at this stage.”
That is an interesting contrast with the Weightman report, which explicitly evaluates risk only in so far as that is reasonably practical and does not even address the major cost of evacuation and dislocation that has emerged at Fukushima.
Why are we being asked to approve a policy with risks that will be significant into the mid-22nd century when the NPS itself admits that those are not practicable to foresee, and the Government’s own safety adviser has not even tried to address them? The NPS talks of additional safeguards to cover these risks, saying that applicants need to
“identify the potential effects of the credible maximum scenario in the most recent projections of marine and coastal flooding”
and demonstrate that they could take “further measures” if necessary. I suspect that Greenpeace, Friends of the Earth, WWF and the No Need for Nuclear campaign, and all their lawyers, will no doubt take full advantage of those words, with scope for years of argument and debate. If I were an investor in new nuclear, I would not be holding my breath for a return on investment before 2025.
The jury is still out on the long-term effects of Fukushima, but it is already clear that even without a major Chernobyl-style meltdown 50,000 people have still been displaced, and there is a bill running to tens of billions of pounds—and, as always, the taxpayer is being asked to foot the bill.
The real lesson, if I can paraphrase this in parliamentary language, is: stuff happens, and when it does, nuclear power is the worst possible energy source to have lying in its path. At this of all times, we should reassess our national commitment to nuclear. I know that the radioactive tendencies in the Tory and Labour parties make the passing of this policy statement inevitable, but we must challenge every licence and its capacity to withstand the worst-case scenario of climate change, and we must challenge every hidden and indirect subsidy that will make nuclear power possible.
John Robertson (Glasgow North West) (Lab)
It is a pleasure to follow the hon. Member for Cheltenham (Martin Horwood). I have heard it all before, and I still do not agree with him. I stand here as chair of the all-party nuclear energy group, so it would not take a genius to work out where my sympathies lie. The hon. Gentleman talked about the stone age, and that is exactly where he would like us to be. We are trying to develop a future—somewhere we want to go to. Eventually, one day, man will have to solve the problem of his own survival and move to another planet. It is pretty clear that the hon. Gentleman did not wait for the spaceship before he went there.
I am bothered by what the Minister said about the time delay that has, once again, been introduced. I attacked my own Government on the length of time it took them to put their policies together, and here we are again, not much further forward than we were at the time of the last general election. I accept that the national policy statements are needed, and I support them. If there are votes, I will support the Government on this, because it is vital to this nation. It was said earlier that there was no solution to the problem of nuclear waste, but there is. Anybody who wishes to go to Oskarshamn in Sweden will see that technology in action. The good news is that Sweden has taken the next step and is now building its new repository.
Mr Reed
We all want CCS technology to succeed and prosper. Does my hon. Friend agree that although Members in all parts of the House seem to be betting the farm on CCS succeeding, what we know about radioactive waste disposal is significantly well in advance of what we know about carbon capture and disposal?
John Robertson
I thank my hon. Friend for his intervention. If anybody knows anything about nuclear power, it will be him, as Sellafield is in his constituency and he deals with it on a day-to-day basis.
My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr Havard) did well in speaking to his amendments in a very short space of time. He and the hon. Member for Montgomeryshire (Glyn Davies), who is not in his place at the moment, said that they dislike incinerators. The good news is that people who live around nuclear power stations do not dislike them; in fact, they see them as a source of wealth and a way of developing further.
It would be remiss of me not to mention Scotland at this point. These NPSs apply to Scotland as well, energy being a matter that is reserved to this House. We can abide by all of them north of the border except on one thing, which is the most important in the development of any new technology or, for that matter, old technology—planning. In Scotland, planning can be used to stop new nuclear power stations or wind farms being built anywhere, whether offshore, onshore or anywhere else. That is wrong, and the Government and this House should take a careful look at it. Thousands of jobs and billions of pounds are involved in building a nuclear power station. The west of Scotland, in particular, will need 9,000 jobs in a few years’ time, and we are not going to get them thanks to a Government north of the border who use the planning rules to stop nuclear development, all because of a doctrine and an ideology followed by many people in this House—the hon. Member for Cheltenham is one of them—that has nothing to do with how real people have to live their lives now and in future.
I have heard the talk about Fukushima. Although everybody in this House regrets what happened there, the fact is that the problem was not the nuclear power station but the tidal wave that hit it.
John Robertson
No, I will not.
I do not believe that anybody has, as yet, been killed because of the nuclear power station. Tens of thousands of people have been killed thanks to the tsunami, but that is unfortunately the way things are going.
John Robertson
I have already said that I will not give way to the hon. Gentleman.
Base load for this country is very important, as is the cost of energy. Two of the big six have already put their prices up. It is the Government’s job to try to make sure that we bring these people to task, but we do not want to give them loads of money to build wind farms in places where they are no good and a waste of money, as we have seen in many places in Scotland. I want a level playing field in energy for everybody. If there are no subsidies for nuclear, there should be no subsidies anywhere else. If we are looking to try to promote low carbon, then so be it. However, my wee old ladies up in Drumchapel, an area of my constituency that is one of the poorest areas in the country, are worried about how they are going to pay their electricity bills at the end of this year. That is a bit more important than whether we build a wind farm in the middle of nowhere that is a waste of money and that we are subsidising.
Mike Weatherley (Hove) (Con)
There are many items in the national policy statements that are to be commended. Were it not for a trip that I made a number of years ago, it is unlikely that I would be addressing the House about my concerns over nuclear power. It is important that emotions do not blur the facts that form the substance of this debate, but it was incredibly difficult to suppress the strength of feeling that overwhelms one when visiting the small, now deserted town of Prypiat, which is now in Ukraine.
I intend to highlight why I believe that the quest for new sources of nuclear power, as a means of producing energy, should be halted. Although I am sure carbon emissions have a place in this debate, my concern about nuclear is focused elsewhere. It can be divided into three main categories: first, the financial viability, without Government subsidy, of any new nuclear facility; secondly, how new nuclear waste can realistically be disposed of; and thirdly, but most importantly, human and animal safety.
I am acutely aware of the need for new ways to generate power. If nuclear generation really was the only option, I would of course support new nuclear power plants. We cannot allow the lights to go out. However, nuclear power will not keep the lights on. I believe that cleaner fossil fuel plants, which are relatively fast to build, renewables, and state-of-the-art decentralised power stations are better alternatives.
Mike Weatherley
In the interests of the debate, I have to continue. I am ever so sorry.
I find it very worrying that the Government are providing significant subsidies, met by the taxpayer. Subsidies are a useful tool for kick-starting new investment. They occur in a number of ways for a wide variety of sectors, but nuclear power should not be part of that.
Disaster insurance is another factor that must be considered, as we heard earlier. Vast liabilities fall to the taxpayer. European law caps insurance liability to £1.6 billion for the industry, and payouts after that fall to Governments. Estimates are still being formed for the recent disaster in Japan, but it is thought that it will cost in the region of £60 billion. Shortfalls like that could cripple our economy.
The second category is that of waste products, which I mentioned in my question to the Minister. Unfortunately, how we will have clean, effective and safe waste management for future nuclear radioactive waste remains unanswered. Underground storage has been suggested, and I thank the Minister for his earlier reply, but at the moment that is only technically achievable and is not a proven reality. Future waste costs are unknown and rely on technology that is yet to be proven to work. That risk from an inevitable by-product is unacceptable.
The final category is safety. The Chernobyl disaster, 25 yeas ago in 1986, brought home to the rest of the world the fact that nuclear power is phenomenally dangerous, and not just in the immediate vicinity of the disaster but across a wide, Europe-sized area. It is well-documented that radioactive caesium was detected in a number of upland areas in the UK. An Environment Agency report from last month states that in 2009 restrictions were still in place for 343 farms or part farms, affecting 190,000 sheep. Twenty five years on, there is still a considerable legacy for the UK from a nuclear disaster some 1,200 miles away. Indeed, freshwater fish in Cumbria still show signs of contamination. Worryingly, the maximum radiation dose that any member of the public would receive from eating those fish was assessed to be up to 10% of their annual limit.
No monetary cost can be put on the devastation should the highly unlikely but possible eventuality of a nuclear accident occur. The national policy statement says that
“the risk of radiological health detriment posed by nuclear power stations (both during normal operation and as a result of an unplanned release) is very small.”
Let us note that it does not say “zero”. A nuclear disaster may be a remote possibility, as we were told in 1985.
Mike Weatherley
No, I have only got another minute. [[Hon. Members: “You would get an extra minute.”] I know, but it is fairer to other people if I keep going.
If a nuclear disaster did happen, the consequences would be immense. The question I ask today is whether it is really worth the risk. We must balance slightly cheaper electricity against an unknown cost that would dwarf any expenditure contingency plans. I say that it is not worth it and we should not take the risk. I urge the Government to reconsider their nuclear programme.
Phil Wilson (Sedgefield) (Lab)
We are all aware of the need to fight climate change and we all have a role to play. This is an issue we need to face as a nation. The question is whether we are facing it as a nation and whether all parts of the nation are playing the same part. Are we all in this together? I would say that we are not. Whether one can stake a claim to the accolade, “We’re all in this together” depends on where one lives.
I speak for a region and a county that can fairly say that they are playing their part in the fight against climate change. Our commitment to generating energy from renewable sources is exceptional. Durham county council was the first local authority to produce a renewable energy strategy back in 1994. In County Durham, 22% of our renewable energy needs are met from renewable sources, predominantly wind. We have 16 wind farms with 65 turbines that generate more than 120 MW of power. That provides for the energy needs of 69,000 houses. In Chilton in my constituency, Dalkia has built a biomass facility with the support of the local community, which generates up to 17 MW of electricity. The wind farms at Trimdon Grange, Walkway and Butterwick generate 44 MW of electricity from 21 turbines, which are all more than 100 metres tall or four times the height of the Angel of the North. The county also produces renewable energy from hydro and landfill.
My part of the country is playing its part, especially when compared with other parts of the country. In the context of the national policy statements, we should look at how the rest of the country is sharing the burden of renewable energy generation. The latest figures from the Department of Energy and Climate Change show that the north-east is producing more than 40% of its energy needs from renewable sources when all approved schemes are taken into consideration. That is equivalent to the regions of London, the west midlands, the south-east, the north-west, the east, the east midlands, and Yorkshire and the Humber combined. The north-east is producing 563 MW from approved renewable energy schemes, which is more than twice the figure for the south-east and the south-west.
The position on wind farms is even more telling. County Durham is again playing its part, but what about the rest of the country? There are significant schemes in Scotland, Wales, Cornwall, Cambridgeshire and Yorkshire. Let us look at the members of the Cabinet. Only five host wind farms in their constituencies. The largest wind farms are in the constituencies of the Secretary of State for Scotland, the right hon. Member for Berwickshire, Roxburgh and Selkirk (Michael Moore), and the Chief Secretary to the Treasury, the right hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander). The former has 226 turbines and the latter 259. However, those constituencies are huge. The first covers nearly 1,500 square miles and the second approaching 2,000 square miles. That is equivalent to one turbine per 6 to 7 square miles. E.ON is to announce a wind farm in my constituency with up to 45 turbines. If that was added to those already in existence and in planning in the Sedgefield constituency, there would be 78 wind turbines in 151 square miles, which is one turbine per 2 square miles. Hampshire, where the Secretary of State for Energy and Climate Change has his constituency, consumes three times as much energy as County Durham and produces zero of its energy from renewable sources. That is not all of us being in it together.
Over the past 30 to 40 years, Durham county council has done an excellent job in reclaiming the pit heaps that once scarred the landscape. It did not do that for the landscape to be reindustrialised, and this time without the thousands of jobs. It does not have to be like that. Renewable energy needs to be produced, but there must be more efficient ways of doing it.
Phil Wilson
I will not take interventions because I am thinking of other colleagues.
An example is the biomass facility in Chilton built by Dalkia, which produces 17 MW of electricity. A written answer that I received from the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), last week stated that wind turbines are 21.5% efficient. Therefore, it would take 40 turbines to produce the same electricity as the one biomass facility in Chilton. Strangely enough, that is about the same number that E.ON wants to build on a 16 sq km site just to the south of the village and on part of a site of special scientific interest. No doubt the company will produce a handsome community chest for the area. However, when that is compared with the population of 40,000 and the increase in energy prices that my constituents face, not to mention the thousands of pounds to be received by a handful of landowners to see the area blighted for 25 years, it is asking too much.
Of course there is a need for renewable energy and for a national plan. However, that plan must involve the whole nation and it must share the burden, not just the benefits.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
This country faces a serious threat of black-outs unless we undertake a major programme of building new generating capacity to replace the existing plants that are coming to the end of their lives or that will no longer be legal under EU directives. I strongly support measures to streamline the planning process so that that construction programme can go ahead and, in particular, to encourage the development of nuclear after 12 wasted years in which there was a failure to move ahead with the nuclear programme.
We will be able to avoid the black-outs only if all our effort is put into this unprecedented construction programme. I do not believe that the country can afford, in addition, to build generating capacity that has no real use. That is what a lot of these measures are about. The Secretary of State for Energy and Climate Change said in a recent article that the measures he is introducing will deliver “secure, affordable energy”. They will deliver neither secure nor affordable energy. Renewables are not secure. The sun does not come out at night, it does not come out in the winter very often, and it does not come out when it is cloudy. It is not available when we most need the energy.
Wind is intermittent. The recent Stuart Young report stated that wind plant operates at less than 20% of its capacity over the country as a whole for half the time, less than 10% for a third of the time and barely 1% for one day every month. For each of the four highest periods of peak demand in 2010, it operated at only 4.7%, 5.5%, 2.6% and 2.5% of capacity. Precisely when we needed it most, wind was not there.
For some reason, people ignore the lessons of the past. The great Victorian economist Jevons wrote back in 1865:
“The first great requisite of motive power is that it shall be wholly at our command, to be exerted when, and where, and in what degree we desire. The wind, for instance, as a direct motive power, is wholly inapplicable to a system of machine labour for during a calm season the whole business of the country would be thrown out of gear.”
Those who seriously believe that we can run this country on wind power are living in a dream world and are harking back to the middle ages.
Nor will this programme produce lower costs. The Secretary of State said that it would keep bills lower than they would be if we stuck with the existing arrangements, but I find that statement completely indefensible. We cannot lower the cost of energy by requiring people to use more expensive types of energy. If we replace low-cost energy with high-cost energy, we will not and cannot reduce the costs, yet that is the whole thrust of the programme. The Renewable Energy Foundation and the Committee on Climate Change agree that it will cost £100 billion in subsidies to 2030, which is equivalent to more than £200 a household a year, to support renewables.
We know, fortunately, that the Government do not really believe they will bring down costs or that renewables costs will rise less rapidly than those of hydrocarbons. If they did believe that, there would be no need for subsidies. They would not be forecasting £100 billion of subsidies if higher hydrocarbon costs or reduced costs of renewables would make the latter economic without subsidy. Sadly, the Secretary of State does not live by the logic of his own position but instead puts forward rhetoric that is neither defensible nor supportable. I wait to hear in his winding-up speech whether the Minister can explain how we can get lower costs from higher-cost energy.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are running out of time, so brevity is important. If hon. Members have already spoken, I think it is quite wrong for them to try to intervene, as there is a very limited time for the debate.
Caroline Lucas (Brighton, Pavilion) (Green)
I am very happy to follow the earlier speeches of the hon. Member for Hove (Mike Weatherley) and, perhaps less surprisingly, the hon. Member for Cheltenham (Martin Horwood). I only wish that the latter and his colleagues were in a position to vote according to how they have spoken if there is a vote later this evening. Time is very short, and I wish to make just three points. One is about the overall targets in the national policy statements, one is about energy from waste, and I will finally say a few words about nuclear.
When I intervened on the Minister earlier about the overall emission reduction targets set out in the fourth carbon budget, I sensed a certain irritation that I kept standing up to make the point that although the targets were ambitious compared with other countries—I certainly give the Government that—they were not ambitious enough. I am sorry if that makes me a bit of a Cassandra in the House, but the Tyndall Centre, one of the foremost institutes on climate change in this country, states that the targets set out in the fourth carbon budget set us on course for having only a 60% likelihood of avoiding the 2° C temperature rise threshold. If I were to say to anybody in the House, “If you step on this aeroplane, it’s got only a 60% chance of reaching its destination safely”, the chances are they might just think twice before getting on the plane. It seems extraordinary. If any other area of Government policy was knowingly designed with such a low chance of success, we would be up in arms, so why are we not when it comes to the very survival of the planet?
Let us not forget that the 2° C threshold is not the distinction between acceptable climate change on the one hand and dangerous climate change on the other. It is the difference between dangerous climate change and very dangerous climate change. That is the lens through which I would like us to look at the national policy statements tonight.
I wish to make a brief point in support of the hon. Member for Merthyr Tydfil and Rhymney (Mr Havard), who rightly questioned the Government’s classification of incineration or energy from waste as a renewable energy source. Given that a significant amount of the material that goes into incinerators is not made from renewables, and that they can often emit at least a third more carbon dioxide than a modern gas-fired power station, it is hard to see quite why they are considered a renewable source.
Furthermore, massive new incinerators such as the one at Newhaven, near my constituency, lock local authorities into providing huge quantities of waste for very many years. The contracts last many years and, under them, a minimum amount of waste is required to feed the incinerators. We are therefore locked into the process, which inevitably discourages waste reduction, reuse and recycling efforts.
The final point that I wish to make is about nuclear. Nuclear power is unsafe, uneconomic and, more than anything else, simply unnecessary. We do not need it. Of the Government’s 17 possible pathways to delivering 80% CO2 reductions by 2050, four include no energy from nuclear or coal by 2035. A recent report by WWF and others concluded that by 2050, it would be perfectly possible to generate 95% of global energy supplies from renewable sources alone. There would of course be a need for up-front investments to make the transition, in the order of 1% to 2% of global gross domestic product, but the report also found that that investment would turn into a positive cash flow after 2035, leading to a positive annual result of 2% of global GDP in 2050. In place of nuclear, renewables are quicker to deliver, can meet our energy demands and have a huge potential to boost the UK’s economy. There are far more green jobs in renewables than there ever are in fossil fuels.
It is not those of us who advocate renewables who are living in the dark ages. To the contrary, it is Members such as the right hon. Member for Hitchin and Harpenden (Mr Lilley), who seems not to know about such things as storing energy, European super-grids or the fact that we are talking not about one single energy source but about a whole range of renewable sources that, together, can provide the energy that we need if the political commitment and will is there. Nuclear energy is incredibly unsafe, as Fukushima has shown us, and massively expensive. More than ever, it simply is not needed. I call on hon. Members to consider that carefully when we hopefully come to vote on it later tonight.
Nicky Morgan (Loughborough) (Con)
It is a pleasure to speak in this debate on these important statements. I will try to keep my remarks brief, because I am very conscious that other hon. Members want to speak. I entirely endorse the Minister’s comments that we need a clear planning regime for major infrastructure in this country. That is what these statements are about—facilitating the planning process.
I wish to talk about national policy statement 3, the inclusion of energy from waste, and in particular incineration. I am not against incineration per se, but I am in favour of it being a last resort, which is why it is important to tie this in with the waste review and the waste hierarchy. However, I am most against not listening to people. I listened with interest to the remarks of the hon. Member for Glasgow North West (John Robertson), who is not in the Chamber. He said that people who live near nuclear power stations did not seem to mind them, whereas people who live near incinerators very much mind them. That is absolutely the case, and I shall explain in a moment why I have a local interest in that respect.
I also want to focus on the planning system, localism—an important tenet of this Government—and the waste review. Localism will mean nothing if local communities are not sufficiently empowered to tackle potentially damaging developments in their area. In my constituency, there is a proposal to site an incinerator near Newhurst quarry, Shepshed. Many of my constituents feel that their voices have not been heard, either in the Environment Agency process for the granting of the environmental permit, or in the planning process. I am delighted to say that the county council has so far resisted giving planning permission to that incinerator, but we are about to go round the houses again with a new planning application and an appeal against the original refusal.
I speak for many constituents when I say that the planning system continues to disfranchise local communities, and often seems to favour large developers, who are able to ride roughshod over the views and concerns of local people. The views of local people are not taken into account in the planning process, and it would be helpful if the Minister could clarify in his winding-up speech or another time whether the statements could define the role and position of local communities in relation to the Infrastructure Planning Commission. At the moment, that seems to be very much a national planning infrastructure body, and the voice of local communities could easily be forgotten or ignored.
The statements explicitly state that the IPC should
“consider how the accumulation of, and interrelationship between, effects might affect the environment, economy or community as a whole, even though they may be acceptable when considered on an individual basis with mitigation measures in place”.
That is an important point to bear in mind, because all to often, planning decisions seem to be made by considering many individual factors rather than the impact that a development might have on an area as a whole. Incinerators will often have a cumulative negative impact on the character of a local area.
I do not have time to say much about two other aspects of the planning system—visual amenity and the impact of incinerators on historical environments—but it seems that incinerators, which often need large stacks to make them work, cannot possibly be seen not to have an impact on the visual amenity of an area.
People are very concerned about the health issues in respect of applications for building incinerators. I wrote to the Health Protection Agency on 29 June and received a response at the end of last week. Although it reiterated its usual position—that the health effects of modern municipal waste incinerators are not harmful—it also acknowledged public concerns and it confirmed that it is in discussions with researchers at Imperial college, London, about a potential study into birth outcomes around municipal waste incinerators. It is currently in the process of drawing up a detailed proposal.
That is where I come back to my original point: we must not forget the views of local communities. As I said in my intervention on the Minister, if we want this country to follow a low-carbon future, we must take people with us.
I think I have made my point on the role of incinerators —it must fit in with Government waste policy—and an Opposition Member has already mentioned the parliamentary answer he received on 17 January about the carbon that is produced by incinerators. Therefore, in conclusion, I must admit that I was tempted by the amendments, but I take what the Minister has said—that energy from waste means something broader than just incinerators—and on that basis, I shall not back them. However, it would be helpful to have a clear understanding of the place of incinerators in the waste hierarchy—I welcome the Minister saying that they are low down in that. The voice of local communities must not be forgotten.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I know that other hon. Members wish to speak, so I shall try to be briefer than the five minutes allowed. There is a lot of detail in the documents, and it is a shame that we are not able to have a longer debate on some of those issues.
In his opening remarks, the Minister talked about the need for certainty in the marketplace, as he has a number of times. I am sure that he is as concerned as I am at the quarterly Ernst and Young survey, which shows that energy infrastructure investment has fallen in the past year. I mentioned carbon capture and storage, skills and export potential in an intervention, so I shall not repeat that point.
My hon. Friend the Member for Glasgow North West (John Robertson), who is no longer in the Chamber, made a point about nuclear in Scotland. I wanted to place on record the deep irony of the position. The separatist Administration in Scotland, with their anti-nuclear policy, seem quite content, effectively, for the base load to be imported from what will be, in their wishes and by that time, a foreign country, to keep the lights on in Scotland.
However, I wanted to make a couple of specific points in relation to the documents, particularly in relation to EN-3 and the impact on commercial fisheries. The document refers to discussions with representatives of the fishing industry about the safety zones that might restrict or exclude activity around offshore wind turbine developments, which has been raised with me by fishing representatives—it is not a direct constituency interest, but it is an interest for a number of people in Scotland. Will the Minister explain further—if he cannot do so in his summing-up, he could do so by writing later—what mitigation will be in place for those industries and communities that are reliant on fisheries? Perhaps that also relates to the Crown Estate, which is also referred to in that policy statement. Will he say whether we can look at the community benefit when Crown Estate revenues are derived from offshore wind developments? When we talk about community benefit, for example in Scotland, it does not mean that the benefit should go to Edinburgh: it means that it should go to the communities that will be adversely affected.
My hon. Friend the Member for Ogmore (Huw Irranca-Davies) referred to creaking grid infrastructure, which is a crucial point to marry up with these policy statements. So too is the transmission charging regime, and the Minister will have heard me make this point on several occasions. The way in which the transmission charging regime works at the moment has been portrayed in some forums as anti-Scottish discrimination. I would not put it in those terms—it has probably been done for political purposes—but we are encumbered by a regime that is designed for a pre-renewable age, and we need to ensure that it is fit for purpose, alongside the infrastructure that is needed in the national grid for renewable energy. It is important to look at geographical signals and how they have changed in relation to where electricity will be generated in the future. That is why I welcome the Ofgem TransmiT review and I hope that Ministers will respond to any recommendations quickly and concisely so that they, these statements and the electricity market reform proposals earlier in the week will work together to give us the best chance of a balanced, sustainable and secure energy future.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
This is an important debate on the energy future of our country. I boasted a little last week in Prime Minister’s questions about how Suffolk has ambitions to be the greenest county. However, I wish to make it clear today that I fully welcome all the national policy statements, in particular that referring to Sizewell as a potential new nuclear site. That is welcomed locally, although about eight constituents have written to me with their concerns about nuclear power. However, I am more than convinced by the Weightman nuclear review, and given that I see the dome of Sizewell B every time I go home, I can assure my constituents and the House that I live in close proximity to a nuclear power station and feel perfectly safe.
Coastal erosion is also relevant to my part of the world, and I am comforted by the fact that the Environment Agency has provided general support, although it recognises that detailed coastal erosion mitigation plans are needed. I also wish to raise the issue of the Minsmere sluice, which is especially important to some of my constituents. I highlight that so that the agency is fully aware of the concerns that people have.
I have to cut my remarks short, so all I would say to the Minister and the Secretary of State—it is a shame that he is not in his place, especially to hear the contribution by the hon. Member for Cheltenham (Martin Horwood) earlier—is that I am fully behind these national policy statements. Speed is of the essence and certainty is needed to engender investor confidence. I have worked with my neighbour, my hon. Friend the Member for Waveney (Peter Aldous), on this issue and we are ambitious to bring energy to our coast—and inland—where appropriate, but we need support in bridging the skills gap and capturing job opportunities. I support the motions.
Dr Alan Whitehead (Southampton, Test) (Lab)
Perhaps I should send the Minister a copy of what I would have said and ask him to respond to it.
I wish to draw attention to the need to get right the future capacity. The documents—EN-1 in particular—conclude that we will require 133 GW of installed capacity by the early 2020s. The figure appears to have come from nowhere and is not supported by the accompanying updated energy provision documents. Indeed, recent pronouncements by the National Grid appear to suggest that that is a considerable overestimate of the likely capacity required to enable us to keep the lights on.
EN-1 is an over-arching policy document, so that conclusion spreads throughout the rest of the documents before us. They determine what energy mix we will have, including not whether we should have any further nuclear power but whether the new nuclear programme should be extensive. Even the UEP figures on enhanced capacity suggest that we will not have the amount of nuclear power that the Government suggest we want.
We need to get the capacity figures right. The National Grid Company’s projection that we will need about 100 GW of installed capacity by the early 2020s to balance the system along with a little additional interconnection and a little work on energy demand—but not an enormous amount—is in stark contrast to what appears to be the guesswork in these overarching documents. My plea to the Minister is that, irrespective of whether we pass these documents tonight, we should have an early review of how much capacity we will need over the next few years, bearing in mind all the various things that are under way. We do not need these finger-in-the-air suggestions—people saying that we need an enormous amount of extra power and coming to a figure that seems about right but not on the basis of entirely standing by our own projections. I hope that the Minister will undertake that work and come back with different projections to inform future documents.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I think that we would all agree that we have heard some excellent contributions this evening on issues that could not be more important to our country: first, the framework needed for Britain’s future energy needs; and, secondly, our transition to a low-carbon economy. It is vital that the national policy statements create an effective framework to deliver on this issue and on the fourth carbon budget’s emissions reductions targets. As we have heard from the manner in which most Labour Members’ speeches have been delivered, the official Opposition want to play a constructive role.
I want to comment on the Minister’s opening remarks. He talked with great enthusiasm about how the NPSs will unlock investment in the UK. I agree that that is an important impact. It is a shame, however, that Government policy elsewhere is working against much of that investment. He said that wave and tidal power will play an important part in reaching our targets, but there has been no investment in tidal by Governments for five years. That delay was introduced by this Government. We also heard from him that the NPSs will deliver growth and jobs. I wish that they could on their own, but try telling that to the solar and other renewables sectors in which Government policy is so far having the opposite effect. Although we welcome the NPSs, the Government’s record so far is not good. We have seen the shelving of investment in tidal power and under-investment in marine technology—both are areas in which the UK should and could be leading the way to create green jobs and investment up and down the country.
The green investment bank, which we support, has been delayed and unfortunately will not be investing until after the next general election. Furthermore, there is as yet no green economy road map. It is good that we have the renewables road map, but on its own it is not enough. The Energy Bill, which is much vaunted by the Secretary of State as the great solution to green job creation, has fallen off the end of the parliamentary agenda. It is not even appearing before the House in the first week of September when we return. Furthermore, as my hon. Friend the Member for Ogmore (Huw Irranca-Davies) said, under this Government, our country has gone from fifth to 13th in the Pew environment group’s report on investment in environmental technologies.
I do not doubt the Minister’s personal commitment to this issue, but the prioritisation of green investment issues is out of the hands of Ministers. Not only does the Secretary of State not have clout in Whitehall, but when we hear his Liberal Democrat colleagues speak in the House we see the true dilemma he faces and why he is dancing like a cat on a hot tin roof. At every turn, the Treasury has grabbed green money for the Exchequer coffers and broken the deal with companies that have gone greener in order to take that money for the Treasury.
We have seen delays and a lack of joined-up thinking on the green economy. That has been demonstrated again tonight by the fact that so little time has been granted to debate these issues. I do not lay responsibility for that at the door of Ministers tonight; I blame the general attitude to these issues across the Government. Yes, other statements are important, but to reduce this important debate on five national policy statements to two hours is frankly a joke.
In addition to the Minister, we heard from the hon. Member for Montgomeryshire (Glyn Davies), my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr Havard), who spoke up for his constituents, and the hon. Member for Cheltenham (Martin Horwood), who delivered an extraordinary anti-nuclear rant—on behalf, one can only assume, of his Secretary of State, along with the entire Liberal Democrat party, as he said. Now we know the truth about where the Secretary of State stands, because the hon. Gentleman rather blew the lid on his repeated attempts to deny the use of subsidies in nuclear. It is good that the truth is out at last. Then we heard from my hon. Friend the Member for Glasgow North West (John Robertson), who spoke with knowledge and a realism that were unfortunately lacking in the previous speech.
The hon. Member for Hove (Mike Weatherley) and my hon. Friend the Member for Sedgefield (Phil Wilson) also spoke, with my hon. Friend highlighting his area’s commitment to renewable sources. The right hon. Member for Hitchin and Harpenden (Mr Lilley) joined in the criticism of the Secretary of State. The hon. Member for Brighton, Pavilion (Caroline Lucas) also criticised the Secretary of State, but from a rather different perspective, while the hon. Members for Loughborough (Nicky Morgan) and for Suffolk Coastal (Dr Coffey), and my hon. Friends the Members for Rutherglen and Hamilton West (Tom Greatrex) and for Southampton, Test (Dr Whitehead) all made thoughtful contributions too.
We want to help Ministers. We want to offer positive guidance and advice, and to support them where they are right. For example, we would welcome the publication of the Government’s cross-departmental green economy road map. Businesses need to know what the Government’s long-term strategy for tackling climate change is. They need to make investment and research decisions free from doubt about the Government letting them down. I tabled a question about that earlier this month, and was told that we would have the green economy road map before the end of July. However, with two more sitting days of Parliament, we are getting close to the wire. Indeed, perhaps that is why Parliament is sitting on Wednesday—so that we can see that document before the end of July. Frankly, the Minister had better hurry up if we are to meet that deadline. However, more important than what this House receives is that businesses up and down the country know what is coming, because further delay will cost orders and jobs. Up and down the country, people tell me on the doorstep that they want jobs, and green jobs are a real opportunity, so will the Minister give the House an assurance this evening that this important document—the green economy road map—will see the light of day? Will he commit himself to a date?
The national policy statements do not adequately address the energy market, the price of energy and the price hikes that our constituents face this summer. We on the Opposition Benches want to see an independent energy advisory committee, akin to the Committee on Climate Change, to advise Ministers on everything from the carbon floor price to energy auctions. We are talking about a body to advise Ministers along the lines of the Committee on Climate Change, but we look forward to the Government perhaps coming up with proposals based on our suggestion, because people have lost faith in Ministers standing up to the big six energy companies. Six energy companies control 99.9% of the consumer market, so how does the Minister intend to protect consumers and tackle fuel poverty?
This is increasingly a Government losing control, distracted by events and unable to deliver their programme. There may be good intent, but there is a lack of clout across Whitehall and a lack of ability to bring other Departments to the green energy and future green jobs table. As someone who is committed to this issue, I fear that we are in danger of seeing wasted years in the battle against climate change, which future generations will not forgive or forget.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
This has been an excellent debate. I am sorry that we have not had more time, but we have managed to cover an extraordinary amount, and I will do my best to deal with the interventions and speeches we have heard.
Investment in new energy infrastructure is crucial to secure a clean, green, affordable and reliable energy supply for both British business and British consumers in the challenging decades ahead, but we are asking a lot of this transformation. It must drive growth, not hamper it; it must underpin the industrial competitiveness of the UK, not threaten it; it must drive technological change, competition and consumer choice; it must incentivise the private sector, but also deliver value for money to the hard-pressed consumer; and wherever possible, it must work with, not against, the grain of local opinion and communities, as has come through loud and clear in various interventions this evening. For the first time, these national policy statements set out clearly and transparently how the coalition’s energy policies will inform decisions on applications for development consent for major energy infrastructure projects.
The hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Ogmore (Huw Irranca-Davies) treated us to their usual music hall turn and their usual party politics. I appreciate the broad consensus that exists on the substance of the NPS.
Gregory Barker
I will in just a moment.
It would be easy to dwell on the divisions that exist. If the hon. Member for Hackney South and Shoreditch will forgive me, I intend to skip past the cheap party political points. Instead, I look forward, after nine months, to hearing her first speech on any substantive policy initiatives that she might have. We expect the green economy road map to be published before the end of July, so she will no doubt be able to get her press release out welcoming its publication before she goes away for some sunshine.
Gregory Barker
I am not going to give way; the hon. Gentleman has not spoken in the debate, and in the time I have left I want to deal with the contributions that have been made.
The hon. Member for Glasgow North West (John Robertson) criticised the delays in bringing forward the national policy statements. He is absolutely right to say that there have been delays, but they occurred under the Labour Government because the original NPSs, which were signed off by the right hon. Member for Doncaster North (Edward Miliband)—hon. Members might recognise his picture in the document here—were riddled with inaccuracies and errors and had to be worked on again. I am glad, however, that we have now produced the NPSs, that broad consensus exists on them, and that we can now plough ahead. That sends an important signal for investment.
Gregory Barker
I want to press on. If I can give way a little later, I will, but there have been a lot of contributions and I want to try to respond to them.
The hon. Members for Merthyr Tydfil and Rhymney (Mr Havard) and for Brighton, Pavilion (Caroline Lucas) and my hon. Friend the Member for Loughborough (Nicky Morgan) were among those who raised their significant concerns about the potential for an expansion of incineration. I understand the gut instinct against energy from waste, but we must recognise that it has moved on significantly over the past decade and now involves a wide range of different technologies. The important thing to remember about any form of energy-from-waste technologies is that they sit at the very bottom of the waste hierarchy. Before we reach that point, we must first ensure that there is waste prevention and reduction, as well as reuse and recycling. We must prepare for recycling and recovery and, ultimately, if there is no other use for the waste, we can turn to the responsible creation of energy from waste.
As my hon. Friend the Member for Loughborough pointed out, however, we must take account of local opinion. This NPS is only a framework. Were there no framework for energy from waste in it, a free-for-all could be created. The NPS creates a framework in which these decisions can be made; it does not necessarily mean that there will be an automatic presumption in favour of energy from waste.
Gregory Barker
I am going to take interventions towards the end of my speech if I have time.
The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) made some important points about fishing, and the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) will be happy to meet him to discuss his concerns. The hon. Gentleman also raised the issue of transmission charging. We recognise that a new structure will be required for a whole host of new generation technologies, which will be in different locations from before. In creating that structure, we will need new grid connections and a fair and progressive charging regime that will enable investment.
The hon. Member for Sedgefield (Phil Wilson) raised his concern about wind farms. He made an important point, but I cannot comment on individual schemes. It is a requirement of the planning regime, however, that cumulative impacts such as we see in locations in the north-east are considered in total. We would expect the local planning authority to set out important local issues in its local impact report, just as we also want host communities for these installations to reap the benefits of taking these assets into their communities.
Let me deal now with the issue of nuclear. My hon. Friend the Member for Cheltenham (Martin Horwood) has spoken with great passion on this subject over many years; I do not expect that I am going to sway him tonight, but I do greatly respect his sincerity on this issue. He gave a rousing speech and some of his concerns were echoed by my hon. Friend the Member for Hove (Mike Weatherley). I do not know whether he is a new convert, but I also recognise his sincerity and I share his passion for a more decentralised energy economy and for the need to push forward with renewables, which have so much to offer the UK.
Gregory Barker
In just a moment. The hon. Member for Brighton, Pavilion also spoke about nuclear.
Mr Havard
Strategy and policy—wonderful stuff. The relationship between incineration, the planning process and energy generation is clearly a matter of debate within the Government. We need an understanding of their way of describing it. Will Ministers thus agree to meet a cross-party delegation of people who have concerns about, or information on, this policy area so that we could inform the discussion and debate as it happens?
Gregory Barker
Of course I will. My hon. Friend the Minister for Energy will also be delighted to meet such a delegation. We recognise the strongly held opinions in this area and the fact that profound local impacts are at stake, so it is absolutely right to listen to a range of parliamentary opinion on the subject.
Returning to the nuclear issue, as the cheapest large-scale, low-carbon source of generation, nuclear should be part of the mix—so long as it is without public subsidy. The NPS deals only with direct planning issues; all the other issues—decommissioning, waste, insurance, safety—are outside the NPS framework. They fall to other frameworks, but I can give the assurance that robust regimes are in place for all those issues.
My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) was deeply sceptical about the whole renewables agenda. I respect his sincerity, but no one in this House—not even the most zealous climate change zealot!—would suggest that we could run the whole UK energy economy on wind power alone. Wind can be part only of a much bigger mix of renewables and other forms of generation, and there is no one single form of generation on which we want to be dependent. That includes nuclear. I remind my right hon. Friend that, last year, Sizewell B was out of operation for seven months, during which time wind powered about 500,000 homes. The important thing is to have a properly balanced energy sector and to get ourselves progressively off the oil and gas hook so that we do not see the constant ratcheting up of fuel bills, which we have seen recently with wholesale gas prices up 40% last year.
We heard an extremely thoughtful contribution from my hon. Friend the Member for Suffolk Coastal (Dr Coffey)—a great champion not just for nuclear, but of the whole green coast.
We also heard from my hon. Friend the Member for Montgomeryshire (Glyn Davies) about his sustained campaign against offshore wind. I appreciate how strongly he feels on this issue, but I point out that the NPS framework is not responsible; the problem lies really with the Welsh Assembly, which has zoned areas for wind farm development—technical advice note 8 areas—focusing developers’ interests in areas such as Montgomeryshire. It is at the Welsh Assembly that my hon. Friend’s ire should be directed, but we of course listen clearly to the messages he sends.
The national policy statements are another example of the coalition gripping the modern energy agenda. They constitute a major step towards reversal of decades of neglect and delay.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
Draft Financial Services Bill (Joint Committee)
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
22:00 - The House having divided: - Ayes: 297 / Noes: 6 - Question accordingly agreed to.
22:13 - The House divided: - Ayes: 290 / Noes: 6 - Question accordingly agreed to.
23:00 - The House divided: - Ayes: 273 / Noes: 9 - Question accordingly agreed to.
The Leader of the House of Commons (Sir George Young)
I beg to move,
That this House concurs with the Lords Message of 21 June, that it is expedient that a Joint Committee of Lords and Commons be appointed to consider the draft Financial Services Bill presented to both Houses on 16 June (Cm 8083).
That a Select Committee of six Members be appointed to join with the Committee appointed by the Lords to consider the draft Financial Services Bill presented to both Houses on 16 June (Cm 8083).
That the Committee should report on the draft Bill by 1 December 2011.
That the Committee shall have power—
(i) to send for persons, papers and records;
(ii) to sit notwithstanding any adjournment of the House;
(iii) to report from time to time;
(iv) to appoint specialist advisers; and
(v) to adjourn from place to place within the United Kingdom.
That Mr Nicholas Brown, Mr David Laws, Mr Peter Lilley, David Mowat, Mr George Mudie and Mr David Ruffley be members of the Committee.
The Government are anxious to subject more Bills to pre-legislative scrutiny and as a result we are publishing more Bills in draft. The draft Financial Services Bill was presented to the House on 16 June, and we now want to make progress and to nominate the Commons membership of the Joint Committee on the Bill. Our proposal was blocked on an earlier occasion; hence, we have tabled the motion before us.
We believe that the quality of legislation is enhanced if more Bills can be subjected to pre-legislative scrutiny. I am disappointed that a small minority of Labour Members are seeking to stop the effective scrutiny of this legislation by blocking the motion. It is for the parties to nominate who represents them on such Committees, and it is a shame that Back-Bench Members are seeking to frustrate a position that has been agreed between the parties and, with their amendment, to skew the balance of the Committee towards the Opposition.
Thomas Docherty (Dunfermline and West Fife) (Lab)
Does the Leader of the House recall that on four occasions last week Members objected to the motion? There were plenty of opportunities, if he had wished to do so, to engage in a discussion about what the problem was. Surely, if the Government had come to discuss this with relevant Members of the Opposition, this matter could have been resolved before tonight.
Sir George Young
No, there is a convention that the nomination of Members to Joint Committees such as this are made by the political parties. That is the procedure that we have followed in this case and I regret that some Members have sought to frustrate that process.
It is the Government’s hope that this very important Bill will now be given the pre-legislative scrutiny it deserves and that these wrecking tactics will stop. I commend the motion to the House.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I remind the House that the amendment has been selected.
Hilary Benn (Leeds Central) (Lab)
I rise to speak briefly to the motion. I agree with the Leader of the House that the Bill is extremely important and raises profound questions about the regulation of the financial services industry and the accountability of the new arrangements. It is important that the Joint Committee gets on with its work and I, like the right hon. Gentleman, am a strong supporter of scrutiny of this sort. As he has said, it is rather unusual for the House to debate such a Committee’s membership—an issue that ought to be quite straightforward.
Let me come to the heart of the matter concerning the right hon. Member for Yeovil (Mr Laws), as he is the subject of the amendment that some hon. Members have tabled. Hon. Members will recall that following the Select Committee on Standards and Privileges’ report on the right hon. Member for Yeovil and its findings against him, he came to the House on 12 May and made a personal statement, prior to his suspension from the House, and apologised. Now that the House has dealt with this case, whether Members agree or disagree with the outcome of the Standards and Privileges Committee process, seeking to withhold membership of a Committee as a means of taking further action against a Member is a difficult course for the House to pursue. After all, there may be other Members to whom some Members wish to object on other grounds when it comes to the membership of future Committees. We do not generally approach the putting together of Committees on that basis and it is not sensible to do so in this case. Either we are equal in this place or we are not.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I beg to move, amendment (a), in line 14, leave out ‘Mr David Laws’. [Hon. Members: “Shame!”] I hear cries of “shame” from the Chancellor’s former chief of staff, from the Liberal Democrat Whip and from many other members of the coalition Government. I took some advice this afternoon about the rules of this procedure because I wanted to be very clear about what I may or may not refer to. I have received clear advice that I may refer to the content of the recent report of the Standards and Privileges Committee and that I may make some general observations, but you will probably agree with me, Mr Deputy Speaker, that I would not be allowed to make accusations about an hon. Member that are not referred to in the report, and I will proceed on that basis.
The Bill is one of the most important Bills that the Government are introducing. I do not say that just because I have had a chance to glance through the weighty tome that the Government have introduced but because one of the great debates that the House will have in this Session is about how we can better regulate our financial industry. Without doubt there was a failure to regulate it in the previous Parliament—[Hon. Members: “Hear, hear!”] I am sure that the hon. Member for Devizes (Claire Perry) will nod away to that.
Mr Kevan Jones (North Durham) (Lab)
My hon. Friend says that regulation failed, and there were loud cheers from the Government Benches, but did not Members on the Government Benches call for less regulation of the financial services industry?
Thomas Docherty
Once again, my hon. Friend anticipates my next sentence. I was about to remind the hon. Member for Devizes, if she were paying attention to the debate, that when she was penning speeches for her right hon. Friend the Chancellor of the Exchequer and for the now Prime Minister, they on more than one occasion decried the fact that there was too much regulation of the financial services industry. The House does not need reminding that the hon. Lady and her cohorts believed that if we had less regulation we would have a better financial services industry.
Thomas Docherty
But I refer the hon. Lady to the speeches that she used to pen for the Chancellor of the Exchequer before he got some better speechwriters, when he used to say, “You may say we have too much regulation—and I agree.” So the Bill—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. As hon. Members know, the debate is quite tight and we are stretching it beyond where we need to be. If we can come back to points that are more relevant, I am sure the House will be happier.
Thomas Docherty
I am grateful, Mr Deputy Speaker. That allows me to pose a question to the Leader of the House. My understanding of the Order Paper is that the debate may continue beyond 10 pm. I am not sure of the mechanism that would be adopted, but my understanding is that the Government would like the debate to have the opportunity, if necessary, to continue beyond 10 pm. If that has been withdrawn, I would be grateful for clarification from the Chair.
The Leader of the House said in his brief yet succinct remarks that if we were to change the balance of the Committee, that would give the Opposition parties control of the Committee. I did not have the benefits of the wonderful education of many Members on the Government Benches because I grew up under the previous Conservative Government, but by my maths there would still be three members of the Conservative party and two members of the Opposition on the Committee. The Government would still have a majority. They are perfectly entitled to nominate a new member, if they choose to do so, and we would support a suitable candidate. Perhaps in his rush to get his suntan creams and holiday brochures out, the Leader of the House had not quite checked the membership of the Committee.
John Mann (Bassetlaw) (Lab)
Would my hon. Friend like to take the opportunity to correct the record and the rather uncharitable statement made by the Leader of the House that those supporting the amendment are in some way attempting to undermine pre-legislative scrutiny? Does my hon. Friend agree that if there had been pre-legislative scrutiny at a much earlier stage in previous Parliaments, some of the issues in the financial sector may not have been as profound as they have been?
Thomas Docherty
My hon. Friend is correct. I am baffled—I would happily take clarification from the Leader of the House or the Deputy Leader of the House—as to how removing one member of the Committee is tantamount to seeking to thwart the business of the House. My understanding—I am sure the Deputy Speaker would correct me if I was wrong—is that the Committee would still be quorate and would still be competent.
I look at the names of some members of the Committee and see good, learned and wise individuals from both sides of the House. At least one member, the hon. Member for Warrington South (David Mowat), is present in the Chamber to hear the discussion. The Committee consists of a competent set of Members from both sides of the House. My hon. Friend the Member for Leeds East (Mr Mudie) is a long-standing member of the Treasury Committee.
David Mowat (Warrington South) (Con)
I thank the hon. Gentleman for his generosity in referring to me. He is going through the list of people nominated to the Committee. How many of them does he think know more about international financial services than the right hon. Member for Yeovil (Mr Laws)?
Thomas Docherty
I will shortly move on to the thrust of my argument and come to the issue of the complications or otherwise for the Committee. We do not seek to thwart the aspects of pre-legislative scrutiny, but we do object to the Government’s choice of one specific individual to sit on the Committee. As I said, this is one of the most important pieces of legislation we will have before us in this Session, and possibly in this Parliament. One point on which both sides of the House would genuinely agree is that over the past few years there was a failing in the scrutiny and regulation of the financial industry. We can argue about who was more to blame for that and about light-touch regulation, or lighter regulation still—[Interruption.] I hear the chuntering from various sedentary positions and, were I to stray too far into the previous Government’s financial regulation regime, I suspect that you, might pull me up on that Mr Speaker.
This is about probity. Ultimately, this comes down to whether or not somebody—I refer to the Standards and Privileges Committee’s report—who was found to have had a serious lack of judgement, who knowingly and wilfully misled the Fees Office and who took significant sums of money, as the report states, is in fact a fit and proper person to sit on a Committee that will scrutinise the new financial services regime. I do not intend to read out the whole report and will stick very closely to the subject of the—
Mr Speaker
Order. The hon. Gentleman will resume his seat. I must emphasise to him and to the House that this is not a debate on the right hon. Member for Yeovil (Mr Laws), and it certainly cannot be a rehashing, reworking or reiteration of the contents of a particular report. This is a debate on the establishment of a Joint Committee. Members are entitled to comment on whether they think the Committee should be established and, if they do not think that it should be or wish to amend its composition, to explain why. A general ad hominem attack on a particular individual is not the purpose of the debate and cannot become its substance. I know that the hon. Gentleman will speedily redirect his remarks in an entirely orderly way.
Thomas Docherty
I am grateful, Mr Speaker. Obviously I took some very senior counsel this afternoon from Officers of the House, as you are aware, on how to stay in bounds and perhaps go offside, to use the modern—
Mr Speaker
Order. I say to the hon. Gentleman that, whatever senior counsel he sought and obtained, he can on this occasion make do with mine.
Thomas Docherty
I always have great respect for your counsel, Mr Speaker, and obviously do not seek a time when you might perhaps be advising other Parliaments in other parts of the country, or other parts of the world. [Interruption.]
John Mann
If I could hear myself speak, I would ask my hon. Friend whether he would care to comment on the fact that the constituency of Yeovil is an English constituency, whether he has considered the make-up of the Committee that is proposed, whether he perceives that it will in fact be an English Committee, rather than a United Kingdom one, and what the potential consequences might be, not least for his constituents, of that happening in such a biased way.
Thomas Docherty
I obviously look forward to my hon. Friend’s contribution in due course.
I must say that I thought the cracks about monkeys and organ grinders that the hon. Member for Devizes made did nothing to raise the standard of the debate, but as she used to work for the Chancellor of the Exchequer I expected nothing more, because her speeches were never that good when she worked for him. It is important that we look at whether the people who are being put forward in general are of a correct measure. The hon. Member for Warrington South, who I think is now detained elsewhere, asked about the qualifications needed for serving on the Committee, and my hon. Friend the Member for Bassetlaw (John Mann) and I are equally concerned about what qualifications should or may bar an individual Member from serving on the Committee. Having read from cover to cover the Standards and Privileges Committee report, and having read the introduction to the draft Bill prepared by the Chancellor of the Exchequer and his team about the need for financial probity and for a new set of regulations, I have severe doubts about whether one member of the Committee is adequately suited to the task.
In a week when Parliament has had to deal with some very severe accusations levelled against members of the Government and against members of Her Majesty’s police forces, when we have seen former special advisers being placed under arrest, and when Government Members simply argue, as I have heard them do today, that we will take people on the basis of the assurances they have given although they are under active police investigation, the public will look at this Committee and say that it beggars belief.
Dr Julian Huppert (Cambridge) (LD)
It has been said several times that the past week has seen Parliament at its best. How would the hon. Gentleman describe what he is doing now?
Thomas Docherty
If the hon. Gentleman thinks back over the past 12 months, he will recall that my hon. Friends the Members for West Bromwich East (Mr Watson) and for Rhondda (Chris Bryant) have almost single-handedly ploughed a furrow in highlighting an issue. Government Members heckled and shouted them down, and accused them of launching personal attacks on the Prime Minister.
Mr Speaker
Order. The hon. Gentleman must not be led astray into a spontaneous panegyric to his hon. Friends. He must focus very much on the matter in hand, which is the Joint Committee on the draft Financial Services Bill—quite a narrow brief, albeit an important one.
Thomas Docherty
Obviously, Mr Speaker, the hon. Member for Cambridge (Dr Huppert) led me down a very tempting path, and I will do my best not to be drawn down it again.
The draft Bill is a phenomenally large document. I am sure that on your evenings off, Mr Speaker, when you are drinking a glass of mulled wine, you will have had a chance to flick through its contents. It is a wide-ranging Bill that seeks, rightly, radically to overhaul our financial services industry. It is therefore right that the individuals from both Houses who are tasked with providing the legislative scrutiny are properly scrutinised themselves, because we are placing a huge amount of trust in their hands. I suspect, Mr Speaker, that if I were to go too far into the issue of trust you would rightly pull me up for it.
Robert Halfon (Harlow) (Con)
Members of both parties were implicated in various expenses issues. Is the hon. Gentleman saying that members of his own party who were so implicated should not serve on any Committee either?
Thomas Docherty
The hon. Gentleman asks a valid question. As a new Member who unseated a former Member who had to pay back thousands of pounds, I am very much alive to these issues. I absolutely believe that if someone is forced to pay back £56,000 to which they were not entitled because they had knowingly misled the taxpayer—the Fees Office—they should be excluded from being a member of a committee that oversees the new financial services regulation. That goes to the heart of the issue. If the hon. Gentleman does not agree with me, I respect that, but I hope that he will indicate that that is his view. I do not see him indicating dissent, so I assume that he agrees.
Mr John Spellar (Warley) (Lab)
My hon. Friend is focusing largely on the Commons composition of the Committee. Does he believe that the Lords composition makes it any broader or, to take the point made by my hon. Friend the Member for Bassetlaw (John Mann), any more representative?
Thomas Docherty
I am most grateful, as ever, Mr Speaker, for your counsel. Of course, that is a debate for another time. As the Leader of the House is listening, perhaps we will have a discussion in future about the joint membership of the Committee and both Houses will be required to give their agreement, but that is not the issue before us today.
On no fewer than four occasions over the past seven days, the Government Whips have tried to slip this motion through literally on the nod at the end of the evening. On each occasion, an hon. Gentleman has objected. [Interruption.] It was an hon. Gentleman, as it was me and my hon. Friend the Member for Bassetlaw (John Mann). Unless the hon. Member for Cambridge knows something I do not, I am fairly confident that I can refer to myself and my hon. Friend as gentlemen.
On each of those occasions, a number of brief back-channel discussions took place between various members of the Treasury Bench—I will not name them, even if they are here—about what was going on. They are fully aware of what this has been about. It was entirely a matter for those on the Treasury Bench. If they did not wish to have this debate tonight, they could have approached us to see whether there was substance to our objection, but they chose not to do so. Indeed, one member of the Treasury Bench thought that we were objecting to our own Members.
Mr Mike Hancock (Portsmouth South) (LD)
Perhaps the hon. Gentleman can explain what he would have accepted from the Treasury Bench.
Thomas Docherty
That is a very good question. I am looking at the many Liberal Democrats who are here tonight. I see the right hon. and learned Member for North East Fife (Sir Menzies Campbell), the hon. Member for Burnley (Gordon Birtwistle), who has a long track record in business, the hon. Member for St Austell and Newquay (Stephen Gilbert), who is a new Member, and the hon. Member for Portsmouth South (Mr Hancock). All of them have had a distinguished service in the House for various lengths of time, all of them have experienced careers outside the House, and crucially, all of them have constituents who have suffered from the failures of financial regulation in the last Parliament. If the Treasury Bench had genuinely offered any other member of the Liberal Democrat party to be a member of the Committee, I would have been happy.
Mr Hancock
As that is the case and the hon. Gentleman wants to have the last word on who serves on the Committee, why did he not put another name forward?
Thomas Docherty
I am grateful for that question. Obviously, I will not have the last word. Indeed, I imagine that you, will have the last word Mr Speaker when you read out the result of the Division that may occur later. Having taken advice from senior officers in the House, it is my understanding, although I have not checked the latest edition of “Erskine May”—the 24th edition, which was edited by the Clerk of the House, is out now and is a snip at £295—that Labour Members would not be allowed to put forward the name of a Liberal Democrat Member without their express consent. I fully understand why a Liberal Democrat Member would not seek publicly to undermine their parliamentary colleague and I respect that. It would be for the Government Whips to approach Liberal Democrat Members.
John Mann
My hon. Friend is getting to the nub of one of the key issues. Is not the dilemma that, when wishing to amend the membership of a Standing Committee or any other Committee of the House, the modernisation of this place has not gone far enough for anything other than the usual channels to determine such things? It is only in the last year that Chairs of Select Committees have been elected by the House. Modernisation has only gone so far. In raising such matters in the House, we are rather trapped in the antiquated systems of how we can object.
Thomas Docherty
My hon. Friend is entirely right. He will know that I am a member of the Procedure Committee, which is the successor to the Modernisation Committee. I have the privilege to serve with a number of the members of that Committee. He is right to say that this is something that I take a particularly keen—[Interruption.] I will give way.
Mr Mike Hancock
I am interested to know how the hon. Gentleman managed to achieve a place on that Committee.
Thomas Docherty
I think that you will correct me, Mr Speaker, if in my youthful naivety I have misunderstood the system. The Committee of Selection considers names, and those are put forward to the House for its approval. I think—again, you will correct me, Mr Speaker, if I am not fully aware of the procedure as a naive new Member—that the House had an opportunity to vote on that.
Mr Speaker
Order. I simply say to the hon. Gentleman that I do not think the House requires a disquisition on his career trajectory, which resulted in his ultimate elevation to membership of the Procedure Committee. I am sure it is a matter of very great interest, but it can be kept for the long winter evenings.
Thomas Docherty
Perhaps over a glass of mulled wine, Mr Speaker. I was simply answering the question asked by the hon. Member for Portsmouth South, but my point is that my appointment was subject to a vote of the whole House, and it was approved. [Interruption.] I suspect that with my career trajectory going downwards, as hon. Members suggest, that would not necessarily happen again.
My hon. Friend the Member for Bassetlaw is entirely right to say that we need to modernise the procedure. It is unfortunate that Members are being detained, and I do not wish to detain the House any longer—[Hon. Members: “Hear, hear!”] I have never had so much support from the Government parties. All I would say is that it is entirely regrettable that, although the Government Whips may say otherwise, they were intransigent in not being prepared to have even a single formal conversation with Opposition Members to see whether a solution could be found. It is regrettable that Members are being kept from their mulled wine, so with that I will sit down with no further ado.
John Mann (Bassetlaw) (Lab)
It is with pleasure that I address such a packed House. Having sat through and participated in a significant number of debates since the general election, I cannot recall on any occasion, even when there have been debates on so-called fundamental reform of the constitution by the Deputy Prime Minister, seeing so many Liberal Democrats present. I heard someone say from a sedentary position that this was Parliament at its worst, but it is a good sign of democracy for this type of debate to have so many active would-be participants. I welcome the Liberal Democrats into the House in such large numbers, and it is good to see that their coalition partners wish to see some balance and to be informed by the debate.
I hope that we can have the full, thorough and proper debate that the House has lacked in relation to the establishment of such Committees, which are a new venture for the House. They should generally be welcomed, but the Leader of the House and his shadow exemplified the bind that we are in, as democratic politicians in this House, when we attempt to amend anything in any way that has not gone through the “usual channels”.
Thomas Docherty
I did not get a chance to notice this while I was speaking—following the rules, I was looking at you, Mr Speaker—but has my hon. Friend noticed that one of the chief cheerleaders tonight is a Liberal Democrat Whip?
John Mann
We take the view that all Members of the House are equal, which is an important principle, so the ability to participate and influence should be equal. It is ironic, therefore, that when it comes to the selection of Committee members some are more equal than others. It seems to me that as we have started a modernisation process that is very slowly beginning to trickle through the House, after many years of waiting, that issue needs proper attention.
It is rather a shame that someone needs to table an amendment even to get the issue on to the Floor of the House. The Government were not going to allocate any time to debating this important Committee, its make-up, whether we should have it at all, the timetable allocated to it, the role of the House of Lords within it, whether the Lords should have a role in financial matters, or the issue of England versus the rest when it comes to the membership of the Committee. None of that could have been debated had not my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) and myself chosen to learn the rules and object at 10 o’clock on a number of occasions over the past week, and then to table an amendment. By its nature, that amendment has forced the Government to create time for this debate.
It is a little odd that the Government are seeking to have unlimited time for this debate, which can continue till any hour, when we have just debated major energy statements—a fundamental issue for each and every hon. Member and our constituents—with speech limits of five minutes per Member. That seems to me a poor allocation of time, but it is another example of the impotence of the Back Bencher in attempting to influence what goes on in here.
I do not court favour, and I never have, with any side of the House. Indeed, on some issues, on some occasions, I have been in a vocal but rather small all-party minority. When the expenses issue was first emerging, and this House was refusing to deal with it and was still not totally on top of it, the usual channels—or what I termed the “gentleman’s club”—were a hindrance to democracy and to our relationship with our voters.
Claire Perry
The hon. Gentleman seems to be taking a very high moral tone, but as a person who has been serially rebuked by the Standards and Privileges Committee, is he therefore ruling himself out of any future Committee membership?
John Mann
I shall give way in a minute.
There is an important point about who should be a Back Bencher and who should remain a Back Bencher, because within the House, some will always be fated to be Back Benchers, often at the behest of their party leader. In power, party leaders love to exercise the power to choose who will be in ministerial positions or sit on Committees and the rest. However, on occasion there is perhaps a democratic requirement that some people should choose to be Back Benchers, or be chosen to be Back Benchers, for the length of a Parliament. It can be quite cathartic, as a politician, to spend one’s time—
Mr Speaker
Order. This is not the occasion for the hon. Gentleman either to dilate or to rhapsodise about the merits of Back-Bench life. Anybody would think that he was seeking to imitate his hon. Friend the Member for Newport West (Paul Flynn), and to pen a book entitled, “How to be a Backbencher”. He is welcome to do that, but if he wishes to do so, he must do so outside the Chamber.
Kelvin Hopkins (Luton North) (Lab)
The hon. Member for Devizes (Claire Perry) accused my hon. Friend of taking a high moral tone, but does he agree that surely a high moral tone is to be preferred to a low moral tone?
John Mann
I am attempting simply to put across a few views that I believe would appropriately reflect the views of my constituents. I am putting no tone—high, low or otherwise—into this debate.
Members are elected to come and put forward in this House what we think appropriate. One thing that my constituents, and therefore I, would not regard as appropriate, and that the House overall should not regard as appropriate, is having a Joint Committee made up exclusively of English members. A Joint Committee on the draft Financial Services Bill that reflects this House, in the way that Select Committees do, ought to be more reflective of the entirety of the UK, and not just of England. I say that with some irony, because I am one of those who has argued that the English voice has been understated in this House.
Mr Kevan Jones
Does my hon. Friend agree that many financial services jobs are based in Edinburgh?
Thomas Docherty
It may assist my hon. Friend to learn that I have more than 2,000 people working in the banking industry in my constituency, not to mention the thousands who make the lovely commute every morning over the bridges to Edinburgh.
John Mann
I put it to my hon. Friend that it would be an own goal by this Parliament, not least considering the job losses in the Royal Bank of Scotland and other institutions in Scotland and elsewhere, to go ahead with this Committee with only English members. One of the niceties—
Gordon Birtwistle (Burnley) (LD)
The hon. Gentleman is obviously concerned by the lack of members from Scotland. There are two Labour members on the Committee, so perhaps one of them could be replaced by a member from Scotland. That would resolve the problem without bothering about any other party.
John Mann
I thank the hon. Gentleman for his point. There are other reasons why, when considering altering the balance of the Committee to represent the balance in Parliament more appropriately, we picked a Liberal Democrat to remove, not a replacement from my party. No replacement will be required if this resolution is passed, as I hope it will be. One of the consequences would be that the Government could rethink the membership of the Committee. The question of how many members, and the balance from Scotland, Wales, Northern Ireland and England—
Matthew Hancock (West Suffolk) (Con)
Will the hon. Gentleman give way on that point?
Matthew Hancock
The hon. Gentleman started his very long speech by saying that all Members were equal, but all his points so far contradict that principle. Can he not just end it?
John Mann
The hon. Gentleman is rather intemperate. Here we are having a good and important debate, and I anticipated an informed intervention from him. Instead, he merely wishes to curtail debate on equality. That says something about these new Conservatives, the partners of the Liberal Democrats—
Stewart Hosie (Dundee East) (SNP)
I am all in favour of gender balance on Committees, but the hon. Gentleman is a member of the Treasury Committee, which has only one lady member. I do not recall him ever making the point that he or his Labour colleagues—all of whom are men, of course—should be replaced by women.
John Mann
The hon. Gentleman is not an hon. Friend of mine—to use the parliamentary language—so he is not privy to the debates and discussions in the parliamentary Labour party. However, I assure him, and the House, that this is an issue that I have raised. It is one of the traps that the House has set for itself, in the same way as it has with this motion. How do we achieve gender balance? I intend to make some suggestions about what we can do if the amendment is passed, and why that is so important.
Andrea Leadsom (South Northamptonshire) (Con)
The hon. Gentleman will recognise that his party has just had the opportunity to appoint a new member to the Treasury Committee, but it did not take the opportunity to appoint a woman. We were joined by another Labour man for the first time today. The hon. Gentleman claims to be concerned about gender balance, but this rather spiteful amendment would have been better if it had proposed such a balance, rather than being a veiled attack on one hon. Member.
Mr Speaker
I ask the Serjeant at Arms to investigate the delay in the No Lobby.
Simon Hughes (Bermondsey and Old Southwark) (LD)
On a point of order, Mr Speaker. Is it usual or in order for Front-Bench Members to both shout and object on matters that are Back-Bench objections? I gather that the right hon. Member for Warley (Mr Spellar) and others may have objected in order to force the last vote, but it is my understanding that that is not the normal convention.
Mr Speaker
The issue is whether there is an objection. There are matters that some people, including the right hon. Gentleman, might deem unusual, and that may be so in terms of party combat, but that does not necessarily have an implication for the conduct of proceedings in Parliament or for the judgment of the Chair. That said, the right hon. Gentleman has put his point squarely on the record.
Sir Peter Bottomley (Worthing West) (Con)
Further to that point of order, Mr Speaker. Going one stage further as one of those Members who have, perhaps, been around for longer than we ought to have been, am I right in saying that there is a convention that votes follow voices, but that is not invariably the case?
Mr Speaker
It is not, but I strongly deprecate the suggestion that the hon. Gentleman has been around for longer than he ought to have been. [Interruption.] I am not wishing his untimely end, notwithstanding the sedentary dissent of the Patronage Secretary.
John Mann
As I was saying, equality is a fundamental issue in respect of Treasury matters. The make-up of this Committee reinforces and exemplifies an historical bias on equality that is a significant bar to effective decision making cross-party and over many generations. One only needs to look at the fact that Chancellors of the Exchequer have been male throughout the centuries. Therefore, in the modern era when all parties rightly, and with increasing success, are bringing women forward into Parliament, this Committee’s membership demonstrates an old-fashionedness and backdatedness that this House should not endorse tonight.
This gets to the nub of the gentleman’s club and the way in which decisions are being made and have been made. I suspect that no such discussions on equality took place as the names were put forward, and that, in fact, the different parties put forward their names in accordance with the usual time-honoured, historical tradition, and nobody then took an overview. I suspect that the bias against Scotland, Wales and Northern Ireland came about in exactly the same way.
Bob Stewart (Beckenham) (Con)
Based on this argument, I am surprised that two male Members have tabled this amendment. Surely 50% of them should have been female, but I do not think that that is the case.
John Mann
It is good that serious interventions are being made. On Treasury matters, there is a historical bias going back over the centuries, but this Parliament has not got to grips with it. We made exactly the same mistakes when establishing the Select Committees. The usual channels have brought forward names and those names are not reflective of the House or the country. That is a fundamental weakness.
Harriett Baldwin (West Worcestershire) (Con)
Will the hon. Gentleman be moving on to the next point, which is the disproportionate number of people called David on this Committee?
John Mann
I will not be making frivolous points about the forename or surname of any of the Members put forward for this Committee. However, the question of gender balance is not going to be knocked off the agenda so easily, because it is fundamental to the whole workings of Parliament. If Parliament in the modern era is portraying itself through one of the very first Joint Scrutiny Committees to be established and the elected House of Commons manages to get itself in a bind whereby all the Members put forward are English males, we are letting the country down. We are also letting down the principle of modernisation, which, superficially at least, is shared by those on both sides of the House. If we are really trying to encourage a wider array of people to take an interest in this House and, in future years, to stand for this House, how we portray ourselves in the Committees that we create is a fundamental principle.
I put it to the House: in what other way can the House manifest its commitment to an inclusive Parliament—a Parliament that is representative of all parts of the country, of all sections of the country and of both sides of the gender division within the country? There is a fundamental point at issue, which the Government, in failing to give proper time to have this proposal debated, are shying away from. That is a weakness at the heart of government.
Thomas Docherty
My hon. Friend is making a compelling argument. Has he considered the idea that in the future it might be helpful if a statement were attached to each name, spelling out what the usual channels felt were the Member’s qualifications for this Committee or for the Select Committees?
John Mann
No, I disagree with my hon. Friend. Others were arguing in interventions—they are welcome to make the point at greater length in debate if they wish—that this Committee should be based on experts, but that is a fundamental flaw of logic. The idea that it has to be bankers and specialist economists who investigate, make decisions on our behalf and carry out pre-legislative scrutiny and that the basis of these bodies should be some academic prowess or past profession is part of the old school and the gentlemen’s club. There is no reason why those from manual working backgrounds or care backgrounds should not also be able to participate in making such decisions as effectively as anyone else as members of these Committees.
When the world looks in, and, in particular, when our constituents look in, and we examine how far we have modernised or not modernised, as exemplified by the failure in the make-up of this Committee, we find, at the very end of the first year of this two-year Parliament and as we go into the summer recess, that the problem is magnified. We are talking about one of the last decisions made by Parliament before the recess. It is a recess that some believe is too long—I tend to share that view—but through which this Joint Committee will apparently be working. If that is the signal we send out to the country of how we see the modern world and financial services and how we intend to influence such services, it undermines our ability to do the kind of things we want to, although we disagree on the precise remedies. Removing such influence from ourselves and weakening ourselves by having such an unrepresentative Committee is a fundamentally flawed policy, but other weaknesses in the make-up of the Committee must be explored.
One such weakness is the fact that the balance between Government and Opposition does not reflect the balance in Parliament. That seems to me to be fundamentally wrong. There may or may not be a desire to have votes in the Committee, but, as regards the contribution, input and perspectives raised when four of the members come from the Government side and two from the combined Opposition side, that distribution does not seem to be democratic or appropriate. It does not reflect the election results.
Sir Peter Bottomley
Unless the number of members is increased, changing the balance by one person from 4:2 to 3:3 brings equality, which does not reflect the present situation in the House of Commons, does it?
John Mann
I thank the hon. Gentleman for his intervention, but there is no suggestion of any name being added—certainly not from me. The suggestion is merely to remove one name to create a better balance of 3:2. Of course, one never could and never should attempt to use an entirely mathematical equation to resolve such matters, but the principle that the balance in Committees should reflect the balance in the elected House is surely one this House would have to abide by. The hon. Gentleman is right; there could have been other ways of doing this, such as adding another member, but it seems to me that adding another member, perhaps from one of the smaller parties, would be rather a hostage to fortune, because we must ask which Member it would be and from which party. Back Benchers could not simply be nominated at random without some process to enable consultation—the very consultation that the Government failed properly to carry out for this Committee. We all know why the make-up of the Committee is as it is and what the Government’s agenda is.
Thomas Docherty
Perhaps my hon. Friend does not recall the exchange between me and the hon. Member for Portsmouth South (Mr Hancock), who is no longer in his place. I explicitly said that we would expect and hope that the Liberal Democrat party would offer a fresh name in the coming days.
John Mann
The right hon. and learned Gentleman, from a sedentary position, says that that is inconsistent, but there is no requirement for those proposing an amendment to agree on every remedy that would emanate from it.
My purpose is not to make any comment on individual Members but to ensure that because there is a balance between the other place and this place the Government take the issue back and rethink the entire make-up of the Committee in order properly to reflect the Parliament that we have, the elections we have had and the modern world we live in. I seek no more than that, but of course my hon. Friend the Member for Dunfermline and West Fife, who has added his name to the amendment, may have other, additional and different reasons. That does not negate the argument; indeed, one could argue that in a democracy it strengthens the case because there are different arguments from different perspectives with different options provided. The principle remains the same, however: it is invidious to have a balance of 4:2, four from the Government side and two from all the combined Opposition parties. However one looks at it, that in no way reflects the result of the last election.
It seems to me rather demeaning for this Parliament to go into such a long summer recess with this Committee apparently sitting through it with such imbalance and such bias. This question of priority and of why the Committee is sitting through the summer is another reason why the amendment has been tabled. If the amendment was passed, one would hope that the Government would be forced to rethink at this late stage. They chose not to table the debate earlier, although they had the opportunity to do so, but one would hope that the time for reflection they would have over the recess would also mean that the proposal for this biased and unrepresentative group, in relation to the general election, to Parliament as a whole, to the nations of the United Kingdom, to the gender balance in the House, to democracy and to the world in which we live, could not happen. It seems to me a wrong priority in the month of August, when there are many important things that we could be deliberating and engaging on, for this Joint Committee to be establishing its work. A slight delay allowing the Government to rethink, reformulate and re-democratise the proposal would be wholly in order. I am sure that in their heart of hearts that is exactly what hon. Members are thinking tonight, having heard the arguments that have been put forward. No hon. Member would want to go into this long recess having taken a decision so unrepresentative of our country, our Parliament and the world in which we live.
There is another fundamental issue at stake that has not yet been addressed, which the amendment would also allow reconsideration of—the giving away of financial control and powers to the other place. Important debates and deliberations on the future of the other place are currently going on, such as whether it should be partially elected—80% elected—how many should sit in it, where they should come from and what the time scale for reform should be. Those are all important issues, not least to parliamentarians in this House. Pre-empting that by giving financial powers to the other place—as the proposal is, in essence, a move towards doing—by having it scrutinise the draft Financial Services Bill jointly with this House is a start on a slippery slope in relation to the historical division on financial matters that has existed ever since democracy in this place was established. The proposal begins to unravel that and one might think that there are some within the coalition whose very agenda that is—those who want a proportionally elected second Chamber that has those financial powers. It seems to me that they have managed to sneak in, through this proposal at this late hour and this late stage—indeed, it would have been without this debate had we not tabled this amendment—potentially a constitutional issue of profound ramifications. It would mean handing over, albeit the very first semblance of doing so, financial powers, decision-making powers and authority to a second Chamber that some want to become an elected Chamber in the very near future.
There will be different views about that and I do not intend to go into what those views are—that is for another day—but it is relevant to the amendment to point out the consequences. Hon. Members who vote through this unwise, undemocratic, unegalitarian, anti-regions, anti-nations, badly thought-out, badly timetabled, rushed and last-minute proposal will be opening this House to potential ridicule from future generations who come here. They will ask when was the moment when we handed over to the other place that first little bit of power in relation to financial matters. When did we allow the second Chamber—
Mr Bernard Jenkin (Harwich and North Essex) (Con)
On a point of order, Mr Speaker. May I put it to you that the question of the allocation of powers to the other place is completely outside the scope of the motion?
Mr Speaker
I thank the hon. Gentleman for his point of order. I was listening intently and I was about to say, which I shall now do, that we are concerning ourselves in this debate with the establishment, composition and remit of the draft Financial Services Bill Joint Committee, upon which subject the hon. Member for Bassetlaw (John Mann) is tabling and, I think, speaking to an amendment relating to a narrow part of the matter—namely, a particular member of the Committee. A wider dilation about possible future transfers of power, which might haunt the hon. Gentleman, are not subject matter for this evening’s debate, to which I know he will now return.
John Mann
Thank you, Mr Speaker, for your advice. I seek your clarification on one important matter. It was my intention, as demonstrated by my previous remarks, to confine myself to one contribution, looking at the substantive motion as well as the amendment. I may be in error in so doing and may require a second speech. It was my intention to restrict myself to a single speech, and I seek your guidance in relation to that.
Mr Speaker
The hon. Gentleman should proceed with his speech according to his own lights. It is not the normal practice of the Chair to conduct a running commentary on the speech of any hon. Member or to advise an hon. Member in advance of when he might inadvertently be about to slip beyond order. The hon. Gentleman can protect himself.
John Mann
Thank you, Mr Speaker, for that helpful guidance.
The final point that I wish to make in relation to the amendment is that the randomness of selection of an individual member to remove can have many motives and be for many reasons. This important proposal by the Government is fundamentally flawed in its make-up, as I have outlined, being English only and male only, with the Committee meeting as a priority during the summer and being a Joint Committee with the House of Lords.
The weakness of the usual channels, inspired by Government and the Government’s timetabling, has meant that we have not been able to have this debate without amendment. I therefore urge that in future when such matters are before the House, they should not be tabled to be nodded through at 10 pm with no debate or require objections from individual Members or groups of Members in order to stop that process, requiring an amendment to allow a debate both on the amendment and on the issues underlying the make-up of the Committee and the flawed and biased decision of Government in that regard. That is the Government’s responsibility. We as a House have a responsibility to hold the Government to account and to ensure that they do not get away with such sloppiness in their programming of legislation that they put legislation—
Kelvin Hopkins
I am rather disappointed that my hon. Friend seems to be coming to the end of his speech, which I am enjoying so much. Does he agree that there are far too many tight programme motions in the Chamber and that we should have more thorough debates to make sure that every point can be thoroughly discussed, as my hon. Friend is doing?
Mr Speaker
Order. That is a most interesting intervention, but sadly it has absolutely nothing to do with the establishment, composition or remit of the Joint Committee on the Draft Financial Services Bill.
John Mann
I shall therefore humbly ignore my hon. Friend’s intervention and conclude my remarks. As guardians of our democracy, albeit within the confines of the gentlemen’s club and the usual channels, and despite the weaknesses imposed upon us by the lack of modernisation, it is our responsibility and duty to expose flawed proposals, such as how the Government have unnaturally put together this unrepresentative and biased group without allowing us a debate that is timetabled in a proper and normal way. It is the Government’s responsibility to get that right, and I implore them to do so in future to save us having to object repeatedly at 10 o’clock at night to the flawed logic and bad politics that they have had to use—we all appreciate that it is a difficult time for the coalition—in order to try to hold these two ramshackle coalition partners together.
Mr Kevan Jones (North Durham) (Lab)
It is an honour to follow my hon. Friend the Member for Bassetlaw (John Mann). As he knows, I was born in his constituency, so I have a fond spot for the area in north Nottinghamshire that he represents. I wish to oppose his amendment, but also to raise some concerns about the motion.
It is important that the work of the Committee focuses on getting this right. We all remember, certainly those of us from the north-east, that the first domino to fall in the financial crisis was Northern Rock. We saw people quite rightly queuing round the block, fearing for their savings and worrying what would come next. Getting regulation right will be very important, and therefore the work of the Committee will be very important not only for this generation, but for future generations.
It is clear that this Government, the previous Government and the previous Conservative Government grappled with getting the balance right between regulation and having a free market that allows markets to generate the capital and finance that industry and individuals require. Therefore, the Committee will be very important. The task we have set it, in quite a short time scale, which I will come on to in a minute, is rather intriguing. It is a little like the ark of the covenant, in the sense that I will be amazed if the Committee finds the perfect system for regulation.
The nature of the Committee was referred to earlier. The Government brought forward the White Paper setting out the draft regulation. I am a big supporter of draft legislation. I do not think that the press and public have quite got a handle on it yet, because when Governments change draft legislation it is seen as a defeat for them, and that should not be seen as the way forward.
Kelvin Hopkins
I very much agree with what my hon. Friend is saying. Does he not agree that more pre-legislative scrutiny would improve the quality of legislation and that we should have more of it?
Mr Jones
I agree. To be honest, my answer to the question of the second Chamber is ultimately to vote to abolish it. I have always been a unicameralist and think that if we did the job here better we would get legislation that was not only better, but more timely and well drafted, and we would not have the theatricals that we have to go through with the other place.
The draft legislation is being put forward and I welcome that process. I sat on one of the very first Joint Committees in 2003—the Joint Committee on the draft Civil Contingencies Bill. For a new Member, that was a very good process and learning curve, because it included young and inexperienced Members of this House, such as the hon. Member for Newark (Patrick Mercer) and myself, and Members of the House of Lords, such as Lord Archer, a former Solicitor-General, and Lord Condon, who is a former Metropolitan Police Commissioner. They brought a wealth of experience to that process, which was a good one in that it could not be replicated by the usual way in which we conduct legislative scrutiny in this place. The most important thing was that out of the 130 amendments that were tabled, well over 100 were accepted. The important thing about this Committee will be whether it genuinely conducts pre-legislative scrutiny and whether the Government will really consider changing their proposals.
My hon. Friend the Member for Bassetlaw talked about the House of Lords. I feel uncomfortable not about joint legislative scrutiny with the House of Lords, which is a good process, but about having it for financial matters. That makes me a bit nervous. Not only the membership of the Committee from this House, but the selection process in the other place, which is nothing to do with us, as I well know, have not been thought through. Getting the balance right is a difficult job. The supremacy of this place in dealing with financial issues has to be maintained. I would not like, as my hon. Friend said, for this to be a chink in the armour that breaks the convention that this House, not the other place, deals with finance. Unfortunately, that point seems to have been glossed over in the way that the Government and the usual channels have put the process together. The Procedure Committee or others might want to look in detail at how such Joint Committees come into being. I would not want it to become a regular occurrence for Joint Committees, including those considering financial issues, to have Members of the other place sitting on them and determining what is taken forward.
It will be difficult to get the Bill right. It will be like finding the ark of the covenant to find a regulatory system that everyone agrees with and that protects the public from the scenes that we saw a few years ago. It is interesting that we hear the Conservatives say these days that they are now for more regulation, even though in the 1980s they deregulated the financial markets and then called for less regulation when the previous Labour Government of whom I was a member were bringing in legislation.
I am concerned about the short time scale that is being allowed for the Bill. The motion says that
“the Committee should report on the draft Bill by 1 December 2011.”
We are about to go into a long recess and the Committee will have to work through that to keep to that timetable. I wonder why that date was inserted. Getting this right is more important than any headlines the Government wish to create so that they can say they have solved the problem of the regulation of the banks. The date needs to be reconsidered and the timetable extended.
Mr Jenkin
If the date is so important, why did not the hon. Gentleman table his own amendment? Why does he think that the Committee that this House is about to appoint is incapable of reporting to the House if it feels that it has not completed its deliberations? Its members have a mind of their own—they do not need the supervision that he is attempting to give them.
Mr Spellar
My hon. Friend agrees with the hon. Gentleman about his Front Benchers’ defence policy.
Mr Jones
Without wanting to be diverted by my right hon. Friend, I certainly do agree with the hon. Gentleman about defence expenditure and the shambles that this Government are making of defence, but I shall not digress to that.
It is important that we get this right, so I do not think that having 1 December is right. The hon. Gentleman is right to say that the Committee will change the date if it wishes.
We must look at what is being put forward. The motion states that the Committee shall have five powers:
“to send for persons, papers and records; to sit notwithstanding any adjournment of the House; to report from time to time; to appoint special advisers; and to adjourn from place to place within the United Kingdom.”
I will go through each of those because they are relevant to the work of the Committee. On the power to send for persons, papers and records—
The Comptroller of Her Majesty's Household (Mr Alistair Carmichael)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Parliamentary Commission for Administration and Health Service Commissioner for England
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Dame Julie Mellor to the offices of Parliamentary Commissioner for Administration and Health Service Commissioner for England.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following motion, on the remuneration of the Parliamentary Commissioner for Administration and Health Service Commissioner for England:
That, in the opinion of this House, the salary paid to the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be £152,000 a year, a sum within the range of salaries payable to Permanent Secretaries in the civil service as required by section 2(2) of the Parliamentary Commissioner Act 1967, as amended by the Parliamentary and other Pensions and Salaries Act 1976; and that this should be subject to (a) any relevant increase for Permanent Secretaries recommended by the Senior Salaries Review Body and (b) after the end of the current pay freeze, 1 per cent. annual uprating in lieu of performance pay; and considers that in future, and subject always to the statutory requirements, the remuneration of the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be agreed by the Prime Minister and the Chair of the Public Administration Select Committee in advance of the recruitment process, and reported to the House, prior to the House being invited to agree to an humble Address on such an appointment.
Mr Hurd
The first motion asks that an humble address be presented to Her Majesty, praying that Her Majesty will appoint Dame Julie Mellor to the offices of Parliamentary Commissioner for Administration and Health Service Commissioner for England. The second motion sets out the detail of her remuneration, and goes on to state that, in future, the remuneration for that role should be agreed between the Prime Minister and the Chairman of the Public Administration Committee before the start of the recruitment exercise. Dame Julie will be appointed for a non-renewable fixed term of seven years.
First and foremost, I wish to record the Government’s gratitude to Ann Abraham, who has undertaken the role of Parliamentary and Health Service Ombudsman with great commitment, independence and integrity. She has done much over the past nine years to increase the understanding of the work of ombudsmen.
The Government are also grateful to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and other members of the Public Administration Committee for their role in the selection of Dame Julie. In a departure from previous practice, the House has led on the appointment process, working in close co-operation with the Government. The Government are pleased that the new arrangement for the appointment of the ombudsman has worked well and delivered an excellent candidate in Dame Julie. The appointment process has included the PAC undertaking a pre-appointment hearing with Dame Julie. The recommendations contained in the Committee’s two reports, published following that hearing, form the basis of the Government’s two motions and I commend them to the House.
Roberta Blackman-Woods (City of Durham) (Lab)
I thank the Minister for his remarks and I also wish to take this opportunity to express the Opposition’s gratitude to Ann Abraham for her dedication and exemplary service throughout her period in office.
We welcome the Government’s decision to open the process of selecting the new ombudsman to the scrutiny of Parliament, especially by moving the approval of the appointment to this House. The previous ombudsman was selected by an open competition managed by the Cabinet Office and the House was not able to debate the appointment. Today’s debate gives the ombudsman the fullest authority available and can only improve her position.
We very much welcome the selection and appointment of Dame Julie Mellor to the post of Parliamentary and Health Service Ombudsman. She is a fantastic choice. I understand that there were a large number of applications of the highest quality, many with relevant experience in the sector, demonstrating the importance of the role and the responsibilities it demands. Julie has a reputation for strong leadership, including turning around failing public bodies and supporting staff teams to deliver more effectively and efficiently. She has 30 years’ experience of public services and business. She really demonstrates the skills necessary for this post, including strategic leadership, an ability to influence and effective communication. She has experience of corporate governance, commissioning and leadership.
However, I have a few comments to make about the remuneration process. While we welcome the appointment of Dame Julie Mellor to this role, and support the Government’s decision to open up the process of appointment to parliamentary scrutiny, we have concerns that the same transparency and openness have not been extended to the ombudsman’s remuneration.
The ombudsman has a quasi-judicial role as a result of their sole accountability for the decisions made and, as a result, for many years the ombudsman’s pay has been set within the permanent secretary pay band at the point equivalent to that of a High Court judge. The Government have decided to change this longstanding tradition of a fixed salary. At a time when the Government are seeking to increase transparency and accountability, the decision to abandon the existing fixed-salary scheme and transfer the power of decision to an agreement between the Prime Minister and the ombudsman is incomprehensible. Indeed, the decision appears even more arbitrary when we consider that it is being done at a time when the Government are also attempting to limit the pay of public officials.
The previous fixed-salary scheme ensured that the ombudsman’s pay remained in line with that of equivalent roles. I am concerned that without this there will be no independent influence determining the terms of pay. Instead, the remuneration arrangements for the preferred candidate for the post have been negotiated directly between the Government and the candidate for the role of ombudsman, circumventing the necessary scrutiny such a decision requires. The Public Administration Committee, in its report on the ombudsman’s remuneration, has outlined considerable concerns, stating that
“this is neither a sound nor desirable way to proceed.”
The report’s conclusion stated that the Committee regretted
“the Government’s insistence on moving away from the established arrangements and substituting it with an invidious process for determining a remuneration package for the Ombudsman without prior reference to the House.”
Perhaps more significantly, this direct negotiation places the prospective ombudsman in a position with the Government that impacts on the independence from Government influence that the role requires. The Opposition believe that it is essential that the ombudsman should not find themselves needing to negotiate their salary and any future increases with the Government. The Committee’s report recommended that the Government’s motion should commit the Government and the House to the principle that in future the ombudsman’s remuneration should be agreed between the Prime Minister and the Chair of the Committee. I am pleased that the Minister’s motion has recognised the Committee’s recommendation. However, the Opposition would wish to go further and recommend that in future the ombudsman’s remuneration be approved by the House in the same way as the candidate is now approved.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I do not intend to detain the House for long. However, with my colleagues’ permission, I would like to place one or two points on the record. In particular, I would like to join the tributes paid to the existing ombudsman, who has done such a fantastic job over so many years. Ann Abraham has stamped her authority on the office of the Parliamentary and Health Service Ombudsman. In particular, she fought a gallant battle over the Equitable Life issue. I am pleased that in the end it was resolved amicably between her and the Government. No one can say that she did not change the course of history on that question, as she has on so many minor issues that are equally important to the people concerned.
Ann Abraham will continue in office until the end of this year. She gallantly gave notice in good time that she wished to step down to give us time to decide not just to appoint a successor but how to appoint one. Traditionally, under legislation, the appointment is made by Her Majesty the Queen on the recommendation of the Prime Minister and with reference to a resolution of both Houses of Parliament. However, traditionally, the appointment process has been handled entirely by the Cabinet Office. Quite early in the process, the Public Administration Committee made it clear that we thought that this was no longer a process that reflected the present times and that Parliament should be much more at the forefront of this procedure. I am grateful that the Government readily conceded this point and handed the whole process over to the House of Commons.
I am extremely grateful to those who took part in the appointment process, notably the Principal Clerk of Select Committees, the permanent secretary at the Department of Health, Una O’Brien, who was the Government nominee on the panel, Professor Alice Brown, who is a former public service ombudsman in Scotland, David Prince, who was the external assessor appointed by the Appointments Commission, and myself. I am pleased to tell the House that we reached a unanimous decision in favour of Dame Julie Mellor. We had a strong field of acceptable candidates from which to choose and many of them were capable of doing the job, but Dame Julie Mellor has an outstanding record of achievement in the public and private sectors.
In particular, Dame Julie Mellor excelled as chairman of the Equal Opportunities Commission between 2005 and 2009. I can assure the House that we are fortunate to have her. That judgment was confirmed by the pre-appointment hearing conducted by the PAC on 6 July, which was chaired by a colleague on the Committee, the hon. Member for Luton North (Kelvin Hopkins). I absented myself as I had served on the panel and therefore had a conflict of interest. I wanted to ensure that the Committee had a free run in making its own judgment about the ombudsman. Again, she received unanimous approval from the PAC, and I am sure that the House will wish her well in her appointment.
Perhaps the more important issue to raise, however, is the ombudsman’s remuneration. As the hon. Member for City of Durham (Roberta Blackman-Woods) pointed out from the Opposition Front Bench, we have slipped into the habit of aligning the ombudsman’s salary with that of a High Court judge, which was appropriate, because, like a High Court judge, the ombudsman has the right to summon persons and papers to resolve the issues before her. However, in the interests of pay restraint, and with the Prime Minister’s salary in mind, the Government have set about trying to re-evaluate the correct salary for quite a large number of public appointments.
The Committee was, shall I say, distressed that the ombudsman’s salary was caught up in that general process. The difficulty that we had in arguing for the status quo was that the Parliamentary Commissioner Act 1967 makes no reference to a High Court judge; rather, it says that the salary should be fixed to that of a permanent secretary. Unfortunately, unlike in 1967, when the legislation was passed, the salary of a permanent secretary is a moveable feast these days. Their salaries extend from a little over—or even a little under—£100,000 to well over £200,000. Fixing the salary to that of a permanent secretary has now become an arbitrary process, although we did not feel it right for the Government simply to take the matter into their own hands. The Government were determined that we should advertise the post with a salary range that we describe in our report on the remuneration as “arbitrary”, and we are distressed that we were left in that position.
The current ombudsman has been clear that de-linking the ombudsman’s salary from that of a High Court judge leaves the office vulnerable to the charge that it is being downgraded by the Government. The office used to be analogous to that of the Comptroller and Auditor General, who now earns a significantly higher salary than the ombudsman. At some stage this matter will have to be addressed, but, as the hon. Member for City of Durham said, the most invidious part of the process is that the ombudsman, having been approved by the panel and agreed by the Government in principle, then had to negotiate her salary within the range offered by the Government, which was between £152,000 and £172,753. We did not feel it right that someone who will be responsible for holding the Government to account on behalf of complainants should have to negotiate her remuneration with the very Government whom she should be regulating. Having discussed the matter with one of two others in prominent public positions who had found themselves in the same situation, I can state that the Committee is entirely right to have concluded that this is an entirely unacceptable basis on which to proceed.
Charlie Elphicke (Dover) (Con)
It is a great pleasure to serve on my hon. Friend’s Committee. I would like to hammer home the point that the function of the ombudsman is analogous to that of a High Court judge, in that the ombudsman acts as a large-scale arbiter and provider of justice. As such, it is right and proper that the ombudsman’s salary should be on a level equivalent to that of a High Court judge. Does my hon. Friend agree that the appropriate course is for the Minister to listen to this debate, go away and reconsider the matter?
Mr Jenkin
I have great sympathy with my hon. Friend’s comment, but the Committee concluded that it would be wrong to upset the arrangements that the new ombudsman had negotiated with the Government. To her credit, she did not argue the toss. She simply said, “I want this job, I want to serve Parliament” and decided that, for her, the remuneration was not significant. However, it is instructive to quote what she told the Public Administration Committee during her pre-appointment hearing. On whether it was right to downgrade the job and to negotiate her own salary, she said:
“I have to say that I do not think it has been a satisfactory process, and I have found myself making the principled argument…around what the criteria should be for determining the pay, and I do not think as an individual I should have been put in that position.”
The Government, having accepted that principle, are addressing the matter, but I have spoken about this matter with such force because it raises questions about every single public appointment that the Government make, and the independence of the appointments is at stake.
I am bound to tell the Minister that, on the advice of the Public Appointments Commissioner, we shall return to the way in which public appointments are made in a future inquiry, because we think that the use of the Prime Minister’s salary as an arbitrary benchmark for salaries for positions such as these is neither a scientific nor a reasonable basis for making such appointments.
Robert Halfon (Harlow) (Con)
Like my hon. Friend the Member for Dover (Charlie Elphicke), I served on the Committee that interviewed Dame Julie Mellor, and I agree that she gave an outstanding interview. Will my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) acknowledge that she is taking a substantial pay cut to take on the job of ombudsman?
Mr Jenkin
My hon. Friend is absolutely right. Since Dame Julie ceased to be chair of the Equality and Human Rights Commission, she has been working in the private sector and earning substantially more than she could ever hope to earn in the public sector. For that reason, she felt that she was going to take a pay cut anyway, and the differences that were being argued about were not worth any suggestion of compromising her independence. She has argued, however, that she should never have been left in that position. This also has a lesson for other appointments—particularly, perhaps, that of the chair of the United Kingdom Statistics Authority. In that instance, with a more limited field of candidates, the Government’s preferred candidate has withdrawn her name, so we shall have to go through a reappointment process. Perhaps if the right salary and conditions had been set at the outset, rather than being arbitrarily cut by the Government, we would not now be facing that situation.
I wish to be charitable to the Government, however. I thank them for addressing this matter, and they have agreed in principle that these things should be done differently next time. They have agreed that the salaries should be decided between the Chair of the Public Administration Committee and the Prime Minister before the recruitment process starts, so that when the position is advertised there is no question of the candidate having to arbitrate his or her salary after the appointment has been made.
In closing, I invite the Minister to recognise that this is the system that is effectively being put in place for the Comptroller and Auditor General, and that the salary should be agreed between the Chair of the Public Accounts Committee and the Government. Should not this also be reflected in the legislation for the ombudsman? The “Open Public Services” White Paper, which was published last week, suggests that the Government will amend the powers of the ombudsman in respect of tendering for public services, and there might well be other changes to the office of the ombudsman in the next year or two, particularly with regard to public access to the ombudsman, which at the moment is not general but is confined to health service complaints. Does the Minister agree that it would be preferable for stability in the salary to be reflected in legislation, to protect the independence of the position in future, rather than relying on horse trading between a Select Committee and the Government, which is how we have to proceed at the moment? I invite the Minister to give us some assurances on those points this evening.
Mr Kevan Jones (North Durham) (Lab)
I should like to start by agreeing with what the hon. Member for Harwich and North Essex (Mr Jenkin) said about the role that Ann Abraham has played as parliamentary ombudsman. As Members of Parliament, many of us will have referred cases relating to the Child Support Agency and tax credits to her. She and her staff have dealt with those cases very efficiently and ensured that those people, who had had awful experiences at the hands of the system, got some redress. I should also like to welcome the appointment of Dame Julie Mellor to the post. She has considerable experience in the public and private sectors, and her enthusiasm for the role was evident during her interview with the Public Administration Committee.
The Government have not handled the issue of remuneration well. With their spin agenda and attempt to translate sound bites into policy, they do not understand one thing about the parliamentary ombudsman. There seems to be a difference between what the sound bite element in the Conservative party comes up with and putting things into practice. They are creating long-term problems for the Government in respect of the parliamentary ombudsman’s position. Her decisions, which will often criticise Departments for their dealings with our constituents, should be independent of the Government and this House.
It is in our interests as Members of Parliament to ensure that the ombudsman is as independent as possible. However, I do not think it is possible for her to be independent when she has to negotiate her own pay with the Government. I am not suggesting for one moment that Dame Julie Mellor is going to be influenced by money; clearly, as has already been said—by the hon. Member for Dover (Charlie Elphicke), I believe—she took a pay cut to do the job in question. We hear the rhetoric about being on a par with the Prime Minister’s salary, but no policy decisions have been made on that and no evidence has been provided on why the benchmark for senior positions should be the Prime Minister’s salary.
Since I have been in the House—the last Labour Government might have been as guilty as this one—independent bodies have been asked to decide on remuneration, but when Governments did not like the outcome, they changed it or argued against it. That might be justifiable when it comes to MPs’ pay, which we put out to an independent body. The first thing the Government did was to stop us taking the increase, which was to be over many years, taking our pay further and further down. There is a big difference between that and the ombudsman, who has to be seen to be independent from the Government. It is not acceptable for the Government or Executive to be able to exert any levers over the ombudsman.
There is a lot of inconsistency in what has been done. The hon. Member for Harwich and North Essex raised the issue of the Comptroller and Auditor General—another post that should be independent of the Government—but his salary range goes from £210,000 to £214,999. The point made by the hon. Member for Dover is right: with a link to a High Court judge, it is the independence of the person that counts. Controlling things in the way the Government have done—to be honest, I do not think they have done it intentionally; it is just that the soundbites have got the better of them—shows that they have not thought this through. If we are to have this nonsense whereby the Prime Minister’s pay is the benchmark, I ask the Minister to provide at least some justification of why and how it is formulated.
It is important to understand the history of the parliamentary ombudsman and the health service ombudsman. The Committee’s report was good both in questioning why things had been changed and in saying that the previous situation, although it had arisen largely as a result of tradition, was at least a justifiable way of determining the individuals’ pay.
Schedule 1 of the Health Service Commissioners Act 1993 says that where a person holds the office of parliamentary ombudsman and the office of the health service ombudsman, they are entitled to draw a
“salary pertaining to the office of the Parliamentary Commissioner.”
Section 2 of the Parliamentary Commissioners Act 1967 sets out the salary provisions for the parliamentary ombudsman, and section 2(1) states:
“There shall be paid to the holder of the office of Commissioner the same salary as if he were employed in the civil service of the State in such appointment as the House”
may resolve from time to time. The Act states that, in the absence of a resolution passed by the House, the salary payable to the ombudsman
“shall be the same salary as if he were employed…as a Permanent Secretary.”
Over time, the way in which civil servants are remunerated has changed. The current annual salary of permanent secretaries ranges from £140,000 to £239,999. There is also the bonus culture, of which, as a former trade union official, I am not in favour. To give the impression that civil servants’ pay is being kept down, the basic salary is kept down but bonuses are paid as well. Civil servants may be on the lowest scale of £140,000 a year, but by the time they have received their bonuses—and various other payments—they are earning considerably more.
The salary of the Cabinet Secretary and Head of the Home Civil Service ranges from £235,000 to £239,999. The salary of the chief executive of the national health service ranges from £210,000 to £214,999. The annual salaries of the permanent secretaries of the Departments that are responsible for most complaints to the ombudsman range from £170,000 to £174,99 and from £180,000 to £184,999.
It will be asked why that matters. I believe that it matters because of the status of the ombudsman herself. That can best be explained by means of an exchange of letters between the present ombudsman, Ann Abraham, and the Prime Minister, which revealed that the current salary was analogous to that of a High Court judge in salary group 4, which is £172,753. As the hon. Member for Dover pointed out, we are asking such people to act in a quasi-judicial capacity, and I think it important that they not only retain their status but cannot be influenced by Government.
In a letter to the Prime Minister dated 11 April 2011, Ann Abraham wrote:
“The existing arrangement provides an objective and effective mechanism for determining the Ombudsman’s salary, and any increases to it. It gives Parliament assurance that an Officer of the House is being appropriately remunerated and it provides clarity and certainty for the Ombudsman. It enables Government to reject out of hand any suggestion that Ministers or officials are applying undue pressure or offering inappropriate rewards to the Ombudsman.”
She went on to object to the salary bands proposed by the Government.
I think that it was right to link the ombudsman’s salary with that of a High Court judge, because it meant that the ombudsman, either on appointment or each year, would not interfere with, or have some influence over, his or her pay, and it removed the danger, which may be posed by the salaries of the many civil servants who earn much more than the ombudsman does now, that the person concerned would be influenced by his or her salary level. Continuing to do that would also dispense with the nonsense that if we are not careful—I will say more about this in relation to the motion concerning the increase in the salary of the new occupant of the post—it will be necessary to negotiate every time there is a new Government, or if the salary becomes pegged below its present level when the economy becomes buoyant in the next few years and pay restraint is removed.
Mr Peter Bone (Wellingborough) (Con)
The hon. Gentleman is making a detailed and valid point, but MPs, too, have to hold to account people who are earning a lot more money than them. Is there not a correlation between that point and the argument he is making?
Mr Jones
There is—and quite rightly. Because of previous Governments’ and this Government’s pegging of MPs’ pay, many people, even some quite low-level local government workers, are earning considerably more than us. In terms of the process that we are addressing however, it is important that the ombudsman is independent of, and cannot be influenced by, Government. We have a slightly different relationship with the individuals to whom the hon. Gentleman has referred.
These measures were all brought in on the basis of pay restraint. A lot has been said about trying to cut senior salaries. I have already mentioned the Auditor General’s pay, and there seems to be some inconsistency across Government about where this restraint should apply. If we are going to make exceptions, I cannot see why things were changed here, as opposed to, say, for Bernard Gray who was appointed Chief of Defence Materiel at the Ministry of Defence by this Government on a salary of £250,000 a year, plus a potential bonus of £30,000. I know that that is a very important job; it delivers equipment to our armed forces. I have no objections to Bernard, either; I know him well, and he is a very fine individual. However, if the decision was taken to break the principle of the Prime Minister’s salary being the ceiling in that case, I do not understand why the Government have intervened in that way in this other case.
The Prime Minister’s letter of 21 June reveals a lot about the attitude to pay restraint policy. I do not think he has understood the process. What we are doing here is going away from quite a well-thought-out system to one that has now brought into doubt whether not only current Ministers and Governments, but others too, could influence these areas in future.
Mr Jenkin
I think that the hon. Gentleman will find that when he served as a Minister, civil servants received performance-related pay and quite substantial salaries. Indeed, larger salaries were probably offered to public officials than the current Government are offering. I am therefore not quite sure what his complaint is. Does he now recognise that the Government have conceded the principle of what he is arguing in the wording of their motion, in that in future the salary will be agreed between whoever holds my office of Chair of the Select Committee on Public Administration and whoever is Prime Minister
“in advance of the recruitment process”
starting, so there will be stability in the salary at the outset of the recruitment process? I am therefore not quite sure what the hon. Gentleman is arguing with the Government about now.
Mr Jones
The hon. Gentleman has not won a great victory here, because he has no powers of determination now in respect of the existing salary, unless he is going to be able to go back and negotiate—be the shop steward—on behalf of the ombudsman each year to increase her salary. A mechanism would be better.
What is the difference between this instance and the cases of other individuals—such as the MOD example that has been given—in terms of the pay restraint policy that the Government are introducing? Another problem is where to start in terms of the salary band. As the motion says, the individual would get an increase, but that will be forgone at the moment.
Mr Jenkin
Is the hon. Gentleman seriously suggesting that we should have come back to the House of Commons, with the new ombudsman having negotiated and agreed her salary at the current level, demanding that the House of Commons vote for a higher salary than she has agreed? In these straitened times I think that the British public would have found that difficult to understand. Starting from now, we have come up with a much better solution to sort this out for the future without embroiling the new ombudsman in a silly controversy that would have distracted from the seriousness of her office.
Mr Jones
The hon. Gentleman cannot have it both ways. He cannot say that he is objecting to the arrangement and that he has obtained some kind of victory for the future when he has not. I am sorry to say that what was wrong was the fact that the Government intervened by imposing an arbitrary cap and then saying to the ombudsman, “Sit down and negotiate your pay.” He has obtained something for the future but it is not going to affect the starting salary or the situation now. He is asking whether it would have been wrong for his Committee to have suggested something, but it could have proposed a mechanism that would have possibly increased a larger salary. If it is okay for Bernard Gray at the MOD to be paid £250,000 a year plus bonuses, why are the Government not having consistency across the board? This is a very important job, as it involves independence from the Government and from Parliament, and it is wrong for the Government to be interfering.
Charlie Elphicke
I say to the hon. Gentleman that under the previous Government there was a lack of ability to check pay and keep it to the correct level. As a matter of policy, it is right, in general, that officials should not be paid more than the Prime Minister. Nevertheless, the failure and misunderstanding of the policy in this particular case relates to the fact that the ombudsman’s role is akin to that of a High Court judge, and her office means that she should be treated in the same manner as a High Court judge. That is what I hope Ministers will consider, and will perhaps reflect upon and act upon.
Mr Jones
I know that the hon. Gentleman is a new Member, but he is living in hope if he thinks that any future Government are suddenly going to throw money at individuals once the salary has been set; he is being a bit naive to say the least. He makes an interesting point about the figure of £142,500. The policy is that nobody should earn more than that. Why? Where has that come from? We know where it came from. It came from the soundbite machine at the general election, from this Government and from a Prime Minister who does not need the salary in any case, because he has independent wealth. If someone could argue that that was the proper level for the job, that would be fine and I would have no problem with it. However, no evidence is being put forward to support that figure of £142,500. That is an absolute fortune, and most of my constituents could only dream of earning anything like that, even in 10 years, let alone in one year. None the less, I would have more respect for the Government’s approach if there were an evidence base to suggest that that figure was the norm, rather than people plucking it out of thin air and then trying to give an impression that it is the norm and capping the pay of the ombudsman—the one post that it should not have been applied to—while having different arrangements for other positions, such as the MOD example that I gave, and others.
I opposed bonuses when I was a trade union official, and the hon. Gentleman is right about our approach. The last Government used them all the time; we tried to say that we were keeping civil service pay down but we were paying bonuses instead. I was always against bonuses because they do not accrue in terms of pensionable entitlements. Let us be honest and say that the Government should try to get away from this whole idea.
The Government have put forward the same argument in respect of local government. The idea that cutting the salary of the chief executive of Durham county council by £5,000 a year or £10,000 a year will actually make a difference in delivering £140 million-worth of cuts over the next three years is completely bonkers. It is nice for the newspapers and it is a nice soundbite at elections, but it does not do the job. What we need in all these situations, as we need in any organisation, is well-thought-out remuneration structures. I am not happy about the cosy relationship between the Chair of the Committee and the Prime Minister in determining the salary of this individual. What the Committee should have proposed are the proper, thought-out, independent salary review processes that we need. As I said before, all Governments try to ignore them when they do not quite fit what they are arguing for, but that is what we need in this case.
The Government have done the ombudsman a huge disservice by intervening in such a way. I feel sorry that she is now lumbered not only with this salary but with a feeling that she somehow has to negotiate her own salary. The Committee did not pull its punches. It said:
“We believe that this is neither a sound nor desirable way to proceed.”
One of the many things about the Government that concern me is the fact that they are completely ignoring processes in devising any type of policy. That leads not only to inconsistencies but to changes that will have an effect, over time, on how the ombudsman service is seen.
My final point concerns the motion. We will agree a salary of £152,000, which the motion says is
“within the range of salaries payable to Permanent Secretaries”.
It is and, as I have already demonstrated, it is not. There are some who are on possibly £100,000 more than that and who are eligible, as the ombudsman is not, to receive annual bonuses. The hon. Member for Dover is right. On some occasions in the Ministry of Defence, I could never quite work out which targets some people got bonuses for meeting. Bonuses were used as a way of avoiding giving pay increases.
The motion says that the salary should be subject to
“any relevant increase…recommended by the Senior Salaries Review Body and…after the end of the current…freeze, 1% annual uprating in lieu of performance pay”,
and that the House considers
“that in future, and subject always to the statutory requirements, the remuneration of the Parliamentary Commissioner…should be agreed by the Prime Minister”.
That is fine for the future, but why 1%? What is that figure based on? Trying to do something at the end is not very satisfactory. Although the motion will be passed tonight, the Government have a lot of questions to answer about why they have intervened in such a way.
Sir Peter Bottomley (Worthing West) (Con)
The hon. Member for North Durham (Mr Jones) has spoken in a way that has interested the House. If I say that he has managed to say in 23 minutes what he might have said in three, I hope he will take that as a compliment.
The essential point of the second motion is that the pay of the parliamentary ombudsman should be set in advance. There is a lack of clarity about whether that will be done before the appointment is advertised. Today, if the motion goes through, I shall be voting for the first time in 36 years for something that I think is seriously wrong. It is wrong to advertise a post and then negotiate with the person who is chosen and reduce the pay after the appointment has been offered. That is wrong. One can understand why the Government might have done it, but that does not make it right. Controlling spending is necessary, but to do it after an appointment has been offered is wrong.
I could say that many more times, but the fact is that this decision is one thing the House has done that is equivalent to what happened when Elizabeth Filkin was chosen to be the Parliamentary Commissioner for Standards. Her number of days was reduced, her pay was reduced, her appointment should have been renewed because in those days it was not a non-renewable appointment, and in her last week this House agreed to pay her the £30,000 she had been underpaid during her years of service. If I may make a remark about a former holder of the office of Chair, when the former Speaker said in her memoirs that she did not approve of the commissioner or of some action, I thought that was wrong as well.
Mr Jenkin
I feel compelled to intervene on my hon. Friend because I do not think it is accurate to say that the Government cut the salary after the post had been advertised. They notified the House of Commons that they did not wish to pay as much as the existing salary and the recruitment panel was left in the invidious position of wondering how to advertise the post. The strong advice we received was that we should advertise a fixed salary, but the Government would not allow us to do so. We advertised based on the existing salary, but that was qualified and the candidates were informed during the recruitment process that it was subject to alteration. It was not a satisfactory process, however, so the spirit of what my hon. Friend is saying is absolutely right.
Sir Peter Bottomley
I am grateful to my hon. Friend and I congratulate him and the Government business managers on finding a motion that could get through the House. The essential point remains however—I think I am right in saying this—that the salary negotiation took place after the person had been chosen, and that is wrong. Although I was not part of the process, I understand that the candidates were strong and that almost any of those who were well-qualified to be chosen could probably have decided to take the job at no pay if it had been advertised at no pay because it is an important position of public service to the people of this country and, indirectly, to improve the government of the country. The essential point is that we should never again start negotiating with someone who has been offered a job in competition by saying, “At what level will you do it?”
My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) referred to the UK Statistics Authority, whose report was published today. The report rightly says that its aims, with the Office for National Statistics, are respect—I do not think that aim has been met in this case—and working together to make a difference, which is true. Another of its aims is being proud of what has been done and always trying to do it better. In terms of trying to do things better I am not sure that, without a framework, it is correct for the Prime Minister and the Chairman of the Public Accounts Committee to decide rates of pay. We need to have a framework and then we can say, “This is what it would appear to be—it should be up or down on that.”
I ought to have started by saying that I approve of the selection of Dame Julie Mellor and that I would have approved of the selection of any of those on the shortlist because I agree with my hon. Friend the Member for Harwich and North Essex that any of those who got to the shortlist could have been appointed with honour and distinction. However, let me make a less important point. Motion 9, which is being taken with the lead motion, refers to the rate of pay which is
“subject to (a) any relevant increase for Permanent Secretaries recommended by the Senior Salaries Review Body and (b) after the end of the current pay freeze, 1 per cent. annual uprating in lieu of performance pay”,
and it goes on to things we have discussed already. I do not think those conditions are right. We ought to say that the rate of pay for someone holding that office should not change at all, as with Members of Parliament between general elections. We ought to say that, although there might be some inflation or even deflation, the rate of pay for someone holding a position that goes from appointment to a point at the end of service, or, as for us, from one general election to another, should remain the same. I do not think that 1% in lieu of performance pay dignifies the office, is necessary or makes sense, but that is not to be amended.
Mr Jenkin
I share my hon. Friend’s concern about this but the problem is the legislation, which allows the salary to be determined only in relation to that of a permanent secretary. That is why I invited my hon. Friend the Minister to give an assurance that we will, at the earliest opportunity I hope, update the legislation.
Sir Peter Bottomley
I shall conclude my remarks by joining in the praise for Ann Abraham and the way she has fulfilled the job, and I look forward with anticipation to Dame Julie Mellor’s doing the same.
I do not think anyone in the House thinks it was the Minister’s idea to get us to this position, although he might have helped us out of a difficulty. I hope that he will say to ministerial colleagues that it would be better to get my hon. Friend the Member for Harwich and North Essex, as Chairman of the Public Administration Committee, and others together to create a framework so that we avoid any possibility of dropping ourselves into such a mess again. I leave aside the fact that Dame Julie Mellor is female and that the House has a record of saying to people, “We’re going to change the terms of the job and a woman will do it.” There are other times when I may be more explicit about such things, but there is an opportunity to say here, with approval for Dame Julie Mellor and disapproval for the way we got ourselves into this fix, that we expect the Government to take on their responsibility and, with others, find a way of resolving it for the future.
Kelvin Hopkins (Luton North) (Lab)
I shall speak briefly to say some positive things about both Ann Abraham and Dame Julie Mellor. I was a member of the Public Administration Committee for eight years in the previous Parliament and met Ann Abraham on many occasions, saw her at work and interviewed her many times. She was always first class. She was steadfast, highly intelligent, a genuine representative of the people she served, and loyal to Parliament. She sometimes had to take stands on behalf of citizens and of Parliament in the face of the Government, who were sometimes unwilling to accept her recommendations. In the end, she won through with the unanimous support of the Public Administration Committee, which I was pleased about. Ann Abraham has done a tremendous job and I am sure other eulogies will be made when she retires at the end of the year.
Because the Chairman of the Select Committee, the hon. Member for Harwich and North Essex (Mr Jenkin), was on the appointment committee, I had the privilege of chairing the pre-appointment hearing. That was not just a privilege, but a pleasure. Dame Julie came before us and was subjected to an hour of questioning. Each member of the committee asked several difficult and searching questions and she came through with flying colours. She was absolutely the right person for the job and I compliment the hon. Member for Harwich and North Essex and his colleagues on recommending her appointment. They have got exactly the right person.
I am confident that Dame Julie will be a worthy successor to Ann Abraham. It was a pleasure interviewing her. We enjoyed the experience. For her, it may have been something of an ordeal but, as I say, she came through it very well indeed and will be a great success in the post. I add my support for the appointment.
Mr Hurd
There have been sincere tributes from both sides of the House to the work of Ann Abraham, and it is clear that she has made an outstanding contribution. Her legacy will be a valuable and lasting one, not least, as my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) said, in relation to Equitable Life.
I am delighted that there is such consensus about the qualities of Ann Abraham’s successor. Dame Julie Mellor’s record as chairman of the Equal Opportunities Commission demonstrates that she is able to perform well in a high- profile and sometimes controversial role, and is prepared to assert her independence and authority when required— all crucial traits, I am sure we agree, for a successful ombudsman.
A number of Members have made points about the remuneration arrangements for the role. The Government make no apology for subjecting highly paid public sector roles, particularly those paying more than the Prime Minister’s salary, to a strict policy of scrutiny and pay restraint, and do not believe that this undermines the status and independence of the ombudsman role. As set out in the motion, Dame Julie has agreed to accept an annual salary of £152,000, which will be subject to the current public sector pay freeze. Thereafter, the remuneration will be uprated in line with the text of the motion.
Sir Peter Bottomley
I do not make this as a personal remark. Could my hon. Friend consider, with his colleagues, making a written ministerial statement any time the Government next intend to negotiate the pay after a candidate has been chosen?
Mr Hurd
That leads me on to my next remark. The Government have reviewed the way the process was conducted and have been quick to accept the Public Administration Committee’s recommendation that for future appointments to the role, the remuneration arrangements should be agreed between the Prime Minister and the Chairman of that Committee before the start of the recruitment process. This commitment is reflected clearly in the Government’s motion.
My hon. Friend has raised the possibility of using any legislation coming out of the Government’s recently published open public services White Paper to enshrine these new arrangements in statute. As he knows, the Government’s proposals in relation to the ombudsmen set out in that White Paper are at an exploratory stage, and it is too early to know what may be required in terms of legislative reform, but the crucial point is that the Government are committed to these new arrangements going forward and that commitment is clear from the terms of the motion. Subject to the outcome of that debate, should a suitable legislative opportunity arise in the future, the Government will give serious consideration to enshrining the new appointment and remuneration arrangements in statute.
Sir Peter Bottomley
On a point of order, Mr Speaker. Would it be possible for the Chair of the Public Administration Committee to make the point that he was hoping to make?
Mr Speaker
No.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Dame Julie Mellor to the offices of Parliamentary Commissioner for Administration and Health Service Commissioner for England.
Parliamentary Commissioner for Administration and Health Service Commissioner for England (Remuneration)
Resolved,
That, in the opinion of this House, the salary paid to the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be £152,000 a year, a sum within the range of salaries payable to Permanent Secretaries in the civil service as required by section 2(2) of the Parliamentary Commissioner Act 1967, as amended by the Parliamentary and other Pensions and Salaries Act 1976; and that this should be subject to (a) any relevant increase for Permanent Secretaries recommended by the Senior Salaries Review Body and (b) after the end of the current pay freeze, 1 per cent. annual uprating in lieu of performance pay; and considers that in future, and subject always to the statutory requirements, the remuneration of the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be agreed by the Prime Minister and the Chair of the Public Administration Select Committee in advance of the recruitment process, and reported to the House, prior to the House being invited to agree to an humble Address on such an appointment.—(Mr Hurd.)
Business without Debate
Hon. Members
Object.
TRANSPORT
Ordered,
That Gavin Shuker be discharged from the Transport Committee and Graham Stringer be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)
Petitions
Chris Williamson (Derby North) (Lab)
Mr Speaker, you will probably be aware from press reports that the British train building industry hangs in the balance because of a Government proposal to build trains in Germany for the Thameslink rolling stock programme, rather than at Bombardier in Derby. Feeling in the city is running extremely high. I have secured more than 50,000 signatures for the petition, calling on the Government to look again at the proposal to award the contract to Siemens in Germany, not least because the Prime Minister visited Derby only three and a half months ago and said that he was committed to rebalancing the economy in favour of the manufacturing industry. The citizens of Derby are hoping that he and the Government will take the same course of action that we saw in 1971 when Rolls-Royce went bust and the Government at the time did the right thing.
The petition states:
The Petition of citizens of the United Kingdom,
Declares that they are concerned about the future of the British train building industry. Their concern is a consequence of the decision to appoint Siemens as the preferred bidder for the new fleet of trains for the Thameslink Programme. The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to reverse this decision.
And the Petitioners remain, etc.
[P000941]
Tessa Munt (Wells) (LD)
I rise to present a petition from the residents of Wells and others who are concerned about the standard of National Grid’s consultation relating to 152-feet high pylons that are proposed to go across the Somerset levels, which would spoil beyond belief the Somerset countryside and damage incredibly the tourism on which most of Somerset is dependent. The people of Wells and others have asked that National Grid consider a choice of various forms so that they can see the cost and other factors that are involved in using alternatives to pylons and overhead lines—in particular, that it should consider undergrounding using an under-sea route through the Bristol channel or a version alongside the M5 corridor. The petition includes the signatures of over 1,500 residents of Wells and the surrounding area.
The petition states:
The Petition of residents of Wells and others,
Declares that the Petitioners believe National Grid’s consultation on proposals to erect 152 ft high pylons is flawed; that the proposal would blight the beautiful unspoiled Somerset countryside; and further declares that the Petitioners accept that electricity transmission is essential but the Petitioners are concerned that National Grid is offering consultees a choice between two unacceptable routes, chosen by National Grid solely on the basis of cost, to the exclusion of other viable options such as undergrounding, under the Bristol Channel or along the M5 corridor.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to encourage National Grid to stop the current consultation into electricity transmission in Somerset and consider other viable options.
And the Petitioners remain, etc.
[P000943]
Nicky Morgan (Loughborough) (Con)
I wish to present a petition on behalf of the residents of Palma park homes in Loughborough that has been signed by 284 people. The House will be aware of concerns that have been expressed by Members of Parliament in all parts of the House about the way in which many park homes are managed. Such homes are often occupied by older and more vulnerable people. In Loughborough—I know that this experience is shared in park homes across the country—there are high maintenance and management charges and difficulties in selling these homes. At Palma park we have also recently had alleged incidents of violence between the former owner and the current owner of the park.
The petition states:
The Petition of the residents of Palma Park Homes, Loughborough, Leicestershire
Declares that the Petitioners are concerned about the standards of conduct exhibited by the owner of Palma Park Homes.
The Petitioners therefore request that the House of Commons urges the Government to introduce a fair, clear and simple licensing system for those owning mobile home parks, so that licence holders must show that they are fit and proper persons to hold such a licence, and that any regulations or legislation should set out how a licence may be revoked if a licence holder is found by the local authority to no longer meet the fit and proper criteria.
And the Petitioners remain, etc.
[P000945]
Election Petitions
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John Mann (Bassetlaw) (Lab)
I rise to introduce this Adjournment debate on an issue that should be, and I think will be, of interest to all Members of the House—perhaps unexpectedly and by surprise in future years if the law is not changed. I declare not an interest, but a long-standing personal friendship with one of the individuals to whom I shall refer—Mr Phil Woolas, the former Member for Oldham East and Saddleworth, who is nowadays something of an expert on election petitions and their impact.
There has been a long history of election petitions over the past 400 years, but since 1604 there has not been much change in this respect in Parliament and therefore in this country. There has been a fundamental weakness in how the law has been consolidated in 1983 and since then. As is well recognised, the Electoral Commission has been privy to cross-party discussions—one could even call them negotiations—on such matters. In a helpful advice note, the commission said of the legal basis for challenging the result of an election:
“There was broad support for a review of the current legal basis for challenging the results of an election. The general”—
cross-party—
“consensus was that the process was antiquated, not user-friendly and that reform of the process was needed.”
Similarly, on the rather minor issue of the correction of procedural errors, it states:
“If the Returning Officer concludes that the wrong person was declared ‘duly’ elected because of a procedural mistake, he or she currently has no powers to correct the error beyond advising the affected candidate to lodge an election petition.”
That is clearly nonsense and an anomaly that needs to be rectified in law.
Petitions on minor but important issues that do not affect the result do not occur. In essence, those issues disappear. One cannot challenge a precise wrong within the process without a full election petition. We should have a system that allows candidates or third parties to point to errors that do not affect the outcome without involving the principle or requiring the potential expense of attempting to remove an elected Member. Any candidate or third party with a rational interest should have the power to point to something that has been done that is anomalous, wrong or mistaken, such as errors that are made in the process by a local authority or a returning officer. The inability to do so in the current system, other than by an exchange of correspondence, is a weakness that undermines our system of democracy.
We now get on to the much bigger issue of costs and surety. Given the nature of political argument and the often heated debates within election campaigns, it needs to be difficult for losing candidates to put in petitions that could be deemed frivolous. If it is too easy to put in an election petition and every candidate puts one in, perhaps because they have lost by a few votes and are looking for an excuse to overturn the result, it clearly does not suit Parliament and democracy. That must be balanced against the potential risks of costs should one put in a petition. It should not be only those with significant wealth, and who might be able to meet adverse costs, who should feel confident about putting in an election petition if there is a wrong that requires righting. There is an imbalance within the process that needs to be rebalanced. We must allow genuine petitions to go forward without encouraging reckless or frivolous petitions that are not genuine, and the ability to take forward a petition must not rely on finance.
The problem of costs was compounded recently by a case involving local election petitions in Slough. This is not a party political point, so I will not even mention the parties involved. The key issue is the principle. One of the major parties ended up with a councillor in prison. The other party, which brought the case, sought to have its costs awarded when it won the case. However, the party whose councillor was in prison dropped the candidate. It was up to the party that won in court potentially to bankrupt the individual. Clearly there needs to be a better system than that. I put it to the Minister that what is needed is a provision to allow election courts a wider remit in awarding costs and in deciding who should meet them. In particular, if a party defends the case, or aids and abets the defence, there should be the possibility of costs in part or whole being awarded against that party rather than necessarily against the individual. I do not think the continuation of the Slough example will serve any of the political parties in this country in future.
A case that, perhaps remarkably, has not been discussed in the House before is that of Mr Phil Woolas, who was a Member of the House and was elected at the last general election. I think it is reasonably fair to say that he was a widely respected Member on both sides of the House. Of course, he is no longer a Member, and indeed he cannot stand in any election for three years. I am not questioning the judgment that was made; I am questioning the process and its weaknesses and inflexibility. I think it will be helpful if I quote part of the conclusion of the judgment made by the two judges who sat on the election court. They stated:
“In our judgment to say that a person has sought the electoral support of persons who advocate extreme violence, in particular to his personal opponent, clearly attacks his personal character or conduct.
It suggests that he is willing to condone threats of violence in pursuit of personal advantage.
Having considered the evidence which was adduced in court we are sure that these statements were untrue. We are also sure that the respondent had no reasonable grounds for believing them to be true and did not believe them to be true.”
One of the anomalies in the current law is the question of what is “personal character and conduct”. The previous time there was an electoral petition on the matter was the North Louth case in 1911. However, unless the law is changed, there is a danger in the era of the modern media that because one such case has been taken, many such cases could be taken. From looking at the publicity and propaganda that there have been, I think it is factually accurate to say that there have been worse in recent elections from all three main parties than in the case of Mr Woolas, and the candidates in question have won. Indeed, there is a significant question of how we determine the facts of a case. Others have raised that matter, and it was part of the appeal that was attempted. However, before I come to it, there is a point that has never been raised that I will raise for the first time.
I am aware that the leaflets that caused offence were not written by Mr Woolas. He never made great play of the fact that he did not write them, but I put it to the House that less honourable politicians may well have used that as a basis of defence, although not necessarily successfully. They might have said that somebody else wrote the publicity. The question is where the sanctions should be applied. Should they be solely applied to the candidate?
John Mann
No.
Clearly the candidate needs to take responsibility for their publicity, but the reason that question rings so true to me is that in 1997, I was sent by the Labour party to oversee the last five days of the campaign in Oldham East and Saddleworth of Mr Phil Woolas. I wrote the leaflets in the last five days, and Mr Woolas, as a good candidate, was not consulted on them at any stage.
In the parlance of the Labour party agents—it is no different among the other major parties—candidates have been known for decades as “LNs”—legal necessities. My leaflets were beyond reproach, but if they had not been, who would have been responsible? Would it have been the writer of the leaflets, the legal agent appointed by the candidate, or the candidate? It seems to me that some flexibility of sanctions is needed in the law, to take that question into account. The matter could be further complicated, of course, if leaflets were put out jointly with local election candidates, potentially involving two agents and different candidates.
It seems to me that there is a fundamental weakness in the law. In essence, the question available to the election court, as demonstrated in the case of Mr Woolas, is yes or no, guilty or not guilty. If guilty, the sanction must be the ultimate one of striking out. No other option was available in Mr Woolas’s case. There was no option of looking to see whether the leaflets influenced the campaign. Therefore, a leaflet that is written but never distributed—a copy could be obtained—could be used to overturn an election result.
There is a second principle: there is no right of appeal—the press coverage at the time of Mr Woolas’s case perhaps confused that. The Fiona Jones case in 1999 was a criminal prosecution. Because of that, she successfully appealed and was reinstated as a Member of Parliament. In the civil case against Mr Woolas, no appeal was possible, as was recognised when he attempted a judicial review, and therefore it was not possible to look at the statements of fact as determined by the election court judges. Natural justice in any other place dictates that there should be an appeal. A murderer of the worst kind has a right of appeal, and yet a parliamentarian who has lost his seat because of an election court ruling—as others could—does not. That anomaly needs to be changed. It was changed in relation to criminal cases because of the Fiona Jones case, but it was left out of the 1983 consolidation Act.
It is essential that the Government move quickly to change that before lots of similar cases are brought to attempt to change results. I put it to the House that in the internet era, there is a greater possibility of more cases being brought, because there are more outlets for things being stated as part of a campaign. The candidate— rightly and honourably—must accept ownership of those things, but he might not have direct control of them during the campaign. I put it to the Minister that we are all at risk.
My final point to the Minister is a separate one that relates to my election. I estimate that a wealthy benefactor in the other place, Lord Ashcroft, put in £250,000 to try to win my seat in the election, and he did so quite legally. Many photographs of the then Leader of the Opposition, the now Prime Minister, were sent by direct mail. One household received 29 direct mails, and mine received six. It was a waste of money—it may have increased my vote—but there is an unfairness in the system. If I had £250,000 to spend, I think I could increase my majority.
That also needs to be looked at. A review of fairness, honesty and integrity in elections is imperative—a review that does not excuse certain behaviour or give candidates of any party anywhere to run; and that allows honourable, fair and just campaigns and outcomes; but that leaves fair, just and reasonable remedies for those who wish to challenge them. The internet, e-mail, texting and Twitter age dictates that the Government must introduce legislation to change the foundation of electoral law in the UK, which is described by Roger Morris and David Monks, in “Running Elections 2003”, as
“Victorian in construction and tone”.
We need to modernise, and for all our sakes, we need to do so quickly.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
I congratulate the hon. Member for Bassetlaw (John Mann) on securing the debate. It is not the first time we have heard from him this evening, but no less the worse for that.
The Government want to improve public confidence in all aspects of our electoral system. I am sure that all hon. Members would agree that it is important that the conduct of all elections to this House, and to local authorities and the European Parliament, are beyond reproach. I agree with the hon. Gentleman when he says that we want elections to be decided through the ballot box and not in the courts, but some remedies should be available to deal with cases of corrupt or illegal practices by candidates or agents. There should be clear and robust mechanisms for challenging the results of elections, and he is right to say that they should include appropriate, proportionate and accessible safeguards. The Government’s view is that that is the case under the Representation of the People Act 1983.
The hon. Gentleman raised several issues of cost, including the overall cost, and made a specific point about a court’s ability to apportion costs. My understanding is that courts have a wide discretion under section 154 of the Act to apportion costs. He raised a specific case that I will endeavour to look at after the debate and consider what he said in the light of it.
The hon. Gentleman also made a point about proportionality. Although there may be technical reasons why a returning officer may have declared a particular result, revoking the election of somebody is a significant step and should not be done lightly. Although the hon. Gentleman suggested cases in which it might be considered only an administrative matter, if we think a little more about it we realise that those of us who have been elected would not want our elections to be overturned by some relatively straightforward process. It should be difficult to overturn an election, and we need to strike a balance in the level of proportionality.
Notwithstanding the relatively recent case of Phil Woolas, it is also worth saying that the election petition device—certainly for parliamentary elections—is rare. There have only been seven petitions issued against the results of UK parliamentary elections since 1997, and only two of those have been successful. Hon. Members on both sides of the House would agree that it would not be healthy if we had regular challenges.
The hon. Gentleman mentioned appeals. The High Court in the Woolas case confirmed that section 144 of the 1983 Act said that decisions of the electoral courts were final insofar as matters of fact were concerned. The hon. Gentleman was right about that, but I do not agree that that was a misconsolidation of the 1983 Act. If he goes back to the 1868 Act—I will not go as far back as the 400 years that he suggested—he will see that it was also clear that matters of fact were final decisions that the election court could take. In the Woolas case, the High Court made it clear that the decisions about the application of the law were judicially reviewable—
Mr Harper
I shall come on to that point in a moment. I just wished to make the distinction clear between matters of fact and the application of the law, which—to be fair—the hon. Gentleman did. The High Court made it clear that it was possible for judicial review of how the election court had applied the law.
On the basis of that decision, I do not think that the law needs to be changed to clarify the decision that matters of law can be appealed, although there was confusion in the reports of the case about whether Phil Woolas was appealing or requesting judicial review.
It is for Members to weigh up the issues, taking into account the hon. Gentleman’s point that we never know when we might be the subject of one these petitions. However, we must balance against that the need for a level of speed in the process. When Phil Woolas sought a judicial review, the High Court concluded on the justification for finality on fact:
“Election petitions must be determined with urgency. Finality in the determination is of great importance for not only must the electors have a representative in Parliament, but in times when majorities are small, the absence of a Member can be significant.”
A balance needs to be struck in this process between getting the right decision and getting it quite speedily. He raised several points about that matter. The Government keep it under review, but at the moment we are not persuaded by his arguments.
At the end of his remarks, the hon. Gentleman raised a more general issue about party funding. He will know that the coalition Government have made a commitment to deal with party funding—hopefully, on a consensual basis. We are waiting for the Committee on Standards in Public Life to publish its report. The committee might make proposals that we can take as a basis for conversations between the parties and that might deal with some of the issues he has raised. He also made a point about the danger of political arguments being used to try to overturn elections. I think that the High Court made clear the distinction between false statements of fact about a candidate’s personal character or conduct and their political or public position—a statement had to be one or the other, but could not be both. Members when approving literature and others when thinking about challenging us should bear it in mind that it is not about running off to court every time someone says something about someone’s political position.
The hon. Gentleman made a point about things that get authorised by us. The legislation makes it clear that candidates should be liable to have their election voided only if they or their election agents—not lots of other people, but specifically they or their election agents—have authorised or consented to those illegal practices. That should ensure that election candidates and their election agents are careful about what they authorise and approve the spending of money on. They should perhaps be careful not to delegate that responsibility to others. It is not the case that anybody involved in a campaign can put out pieces of paper—if they are not approved by the candidate or election agent, they cannot lead to what happened in the case of Mr Woolas.
In conclusion, the Government agree that there should be proportionate and accessible procedures for challenging elections. We will keep the current position under review, and I will consider the specific issues that the hon. Gentleman raised, particularly on costs, and come back to him one way or the other.
Question put and agreed to.
Petitions
Response to DEFRA Consultation on Water Charges in the South West Water Area
Accident and Emergency and Maternity Services at King George Hospital (Ilford North)
Abolition of cheques
Written Ministerial Statements
(12 years, 11 months ago)
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English for Speakers of Other Languages
(12 years, 11 months ago)
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The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
I am today publishing the equality impact assessment of provision of English for speakers of other languages (ESOL) training, which I ordered earlier this year. I did so because of my determination that necessary additional cost-effectiveness should not unduly disadvantage vulnerable individuals in vulnerable communities.
Furthermore, I have asked the Association of Colleges to advise on developing with key providers an effective methodology for targeting funds at settled communities in which language barriers inhibit individual opportunity and community cohesion. Given the respective work that Lord Boswell and Baroness Sharp are doing on adult literacy and colleges in communities I have asked that they are involved in this work.
Simultaneously, we will devise means by which the quality of ESOL can be measured more effectively with a new emphasis on familiar benefits, progression to further learning and employment. I will discuss measurements of quality with Ofsted.
By targeting public funding on those in greatest need, and setting higher standards for providers, our reforms will make ESOL provision work better for learners, employers, and taxpayers.
Between 2001 and 2005 ESOL enrolments tripled, and Government spending peaked at £271 million. Despite policy introduced in 2006-7 to limit automatic fee remission to those on income-related benefits, by 2008-9 spending had only fallen to £250 million. We are, therefore, determined to continue to regain control of spending by introducing the further measures.
From August this year, full Government funding for ESOL courses will be available only for people on jobseeker’s allowance and employment support allowance (work related activity group) to help them find work. As part of a broader move towards rebalancing the investment in skills between Government, the employer and the learner, other eligible learners will be expected to make a contribution towards their course fees.
It is unacceptable that the public purse pays for free English language training for people who have come here to take up work—companies that recruit abroad must take full responsibility for that decision.
But I know that, in particular, there are women and families who rely on community-based English language to help them communicate with their children’s schools, as well as opening the door to other public services.
I am, therefore, pleased to announce that we will work in partnership with the Department for Communities and Local Government on developing new forms of support for those who need informal, community-based learning of English.
I am placing a copy of the impact assessment in the Libraries of both Houses.
Double Taxation Convention (United Kingdom and the Republic of Armenia)
(12 years, 11 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
A new double taxation convention with the Republic of Armenia was signed on 13 July 2011. The text of the convention has been deposited in the Libraries of both Houses and will be made available on HM Revenue and Customs’ website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.
Isle of Man Indirect Tax Revenue Sharing
(12 years, 11 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Treasury has agreed a revision to the formula governing the sharing of joint indirect tax revenues under the 1979 Customs and Excise agreement with the Isle of Man.
The new formula is intended to give the Isle of Man the revenue that they would collect if they ran their own indirect tax system, while providing the Isle of Man with generous transitional payments. In 2010 the Isle of Man changed the way that it measured its national income to more closely follow international standards. Under the previous formula this would have implied a significant increase in the Isle of Man’s share of joint revenues. The new formula provides the Isle of Man with a share of joint indirect tax revenues similar to that which the UK Treasury expected when the last formula was agreed in 2009.
The Treasury welcomes the recognition by Isle of Man Government that the previous revenue sharing formula was not sustainable and we are pleased that a new formula has been agreed, following negotiations. The Treasury hopes that it provides a stable and secure basis for the long-term future of the Customs and Excise agreement between the United Kingdom and the Isle of Man.
Counter-Terrorist Asset-Freezing Regime: 1 April 2011 to 30 June 2011
(12 years, 11 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
Under the Terrorist Asset-Freezing etc. Act 2010 (the Act), the Treasury is required to report quarterly to Parliament on the operation of the UK’s asset-freezing regime mandated by UN Security Council Resolution 1373.
This is the second report under the Act and it covers the period from 1 April 2011 to 30 June 20111.
This report also covers the operation of the UN al-Qaeda and Taliban asset-freezing regime.
As of 30 June 2011, a total of just under £230,0002 of funds were held frozen in the UK. This covers funds frozen under the UK’s domestic terrorist asset-freezing regime, mandated by UN Security Council Resolution 1373, and also funds frozen under the UN al-Qaeda and Taliban asset-freezing regime, mandated by UN Security Council Resolution 1267.
(1) UK’s domestic terrorist asset freezing regime under the Terrorist Asset-Freezing etc. Act 2010
As of 30 June 2011, a total of 85 accounts containing just over £120,000 were frozen in the UK under the domestic terrorist asset-freezing regime. No new accounts were frozen during the quarter.
Operation of the Terrorist Asset-Freezing etc. Act 2010
Asset-freezing designations and reviews
In the period 1 April 2011 to 30 June 2011, the Treasury made no new designations under the Act and did not conduct any reviews of existing designations.
Licensing
Maintaining a fair and effective licensing system is crucial to ensuring the overall proportionality of the asset-freezing regime, whether the individuals concerned are subject to an asset-freeze in accordance with a UN or EU listing, or domestic designation. A licensing framework is put in place for each person in the UK on a case-by-case basis. The key objective of the licensing system is to strike an appropriate balance between minimising the risk of diversion of funds to terrorism and implementing asset-freezes in a proportionate way. Licences contain appropriate controls to protect against the risk of the diversion of funds for terrorist finance.
A total of four licences were issued this quarter under the Act in relation to three persons subject to an asset-freeze.
In addition to issuing licences relating to a specific person, the Treasury may also issue general licences, which apply to all persons designated under a particular regime or regimes. Licences are granted where there is a legitimate need for such transactions to proceed and where they can proceed without giving rise to any risk of terrorist finance.
No general licences were issued this quarter under the Act.
Legal Challenges
Two legal challenges against designations made under both the Terrorism (United Nations Measures) Order 2009 and the Act were ongoing in the quarter under review.
(2) UN al-Qaeda and Taliban asset-freezing regime
The UN al-Qaeda and Taliban asset-freezing regime, established under UNSCR 1267, is implemented in the UK by Council Regulation (EC) No 881/2002. Enforcement measures are provided for in the UK’s al-Qaeda and Taliban (Asset-Freezing) Regulations 2010.
In June, the UN adopted resolutions 1988 and 1989 which split the UNSCR 1267 al-Qaeda and Taliban regime into two separate regimes. The UN also introduced welcome new due process reforms including strengthening the role of the ombudsperson and enhancing arrangements for reviewing designations.
This quarterly report covers the combined al-Qaeda and Taliban 1267 regime. Future reports will cover the operation in the UK of the 1989 al-Qaeda regime and the 1373 regime only, as the Taliban regime will be taken forward on a basis similar to other country sanctions.
As of 30 June 2011, a total of 84 accounts containing just under £110,0003 were frozen in the UK under the al-Qaeda and Taliban asset-freezing regime.
Designations
During this quarter, the EU added three people to the list in annex I to Council Regulation (EC) No 881/2002.
Six people were delisted during the quarter, none of whom had UK connections.
Licences
Seven individual licences were issued in this quarter in relation to three persons subject to an asset-freeze under the al-Qaeda and Taliban asset-freezing regime. One of these licences was revoked.
(3) Proceedings
In the quarter to 30 June 2011, no proceedings were initiated in respect of breaches of the prohibitions of the Act or the al-Qaeda and Taliban (Asset-Freezing) Regulations.
1The detail that can be provided to the House on a quarterly basis is subject to the need to avoid the identification, directly or indirectly, of personal or operationally sensitive information.
2This figure reflects the most updated account balances available and includes approximately $64,000 of suspected terrorist funds frozen in the UK. This has been converted using exchange rates as of 05/07/11.
3Includes approximately $64,000 of suspected terrorist funds in the UK.
Remote Gambling
(12 years, 11 months ago)
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The Economic Secretary to the Treasury (Justine Greening)
On Thursday 14 July, the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Weston-super-Mare (John Penrose), who is responsible for tourism and heritage, announced that he proposes that the Gambling Act should be amended so that remote gambling is regulated on a point of consumption basis. Under this proposal all operators, whether from here or abroad, will be required to hold a Gambling Commission licence to enable them to transact with British consumers. I will review the case for changing the taxation regime in line with my hon. Friend’s proposal and taxing operators on the basis of customer location.
Separately, other countries are also changing both their regulatory and taxation regimes for remote gambling. I will consider the tax implications of these developments. In particular, I will consider ways to prevent operators in the UK being subject to double taxation on remote gambling in the shorter-term.
Local Government Finance
(12 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
In the interests of delivering greater transparency I am today making available the written representations received by the Department for Communities and Local Government from local authorities during the consultation period on the 2011-12 provisional local government finance settlement. Copies of all written representations from local authorities received can be found at:
www.local.communities.gov.uk/finance/1112/consultreps/index.htm
This opening up of this year’s local government finance settlement is provided in the context of the announcement we are making today to change the way local government is funded through the local retention of business rates from 2013.
The new system should reduce councils’ dependency on central Government and ensure they channel their energies into investing in local growth, rather than, as now and as illustrated in these written representations, focusing on lobbying for more resources at the expense of other local authorities.
This statement updates the number of responses given in the written ministerial statement of 31 January 2011, Official Report, columns 26-28WS, about the consultation on the provisional local government finance settlement for 2011-12. Responses were received from 230 local authorities.
Background
The last Government left the biggest budget deficit in our peacetime history—with the state forecast to borrow £146 billion a year in 2010-11, or £400 million being borrowed every single day. The coalition Government’s savings will help eliminate the structural current deficit by 2014-15. This will help keep interest rates down, restore economic stability and reduce the amount of taxpayers’ money that would otherwise be spent on debt interest. As with a credit card bill, the longer one leaves to pay the debt off, the worse it gets. If a Government live beyond their means, it will mean higher taxes or deeper spending reductions in the future.
Councils account for around a quarter of all public expenditure, so they must play their part in the coalition Government’s determination to tackle the deficit. Even so, Ministers made several changes to the way central Government grant is shared out between authorities to achieve a fair and sustainable settlement.
The coalition Government took into account that some councils are very dependent on central Government grant. The weight given to levels of need in the formula was increased, so that more money follows socio-economic indicators. Four different bands were set for damping purposes for authorities in different circumstances, reflecting their relative reliance on central Government grant. These banded floors ensure that the most dependent authorities get the smallest reductions.
Ministers also smoothed the impact of the reductions and limited the need for councils to front-load their spending reductions. Reductions in overall spending power were limited to no more than 8.8% for all councils in 2011-12. The transition grant funding provided to limit losses—some £96 million this year—is going to the most dependent areas.
Taken together, these actions mean that those areas which are more reliant on central Government grant are protected from the greatest reductions in grant in the local government finance settlement for 2011-12.
Furthermore, Ministers have removed many costly burdens on local government such as comprehensive area assessments, and have removed ring fencing around all revenue grants except simplified schools grants and a new public health grant to provide the maximum local flexibility to allocate funding efficiently. These freedoms are accompanied by £300 million of capitalisation in 2011-12 to help early restructuring. The main application deadline was 12 May. It is intended to issue capitalisation directions in July, nearly six months earlier than in previous years, to provide early clarity to authorities.
Changes in the final settlement
The local government finance settlement for 2011-12 was approved by the House of Commons on 9 February 2011. Following consultation Ministers made a number of changes. Key amendments arising out of the consultation were:
£10 million was added to district formula grant to compensate for concessionary fares changes;
Transition grant increased so that no council faced a reduction in their spending power of more than 8.8% (from 8.9% before consultation), based on spending power figures as set out at the provisional settlement;
Spending power calculations were revised to exclude parish precepts, and to reflect local allocations of Local Economic Growth Initiative, Housing Market Renewal and Eco-Towns grants where one local authority acts as an accountable body for several local authorities;
A £1.9 million reduction was made to the quantum of the adjustment for the South Downs National Park;
The base position for Bury and other Greater Manchester authorities changed to reflect that Bury are no longer lead authority for staff transferred from the Learning and Skills Council, and;
The spending review announced that £200 million of capitalisation would be available in 2011-12. Following representations from authorities, the Government decided to increase the amount to £300 million, which was announced on 3 March.
Common themes raised by local authorities
Councils believe the current system is far too complex and lacks transparency, making it very hard for local communities to understand.
Councils frequently called for changes to be made to advantage their council at the expense of others. For example, Barnsley metropolitan borough council argued against the large proportion of floor damping that goes to local authorities in London and the south-east. By contrast, Basingstoke and Deane borough council argued against authorities above the floor having to fund floor damping, calling for a reduction of the scaling factor used for district councils and opposed the increase in weighting for relative needs.
The Association of North East Councils argued that the north-east received a worse deal than the south-east, and that deprivation had risen more in the north-east than London since 2007.
Brighton and Hove city council disagreed with the area cost adjustment for Cumbria, Wolverhampton, Wigan, Liverpool and Oldham, but not to its area. London councils contended that London has faced particularly tough settlements over the last five years, and that the area cost adjustment system penalised councils in high-wage labour markets like London. Southampton city council objected to being scaled back in the damping mechanism in order to fund inner-London boroughs. Ashford borough council asserted that district councils and south-east councils were being treated less favourably than other parts of the country.
Councils frequently maintained that they were so deprived that additional funding and weighting should be given to them, or that the measures of deprivation did not properly reflect their real level of deprivation.
The representations, taken together, illustrate the need for reform of the local government finance system. At present, the massively complex and opaque system encourages local authorities to argue for more money at the expense of other local authorities, and to champion their particular circumstances and downplay their locality rather than seize the opportunities for growth and success.
A New Framework for Local Television
(12 years, 11 months ago)
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The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)
Today, I am publishing a new framework setting out proposals to help create a new generation of local TV services across the UK.
The framework outlines the steps the Government intend to take by using available secondary order-making powers and the funding of up to £40 million secured through the licence fee settlement with the BBC to support local TV services.
The proposals include three statutory instruments: the first, to reserve sufficient local, low-cost spectrum for carrying the local TV services; the second, to create a proportionate and targeted licensing regime for the spectrum and local TV service operators; and the third, to secure appropriate prominence for the licensed local services in television electronic programme guides.
Local TV will provide news and other content for local audiences, helping to holdlocal institutions to account and providing proper local perspectives. This framework offers the right incentives to the market to develop innovative business models; provides greater certainty and reduced risk for investors; and encourages new market opportunities and growth.
This framework takes into account a range of views provided to the Government through an earlier consultation and has involved a broad assessment of the technical, commercial and regulatory requirements involved. Information on spectrum coverage and possible locations will be made available in due course.
It is expected the first local television licences will be awarded by Ofcom from summer 2012. I have placed copies of the framework and associated impact assessment in the Libraries of both Houses.
Royal Parks Agency
(12 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)
I am publishing today a statement regarding the future governance of the eight royal parks and the Royal Parks Agency
In my ministerial written statement to both Houses on 18 January 2011, I outlined how the Government were committed to transferring more responsibility for the management of the eight royal parks to the Greater London Authority (GLA) and to ensuring that Londoners had a voice in how the parks are managed.
I have now considered a range of options for how best to achieve our objective of greater accountability to the GLA and to park users and local residents. I do not believe that primary legislation is necessary to transfer responsibility for the day-to-day management of the parks. Instead, I believe that it is possible to achieve an outcome that allows the mayor and local interests to have a significant say in how the royal parks are managed which is also cost-effective.
Our intention is that Crown ownership of the royal parks will be maintained. The royal parks will remain an Executive agency of DCMS and the responsibility of the Secretary of State but we will create a new royal parks board to provide a voice for the Mayor and for London in how the parks are managed. The chair and board will be appointed by the mayor, with board members including representatives of the London boroughs and the royal household. At the same time, we will task the board to develop and recommend new consultation processes that will give local communities and users of the parks a role in decision-making. The details of these new governance arrangements will be announced in due course. Board arrangements will be kept under review by the Secretary of State.
Defence Transformation
(12 years, 11 months ago)
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The Secretary of State for Defence (Dr Liam Fox)
The strategic defence and security review (SDSR), announced last October, marked the start of the process of transforming defence to meet the challenges of the future. It set out a path to a coherent and affordable defence capability in 2020 and beyond; and some of the key building blocks—such as the return of the Army from Germany, and a Royal Air Force (RAF) structured around fewer, more capable fast jets.
This statement provides detail of our intent on future armed forces basing and rationalisation of the defence estate.
This has been a complex piece of work. It addressed the decision to accelerate the return of the 20,000 personnel still in Germany, plus their dependants, to the UK and the formation of the Army into five multi-role brigades. It took into account the footprint of the armed forces around the UK and the planned changes to the RAF force structure. A number of other initiatives, such as the future location for defence technical training and the restructuring of the Army’s non-deployable regional footprint, have also had significant estate implications. Finally, it has also taken account of the need to realise receipts from high-value sites defence no longer required to help address the black hole in the defence budget left by the previous Government.
Basing affects a wide range of interested parties across defence. Experts from across the Department and all three armed services were consequently involved in the study. Throughout the process MOD has been very clear and consistent about the criteria used—above all what is best for the defence and security of the UK and what makes overall military sense. We looked at what was best for those serving in our armed forces, and their families. We also recognised that defence decisions have broader regional, economic, and social consequences. Finally, the resulting plan must of course be affordable and offer value-for-money for the taxpayer.
The starting point for the review of basing has been the military requirement. Units which are part of larger formations have to be close enough together geographically to be able to work and train effectively and to create the formation coherence necessary for successful combat operations. To do so, they need access to suitable training areas of the right size, and with the right terrain, so they can prepare for deployment.
We have considered the impact of the proposed changes on service personnel and their families. Under the armed forces’ new employment model, the Army aim to base personnel close to a number of units so they can change post without their family needing to move home, and close enough to an urban centre for their families to have access to jobs and education and to the housing market. This will allow greater stability, which is important for the welfare of our armed forces and their families, and to continuing the Government’s commitment to rebuilding the armed forces’ covenant.
The defence of the United Kingdom, and wider military tasks, including the capacity to support the civil authorities in times of crisis, requires a strong military presence across the entire country. We have also considered the impact of changes on local communities. Finally, we have taken into account the need to make the maximum use of existing defence estate and to dispose of that which is not required.
Much detailed planning remains to be done, both to identify the most effective draw-down plan for the forces currently in Germany and to determine which units are the best match for which sites. We will also need to take into account the potential changes in the balance between the regular and reserve forces I have also announced today. And there will be a need for the appropriate level of engagement with local authorities, including the preparation of sustainability assessments and the other work needed to meet our obligations. This means that some uncertainties remain, particularly about the time scales in which the necessary moves will take place. But our strategic objective and the key building blocks of our plan are clear. I will set these out, together with indicative time scales we are currently assuming for planning purposes.
There is already a concentration of the Army in the south-west of England, around Salisbury and around Catterick in Yorkshire. These will make up three of the five multi-role brigades (MRBs).
One of the two remaining MRBs to be formed from the units returning from Germany will be based in Scotland. The centre of gravity of the brigade will be in the central Lowlands. The key sites that are anticipated to be used are Kirknewton, which we propose to develop into a major Army base, and Glencorse. Other MRB units will be moved into Caledonia and, eventually, Arbroath, with the long-term plan being to bring the bulk of the Royal Marines together in the south-west of England. A site will also be used at Albemarle Barracks, Northumberland. We will aim to move the first unit into Kirknewton in 2016-17, with units probably moving into Glencourse and Caledonia a year earlier. We will plan to move the Royal Marines out of Arbroath around 2015-16, with a unit from Germany moving in shortly thereafter.
RAF Marham will remain as a base for Tornado GR4 and we have decided that we will build up the Typhoon force at Lossiemouth, retaining that station for the long-term as a RAF base, providing the location for the northern quick reaction alert missions. We will start preparing the infrastructure at Lossiemouth to receive the Typhoon force straight away, and would aim to start to redeploy aircraft there in 2013. We will continue to redeploy aircraft over the following years as space becomes available.
Although Leuchars will cease to be an RAF base it will remain in military use and will be used to base two major Army units and a formation headquarters. Our aim will be to move the headquarters to Leuchars before 2015, with the major units thereafter in the period 2015-17. This will ensure that as space becomes available at Leuchars, the Army will begin to take advantage of it.
We are also planning to place Army units in Kinloss in around 2014-15, subject to further detailed planning.
The MRB centred in Scotland will require a new training area and the MOD is grateful for the positive engagement being taken forward with the Scottish Government to achieve this. We will continue to engage with the Scottish Government to develop firm plans, including the confirmation of a specific site. Overall, this is good news for Scotland with overall force levels increasing.
The other MRB will be based in the east of England centred on the former RAF base at Cottesmore (in Rutland). The RAF will vacate Cottesmore in 2013, and we anticipate the first unit coming back from Germany should arrive the following year. We also intend to use other former RAF bases and existing Army bases including north Luffenham, in Rutland, where we aim to bring the first unit back in about 2015-16, Bassingbourn, in Cambridgeshire, with the first unit arriving back around 2016-17, and Woodbridge, in Suffolk, where the first unit is unlikely to arrive back before 2017-18.
Other sites that are anticipated to be used to accommodate Army units returning from Germany are Aldegrove in Northern Ireland, with the aim of a unit arriving in 2015, and Pirbright where we are planning for units from Germany to arrive in 2013.
Defence must also continue to look to make the most efficient use of the defence estate and the process will continue to identify and dispose of sites that are no longer needed. Those sites which can be sold, especially high-value sites, will deliver much needed receipts to the defence budget. We also need to make sure we are making maximum use of those sites which remain. The decision has therefore been taken to vacate and dispose of Craigiehall, Redford and Dreghom Barracks in Edinburgh. We will aim to achieve these disposals by 2014-15 at the latest. We also plan in the same timescale to vacate and dispose of Waterbeach in Cambridgeshire which, subject to the necessary planning consents, will support the Government’s broader aim of increasing the supply of new housing. The units currently based at these sites will, as appropriate, be accommodated at other locations.
This conclusion also paves the way for a number of other estate-related initiatives to proceed.
In accordance with SDSR direction it is proposed that the Army’s four regional divisional headquarters will be replaced by a single UK support command. The new formation, commanded by a major general, will be known as headquarters support command and it will be based in Aldershot. Its creation will lead to the disbandment of Headquarters 2nd Division in Edinburgh, Headquarters 4th Division at Aldershot and Headquarters 5th Division at Shrewsbury in 2012. Savings at the regional brigade level will be made through structural changes to each of the ten regional brigade headquarters and to HQ London district, together with their supporting structures rather than closing individual brigade headquarters.
Another of the decisions from the SDSR was to reduce the Army by one deployable brigade as part of the measure to restructure towards five MRBs, replacing the current mix of armoured, mechanised and light brigades. Having considered the various options, we have concluded that 19 Light Brigade and its constituent units, currently based in Northern Ireland, is the most logical option from a military judgment for disbandment as it is not well suited to become an MRB, nor do the existing basing and training facilities in Northern Ireland cater for heavier equipments and all-arms training. Detailed planning and trade unions consultation will now commence on the basis of our intent to complete the disbandment by 2013. While this will result in a reduction in the current troop levels in Northern Ireland, with some units being amalgamated within different brigades and others disbanded, we continue to consider options for future basing in Northern Ireland consistent with our wider re-basing plans. We remain committed to maintaining a permanent military garrison in Northern Ireland. As part of the implementation planning we will now undertake, we will examine what alternative military uses can be made of the sites which are no longer required for 19 Light Brigade.
Routine business on basing and further work on disposals will continue. Stafford will become home to two additional Signals Regiments in the period 2015-18. This will be done in close consultation with the German authorities, which will continue as the Army now draws up its plans for how to draw down from Germany in a sensible and coherent way.
RAF Lyneham is the preferred location for future defence technical training. This confirms that the Department will withdraw from Arborfield in Berkshire and Bordon in Hampshire, releasing the sites for sale by 2014-15 at the latest. This announcement in no way threatens the existing defence presence at St Athan. There are no plans to move or reduce the 300 technical training posts as part of the rationalisation to Lyneham. Indeed plans to relocate additional defence units to St Athan are being developed, and if those plans come to fruition, they will bring a major uplift in employment at that base. We intend to make an announcement before the end of the year.
As noted above, 160 brigade will also continue to be in Wales at Brecon.
Finally, even with the decisions to use the former RAF bases to the greatest extent possible, the demand for civilian workforce at RAF Kinloss, Cottesmore and Lyneham will be reduced. This, combined with the need to match skills to jobs, means that around 545 posts in total will be lost. Consultation has been under way with trade unions on the drawdown of RAF Kinloss, Lyneham, Cottesmore and much work has been done to help individuals to assess their future options. Staff have been encouraged to apply for MOD voluntary early release (VERS), and many have taken up that opportunity. However, to manage the drawdown of the stations efficiently, it is necessary to introduce a redundancy scheme, which will commence with voluntary redundancy terms. Consultation with trade unions on the redundancy scheme will take place very shortly.
The detailed planning work, including the investment required to adapt sites, will now get under way based on this strategic direction. The Ministry of Defence will now begin the process of detailed planning and the appropriate and necessary engagement with the devolved Administrations and local authorities concerned around the country.
Further work will be done to draw up individual project plans and determine the timing and sequencing of the Army moves, and this may affect some of the indicative time scales set out here. Once completed, this will deliver the military requirement for basing and estate, which will facilitate our work to maximise the effectiveness of our armed forces under the adaptable posture set out in the SDSR. It will rebalance the defence footprint across the UK, offer stability to our armed forces, and deliver better value for money for the taxpayer.
Ministry of Defence Annual Report and Accounts 2010-11
(12 years, 11 months ago)
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The Secretary of State for Defence (Dr Liam Fox)
I am today publishing the Ministry of Defence (MOD)’s annual report and accounts 2010-11. It provides a comprehensive overview of the Department’s financial performance for the year, together with data on some specific areas of non-financial performance including factual information on the Department’s progress against structural reform and business plan priorities. Copies will be available from the Vote Office and online from the MOD website at the following address: www.mod.uk/DefenceInternet/DefenceFor/Researchers/.
Co-ordinated Online Record of Electors
(12 years, 11 months ago)
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The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
The previous Government legislated for the co-ordinated online record of electors (CORE) in the Electoral Administration Act 2006 and the Political Parties and Elections Act 2009. CORE was intended to provide a single source of electoral registration information for authorised users, principally to provide political parties with a system that would help them meet their donation reporting obligations. The CORE service was to be managed by a new public body, a corporation sole, established for the purposes of being the “CORE keeper”.
The cost of building the CORE system was estimated to be £11.4 million and £2.7 million per annum to run thereafter.
The Government have decided not to pursue the project. We do not believe that establishing this system is proportionate, cost-effective or consistent with the Government’s policy on databases and reducing the number of non-departmental public bodies. We will continue to consider more cost-effective ways to improve the processes and procedures for political parties to report donations.
Early Intervention
(12 years, 11 months ago)
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The Minister of State, Department for Education (Sarah Teather)
The Government welcome the recent publication of the second and final report of the review of the hon. Member for Nottingham North (Mr Allen) into early intervention. The Government recognise the case for supporting prevention and early intervention and are already taking action. Today, jointly with the Under-Secretary of State for Health, I am launching “Supporting Families in the Foundation Years” which sets out the importance of intervening early and the role that different services, working together, should play to ensure that children and families receive early help where needed. It reflects the review’s vision that every child should be helped to develop the necessary social and emotional skills to form positive relationships, have self-confidence, perform to the best of their abilities at school and in later life, being aware of the needs of both themselves and others. A society without those skills will ultimately fail—and the cost is already there to see in terms of children falling behind at school, at greater risk of developing physical or mental health problems, needing to go into care and, in the worst cases, getting into crime. Failure to get this right results in substantial costs both to society and children’s life chances, with poorer health, reduced employment prospects and relationship instability in later life, and the risk that these problems cascade on to the next generation. As the Government have already set out in their child poverty and social mobility strategies, we must take action now to address these issues.
The vision of the hon. Member for Nottingham North is wide-ranging in scope. He challenges central Government to respond to this vision, to ensure that early intervention principles are embedded across Government, but particularly to focus on the needs of those who can benefit most—our children and young people. He also argues that every local area should put in place effective strategies to work not only with the most challenging families, but also to take preventive action at every stage of a child’s development through community budgets.
Today’s launch of “Supporting Families in the Foundation Years” recognises the input of the hon. Member for Nottingham North to the early intervention agenda. He has directly contributed to Government’s thinking on this statement which has taken into account many of his recommendations, for example on adopting the term “foundation years” from pregnancy to five, his emphasis on the importance of parenting, and focusing on what works in evidence-based interventions such as the family nurse partnership. He has identified approaches to innovative finance and payment by results through data collection, along with proposals to encourage people at every level to focus on intervening early, particularly in the foundation years. Much of his vision links to Eileen Munro’s recommendations on offering early help.
The hon. Gentleman has conducted an analysis of evidence-based programmes in his two reports, and argues powerfully that in a tight fiscal climate it makes sense to use programmes which are most effective, and are proven to deliver results. We agree that evidence-based programmes and practice are important and, like the hon. Gentleman, recognise that any list of the most effective programmes will change over time so should be kept under review. Naturally it is for local areas to decide which programmes suit the needs of their community. Through “Supporting Families in the Foundation Years” we are asking the sector for their views on how best to encourage the sector to make full use of those programmes, as part of the commitment to the Government’s new relationship with the increasingly autonomous and self-confident sector.
On his recommendations on wider system reform, and the creation of early intervention places, the “Supporting Families in the Foundation Stage” document sets out an ambition that this work should link closely with community budgets focused on families with multiple problems, to encourage local authorities to work not only with the most challenging families, but also to support families earlier to reduce the numbers of families reaching crisis point.
In his second report, the hon. Member for Nottingham North has investigated a number of innovative approaches to contracting for outcomes and funding to support the delivery of this vision. This is challenging and new territory, but his proposals provide a very useful input to the Government’s consultations on how they can best deploy and unlock resources to improve the effectiveness of public services. We welcome his call for an independent foundation to champion early intervention and challenge public service providers and Government. Such a foundation has an important role to play. We welcome this proposal as a way of engaging the key partners in this agenda.
The Government view both reports of the hon. Member for Nottingham North as a very positive step forward in what we know about early intervention and its funding. We are very grateful to the hon. Gentleman and his review team for their considerable efforts in clarifying the challenge, and the opportunities, arising from an early intervention approach.
Families in the Foundation Years
(12 years, 11 months ago)
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The Minister of State, Department for Education (Sarah Teather)
Today the Under-Secretary of State for Health, the hon. Member for Guildford (Anne Milton) and I are publishing a policy statement “Families in the Foundation Years”, which sets out the Government’s policy and the services that we think should be offered to all parents and families across England from pregnancy until a child reaches the age of five.
Today we are also launching a document—“Supporting Families in the Foundation Years”—for commissioners, local leaders and professionals who work with families in the foundation years, setting out our vision for the system that will implement these policies. It has been developed with advice from a wide range of professionals with extensive knowledge and experience of the foundation years.
On 6 July I launched a consultation on revised standards for learning, development and care of children from birth to five—a simpler, strengthened early years foundation stage (EYFS). We also made available a discussion document on the new core purpose of Sure Start children’s centres focusing on the outcomes they support for children and families, particularly the most vulnerable.
Taken together these publications constitute our response to those recommendations from the hon. Member for Nottingham North (Mr Allen), the right hon. Member for Birkenhead (Mr Field), and Dame Clare Tickell that deal partly or wholly with the foundation years. I have also laid a written ministerial statement today in response to the hon. Member for Nottingham North’s second and final report “Early Intervention: Small Investment, Massive Savings” which I welcome and which will inform wider work on innovative finance.
Today’s publications emphasise the vital role that skilled and knowledgeable professionals and strong leadership play across the foundation years. This requires a framework of high-standard qualifications that meet the needs of employers, and equip early education professionals to support young children’s development. I am pleased to announce I have asked Professor Cathy Nutbrown to lead an independent review of foundation years qualifications. The review will consider the quality and breadth of qualifications available to the early education work force, and how best to strengthen qualifications and career pathways in the foundation years, offering advice to me during next year.
I am also announcing that nine local authorities will be the first to trial payment by results in children’s centres. The areas are Southampton, Oxfordshire, Oldham, Gloucestershire, Devon, Croydon, Blackpool, Barnsley, and Barking and Dagenham. They will test how to reward and incentivise reaching the most vulnerable families, improving family health and well-being and raising attainment of children at age five.
Raising the status of the foundation years
This Government want to build on recent improvements in the quality of services for young children to create an environment in which local communities, business and public services work together to help families and parents to be the best they can be, particularly during the important first years of their children’s lives.
Research clearly demonstrates the impact of the first years of a child’s life on later life chances. Maternal health and health in early childhood are important for later well-being. Children who do well at age five are six times more likely to achieve at or above expected levels in the first years of primary school and the effects of good early education are still visible at age 11, and on into later life. Research also shows that children do best when parenting is warm, responsive and authoritative.
The strength of this evidence has been recognised in the recent major reports from the right hon. Member for Birkenhead on poverty and life chances, by the hon. Member for Nottingham North on early intervention and by Dame Clare Tickell on the early years foundation stage (EYFS). Both the hon. Member for Nottingham North and the right hon. Member for Birkenhead called for Government to adopt the term “Foundation Years” to signal the importance of the first phase of life in underpinning later achievement and well-being. Recognising the need to raise the status of this time of life, we have adopted this name in the statement we are making today.
Making this the most family-friendly country in Europe
Families are the cornerstone of our society, and this Government have committed to making this country the most family-friendly in Europe. We have already demonstrated our commitment to supporting families during the foundation years:
The Government have already increased to 15 hours a week the free entitlement to early education for all three and four-year-olds, and the paving legislation required to extend this entitlement to disadvantaged two-year-olds is currently before Parliament;
By 2015, we aim to increase the health visitor workforce by 4,200 (an increase of over 50%). Health visiting services can then deliver a full service to children, families and the community working closely with Sure Start children’s centres and other organisations;
Over the same period we will double (to 13,000) the number of vulnerable young families who will benefit from the family nurse partnership;
Investment in relationship support over the spending review period will further the positive impact relationship stability has on parenting;
The Government are consulting on a new flexible system of shared parental leave which will give mothers and fathers more choice about how they share their caring responsibilities;
The Government have announced that it wants to retain a network of Sure Start children’s centres, accessible to all families but focused on those in greatest need;
The Government are committed to strengthening accountability arrangements for children’s centres, including through introducing payment by results, so that success is recognised and rewarded. Nine local authorities, announced today, will become the first to trial payment by results in children’s centres—with up to 21 further trials to be announced early in the autumn. The experience of the trial areas will help the Government and local authorities develop a final set of measures so payment by results can be rolled out nationally from 2013-14.
Supporting children, families, and professionals
Taken as a whole, this package takes forward our principles of public sector reform by promoting greater involvement of parents in services; increasing flexibility in the free entitlement; strengthening quality across foundation years services; further opening up children’s centres to a wider range of providers; and reforming funding and strengthening accountability.
It emphasises the importance of intervening early and outlines the role that different services, working together, should play to ensure that children and families receive early help if this is needed, in line with recommendations from the hon. Member for Nottingham North and Professor Eileen Munro. The Government response to Professor Munro’s report was published on 13 July, and set out our commitment to early help.
As I confirmed in my statement on 6 July, we are introducing a new requirement on early years providers via the reformed EYFS to provide a summary report to parents on their child’s progress in the prime areas of learning and development between the ages of two and three. The report will help parents understand how they can encourage and support their child’s learning and social and emotional development at home and guide the provision of any additional support the child might need to help them catch up by age five. Parents will be encouraged to share that report with their health visitor to inform the health and development review at the age of two to two-and-a-half, which is part of the healthy child programme.
For the longer-term we are exploring the feasibility of a single integrated review at around age two, in which parents will be able to review their child’s progress with health visitors and early years providers jointly who will be able to offer help to address any issues early on. We will work with expert early years and health professionals, practitioners and sector representatives, and parents, to develop new models for this integrated review. We will explore, with the help of our health visitor early implementer sites, moving to a universally available single integrated review to support children and families from 2015 when the planned increase in health visitor numbers will make this possible.
We will place copies of “Supporting Families in the Foundation Years” in the House Library.
Lord Bew's Independent Review of Key Stage 2 (Government Response)
(12 years, 11 months ago)
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The Secretary of State for Education (Michael Gove)
We are very grateful to Lord Bew and his panel of head teachers and other experts for their thoughtful, detailed and comprehensive work on their independent review of testing, assessment and accountability at key stage 2.
We believe the recommendations in Lord Bew’s final report will lead to a fairer and more effective system. We agree to the principles that underpin the final report and accept all of the recommendations in full.
We have always been clear that external accountability is vital to raising standards and narrowing attainment gaps, and we are pleased that Lord Bew’s report recognises this. While preserving strong accountability, Lord Bew’s recommendations include a number of important changes to the current system. We will encourage all agencies concerned with assessment and accountability of schools, including Ofsted, to take full account of the principles of the report.
We will publish a wider range of data, including new progress measures and three-year rolling averages, which will give a more rounded picture of school performance while allowing parents easier access to the information they need about their child. This aligns with our commitment to transparency and plans to make as much information as possible available to the public.
We also agree the recommendation to extend the time frame in which pupils who are absent on the day of a test can sit it, and will trial an extension to a week. This will apply to all pupils at the end of key stage 2 in 2012. An evaluation at the end of the test cycle will determine whether the extension will become permanent.
We welcome the fact that Lord Bew has considered the testing and assessment arrangements in each subject from the point of view of what is educationally most appropriate. We acknowledge the problems with the current writing test and agree that summative teacher assessment is the most appropriate way to assess writing composition. External moderation of that assessment will be important to ensure it is recognised as reliable and robust. We will develop and trial moderation arrangements next year and introduce them on a statutory basis from 2013. Teacher assessment judgments of writing composition will form the greater part of any overall writing judgment once the new arrangements are in place from 2013 onwards.
The Standards and Testing Agency will work with the profession on the design, implementation and administration of a test of essential skills which children need to master to become fluent, confident writers, such as spelling, grammar, punctuation and vocabulary, and consider the potential to include an assessment of handwriting in the test. We will trial the test in 2012 and intend to introduce it in 2013.
In 2012 interim arrangements for writing assessment will be required. Those arrangements should be in line with the principles in Lord Bew’s report and ensure that results are as reliable and robust as possible. Teacher assessment judgments of writing composition will make a significant contribution to the overall writing results. We also believe some external testing will be required alongside teacher assessment. We will discuss the detailed arrangements for 2012 with the profession and confirm them to schools at the start of the new school year.
We will retain externally-marked tests in reading and mathematics, and will refine them over time to ensure they are accessible to all groups of pupils. We will also retain the current system of sample testing in science.
We agree that more emphasis should be placed on teachers’ own assessments of their pupils. We accept Lord Bew’s recommendation that teacher assessment should continue to be reported alongside test data, and that schools should be required to submit teacher assessment judgments before pupils sit the tests.
We recognise that Lord Bew’s recommendations represent substantial reform to the current key stage 2 testing, assessment and accountability system. We want to act as quickly as possible to take the recommendations forward. However, change of this scale needs to be implemented carefully to ensure the positive impact is realised for all involved. We will implement the recommendations as quickly as is practicable.
We are today placing my Department’s full response to Lord Bew’s final report in the House Library.
Non-Departmental Public Bodies (Resource Accounts)
(12 years, 11 months ago)
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The Minister of State, Department for Education (Mr Nick Gibb)
I have today published and laid before Parliament the annual reports and accounts for the Training and Development Agency for Schools and the National College for School Leadership.
These reports cover the activities of the Training and Development Agency for Schools and the National College for School Leadership in 2010-11 and include full sets of accounts for 2010-11. As a company limited by guarantee, the accounts for the National College for School Leadership have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards. The accounts for the Training and Development Agency for Schools have been prepared in accordance with the 2010-11 Financial Reporting Manual.
In reviewing the accounts I concluded that while the accounts had been prepared correctly, the disclosures about exit packages were inconsistent with the disclosures in the departmental resource accounts and with other non-departmental public bodies for which the Department has responsibility. The accounting officers have, therefore, agreed to publish additional information which ensures that the level of disclosure is consistent with that shown in the departmental resource accounts for 2010-11.
The additional disclosure for the National College for School Leadership is:
Exit package cost band | Compulsory redundancies 2010-11 | Number of other departures agreed 2010-11 | Compulsory redundancies 2009-10 | Number of other departures agreed 2009-10 |
|---|---|---|---|---|
<£10,000 | 8 | 11 | ||
£10,000 to £25,000 | 9 | |||
£25,001 to £50,000 | 1 | 4 | 1 | |
£50,001 to £100,000 | ||||
£100,001 to £150,000 | ||||
£150,001 to £200,000 | ||||
£200,001 to £250,000 | ||||
£250,001 to £300,000 | ||||
£300,001 to £350,000 | 1 | |||
£350,001 to £400,000 | ||||
£400,001 to £450,000 | ||||
£450,001 to £500,000 | ||||
£500,001 to £550,000 | ||||
Total Cost (£000) | £38,000 | £642,000 | £23,000 | £43,000 |
The additional disclosure for the Training and Development Agency for Schools is:
Exit package cost band | Compulsory redundancies 2010-11 | Number of other departures agreed 2010-11 | Compulsory redundancies 2009-10 | Number of other departures agreed 2009-10 |
|---|---|---|---|---|
<£ 10,000 | 5 | 23 | ||
£10,000 to £25,000 | 1 | 1 | 2 | 32 |
£25,001 to £50,000 | 4 | 30 | ||
£50,001 to £100,000 | 3 | 22 | ||
£100,001 to £150,000 | 6 | 4 | ||
£150,001 to £200,000 | 1 | 1 | ||
£200,001 to £250,000 | 1 | 1 | ||
£250,001 to £300,000 | 1 | |||
£300,001 to £350,000 | 1 | |||
£350,001 to £400,000 | 1 | |||
£400,001 to £450,000 | ||||
£450,001 to £500,000 | ||||
£500,001 to £550,000 | 1 | |||
Total Costs | £0.019 million | £3.092 million | £0.061 million | £4.186 million |
These reports have been placed in the Libraries of the House of Commons and House of Lords for the reference of Members and copies will be made available in the Vote Office. They are also available online at the websites of the National College for School Leadership (www.nationalcollege.org.uk) and the Training and Development Agency for Schools (www.tda.gov.uk).
Export Control Policy (Review)
(12 years, 11 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I told the Foreign Affairs Select Committee on 16 March 2011 that the Government would commission a thorough review of the UK’s policy and practice with regard to the export of equipment that might be used for internal repression, in particular crowd control goods, in the light of events in the middle east and north Africa and concerns in Parliament and the public about UK policy.
This review has now been completed. It was conducted by Foreign and Commonwealth Office officials in close consultation with their colleagues across Whitehall, and it examined our policy on arms exports. Its purpose was to determine whether improvements could be made to reduce further the risk of misuse of UK-origin controlled military goods and to increase confidence that goods exported from the United Kingdom would not be used for internal repression. It looked specifically at events in the middle east and north Africa region.
The review concluded that there was no evidence of any misuse of controlled military goods exported from the United Kingdom. There were some reports of the use of UK-origin crowd control vehicles in Libya, but these reports remain uncorroborated.
Consultations with our overseas posts revealed no evidence that any of the offensive naval, air or land-based military platforms used by Governments in north Africa or the middle east against their own populations during the Arab spring, were supplied from the United Kingdom.
However, the review also concluded that further work is needed on how we operate certain aspects of the controls. The Secretary of State for Business, Innovation and Skills has responsibility for our export licensing operations. The Secretary of State and I will consider how this should be done, and once that process is complete I will update the House on our proposals.
Spanish Site of Community Importance
(12 years, 11 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
In February 2009 environmental experts in Gibraltar identified that the European Commission had adopted the proposal by the Spanish Government to designate under the Habitats Directive a Site of Community Importance (SCI). The SCI, named Estrecho Oriental, overlaps the co-ordinates of British Gibraltar Territorial Waters (BGTW) and entirely overlaps an existing adopted UK SCI, Southern Waters of Gibraltar, which is managed by the Government of Gibraltar (subsequently designated by the Government of Gibraltar as a special area of conservation—SAC). The UK has sought to reverse the adoption of the Spanish site, first through diplomatic action with the European Commission and the Government of Spain and then through legal action. We continue to work closely with the Government of Gibraltar to resolve this issue.
The original legal case was launched by the UK in the European General Court (EGC) on 22 December 2009. This challenged the European Commission’s listing of this site as a Spanish Site of Community Importance. The Government are clear that only the UK can submit sites covering BGTW. Spain cannot enforce the management or monitoring of the specific area in question. There is therefore a risk that, given its lack of access to this site, Spain will make decisions without accurate scientific information which could have detrimental environmental or economic impact on Gibraltar and BGTW.
On 24 May 2011 the EGC ruled the UK’s case inadmissible on technical grounds, ruling that the UK should have challenged the Commission’s original rather than subsequent confirmatory decision to list the site. The UK’s rebuttal stated that due to the Commission’s deficient processes, lack of transparency and consultation, it had been unable to do so within the normal time limit. We have also highlighted that when the UK put forward its Southern Waters of Gibraltar site it did so on the basis of consultation with Spain, which was insisted on by the Commission. The Commission did not insist that Spain consult the UK before the listing of Estrecho Oriental.
Following extensive consultation and on the basis of legal advice the UK will be appealing against the court’s decision. The Government have a clear responsibility to uphold the UK’s position over the waters around Gibraltar. I want to reassure the people of Gibraltar that we will defend their interests on this matter.
The Government of Gibraltar had also launched their own separate legal action, which the UK supported. This was also ruled inadmissible on technical grounds. The Government of Gibraltar are appealing against that decision.
I will keep the House informed of further significant developments in the case.
Care Quality Commission Registration
(12 years, 11 months ago)
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The Minister of State, Department of Health (Mr Simon Burns)
I wish to inform the House that the Department is today publishing a consultation on proposed changes to the Care Quality Commission (Registration) Regulations 2009 and The Health and Social Care Act 2008 (Regulated Activities) Regulations 2010. The proposals include changes that will improve the effectiveness of current regulatory arrangements for health and social care and reduce the burden on providers (including the providers of health care at the Olympic games).
The Government are committed to keeping regulatory systems under review and to ensuring that regulatory burdens are kept to a minimum, while ensuring that the systems are effective at protecting service users. In line with commitments given to the House, officials have carried out an initial review of the operation of the regulations governing the new registration system for health and adult social care providers operated by the Care Quality Commission. The first year of operating the system has highlighted a number of issues in the regulations that either do not function as initially intended, lack clarity or which impose an unjustified burden on providers. This consultation document sets out the issues identified, proposes how they might be addressed and seeks views on these. It also asks respondents to identify other issues that should be considered as part of a wider review to begin later this year. The proposals include changes to both the regulation of health care and adult social care services that, subject to consultation responses and the parliamentary process, could be made swiftly and that we plan to start to implement in 2012.
By keeping the regulations governing the registration system under constant review, we will ensure that legislative framework keeps pace with service developments, focuses regulatory requirements where they are most effective, and delivers a system that allows the Care Quality Commission to provide the assurance that services meet the safety and quality requirements that people who use services and their families expect.
“Consultation on proposed changes to regulations for Care Quality Commission registration” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Consultation on Value-Based Pricing (Government Response)
(12 years, 11 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
I am publishing today “A new value-based approach to the pricing of branded medicine—the Government’s response”.
The consultation document set out this Government’s proposals for introducing a system of value-based pricing for medicines, as stated in the coalition agreement. The system will enable patients to access the medicines and treatments their doctor advises they need by establishing a closer link between the price of a new branded medicine and the value which it offers in terms of benefits to patients, reflecting unmet need, therapeutic innovation, and benefit to society.
We have committed to honouring the terms of the pharmaceutical price regulation scheme 2009 until its expiry, but there is a need to reform the way in which we pay for medicines from 2014 onwards. The current system of pricing medicines does not promote innovation or patient access in the way that we are looking for. As we have made clear through the establishment of the cancer drugs fund prior to 2014, we are enabling NHS clinicians to have better access to the medicines required for their patients.
A total of 188 consultation responses were submitted by a wide-range of organisations and individuals. The Government’s response to the consultation provides a summary of the responses received. There was broad support for the concept of a value-based pricing system for new medicines, and for the objectives set out in the consultation document. Many responses welcomed the broader approach proposed for the assessment of new medicines’ value, while also acknowledging the complexity involved in carrying out such assessments.
The Government’s response confirms our intention to introduce value-based pricing in 2014. We want the arrangements that we put in place from 2014 to ensure that NHS patients have consistently good access to effective, clinically appropriate medicines, wherever they live. The current funding direction requiring NHS commissioners in England to fund drugs and treatments in line with the National Institute for Health and Clinical Excellence’s recommendations is designed to achieve this, and it is one of our key objectives for value-based pricing.
The response highlights our intention, set out in the Government’s response to the Future Forum report, to maintain the effect of the funding direction in the value-based pricing arrangements, to ensure that the NHS in England consistently funds medicines with a value-based price. The NHS will be required to fund drugs already recommended by NICE, as well as drug treatments subject to the value-based pricing regime. This means patients will continue to have the legal right to clinically appropriate, cost-effective drugs and treatments as set out in the NHS constitution and accompanying handbook.
The response confirms that, in relation to the scope of value-based pricing and the key elements of the value-based pricing assessment, we intend to pursue an approach in line with the proposals set out in the consultation document. The response also acknowledges that significant work remains to develop the value-based pricing system, in particular, as regards how to measure and assess the value of new medicines.
The response emphasises that we want our work to be informed by the best available evidence, and that we look forward to continued positive and productive engagement with the full range of interested stakeholders as our work progresses.
The consultation provided an important opportunity for different groups to contribute their views on our proposed approach, to inform key principles at the heart of value-based pricing and to signal their interest in engaging with further work to design and implement the new system.
We are grateful to all those who responded, and believe that the Government response to the consultation represents an important next step in the process of developing a new system that is stable and sustainable for both the NHS and industry, and delivers improved outcomes for patients through better access to effective medicines.
A copy of the Government response to the consultation has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Chronic Obstructive Pulmonary Disease and Asthma
(12 years, 11 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
I am publishing today an “Outcomes Strategy for Chronic Obstructive Pulmonary Disease and Asthma”.
The “Outcomes Strategy for Chronic Obstructive Pulmonary Disease and Asthma” identifies the overarching objectives that will help transform respiratory care in England. The outcomes strategy will help local commissioners to identify the key dimensions of a quality service, and to complement other related local and national initiatives, such as the clinical guidelines developed by the National Institute for Clinical Excellence and the Public Health and NHS Outcomes Frameworks.
The strategy does not define how each aspect of care should be delivered. We think services need to be sensitively planned and appropriately delivered in response to the needs of each local community.
Chronic obstructive pulmonary disease (COPD) affects over 3 million people in England, with one in eight people over 35 having COPD that has not been properly identified or diagnosed. One person dies from COPD every 20 minutes in England, around 25,000 deaths a year. Too often people are diagnosed late in the course of the disease when the disease is severe and disabling. More than 5 million people receive treatment for asthma, with around 1,000 deaths a year, the majority of which are preventable.
As we have developed the strategy we have had extensive engagement with people with COPD and asthma and their carers. The strategy offers a real opportunity to make a difference to people with respiratory disease. With better co-ordinated and integrated services we can provide care that better meets the complex needs of people with these conditions.
The “Outcomes Strategy for Chronic Obstructive Pulmonary Disease and Asthma” has been placed in the Library. Copies are available for hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Winterbourne View and Castlebeck Facilities
(12 years, 11 months ago)
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The Minister of State, Department of Health (Paul Burstow)
I promised to update the House about ongoing activity in relation to Winterbourne View private hospital.
The House will wish to be aware that the Care Quality Commission (CQC) has today published its compliance report on Winterbourne View.
All patients have now left the premises and Winterbourne View is now closed. CQC undertook a responsive review of Winterbourne View following the abuse uncovered by Panorama. This review found serious concerns about the safety and quality of the service and CQC decided to take enforcement action to remove Winterbourne View from Castlebeck Care’s registration, closing the service permanently. CQC regulatory action in relation to Winterbourne View concludes with the publication of the compliance report today.
CQC has now inspected all Castlebeck Care services in England (23 in total). Individual reports on the findings are being drafted. These reports will be published separately and followed up with appropriate regulatory or enforcement actions where necessary. The final summary report and individual reports will be available on the CQC website by the end of July.
CQC’s own internal review is progressing with interviews of staff involved currently taking place. This information will provide the evidence for CQC’s individual management review as part of the serious case review, led by south Gloucestershire council. The internal review is expected to be completed by late summer.
CQC will be carrying out a focused inspection programme which will review care provided for people with learning disabilities by hospitals. The review will be in two phases:
phase one will consist of the inspection of 150 services that provide care for people with learning disabilities;
phase two will use the learning from phase one to look at a sample of other registered services covering alternative models of provision for people with learning disabilities.
South Gloucestershire council has appointed Margaret Flynn, chair of the Lancashire safeguarding adults board, as independent chair of the serious case review and the rest of the panel are now in place.
The panel for the NHS serious untoward incident review has been appointed with members from NHS South West, NHS South Central and NHS West Midlands. The review will be led by Dr Gabriel Scally, South West Regional Director of Public Health.
Arrangements are being put in place for family, carers and self advocate representatives to be involved in the review as part of a reference panel.
The first phase of the review has started. This involves gathering information from all commissioners of care and treatment at Winterbourne View since 2006.
The Department of Health review will be led by Bruce Calderwood, Mental Health and Learning Disability Director. The review will be advised by a panel of experts including Professor Jim Mansell, Mark Goldring and Anne Williams. Its activities will be informed by the views of service user and carer representatives including the National Forum for People with Learning Difficulties, the Challenging Behaviour Foundation and the National Valuing Families Forum.
I have today placed in the Library a copy of the Winterbourne View compliance report. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. I will update the House further at the earliest opportunity.
Use of Animals in Scientific Research
(12 years, 11 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)
The coalition agreement includes two commitments relating to the use of animals in scientific research: to end the testing of household products on animals; and to work to reduce the use of animals in scientific research.
We believe these are ambitious but essential and achievable goals and that scientific advances present significant opportunities to replace animal use, to reduce the number of animals used, and, where animal use is unavoidable, to refine the procedures involved so as to minimise suffering. These long-standing aims are referred to as the 3Rs.
I am, therefore, pleased to inform the House that the Government have agreed arrangements to deliver both commitments.
The commitment to end the testing of household products on animals will be implemented using the licensing powers provided under the Animals (Scientific Procedures) Act 1986 by adding a condition to relevant project licences.
Before implementing the licence condition, I propose to consult with establishments holding relevant project licences to confirm the economic impact. I propose also to consult with establishments, relevant trade bodies and other stakeholders to agree a working definition of household product to accompany the condition.
The commitment to work to reduce the use of animals in scientific research will be delivered through a science-led programme led by the National Centre for Replacement, Refinement and Reduction of Animals in Research (NC3Rs), an organisation with a strong record in reducing animal use. The NC3Rs will closely involve Government Departments and agencies, the Home Office Inspectorate, the research community in both academia and industry, and others with relevant animal welfare interests.
The programme will focus on refinement as well as reduction and replacement and will co-ordinate action to minimise and reduce animal use and suffering while avoiding actions which might simply drive work abroad to countries where lower standards or less stringent testing guidelines apply.
Key areas of activity will include exploiting the latest developments in science and technology to reduce animal use; facilitating data sharing and collaboration across industry and academia; providing an evidence base for changes to international regulations which require animal use; a continuing focus on the 3Rs and the use of non-human primates; and ensuring that the 3Rs are at the heart of the training of the research leaders of the future.
Terrorism Act 2000 and Part 1 of the Terrorism Act 2006 (Independent Reviewer Annual Report)
(12 years, 11 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
I am pleased to announce that Mr David Anderson QC has completed his first annual report as independent reviewer of terrorism legislation, on the operation of the Terrorism Act 2000 and part 1 of the Terrorism Act 2006 in 2010, which will be laid before the House today.
I am grateful to David Anderson for his detailed report and will carefully consider his recommendations. Following consultation within my Department and with other relevant Departments and agencies, I will place the Government’s response to his recommendations in the Library in the autumn.
Crime Statistics: England and Wales
(12 years, 11 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
On 20 January 2011, the Home Secretary, in a written statement to the House, Official Report, column 49WS, made clear her concern that,
“... our existing measures of crime are confusing and offer the public only a partial picture of the true level of offending. It is in the public interest that we have measures of crime that are clear, meaningful and in which the public can have confidence.”
The Home Secretary announced a review to be undertaken by the national statistician, Ms Jil Matheson to address these points. On 6 June 2011, the national statistician published her review of crime statistics for England and Wales. I am today placing a copy of the Government’s formal response to the national statistician’s recommendations in the Library of the House along with a copy of the review report.
The Government accept all the recommendations of the national statistician. The Government believe that the transfer of publication of crime statistics to the independent Office for National Statistics will help build public trust in the key data that are published nationally about crime. The Government also look forward to the national statistician’s independent advisory committee considering what further changes are necessary to the collection and presentation of crime statistics while reducing administrative burdens involved in collecting them.
Terrorism Act 2000 (Remedial) Order 2011
(12 years, 11 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
On 16 March, I made a remedial order under the powers conferred on me by section 10(2) and paragraph 1(1) of schedule 2 to the Human Rights Act 1998. That order replaced stop and search powers previously available to the police under sections 44 to 47 of the Terrorism Act 2000, with a significantly circumscribed set of powers, and provisions for an associated code of practice.
As required by paragraph 4(2) of schedule 2 to the Human Rights Act, I have placed a statement in the House Library to summarise the representations made during the 60 days since that order was made.
Parliamentary Written Question (Correction)
(12 years, 11 months ago)
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The Minister of State, Department for International Development (Mr Alan Duncan)
An error has been identified in the written answer provided to the hon. Member for Witham (Priti Patel) on 30 June 2011, Official Report, column 931W. The full answer given was as follows:
Priti Patel
To ask the Secretary of State for International Development, whether any funding from the public purse provided through his Department’s Strategic Grant Agreement with the Trades Union Congress was used to fund the Trade Unions and International Health and Safety workbook. [62589]
Mr Duncan
Between 1 January 2003 and 31 December 2005, the Department for International Development (DFID) provided £416,387 to the Trades Union Congress under the Strategy Grant Agreement. A final report on activities funded by this grant was presented to DFID in June 2006. The report provides a comprehensive description of the activities conducted by the ten Unions funded by this grant. There is no reference in the report to funds being used for the Trade Unions and International Health and Safety workbook.
The correct answer should have been:
Mr Duncan
Between 1 January 2003 and 31 December 2005, the Department for International Development (DFID) provided £416,387 to the Trades Union Congress under the Strategy Grant Agreement. A final report on activities funded by this grant was presented to DFID in June 2006 and is available on the TUC website. The report provides a comprehensive description of the activities conducted by the ten Unions funded by this grant. The report indicates that public funds were used for the production of the International Health and Safety workbook. However, information held shows only expenditure by broad category and does not give information on how much funding was used for each publication.
Northern Ireland Human Rights Commission
(12 years, 11 months ago)
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The Secretary of State for Northern Ireland (Mr Owen Paterson)
Following an open recruitment process based on merit I have appointed Professor Michael O’Flaherty as the new Chief Commissioner of the Northern Ireland Human Rights Commission. I am also appointing seven new Commissioners to the Northern Ireland Human Rights Commission—Grainia Long, Christine Collins, John Corey, Milton Kerr, Alan McBride, Marion Reynolds and Paul Yam. The new Chief Commissioner and seven new Commissioners will take up their posts in the early autumn.
The Northern Ireland Human Rights Commission is a key part of the architecture of human rights protections in Northern Ireland, and an important feature of the Belfast agreement. The Commission is now facing new challenges, not least in fulfilling its remit in a testing economic environment.
I am confident that these new appointments will ensure that the Commission will make a significant contribution to the advancement and protection of human rights in Northern Ireland in the coming months and years.
Machinery of Government Changes
(12 years, 11 months ago)
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The Prime Minister (Mr David Cameron)
I am announcing that the following Machinery of Government changes will take effect from today:
The Government Property Unit will report directly to the Minister for the Cabinet Office and become part of the Efficiency and Reform Group within the Cabinet Office;
HM Land Registry, the Met Office and Ordnance Survey will move from the Ministry of Justice, the Ministry of Defence and the Department for Communities and Local Government respectively to the Department for Business, Innovation and Skills.
Explanatory notes will be published in the normal way.
Jobcentre Plus Annual Report and Accounts 2010-11
(12 years, 11 months ago)
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The Minister of State, Department for Work and Pensions (Chris Grayling)
I am pleased to announce that the Jobcentre Plus annual report and accounts for 2010-11 will be laid before Parliament and published electronically on the DWP website later today at:
http://www.dwp.gov.uk/about%2Ddwp/customer%2Ddelivery/jobcentre%2Dplus/publications%2Djobcentre%2Dplus/.
The annual report section provides a summary of Jobcentre Plus’s performance against the business priorities and targets in the 2010-11 published business plan along with structural reform priorities.
The accounts provide a summary of Jobcentre Plus’s administrative and employment programme expenditure for 2010-11.
State Pension Reform (Summary of Responses to the Consultation)
(12 years, 11 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The consultation document, “A State Pension for the 21st Century” (Cm 8053) was published on April 4, 2011 and invited organisations and members of the public to respond to proposals for reforming the state pension system and managing future changes to state pension age.
The consultation ran from April 4 to June 24 2011 and during that period, I met with a number of organisations to explore our proposals for reform.
I will be publishing a summary of the comments received from the many different organisations and individuals who responded to our proposals by the end of July.
This document will not constitute a Government response to the consultation. The Government will consider in further detail all the responses received before taking any decisions about reforming the state pension system.
A copy of the summary of responses will be available on the Department for Work and Pensions’ website at: www.dwp.gov.uk/state-pension-21st-century.
Copies will also be available in the Vote Office and the Printed Paper Office.
I am grateful to all those who responded to the consultation.
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Geddes)
My Lords, it is now 3.30 pm. As is usual on these occasions, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Education Bill
(12 years, 11 months ago)
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Lord Lucas
“Marks to be published at Key Stages 4 and 5
Where a student is awarded a grade in an examination at Key Stage 4 or Key Stage 5, and that grade is based on an underlying mark, that mark shall be disclosed to the student, and this information shall also be made available in or with any data set that include the grades awarded in such examinations.”
Lord Lucas
My Lords, again I have received a very satisfactory e-mail from the Government on this subject. My object here is merely to try to persuade the Government to release more information about the actual marks obtained by students in examinations.
If you are trying to use data to evaluate schools, having things divided into grades is very inconvenient and is a very coarse measure of student achievement, which therefore tends to produce rather coarse judgments of how well individual schools and students have done. It is much more helpful to have the detailed grades. If the Government allow more access to government data in respect of not just universities but schools, that will help parents and whatever intermediaries they use—I declare an interest as the editor of the Good Schools Guide, which uses a lot of government data—and it will greatly improve the information that can be passed on to parents. Generally, it will also improve people’s understanding of where a school is. To have a C-D boundary—or even an A-B or B-C boundary—and to judge schools on how many children they get to one side or the other of that boundary is a very coarse way of measuring the performance of a school, which might be one mark either way. What is interesting is where the preponderance of the students are on a much finer scale.
I am encouraged that the Government are thinking of making this sort of information available. The information may not sink in with employers very quickly, but that will happen eventually. The Swiss publish individual marks, so that people can see where they are on a scale out of 100, and Swiss employers now understand that the mark is more important than some artificial boundary that has been inserted in the middle to say whether someone is a C or a D. I think that this would be progress for everybody, and I am very glad that the Government are prepared to contemplate moving in this direction. I beg to move.
Lord Peston
My Lords, I ask the noble Lord, Lord Lucas, to enlighten me, as I do not know much about what goes on in schools. Certainly, as someone who was once a university teacher, it never occurred to me that the marks meant anything at all. Is it the case that the pupil is given a mark by the teacher but the pupil does not know the mark and is instead given a grade? Is that what actually happens now?
Certainly, what used to happen in universities was that, essentially, you gave students marks and, if those marks corresponded to certain grades but there were not the desired number of people in the grades, you just changed the marks. In other words, the marks were meaningless. What does it mean to be given a mark of 80? It means nothing at all; it is not a measure of achievement because we could have given a mark of 0.8 or 0.08 or anything else. What matters is first how the students are ranked, and you then need some other measure of their achievement, which I do not believe is given in any way by either numbers or grades.
Can the noble Lord at least tell me what actually happens in schools? When someone marks the student’s papers, would the student know what grade they would get if they knew the mark? Are the marks adjusted to get to the grades, or are the grades adjusted to make them come out the way that they ought to come out?
Lord Lucas
My Lords, perhaps someone will rescue me if I get this wrong—there are several experts here—but, generally, rather than the marks being shifted, the grade boundaries are shifted, so you do not know what mark the C-D boundary is until the assessors have gone through the whole process of marking the papers and assessing how the students have answered the questions so that they can see where the level of difficulty lies.
The importance of knowing individual marks is that the information allows you to look more finely at how students have done and how a school has done. That would enable, for instance, parents to look at the results in a norm-referenced rather than criterion-referenced manner, if that was a judgment that they preferred to make. At the moment, you cannot say whether a child is in the top 10 per cent nationally, because you only have very coarse information as to where the grade boundaries are. I agree with the noble Lord, Lord Peston, that there is no significance to the marks themselves—it is all a matter of relativities and rank and order—but my proposal would start to give us more and better information about schools. What use we can make of that information is down to our individual ingenuity.
Lord Peston
I would like to add another question. Is the purpose of this to compare schools? Is that the point? What you need therefore is some ruler which enables you to say that this school is more successful than that school “because”. I do not understand what you put in the “because” bit.
Lord Lucas
My Lords, comparing schools is a complicated business and you have to take all sorts of things into account. Exam results are part of that. To have the marks finely graded makes them a better part of measuring how schools have behaved. When the system gets used to it, such information will be better for students in that they could show that, for example, they are in the top 1 per cent nationally or that they only missed a C by one mark. In either sense, students would benefit from being able to display them.
Students can get the marks under certain circumstances now. If you ask for a regrade, you get to see what your marks have been but, because you cannot see everybody else’s marks or what the universe of marks looks like, there is very little you can do with that. So they exist but they are not disclosed.
Baroness Jones of Whitchurch
My Lords, I want to make a couple of comments. First, much of the anxiety about the current grading system is because people have lost confidence in the way that the examinations are marked at the moment. I remember that, when I was doing O-levels and such-like many moons ago, there was much more confidence in the marking system and the legitimacy and accuracy of the examination boards. Maybe that was misplaced but that was certainly how I was brought up. Perhaps the scandals in recent times about the quality of the marking and so on have raised concerns and people want to dig deeper to know the underlying marks, which is understandable.
I am anxious, however, as to how this would work in practice. If the grades and the marks are published and if some children will only be two or three marks below the next grade up, if you run that parallel system of marks and grades, you will engender a lot of new appeals because anyone who is a short step away from the next grade up will flood the market with appeals. Unless we have a mechanism for managing that, therefore, there will be more discontent than satisfaction. I am not sure the system can run in parallel in the way the noble Lord is proposing. It may be, however, that the famous e-mail, which I should have seen but have not, spells out what the Government intend and will satisfy those points.
Baroness Garden of Frognal
My Lords, my noble friend has made strong arguments for making comprehensive, transparent information on exam results and school performance available to all and we are committed to increasing the amount of information available so that people can build their own measures and reach their own views about progress in the education system. We have already published more information than ever before.
The 2010 tables enabled users to download the school-level data underlying the table so that they could carry out their own analyses. In January 2011, school spending data were published alongside performance information. In March 2011, we published school-level information on attainment in individual GCSE subjects. As has been stated, in relation to exam marks, the candidates do have the right to request their marks. In practice, awarding bodies do provide marks—and, where requested, exam scripts—to schools and candidates. That means, for instance, universities can ask applicants to provide individual marks in order to differentiate performance within a grade.
In relation to publication of marks in data sets, we want to make as much information as possible available about exam results, and we are happy to commit to considering the practicality of obtaining and publishing marks as part of the national school-level data we are releasing. I understand my noble friend will be speaking to officials about this at a meeting on 25 July.
However, as the noble Baroness, Lady Jones, has said, there will be practical issues that we need to consider. Collecting individual marks rather than just grades would mean a significant increase in the quantity of data that the department would need to collect and process, which we would need to ensure we could manage without undue cost. That said, although it is the Government’s intention to collect and publish as much information on qualifications as we can, in relation to having both marks and grades it is the case that the same mark on a harder paper would represent better performance and it would not always be fair to candidates simply to add up the raw marks to give the overall result. A uniform mark scale puts all those raw marks on the same scale, which is then converted into the grade boundaries.
The noble Baroness, Lady Jones, mentioned confidence in exam awarding bodies. Ofqual was established by the previous Government to improve and strengthen confidence in the standards of exam awarding bodies. Ensuring that that confidence is restored is what Ofqual has at its heart. It may of course be that our memories of the olden days when everything was so much better have somehow managed to make us feel that it was better; I seem to remember from my days of A-levels that there were still quite a lot of queries to the boards, but we were much more intimidated in making those queries.
I hope that, with the assurance that we will give serious consideration to the practicality of publishing marks as part of the school-level data that we are making available to all, my noble friend will feel able to withdraw his amendment.
The Earl of Listowel
I have a quick question. Is there a measure that is easily understood and easily available to judge the progress that schools make in improving a child’s education? The Committee was discussing comparing schools. Is there a quick and easy measure that is easily accessible to say that this school is particularly good at taking children from one level to another, rather than judging all schools by one standard? Does that make sense?
Lord Lucas
My Lords, the difficulty is that the key stage 2 and key stage 1 data that are published are so coarse. The idea that you can effectively chuck children into one of three pots at the age of 11 and sensibly use that as a measure of anything is not something that I am comfortable with. If there were a better assessment, a teacher assessment, of where children were on a finer scale, you would have something that you could more reliably use to chart progress. Because of the coarseness of the base indicators, you can really only measure these things when large numbers of pupils are involved and the coarseness evens out. At the level of a primary school it is really pretty difficult, but at a big secondary you can get somewhere. Perhaps the Minister has something to add to that. I hope that the Government will consider releasing more and better data as part of what they are doing to improve the value-added indicator, which is a pretty important part of looking at how schools do.
Baroness Garden of Frognal
Before my noble friend sits down, the Government are looking at progress reports for schools, which would give a more descriptive picture of where schools were moving.
Lord Avebury
“Collective worship
(1) Section 70 of SSFA 1998 (requirements relating to collective worship) is amended as follows.
(2) For subsection (1) substitute—
“(1) Subject to section 71—
(a) each pupil in attendance at a foundation or voluntary school of a religious character shall on each school day attend an act of collective worship;(b) community, foundation or voluntary schools which are not of a religious character and Academies that are not religiously designated may hold acts of collective worship at the discretion of the governors.(1A) Governors should be under an obligation to consider representations made to them by pupils and the parents of pupils as to whether or not schools or Academies hold acts of collective worship under subsection (1)(b).”
(3) In subsection (2) for “community, foundation or voluntary school” substitute “foundation or voluntary school of a religious character”.
(4) In subsection (3) for “required” substitute “permitted”.
(5) In paragraphs (1) to (4) of Schedule 20 to SSFA 1998 (collective worship) for “required” substitute “permitted”.”
Lord Avebury
My Lords, I declare an interest: as an honorary associate of the National Secular Society; as a Buddhist, which I have been since the middle of the 1970s; and as founder and first chairman of the All-Party Parliamentary Human Rights Group from 1976 to 1997 and as vice-chair ever since. The group has always been very active in the defence of freedom of religion or belief, which includes the freedom not to believe, a right that is impaired by the compulsory participation in acts of collective worship in our schools.
Under the School Standards and Framework Act, a school can apply for a determination that the requirement for Christian collective worship is not to apply but then it has to conduct an act of collective worship in accordance with the tenets of some other faith. That would be decided by the SACRE, as I understand it, under the provisions of paragraph 4(1) of Schedule 20 to the Schools Standards and Framework Act, presumably at the behest of the governors. Here I would like to ask my noble friend whether the SACREs were considered for abolition under the bonfire of the quangos and why it is considered necessary to retain them rather than leaving schools free to get their own advice on matters of religious worship and education. Whatever the decision may be, it is almost certain to be contrary to the beliefs and practices of the majority of the population served by the school in today’s multicultural society.
Baroness Massey of Darwen
My Lords, I wish to speak to Amendment 97 in my name. I thank the noble Lord, Lord Avebury, for his eloquent and informative introduction to this group of amendments, and of course I agree with the issues he raised. I, too, should declare an interest as secretary of the British Humanist Association and a patron of the National Secular Society. I wish to speak mainly as someone who has been involved in teaching in various schools over a number of years. I should make it clear from the beginning that I think that a daily gathering—an assembly, if you like—of the whole school is of immense value. Such gatherings can be informative, uplifting and inspiring, and they do not need to be Christian.
I have taken part in many assemblies in my time and have noted that often in those assemblies Jewish, Muslim or Hindu children sat in the classroom outside the assembly because they did not wish to participate and were doing very little, as far as I could make out. Schools are not churches, synagogues, mosques or temples. They are places of wide learning, and I am disappointed that—despite opposition from educational practitioners and a government commitment to free up schools from prescriptive rules and regulations—a repeal of the duty on all schools to participate in a daily act of worship that is “broadly Christian in nature” is not included in the Bill. This is surely an outdated law.
The law, in theory at least, impedes a school’s ability to provide assemblies that are not Christian but may be based on moral and ethical precepts. Some of the best assemblies that I have taken part in or witnessed have been based on such moral and ethical themes. For example, I remember an assembly on the theme of friendship. In it the story of Ruth from the Bible of course came up, but so did many inspirational texts. Pupils contributed their own views and readings about friendship. Such assemblies would have been technically outside the law—a law that is consistently flouted by schools. Why have that law?
The law also violates the human right of freedom of belief for children. As I have said, Christian-based assemblies exclude pupils from other faiths. My amendment would replace the requirement to conduct collective worship with a requirement to hold assemblies that would further the,
“spiritual, moral, social and cultural education”
of children. Assemblies should take account of the many faiths, religions and beliefs in one school. If the law were to be changed, shared values found in different religious beliefs, including humanism, could be explored and be based on our common ground of humanity. This would represent a new entitlement for pupils, unlike the current requirement to provide Christian collective worship. The law is outdated. Why keep it?
Baroness Flather
My Lords, I have put my name to the amendment. I want to tell you of my own two experiences of collective assemblies—not collective worship.
When I was a child in India, the school that I went to held an assembly every morning. It was not for worship but for learning. We learnt much more, as the noble Baroness, Lady Massey, has said, about how to be good people, good citizens and good human beings than we would have done with one faith. My second experience was later in life when I went to a Methodist college, where we were made to go to chapel every day. It took place in the middle of the day, so that one could not arrive late. The teachers would go round the classrooms making sure that none of us girls was skiving. I am not saying that this happens now in schools, but quite often in those assemblies anti-Hindu and anti-Muslim sentiments were expressed. That left us with a very bitter taste. Frankly, I never understood what Methodism was about until I came here and worked with Methodists in my area—they do much good work. However, we did not know that and we did not learn about the good things. We were told only about the belief system.
The time has come to widen the remit and allow schools to focus on the needs of all the children in the school, because I do not believe in children withdrawing from a morning assembly. If you start to do that and the parents start to withdraw their children, you do not have a group spirit. The attitude is, “These people are there and those people are there. These children will not be coming”, and so on. That is a very retrograde step. It should be compulsory for all children to attend an assembly in the morning, and that assembly should be such that it is meaningful to everyone. I do not understand why the principles of various faiths or religions cannot be used in that assembly instead of just the dogma, the doctrine, or whatever, that people feel that there should be. If we had other faith preachers come now and again to speak at an assembly, it would bring everybody together much more.
The Lord Bishop of Oxford
I, too, declare an interest as a bishop of the Church of England. It will not surprise your Lordships to know that I resist the amendments in this group. As a preliminary, I say that we easily encounter in this kind of debate the myth of neutrality, with the idea that the amendments might lead us into a distinction between church schools—or, at least, religious schools—and religiously neutral schools. That is a common myth: that we would have religious schools and non-religious schools. I am not sure that we have a basic philosophical agreement on that point; I do not want to pretend that we do.
It is unnecessary to change the law, which seems to be working well. We have the existing safeguards; we have the possibility of withdrawal. The fact that so few parents use that right of withdrawal suggests to me that most parents think that it is working pretty well. A generous experience of spiritual and religious reflection goes on in assemblies; obviously, I go to a lot of them. In them, I experience not just Christian worship but spiritual reflection. I know that that is one possibility under the amendments, but it is the religious and spiritual element that is really important. If we take religion out, we have lost the key domain.
Lord Knight of Weymouth
I had no intention to intervene in this debate, but the right reverend Prelate said that he thought that the current law was working well. I have no doubt that it may be from parents’ perspective, but when Ofsted inspections of schools take place, do they not often find that the daily act of collective worship is not taking place? From the point of view of the practicality of the school, it is not working that well. I am not aware of huge numbers of parents complaining that the daily act of collective worship is not taking place. People like school assemblies, but if, for practical reasons, it is hard for them to come off because there is not a big enough hall, parents are not complaining in large numbers.
The Lord Bishop of Oxford
I just point out the statistic that 98 per cent of primary schools have a daily act of worship. The noble Lord is quite right that in secondary schools the figure is not as high as that: it is between two and three acts of collective worship a week; on other occasions, the school is meeting for an assembly purpose. That is what I mean by the generous interpretation of religious and spiritual reflection, which is crucial.
Secondly, the system of opt-in rather than opt-out would drive a wedge into our schools which would be regrettable. We could find social division. As it is, there is a difference between collective worship and corporate worship. Collective worship is a gathering of everyone who is together in a certain place at a certain time, such as a school. Corporate worship is when people opt into the faith and want to go to a church. Therefore, we have a collective gathering which allows youngsters to experience something and not just learn about it. As we are legally charged with promoting the spiritual, moral, cultural, mental and physical development of pupils and society, experience matters, and the candle, the singing, the prayer, the stillness and the silence, which are so often present, are all part of the experience of the spiritual, which is part of what we are required to provide.
Thirdly, there is the problem of a wedge appearing between two different types of school. One of the glories of our system is that it is an integrated church state system or a system of church schools within the state. It works well because it is integrated and, if we drive a wedge by saying that there are church schools over here and non-religious schools over there, we will deny ourselves something rather precious about the British system. There is much more that I could say but I will not go on.
Lastly, let us remember that in 2010 the Office for National Statistics said that 71 per cent of the population of this country still want to identify with—I think that that is the phrase—the Christian religion. If we are swapping statistics, 86 per cent of people in this country go into a church at some point during the year, but if 71 per cent want to identify with the religion, that would seem to indicate that most parents are happy with the way that we go about things at the moment. We have a good British compromise and, if we rock the boat with this, I do not know quite where that will lead. I think that it will probably be to our detriment.
Baroness Turner of Camden
My Lords, I support the contributions of my noble friend Lady Massey and the noble Lord, Lord Avebury, to this debate. In my view, the law as it stands is a legacy of a society which is unrecognisable compared with the one that we have today, with its wide variety of beliefs and traditions. The Bill provides an ideal opportunity to modernise an outdated and overly prescriptive law, and the amendments give us the opportunity to do precisely that.
Although it is true that parents have the right to withdraw their child from collective worship, for many parents this is very unsatisfactory because it means that the child may feel excluded and separated from their classmates, and this can have a very damaging effect, particularly on very young children. In some respects, I speak from personal experience in that regard. My mother was a Roman Catholic and my father was not, but they insisted that we went to state schools, and my mother filled in the appropriate forms to the effect that I was a Roman Catholic. Therefore, when I went to school, instead of going in with everyone else, I sat outside the door. It was thought right and proper that I should be separated from the rest of the children. I remember being very upset about this, getting home and saying to my mother, “They don’t really like me, you know, because I’m a Roman Catholic”. Perhaps that is one reason why I grew up to be a secularist. That is by the way but the fact remains that it is not a very good solution simply to say that parents can withdraw their children. Much better in my view is the kind of assembly envisaged by my noble friend Lady Massey, which is available for everybody. People can attend irrespective of their religion or no religion.
I turn to the amendments in the name of the noble Lord, Lord Avebury. Amendment 92 would at least ensure that conducting an act of worship was made optional for schools without a religious designation, and Amendment 93 would make attendance at worship optional for all children. However, the less satisfactory amendment from my perspective is Amendment 94, which would lower the age at which pupils may withdraw themselves from collective worship from sixth-form age to a default age of 15.
The three amendments in the name of the noble Lord, Lord Avebury, would certainly be an improvement on the present situation, and we now have an opportunity to reform what I think is a very outdated way of looking at collective worship. I therefore hope that the Government will be prepared to respond suitably to these amendments.
Baroness Walmsley
My Lords, I have no interest to declare save that in previous pieces of legislation I have tried to achieve exactly the same objectives that my noble friend is trying to achieve today. I agree with what he is saying. I also agree with the noble Baroness, Lady Massey, that it is important that children are able to make decisions for themselves about something like this. We are not just talking about a piece of religious education; we are talking about worship. I wonder whether the proponents of the out-of-date law as it stands would feel the same way if this were a Muslim country and Christian children were being asked to worship in the way that Muslims do, even though they did not espouse that faith.
The noble Baroness, Lady Turner, also put her finger on the fact that this is completely out of date in our multicultural society. If it is true that academies have the freedom to decide whether or not to do this and maintained schools do not, that is not right.
Lord Touhig
My Lords, I declare an interest as a Christian. I am concerned about these amendments. Currently there is a legal requirement on all schools to have a daily act of collective worship of a broadly Christian nature. As has been said by a number of noble Lords, parents have the opportunity to withdraw their children from these acts of worship if they so wish and that seems to make perfect sense. These amendments erode this requirement.
Collective worship is important for two reasons. First, it is a visual recognition of the Christian heritage of our country—it is a Christian heritage. It enables children of whatever faith to engage and better understand this heritage. Secondly, it is an opportunity for children and young people to explore their own faith. For some children, that may be their only opportunity to understand the Christian faith.
I am Catholic and my family were Catholic but they were not practising. I first came into contact with the Catholic faith and Christianity by going to a Catholic school. The majority of youngsters at that time at the school were not Catholic. I might have been ahead of my time ecumenically but I went to half-past 9 mass as a Catholic and, because my neighbours were Baptists, at 11 o’clock, I went to the High Street Baptist Chapel in Abersychan and even took part in Sunday school anniversary singing “Jesus wants me for a sunbeam”.
The point is there was a good feel in the school and people took part in the collective act of worship. Some of the amendments undermine parents’ primary right as the educators of their children. Indeed, Article 2 of the First Protocol to the European Convention on Human Rights says that parents have a right to educate their children on their own religious and philosophical convictions. Amendment 93, moved by the noble Lord, Lord Avebury, would alter this requirement for all children to attend collective worship from one which is compulsory, unless parents withdraw them, to one which is voluntary. The importance of collective worship would be undermined and children might choose due to peer pressure not to take part in the daily act of collective worship.
Lord Avebury
Is it all right for peer pressure to compel them to take part in collective worship, although not to compel them not to take part?
Lord Touhig
That is not the case. It is a question of parental decision. If we accept the European Convention on Human Rights, parents have a primary right to educate their children. That is what it says.
Baroness Brinton
The distinction is clear in the Act about collective worship versus religious education. These amendments tackle the issue of collective worship rather than education. I am struggling to see the noble Lord’s point about how this impacts on parental choice, because parents are free to have an act of worship with their children outside school, but more importantly how it impacts on religious education if it is a collective act of worship.
Lord Touhig
Parents have a right to decide on their children’s education and, if they choose for their children to take part in a collective act of worship, which the law of this country so prescribes, they are entitled to exercise that right. I do not think we are entitled as legislators to change that.
Baroness Massey of Darwen
Could I interrupt my noble friend? Members of your Lordships’ House are a good deal older than school children and can make their own choice.
Lord Touhig
Yes, indeed, and a number of Members did not come into the Chamber. It is right and proper that they should be able to exercise that right. Equally, parents on behalf of their children can exercise the same right under the law as it stands. My noble friend said earlier that the law was flouted and therefore asked why we have it, but there is a law which says you should not drink and drive. Would we imagine abolishing it because some people flout it? This morning I saw two people driving cars while using their mobile phones. Again, that is against the law, but because the law has been broken, should we take it off the statute book? Of course we should not. I do not think that that arguments carries any weight.
For the reasons I have given, it is worth while to maintain the collective act of worship in our schools and I believe it is right that that collective act of worship should be Christian in nature for the reasons I have argued. Other noble Lords may have different views, and it is important that we should respect each other’s views. The present law allows for that.
My final comment is this. One of my oldest friends, the late Leo Abse, represented Pontypool and Torfaen in the other place for over 30 years and was probably responsible for more social legislation than any Back-Bencher in the history of the British Parliament. His final words to his constituency Labour Party when he announced his retirement were these: “Tolerate everything and tolerate everyone, but do not tolerate intolerance”. I believe that these amendments lead to a degree of intolerance. I am sure that that is not the intention, but it is where I believe they will lead.
Lord Peston
My Lords, I start by declaring an interest, or in my case a lack of interest, in that I am an atheist. I regard all religions and religious doctrines as simply nonsensical—tout court nonsensical. Over the past few years I totally opposed the Government, who I supported, in their total misuse of public money in order to increase the vast number of religious schools in this country. It is a source of pride to me that I never once voted with my own Government on that extension and waste of public money, and I stick to that view.
Referring to my noble friend’s remarks just now, only once in my 25 years in your Lordships’ House, I ended up in the Chamber by mistake and I could not get out because the doors were locked, so I was present during the act of spiritual worship or whatever it is called. I have to say that I regarded it as one of the weirdest experiences I have ever had, in a life that has included a great many broad experiences. I could not believe what I was observing, and I say that in terms.
Having said that, I am as committed as anyone in the Room to freedom of thought, belief and expression. I have never spent any time trying to persuade anyone who was religious that they should not be. Quite to the contrary, I would regard it as a disaster in our country if our young people were not brought up to read the King James version of the Bible, one of the greatest works of literature in our history. I discovered the other day on Google that there are several other versions of the Bible, and they are so bad that they must have been written by people with the prose equivalent of cloth ears. I gather that they are more correct translations of the Hebrew, but compared with the King James version, I would not allow any child to read them.
I have no difficulty whatsoever in our children knowing about religion, but I insist that this has nothing to do with religious education. I want people to know that there are many religions. Indeed, speaking as an atheist, I think that the more religions they know about, in my view, the less likely they will be to believe that any of them can be true, because how can you have so many if they are all true? Not long ago, the Chief Rabbi made the terrible mistake of saying, “Of course, we have different religions, but we all worship the same God”. The Orthodox Jewish rabbis said, “No, we don't”, and the Chief Rabbi—mistakenly, in my opinion—withdrew his remark.
Therefore, the question is not one of religion; it has nothing to do with whether you are a believer. I reiterate my point that I am not seeking to persuade those of you who are believers that you should not be—that is your choice—but the act of assembly in school, which is vital to the unity and whole atmosphere of the school, should be conducted on a totally non-religious basis.
I would go further. My view is that the assembly should be conducted largely by the pupils, not by the head teacher or other teachers. To give an example, if it were my choice, every day I would have one of the pupils talking about some great figure in the world, their courage and what they achieved, such as Aung San Suu Kyi or the woman who is being threatened with being stoned to death by the Iranians for sticking up for what she thought was right. Pupils in schools could choose those great figures, and that is exactly the atmosphere that I would want to develop—plus the bit about someone telling the school that the first 11 lost at cricket yet again, and so on, which was certainly my experience of school assembly.
As my noble friend Lady Massey brought to our attention, the whole point of the gathering is that people meet together for the sake of producing a decent spirit in the school in which religion should have no part to play, other than that people should be aware of other people’s multiplicity of opinions and views. I would have no objection if, one day, one of the pupils who spoke decided that their address would be to say why they were a Christian, a Jew or a Muslim, but they would be saying it only as a contribution to general discussion not as a formal religious matter.
Times have changed. We need to know that the world is full of different people. When I went to school, I did not know that there were any blacks around at all. There were no blacks to be seen in any of the schools where I was. I was happy, when my children went to the local comprehensive, that they knew that there was a vast range of different people in the world. I am certain that they benefited enormously from that.
I am not certain that I like the detail of any of the amendments, and I say to my noble friend that I hope that we can come back at Report with something that we can divide on so that we can at least test the opinion of the House.
The important thing is the gathering at the beginning of the school day which unites the school and does not divide it.
Lord Griffiths of Burry Port
My Lords, I confess myself to be a little confused that the exigencies of the arrangements of this Room have led to my sitting on the government side, but I will do my very best to use this to illustrate the point that, in a perfect world, people can sit anywhere and have decently held points of view without being called nonsensical for them.
I also want to say to the noble Baroness, Lady Flather, that I will make it my resolution to work as hard as I possibly can to show the other face of Methodism for as long as we know each other. In response to my noble friend Lord Touhig—I must say that he is my noble friend, although he is sitting opposite me—I just want to mention that, although the first line of the hymn that he sang at the Baptist Sunday school anniversary is “Jesus wants me for a sunbeam”, I happen to know that its last line is,
“You in your small corner, and I in mine”,
which is pretty much what this debate seems to be turning out to be like.
This is a terribly important debate and the points of view that I have been hearing are necessary and are to be engaged with, but I just feel uncertain that they sit comfortably within the scope of this Bill. I feel that this proposal would take a stance against the historic position. Let us remind ourselves that the 1944 Act, which brought this collective worship idea into being, was really an attempt to bring together the provision of schools by a variety of bodies, most of which were Christian. It is still the case that the Church of England has a significant stake in secondary education and a predominant stake in primary education. Therefore, we are talking really about history and culture—this is who we are and this is our identity—and I do not at all want to discount other religions or other points of view.
I listened to what was said by the noble Lord, although apparently I am not being listened to myself, but I just feel that the demonising of collective acts of worship is not consistent with my experience of actually performing them. In the hundreds of different kinds of school where I have led assemblies all over the world, I can promise you—perhaps I should not promise, as there are bishops here—that, in any school where I have been a governor or led a school assembly, I have never met antagonism, objection or dissent about what is being offered.
In the East End of London, one of the two schools for which I have responsibility attracts 60 per cent of its pupils from a Bengali population. People send their girls to the school because it has a religious basis and they want the structures that go with that; there is no proselytising and, if there were, the people doing it would be on the carpet. In the boys’ school where I lead collective acts of worship, I am conscious of the range of religions and I suppose that there are people of no religion. That does not worry me in the slightest. We can conjure up an idea, we can play with a thought and we can ground that thought in the traditional religious position, indicate that there are other ways of looking at it and then call for a silence—which is what I do—during which people can think their own thoughts according to their own inner light. There are ways of doing these things without us getting into this silly antagonistic position.
In response to my noble friend Lady Massey, who was my mentor in bringing me into the House of Lords—she wanted a religious person to see if it was all right, but now that we are sitting on opposite sides I am not so sure about that—I just feel honestly that we are making more of this than needs to be made. It is not a problem in the experience of the schools that I know about, and I know about lots and lots of schools. Let us have the debate another day. If a consensus emerges from a debate dedicated to this subject, then let us see what we have to do about that, but piggy-backing the subject on this Bill seems to me to be inappropriate.
Lord Sutherland of Houndwood
My Lords, I am very pleased that I gave way to the noble Lord, Lord Griffiths. It was a humane contribution to a discussion that was otherwise beginning to polarise. I do not have interests to declare of the kind that others have declared. I am not a card-carrying member of any secular society or indeed of any church or religion. I suppose that my interest, if I have one, is that I was once a professor of philosophy of religion. In that context, I learnt that there are all sorts of philosophies, and on the whole the one that I liked best was that of David Hume, who taught me a bit of pragmatism. For example, I have discovered pragmatically that if you want a seat that allows you to take part at Question Time and you are a Cross-Bencher, you have little choice but to attend worship in the main Chamber. It is between me and my conscience what I am thinking when all that is going on, although I am not quite as clear in my mind as perhaps some of my noble friends are.
In this context, the reality—and this has been happening for a number of years—is that in many schools assembly is withering on the vine. In other schools, the assembly is very important because they have either a statutory or at least a common religious character that is accepted in the community. There, the assembly fits very well into the day’s activities and, by and large, the parents respect it.
I reiterate an additional point that the noble Lord, Lord Griffiths, drew out. If you were to replace assembly completely by fiat and say that assemblies must not take place, that would be a rational position that I would understand, although I would not share it. However, if you do that, you need properly to sort out the alternative. The one thing that assembly does is to engage the emotions of young people, which, sadly, is what we have failed to do with much of the curriculum. There are a variety of alternative ways of engaging the emotions of young people and, for some, religious worship in the community is one. Therefore, I would be very reluctant to get my tanks lined up and say, “Shoot it out of the Bill now”. If, as a matter of evolution, assembly is withering on the vine—which, I believe, is the reality—alternatives will, in an evolutionary way, begin to emerge, and that would seem a wholly satisfactory way of changing the situation in our schools. However, without further discussion and without a further clear picture of the alternative, I would not want to support the amendment.
Baroness Whitaker
My Lords, I think that my noble friend Lord Griffiths, who is temporarily sitting on the other side, is very disarming but I disagree with him about the relevance of these amendments. I am sure that many people in this Room and outside share the view that a moral and spiritual dimension to school life is essential. I personally think that it is essential for school students to join in a morally and spiritually uplifting act every day. The problem is that, if it is a Christian act, quite a lot of children are not Christian and some are not of that particular sect of Christianity. Those children are deprived. When I went to school, the children who were withdrawn sat outside, as has been said, and I do not think that that is what school is about.
Of course, I have absolutely no objection to children learning about Christianity. It is one of our glorious traditions which I do not happen to share but, like my noble friend, I am very glad to have known the King James Bible and, for that matter, the Bible of Tyndale. I would have no objection at all to my children experiencing a Christian religious ceremony or a collective act referring to the Christian approach. What I really think we should move away from, for all the reasons which have been given and which I shall not repeat, is a sectarian approach to morality and spirituality. We really cannot allow our children in this wide, diverse world to think that only one way to truth is the right way, that only one morality is right and that only one spirituality has any validity. Therefore, I am extremely happy to support the spirit behind all these amendments.
Lord McAvoy
My Lords, I think I should try to sit in a different seat in future, because every time I sit here I seem to be last or near-enough last in the batting order in trying to speak. Last Wednesday, there was trouble and the Government Whip intervened and effectively stopped me from speaking—despite the fact that I was unaware of how to work these things. Fifteen speakers were in favour of that type of amendment. I was against it and was frozen out. I do not know how we find a way of trying to balance things. I should also like to speak. I am not going to declare an interest, because I take exception to folk expecting me to declare my religion before I speak on an issue. If you consider my Sundays, you might get a clue.
The noble Lord, Lord Avebury, rhymed off a lot of substantial figures that seemed to prove that religion in schools was dying, that all sorts of statistics showed that folk did not bother and that we were heading for an atheist or a non-believing society. If that is the case, why is there enthusiasm for coming forward with amendments such as this that seem to flog a dead horse? I do not understand, if Christianity and religious belief are dying on their feet anyway, why we are trying to bury them.
At the risk of being controversial, what we have here is aggressive secularism. This is not a contribution to a debate based on tolerance. I agree with my noble friend Lord Peston that tolerance should surely be at the heart of any discussion such as this. I would never dream of stopping someone else from practising their religion or proselytising, as the noble Lord, Lord Griffiths, said. People are people and will do their own thing.
I can tell noble Lords that there is confusion and wonder among many in faith communities who have chosen to go to and use these schools. My noble friend Lady Whitaker was definite about the situation that she would choose for her children. That is absolutely fine, but the people who send their children to faith schools for collective worship and gatherings are surely entitled to have their point of view. There is a feeling that I am picking up—
Baroness Whitaker
I am sorry to interrupt the noble Lord, but since he mentioned my name, I should say that I do not think that any of these amendments would prevent parents from choosing a religious school that would have a religious act of collective worship.
Lord McAvoy
That is technically true, but it forces them to accept assumptions—I shall not be provocative and say that they are based on hostility—that are certainly not sympathetic towards school gatherings based on Christian beliefs. This should surely be about tolerance. If people want to change the way that things are, surely they should go about convincing people of that. I really do not understand, because no one in this Room has a mandate to talk about removing the basis of collective worship within schools. I should certainly like to see a politician standing for election along the corridor try to advocate some of the beliefs and authoritarian elements in these proposals.
I appeal to colleagues: if you want to change things, try to persuade; do not dictate or try to lay down such conditions from on high. Whether colleagues like it or not those are the unforeseen consequences. I agree with my noble friend Lord Touhig that it is not the intention of noble Lords to be hostile to faith schools on the basis of collective worship.
I shall say another couple of quick sentences in a mood of co-operation. My noble friend Lady Massey said that schools are places of learning only. Among a whole host of things, I accept that. However, the religion that I belong to—the Roman Catholic faith—believes in the trinity: home, school and church. We do not believe that schools are there for learning only.
Baroness Massey of Darwen
In fact, I did not say that schools are places of learning only. I would support schools that have a wide learning experience, such as culture, the arts, sport and so on. Learning is not just about academic learning. Learning is moral, spiritual and so on. I was trying to say that schools are not churches, temples, mosques or synagogues.
Lord McAvoy
The Catholic schools that I know, and which I have the most experience of, incorporate all the various subjects that my noble friend mentions. There is nothing wrong with that. I go and speak to modern studies classes and I assure my noble friend that their opinions are extremely varied. These schools encompass everything. They get involved in fair trade, mission work for Africa and raising funds. They do terrific work based on their faith and it should not be mocked. I believe that if people choose to say that school, home and church are a trinity, they are entitled to do so. I very much oppose the amendments.
Baroness Garden of Frognal
Before we continue, I should say that this has been a fascinating debate and I rather sense that we could carry on all afternoon, but I am rather taken with the idea of the noble Lord, Lord Griffiths, that we should try to schedule a debate on this topic where we would have more time to discuss it. In the context of scrutinising amendments in Committee, though, I wonder whether we might just hear from the right reverend Prelate the Bishop of Lichfield who was trying to get in and then move on to the opposition winders. Would that be acceptable to the Committee?
The Earl of Listowel
If I may just interject, strong arguments are being made on all sides but I would like to make one assertion. It is important for children to have some experience of the numinous, of the higher power, of the spiritual life, if you like, in their childhoods, but particularly for some children who have a lot of chaos in their lives. Many young boys, for instance, growing up without fathers, children whose parents are separating or children whose parents suffer from issues around substance misuse do not have a strong sense of belonging to a family. As they go through life, a few of them may enter the care system. Often they move on from there with very little support. A significant number of those who do not have that support from a family may end up falling by the wayside in various ways. For some of them to be able to look back at an experience in their childhood when they felt at one with a group and had some contact with a god or a numinous sense of something beyond themselves, for a few of them in their adult life that may be an important experience where they can look for their own redemption and find somewhere that they can belong, though one means or another.
What concerned me in what the right reverend Prelate said is that we are not really discussing whether there will be one kind of spiritual practice in schools or another. I think that he was saying that if we go along with the amendments, his concern might be that in many schools it will start withering on the vine and there will simply be a formal gathering but not with this spiritual, reflective sense of a contact with a higher power. That may be what he was driving at.
Lord Touhig
May I just respond to the Minister? The Government are quite wrong. This is the second occasion on which they have sought to curtail debate, but that is not their role. Members are entitled to take part in the debate as widely as they need to or want to. The Government should stop trying to intervene and control the timetable of this Committee by telling people not to speak.
Lord Lucas
My Lords, I think that the noble Lord is misinterpreting the rules of Committee. The Minister speaking does not curtail debate in any way; it merely gives us a bit of information on which we can base our further debate.
Baroness Howe of Idlicote
My Lords, we need not just information, but a little guidance as this Committee stage could go on and on. I think that we all accept that.
The problem with my noble friend’s comment just now is that, alas, as we heard earlier, one or two people have personal experiences of finding the whole business of sitting outside an assembly or religious occurrence in a school very disturbing. This is something that we all need to take into account. This issue has gone on and on. I was remembering, as the noble Lord, Lord Peston, was on his feet, having these arguments in the Communications Committee. However, we managed eventually to come to a satisfactory conclusion and we moved on.
The Lord Bishop of Lichfield
My Lords, I thank those who set out so clearly the reasons against religious assemblies for schools. I shall go on thinking about those reasons and some of my best answers will come in the bath tonight.
Several noble Lords have said that religious assemblies are way out of date. I am not so sure about that. I have got to leave my duties here on Wednesday because one of our home regiments is coming back. Apparently, when they come back from Afghanistan and the local population want to greet them, the first thing they think should be on the agenda is a religious service. So there we have the youth of today opting for a religious and corporate act of worship in order to express what they want to say.
I cannot help feeling also that the surroundings of this Room have something to tell us about our own history. Is what we see around us all out of date? I do not think so. It has been a constant feature that people have suggested that religious assemblies for children are divisive and divide up communities. That is not my experience at all. On the contrary, I see constant cohesion in welcoming people of all different ethnic groups and faith groups and managing that. I often go to assemblies where children are given a major part in running it. It is a regular part of our diet for someone to get up and say “I am a Jew; this is how it happened to me” and so on. Muslims, Buddhists and other parents are usually very keen to have their children come to assembly. The assertion that lots of children sit outside is just not true. I remember a couple of Jehovah’s Witnesses but, apart from them, there are very few people who sit out.
We are agreed on both sides of this debate that assembly is a good thing. What divides us is whether it should be substantially Christian. My own opinion is that the great advantage of a religious assembly is that it gives us the opportunity to give worth to worship that goes further than the latest fad from the head or from the local authority, that gives not just a sense of the numinous but of someone beyond our daily matters who can guide us with regard to the values that our society should be built upon. I do not think any age is too young to start that struggle of saying, “If we want a cohesive community, if we want tolerance, truth and honesty, where do those values come from?” I think many of us in this Room would say they come from God, and that the authorised version of the Bible is not only so impressive because of the style of the writing but also because of the content.
There is much more to say but I am against those who say that Christianity is just one of our religions. It occupies a more important place in our constitution than that. If we are having debates about the constitution, we should not just nibble away at one side of it without seeing that it affects all the others as well.
Lord Quirk
My Lords, if there is one thing that is clearly agreed in the Committee this afternoon, it is the value of the assembly as a way of showing that the school has a sense of community. There is much good in the amendments put forward, but at the same time we should not forget that church schools happen to be extremely popular with parents, even those with no religion or religious beliefs of their own. Church schools are not popular by accident. If we wish to move from the current position, let us say in Northern Ireland, with mutually hostile but strongly religious schools, to something of the idealism put forward by the noble Baroness, Lady Massey, and the noble Lord, Lord Peston, we need to think very carefully about what we will put into this mix of idealism and discipline that appears equally in these amendments.
Baroness Flather
My Lords, church schools are extremely popular, especially with ethnic minority parents. They feel that there is more discipline and they are better controlled, and there is usually a uniform. Most ethnic minority parents like that. I am not sure it is because of collective worship and we should bear that in mind very carefully. If we take out the word “worship”, we have had things about spirituality and about Christian heritage. It is very important that children from anywhere and everywhere learn about the Christian heritage of this country. That is fundamental: if we do not know anything about the Christian heritage of Britain we do not know about Britain.
I would also like to point out that this is the most irreligious country I have ever come across. The people in this country are not religious and they do not even pretend to be religious. If collective worship is your idea to bring up a generation that will be more religious, it will not, because it has not done so. As far as the worship in the Chamber is concerned, I agree with the noble Lord, Lord Peston. I went once; I could not go again, simply because it is so ludicrous. Turning your back and showing your bottom is just not on. I would never do that. I do not mind a few words thanking God et cetera—that is fine. I have no problem with any religion, or no religion. I was brought up to believe that all faiths, all religions, are pathways to God and they are equally valid in that sense. I have no problem with that, but there has to be a limit to how we deal with these issues. Certainly there are old people here and people of a generation who are used to that kind of thing. For me, it was very strange indeed. We talked about peer pressure. Peer pressure works here as well.
I say to the noble Lord, Lord Griffiths, that, during the years that I spent in voluntary work in Maidenhead, my closest allies were the Methodists and I have long since learned how good they are. I now judge people not according to what I learned once but as they present themselves to me. However, I would say that the Catholics suppress women, and hundreds of thousands of women die in childbirth. He may not like that, but I do not care.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
Behind me is a portrait of the judgment of Daniel. Actually, I think that it should be a portrait of the judgment of Solomon, given today’s debate—
Lord Peston
I am sorry to interrupt the Minister. I am very much looking forward to hearing his speech, but the monitor suggests that we are possibly within seconds of voting in the Chamber.
Lord Peston
It is just that I do not want his speech to be ruined by the fact that we may need to march out during the middle of it.
Lord Hill of Oareford
My Lords, I would have finished it by now if the noble Lord had not intervened.
There is an extremely wide range of views on this important issue, as I knew there would be, and, like others, I am grateful to my noble friend Lord Avebury for raising it. In considering the current system and the way forward, the Government’s guiding principle is that the arrangements for collective worship should be flexible and fair to pupils and parents as well as manageable for schools. The requirement for a broadly Christian collective worship is a long-standing one, which I think was the point made by the noble Lord, Lord Touhig, who referred to it as our Christian heritage. A similar point was made by the noble Lord, Lord Griffiths of Burry Port.
If I may declare an interest, as other noble Lords have, I am the son of a Methodist mother, who herself had to go to chapel three times a day on Sunday, and of a father who was a chorister at Westminster Abbey and so went to church almost every day for six years. As a result of that, we had no church at all in our household because I think that my parents suffered from overload. However, as a kind of historian—or a historian manqué—I think that it is difficult to write out the role that the church has played in education and in the history of our country for many hundreds of years—
The Deputy Chairman of Committees (Lord Geddes)
With great respect to the Minister, the noble Lord, Lord Peston, was entirely right, as a Division has now been called. The Grand Committee stands adjourned for 10 minutes, to resume again at 5.10 pm.
The Deputy Chairman of Committees (The Countess of Mar)
My Lords, I remind noble Lords that there is a problem if mobile phones are switched to silent in that they still interfere with the sound system. Therefore, can noble Lords please ensure that their mobiles are switched completely off so that we do not get a buzzing noise? I gather that the Minister was in the process of winding up.
Lord Hill of Oareford
My Lords, I cannot apologise to the noble Lord, Lord Peston, for my hubris but I shall do so later.
The Government believe that this educational experience makes a valuable contribution to the spiritual and moral development of all young people and not just for those who attend religious schools. That view is shared by many parents, who still expect their children to understand the meaning of worship as well as to have an opportunity to consider spiritual and moral issues, and to explore their own beliefs, whether or not they hold a faith. The right reverend Prelate referred to some statistics published in September 2010 by the Office for National Statistics, which suggested that 71 per cent of the population still identify themselves as being Christian.
In response to a specific question that I was asked, academies are covered by the provisions on collective worship. Parents can withdraw their children from collective worship if they wish to do so, and sixth-form pupils also have this right. The Government consider it appropriate for parents to exercise these rights on behalf of children of compulsory school age, and we respect the right of parents to have their children educated according to their religious and philosophical beliefs. We would expect that, in exercising this right, parents would take account of their children’s views.
The law also requires schools to provide an educational experience of collective worship that is relevant to all pupils, no matter what their background or beliefs, ensuring that the collective worship is presented in a way that benefits the spiritual, moral and cultural development of all children and young people. In addition, under Section 394 of the Education Act 1996, schools have the freedom to apply for a determination from the local authority if they judge that it is not appropriate for the requirement for collective worship to be of a broadly Christian nature to apply to their school.
Therefore, overall we believe that the current system of collective worship is sufficiently flexible and fair in making provision for a variety of different perspectives and attitudes to collective worship without imposing unnecessarily complex arrangements on schools. I understand the range of views expressed but I intend to take the advice of the noble Lord, Lord Griffiths of Burry Port, that this is an important issue to which we may need to return in a different context. With that, I ask my noble friend Lord Avebury whether he feels able to withdraw his amendment.
Lord Avebury
My Lords, we certainly will have to return to this matter in a different context but we will have to do so on Report, because we are not going to resolve it here this afternoon. As your Lordships will understand, we cannot have a Division on it. However, there are certain things on which we can agree. First, all noble Lords who have spoken have said that an assembly is a good idea—that all the pupils should come together as one and partake of a proceeding that has a moral and ethical dimension. Even the noble Lord, Lord Peston, would go as far as that, although he might not wish to add the word “spiritual”.
I point out that some among us are atheists—that is, we do not believe in a supreme being who is directing our procedures and telling us how to behave—but we believe that there are moral and ethical codes that should be common to the whole of humanity and we want them to be taught in assembly. We want children to have, for example, the virtue of tolerance, which has been mentioned. How can we have tolerance when children are separated into different kinds of religions, even if, as the Minister has just said—
Lord Avebury
I am in the middle of a sentence. I shall give way when I finish it. How can we have tolerance when children are separated into different kinds of religions, even if, as the Minister has just said, there can be a determination that allows the act of worship to be of a non-Christian character, which just means that it will presumably be of a Muslim or Hindu character, thus separating the children who belong to those schools even further from their contemporaries in the mainstream Church of England schools?
Lord McAvoy
I am grateful to the noble Lord for giving way. Will his tolerance for other people’s points of view stretch to engaging with schools that have the type of collective activity to which he is objecting? Would he care to consult them and get some measure of how they feel before we get to Report?
Lord Avebury
I was going to come on to the question of who is entitled to make this decision. I do not believe that there can be, as I think the noble Lord said, a diktat from on top, which is what we have in the Education Act 1944. This should be a matter for the schools themselves, and they should consult the parents and the pupils. If you want localism, if you want the decision to be made freely by the people who are intimately concerned with it, the pupils and their parents, this is the right way to do it.
“( ) Where a child has a special educational need, a school must demonstrate co-operation with other agencies to ensure the child’s needs are supported holistically.”
Lord Rix
My Lords, I wish to speak to Amendment 99, tabled in my name, regarding issues around the duty for schools to co-operate with other agencies. I also thank the Minister for the opportunity he gave me nearly four weeks ago now to meet him and to summon his officials to discuss this matter in more detail, and for the letter that he subsequently sent me on the issue which, thanks to the vagaries of the post, arrived 14 days after it was posted. Tempus fugit but apparently not for the postal service.
The co-ordination of services for children with SEN, including those with a learning disability, is an approach for which the disability sector has been calling for a number of years. Co-ordinated support is a holistic approach that ensures that disabled children and their families are at the centre of the services that are aimed at improving their access to a full and meaningful life. The amendment tabled in my name aims to retain the duty on schools to co-operate with external agencies, which the Bill in its current form seeks to remove. Even the Government’s own SEN Green Paper refers to the importance of multiagency working and the role of partnerships in delivering the best outcomes for disabled children. By removing the duty to co-operate, I fear that the Government are sending out completely the wrong message, and I encourage Ministers to return to the aspirations as set out in the Green Paper.
However, in his recent letter, to which I referred earlier, the noble Lord, Lord Hill, advised me that new inspection requirements for schools will be explicit about disability and SEN. As these inspectors will include the,
“leadership and management of the school”,
the Government hope that schools will fully consider their responsibilities when working with external partners and other agencies in the interests of the children concerned. Perhaps to pre-empt all this, there was a meeting last Thursday with the noble Lords, Lord Laming, Lord Low and Lord Touhig, and the noble Baronesses, Lady Walmsley and Lady Benjamin, to which I was invited but was unable to attend because I had to go to hospital.
The noble Lord, Lord Laming, has received a letter from the Minister. I hope he does not mind if I quote the words:
“I said that I would need to consult Ministerial colleagues, but confirmed that I intended to return to this matter at Report Stage”.
Therefore, although of course I am very happy to listen to others, at the same time when the time comes I shall withdraw my amendment.
Lord Laming
My Lords, as the noble Lord, Lord Rix, has indicated, the Minister generously met a group of us last week. I think we would all agree that we had a very useful meeting where we were able to express our thoughts fully and the Minister was responsive to our concerns. As the noble Lord, Lord Rix, said, the Minister has since written to me and indicated that he has given the matter further thought. The letter is written in what I would call careful language, perhaps even a touch cautious, and therefore no bunting is to be unrolled as yet. However, I am sure that I speak on behalf of the group when I say that we are extremely grateful for the Minister’s thoughtful approach to this and we look forward to returning to this on Report.
Baroness Walmsley
I point out to the Committee that my noble friend Lord Storey has withdrawn Amendment 100ZA, but for some reason that has not appeared on the Marshalled List. That amendment is probably the reason for the reference in the Minister’s letter on the Health and Social Care Bill. It related to the possibility that the new welfare public health boards might be more appropriate organisations for schools to co-operate with when it comes to children’s well-being. We have been persuaded that it might be more appropriate to lay that amendment to the health and Social Care Bill when it comes to us.
That future legislation, besides the SEN Green Paper that will undoubtedly lead to further legislation, is one of the reasons why it was suggested to the Minister that the Government might consider waiting and not making this change to legislation just at this moment, but might instead leave the potential for that change until we know what is coming in the legislation that follows the SEN and disability Green Paper and what will transpire in the Health and Social Care Bill. It makes sense for the Government to keep our powder dry for the time being and postpone any decision about removing the duty to co-operate until we see what legislation is coming down the track and how that might be affected by this idea.
Lord Elton
My Lords, this might be the right moment to ask the Minister to tell me in his reply—or, more probably, in correspondence afterwards—what progress has been made in implementing the requirements to identify children suffering from dyslexia and that range of specific difficulties? They were legislated for in the previous Parliament but that has not necessarily as yet been implemented. I would be grateful if he could let me know in advance of Report.
Lord Touhig
My Lords, we had a good debate on this issue on the second day of Committee. I do not intend to detain the Committee very long, other than to say that the Minister has been extremely helpful and thoughtful. We had a good discussion.
One point came out in that discussion but not when we debated this in Committee, although it is mentioned in the Minister’s letter. He says that he has various things to consider:
“I said that the Government needed to be mindful that individual head teachers and college principals and their collective professional associations had all expressed support for the proposals in the clauses”.
He indicated in our meeting with him that there had been objections around the country to the duty to co-operate. I have not come across that, and I do not know whether other noble Lords have. We were surprised by it, so perhaps we might look at this again on Report.
The Minister was certainly in a listening mode and said to us that most schools are now co-operating. That is a good thing, but the current legislation ensures that those which do not co-operate are obliged to do so. I do not remember who made the comment when we debated this issue on the second day in Committee, but they said that this is one bit of bureaucracy that we should welcome. I am sure that the Government will listen to us, and I do not doubt that the Minister will reach the right decision when we get to Report .
The Earl of Listowel
My Lords, it is encouraging to hear that the Government are approaching this in such a careful and thoughtful way. The Secretary of State has made a commitment to look at education systems around the world in order to learn from best practice. I understand that in Finland it is normal for social services and the education system to work in close partnership with each other. Perhaps, if it is easily accessible, the Minister might like to provide some information about this for the Committee, or at least look to see whether what they do in Finland is relevant to what might work best in this country.
Baroness Hughes of Stretford
My Lords, I rise briefly to thank the noble Lord, Lord Laming, my noble friend and other noble Lords for taking this matter up with the Minister on behalf of almost everyone in the Committee after the earlier debate on this subject. It is clear that they were speaking for all of us. On the withdrawn amendments of the noble Baroness, Lady Walmsley, I think that the proposal is a good idea and may well sit better in the health Bill when it finally comes. However, the duty on schools to co-operate would require them not only to co-ordinate with the local health authority at the strategic level, but also in relation to individual children and the packages that they need, whereas the well-being boards will look at services more broadly. The duty to co-operate is still necessary in order for schools to work with other agencies in relation to individual children.
I thank the Minister for his willingness to discuss this issue. All noble Lords in the Committee believe that were it in his gift, I am sure that the matter would not be proceeded with at this time, but obviously and rightly the Secretary of State has to make the decision. I therefore ask the Minister to give us an assurance that we will be clear about the Government’s intentions before we get to Report. Clearly, if the Government decide to proceed with this, Members of the Committee will want to think about their approach at the next stage.
Lord Hill of Oareford
I will be brief. I can say yes to the noble Baroness, Lady Hughes. We will be clear before we reach Report; we need to be. I have given that undertaking to the noble Lords I met with and I am happy to repeat it. I am grateful to the noble Lords, Lord Rix and Lord Laming, for what they said. I was glad to have the chance to meet them and we will meet again—I will not finish that line.
I will have to follow up the point made by my noble friend Lord Elton and write to him. Ditto, I am not sure about the position in Finland, but we will look into it.
Again, I am grateful to noble Lords for meeting me. I have undertaken to discuss this further, which will probably be in September but before the Report stage. On that basis, I hope we can move forward.
Lord Rix
My Lords, I am very grateful to everyone who has spoken. I hope that the Minister can write to me during the Recess because I am going away in the first week in September, when the Bill might well reach its Report stage. I should certainly like to be able to discuss this with the Minister or with my colleagues, if that is possible, before we actually reach the next stage. However, with the Minister’s assurances ringing in my mind, I am happy to withdraw the amendment.
“( ) In section 84 (code for schools admissions) in subsection (2) after “other matters” insert “which ensure fair access to opportunity for education”.”
Baroness Hughes of Stretford
My Lords, I stand to move Amendment 100A and speak also to Amendments 101A, 103ZA and 107B in my name.
This is a very important clause in this Bill and it proposes to introduce a number of changes to admissions. I am sure we all agree that admissions and the way children are admitted to school really matters. It matters in ensuring that everyone gets fair access to a good education and that matters in terms of helping to improve social mobility and ensuring every child gets the best life chances, regardless of their background. The international evidence upon which the Government are drawing to support their moves to give schools much greater freedom also makes clear that, while those freedoms can improve levels of attainment in schools, they only do so in the context of a system that is both accountable and also in systems which have an inclusive admissions system, meaning that the schools have a comprehensive intake across the ability range. That is the balance of the international evidence—not freedoms on their own but freedoms in the context of accountability and inclusive, comprehensive intakes for all schools.
The Secretary of State is making a number of changes with this clause which in our view add up to a significant weakening of the admissions system from the point of view of parents and children. This causes me concern that it will be harder for parents and children to get fair treatment. First, the clause removes the powers of the adjudicator to direct a school or local authority to change its admissions practices when the adjudicator has judged that they are in breach of the admissions code. Secondly, it removes the power of the adjudicator to choose to look more widely at admission practices of a school or local authority when the adjudicator receives a specific complaint. Thirdly, the clause abolishes the local admissions forums which bring parents and others together to resolve issues locally. That prevents all complaints from going to the adjudicator.
I shall come on to the amendments in relation to the adjudicator in a moment. First, I want to concentrate on ensuring that admissions are fair in the first place—that is that children have fair access to good education and training, whatever their background. Amendments 100A and 107B are similar in effect to Amendment 103 in the names of the noble Baronesses, Lady Walmsley and Lady Brinton, and would place a duty on the Secretary of State to ensure fair access through the admissions code.
We want all children to be able to access schools that are good or better. Schools that are highly performing are often very popular and it is crucial to ensure that access is fair so that children from all backgrounds can benefit. With the fragmentation of the education system that will follow if this Bill becomes law in its entirety, it is more important than ever before that systems are in place to ensure that those admissions are fair.
Where a school is an academy, it is its own admissions authority, setting its own admissions arrangements, hopefully within the admissions code. For community and voluntary controlled schools, the local authority is the admissions authority. Given the Government’s direction of travel towards making ever-increasing numbers of schools into academies—already more than a fifth of secondary schools are academies—it is not hard to envisage a future in which most or all of our 20,000 schools are their own individual admissions authorities.
I cannot get beyond thinking that this means that parents and pupils will face a baffling and utterly opaque situation, with all the schools in their area operating different admissions criteria. Parents who are most articulate or who know the system can perhaps work it to their advantage; others—for example, those for whom English is not a first language or who are less engaged in the education system—will lose out. When the Minister replies, can he please explain in detail how a parent would navigate such a system? Will not parents inevitably apply to as many schools as they can, and will not that in itself cause gridlock, with schools processing many more applications than they have places? Will not parents be in limbo, with no one co-ordinating that process? I am informed that in many local authorities this is already the case. Parents whose children currently do not get into their preferred choice of school are at a loss to know what to do and the local authority cannot do anything to help.
It may be a good thing to give more freedom and autonomy to schools but, as I said earlier, with that freedom should come accountability and safeguards. Without those safeguards there is a risk that highly localised admission arrangements could result in what Barnardo’s has described as “selection and segregation”, with some children missing out unfairly.
Last year’s schools White Paper supported a local authority role to ensure fair access but, as this clause would get rid of the duty to have an admissions forum, the Government are abolishing the mechanism to enable local authorities to do that. These amendments would ensure that the Secretary of State had an overarching duty to ensure fair access to education and training.
The new draft admissions code uses the word “fair” 26 times, including the line:
“The purpose of the Code is to ensure that all school places for maintained schools … and Academies are allocated and offered in an open and fair way”.
It is good to note the Government’s commitment—at least, on paper—to drive fairness, but if that is the case it would surely follow that the Government would be keen to support these amendments, which give the Secretary of State a statutory duty to ensure that admissions are fair.
Amendments 103ZA and 101A would respectively reinstate the power of the adjudicator to direct admissions authorities—that is, academies and local authorities—to change their policies where they had been found not to be in compliance with the admissions code. Amendment 103ZA goes further. It would require the adjudicator to put the views of parents at the heart of his decisions in exercising his powers.
Currently, as I said, the school adjudicator can specify appropriate modifications to the admissions arrangements, whether they arise from objections or not. He can protect those modifications from being changed back for up to three years, and the admissions authority in question can be made to comply with the adjudicator’s decisions forthwith. Clause 34 would remove all those powers. At the moment, the school adjudicator steps in to challenge and remedy non-compliance with the admissions code. Surely, if the Government are serious about fairness in admissions, a control needs to be in place to ensure that, where admissions criteria or processes are not fair, they are identified and corrected. There is a need to ensure that somebody is responsible for seeing that they are corrected and it should not simply be left, as I feel sure the Government will argue in a moment, to schools to do that of their own volition without any need for any monitoring. Last year, 92 per cent of complaints heard by the school adjudicator were from parents. Where these complaints were upheld, the school adjudicator could direct the admissions authority to change. As I said, under the Bill that process will change.
In one sense, the Bill is also contradictory. On the one hand, it extends the right of parents of academy pupils to go to the adjudicator and lets parents from anywhere—not just the school in question—to make a complaint. On the other hand, it removes the school adjudicator’s powers to do anything to overturn malpractice. Therefore, under the Bill more parents can now complain to the school adjudicator but he or she can do less as a result of the Bill. I just wonder whether the Minister thinks that this will empower parents or do the reverse.
Clause 34 also abolishes admissions forums—the local bodies made up of parents, local authorities and schools—which oversee the admission arrangements in an area. I cannot see any valid reason for cutting parents out of that process of having some kind of say on the way that admissions are handled throughout an area. Parents will have nowhere to go except to the school adjudicator, whose powers are being seriously diminished. I beg to move.
Baroness Walmsley
My Lords, I have Amendment 103A in this group. What concerns me is that someone should have oversight as to whether fair access is going on. I am most grateful to the Bill team for sending some notes about how the school admissions and appeals code works and how the Bill seeks to change that. I was very exercised about the fact that, as the note states:
“School admission arrangements are set two school years before pupils enter the school by the schools’ admission authority, in line with the Admissions Code”.
Of course, the authority must have consulted about those arrangements beforehand. That makes it very difficult for parents. If they apply to several schools two years before their child moves schools, they then have to scrutinise the admissions arrangements of all the schools to which they apply in order to make sure that they are happy with those admission arrangements. This is not the case just under the Bill, but is the case now, before the Bill goes through. The arrangements are very difficult for parents to navigate.
The note also points out that:
“Parents, local authorities, other schools or the Secretary of State who have concerns about the admissions at a maintained school can ask the Office of the Schools Adjudicator … to investigate”.
I very much welcome the fact that this power is being extended to the parents of children who want to go to academies. However, the problem is that many local authorities are not doing the job of scrutinising admission arrangements terribly well. It is therefore left to parents to make the complaints and appeal. If all the schools in the area are academies, parents have to look at a whole lot of different sets of arrangements.
The note that the Bill team kindly sent us points out that:
“Local authorities will still be required to report annually on local admissions”.
The Bill states that they do not have to report to the adjudicator, but they will have to report. Therefore, my first question to my noble friend is: to whom do they have to report? It does not say in the note. However, I have a clue here in the way that the note continues. It states:
“The Chief Adjudicator will still be required to report to Parliament each year and, as now, base his findings on a range of sources, including having access to local authority reports from their websites. The local authority reports will still focus on key issues for local parents and others with an interest in access to local schools”.
My question, therefore, is: does the chief adjudicator or any parent just have to go to the website of the local authority to find out what the arrangements are and whether there have been any appeals, or what the problems are? The whole system is not at all parent friendly. It is not access friendly or social mobility friendly, given how important social mobility through education is to my Government.
What I want to do in Amendment 103A is give a reciprocal duty to the Secretary of State to take this information from the chief adjudicator, who is reporting to Parliament, and act on it if he identifies trends of injustice happening, perhaps across the country. The difficulty with the proposed arrangements is that any adjudicator looks only at the appeals in his own area. Let us be clear that we are not talking about appeals from parents who did not get their child into a school; we are talking about appeals being made 12 months before parents even try to get their child into a school, and two years before the child goes there—or not, as the case may be. These are appeals against the nature of the arrangements.
If the adjudicator can only look at arrangements in his own local area, who is going to look at trends? For example, an education provider may have a lot of appeals against the admission arrangements in one part of the country, another lot in another part of the country, and yet another lot in a third area. The adjudicators in those three separate areas can only see the problems brought to their attention in their own areas. Who is going to identify that there are trends of injustice in that particular chain of education providers? It is important not just to have, as the Explanatory Notes tell us, a requirement on the chief adjudicator to report to Parliament each year. We need a duty on the Secretary of State to take the information and ensure that the arrangements his department have in place are providing fair access for children all over the country, no matter what sort of school they go to.
Lord Knight of Weymouth
My Lords, I want to speak to this group of amendments in part to avoid speaking in a clause stand part debate not only because that is more efficient but because, I have to apologise to the Committee, I will need to leave in around 20 minutes in order to fulfil a speaking engagement. If I miss the Minister’s response, I apologise. I hope, nevertheless, that it is in order for me to make some comments.
In many ways, I think that Clause 34 is possibly the worst clause in the Bill. I know that there is some stiff competition for that accolade, but the issue of fair admissions is of vital importance. In passing, I want to thank Chris Waterman, who has done some excellent work on and analysis of the issue for us.
The reason I say that fair admissions are very important is because I support diversity and more competition between schools. As moves are made to increase choice and accountability and thus to drive competition in that way, it is all the more important to ensure that admissions are fair and every child is given an equal chance to attend the good schools so that, in the end, parents are choosing schools and not the other way around. It is on that basis that I strongly support Amendments 100A, 102 and 103 because they seek clarity on the overarching aim of fairness in school admissions. They seek to improve the situation presented in Clause 34, but in the end they will not fix the problem. The problem is that Clause 34 makes the job of the adjudicator pretty toothless by taking his powers away.
Paragraph 168 of the Explanatory Notes makes the position clear by stating:
“Subsection (3) restricts the powers of the school adjudicator. It repeals section 88J of SSFA 1998 which requires schools adjudicators, upon referral of a specific matter concerning a maintained school’s admission arrangements, to consider whether it would be appropriate for changes to be made to any aspect of those admission arrangements”.
Similarly, the notes in respect of subsection (4) state that it,
“removes the requirement under section 88P … for local authorities to provide to the adjudicator reports on admissions to schools in their area”.
Why do I think it is so bad to remove these two powers? As my noble friend Lady Hughes said, every school is potentially an academy so every school is potentially its own admissions authority. That means a confusion of the arrangements faced by parents. The noble Baroness, Lady Walmsley, made a strong argument in that cause. There are numerous oddities in the arrangements of schools. We have oddities of scale in areas such as South Hertfordshire, with its particular preference to parents from Islington because of some historic arrangement, as well as partial selection—something I had to wrestle with at some length and which was very odd.
In the constituency in which I used to live, the school of Budmouth, a very popular school, gave particular priority to children from the village of Chickerell for some historic reason. It was difficult for people struggling to get their children into the school to understand. There are issues of siblings. There are issues of faith, which I do not want to get into for fear of stimulating a very long debate. There are issues of children of staff. How will staff be defined? If we are true to some of the themes running through the Committee, staff might be defined just as teachers. If we go down that road, we should include all school staff, but then a parent whose children a school might want to attract might get a job for just an hour a week helping out as a member of the support staff and then, magically, their children would be allowed priority. It is very important that we get that definition right.
The problem of coherence is already an issue with voluntary aided schools and academies being their own admissions authority. The admissions forums—fora; I am struggling with my Latin—are now being abolished in subsection (2)(a), despite the fact that they provided some co-ordination and tried to ensure that local unfair anomalies did not emerge. It is a retrograde step to get rid of them as we move into even greater proliferation of arrangements.
In many ways, the simplicity of the new code, which is currently being consulted on, will create massive local complexity, for the reasons I have described. That is a view held among many admissions officers, which is why I support Amendment 101A, with its focus on the views of parents. With every school its own admissions authority, as their resources come under pressure—as they are at the moment, for understandable reasons—fair admissions must remain a sufficient priority for the admissions code to be consistently adhered to by every school and admissions authority. We know, through the work of the Sutton Trust, that even with the current tougher admissions regime in place at the moment schools still find covert means to attract children who are more likely to succeed and discourage those less likely to attain five A* to C-grade GCSEs.
The removal of subsection (4) of section 85A of the 1998 Act, under Clause 34(4) of the Bill, removes the policing of admissions and the requirement of local authorities to report to the schools adjudicator—effectively, the prosecutor—all admissions arrangements. I was interested in what the noble Baroness, Lady Walmsley, had to say about around where they would report to. It seems clear to me that, in the same way that the police get in touch with the CPS if an offence might need prosecuting, local authorities should report to the school adjudicator.
The removal provided for in Clause 34(3) removes the teeth from the adjudicator making changes to admissions arrangements to ensure compliance. It is obvious to me that if we are to have a fair admissions system, the person in charge must have the power to get the admissions arrangements changed to make them comply with the law—we are talking about the law. The measures that Clause 34 will remove are necessary.
Finally, it is worth reminding the Committee why the current rules came in. In 1998, when the Department for Children, Schools and Families—as it was then—commissioned a look at the admissions arrangements in three local authority areas, the abuses found included: schools asking parents to commit to making financial contributions as a condition of admission; asking about the marital, occupational or financial status of parents; and ignoring the priority for admission that schools are legally obliged to give to looked-after children. Other cases uncovered included schools giving priority for places to family members who were not siblings and interviewing children before making an admission decision. Those are not fair practices. They allow schools to select parents, and not vice versa. For that reason, I very much support Amendment 101 and would support omitting Clause 34 altogether.
Lord Rix
My Lords, Amendment 102 addresses a variety of concerns I have in relation to the relaxing of duties of schools regarding the admissions process for children with special educational needs, including those with a learning disability. My concerns are clearly shared by other noble Lords in the amendments that surround mine.
Schools must be held to account for their admissions policies and the way they operate these policies in practice. If the parents of disabled children are to have full confidence that their children are not being discriminated against in terms of admissions, schools must be aware of their obligations under the Equality Act 2010 and make the reasonable adjustments required. In the interests of openness, transparency and the genuine empowerment of parents, the second part of my amendment would set out the rights of parents in appealing and complaining against admissions and oblige schools to publicise these details.
It is often said that information is power; I want parents to have easy access to the information to which they are entitled when it comes to challenging unfair decisions by schools over the admission of their children. However, in his letter to me to which I have already referred, the noble Lord, Lord Hill, advised me that parents and others would still have the option to make their objections known to the school adjudicator. There are also proposals to include academies and free schools, which of course I welcome. No doubt he will explain more in his response to these amendments.
Lord Touhig
I support the objectives in the noble Lord’s amendment. However, in voluntary aided Catholic schools and academies, the governing body is the admissions authority. Currently it can determine admissions on oversubscription criteria based on a child being a Catholic or a non-Catholic and so on. These schools are required to, and do, comply with the Equality Act 2010. I am a little concerned. Does he think his amendment, if accepted, would remove the right of the governing bodies to determine the admissions criteria based upon the existing principles?
Baroness Morris of Yardley
My Lords, I would also like to speak to this group of amendments. I support the amendments moved by my noble friend. I shall be brief. I think that the details of the amendments and how they would affect the legislation have been made quite clear. I would like to carry on where my noble friend left off in considering what underpins this.
At first look, the system of the adjudicator and admissions forums might seem quite complicated. It clearly is a bureaucracy in the sense of the word and there are things going on there that seem to be relatively complex. However, I think that the Minister has to go back and look at why this arrangement was made. If those amendments improved the working of the adjudicator, I would not have a problem, but it is really quite clear that the powers of the adjudicator and the admissions forum are very much reduced by this.
Three things underpinned the introduction of the adjudicator. When the Minister replies, will he be able to tell us how his Government are going to deal with these three problems if he removes the power of the adjudicator? The way that the last Government dealt with these three problems was through the system of admissions forums and the adjudicator. Take them away if you do not like them but it would be disastrous if nothing was put in their place, for three reasons.
First, I go back to this great complexity of the system, when schools are their own admissions authorities, and indeed when the adjudicator system was brought in there were far fewer schools that were their own admissions authorities than is the case now. I was not in favour of any school being allowed to be its own admissions authority, save for faith schools. Indeed, I was not in favour of the move by my own Government to allow academies to be their own admissions authorities. As we now move towards having more schools in that category, it will get worse.
Lord Sutherland of Houndwood
My Lords, I support the idea that schools should have discretion in relation to admissions policy but it should be a clear, publicly stated admissions policy. Out of that, however, come two difficulties, one of which is the possibility of anarchy. The noble Baroness, Lady Morris, indicated how that was the case. As a young, innocent parent who came to joust within the Inner London Education Authority, longer ago than I care to remember, there was an element of anarchy in the system. As a parent, if you were not savvy or did not know x, y and z, you could not crack it. There is an issue of anarchy here. If every school has its own admissions policy and there is no co-ordination, parents will find themselves in an anarchic situation but will not quite know it. The knowing and the well attached will do well. The second danger is fairness and unfairness. The point has been made and we need someone to take responsibility for saying whether or not cumulatively these admissions policies add up either to anarchy or unfairness. There may be better ways of doing it. The best way is having many excellent schools, but we are where we are.
I draw quick comparisons with universities. There was a risk of anarchy in admissions systems a number of years ago as a number of universities expanded in the 1960s and thereafter. That anarchy was dealt with in part through creating UCAS, the Universities and Colleges Admissions Service. For example, there was an agreement that you could not apply to both Oxford and Cambridge, and that if you wanted to apply to one of them, you had to apply earlier. Rules were worked out so that people knew where they were.
On the question of fairness, and here I put a direct question to the Government, in universities there is a sudden interest in fairness and access and OFFA may well have its powers increased to deal with a set of financial regulations about how universities are funded. It is interesting that in one educational context regulation and the imposition of fairness and unfairness is taking place, and yet in schools the same question of fairness is going in the other direction. We need consistency here.
Lord Lucas
My Lords, I look forward to what my noble friend has to say because I share some of the concerns of other Members of the Committee. I think it is important that we should continue to move schools admissions towards fairness. As the noble Baroness, Lady Morris, has pointed out, this is not the history of schools. They have always been interested in finding ways of covert selection. The history of the last 10 years or so has been a gradual winding back from that. We even have Cardinal Vaughan Memorial School, that great Catholic school in west London, removing some of the most objectionable means of social selection which were in its admissions criteria. There are other examples of progress throughout the UK.
The Anglican church has been very helpful in what it has done to make schools fairer. However, it is a process that goes against the natural inclination of schools and governors. Once parents capture a school, they tend to want to keep it captured. I find it hard to understand how the proposals in the Bill will improve fairness. At this point, I shall sit down and listen to my noble friend.
The Earl of Listowel
My Lords, I will be brief. I am grateful for the Minister’s reassurances that children in the care of local authorities will continue to have first priority in school admissions. I am looking for a further reassurance on this occasion. I think we all agree that when the state takes a child away from his family, the least that the state can do is ensure he gets the best education possible. We know that that has not been the case in the past. There is great instability in many of these children’s lives, particularly when foster placements break down in the middle of the school year and a child has to move to a new area and a new family. Teachers have told me that these children end up in the poorest schools because no places are left in the good schools by the middle of the year. I hope that the Minister can offer me further reassurance on this matter. I have missed the letter on admissions that might have already answered the question. How will he know that these children are continuing to receive priority? I should be grateful for information on that and I look forward to his response.
Baroness Howe of Idlicote
My Lords, perhaps I may make a brief intervention because, obviously, one supports a great deal of what has been said, particularly on fairness and ensuring that the least well provided for children are given not only a fair, but a more than fair, chance. I thought that one of the bases on which academy status was to be granted was a clear understanding that academies would take a proportion of these children. If that is the case, how will that be ensured?
Lord Hill of Oareford
My Lords, I start by responding to the noble Baroness, Lady Hughes, and recognising her commitment to fair access and the points made by a number of noble Lords. I hope we can accept that there is common ground between us and that there is nothing more important than working to make sure that all children and young people have a fair opportunity for excellent education and training. Part of the answer, as the noble Lord, Lord Sutherland, said, lies in increasing the provision of good places. We are not there yet, but that is one of the underlying principles of what the Government are trying to do in their reforms—trying to give schools more autonomy and encouraging more diverse provision. That is, in a way, the other side of the coin to extending autonomous schools, about which noble Lords have concerns. We can address those concerns, but it is the drive towards greater autonomy and variety that will, over the longer term, provide a greater number of better places and deal with the underlying problem with admissions, which is that there are not enough good places.
I shall pick up on the point made by the noble Baroness, Lady Morris of Yardley, and put the scale of the problem into context. In February, the schools adjudicator gave evidence to the Education Select Committee in another place. He said that,
“the vast majority of admissions authorities … if they are breaching the rules, don’t mean to be doing so”.
In 2009-10, there were 151 decisions, in the context of around 5,500 admissions authorities, in more than half of which the complaint was not upheld. I say that just to provide a little context.
Baroness Hughes of Stretford
My Lords, I thank the Minister for his response and I also thank other noble Lords who contributed to the debate. As everyone has said, the issue of admissions and how schools make decisions when they are oversubscribed is incredibly important. We all share aspirations regarding fair access, particularly so that children from poorer backgrounds have the opportunity to get the best chances by going to good schools.
The noble Baroness, Lady Walmsley, raised the question of the reports that will still be required by the local authority and the adjudicator. They are important and she raises a significant question about who will look at those reports in the round across the country and come to a view about any further changes that may be necessary in the light of how schools behave. It is very important to have that perspective across a whole range of areas. However, the reports will not help parents at the time. They will be too late for parents who want to complain about the way in which a school conducts itself, necessary though they will be for that broader perspective. The noble Lord, Lord Rix, alerted us to the possible consequences for disabled children, and that remains a concern for us.
The contribution of my noble friend Lady Morris was characteristically powerful and crisp. Her question about what the Government would put in place of the school adjudicator and admissions forums has not really been answered, other than the Minister saying that he does not feel that these changes are as significant as some of us believe.
There are three principles embedded in this issue, as there are in other parts of the Bill. The first is: what are the Government doing in relation to the balance between the opportunity for parents to constructively challenge the system and the power of schools to make determinations across a whole range of issues? As elsewhere in the Bill, what we are seeing here is a shift in the balance away from parents and local communities towards individual schools. That balance will be tipped further as many more schools become academies with the power to determine their own arrangements. Several noble Lords have raised the point, but we have to keep coming back to it because we are not talking about the system as it is now but how it will be in the future. That shift in the balance of power, if you like, is significant and reflects what we are also seeing in relation to exclusions policies and the power to complain to the local commissioner, which we shall talk about later. The Bill shifts the balance in a number of important respects, and that is a matter of great concern.
Secondly, I need to ask if the following is a reasonable principle. A situation can arise in which the schools adjudicator may have decided that a particular school is operating its admissions contrary to the admissions code. The school is doing what my noble friend Lady Morris said schools often do: it is behaving badly for reasons we understand. In those circumstances, the school adjudicator decides that the school has not complied with the admissions code, but what the Government want to institute is that it will be for the admissions authority to decide what action needs to be taken in order to implement the adjudicator’s decision. I want to raise the question of whether it is reasonable, when an admissions authority is found to be knowingly contravening the admissions code, that it is for the school to decide what action it needs to take in order to comply. I cannot think of another situation where, if an organisation is doing the wrong thing in terms of lack of compliance, it is for the organisation itself to decide what it needs to do to put it right. It is a principle I cannot relate to.
Thirdly, I think I got the Minister’s words correct when he said in his summing up that the schools adjudicator will be looking, as he does now, at all school admissions arrangements and following them up. I wonder who will do that in the future, particularly when many more schools become academies and thus their own admissions authorities. Is it to be the Secretary of State? Are we really being told that the Secretary of State will have the capacity to look closely at the admissions arrangements of tens of thousands of academies across the country; that if they have been admonished by the schools adjudicator, the Secretary of State will check that their admissions practices comply with the code and follow up in detail that they have done what they said they would do? Are we really saying that without the schools adjudicators—it is not just one, but teams covering the whole country—the Secretary of State will be able to ensure that schools are complying with the code? I do not think so.
Despite the Minister’s genuine attempt to reassure us, I am afraid that we may well return to this issue on Report, but for the moment I beg leave to withdraw the amendment.
Baroness Massey of Darwen
“( ) In paragraph 5 of Schedule 11 to the Equality Act 2010 omit paragraphs (a) to (e).”
Baroness Massey of Darwen
I shall speak also to Amendments 140 and 141 in this group. I was fascinated by the previous debate on admissions, when many wise and challenging things were said. My noble friend Lady Morris, I think, said that we have a system littered with schools trying to do their best but fighting a losing battle because of other local schools selecting pupils. We heard some comments about schools selecting parents, rather than the other way round. I know that the Church of England has recently been looking at this and I hope for some clarification on its thinking.
The Minister talked about autonomy and variety. Autonomy and variety will not solve all the issues in front of us concerning admissions. I want to talk about faith schools. My first amendment to the Academies Act 2010 would prevent academies and free schools with a religious character discriminating on admissions; my second would prevent voluntary-controlled faith schools which convert to academy status from increasing the priority of religious criteria in their admissions policies.
As my noble friend Lady Hughes said earlier, admission to school is extremely important. We know that many state-funded faith schools use their legal privileges to have highly selective admissions criteria, giving preference to the children of parents with particular beliefs. Academy schools which have converted from state-maintained faith schools are, of course, their own admissions authority, and they religiously discriminate up to 100 per cent in admissions. Free schools with a religious character may discriminate in up to 50 per cent of admissions. Will that remain the case? Will that be the case for looked-after children who do not have the same faith as the school they want to go to?
Discrimination by faith schools can cause segregation along both religious and socio-economic lines. Professor Ted Cantle, author of a report into community cohesion in Blackburn, describes religious schools as,
“automatically a source of division”,
in the town. In other areas, faith schools that are their own admission authorities are 10 times more likely to be highly unrepresentative of their surrounding area than faith schools where the local authority is the admission authority. Separating children by religion, class and ethnicity is totally opposed to the aim of social cohesion.
In addition, voluntary aided faith schools have, on average, 50 per cent fewer pupils requiring free school meals than community schools. Pupils starting at faith schools are also, on average, more academically able than pupils starting at inclusive schools. That is because faith schools’ selection criteria mean that they usually—not always, but usually—take fewer deprived children and more than their fair share of children of ambitious and wealthier parents.
I share an office with a colleague from Northern Ireland, who constantly asks me: “Have we not learnt the lessons from faith schools in Northern Ireland?”. All schools should include and educate pupils of all beliefs together so that they can learn about and from each other, instead of being segregated by their religion. Prejudice was mentioned last week in Committee. I heard that homophobic bullying is more likely to happen in faith schools. The amendment to the Equality Act 2010 will stop maintained schools—voluntary and foundation schools—with a religious character from discriminating in admissions by removing the opt-out from the Act.
Any religious discrimination in admissions is against the ideal of an open and inclusive school system. No state-funded faith school, including academies, should be permitted to discriminate in their admissions on religious grounds in any circumstances. My first amendment would rule out religious discrimination in admissions to all new academies. If the complete prohibition of religious discrimination in the new academy and free school system cannot be achieved, and my first amendment does not pass, my second amendment would ensure that voluntarily controlled schools which had not previously been permitted to discriminate could not begin to discriminate on conversion to academy status. I beg to move.
Lord Lucas
My Lords, I shall speak to Amendment 138. I like faith schools and I want parents to be able to choose them, whether or not they are of that faith. I share the distress of the noble Baroness, Lady Massey, at the idea that schools become ghettoes for their own religion. Wherever that is widely practised it has been disastrous. Northern Ireland in particular and also the west of Scotland are examples of where this has caused and causes continuing division and strife that we do not see in the rest of the UK.
Lord McAvoy
I am loath to sound authoritative on the English and Welsh system, but I know something of the system in the west of Scotland. It is a complete travesty to say that the tragic history of the west of Scotland has been caused by, exacerbated by or would be solved by the removal of Catholic schools. If he has some time, I will give the noble Lord a history lesson on prejudice in the west of Scotland.
Lord Lucas
My Lords, I would be delighted to share tea with the noble Lord, Lord McAvoy, if I get the chance, but I would say that those in charge of a number of Scottish universities have spent many years refusing me information about which schools their students attend on the grounds that, if it is known that a student at a Scottish university attended a Catholic school, they would be subject to discrimination and harm as a result. If that is the kind of society which the noble Lord, Lord McAvoy, is happy with, I differ from him.
I think that separate education is not desirable. On the other hand, I recognise that a religious school with no pupils who follow that particular creed would be a very strange animal indeed. I propose a compromise which has been reached on a large scale in the Anglican community that schools should be open for around half their pupils—in many cases more—whose parents are not of that religion but who accept that they want an education in that religious tradition.
Lord McAvoy
The noble Lord’s amendment states:
“(2) Notwithstanding subsection (1), an Academy with a religious character may require all pupils admitted to the school to take a full part in the school’s religious life”.
Has he any idea how that would work in practice? Does he realize the division and animosity that that could cause by imposing the ethic on a Catholic school which now becomes 50 per cent Catholic and 50 per cent mixed variety? What right would the Catholic 50 per cent have to impose their point of view on the 50 per cent who are not Catholic? How would that be policed?
Lord Lucas
My Lords, that phrase comes from the admissions criteria for Ampleforth, which is a well known Catholic school, where it works extremely well. Parents who want to send their children to a Catholic school should accept that it is a Catholic school and that it will educate its children in the Catholic religion. I send my children to an Anglican school. I am not religious myself, but I entirely accept that my child is being brought up within the context of school as an Anglican. I value that tradition of education. Again, it is perhaps an illustration of the conditions in the west of Scotland that such a thing is inconceivable to the noble Lord. For me, it is just ordinary. I beg to move.
Baroness Perry of Southwark
My Lords, my name is also to Amendment 138. For me, these two paragraphs together describe the ideal nature of a faith school when it has the freedom of being an academy. Subsection (1) makes the point that a faith school should not in any way have admission criteria that insist that all children shall have some kind of allegiance to the faith of that school. We have all heard stories about parents suddenly turning up at a church in the last few months before their application to a school that happens to be the best school in the area and a faith school. That is unfortunate; it distorts what should be an open choice by parents of a good school that has a particular ethos. Subsection (1) is inclusive and says that faith schools would be inclusive. Around half the children they took would share a commitment to their faith, but the other half could be of any faith or no faith.
I strongly believe in subsection (2). Exactly as my noble friend Lord Lucas said, if parents have chosen a Catholic school, an Anglican school, a Jewish school or a Muslim school for their children, they must respect the traditions of that faith. It is not a secular school; it is a school of that faith. They should be included in the general ethos of the school and pay tribute to the customs within it that reflect its faith. My experience and that of noble Lords who spoke earlier reinforce this; parents of other faiths welcome the ethos of a Christian school, and perhaps parents of other faiths will welcome the ethos of a Muslim or a Jewish school as well.
Parents are looking for a school with strong values, and if those values are based on faith, the parents will accept that. The success of faith schools has been widely demonstrated by their popularity and their academic success.
Baroness Turner of Camden
My Lords, I support my noble friend Lady Massey on Amendments 103, 140 and 141. I do not accept Amendment 138. In fact, I seem to recall that the bishop in the Anglican Church in charge of education recently announced that he would welcome the idea that people not of the faith were accepted into religious schools. That should be welcomed.
Baroness Perry of Southwark
Does the noble Baroness not recognise that the amendment specifically states that 50 per cent of the children would not be of the faith?
Baroness Turner of Camden
I am sorry, but I will continue, if I may. In view of what I said, the noble Baroness will accept that in no way can I accept the subsection (2) in Amendment 138, particularly where pupils would be accepted into religious schools who were not themselves religious. I do not see how subsection (2) could in any way be accepted; it does not seem sensible. If people are being accepted who are not of that religious faith, why should they be expected to participate in the school’s religious life when it is not of their particular faith and it was known that they would not be of that faith when they were accepted into the school?
The Lord Bishop of Lichfield
The right reverend Prelate who laid this challenge was sitting next to me until a little while ago, and he got into serious trouble in some quarters for saying what he did. We take very seriously the possible ghettoisation of our country’s schooling, and we are constantly thinking about it. Perhaps we all skirt around the fact that we live in one of the most educationally divided countries in the world, and the fault lines run deepest between rich and poor rather than between one religion and another. We ought not to forget that.
We in the church are not new to this. It has to be remembered that for two generations, the Church of England provided thousands and thousands of schools for the poor, while our successive Governments were still saying that the poor did not need educating. Then to accuse us of ghettoisation is a misremembering of history.
Lord Touhig
My Lords, I looked at Amendments 138 and 140 and was troubled and confused. After listening to my noble friend Lady Massey, I am worried again. She knows me well enough to know that I have no wish to misrepresent her in any way, but she seems to be saying that, in her view, faith schools are more likely to be homophobic, do not take youngsters from poorer backgrounds and are therefore more middle-class. If that is what she is saying, I am sure she genuinely believes it, but perhaps I may suggest—taking the point made by the right reverend Prelate—that she moves out of London and travels around the country to see what faith schools are actually doing in some of the most deprived communities in our country.
Baroness Massey of Darwen
I am sorry to interrupt my noble friend in full flow but I must say that what I said about the issue of homophobic bullying in faith schools was a quotation from someone in this Room. It was not my impression—I quoted someone who averred that this was the case. On his second point, I am not saying that all faith schools are of one particular calibre, I am saying that some schools undoubtedly experience what the noble Baroness, Lady Perry, said, that parents move to the grandparents’ house or to the end of the road to get into a particular school, which remains firmly ghettoised, if I may use the expression.
Lord Touhig
I am very grateful to my noble friend for clarifying that point, because it is important that we fully understand her views on this. I am glad that I gave her the opportunity to explain in more detail what she believes and understands. I accept her final point. I have been the governor of a faith school and there are instances where people move around in order to try to get their child into a faith school.
I am troubled and confused about Amendment 138. It states:
“No Academy may select more than 50% of its pupils on criteria based on religious characteristics”.
It goes on to say that those who attend will be required,
“to take a full part in the school’s religious life”.
It seems to state that half the school population should not be of any particular faith but that all the school population must take part in the school’s religious life. To my mind, that is wrong. I strongly support the view that parents should have the right to withdraw their child or children from the religious life of a school if they so wish. At the moment, Catholic schools that convert to academy status retain their existing admissions arrangements. The amendment tabled by the noble Lord, Lord Lucas, and the noble Baroness, Lady Perry, would mean that 50 per cent of the pupils would not be admitted on the basis of faith. This makes no sense whatsoever and is really discriminatory. My noble friend Lady Massey made the point about public funding for faith schools. The Catholic church, like others, pays a great deal of money towards supporting its own schools in any event. We should bear that in mind.
Amendment 140, moved by my noble friend Lady Massey, states,
“admission arrangements for the school should make no provision for selection on the basis of religion or belief”.
I am sure that it is not my noble friend’s intention, but that would put at risk every Catholic school and faith school in the country. What is the point of having a Catholic school, or a faith school of any kind, if there is to be no provision based on faith, belief or religion in deciding the admissions policy? I am sure it is not her intention—I am sure it would never be the intention of my party—to close every faith school in the country, but that is the risk of this amendment.
Lord Sutherland of Houndwood
My Lords, I remind the Committee that the issue of parents who try to move into areas near schools is not confined to faith schools. I remember the distant days of people of the most surprising political background being able to afford houses near Holland Park because it was not a bog standard comprehensive. That has gone on for quite some time in a variety of communities; it is not confined to faith schools.
I support Amendment 138. The direction of travel is the right one, to open up the community, and it seems compatible that those liberal churchmen and women whom I know would want this. There may be a practical problem. If this is seen as a restriction in terms of faith background, I am not sure that Muslim schools would be able to fill all their places. We would have to be a bit careful about that formulation. On the second part of Amendment 138, if we have faith schools, that seems to me to be part of the deal. If my parents had decided to send me to a sports academy—God forbid—part of their understanding would have been that I would spend hours in the gym and on wet, cold, miserable sports fields. Although I might never have forgiven them, that would have been part of going to that kind of school. The same applies to technical schools and other sorts of schools. I think it not unreasonable that a faith school with a particular ethos and direction should say to parents, “You understand that this is how we do things here”. Then you inspect them independently and see whether they do it in a fair and reasonable way.
Lord Baker of Dorking
My Lords, I support what the noble Lord, Lord Sutherland, has said, and I support Amendments 138 and 140. I think that the noble Baroness, Lady Massey, in her characteristically charming way, may have gone a little far in wanting to end all faith schools in our country. The view I have taken consistently in my political life is that one should live with the existing faith schools and make them more inclusive, but I have always resisted the creation of new faith schools. When I had responsibility for these matters, I did not approve an exclusive faith school, and I think it was a mistake on the part of the Labour Government in 1997 to open up that possibility again.
Why do I say that? During the war, I went to an Anglican primary school in Southport. I loved it. It was a Victorian building and I had, as the basis of such education as I have had, a Victorian education. The school was right next door to the church. However, religion was not thrust down our throats. We went to church twice a year, at Christmas and at Easter. Of course we started each day with a hymn and a prayer, but everyone did that in those days. It was really a community school and embodied for me the great attractions of Anglicanism. Belief was a comfort rather than a passion and there was a welcome absence of fervour. It was, as the right reverend Prelate the Bishop of Lichfield said, a community school which included everybody. My closest friend was a Jewish boy who was the son of a refugee. When I went to see his family, his mother explained the Jewish faith to me. I believe strongly that in schools, Christians, Jews, Hindus, Muslims and Buddhists should all sit alongside each other, play alongside each other, eat alongside each other and go home on the same bus together, because that way lies tolerance, understanding and forbearance. If one moves away from that, one creates intolerance and all the troubles of a divided society.
It was interesting to hear the noble Lord, Lord Sutherland, speak, because he recalled the debates we had four years ago when the policy of the Labour party, I am glad to say, was that in all new faith schools, 25 per cent of the pupils should come from outside the faith. It was a view expounded by the noble Lord, Lord Adonis, in the House of Lords, and I shared it. It was not shared by the leaders of my party, but they were mistaken in that. They are not always mistaken, but they were mistaken then. I campaigned with the noble Lord, Lord Adonis, to support the view. Unfortunately, the Labour party was rattled by a quite unscrupulous campaign by the Catholic church—I see the noble Lord is nodding so he must have been part of it—in which it tried to pretend that this would undermine all Catholic schools in the country for ever. But it was only for new Catholic schools, and the Catholic church had founded only two new schools in England since the war. The Catholic church thought that with all these Poles coming into the country, there would be lots more Catholic children in future, although I think that that particular ambition has been dashed. It was a quite unscrupulous campaign and the Labour Party gave in and surrendered.
The amendments were drawn up. I had seen the amendments ready to be tabled saying that new faith schools should ensure that 25 per cent of their intake was from outside the faith. During those debates, the present Archbishop enunciated the policy of the Anglican church, which has been developed by the right reverend Prelate today, and said that for new Anglican church schools, 25 per cent of the intake should be from outside the faith or of no faith. That has now been extended to 50 per cent, and I do not disagree with that at all. It is the best way to go forward.
If, during the next five to 10 years, we see the establishment of faith schools, particularly of the new faiths in our country, we are going to have very exclusive schools that I think will create divisions in society, particularly in our towns and cities. I favour very much the idea of all new schools at least being inclusive and extending that slowly to all schools. In fact, that is the reality. Very few Catholic schools today have 100 per cent Catholic pupils, so they are part of the policy. Why do you not announce it? There must be a direction somewhere from on high that you do not. The Anglican community of faith schools is very inclusive today—by nature, it always is. As the right reverend Prelate said, some of these schools are 100 per cent Muslim but they still have the rigour of teaching that comes from a belief. That is very important.
I know that I am not going to persuade the Minister to agree with us because I think that they are going to approve some new faith schools. I must say that that would be a profound mistake.
Lord Boswell of Aynho
My Lords, I am grateful to my noble friend. Many of us have a strong interest in faith schools. I speak as a practising Anglican. I am heartened that on the whole the debate has not reinforced the view that we would take comfort from the ghettoisation of schools. They should be able to exist in our society, give of their own merits and receive of their own experiences from other citizens of different faiths. Some of the most impressive schools that I have seen—without exception, as it happens—have been Anglican schools that have a high Muslim component because that is what has happened to the demography in that particular area.
I want not to prolong the debate but to widen it slightly into a different consideration that can also be met by Amendment 138, to which I am sympathetic. If I may avert to the interest of noble Baroness, Lady Hughes of Stretford, in wider issues of community cohesion, on which she has a strong record, many of us would be committed to that.
It has always seemed to me that the debates that we have about multiculturalism are often misconceived. The ideal that I want is people who believe in something and have a body of beliefs that they exemplify and wish to express along with fellow believers in their own school. They thereby have an ability to look within their own community but at the same time reach outwards to other communities. They are not doing it in an exclusive or inhibitory way; they are saying, “This is what we stand for but we listen to you, respect you, welcome you in and enjoy having you as participants”. I therefore feel strongly that as our society evolves we ought to be getting to a position where people may have their inner beliefs that will differ in many ways, or their own particular characteristics, but at the same time they are prepared to share a common citizenship, a common space and a common respect. The way that these amendments are conceived may help us to lead towards that. There should be no ghettoisation but a sensible inclusion—that is the way that I hope this debate is now going.
Lord McAvoy
My Lords, it is a pleasure to follow my noble friend, as he says in this debate. My noble friend Lady Massey has cited Northern Ireland. If you want, and I normally do, we can go back to 1176 when the Welsh allowed Pembroke, otherwise known as Strongbow, to first invade Ireland, and that was the start of the Troubles—English and Norman interference in Ireland. It is a long-term issue.
What is coming across to me from the noble Lord, Lord Lucas, and certainly from my noble friend Lady Massey, is that faith schools—especially Catholic schools, it seems—are an inherently bad thing; they do bad things and they are not good for society. Among colleagues here there is a certain detachment from reality because that is not how they are perceived outside. It is completely unfair—
Lord McAvoy
If you will let me finish, it is completely unfair to portray them in the way that they are being portrayed here at times.
Baroness Massey of Darwen
I am sorry to interrupt my noble friend. I think he will find when he reads Hansard tomorrow that at no point have I said the things that he is accusing me of.
Lord McAvoy
It may be that the noble Baroness has not heard me clearly. I am saying that inherent in these amendments is the idea that faith schools are a bad thing. Folk may not like that, but that is what is coming across loud and clear. For instance, there has been no answer to the noble Lord, Lord Sutherland, who quickly picked up the point that the trait of moving house is not confined to faith schools or Catholic schools; it seems to be a trait throughout a whole host of schools. Yet, there has been no mention of that or any drawing back of the implication that this happens only in Catholic schools.
Society is evolving. Last week, I revised my opinion of the noble Lord, Lord Baker. I certainly remember him from the 1980s and I did not like his politics, but last week I thought that he was great. However, this week I have revised my revision and he is back to being a bad man again. Certainly for 800 years we kept the faith in Ireland, I can tell you. In saying that there should not be any more faith schools, the noble Lord, Lord Baker, makes a point and he is asking us to trumpet it. I think I mentioned last week that there is a fairly large Roman Catholic school in Scotland where, if my memory serves me correctly, about 10 per cent of the pupils are Muslim. It is working and it is great—it is doing well for everyone.
I have mentioned the phrase “detachment of reality”. I say to noble Lords who have tabled these amendments and who have spoken in the manner that they have: let society evolve and let things happen. No one should take active steps against what they see as the badness in faith schools. I say to noble Lords in all sincerity, honesty and frankness that the more you try to enforce this, the higher the wall will go up, because there has been a lack of trust that is based on British history over the past 500 years. I am sure that noble Lords will be glad to hear that I shall not go into all that, but that lack of trust is based on 500 years of British society. One thinks particularly of the Catholic community. If noble Lords try to enforce it, it just will not happen. They should go the way suggested by the noble Lord, Lord Baker, of letting things evolve, although I disassociate myself from his wish not to build faith schools. On the other hand, if you make a big issue of it, that may happen anyway, and if so, and if that is what people want, that will be a good thing. However, I do not accept that faith schools are a bad thing.
The amendment in the name of the noble Lord, Lord Lucas, is completely unworkable. It would cause strife and animosity and would make the original ethos of the school seem dictatorial towards the new component of the school. That would take us back. I say again that if we want to move forward, the way ahead is consensus. We should convince people that going in a particular direction is right. Go that way and all the community will come together. Go in the opposite direction, and the community will be divided.
Lord Elton
My Lords, I am as eager as anyone else to help the Committee to move on quickly, so I shall be brief. I was not going to intervene at this stage but, having been Minister for Education in Northern Ireland for two and a half years, and during my watch having authorised the institution of the Lagan integrated school, I feel that I have an interest that I should put before your Lordships.
The most heartening things that I have heard have come from my right reverend friend the Bishop. As I see it, the process of integration is already going on in established faith schools. It seems to me that what we do not want behind the movement for these amendments is an animosity towards religion. We want an animosity in favour of good education, and here I endorse what the noble Lord, Lord Sutherland, said. In other words, a good school is always going to be a magnet. Whatever its theological background, people are going to move there to get their children into it, and the same applies to a school that is not a faith school. You are not going to end that with any amendment of this sort. It is in fact competition working its influence on the educational market. Therefore, I say only that if we are to have amendments at Report they should be designed to foster, rather than smother, the movement to inclusivity within faith schools that we have seen, and which I believe to be thoroughly healthy.
Lord Hill of Oareford
My Lords, this is our second debate this afternoon on faith. Like the last one, it has been thoughtful and stimulating. I want to start with the comments of the right reverend Prelate the Bishop of Lichfield who reminded us first about the tradition of the churches and other faiths providing education being a longstanding one in our country. He also wisely warned us against the dangers of generalisation.
There have been a couple of times this afternoon where we have teetered on the edge of generalisation, and the right reverend Prelate sensibly and calmly brought us back from that. He also used powerful evidence to show the contribution that faith schools make. It is the Government’s position that they provide high quality school places and, as we have heard from a number of noble Lords, that they increase choice for parents and that they secure better results overall, which is one of the reasons why they are popular with parents.
Therefore, my starting point in replying is to say that I will, perhaps not surprisingly, be arguing for the status quo. We think that faith schools should be able to teach according to the tenets of their faith and to have admissions policies that reflect that ethos. The right of parents to have their children educated in accordance with their religious beliefs is enshrined in the European Convention on Human Rights, as we have heard, and we are committed to maintaining that right. The exceptions in the Equality Act that have been discussed today exist to allow faith schools to continue to provide education in an environment conducive to their religious ethos and in accordance with parents’ wishes. We see no reason to remove them.
However, those exceptions do not mean that schools with a religious character can discriminate at will. All maintained schools and academies must comply with the schools admissions code, as we have already discussed. They may give priority to applicants of a particular faith only when oversubscribed and they must admit all applicants without reference to faith-based or any other criteria when they cannot fill all their places. Schools with a religious character, irrespective of their faith, are subject to the same checks and inspections as all other schools and, as the right reverend Prelate pointed out, many of these schools have a very good record of reaching out to their local communities and promoting diversity. I remember that Church of England schools score more highly on community cohesion than community schools, which is a fact worth reminding ourselves of.
So far as maintained schools converting to academies are concerned, we set out the principle at the time of the Academies Act that they should convert on an as is basis. Therefore, the process of conversion to become an academy is not in itself a way of increasing the number of faith places available. New academies, including free schools—this is a question I was asked by the noble Baroness, Lady Massey of Darwen—will be able to apply faith-based admissions criteria only to a maximum of 50 per cent of their pupils and, again, only if they are oversubscribed. We were clear about that at the passage of the Academies Act, and I am happy to restate that today.
Overall, we see no reason to change the operation of maintained faith schools and academies. As many noble Lords have said, things are evolving in their own way. They are popular with parents, they are beneficial for pupils and they are an important part of the education landscape. However, we recognise that we need to strike a balance. That is why, with the expansion of the academies, we have been careful to ensure that there is no overloading of the system with religious-based schooling, which is why we have put in the 50 per cent limit.
I think we have struck a fair balance and that faith schools have served us well. I would therefore ask the—
Baroness Morris of Yardley
I agree entirely with the position the Minister has outlined. I just want to invite him to explore one point on which I think the Committee would like some reassurance. It is the point raised, to some extent, by the noble Lord, Lord Baker. The position that the Minister has just defended is the position as it was up to 10 or 15 years ago, and a lot of schools with faiths other than those which we are used to seeing are now coming into the system.
I remember at a meeting or two ago of this Committee that the Minister gave an assurance that he would not let creationist schools go ahead, and that is a religion. Yet his opening comments, however, were about the degree to which a religion is right to teach their faith in school. As we move forward—and there are more schools with a religion other than those with which we are familiar—how worried is the Minister and what actions is he taking to make sure that the position he is at ease with now continues?
Lord Hill of Oareford
My Lords, I take the underlying point. In my comments, I made reference to the importance of inspection. That is not simple, because inspectors need to know what they are looking for if they go into a faith school where one might think there is cause for concern. It is not always straightforward, but inspection is one way of addressing this.
As to setting up new schools and free schools, about which noble Lords, including the noble Baroness, Lady Massey, have concerns, oddly enough I think that because that whole process is being set by and overseen by the Government from the outset—we have due diligence and ways of exploring these questions, which we will do carefully and rigorously—that area is of less concern than perhaps that of independent schools and maintained schools. I am not at all dismissive of the point that the noble Baroness raises. I hope that inspection and the Secretary of State’s powers on academies to make sure that everything is operating correctly will provide some reassurance. We should not stick our heads in the sand about the issue. I was headed towards asking the noble Baroness, Lady Massey of Darwen, to consider withdrawing her amendment.
Baroness Massey of Darwen
My Lords, as ever, this has been a fascinating and wide-ranging debate. We are evolving in this, but evolution sometimes needs a little helping hand. I accept the historical role played by the church in education but we have become a different society from the one that we were many years ago. I continue to have fears about ghettoisation. Of course I am not seeking to close faith schools. I am not sure how I gave that impression. I am just seeking to ensure that faith schools are more open, and I have some sympathy with the noble Lord, Lord Baker, in all this.
In following up the question of my noble friend Lady Morris, which I was also going to ask, I hope that the Minister has no fears that some free school could be set up somewhere and designed solely to promote a faith of one kind or another. I am not so convinced of that. I accept the historical influence of faith schools, and I am not seeking to go back on that. However, we have to continue our vigilance about our schools—be they faith schools or otherwise. As always, I would wish to strike a balance. I hope that at some point we can discuss with Members of the Committee of all faiths some of the issues that came up in my previous amendment and try to reach a greater understanding. In the mean time, I beg leave to withdraw the amendment.
“(1B) Subsection (1A) shall also apply where a local authority in England sub-contracts out the provision of school meals.”
Baroness Hughes of Stretford
My Lords, I shall be very brief, and I am grateful to the Minister, who has written to me on this matter. My amendment simply sought to make sure that the provision in the Bill relating to charges for school meals included situations where the local authority was contracting out the provision of the meals as well as providing them by directly employing people to cook them. The Minister has assured me in a letter that that is the case. I just want to get that commitment on the record. It states:
“Sections 512ZA and 533 of the Education Act 1996 provide powers for local authorities and governing bodies to charge for school lunches—they are still responsible for this if they contract out the delivery of the meals. Clause 35 of the Education Bill will not change this, so all school meals, whether delivered by a contractor or by the local authority or governing body will be covered by the clause”.
On that basis, I will not move the amendment.
Lord Lucas
“Music licensing
After subsection (1)(g) of section 173 of the Licensing Act 2003 (activities in certain locations not licensable) insert—
“(ga) on the premises of a school or college”.”
Lord Lucas
The amendment is self-explanatory. As I have had a very clear and supportive e-mail from the Government today, which I hope has been widely circulated, I shall leave it at that and beg to move.
Baroness Jones of Whitchurch
I support the amendment and have read the helpful letter from the noble Lord, Lord Hill. I restate how much I agree that getting schools to apply for licences in the past has been a very unwieldy way to get them to put on fairly simple forms of entertainment. I very much support the Live Music Bill of the noble Lord, Lord Clement-Jones, to which the letter of the noble Lord, Lord Hill, referred. I am very pleased to hear that the Government will be supporting it in its progress through Parliament. That obviously goes much wider than dealing with live music in schools; nevertheless, it will be helpful.
When I said to my colleagues that I was also very pleased that the Government had committed to looking at the Licensing Act 2003, they said, “You’re going to regret saying that, because it took us for ever to get a half-decent balance on licensing music and alcohol provision. Good luck to you”. My instinct is that we should look again at the Licensing Act. I am pleased that the Government will be doing that, and I look forward to that debate.
Baroness Perry of Southwark
My Lords, my name is added to the amendment. I just say to my noble friend that, although I urge him to continue to look kindly on removing the need for licensing from schools and colleges, perhaps this is an opportunity to look more widely at some of the other places where young people need licences, such as small sports clubs, and so on, where if they have even a radio playing in the background, they must get a licence. We need to encourage young people, not make life more difficult for them. I hope that, in their consideration of the issue, the Government will look more widely than simply schools and colleges.
Baroness Garden of Frognal
My Lords, I know that many in this House share my noble friend's view that public performance of music should not be licensable in schools. We agree that schools currently face unnecessary bureaucracy when they organise events such as school plays, concerts or swimming galas, and we are taking steps to address that. We heed the warnings of the noble Baroness, Lady Jones, but we have announced our intention to consult on Schedule 1 to the Licensing Act 2003, which currently regulates the public performance of live music and performance of other creative and community activities, such as dance, plays, film and indoor sport. Our intention, subject to the consultation, is to deregulate those activities as far as possible in schools. That is possible through secondary legislation.
The Government have also expressed clear support for the Live Music Bill introduced by my noble friend Lord Clement-Jones, which completed its Committee stage on Friday. I know that, because I was there. It seeks to deregulate in certain circumstances the provision of live, unamplified music in most locations and live, amplified music in workplaces such as schools, as well as licensed premises such as public houses, subject to restrictions on audience size. These planned changes will free schools from the unnecessary bureaucracy they currently face and allow them to use music in a sensible way to deliver the best possible education for their pupils. On the basis of that reassurance, I hope that my noble friend will feel able to withdraw his amendment.
Lord Lucas
My Lords, I am very content with that reply and I beg leave to withdraw the amendment.
Lord Blackwell
“Duty to provide for the needs of high-ability pupils
In determining the nature of their educational provision, all maintained schools, Academies and free schools must have regard to meeting the special learning requirements of children within their admissions group who have or subsequently demonstrate high ability or aptitude for learning.”
Lord Blackwell
My Lords, I shall speak also to Amendments 107 and 119. Given the hour, I will try to be brief. These amendments relate to points I made at Second Reading about the importance of providing a proper learning environment in our schools for children of high ability and high aptitude. Although they all relate to that, they are not consequential, and therefore at subsequent stages of this Bill it may be appropriate to consider them separately. I must also make it clear that none of these relates to the admission procedures of schools. In the words of the noble Baroness, Lady Morris, they talk about how best to teach all the children who come through the school door.
Amendment 106 puts a duty on schools simply to provide for the needs of high-ability pupils. I use the terms “high-ability” and “high-aptitude” because I want to make clear that we are talking about latent as well as demonstrated capability. It is clearly important that standards are high for all children and we make all schools excellent, but we must make sure that the most able children are properly catered for. This is an argument about fairness, that these children, like all children, should be able to fulfil their potential. It is also an argument about what is important for the nation because the most able children are those from whom our future leaders in all spheres of activity often come. If we are going to compete on a global stage, we need to make sure that the most able children have the highest possible standards against global competitors. We need that to apply to children in the state sector, not just those children who are able to go through the private sector.
The amendment does not prescribe how schools should make educational provision for high-ability children but clearly one of the most common ways of doing that is through streaming or setting. The latest figures from Ofsted are for 2006-07, and suggest that 14 per cent of children in primary schools are setted or streamed, excluding PE. In secondary school that rises to 46 per cent, but that means that 54 per cent are not setted or streamed. Interestingly, in maths 78 per cent are setted or streamed, in contrast to 51 per cent in languages and only 34 per cent for geography. The question that that raises is why standards are considered less important in geography or languages than they are in maths. If streaming or setting are appropriate to deal with high-ability children in maths, are they not equally important for other subjects, particularly for those children who need to get high grades in a number of subjects in order to progress to the best universities?
This is not the time for a long debate about this. I recognise that there are counterviews, including the argument that other children benefit from having high-ability children in the same class. The counter to that is that there is evidence that both sets of children can benefit if they have teaching best suited to their aptitude and ability. In any case, it is important for the whole of society that the most able children are allowed to excel. Putting this duty on schools without prescribing how they do it would require them to address the question of how they are providing for the needs of the most able children and allow them to defend whatever method they believe they have to fulfil that requirement.
Lord Lexden
My Lords, I vigorously support Amendment 107, on which my name appears. It would be even better if subsection (1)(c) in the amendment included the words “independent schools” after the word “academies”.
Speaking on an earlier amendment, I laid stress on the importance of partnerships between independent and maintained schools. Nowhere is co-operation more likely to be valuable on both sides than in the areas covered by the amendment. In subjects like science and maths, independent schools can really help to raise standards and prospects for high-ability pupils overall because of the successful results that they achieve. In modern languages, for example, almost 50 per cent of top grades go to pupils from independent schools. Let that expertise be shared widely in order to break down even more of the barriers between the two sectors. Independent schools see themselves as part of our national education system. Their inclusion in co-operative ventures of the kind envisaged by the amendment would be greeted by them with considerable enthusiasm. For those reasons, I support Amendment 107.
Baroness Morris of Yardley
My Lords, I have a great deal of sympathy with the intention behind these amendments, but I have a few issues about the solution to the problem. I want to ask a particular question that the Minister might address in her response. In the past we assumed that very bright children will succeed despite school and that we should not put in a place a system where they could succeed because of their schooling. I am very much in favour of the proposal that all schools should try to meet the needs of all their students. I have often thought that the most able 2 per cent to 3 per cent of young people in this country have special educational needs in the broadest sense, and that they need to be supported. So I am entirely on board with the idea. I welcome the debate, and although I will have to look at the amendments more closely, raising the issue is a good thing and this should be a feature of our education system. We should ask schools to address the particular needs of this group of children just as we ask them to look after the less able.
I welcome what the mover of the amendment said in terms of not wanting to go back to selection, and I can see that the amendment is not about that. However, I think that there must be a more imaginative approach than creating what is essentially a high ability stream within a school. I am no great researcher, but I know that all the evidence shows that separating children in schools is not the best way of raising standards. With reference to the comments made by the noble Lord, Lord Lexden, work has been done about children working with those in the independent sector. I remember an innovative scheme that was set up under the Excellence in Cities programme in Manchester. Sixth-formers from state schools took an undergraduate module with students from Manchester University, or it could have been the Open University, I cannot quite recall. That was not an isolated scheme.
All I would encourage is more general thinking about how to provide for really able children who need to be pushed. What, in the first part of this century, can we do that has not been done before to raise standards? I would be much more interested in using new technology to set up master classes with the best in the world, even if they are located on the other side of the world. We should free this debate up in order to be more creative than we have been in the past, and therefore my question for the Minister is this: why did they abolish the Young, Gifted and Talented Programme? It was the one scheme that made every school in this country identify a number of students who were thought to be gifted and talented. It brought about cultural changes in schools; some schools had said, “We haven’t got any bright kids”, while others had said, “We’ve got too much on our plate with our struggling kids”, so there was a group of children whose needs were not being met. Over the years that the programme was in operation, we began to change the culture of every school in the country. It was not perfect, but it got on to the agenda in every school that the needs of the most able, by ability or aptitude, also have to be met. It was sad that the Government chose to abolish and destroy the programme, which would have been a good hook on which to continue the debate. I would not mind an explanation of why it was done and what will take its place.
Baroness Walmsley
My Lords, perhaps I can just warn against being too prescriptive. It is important that schools do this in a way that is most appropriate. I certainly join others in encouraging schools from different sectors to co-operate with each other, but I will give just one example of why I think this is so important. I have two grandsons, one of whom is brilliant in English and terrible at maths, while the other is terrible at English and brilliant in maths. They both came from the same gene pool. A child might be in a high-ability group for one subject but not for another, so we have to let schools take account of that.
Baroness Perry of Southwark
My Lords, I know that we are short of time, but I would like to interject that when we talk about giftedness, we are not just talking about academic ability. Schools should be urged to recognise that some children are immensely gifted with their hands, with technology, at sport, in music and so on.
The Earl of Listowel
My Lords, I recall articles published in Scientific American and New Scientist not so long ago which looked at chess grandmasters. The articles identified that they had spent so much of their lives playing chess that they had become geniuses in the chess arena and suggested that genius derived from people spending an awful lot of time doing whatever they were most passionately interested in. I should be grateful for an assurance from the Minister that, for example, a young man who is passionate about science can have the opportunity to study science at playtime and after school, and that the staff within the labs will make the equipment available for him to use. I should like an assurance that, where young people are passionate about using their hands or whatever, there will be the necessary flexibility and resource in schools for them to follow their passion and spend a lot of time doing it.
Baroness Sharp of Guildford
My Lords, I endorse the words of the noble Baroness, Lady Morris, about the need for innovation in this area and, in particular, for linking up with local universities and perhaps local colleges. That is very important.
While we are talking about other areas—the noble Baroness, Lady Perry, mentioned children being brilliant at other things—perhaps I may get in a plug for something that will be happening in this country in October. I refer to the World Skills Competition, at which those who are brilliant at doing all kinds of things with their hands and so on will be exhibiting their skills. It is the skills Olympics. I hope that a number of Members of this House will go to ExCeL to see the exhibition.
Lord Lucas
My Lords, about 5,000 English sixth-form school pupils a year take Open University modules, which is a very good approach to this matter and something that we will come to on the 25th. Those modules are not reflected in the performance tables, and the data on the performance of these children are not available to celebrate their achievements and those of their schools, as I think should be the case. It should be possible for children who are capable of taking on these things to be allowed to expand and flourish, and for schools to be rewarded for that in a way that they understand—that is, through recognition and, indeed, money. At the moment, the YASS scheme seems to exist on the good will of schools and their interest in the attainment of their brightest pupils, rather than on any great support from the Government.
It is wonderful for me to find myself agreeing with my noble friend Lord Blackwell. I have often found myself in opposition to him but I think that he has struck a very clear note here and I am very happy to support him. Of course, I agree with other noble Lords that there are many ways of doing this, and mathematics taught as a mixed-ability subject can be very strong. I recommend my noble friend to the works of Professor Jo Boaler on that subject. We know from the Oxbridge admissions statistics how much we are generally failing in this area. We need to do much more to give the brightest children from the poorest backgrounds the education and ambition that they deserve.
However, as it is fashionable to talk about international comparisons, I also point out that Singapore reckons that half of its most crucial entrepreneurs were in the bottom 10 per cent at school, so it is not just the bright children who need our attention.
Baroness Jones of Whitchurch
My Lords, this debate has been a model of brevity. We have got in an enormous number of points in a very short period. Perhaps we could learn something from that. Therefore, I shall not prolong the debate, given the lateness of the hour and the fact that most of the points that I was going to make have been covered.
The debate has underlined for me that the whole thrust of the Government’s future schools programme is based on school autonomy and that we are rowing back here in talking about schools needing to co-operate. Someone pointed out that local authorities used to provide some of that element of co-operation for specialist education, whether it was for specialist GCSEs and A-levels or whatever. We are trying to reinvent the wheel when some of those mechanisms were already there to provide at least some of that.
I very much agree with what has been said. I had a similar question to that of my noble friend Lady Morris concerning what happened to the gifted and talented scheme.
My only other concern relates to the wording of, particularly, Amendment 106, which talks about,
“high ability or aptitude for learning”,
as being the only area for which we should make special provision. Again, I very much agree with the noble Baroness, Lady Perry, and others, who said that talent goes far beyond academic talent. If we are to pursue this, I hope that the mover of the amendment will look to broaden it out. I am not trying to water it down, but talents and gifts come in all sorts of forms. As much as we need leaders who are academically bright, we need sports men and women who are world leaders, and there are lots of different ways in which we want our children to excel and eventually to provide leadership in this country. Therefore, I have a concern about the wording of the amendment, although I think that there is an enormous amount of agreement around the Room about how we should go forward on this issue.
Baroness Garden of Frognal
My Lords, education is about helping every child to make progress and reach their full potential, and that includes those pupils who have a high ability or aptitude for learning. There are many ways in which schools can support and challenge those pupils with the highest ability, including, as my noble friend Lord Blackwell pointed out, setting and streaming. Where setting is done well and is regularly reviewed, it can raise standards, and teachers are free to do this. He asked, if it was so good to stream pupils in maths, why it did not happen also in geography. The answer is the numbers taking those particular subjects. You need a critical mass for each subject in order to make streaming an effective tool.
Schools target their resources in the way that they feel will be of most benefit to their pupils. That could include the provision of extracurricular activities or outreach programmes with local universities or colleges. We have removed much of the ring-fencing of funds that restricted schools’ ability to make their own decisions about how to drive their improvement.
Today, in response to the Bew report, we have announced that higher level tests for year 6 pupils will continue to be available for schools to stretch the most able pupils, if they wish. We will consider how to incorporate results from these tests in performance tables to give credit to schools that support their highest attaining pupils. Within a slimmed-down national curriculum, it is possible for schools to design a wider curriculum that best meets the needs of all their pupils: for example, pupils with a particular aptitude for languages taking more language subjects.
My noble friends made the important point about children from disadvantaged backgrounds in particular. One of the key points about the pupil premium, which is given to support schools in helping those pupils, is that we have given schools the freedom on how to spend it. Schools could, therefore, use those funds towards additional support for high-aptitude or high-ability pupils from disadvantaged backgrounds to help them succeed. School governing bodies already have a duty to promote high standards of educational achievement and the well-being of all pupils at the school. I hope that my noble friend will understand that we are not attracted to a particular further duty.
In Amendment 107, my noble friend also seeks to promote greater co-operation between schools to provide for the needs of this group of children. We strongly support collaborative working between schools in the interests of their pupils, be those children with a particular interest, aptitude or need. As my noble friend said, there are many positive examples, such as schools providing a particular qualification at one school and pooling their interested pupils so that there are enough to warrant the course. We have had examples of Japanese or some specialist forms of learning where classes can be put together to provide a quorum to follow a particular programme. Schools have the necessary powers and freedoms to do this without new primary legislation.
The noble Baronesses, Lady Morris and Lady Jones, asked why we got rid of the gifted and talented scheme. It was actually the previous Government who took the decision to end the gifted and talented scheme. Our strategy for education is about raising standards for all pupils, and that of course includes pupils with natural ability or aptitude. As my noble friend said, those children are our future leaders in business, our future doctors and teachers, our future engineers and scientists. I agree with my noble friends Lady Perry and Lady Sharp that it is also about those with the creative and manual skills. I entirely endorse their enthusiasm for the World Skills Competition in October, where we will see some of the most skilled young people from our country and around the world. We must not forget the abilities and aptitudes in those practical skills as well.
Schools already have the necessary freedom to work together to ensure that all the pupils in their care get an education that stretches and develops them. That is backed up by accountability through Ofsted inspections. More performance information on the progress that schools make with the highest achieving pupils will be part of that. With those assurances, I hope that my noble friend will consider withdrawing the amendment and supporting our approach.
The Earl of Listowel
Before the noble Lord responds, I think that I am right in thinking that a Select Committee of this House, when discussing science education, drew particular attention to the lack of lab technicians and the difficulty that that posed for young people to spend time in the lab to do experiments. I encourage the Minister to consider that issue and consider what progress has been made since that report was published two years ago.
Lord Blackwell
I thank my noble friend for her response and thank the other noble Lords who have taken part in this debate. Some extremely helpful and interesting comments came in this brief exchange. It is clear to me that the amendments could be improved, if they were to be pursued. Obviously, I will want to reflect on what the Minister said about what the Government are already doing and come to a view on whether more should be done that the amendments would encourage. We may want to return to them on Report but, for the moment, I beg leave to withdraw the amendment.
Baroness Garden of Frognal
My Lords, this may be a convenient moment for the Committee to adjourn until Wednesday at 11.45 am.
House of Lords
Election of Lord Speaker
Message from the Queen
The Lord Chamberlain (Earl Peel)
My Lords, I have the honour to notify your Lordships that Her Majesty the Queen, having been informed that your Lordships have elected the Baroness D’Souza to be Lord Speaker, has pleasure in confirming your Lordships’ choice of her as your Speaker.
Election of Lord Speaker
(12 years, 11 months ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I am sure the whole House will join me in congratulating the noble Baroness on becoming our next Speaker. I am sure that everybody will wish to join in supporting her and encouraging her not just in this transition period but throughout her term of office.
My purpose in rising now is to inform the House that there will be an opportunity to pay tribute to the noble Baroness, Lady Hayman, the Lord Speaker, for her distinguished work as Speaker of this House and for being the first holder of the office of Lord Speaker. That occasion will take place at the start of business on Monday 5 September.
Baroness Royall of Blaisdon
My Lords, I rise briefly as I realise that now is not the time for tributes. However, as Leader of Her Majesty’s Opposition in this House, I just want to convey the very warm congratulations of our Benches to the noble Baroness, Lady D’Souza. This is another step in the evolution of our House. We have had another successful election for a Lord Speaker. It is extraordinary that we have had two women. I know that the noble Baroness will have the confidence of the whole House and that she will do a splendid job for the Lords, inside and outside Parliament, and for Parliament as a whole.
The Lord Speaker (Baroness Hayman)
My Lords, I intend to follow the example of others and not be present for first business on 5 September. Therefore, I trespass on the patience of the House for a single moment to add my congratulations to the noble Baroness, Lady D’Souza. She has been an effective and distinguished Convenor of the Cross-Bench Peers and I am certain that she will be an effective and distinguished Lord Speaker. I wish her well in those responsibilities. I express my deepest gratitude to the House for the honour that it gave to me in entrusting me with the responsibility of being first Lord Speaker for the past five years. It has been an extraordinary experience and I owe a debt of gratitude to many people in the House for their support during that time.
Thames Tunnel
(12 years, 11 months ago)
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Lord Berkeley
To ask Her Majesty’s Government what are the environmental benefits of the proposed Thames Tunnel.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, the Thames Tunnel proposed by Thames Water would reduce the frequency of spills of untreated waste water into the Thames from the current average of once a week during rainfall to three or four times a year, and reduce spill volumes from 39 million cubic metres annually to around 2.3 million cubic metres. This would meet the dissolved oxygen standards identified by the Thames Tideway Strategic Study and protect local ecology.
Lord Berkeley
I am grateful to the Minister for that Answer. I agree with him that the tunnel will help to clean up the Thames but in the process it could make a serious mess of London. One of Thames Water’s proposals is to concrete over most of Barn Elms Playing Fields and other greenfield sites and to remove spoil by road, involving some 500 trucks passing through London every day. Will the Government insist that Thames Water takes the majority of the spoil out by water down the river, because the line goes under the river? Secondly, will the Government safeguard the necessary brownfield sites, such as the Battersea power station site, to avoid the need to use greenfield sites in the construction?
Lord Henley
My Lords, I am grateful to the noble Lord for stressing the importance of the fact that it will clean up the Thames. That is very important, both in itself and in order to avoid infraction proceedings under the urban waste water directive. I note the noble Lord’s other points, which are really matters relating to planning issues. Thames Water will be consulting later this year on the route and where to put the various access points for the tunnels. After that, these are matters that should be left to the planning process rather than to Government.
Baroness Gardner of Parkes
My Lords, is the Minister aware that the London Group had the benefit of a presentation on this project? It said that one of the important features was to allow drainage in London, as the water level is now rising so high that it is becoming a problem, particularly with the development of more basements and sub-basements.
Lord Henley
My Lords, my noble friend is absolutely correct in talking about problems of drainage. We have seen, since Bazalgette built the original sewers some 150 years ago, a vast expansion of London, a vast increase in the number of people here, and a vast increase in the number of impermeable surfaces which allow water to drain off far quicker than it did in the past, creating serious environmental problems. As part of this process we need to look at all of those factors and all appropriate solutions.
Lord Aberdare
My Lords, in view of the fact that major projects such as the Thames Tideway Tunnel often fall short in delivering the environmental and community benefits expected, will the Minister consider encouraging Thames Water to establish an independent trust to provide a vehicle for ensuring that those benefits are achieved and maximised and that the tunnel project leaves a lasting legacy for London along the lines that Sir Joseph Bazalgette achieved with the original sewer project?
Lord Henley
My Lords, that is exactly what Thames Water is proposing in the plans. That is why it wants to consult on them and why it will have to go through the planning process in due course. At the end of that planning process we hope that it will be able to produce the right tunnel, in the right place, that will produce the right benefits.
Viscount Hanworth
In the 1960s when we were digging the Victoria line tunnel I remember that we caused minimal disruption around London and that the spoil was carried away directly. Can the Minister tell us why this cannot happen in the case of the Thames Tunnel when there is an easy way of carrying the spoil away—by the river?
Lord Henley
Again, it is a matter for the planning process and planning authorities to propose what conditions they think appropriate to impose on Thames Water. Since it is proposed at the moment that the tunnel should follow the river down, I would have thought it might be possible to have a lot of the access points close to the river. It should therefore be possible. However, it is not a matter for Government but for the planning process to consider using the river, rather than roads, for disposal of that spoil.
Baroness Kramer
I must declare an interest in that I live by the river and am a member of the Skiff Club in Teddington and therefore a supporter of the Thames Tunnel. Does the Minister agree that the reason why greenfield sites such as Barn Elms are at risk is that they are cheaper than the brownfield alternatives and that therefore it is a Defra issue? Will the Minister consider talking to Thames Water to make sure that environmental vandalism to sites such as Barn Elms does not take place?
Lord Henley
Obviously, we would want to encourage the use of brownfield sites, where possible, rather than greenfield sites. However, I do think that this should be a matter for the planning authorities and the planning process rather than for a diktat from Defra itself.
Lord Knight of Weymouth
My Lords, Defra is currently consulting on these sorts of projects becoming national infrastructure projects and at that point the Minister would have the leverage that he currently tells us he does not have. I understand the point that he is making. However, should he not take a lead, for example, from the Mayor of London, who is very happy to interfere and to pass comment wherever he sees fit? Should he not use his influence in this case and listen to what noble Lords have said about the importance of using the river to transport spoil in order to protect our greenfield sites and to preserve the brownfield sites? A meeting would be fairly straightforward and I am sure that Thames Water would want to listen to what the noble Lord has to say.
Lord Henley
My Lords, I would have thought that what I have said has given some idea of where Ministers in Defra stand on these matters. Again, I think that the planning process should decide the appropriate route, how it is done, where to dig the access tunnels and so on. In the end, we want the right solution for London and for the customers of Thames Water to ensure that we can get rid of that waste water and that we do not have, again and again, the kind of environmental disasters that we have seen, on a number of occasions, further up the Thames, with vast quantities of dead fish and other such things.
Lord West of Spithead
My Lords, I declare an interest as a waterman and lighterman. It seems to me that the Government have to take an overview of this. Leaving the matter to separate planning authorities can lead to things like the green aspects of using the river, which are dramatically less harmful to the environment, being forgotten. The Government ought to take an overview, if not pass legislation on it to make it happen. I notice that as regards the Olympics we have failed abysmally to use the river as much as was promised. That is a great failure and a loss to the nation.
Lord Henley
My Lords, I had a sneaking suspicion that a number of noble Lords in this House, who live further west up the Thames, would want to declare an interest in how these building works are to take place. Fourteen planning authorities are affected by this and it is one of the problems that has to be dealt with overall at government level. That does not mean that Defra should make the decision; the appropriate planning process should take place. Obviously, we will feed in our views and I have given some indication of a desire to use brownfield sites where possible rather than greenfield sites. In the end, we must leave this matter to the planning process.
Democratic Republic of Congo
(12 years, 11 months ago)
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Lord Chidgey
To ask Her Majesty’s Government what assessment they have made of the preparations for the forthcoming elections in the Democratic Republic of Congo.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, we are closely following the DRC elections. Despite delays, there has been considerable progress. The election calendar has been published, the electoral law passed, and over 30 million Congolese have registered to vote. There have been reports of harassment of political activists and demonstrations in Kinshasa earlier this month led to violence. However, so far we have seen no sign of systematic attempts to undermine the process. The Department for International Development is providing significant support.
Lord Chidgey
I thank my noble friend for that response. Is he aware that, during a recent visit to the DRC, we found that CENI’s electoral calendar was unrealistic and unworkable? For example, in spite of a completion date for voter registration at the end of June, by July only four out of 11 provinces had been signed off. Is he also aware that, perhaps more worryingly, the most serious threat to forthcoming elections is the increase in LRA activities, with numbers back at 2008 levels; and that MONUSCO, with just 5 per cent of its peacekeepers active in the LRA-controlled areas, is deeply frustrated by the lack of resources to utilise the intelligence gathered for DDRRR purposes?
Lord Howell of Guildford
I was aware of my noble friend’s recent visit to the DRC and I appreciate his concerns about the timing of the election. We reckon that the independent national electoral commission, to which he referred, CENI, is going reasonably well with its operations. Of course the timetable is tight, but we think that it is just realistic and that it is managing to get wider participation and better registration than some feared earlier. The Lord’s Resistance Army is a plague, as it were, a trouble which affects both the DRC and other countries in the region. Our aim is to get the African Union to support and work with MONUSCO, the UN force, in meeting this continuing threat. I fully recognise that it is a problem but if we can get the African Union fully engaged, as we are trying to, we believe that we can create the conditions in which the problem can be addressed effectively.
Lord Alton of Liverpool
The noble Lord, Lord Chidgey, was right to direct the Minister towards the depredations of the Lord’s Resistance Army, in a country where, after all, between 5 million and 6 million people have died in the last 25 years, mainly as a result of marauding militias. Has the Minister seen the report in today’s Telegraph online about Makombo, where 321 civilians died and 250 were abducted at the end of last year, and where 26 died and 53 were abducted in another raid on 6 July? Given that in 2005 the International Criminal Court issued indictments against Joseph Kony, the leader of the LRA, and two of his lieutenants, why has MONUSCO been so inadequate in gathering the necessary intelligence to bring these people to justice?
Lord Howell of Guildford
The noble Lord is quite right to deplore the endless slaughter and activities which are associated with the Lord’s Resistance Army. It seems to be a negative force both in this country and in many others. As I said earlier to my noble friend, it is our aim to get the African Union to work very closely with MONUSCO, the second largest UN mission in existence, in meeting this problem. The noble Lord, Lord Alton, asked me why it has not been so effective so far; I cannot answer that precisely, but I can only say that we are working extremely hard with other countries, with the EU and with our colleagues and allies, to reinforce the determination of MONUSCO and the African Union to meet the problem. This is the way forward that we think will be most effective.
Baroness Kinnock of Holyhead
My Lords, does the Minister share concerns about what is clearly the international community’s Congo fatigue, and the consequent much lower level of engagement in the November 2011 election process compared to what occurred in 2006? Is the Minister aware that, contrary to what we heard from him, there are predictions that as things stand we risk a situation in Congo such as we saw in Côte d'Ivoire, which also had a deeply flawed election?
Lord Howell of Guildford
I hope that on this matter the pessimism of the noble Baroness, who follows these things very closely, is unfounded. Our information is that 31 million people have been registered and that the organisation of the whole election is going reasonably well. Obviously there are bad examples: there were disturbances in Kinshasa earlier this month, as I mentioned. No doubt there have been some instances of irregularity, but overall we believe it is going reasonably well. As for the level of participation compared with 2006, she is right that the donor support for the election this time, as a percentage of the total costs of the election, is down somewhat from the 2006 levels. However, it is still a substantial amount at $176 million, of which we have contributed £31 million. I hope that she is wrong, if she does not mind me putting it bluntly, but her warning that this needs watching very closely is very apposite and well taken.
Lord Avebury
My Lords, if the electoral timetable is not achieved, what plan B is in place to avoid a constitutional vacuum? Considering the large sums of money that we and others have invested in these elections, have representations been made to the Government of the DRC to rescind the ban on Radio Lisanga Télévision and to refrain from taking any other extra-legal measures against freedom of speech and freedom of assembly in the run-up to the elections?
Lord Howell of Guildford
We have certainly played our part, again with international colleagues, allies and the European Union, to urge that there should be proper freedom of expression and freedom of access, as well as opportunity for the media and the printed press to have full say in the election; that is a very important aspect. We have pressed on that, as well as on other aspects such as observing human rights, maintaining regularities, getting full registration and wider participation of women, and all the other necessary requirements to ensure that this is a free and fair election.
Finance: Off-exchange Trading Venues
(12 years, 11 months ago)
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Baroness Kramer
To ask Her Majesty’s Government what assessment they have made of the risk to financial markets of off-exchange trading venues commonly known as “dark pools”.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the Government strongly support ongoing initiatives at the European and international levels to improve transparency in financial markets. The International Organisation of Securities Commissions, IOSCO, has recently agreed a set of principles for regulating dark pools that will help inform the European Commission’s ongoing review of the markets in financial instruments directive, MiFID.
Baroness Kramer
I thank the Minister for that Answer. He will be aware that Andrew Haldane of the Bank of England, in a speech a week ago, pointed out the dominance of dark pools and their high-frequency trading in many financial markets. Does the Minister agree that the lack of transparency, the price differential suffered by small investors, the implications for corporate governance of nanosecond share ownership and, above all, Andrew Haldane’s concern that liquidity could disappear rapidly in times of stress all point to a serious risk to financial stability? Will he continue to follow the issue and look at more action by the British Government, not just at the European level?
Lord Sassoon
My Lords, we should distinguish—as I am sure my noble friend Lady Kramer does—between the two issues of dark pools and high-frequency trading, both of which I am sure noble Lords are very familiar with. Dark pools are akin to what used to be called “upstairs trading”—off the floor of the Stock Exchange. We need to make sure that the benefits of being able to trade in such an environment, such as competition and choice for investors, do not impinge in any way on the transparency and the price-discovery ability of markets. The FSA has done work on that and is content that the price-discovery mechanism is not being damaged.
High-frequency trading is a very new and slightly separate area, although I agree that it is related, and it is one on which the Government are doing considerable work. A research project led by the Government Office for Science is looking at the possible evolution of computer-generated trading and its implications, and will produce up to 20 papers on the subject during 2011.
Lord Peston
Are dark pools the same as dark matter, which the astrophysicists tell us permeates the universe but which no one can observe? Is not the problem that for a considerable period banks and other financial institutions marketed paper assets that had no real assets behind them, and that that is what led to the financial crisis? Is it not more worrying that the banks cannot wait to get up to the same tricks again, and will do so if something is not done to regulate them properly?
Lord Sassoon
My Lords, I am no great expert on dark matter and black holes, but I think the distinguishing point about dark pools is that they are a venue for trading that enables confidential orders to be submitted and matched using a reference point that comes from a transparent market. As soon as the trade is done, the details are reported publicly. Therefore, there is confidential trading and then full reporting, which is the critical feature of the market. Various platforms are available for the market, which accounts for something of the order of 7 per cent of UK and European equity trading. It is not a dominant part of the market by any means, but it is one that we are watching.
Lord Bilimoria
My Lords, one of the best moves in the mid-1990s was the creation of the alternative investment market, AIM, which has been a great success. I was a director of an AIM company that is now a FTSE 250 company. However, the biggest problem with AIM was always liquidity. Liquidity is an also issue outside the FTSE 250 on the main market. Can the Government do something to improve liquidity? Should more be done or are they happy with the situation?
Lord Sassoon
My Lords, I certainly agree that mechanisms that help liquidity such as dark pools, which are run by investment banks, multilateral trading facilities or independent operators, are indeed aids to liquidity if they form a proper part of the market. The proponents of high-frequency trading, too, cite them as an aid to liquidity. I completely agree with the noble Lord, Lord Bilimoria, that the last thing we want for example the European Commission to do is to restrict sensible increases in liquidity in our markets without looking at the evidence base that needs to be assembled.
Lord Pearson of Rannoch
Does the noble Lord agree that we can all relax on this question, because we surrendered supervision of our financial services—
Lord Pearson of Rannoch
Yes, my Lords, and to the biggest black hole of them all in the shape of the European Commission. Do the Government agree that we can surely rely on this body to come up with an honest solution to any problem, if only because it has not been able to get its own accounts signed off by its internal auditors for the last 16 years?
Lord Sassoon
My Lords, I certainly do not think we should relax on the issue of high frequency trading. We only have to think back to the events of 6 May 2010. I do not need to remind your Lordships that there were two crashes on that day: one was the crash of the outgoing Government; the other was the so-called flash crash in which the Dow Jones index plummeted in a number of minutes by 9 per cent but fortunately, unlike the Labour Government, recovered by 9 per cent a few minutes later. We certainly take this issue very seriously but we need to continue to do the work and see where this leads us.
Lord Davies of Oldham
My Lords, I think the country should be on its guard when euphemisms such as “black pools” are used. I agree with the noble Lord that they are an aid to liquidity but he will know—and I am grateful to him for identifying that the Government are expressing some anxiety in this respect—that they restrict transparency in the marketplace. We all know the price that we have paid for a lack of understanding of what has gone on in the world of finance and the importance, therefore, of the Government being concerned to get as much openness and transparency as they can.
Lord Sassoon
My Lords, if they were black holes as the noble Lord suggests, we would be worried, but for dark pools, IOSCO, the international regulatory organisation, has recently laid down six principles to guide the operation of the regulatory framework of dark pools, and the FSA’s assessment is that the UK and the EU are fully compliant.
Dyslexia
Lord Addington
To ask Her Majesty’s Government what progress has been made in making apprenticeships fully accessible to those with dyslexia.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, we have been taking forward the commitment to develop an alternative way for disabled people to demonstrate their suitability for an apprenticeship. We have developed an initial recommendation. The next steps are to confirm wider endorsement of the proposed model and focus on implementation. External experts continue to advise officials on this and other disability access issues in apprenticeships. We are currently reviewing these advisory arrangements and would welcome specialist input on dyslexia.
Lord Addington
I thank my noble friend for that reply. Will she confirm that it is an absurdity that people can get special arrangements to help them through the A-level system whereas dyslexics are failing a communication test which they have to take in the apprenticeships process and are thus not being allowed to qualify, when direct access to this qualification would allow them to earn a living? Is this situation not an absurdity, and will the Government assure us that they will report back to the House when they have corrected it? If not, we are going to go back to it again and again.
Baroness Wilcox
The noble Lord is an expert in this area and has spoken to me about this question so I am able to give him my hope for the reassurance that he is asking for. He is talking about the option of key skills as opposed to functional skills in apprenticeships. We have looked at this and extended the options of key skill apprenticeships only on a temporary basis until autumn 2012, because not enough providers were geared up to offer the functional skills which we—and which I know that he and employers—actually prefer. We are well on the way to providing this. We wanted to ensure that there was continuation during this time. However, it does seem very odd that you can get into university or take your GCSE with a functional skill that is not being provided at apprenticeship level. I give the noble Lord my personal assurance that I shall make sure that we continue to address this.
Baroness Wall of New Barnet
I support the noble Lord, Lord Addington, in the plea that he has just made. As somebody who is involved in apprenticeships at many levels, this has been an issue for me as well. The sector skills councils have been looking at how they will overcome this and I think that some of them have been giving advice to government on it. The parallel which the noble Lord, Lord Addington, mentioned is awful. People can get all that support for an A-level, and the Government are trying very hard to make sure that apprenticeships are as widely available as possible, but they cannot get the support that will enable them to learn a skill and get a job.
Baroness Wilcox
The noble Baroness is absolutely right; it is one of those things that happened. As she will know, one or two very poor cases have highlighted the problem, and we are all working very hard to see how we can overcome it. Any input that we can receive, particularly from people with dyslexia, will be an enormous help. We are consulting very widely on it.
Lord Bilimoria
My Lords, my younger son has dyslexia. It was lucky that a kindergarten teacher spotted it early so that from that time onwards we have been able to give him help which we hope will allow him to go on and do anything later on in life. Are the Government doing enough to train teachers to spot dyslexia at as early an age as possible and to provide the learning support? The Minister’s response to the noble Lord, Lord Addington, was very encouraging, but are they doing the same to help pupils at school?
Baroness Wilcox
As the noble Lord will know, the education Bill is currently going through the other House and will introduce many things. When it completes its passage a duty will, I hope, be placed on schools to make sure that there is good independent advice, particularly on careers. However, we are carefully monitoring the position at the earlier ages to make sure that all our children have equal opportunities. We really aspire to equal opportunities in this matter as well.
Lord Young of Norwood Green
My Lords, I recognise what the Government are doing in relation to this particular problem. However, there is a huge demand for apprenticeships generally and for apprenticeships for people with disabilities specifically. Does the Minister agree that it might help if the Government stipulate the need for apprenticeships when they let procurement contracts, placing a special emphasis on those with disabilities? Should they not act similarly in relation to government departments?
Baroness Wilcox
I was very interested to hear the noble Lord’s suggestion. I wonder why he did not do it when his people were in government.
Baroness Wilcox
You did, did you? Okay, then I have no doubt that we are carrying it forward, as we do with many of the things that you did. What support is available for disabled apprentices? Additional funding is available, and we are taking forward the work that you were doing in the past. I am sorry, that was cheeky.
Baroness Brinton
Is the Minister aware that the Joint Council for Qualifications guidance is clear on support for students with special needs? Does she think that providers should be required, rather than just following guidance, to ensure that all elements of the courses are accessible for students with disabilities including dyslexia?
Baroness Wilcox
The answer to that has to be yes. It is just how we get there.
Lord Roberts of Llandudno
My Lords, does the Minister speak only for people in England who suffer from dyslexia, or is this also an opportunity for those in the other countries of the United Kingdom?
Baroness Wilcox
I am speaking for England today, so I am assuming that this is a devolved responsibility. If it is not, I shall come back to the noble Lord with more information. I think that it is definitely a devolved responsibility.
Privacy and Injunctions Committee
The Chairman of Committees
That the Commons message of 14 July be considered and that a Committee of thirteen Lords be appointed to join with the Committee appointed by the Commons to consider privacy and injunctions, including:
(1) how the statutory and common law on privacy and the use of anonymity injunctions and super-injunctions has operated in practice;
(2) how best to strike the balance between privacy and freedom of expression, in particular how best to determine whether there is a public interest in material concerning people’s private and family life;
(3) issues relating to the enforcement of anonymity injunctions and super-injunctions, including the internet, cross-border jurisdiction within the United Kingdom, parliamentary privilege and the rule of law; and
(4) issues relating to media regulation in this context, including the role of the Press Complaints Commission and the Office of Communications (OFCOM);
That the Committee should report by 29 February 2012;
That, as proposed by the Committee of Selection, the following members be appointed to the Committee:
L Black of Brentwood, B Bonham-Carter of Yarnbury, Bp of Chester, B Corston, L Dobbs, L Gold, L Grabiner, L Harries of Pentregarth, L Hollick, L Janvrin. L Mawhinney, L Myners, L Thomas of Gresford;
That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;
That the Committee have power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have leave to report from time to time;
That the Committee have power to adjourn from place to place within the United Kingdom;
That the reports of the Committee from time to time shall be printed, regardless of any adjournment of the House; and
That the evidence taken by the Committee shall, if the Committee so wishes, be published.
Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2011
(12 years, 11 months ago)
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Lord Strathclyde
That the draft orders and regulations be referred to a Grand Committee.
Fixed-term Parliaments Bill
(12 years, 11 months ago)
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16:56 - Division on Motion A1 - Ayes: 251 / Noes: 219 - Motion A1 agreed.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I beg to move that this House do not insist on its Amendments 1, 2 and 9. I am sorry—I beg to move that the Commons reasons be now considered.
Motion A
Lord Wallace of Tankerness
That this House do not insist on its Amendments 1, 2 and 9 to which the Commons have disagreed for their Reason 9A.
Lord Wallace of Tankerness
My Lords, what it is when one does not have the crib sheet Depending on which way we vote, if the opinion of the House is tested, we may—or may not—be approaching the home straight of this Bill. However, it is worth putting on record that it is exactly one year ago this week, on 22 July, that the Bill was introduced in the other place. By any reckoning, for a Bill of seven clauses and one schedule this is quite some time. We are now down to the fact that there is one remaining and outstanding issue. Your Lordships’ Amendments 1, 2 and 9 provide that the provisions of the Bill are subject to a sunset clause after the next general election, and each subsequent Parliament would have a choice whether to be a fixed-term Parliament or not. These amendments were passed by your Lordships’ House by a majority of six. The other place has considered these and has sent back a strong message in relation to this group of amendments, which they voted to disagree by 312 votes to 243. The reason on the Commons Disagreement and Reasons paper indicates that Commons disagreed because they,
“do not consider it appropriate that the continuing operation of the provisions of the Bill should be dependent upon periodic resolutions of each House of Parliament”.
I am, perhaps not surprisingly, in accord with this view.
It is worth remembering that the Government have been prepared to consider amendments which improve the Bill, and indeed we have taken on board a number of your Lordships’ suggested amendments. We were persuaded that the provision to allow the Prime Minister to move the date of the election earlier by order was unnecessary, and that if there was to be an order to delay by up to two months, it should be accompanied by a statement of reasons. We have tabled amendments to put back elections to the Scottish Parliament and Welsh Assembly from May 2015 to May 2016. This issue was of concern not only in the other place but also when the Bill came here for Second Reading. In particular, and thanks in many respects to the work done by and discussions between the former distinguished Speakers the noble Baroness, Lady Boothroyd, and the noble Lord, Lord Martin of Springburn, and the noble Lord, Lord Howarth, who took the initiative with an amendment, and others, we redrew the architecture of the circumstances in which a vote of no confidence or of dissolution could trigger or lead in turn to an election. This indicates that the Government have been willing to listen, and on these points the other place has recognised that this House has done its task as a revising Chamber and has agreed to these amendments.
However, we were not prepared to support amendments that we believe undermine the fundamental purpose of the Bill—a purpose which was welcomed by the Political and Constitutional Reform Committee in another place and has obviously been supported there. That purpose is that the fixed-term Parliament is not for this Parliament only but, subject of course to the fact that any legislation can be repealed by a future Parliament, it should nevertheless apply to future Parliaments. Further, the purpose is to make fixed terms for the United Kingdom Parliament the norm, just as they are for local government, the devolved legislatures set up by this Parliament, and the European Parliament. This will deny the Executive the ability to choose a date for a general election to suit its own political ends. It will create certainty as to how long a Parliament should last. I ask your Lordships to recall that at Second Reading the noble Lord, Lord Hennessy, noted that we should not forget that the Prime Minister is surrendering a significant power in this Bill.
I also remind your Lordships about what my noble friend Lady Stowell said in Committee. She noted that this Bill will,
“ensure that the Government and the Opposition had to face the electorate on a predetermined date, whatever the political conditions are at that time. That is the most compelling thing about fixed-term Parliaments”.—[Official Report, 15/3/11; col. 223.]
In addition to this, many of your Lordships noted that the certainty of a fixed-term Parliament would create better facility to plan across Government, within Parliament, and beyond. By contrast, if these amendments are accepted, the electorate turning out in May 2015 will not know what they were voting for. Will they be giving the next Parliament a fixed and predictable term within which to govern or will they be handing to the leader of the next Government a trump card; namely, the ability to call an election whenever he or she thinks it is most opportune?
During the debates on this on Report, I indicated that the assumption behind these amendments must be that in the event a subsequent Parliament is not a fixed-term Parliament, the current rules about calling elections should apply to that Parliament. I again highlight what a somewhat anomalous and strange position this will result in. In particular, we presume that the drafters of the sunset—they are sometimes referred to as sunset or sunrise—provisions would mean that the royal prerogative power to dissolve Parliament would be summoned back into existence for that subsequent Parliament. I assume that that must be the intention, for how else would Parliament be dissolved other than by the prerogative unless the drafters intend Parliament only to end by reaching the five-year limit set in the revised septennial Act?
I wish to make two points about this. First, is it right that the existence of a royal prerogative be dependent on resolutions of each House not being carried? It seems very undesirable to the Government that the prerogative power may sometimes not exist and sometimes be revived in this way. Secondly, if this is the intention of the drafters, it is not at all clear that it has been achieved in the drafting that they have provided. In particular, the presumption in Section 16 of the Interpretation Act is that where an enactment of a temporary duration, which the provisions abrogating the dissolution prerogative appear to be, expires, it does not ordinarily revive anything not in force at the time of the expiry. Admittedly, that may seem to be a technical point but I urge noble Lords to consider that what is being proposed here is far from straightforward and hidden complexities abound. We should be very careful before giving our approval to what, perhaps at the very least, can be described as a constitutional novelty.
As I have indicated, it is important to note that this Parliament did not include sunset clauses when legislating for the fixed terms for the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly. Indeed, in this Bill we are extending the fixed term of this parliamentary term for the Scottish Parliament and the Welsh Assembly but doing so by primary legislation. I have heard no convincing arguments to explain why we should sunset the fixed terms of the United Kingdom Parliament.
Is a sunset clause necessary to ensure that the issue of fixed terms, and the merits of this piece of legislation, are properly reviewed? Arguably, it is not. This Bill has received thorough scrutiny by four Select Committees—your Lordships’ Constitution Committee, the PCR in the other place, the JCHR and the Delegated Powers Committee. It has had all of its stages on the Floors of the respective Houses and the Government have reflected during the progress of the Bill and, as I have indicated, have made amendments where they feel that these improve the overall package.
If a future Parliament decides that it wishes to move away from fixed terms, or if it wishes to amend what we have provided for, we cannot bind its hands. Perhaps it has not been said in this Chamber but it has been said in some of the commentary that somehow we are trying to bind the hands of future Parliaments. Perhaps I may make it clear that that is not the case, nor is it the intention. It is clear that we believe that, if there is to be a change, it should be done through primary legislation, and can be done by means of primary legislation.
A change to the fundamental structure of Parliament is not a small matter and we believe that it should be subject to the full scrutiny of Parliament. It should not be a default option if a resolution fails to be tabled or passed to sunrise provisions for fixed terms. Many noble Lords have expressed concern about what these amendments would mean for the relationship with the other place. Arguments have been made that by providing that the Bill could be revived only with a resolution of both Houses, we could be undermining the primacy of the other place. This House would be given a power to veto the will of the other place on this matter. I would ask your Lordships to recall comments made by the noble Lord, Lord Armstrong of Ilminster, who has contributed notably in our debates on this Bill, when he spoke in the debate on 22 June on the reform of your Lordships’ House. I think that what he said would be echoed by noble Lords across the Chamber.
“We are a revising Chamber and a debating Chamber, and valuable in both functions, but we cannot prevail against the House of Commons if it wishes to insist. The House of Commons is sovereign in the matter of law-making”.—[Official Report, 22/6/11; col. 1257.]
In the case of this Bill, the other place has clearly indicated that it wants to establish fixed terms as a rule that applies equally to each Parliament. Both your Lordships’ House and the other place finally decided that it would not be appropriate to include a sunset provision in the European Union Bill. In the final debate on that Bill, my noble friend Lord Lamont of Lerwick wisely noted that a sunset provision was not appropriate because it would provide for primary legislation to be reversed by a simple resolution. That is the same effect as the sunset amendment would have on this Bill, turning important amendments to the statute book on and off, perhaps somewhat akin to a light switch. It is also worth noting the report of the European Scrutiny Committee in the other place on the European Union Bill. Again, I quote:
“All Parliaments legislate for the future. Laws passed by one Parliament do not contain a sunset clause at the Dissolution. The real point is whether a government can, in law, make it difficult for a future Parliament to amend or repeal the legislation it has passed; in our view it cannot. Our conclusion therefore is straightforward—that an Act of Parliament applies until it is repealed”.
That should be said also of the Fixed-term Parliaments Bill. Should a future Parliament wish to amend or repeal the legislation, it can do so, but it should do so through the normal legislative process, not simply by passing a resolution.
I repeat that, in a number of respects, this House performed valuably the revising and reforming function to legislation which is at the core of your Lordships’ business and that the Government responded to these proposals, but the amendments run contrary to the spirit of the Bill and raise more questions than they answer. Your Lordships have raised a matter of concern and have asked the other place to reconsider its position. The other place has done so. Consistent with the role of your Lordships under our parliamentary system, a role which many noble Lords have been at pains to suggest does not amount to the making of law but only to its scrutiny, I urge your Lordships to accept the verdict of the other place and not to insist on the amendments. I beg to move.
Amendment to the Motion
Lord Butler of Brockwell
As an amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendments 1, 2 and 9”.
Lord Butler of Brockwell
My Lords, in the absence of my noble friend Lord Pannick, but with his support, it falls to me to urge your Lordships to cause the Government to think again about these amendments which this House passed to the Bill. My noble friend asks me to express his regret that other unavoidable business prevented him being here today.
The amendment which your Lordships passed would give the next Parliament and subsequent Parliaments the opportunity to decide whether the provisions of this Bill, subjecting them to a fixed term, should apply to them. It does not nullify the Bill. It merely gives future Parliaments the right to disapply it without having to go to the lengths of repealing it.
In essence, the case for your Lordships’ amendment is that a permanent constitutional change to fixed-term Parliaments should not be made without more preparation and consultation than this Bill has had. In the substantial debate in the other place last week, thoughtful individuals in both the main political parties both spoke and voted for your Lordships’ amendment. A Conservative Member described the Bill as a “reckless” constitutional act,
“on the back of an envelope”.—[Official Report, Commons, 13/7/11; col. 375.]
A Labour Member, perhaps better versed in the vernacular, described it as tinkering with the constitution,
“on the back of a fag packet”.—[Official Report, Commons, 13/7/11; col. 373.]
As for those who argue, as the Minister did today, that it would be open to a future Government who disagreed with the provisions to repeal the Act, the Minister in the other place gave the game away. He asked, if the Bill became law and fixed-term Parliaments became the norm,
“would any Minister realistically be able to come to the Dispatch Box and suggest with a straight face that we should change the position and give the power back to the Prime Minister to hold an election at a time of his choosing to suit his political party? Would anyone take that proposition seriously? I suggest that they would not”.—[Official Report, Commons, 13/7/11; col. 361.]
So it is clear that the Government intend that this should be a permanent change to the constitution.
The main case advanced by the Government for the legislation—what the Minister called today the “fundamental justification”—is based on a fallacy. I do not doubt the sincerity of those who argue for it, but it is a fallacy none the less. It is that the power of a Prime Minister to seek a dissolution at a time of his or her choosing gives the governing party an unfair political advantage. The Minister went so far today as to describe it as a “trump card”. In the real world, the Prime Minister’s room for manoeuvre is heavily constrained. In normal times, and with a workable parliamentary majority, it is simply not practical politics for a Prime Minister to call an election in the first, second, third or even fourth year of a parliament. It is true that the fifth year becomes open season for elections and Prime Ministers often seek a dissolution before the last moment in order not to be at the mercy of events, but the practical advantage this gives is very limited—it is far short of a trump card. Even the proponents of the Bill accept that there should be some flexibility in the fifth year to allow for unforeseen events such as the BSE epidemic.
It follows that it will be only in exceptional circumstances that a Prime Minister will seek a dissolution in the first, second, third or fourth year of a parliament. As the noble Lord, Lord Grocott, pointed out in our earlier debates, history shows that these occasions are never dictated merely by political advantage. In 1966 and 1974, general elections were called in the second and first years of the parliaments respectively in the circumstances of a growing economic crisis when the Government did not have a sufficient majority to deal with it. In 1974, a general election was called in the midst of a miners’ strike when the incumbent Government had exhausted their means of resolving the strike. Can it be denied in these circumstances that it was in the national interest rather than in the Governments’ political interest that the Governments should seek a reinforced mandate to deal with these national crises?
In such circumstances, what would have been the effect of this Bill? The Government would have had to rely on the Opposition’s support to obtain a dissolution. Proponents of the Bill may say that, in practice, general elections would always be available in such circumstances because Oppositions would never deny themselves the opportunity to throw the Government out. In that case, the legislation is pointless. However, let us suppose that they have a point, that there would be circumstances in which a Government would want a reinforced mandate to deal with a national crisis and the Opposition, for whatever reason—shortage of party funds or whatever—denied them the 75 per cent majority necessary for a dissolution. Would that be in the national interest? Can it be right that in such circumstances the Government should be dependent upon their political opponents in seeking a fresh mandate from the people? The purpose of this constitutional change is misconceived.
A further argument used by the Minister in another place, over several columns of Hansard—although I noticed that the Minister made only a glancing reference to it today—was that because a decision to reapply the provisions of the Bill would require a resolution of both Houses, your Lordships could deny an elected House of Commons the right to apply the Bill and thus undermine the supremacy of the elected House. To my mind, it is appropriate that, if a law is to be reapplied, it is constitutionally right that it should be reapplied by both Houses of Parliament. I find it inconceivable that in a future Parliament, if the newly elected House of Commons voted for a fixed-term Parliament, your Lordships would overturn that decision. The fact that the Minister relied so much in this argument on another place illustrates, to my mind, the weakness of the Government’s arguments against the amendment.
Lord Howarth of Newport
My Lords, the noble Lord, Lord Butler of Brockwell, has set out fully and powerfully the case for your Lordships’ House to insist on these amendments. Nevertheless, I would like to say a few words in support of the excellent case that he has made. I do think that it would be right to ask the other place to think again. I do not think that it had the opportunity to consider this legislation properly when, in the new Parliament, it was sent sailing through—if I may put it this way—a very inexperienced new House of Commons.
The Bill was only hastily examined by the Political and Constitutional Reform Committee; I do not criticise the committee for that because it had all too little time between the publication of the Bill and the date of Second Reading that the Government had scheduled very early on indeed. It was then rather perfunctorily examined in the Chamber of the House of Commons before it came to this House. The other place should have looked at it much more carefully. After all, among our powerful objections to the legislation as the Government presented it was that the Government were playing fast and loose with the role of the Speaker and with parliamentary privilege, matters that surely one would have expected the House of Commons to ponder and take very seriously, but it did not and the legislation went through quickly.
This is not the moment to rehearse again all the flaws in this Bill, but, as we bottomed out the issues that the Bill gives rise to in our proceedings here, it became more and more evident that it was bound to be a bad Bill because it was seeking to give legislative force to a bad idea. It was addressing a non-problem. There is no evidence that there has been abuse by successive Prime Ministers of the right to choose the date of the next election or that the country has suffered because successive Prime Ministers have exercised that right. I do not think that the “will he, won’t he” issue that Mr Harper made so much of in the other place is a serious problem, and I do not think that the country considers that it is.
This legislation was dressed up as a project to reduce the power of the Prime Minister and increase the accountability of government to the people, but it did not do that. In fact, it did exactly the reverse. It secured for this Prime Minister the assurance of a five-year Parliament and bound the coalition, however unhappy the marriage, into a five-year Parliament. Far from increasing accountability, it reduced the frequency with which electors can be expected to have the opportunity either to throw the Government out or to renew their term at a general election.
The typical interval between general elections in most of the 20th century was, we are told, some four years. By extending the term of Parliament rigidly to five years, without allowing the sensible pragmatic flexibility that our unwritten constitution has hitherto permitted, the legislation would make Governments and Prime Ministers less accountable to Parliament, not more.
The measure would still have been bad in principle, but it might have been somewhat less objectionable had the Government accepted the amendment tabled by my noble and learned friend Lord Falconer of Thoroton to reduce the fixed term from five years to four years. However, the Government saw no merit in that, no doubt because they were very worried that the consequences of their fiscal nihilism and the misery and waste that their policies are causing will not have been forgiven, or anywhere near forgiven, in a mere four-year term.
The amendment that your Lordships passed and which built a sunset clause into the Bill was the best damage limitation that this House was able to offer, because we rightly have a convention that we do not reject government legislation at Second Reading. The noble and learned Lord, Lord Wallace of Tankerness, and his ministerial colleague in the other place, Mr Harper, have raised various objections to the amendment that we passed, but they seem to me to be quibbling amendments. None of them creates such difficulty that, had the Government been willing to accept the advice of this House, they would not have been able to refine the legislation to deal with those problems.
We could certainly have thought about whether your Lordships' House should approve an order under this legislation in a normal way. An argument could have been mounted that it would not be appropriate for your Lordships' House, unelected as it is, to decide itself whether the fixed-term provisions of this legislation should have been renewed, although I am attracted to the argument made by the noble Lord, Lord Butler of Brockwell, on that point. Issues such as the royal prerogative or the exact stage in the new Parliament in which the vote on the order might take place could have been sorted out consequentially had the Government been willing to accept the advice of your Lordships.
Nor am I impressed by the argument about consistency. Just because we have not proposed that we should undo the fixed terms for the Scottish Parliament or the Welsh Assembly, which are being extended under this legislation, it does not follow that we should not seek to amend the provisions relating to the Parliament at Westminster. A constitution benefits from sensible anomalies; a constitution that is pragmatically designed and evolves to take account of the political realities in different places at different times stands a much better chance of working successfully.
I appreciated the fact that the Government accepted some of the amendments that we passed in this House. They should, after all, surely accept this provision. It is simple and effective, and would give the House of Commons the opportunity, after the experience of this five-year Parliament, to confirm or not to confirm that a fixed-term Parliament would be a permanent arrangement. It would, in effect, be an exercise in post-legislative scrutiny. It seems to me that the Government would do well, in the light of experience, to have the modesty to allow reconsideration of a very contentious and experimental piece of legislation such as this, in the convenient way that the amendment provides for.
As the Minister has emphatically reminded us this afternoon, it would be open to the new Parliament—or, indeed, to this Parliament should the coalition fall apart within five years, which is not at all inconceivable—to repeal the legislation. It is, however, much more of a performance to repeal, whether in this Parliament or at the beginning of the next Parliament, because it involves all the long drawn-out processes of primary legislation to achieve in essence the same as your Lordships’ amendment would achieve. In all events, one way or another I hope that Parliament will get rid of this footling and misguided piece of constitutional tinkering.
Baroness Verma
My Lords, perhaps the noble Lord, Lord Rennard, could carry on and the noble Lord, Lord Cormack, could speak after him.
Lord Rennard
My Lords, the noble Lord, Lord Butler, will no doubt recall very well from the period in early 1992 that there was much speculation about the likely timing of the general election then due. Options of April, May and June were all under consideration by John Major, and his choice was based simply on when was most likely to favour his party in what was expected to be a very close contest. Indeed, it was a very close contest that was well described in the book I much enjoyed by the noble Lord, Lord Hill of Oareford, entitled Too Close To Call. It was clear from that account that the advantage of being able to choose polling day possibly made a decisive difference.
At the time I was involved in helping to prepare the campaign led by my noble friend Lord Ashdown. I was quite shocked to receive a call one day in the run-up to that election from someone who ran a printing firm.
Lord Lamont of Lerwick
The noble Lord says that John Major was much advantaged by being able to choose the date of the election, but he actually chose the last possible date. Is that an argument for a fixed-term Parliament?
Lord Rennard
My Lords, the last possible date was June of that year. A date that was widely considered was the May of that year, which coincided with the local elections. In fact, the date chosen was 9 April, which was rather earlier than the last possible date, and was chosen—as the book I have just described accounts—for his advantage. I asked the printer, who told me that the date would be 9 April, how he could know. He told me he was breaking commercial confidence by telling me, but he knew because he was in the process of printing the election address of a then Cabinet Minister who was able to tell him that the date would be 9 April, and that this date was on the front of his leaflet. It seemed to me that that Cabinet Minister had an advantage over other candidates in that election, and that the ability to print election literature at a time of one’s choosing is just one of the unfair advantages afforded to the governing party over all other parties in our present arrangements.
As I have said before in these debates, it is rather like allowing Sir Alex Ferguson to pick the dates for all the Manchester United games. In 1992, the advantage of choosing polling day was possibly crucial to the narrow and generally unexpected Conservative victory, although in that election the Sun newspaper famously said:
“It’s The Sun Wot Won It”.
I know that many noble Lords opposite were candidates for the Labour Party in that election, in which they were led by the noble Lord, Lord Kinnock. I ask them to remember the words of their manifesto in 1992, which said:
“This general election was called only after months of on-again, off-again dithering, which damaged our economy and weakened our democracy. No government with a majority should be allowed to put the interests of party above country as the Conservatives have done”.
It concluded:
“Although an early election will sometimes be necessary, we will introduce as a general rule a fixed parliamentary term”.
The principle of this Bill is to do exactly that. It upholds a principle that was also in last year's Labour manifesto, which guaranteed to ensure that legislation would be introduced to make sure that we have the principle of fixed-term Parliaments. That principle was also in last year's Liberal Democrat manifesto and was one that David Cameron agreed in opposition to consider seriously before committing his party to it in the coalition agreement.
Lord Forsyth of Drumlean
I hesitate to interrupt my noble friend, but I feel that he is making a bit of a Second Reading speech. I hope he will not mind if I ask him a question that has been puzzling me on the idea of the abuse of prime ministerial patronage. If we know the date of the election, is that patronage not going to be used to ensure that all kinds of goodies are announced before that date, and are Governments not going to plan their programmes accordingly? Is the problem not going to be much worse, not better?
Lord Rennard
My Lords, I think the problem would be rather less serious when we all knew when the election would be. The amendments strike very much at the principle of the Bill, which is why I am now addressing them. If anyone doubts how a Prime Minister can manipulate the present system for party advantage, they should think back to the events of September 2007, when a new Prime Minister was clearly planning an election for the autumn. Indeed, we now know that more than £1 million was spent on leaflets that sat with the Royal Mail waiting to be dispatched, when the Prime Minister suddenly realised that he might lose the election and called it off. Surely that is a great example of a Prime Minister abusing the system for party advantage.
Again, comparing this with football, would we consider it fair if Sir Alex Ferguson was allowed to call off a football match if he was worried about the form of his team and to rearrange the match for another day when it might perform better? Of course we would not. I see the noble Lord, Lord Triesman, who obviously regards football as a very serious matter, sitting opposite. I recall my own sporting hero Bill Shankly saying that football is not,
“a matter of life or death … it's more important than that”.
However, I would say that democracy is even more important. At the moment, in this period of great turbulence and concern about the rules of fair play, fair competition and fair enforcement of the law, we should take this small step towards making the rules of our democracy fairer. If a future Parliament wishes to take issue with the fixed-term principle or with any of the detail of how it operates, it should go through the same parliamentary processes that are currently necessary with this Bill.
On the principle of the Bill, let us consider finally that neither the Scottish Parliament nor the Welsh Assembly, the Northern Ireland Assembly or the European Parliament, the Greater London Assembly or a single one of the hundreds of local councils across the United Kingdom appear to have a problem with the fixed-term principle for elections. Neither should we in this unelected House.
Baroness Jay of Paddington
My Lords, I am delighted that the noble Lord, Lord Rennard, has returned to the principles of this Bill because it enables me briefly to return to the report of your Lordships’ Committee on the Constitution, which I have the honour to chair and which I note the Minister did not refer to. Well, he referred to it only in passing; he did not refer to the fact that the Committee was on the whole opposed to the idea of the principle of fixed-term Parliaments and was very much in support of the idea that if they were to be undertaken they should have four-year terms rather than five-year terms.
In supporting the amendment tabled by the noble Lord, Lord Butler of Brockwell, it is more appropriate to refer again to the Constitution Committee’s strictures on the processes that produced this Bill. Your Lordships will recall that one of the things that the Committee felt most strongly about was that the Bill had been brought forward with as many political concerns and ambitions in mind as constitutional principles. In fact, we were very concerned that this was seen as a short-term measure designed to extend and protect the five-year term of the present coalition Government, and not something that was designed properly to change the constitution.
We also referred to the fact—as the Minister said in his opening remarks—that there was some time in Parliament for the Bill to be considered, although I noted that my noble friend Lord Howarth referred to the lack of pre-legislative scrutiny that we felt was desirable in this case. None of the pre-legislative scrutiny or any of the processes that we as a committee felt should have been undertaken to ensure that the Bill had widespread support in making a major change to the constitution had been undertaken. There was no Green Paper and no White Paper, and although Ministers appearing before the committee said at the time that this was because it was early in the Parliament—as the Minister said—we felt that there was no time limit on this Bill in the way that there was on the referendum legislation that was brought forward with equal speed early in the Parliament, so there was nothing to prevent this Bill being considered in what we would have thought was the proper way for a constitutional Bill of this significance.
I add in conclusion that your Lordships’ committee has now undertaken, partly because of our concern about this Bill, a full-scale inquiry into the process of constitutional change that we have just completed and which I very much look forward to having the opportunity to debate with your Lordships following the Recess.
Lord Tyler
I agree very much with the noble Baroness and respect the views of her committee. In thinking about process, does she think that the novel constitutional process that the amendments introduce is a short-cut, without proper process, to look at major primary legislation by resolution of the two Houses, which could be in conflict, or does she think that that is a proper constitutional process?
Baroness Jay of Paddington
My Lords, the committee’s position, and certainly my personal position, is that given the inadequate processes that have produced this legislation, some form of post-legislative scrutiny was needed. I do not remember whether the noble Lord was present when the noble Lord, Lord Pannick, led the previous debate on a similar subject, but the discussion included the issue of whether there was some way not perhaps of preventing the present Government fulfilling their five-year term, which the Constitution Committee certainly thought was the primary aim of this Bill, but of giving Parliament an opportunity to think again about whether this was an appropriate way for the constitution to be changed.
Lord Cormack
My Lords, I wish to make a brief speech in support of the noble Lord, Lord Butler of Brockwell, and to focus the House’s attention on one or two points. First, whatever our views on fixed-term Parliaments, we have debated that. The House, in its wisdom, has made its decisions and has not stood in the way of another place. We are to have a fixed-term Parliament and the next general election will take place in May 2015. That is not the issue this afternoon. However, we have also decided that it is entirely proper to seek to improve and amend what many of us consider to be an ill thought-out, unnecessary and bad Bill. That is what the amendment of the noble Lord, Lord Butler of Brockwell, seeks to do. I hope very much that we will support him if he decides to press his amendment to a Division, and that we will do so because we recognise the circumstances in which this Bill was produced.
This Bill is the creature of coalition. It came into being because of the coalition agreement. None of us has sought to deny the right of the Government to decide when the next general election will be. As I said, it will occur in May 2015. Attempts to bring forward that date were defeated—in my view, understandably, and probably rightly—when we sought to amend the Bill. However, because this Bill is the creature of coalition, there should be an opportunity for the next Parliament to consider whether it truly wishes to continue with this experiment. The next Parliament may well be one with a Conservative majority—I sincerely hope that it will be—but whether it has a Conservative majority or a Labour majority it is unlikely that it will be another coalition. This amendment merely gives the opportunity for the new Parliament to make its decision. Indeed, this has already been recognised on the Floor of this House by my noble friend Lord Howell of Guildford when he was dealing with the sunset clause on the European Union Bill. He pointed out that the two things were different. He said:
“As was explained in the debate”—
that is, the debate we had just had—
“one can see perfectly well why”,
our amendment had been passed. He continued:
“The coalition exists, and I hope that it continues to exist in strong fine form during this fixed-term Parliament, but after that we have a new landscape. Who knows who will govern? Who knows what the pattern will be? It made perfectly good sense for that legislation to have a limited life before coming to be re-examined”.—[Official Report, 25/5/11; col. 1861.]
My noble friend Lord Howell made a similar point when he wound up the debate on the sunset clause at Report on the European Union Bill.
We have before us the opportunity to say to the other place, “Please reflect on what you have done. Please recognise that we have not wrecked the Bill that you sent to us and that we have made no attempt to change the date of the next general election, but also recognise that what we have done is to give an opportunity for the Parliament elected in May 2015 to re-examine this matter and to decide whether, in the light of experience, it wishes to continue with fixed-term Parliaments”. We are giving that Parliament the opportunity to make that decision without burdening it with the necessity of introducing full-scale constitutional legislation at the beginning of a new Parliament if it generally desires to move away from what we have decreed.
As we know all too well, constitutional legislation takes a long time to get through Parliament. We may learn that lesson yet again in the not too distant future, so we are being exceptionally kind to the next Parliament in giving it that opportunity to ratify or nullify without long, protracted debate. Because of that, I very much hope that the noble Lord, Lord Butler of Brockwell, will be listened to and heeded, and that if he decides to put this to the vote the majority will be more than six this time.
Lord Armstrong of Ilminster
As one who put his name to the amendment on Report, I rise briefly to add to the comments of my noble friend Lord Butler of Brockwell and others. I do not need to go through the defects of and objections to the Bill again. For all the reasons given in earlier stages, and again by my noble friend Lord Butler now, I share his view that the Bill is neither necessary, nor desirable, nor satisfactory.
There is something very rummy about a Bill in which one clause decrees that a Parliament should last for a full term of five years, and the next clause tries to provide for the circumstances in which, despite the first clause, it may be dissolved prematurely. It is all Lombard Street to a China orange that the time will come when a premature Dissolution would be to the manifest benefit of the country, in circumstances which have not been foreseen or provided for by the legislation. The Prime Minister will have to resort to some artificial device to enable him to request a Dissolution from the Queen—for instance, by calling for a vote of confidence in Her Majesty’s Government, and advising his supporters to abstain or even vote against it.
As the noble Baroness, Lady Jay, has pointed out, the Bill has been introduced as part of the glue to allow the coalition to stick together and stay in office as long as possible while it takes through the unpalatable measures required to restore a measure of stability in the finances of the Government, and a climate more conducive to growth in the economy.
It is said that the legislation is intended to deprive Prime Ministers of the opportunity to request a premature Dissolution for the sake of supposed party-political advantage. If Prime Ministers are so deprived then, as the noble Lord, Lord Forsyth, has pointed out, they will be forced to trim the timing and the quality of their policies to the electoral timetable. They will defer good news, such as tax benefits, until near enough the election to affect the result. That may not be in the best interests of the country. Either way, the Prime Minister is going to retain some form of discretion about how he or she responds in these circumstances. Therefore, in reducing—though not, I suspect, eliminating—one risk, there is reason to fear the risk of unforeseen and adverse consequences. One devil—if it really is a devil—may be stunned, if not slain outright, but seven other devils may be released.
After the next general election, a new Government and a new Parliament should be obliged to review the arrangements for and against legislation of this kind, decide whether to be bound by the provisions of this legislation in future, and consider the case for reverting to more flexible arrangements of the kind that have prevailed until now. Passing this amendment would ensure that that would happen, so I hope that your Lordships will vote accordingly, if they are asked to divide, and invite the other place to think again.
Lord Marks of Henley-on-Thames
My Lords, the other place has rightly rejected these amendments because they rest on a fundamental misconception that, merely by enacting legislation that is not time-limited, Parliament is seeking to bind its successors by passing permanent legislation. That proposition needs only to be stated to demonstrate its falsity. The Bill contains no entrenching provisions. It does not seek to restrict in any way the power of any subsequent Parliament to amend or repeal it. If the next or any future Parliament wishes to reconsider the provisions of this Bill when enacted it is free to do so, relying on the normal processes by which we consider and pass legislation. In 1885, Dicey defined the doctrine of parliamentary sovereignty on this point as the right,
“to make and unmake any law whatsoever”.
Nothing in this Bill as unamended infringes that principle.
These amendments, with their ungainly hybrid of a sunset provision and what might appropriately be called a Lazarus clause—rather than a sunrise clause—would kill off the effective provisions in the Act after the next general election automatically and without any parliamentary consideration whatever, contrary to the assertion of my noble friend Lord Cormack. They would then allow one or any number of future Parliaments, by simple resolution of both Houses, to reinstate the legislation for a single Parliament at any time and at any stage of the Parliament in question. That would not then be a fixed-term Parliaments Bill; it would be no more than an unedifying muddle with no clarity for the electorate—or for parliamentary candidates, for that matter—when they go to the polls.
The amendments offend against constitutional principle on three main grounds. It is notable that your Lordships’ Constitution Committee, led by the noble Baroness, Lady Jay, did not at any stage suggest a sunset and sunrise clause in the form proposed. The first offence against principle is that the amendment threatened to remove from Parliament the right to insist on full and detailed consideration of any proposal to repeal or re-enact the legislation by introducing a mechanism for re-enactment by resolution of both Houses. That re-enactment, as my noble and learned friend Lord Wallace of Tankerness pointed out in opening, would apply to the Schedule, which contains historic and important repeals, and would apparently be reversible by a resolution of both Houses.
Secondly, the amendments would increase the power of your Lordships' House beyond that generally permitted by the Parliament Acts because they would give this House the power to thwart the will of the other place, not merely to delay its implementation, if a resolution were passed by the House of Commons but denied passage by the House of Lords.
Thirdly, the amendments would offend against the Salisbury/Addison convention, if not in the letter certainly in the spirit. Both the Labour Party and the Liberal Democrats had commitments to fixed-term Parliaments in their manifestos, which were then agreed by the Conservatives in the coalition agreement. The settled view of the House of Commons, expressed on two occasions, is that this Bill should pass. Yet these amendments seek to time-limit it in a way that would remove its impact altogether. I say that because as the noble and learned Lord, Lord Falconer of Thoroton, and a number of other Lords pointed out at earlier stages of this Bill's passage, no legislation whatever is required for this Parliament to last until May 2015.
As always, the noble Lord, Lord Butler of Brockwell, put his argument seductively and persuasively, but the reality is that far from being asked to act in this House as guardian of the constitution by these amendments, we are in fact asked to challenge the primacy of the elected House and to usurp the revising and scrutinising role of this House by effectively emasculating this Bill.
Lord Forsyth of Drumlean
Perhaps the noble Lord could help me with a point. I may be wrong, but I believe that we still retain the power in this House to prevent the other place from extending the life of a Parliament. Is there not a parallel there?
Lord Marks of Henley-on-Thames
My Lords, I do not accept that there is a parallel. There is indeed the exception in the Parliament Act for a Bill to extend the life of Parliament, and that was the case with this Bill, with the power to extend by two months. That is not the case in respect of these amendments.
Lord Goldsmith
My Lords, I have listened to the noble Lord and the noble Lord, Lord Rennard, and I must say that it seems to me that they are making an enormously unnecessary mountain out of this. What has happened is perfectly straightforward. Many parts of this House do not like this Bill, and for good reason. Your Lordships’ Constitution Committee, on which I have the privilege to sit, did not like it either. But in the way that this House often finds compromise solutions, instead of saying, “We won’t have the Bill at all”, the House said, “You can have your Bill. You want a fixed term this time around, but don’t force this down the throats of every successive Parliament. We will make it easy for you. We will not even require you to go through the full process, though you can if you want to”—I think the noble Lord, Lord Cormack, was at one stage proposing that, and I will come back to it. The House said, “We will leave it on the basis that if each House resolves that in its turn it wants a fixed-term Parliament, it can have one”.
That seems to me to be an eminently suitable compromise. What the noble Lords say, inter alia, is that this somehow gives this House the ability to prevent the Commons from having its way. But no; if the Commons wants to pass a Bill—a full Act—against the wishes of this House, it can still do that in the next Parliament. There is no constitutional aberration about this at all. It is a sensible compromise, it is a good British compromise, and it is the sort of compromise that this House is good at finding. I too hope that the noble Lord, Lord Butler, will divide the House. If he does, I will gladly join him in the Lobbies.
Lord Marks of Henley-on-Thames
Does the noble and learned Lord accept that the will of the House of Commons is that this Bill should pass in a way that does not last just for one Parliament, and that this Parliament does not need any legislation to sit until 2015?
Lord Goldsmith
I have two answers for the noble Lord. First, that is one of the reasons why this Bill has never been necessary. It would have been perfectly possible for the Prime Minster to have made it very clear—on his honour, on his commitment, or whatever— that he was not going to go to the country until later. That was undoubtedly one of the options which was available, as we know from the evidence that has been given. The reasons why it was not taken I do not find at all convincing. Nevertheless, that is the route by which the Government have gone. Secondly—I say this with respect to the noble Lord, who has not been here as long as some other noble Lords—this House has the obligation and the responsibility of saying to the other place, “We think you are wrong. Think again”, and from time to time of saying, “We think you are wrong and we are not going to support what you are trying to do”.
Lord Phillips of Sudbury
Does the noble and learned Lord know of any precedent or parallel for the provision which he supports?
Lord Goldsmith
This House has put forward sunset clauses which have been agreed a number of times; the precise mechanism does not matter. The point is that this House has said from time to time—for example, in relation to control orders—“All right, Government, you can have them for the time being, but you are not going to keep them without some further legislative process”. That seems to me to be a very good idea.
Lord Tyler
Can I ask the noble and learned Lord whether in his consideration within the committee—to which I made reference earlier—he thought it appropriate for a constitutional Bill of this sort, over which a great deal of concern has been expressed on his side of the House, to be subject to this fast-track, quick process, which is an entire novelty? It is not given to any other legislation whatever. Will he address in particular what would happen if one resolution were “Yes” and the other resolution in the other House were “No”? Would that not then raise questions about the adequacy of the process?
Lord Goldsmith
The noble Lord is tempting me to tell him what I think about the legislative process that has taken place so far in relation to the Bill. It is deplorable—not the consideration in this House, but the whole way in which this has come forward. This House is making the best it can of that job by taking poor, inadequately consulted-on legislation and putting forward a compromise that I believe will work. In answer to the noble Lord’s second question, the amendment is very clear. Both Houses need to give their approval. However, if they do not, it is still open to the other place to bring forward legislation and to use the Parliament Act if it wants to do so.
Baroness Stowell of Beeston
My Lords, I will come at this from a slightly different angle. Before I do, I will say that it is to your Lordships’ great credit that the Bill before us is much improved, especially the completely revised Clause 2. I regret that I disagree with the noble Lord, Lord Butler of Brockwell, for whom I have great respect, on this Motion, which drives a coach and horses through what the Bill has the potential to help us as a Parliament begin to achieve.
On many occasions during the passage of the Bill, several noble Lords have argued that our political system is not broken. I agree with that. My argument has always been that the problem we need to address is the public's lack of confidence and trust in the system. To fix the problem, we need to look for opportunities to change—not change for the sake of it, but change that delivers the kind of result that shows people we mean it when we talk about putting the public interest before our own.
I support the Bill not because I believe in fixed-term Parliaments; I support it because it is a means to a positive end. The Government and Opposition will have to face the electorate on a predetermined date, whatever the political conditions at the time. In other words, the Bill provides certainty to the electorate that the politicians have less room to manipulate the system for their advantage. It is not a silver bullet but a small step in the right direction—and it is change with a purpose. That makes it very different from changing the voting system, with which some noble Lords have compared it.
I did not support AV, and I believe that voters rejected it because it was only a means; it delivered no end. It was obvious that AV would not mean, as the leaders of its campaign tried and failed to argue, more hard-working MPs and fewer MPs likely to fiddle their expenses. If I were minded to make a party political point, I might say how ironic it is that the person who keeps telling the rest of us that we “just don’t get it” was in favour of AV and is, based on his Front-Benchers’ response to the Bill, at best confused as to whether he supports fixed-term Parliaments.
Even though the case is different, some noble Lords have argued that the public should be consulted on this matter as well: that if a referendum was held for AV, why not for fixed-term Parliaments? I would not have held a referendum on AV, either: but the reason a referendum on fixed-term Parliaments is not necessary is that our job is to find a solution to the problems that people have identified, and to take responsibility for the changes that we make.
I will offer my own analogy, which is not based on football. It is bit like Marks & Spencer asking loyal shoppers who have abandoned it because it has stopped supplying the kind of fashion that 40-something women want, to design next season's women's range. It is not the job of shoppers to fix the problem; it is up to Marks & Spencer to listen, understand and come up with the right solution to meet its customers’ concerns. If it starts supplying what people want, they will return.
Over the past few weeks, many commentators have made the point that the recent phone hacking scandal is the latest in a series of similar scandals that have already affected bankers and politicians. I agree with that. One common thread running through all three is the public's reaction to the evidence in front of them. It can be summarised as: “Now we know for sure that you’re all in it for yourselves”. Although expressed at varying speeds and to varying degrees, another common thread is the way the institutions responded to that dreadful public indictment. We have seen shame, apology and promises to put the House in order. Sadly, when it comes to the last of these, we are all found wanting. No one seems to want to change anything in a way that will show the public that we are in it for them. There is always a compelling argument for the status quo. Whether it is ring-fencing bonuses in banking, stronger regulation of the press or a simple guarantee to voters that they will definitely get five years instead of, “possibly five, but maybe not if we think we can get more years in power by giving you less”, there is always someone saying, “That is not the bit of the system that is broken”. That is not good enough and it is not the point.
At his press conference a couple of weeks ago, when he announced the public inquiries now under way, David Cameron concluded his remarks by saying that after all the inquiries had finished, we need to have a political system that people feel is on their side. If we are to achieve that, we need to restore public confidence in the system which currently we think works okay. That means changing things which might not be broken, but by doing them differently, which could create a different result: one that people can see clearly is in their interest and that therefore gives them greater confidence that we are truly on their side. Committing ourselves to fixed-term Parliaments without the get-out-of-jail-free card that this amendment offers is something that we can and should do.
The problem with this amendment is that it looks as though we do not really mean what we say. In short—and I hesitate to say this, because I know that it is not what your Lordships intend—this amendment is symptomatic of the problem that we are trying to solve. At the moment, we are demanding leadership in banking, in policing and in the media; we are asking them to make changes that might not be in their interest in order to show people that they operate in theirs and, in doing so, will, we hope, help to restore public trust. We cannot and should not demand of others that which we are not willing to do ourselves.
Baroness Jay of Paddington
Before the noble Baroness sits down, let me say that I follow her argument. She sees this Bill as a way of increasing public trust and public involvement in the political process. Does she accept that had fixed-term Parliament legislation been in place since the Second World War on the five-year basis, there would have been four fewer general elections?
Baroness Stowell of Beeston
As I said in Committee, when we talked about the length of Parliaments being either four or five years, I really do not think that that is the issue. People are not looking for more general elections. They are looking for a system that gives them the confidence that we want to work in their interest.
Lord Elystan-Morgan
My Lords, I believe that the issues that we are concerned with turn upon three very simple matters. First, the argument against the amendment is seen to be founded on the idea that in some way or another it brings about a revolutionary change in our constitutional situation. It does not. The point has already been made—and due to a late train I am sorry that I was not here when the noble and learned Lord dealt with this matter—that the flexibility is still there, because no Parliament can bind its successor. If this Bill were passed and within three months Parliament, in its wisdom, sought by a majority of one in each House to repeal it, that would be the end of it. No constitutional impediment to that exists at all. So the flexibility is there. Well, you may ask, if that is so, why have the amendment? The argument for it, it seems to me, is not tenuous and indeed it has some merit. It concentrates the mind. It enables a new Parliament in a new situation to look at the circumstances prevailing at that particular time.
My second point—and I hope that I am not making a Second Reading argument now, because I think that is very much the backcloth to this very amendment—is what I would call the William Lovett point. Do you remember the last point in Lovett’s charter—annual general elections? God forbid. But the reason for it was that Lovett and other brave people of his day were convinced that the more you defended a Parliament and a Government from the will of the people, the greater the disservice to humanity and to democracy. If you gave them a certain five-year term rather than a much shorter term, that as far as Lovett was concerned would be a betrayal of democracy. Therefore, one should approach the idea of a five-year full term with very great reservation on that point alone.
My last point is the question where the onus of proof lies. This is a major constitutional change from any point of view—nobody would dispute that. Where is the evidence in support of it? It comes either from an idealistic direction or from a cynical direction. If it comes from an idealistic direction—and I can see that that may be so—it is based upon the theory that there is evidence within, say, the last half century of Prime Ministers beating the gun and going to the country when it was wholly unnecessary to do so. It certainly did not happen in 1935. It did not happen in 1945. There were elections in 1951, 1966 and 1974 that have already been referred to. In each case, the country was crying out for the chance to decide the matter there and then. If there is any criticism to be made about the abuse of the privilege of a Prime Minister to decide the exact date, it is against those Prime Ministers, of more than one party, who have stayed too long rather than against those who have gone to the country too soon. Where then is the case for this amending legislation? Therefore, one doubts whether there might not indeed be some faint cynical reasons for it.
Lord Hamilton of Epsom
My Lords, I shall not delay the House long. I supported the amendment moved by the noble Lord, Lord Pannick, for a sunset clause when it first came in front of us. I totally accept the rationale to which my noble friend Lord Cormack referred: this was part of the coalition agreement. Whether, in the words of the noble Lord, Lord Butler, this was written on the back of an envelope or a fag packet, I do not quite know, but it was certainly cobbled together to try to cement the coalition together. I always took the view that it was quite legitimate for the coalition Government to decide, if they wanted to, that they wanted to go the full five years. Indeed, the noble and learned Lord, Lord Goldsmith, made the point that that undertaking could be made by the Prime Minister because it did not need legislation. One rather suspects the reason why the coalition Government have decided that this should go into future Parliaments is to give that agreement a bit of respectability, but I cannot see why it should bind future Parliaments.
However, I will not be supporting the concept of a sunset clause this time round because the whole idea of a fixed-term Parliament is completely nonsensical and is not even worth the paper the Bill is written on. The reasons for that are those put forward by the noble Lord, Lord Armstrong. I think the Prime Minister of the day could organise things so that a vote of no confidence was achieved which would bring down his own Government even if his own Back-Benchers voted against the Government. Therefore, we could well end up with a four-year Parliament if the Liberals decide no longer to support the coalition. Indeed, four-year Parliaments could happen in the future with this Bill existing. That is the real flaw in the whole thing. There would obviously be an amazing row and accusations of bad will if the Prime Minister organised things that way but, on the other hand, knowing the way that elections kick in, that row would last 24 hours and then we would all be campaigning on the election and who we wanted as the next Government so we would all forget about how the election was brought about in the beginning.
Lord Dobbs
My Lords, I am rather torn over this issue—after all, I am much in favour of opportunistic Prime Ministers. I enjoy sunsets and I also enjoy flexibility and preparations for the unexpected, which is the point raised by the noble Lord. After all, I was an aide to Margaret Thatcher when, as leader of the Opposition, she advised us all to store tins in our larders for just such an event.
This is an important constitutional Bill, and sunset clauses are entirely inappropriate here. Noble Lords have questioned the manner in which this Bill has been conducted and introduced, and I share some of those reservations, but surely, even if they believe in their claim of constitutional purity, they cannot respond with a constitutional absurdity, which is what a sunset clause would be in this matter. The noble Lord, Lord Butler, suggested that no Minister in a future Parliament would ever dare argue—I quote him as far as my memory will allow—that this Bill should be overturned in order to give power back to Prime Ministers for narrow party-political reasons. Surely Prime Ministers acting for narrow party-political reasons is entirely the point. Where is the constitutional purity in that?
This Bill does not mean that elections can be held only every five years. I believe that almost all the early elections of the past 60 years could still have been held under this legislation.
I wish to be very brief because we must move on. As to the call for second and third thoughts on the part of the other place, we should be clear about the purpose of this amendment. We are not looking into a sunset here. What we are looking at are the lamps of wreckers, lined up on the cliff top, waiting to lure the ship of state on to the rocks and destroy it. No matter how much better dressed they may be than their forebears, and how much better their manners, that is still the purpose of this amendment.
This issue has effectively been decided in this House and in another place, whether we like it or agree with it or not. I would not say that to support a sunset clause on this occasion is unethical, but it is entirely inappropriate. We do not use it on any of the other constitutional Bills; it is not the time to start doing it now.
Lord Falconer of Thoroton
My Lords, this has been an extremely good debate. If I may respectfully say so, the opening speech from the noble Lord, Lord Butler of Brockwell, said almost everything that could be said and I support everything that he has said in relation to this.
We support this amendment because we think the Bill is a bad Bill. We respect the right of the coalition, because of the relationship between the Commons and the Lords, to have what they wish—which is a Parliament that ends on 15 May 2015—but if you analyse the detail, this Bill damages rather than improves the constitution. Mindful of our obligation to respect the primacy of the Commons, we suggest that we give the Commons what they wish but do not affect the constitution further than is necessary. Before I come to the detail of that argument, I will just get rid of some of the truly appalling points that have been taken against the amendment.
First, I turn to the point that the provision is badly drafted. It was drafted by the noble Lords, Lord Pannick, Lord Butler of Brockwell, and Lord Armstrong of Ilminster, and supported by the noble Baroness, Lady Boothroyd. I do not think you could have a more powerful team in relation to this. What the amendment says—and it says it incredibly clearly—is:
“The polling day for the next parliamentary general election after the passing of this Act is to be 7 May 2015”.
It then says,
“If, but only if, a resolution to this effect”,
is passed, then the next one will be five years after that, and if a resolution is not passed, the other provisions do not apply. It could not be clearer. Please ignore all false remarks made in the other place. With respect to the noble and learned Lord, there is nothing wrong with the drafting of this.
The second point that has been made is that it is suggested there is something unconstitutional about this provision. First, it is said a sunset clause is inappropriate. We know that there have been sunset clauses in what may be described as constitutional Bills, for example the EU Bill and the control order Bills. The idea that a sunset clause in a constitutional Bill is inappropriate has been rejected by this House on a number of occasions and accepted by the other place.
The third particularly bad argument is that the provision increases the power of this place by allowing it to defeat orders. Yes, we can defeat orders, and the Parliament Act does not apply, but we always behave responsibly, and I would expect us to behave responsibly should the Commons indicate after the next general election that they want to have a fixed-term Parliament. If, however, that was the objection to this provision, then speaking for myself I would readily agree to an amendment to deal with that.
The final particularly appalling technical argument that has been advanced is that this is contrary to the Salisbury/Addison convention. I have never heard this being said until this afternoon. The Salisbury/Addison convention effectively says if the electorate have indicated it supports something this House should not resist it. I do not know if Members remember the election in 2010, but the one thing I can tell you, and it pains me to say it, is the one party that unquestionably lost the election was the Labour Party. Yes, a fixed-term Parliament was in our manifesto, but the public appeared very unattracted to it, so I do not think the Salisbury/Addison convention can be relied on by anybody remotely sane.
We know why this has been put in because we have had the privilege and the pleasure of Mr David Laws’s book, which was read many times on the Floor of this House during debates. Noble Lords will recall that Mr David Laws, who happily for this House was present during negotiations, gave us an account of how we got the Fixed-term Parliaments Bill. It is lovely to hear the highly principled noble Lord, Lord Rennard, and the splendid noble and learned Lord, Lord Wallace of Tankerness—neither of whom were there and neither was I—but have I got news for you. It was not on the basis of a desire to change the constitution; it was because the Tories and the Liberal Democrats did not trust each other to hold on to the convention. As David Laws explained, that is why they said that there had to be a Bill.
I respect the decency of the noble Lord and the noble and learned Lord to whom I have referred but that was not the reason given by David Laws for why this has been done. It is because of the coalition agreement. I could not put it better than Mr Shepherd, the Member for “somewhere”. He is facing a House of Commons laughingly about to pass this Fixed-term Parliaments Bill without the sunset clause. He says:
“I hope that this cheerful Chamber will look askance at the Minister and his colleague, the Deputy Leader of the House, who are sitting on the Front Bench and trying to seduce us into thinking that there is some immaculate constitutional conception behind the Bill. There is not. It is the raw politics of ‘We want to be there for five years, in the hope that something turns up at the end of the fifth year’. That is what it is about, and we know it. I urge the House to vote for the Lords amendment, and damn them”.—[Official Report, Commons, 13/7/11; col. 378.]
I do not think he meant damn the Lords; I think he meant damn the coalition.
Lord Rennard
My Lords, does the noble and learned Lord, Lord Falconer, also recall that during the very same debate Richard Shepherd said that,
“the Lords make the absurd proposition that it should have a role, as an unelected House, in determining when an election should be”?
He also described these proposals as,
“ridiculous proposals from the House of Lords … the body of the House … feels that this is almost an impertinence”.—[Official Report, Commons, 13/7/11; col. 377-78.]
Those were the context of his remarks last week.
Lord Falconer of Thoroton
I recall that but he voted in favour of the amendment. So I think you can say where his heart lay in relation to this.
Moving away from the technical points to the point of this Bill, let us think about history for a moment. In 1924, the Labour Government were defeated in a vote because the Labour Prime Minister had interfered with the Attorney-General in the exercise of his discretion. The moment he was defeated on the Floor of the House of Commons, there was a general election and the Conservative Party was returned to power. Imagine if Mr Ramsay MacDonald had been faced with the Fixed-term Parliaments Bill in 1924: first, being defeated on the proposition that he had interfered with the Attorney-General would not have led to a general election. There would had to have been a vote of no confidence put down by the Opposition. Let us assume that that had passed but that would not have been the end of it. Mr Ramsay MacDonald would then have had 14 days to try to cobble together a bit of support. Let us remember that he had a small majority in relation to this. He could have tried to survive on that basis. Is it seriously being said that that sort of behaviour would have led to the public having more confidence in the Government?
Moving forward in time to 1974, Mr Edward Heath perfectly legitimately wanted to test who governed the country because the country was in a major crisis in relation to the miners’ strike. Despite the fact that he legitimately wanted to go to the country, he could not have gone because he would not have been allowed to under this Bill unless he had tabled a vote of no confidence in his own Government. I think it was the noble Lord, Lord Hamilton, who said that perhaps he could have done that. But what would people think of a Government who put down a Motion of no confidence in themselves?
Finally, the father of my noble friend Lady Jay in 1979 was defeated in a vote of confidence on the Floor of the House of Commons. The most quoted extract from political history in the course of this debate was what Mr James Callaghan said when he was defeated. He said, “I have been defeated in the House of Commons. I must now take my argument to the people”. After this Bill has been passed he would have to say, “Now that I have been defeated on a vote of no confidence, I must see if I can scrabble together a majority to stay in power because this beastly Act gives me 14 days in which to try to do it”.
Okay, I say to the coalition, have your miserable Act so that you can stick together until 5 May 2015, because we respect your right to force that upon us. However, there is nothing unconstitutional in saying that it is appropriate for this House to stick with the principle that says, after that, let the next Parliament decide whether it wants to continue with what I say is a terrible Act. We will support the noble Lord, Lord Butler of Brockwell, in his excellent sunset clause.
Lord Wallace of Tankerness
My Lords, once again on this subject, we have had a very full and interesting debate, and I thank all noble Lords who have made important contributions to it.
It is clear that a number of noble Lords who spoke in the debate approached the amendment on the basis of whether they supported fixed-term Parliaments. My noble friend Lady Stowell and my noble friend Lord Dobbs gave compelling reasons why they believe in fixed-term Parliaments, whereas the noble and learned Lord, Lord Falconer, departing from his party’s manifesto at the last election, indicated that he is now not quite so sure about them. When the House was debating whether the fixed term should be four or five years and the noble and learned Lord was asked whether, if five years was passed rather than four, a future Labour Government would try to bring it back to four, I remember his not being able to give an answer. If this Bill is passed and the amendment which we are currently debating is not included, I cannot see a future Government trying to repeal it either.
Back in 1992, as my noble friend Lord Rennard reminded us, fixed-term Parliaments was a policy of the Labour Party on which it fought the election; it is a policy which my party has espoused for many years; and it is a policy of the coalition. The argument that the legislation was meant to last only until 5 May 2015 is nonsense. The coalition agreement makes a clear commitment to legislate for fixed-term Parliaments in the future. The title of the Bill refers to fixed-term Parliaments in the plural, so it was never intended simply to be a fix for the current Parliament. Many of the arguments brought forward, particularly when we were debating four or five years, related to the ability to plan government business over a period of time. Whether one could test the feasibility of that in this first Parliament, when we do not have the Bill on the statute book, is doubtful.
I want to put to rest the idea that the Bill was meant to be for only one Parliament. It is very clear in the coalition agreement that it was intended for future Parliaments, subject crucially to the fact that no Parliament can bind its successor, as the noble Lord, Lord Elystan-Morgan, said. The important point here is that if a Parliament cannot bind its successor and future Parliaments do not want fixed-term Parliaments, they should bring forward legislation. That would be the proper way of scrutinising whether the fixed-term Parliament has worked. As things stand with this amendment, no resolution whatever would be required if one did not wish to continue with fixed-term Parliaments. There would be no post-legislative scrutiny, no opportunity to consider whether the idea had delivered what those of us who support it claim it would. If one had to bring forward a Bill repealing the legislation, it would provide ample opportunity to debate the pros and cons.
I say with all due respect to the noble and learned Lord, Lord Goldsmith, that the idea that, somehow, Acts of Parliament should be suspended or ended at Dissolution and that, if you wanted to continue them into a future Parliament, you should bring back a new Bill to do it, rather than what we have thought for years, which is that if you wish to repeal an Act of Parliament you do so by primary legislation, was a very novel constitutional proposal which I certainly would not like to argue before the Constitution Committee if it became an act of faith.
Lord Goldsmith
It is the answer to the point that is being made. The amendment as it stands enables future Parliaments to decide whether to go the same way without having to go through the full process. The objection that is raised is that that might lead to the Commons taking one view and the Lords another, to which I say, in those circumstances, one should pass an Act. The Parliament Act could be used and the Commons could have its primacy through that proper route.
Lord Wallace of Tankerness
My Lords, the more appropriate approach is in the ABC of constitutional law, whereby, if one does not like legislation passed by a previous Parliament, one brings forward primary legislation to repeal it and does not simply let it lapse, particularly on matters of such constitutional importance.
Lord Howarth of Newport
I said there was no evidence of this power having been abused. Indeed, would not the noble and learned Lord agree that Prime Ministers who have attempted to string things out, who have dithered, hesitated and dragged out the life of their Governments until the last possible moment, have usually been heavily punished by the electorate for doing so?
Lord Wallace of Tankerness
Prime Ministers have tried to divine the times to see when would be the best time to call an election. Indeed, in an earlier debate I quoted from the book of my noble friend Lord Lawson, The View from No. 11: Memoirs of a Tory Radical. He said about the then Prime Minister, now the noble Baroness, Lady Thatcher:
“Her view was that a Government should always wait until the final year of the quinquennium, but once there should go as soon as it is confident it will win”.
In other words, a partisan political judgment was clearly being made. As my noble friend reminded us, in September/October 2007, Mr Gordon Brown did a calculation in the third year of that Parliament as to whether or not it would be in his party’s best interests to go to the country. There is more to this. The power that the Prime Minister is giving up as a result of this Bill, as noted by the noble Lord, Lord Hennessey, at Second Reading, is important.
The noble Lord, Lord Butler, said that it was not much of a power, and then he said that no Prime Minister would have a straight face in trying to reverse the situation in the future. He is absolutely right. If a fixed-term Parliament became law, it would be very difficult for someone to come before the House and say that they wanted to revert to the position where the Prime Minister could choose the date of the election because of party advantage. They would get pretty short shrift—it would be difficult to do—but no one denies that, constitutionally, it is perfectly possible. It would be perfectly proper for them to seek to do it and to argue their case. However, my point is that they should do it by proper means through primary legislation and not in the way proposed by the amendment to the Motion.
Lord Forsyth of Drumlean
Why does my noble and learned friend use the phrase “because of party advantage”? What happens if a Prime Minister thinks it is the country’s advantage—as happened in 1974 when the Prime Minister felt that the issue of the power of the unions needed to be settled? Why take that away? Secondly, I struggled with the speech of my noble friend Lady Stowell when she said that having a fixed-term parliament would restore people’s trust in Parliament. How does giving people absolute job security for five years help to restore people’s trust? Can my noble and learned friend explain that to me?
Lord Wallace of Tankerness
My Lords, the answer is the same to both parts of my noble friend’s question. On the position in February 1974, which has been raised in the debate, if the Conservative Prime Minister of the day believed that it was necessary for an election, it is beggaring belief to suggest that the Labour Party would not also have agreed to an election and that the 75 per cent majority for a dissolution would not have been achieved. This does not mean absolute job security for five years because, if a Government lose confidence, the Bill contains within it mechanisms which can lead to an election. This can also happen if there is an agreement—as I believe would have been the case in March 1979. The then Prime Minister, Mr James Callaghan, could have said that he had lost a vote of confidence and that the following day he would table a Motion for dissolution, which I am sure would have been overwhelmingly carried by more than the majority required under the Bill. To suggest that he would have had to go scrabbling around trying to find a means of living on until October would not have been the case. There are mechanisms in the Bill to deal with that kind of situation.
I believe that the noble Lord, Lord Butler, sought to dismiss the suggestion that there could not be tensions between the two Chambers, although I do not think that he actually denied that that was a possibility. However, he did say that this House would not stand in the way of a newly elected Government who sought to establish a fixed-term Parliament. Part of the problem with the noble Lord’s answer, apart from suggesting that this House might simply rubber-stamp the Bill—heaven forbid—is that the amendment does not say that the resolution would be brought forward by a newly elected Government. It actually says that it would have to be brought forward at some time during the Parliament. Therefore it might be brought forward some years into the Parliament. At that point, who is to say that this House might not think that they were at it at the other end, bringing forward the resolution for partisan advantage? This House might take a different view about that in those circumstances. Therefore it does change the balance.
My noble friend Lord Forsyth asked whether this does not parallel the position in the Parliament Act when Parliament was extending the lifetime of a Parliament. The point is that the exception in Section 2 of the 1911 Act is to,
“a Bill containing any provision to extend the maximum duration of Parliament beyond five years”.
There is a crucial difference between a Bill that extends a Parliament beyond five years and a resolution as to whether there should be a fixed-term Parliament. In that respect, it is not proper that this House should be given a veto in these circumstances.
I have already indicated that this course can be revived in each succeeding Parliament. It is not just a case of seeing how the Parliament from 2010 to 2015 would go. It may not happen under the amendment here—there may not be a fixed-term from 2015 to whenever—but it could be revived in the following Parliament. It is another unsettling uncertainty about this Bill that it can switch on and off fundamentally important constitutional proceedings.
There has been considerable debate on this Bill. As I indicated, it was introduced a year ago this week. It had its Second Reading in another place in September last year, extra time was made available in Committee, and Report and Third Reading in the other place took place in January. In your Lordships’ House, the Bill was introduced in January, Second Reading took place in March, the Committee sat on three days in March, Report was heard on two days in May and Third Reading also took place in May. It has been very fully debated. I note that the noble Baroness, the chair of the Constitution Committee, referred to the committee’s report on the process of constitutional change, which I believe was published overnight. One of the conclusions was as follows:
“We stress the importance of proper parliamentary scrutiny of all bills”—
and this Bill has been subject to considerable parliamentary scrutiny for a Bill of only seven clauses and one schedule—
“but we do not recommend that any new parliamentary procedures such as super-majorities should apply to significant constitutional bills”.
I cannot think of any more noted significant new parliamentary procedure than the one that is promoted by this amendment. If the Constitution Committee is sceptical about using new parliamentary procedures with regard to even very sensitive and important constitutional Bills, this is one about which we certainly should be very sceptical. I do not believe the view of the noble Lord, Lord Butler, that we are doing a service to the constitution by saying that we do not have to go to the length of repealing. Repealing is what we do if we do not like legislation that was passed by previous Parliaments. If we depart from that principle on a matter of constitutional importance, I believe we should only do so with very great caution. I would urge your Lordships not to insist on the amendment because I do not believe that the case has been made for such a serious constitutional departure.
Lord Butler of Brockwell
My Lords, I agree that this has been a very good debate. I do not need to go over the arguments again except perhaps to assure the Minister and the noble Lord, Lord Rennard, that, like Mark Twain’s death, reports of the advantage to a Prime Minister of being able to decide when to call an election in the last year are greatly exaggerated. Certainly such reports did not prevent the noble Baroness, Lady Thatcher, from packing her bags on the morning of a general election in preparation for the election not going the way she expected.
I am very grateful to the noble Baroness, Lady Jay, and the noble and learned Lord, Lord Goldsmith, who spoke about the report from your Lordships’ Select Committee on the Constitution. The Minister quoted one of its conclusions in his last remarks, but I would like to quote the two main conclusions. The Minister said that the Select Committee on the constitution in another place endorsed the proposal, but I shall quote what your Lordships’ committee said. If I may say so, your Lordships’ committee contains distinguished constitutional lawyers from all parties, who trump those who are members of the constitution committee in another place. They said:
“We take the view that the origins and contents of this Bill owe more to short-term considerations than to a mature assessment of enduring constitutional principles or sustained public demand”.
The committee continued by saying that,
“the balance of the evidence we heard does not convince most of us that a strong enough case has yet been made for overturning an established constitutional practice and moving to fixed-term Parliaments”.
There could hardly be two more damaging sentences.
Our national constitution is too important to be tinkered with as a bargaining chip in the negotiations of a temporary coalition. The British people have decisively prevented that from happening to the voting system for the House of Commons. They are not to be given a chance to express a view on this constitutional change, so it falls to your Lordships to insist that the Government and the House of Commons refrain from making a permanent change and give future Parliaments and Governments the opportunity to make these decisions for themselves. I would like to seek the opinion of the House.
Metropolitan Police Service
(12 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Office (Baroness Browning)
My Lords, I beg leave to repeat a Statement made earlier today in another place by my right honourable friend the Secretary of State for the Home Department. The Statement is as follows.
“Mr Speaker, with permission, I would like to make a Statement on the resignations of Sir Paul Stephenson and John Yates, the Metropolitan Police investigation into phone hacking and allegations of police corruption.
As the House will know, last night Sir Paul Stephenson resigned as Commissioner of the Metropolitan Police. As I told him last night, I am sorry that he took that decision. He has led the Met through difficult times and, although current circumstances show there are still serious issues to be addressed, the Met is stronger operationally today than it was when he took over. I will turn to those difficult circumstances in a moment, but first I would like to update the House on today’s developments and the next steps for the Metropolitan Police.
I have already started work with the Mayor of London and the Metropolitan Police to arrange an orderly transition and the appointment of a new commissioner. I have agreed that Sir Paul Stephenson will leave his post as swiftly as possible. In the mean time he will remain commissioner in post at New Scotland Yard and in operational command. Sir Paul will be replaced by Tim Godwin, who will again become acting commissioner, a role he filled very effectively during Sir Paul’s illness between December and April this year. With Tim Godwin as acting commissioner, the mayor and I are clear that additional resilience is essential from outside the Metropolitan Police. I am therefore pleased to announce that Bernard Hogan-Howe has agreed to take on the responsibilities of deputy commissioner on a temporary basis. We are looking to expedite the process for selecting and appointing the next commissioner.
The House will also know that within the past couple of hours, Assistant Commissioner John Yates has also resigned. I want to put on the record my gratitude to John Yates for the work that he has done while I have been Home Secretary to develop and improve counterterrorism policing in London and, indeed, across the whole country. I can confirm to the House that Assistant Commissioner Cressida Dick will take over his role.
I want honourable Members, Londoners and the whole country to know that the important work of the Met—its national responsibilities, such as counterterrorism operations as well as policing our capital city—must and will continue. That important work includes the related investigations, Operation Weeting and Operation Elveden.
Operation Weeting, the investigation into phone hacking, led by Deputy Assistant Commissioner Sue Akers, is now going through the thousands of pieces of evidence relating to the allegations. Unlike the original investigation into phone hacking, Operation Weeting is proceeding apace, with officers interrogating evidence that was neglected first time round, pursuing new leads, and as we saw once again at the weekend, making arrests.
Operation Elveden, also led by Sue Akers, is investigating allegations that police officers have received payment from the press in return for information. This investigation has independent oversight by the Independent Police Complaints Commission. At this stage, this is a supervised investigation, meaning that the IPCC sets the terms of reference and receives the investigation report, and as soon as individual suspected officers have been identified, IPCC investigators, overseen by an IPCC commissioner, will take over and lead a fully independent investigation of those officers.
In the future, both of these matters will be considered by the Leveson inquiry established by the Prime Minister. In the mean time, I can tell the House that Elizabeth Filkin, the former Parliamentary Commissioner for Standards, has provisionally agreed to examine the ethical considerations that should in future underpin the relationships between the Metropolitan Police and the media, how to ensure maximum transparency and public confidence, and to provide advice. The management board of the Met has agreed a new set of guidelines relating to relationships with the media, including recording meetings and hospitality and publication of information on the internet.
These allegations are not, unfortunately, the only recent examples of alleged corruption and nepotism in the police, so I can tell the House that I have asked Her Majesty's Inspectorate of Constabulary to consider instances of undue influence, inappropriate contractual arrangements and other abuses of power in police relationships with the media and other parties. I have asked HMIC to make recommendations to me about what needs to be done to address it.
There is nothing more important than the public's trust in the police to do their work without fear or favour, so at moments like these it is natural that people should ask who polices the police. I have already asked Jane Furniss, the chief executive of the Independent Police Complaints Commission, whether she has the power and the resources to get done the immediate work at hand. She has assured me that it does, but additional resources will be made available to the IPCC if they are needed.
I can also tell the House that I have commissioned work to consider whether the IPCC needs further powers, including whether it should be given the power to question civilian witnesses during the course of its investigations. Given that the IPCC can at present investigate only specific allegations against individual officers, I have also asked whether the commission needs to have a greater role in investigating allegations about institutional failings of a force or forces.
Finally, I want to say one last word about the future of the Metropolitan Police. The Met is the largest police force in the country and has important national responsibilities beyond its role policing our capital. The next Metropolitan Police Commissioner will lead thousands of fine police officers, community support officers and staff, the great majority of whom have spent their careers dedicated to protecting the public, often at risk to their own safety. Just three nights ago, honourable Members will know that in Croydon an unarmed Metropolitan Police officer was shot as he tried to arrest a suspect. I know that the whole House will agree with me that it is for the sake of the many thousands of honourable police officers and staff, as well as for the public they serve, that we must get to the bottom of all these allegations. Only then will we be able to ensure the integrity of our police and public confidence in them to do their vital work. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Hunt of Kings Heath
My Lords, I thank the Minister for repeating the Statement. I echo her tribute to the thousands of police officers who perform their duties in the metropolis, often in dangerous circumstances.
The noble Baroness rightly paid tribute to Sir Paul Stephenson and his work. He has done excellent work in London, backing neighbourhood policing and action to cut crime in the capital as well as vital work on counterterrorism. His is an honourable decision to protect the crucial operational work of the Met from continuing speculation. However, his departure raises serious questions for the Home Secretary and the Prime Minister. It is clear that the Met commissioner and the head of counterterrorism have now gone because of questions about this crisis and the appointment of the former deputy editor of the News of the World. Yet the Prime Minister is still refusing to answer questions, or apologise for his appointment of the former editor of the News of the World. The judgment of the Metropolitan police force has been called into question by appointing Neil Wallis, but so too has the judgment of the Prime Minister by appointing Neil Wallis’s boss, Andy Coulson. People will look at this and think that it is one rule for the police and another for the Prime Minister. The Prime Minister agreed to that this morning. He said:
“The situation at the Metropolitan Police is really quite different to the situation in Government, not least because the issues that the Met are looking at, the issues around them, have a direct bearing on public confidence into the police enquiry into the News of the World”.
But the Prime Minister runs the country, and the issues that he is looking at, and the judgments that he makes, have a direct bearing on public confidence in the Government’s ability to sort this crisis out. Sir Paul has very honourably accepted his ultimate responsibility for the position the Metropolitan police force finds itself in. Why does the Prime Minister not similarly accept his responsibility?
The Home Secretary is right to have concerns about the appointment of Neil Wallis, and she is right that she should have been told about the conflict of interest. This does raise serious questions for the police force. But the Met commissioner says that he could not tell her, or her boss, because of the Prime Minister’s relationship with Andy Coulson. How did it come to this? The most senior police officer in the country did not feel able to tell the Home Secretary about a potential conflict of interest for the Met because of the Prime Minister’s compromised relationship with Andy Coulson—an ongoing relationship, as they met at Chequers in March, months after the new police investigation began.
This morning the Home Secretary refused to defend the appointment of Andy Coulson, and today the London mayor refused to defend it. The Home Secretary has been remarkably silent during the crisis despite the serious allegations that phone hacking may have interfered with criminal investigations, the serious questions for policing, and the growing cloud over the national and international reputation of British policing as a result of the crisis. She has said very little in the last two weeks. The judicial inquiry that we have called for is important, but confidence in policing is too important to wait for its results.
Why has it taken the Home Secretary so long to ask Her Majesty’s Inspectorate of Constabulary to consider instances of undue influence, inappropriate contractual arrangements and other abuses of power in police relationships with the media and other parties? What are the implications of the Home Secretary’s proposals to bring in American-style elected police and crime commissioners? The nearest Britain has to an elected police chief—the London mayor—did not stop these problems at the Met. If anything, he made them worse. Boris Johnson described the phone hacking allegations as “codswallop”. He went on to say:
“It looks like a politically motivated put-up job by the Labour party”.
What backing does the Minister think that Sir Paul Stephenson and John Yates could have expected from the mayor if they had decided to reopen an investigation that he described as politically motivated? The truth is that the elected mayor made it harder, not easier, for the Met to get to the heart of this issue. The Mayor of London is now looking forward to working with his third police commissioner in his current term. To lose one commissioner is a misfortune; to lose two looks like carelessness. Above all, it shows the risks of the closeness of the relationship between politicians and operational policing.
I come to the implications of all of this on the police Bill, which we are told is based on experience in London. In light of what has happened, I would ask the Minister for a pause in consideration of the Bill, currently due for Third Reading in your Lordships’ House on Wednesday. Whatever the ups and downs of the British police force over the decades, its political impartiality has shone out to international acclaim. However, this Bill threatens a disaster. Party political commissioners to be elected in nine months’ time risk undermining the very impartiality of which we are so proud. The Bill threatens the politicisation of operational policing; and it threatens a huge loss of public confidence in the untrammelled power given to party political commissioners to appoint or to dismiss chief constables at will.
The London situation is particularly worrying. As Sir Paul said in his statement today, the Met faces extraordinary challenges: the phone hacking investigation, the public inquiries, the inquiries that the Home Secretary announced today; its responsibility in counterterrorism and national security issues; and the Olympics. There is now huge disruption in the senior ranks of the force with the resignation of the commissioner and Mr Yates. What are the Government doing to stabilise the situation? They are introducing legislation to scrap the Metropolitan Police Authority, threatening yet more disruption. That is the last thing that the Metropolitan Police force needs now. I believe that Third Reading of the police Bill should be postponed so that the consequences of the proposed legislation can be seen in the context of this week’s very disturbing events. Will the Minister agree to that?
Baroness Browning
My Lords, I thank the noble Lord for his opening remarks, particularly in respect of the Metropolitan Police officers who have announced that they are standing down.
On his final point about the police and crime commissioners, the noble Lord will know only too well, as he and I have debated this in some detail over many weeks now in Committee and on Report, that there has always been a difference of opinion on this matter. The Government believe very firmly that chief officers should be held to account, on behalf of the public, by police and crime commissioners for the way in which they conduct business—not operational business—in their force. The public have been the losers in all this. They have lost confidence, and we believe that the police and crime commissioners, on behalf of the public of their police force area, are the answer to ensuring that the police are held to account both for the way in which they tackle crime and for the way in which they prioritise and carry out what the public want, which is a reduction in crime.
I suspect that there will always be a difference of opinion between this Bench and that Bench, as there was when the Bill came to the Floor of the House, so I am not in a position to say to the noble Lord, Lord Hunt, that we intend to defer Third Reading of the Bill, which has reached its final stages now, having gone through another place and had a great deal of scrutiny in this place.
I have a long list in my folder, as the House may expect, of the details of what has happened in this whole shocking affair that go back long before this year. It is not my intention to read that out, primarily because I believe that Governments of parties on both sides of the House have recognised that these problems have not just occurred in the past few months—recommendations have been made to previous Governments. Frankly, that might be the tone of another place, but I hope that we might rise above that in this House and tackle the underlying problem and the way to take the matter forward to bring back confidence in the police.
The noble Lord mentioned Neil Wallis and the fact that the commissioner has stated that he could not approach the Government with this because of a conflict of interest. That applied as much to his Government as it did to the current Government. The Prime Minister has set out very clearly the terms under which he employed Andy Coulson and has quite rightly made it very clear that if, following police investigations, Andy Coulson is found to be guilty of anything of a criminal nature, he would expect him to be charged and brought to justice. However, there was a clear difference between the Prime Minister’s employment of Andy Coulson and the fact that the Met was investigating these matters but failed to identify to the Home Secretary, who has made her views very clear, that Neil Wallis was involved with the Met. That was denied to the Home Secretary as late as last week.
Baroness Hamwee
The House will understand that the Minister cannot say anything other than what she just has about the Third Reading of the police Bill. However, in reflecting on it, as I am sure they will, will the Government reconsider the proposed timing of the introduction of their changes, particularly in London where we have these new unexpected factors in the run-up to the Olympics?
On a more detailed point, does the Minister agree that a mechanism for registering interests and hospitality that is available for inspection by everyone in public life, without investigation by the media, is of great importance? The House will understand the irony of relying on the media in this. What really matters is not what you register but what you do.
Baroness Browning
I quite agree with the principle that my noble friend Lady Hamwee has just espoused. Certainly, the investigations, and the recommendations that will come from them, will, I hope, show us the best way forward for things such as hospitality. Very often, these things come down to personal judgment. All of us in public life have to make a personal judgment about some of these issues, and sometimes we are bound by the spirit of the law as well as what is said in the law. I therefore hope that when we see the final results of the investigations, they will include codes and practices that encapsulate the spirit of the law as well as the law itself.
Lord Blair of Boughton
I declare a rather special interest. Until yesterday I was the last commissioner of the Metropolitan Police. I am now the one before that. That is rather a striking position. The last time commissioners resigned was in the 1880s; these were Sir Edmund Henderson and Sir Charles Warren. The circumstances were somewhat different; Sir Edmund resigned because the club of which he was a member in Pall Mall had its windows broken by rioters.
My question to the Minister is in two succeeding parts. First, does the resignation of two successive Commissioners of the Metropolitan Police in just over two and a half years indicate that something is gravely wrong with the political oversight and governance of that body? Secondly, does the Minister agree that there is a much wider question at hand than the grave matters now entrusted to Lord Justice Leveson? My concern is that we have a police Bill and the Winsor report, and we now have the Filkin and HMIC reports. Why does the Minister not agree that the Home Affairs Select Committee recommendation should now be put into place and a royal commission into the mission, structure and governance of the police be appointed? Every time this has been raised, the coalition Government have said, “We have not got time”. I think we should take time now.
Baroness Browning
While I hear what the noble Lord, Lord Blair, says about a royal commission, we have, since he last raised this, put into place a series of investigations, reviews and reports that I hope will throw light and transparency on to the problems that he has identified as underlying the number of commissioners who have left. We do not know at this stage how deep those investigations will go and what they will show in conclusion, but we want them to be thorough and we believe they are all-embracing.
It may interest the House to know that since the Home Secretary’s Statement in another place just an hour ago the Metropolitan Police Authority has referred four cases to the IPCC. The IPCC is now considering the referrals carefully to determine how they should be taken forward. That is perhaps an indication not just of the seriousness of the investigations before us but of the depth to which they need to go, so although I hear what the noble Lord says about a royal commission, people have now been appointed to carry out these investigations and they should be allowed to carry them through to their conclusion.
Lord Harris of Haringey
My Lords, I declare an interest as a current member of the Metropolitan Police Authority and associate myself with the very positive remarks that the Minister has made about Sir Paul Stephenson and John Yates. However, given what she has just said about the referrals to the IPCC, perhaps she could ponder for a moment what the circumstances of today would have been had the Bill currently before this House been passed.
The Metropolitan Police Authority sub-committee on professional standards met this morning to consider complaints against named officers. It considered those complaints and, as the Minister has just reported to the House, it made recommendations in one instance that an officer be suspended and in other instances that matters now be investigated by the IPCC. Under the Bill which she is steering through this House, that would not happen. Any allegations against individuals would be considered by the Commissioner of Police for the Metropolis or the Chief Officer of Police outside—of course the Commissioner of Police for the Metropolis has now resigned—who would then decide whether something should be investigated or another officer suspended. Surely the interests of openness and public support for the process demand that there be some independent structure to handle complaints and consideration of whether an inquiry should be opened. That will disappear under this Bill.
Baroness Browning
Well, my Lords, again, this is a matter that the noble Lord and I have debated at some length during the Committee and Report stages of the Bill. As he will know, we have disagreed over the internal handling of minor complaints within the police force. I have not changed my mind about that, but on more serious matters involving senior officers he will know that it is not simply the case that they will not be investigated independently. Ultimately, there is recourse to the IPCC.
Baroness Harris of Richmond
My Lords, will the Minister undertake to look at the present make-up of the IPCC and ensure that its staff are of the highest calibre and integrity and are entirely independent? A number of former police officers are employed by the IPCC at the moment, and I want reassurance that they do not carry any past grudges against a particular officer or force that polices the IPCC.
Baroness Browning
My Lords, I hear what the noble Baroness says. I think we all want transparency and clarity. If she is saying—I am not quite sure whether I have understood this correctly—that there are question marks about the independence of individual members of the IPCC, I will certainly be happy to take that away and to have further discussion with her about how it might be addressed.
Lord Condon
My Lords, as someone who had the honour to serve as commissioner for seven years, I can say with absolute confidence that this is one of the saddest and most disturbing days in the history of the Metropolitan Police Service. While clearly a number of inquiries are in place that will undoubtedly get to the bottom of the allegations and concerns that we are all so troubled by, does the Minister agree with me that perhaps today is an opportunity in your Lordships’ House to remember that the vast majority of the men and women who serve in the Metropolitan Police are honest, decent, brave people who deserve our and the public’s support as they live through what is a very confusing and disturbing time for them? I in no way prejudge the outcome of any of the allegations or inquiries, but I can say with absolute certainly, and I hope the Minister will agree, that the overwhelming majority of good men and women in the Metropolitan Police are doing an honourable, brave job.
Baroness Browning
I am very happy to support the words of the noble Lord, Lord Condon. Indeed, in her Statement in the other place, the Home Secretary made a point of concluding her remarks on that basis. We are all conscious of the impact that this will have on morale, not just in the Met but rippling out more widely. There are in this House in particular former senior police officers who have served their country with great distinction. I pay tribute to all of them and to the many people of all ranks who voluntarily police their own communities by consent. It is a great strength of British policing that it is by consent. I endorse entirely what the noble Lord, Lord Condon, said. I hope that leadership will be shown in police forces around the country to minimise the damage to morale from what has happened in the capital.
Baroness Smith of Basildon
My Lords, when it became clear that there was no widespread public or professional support for the health Bill, the Prime Minister wisely stepped back and paused the Bill for consideration. What I find incredible in the noble Baroness's answers is that she does not seem to think that the events of the past couple of weeks have had any impact on, or should be considered in any way in connection with, the police Bill. Will she take this away and think about it? People across the country who support the Metropolitan Police will find it incredible if these events do not impact on deliberations on the Bill. The best thing now would be for the Bill to be paused for consideration, and for the Government then to come back with more effective and thought-out proposals.
Baroness Browning
My Lords, I hear what the noble Baroness says, but I am well aware, as she is, that right from the start her party has opposed police and crime commissioners. Despite what has happened over the past two weeks, there are those who have now focused on the fact that police and crime commissioners will be there to represent the public, having been elected by them, and to hold chief constables to account. While I hear what she says, many take a view exactly opposite to hers.
Lord King of Bridgwater
Perhaps I may say to my noble friend how much I appreciate the approach that she has taken to responding to what is clearly a very difficult situation. As the noble Lord, Lord Condon, rightly said, there are deep concerns of vital importance at a very dangerous time in our country, for many reasons, and there should be maximum public confidence and trust in the police. I do not know whether I am the only person in your Lordships' House who does not quite understand what is going on at the moment. Various allegations have been made, including in the Sunday papers, against Sir Paul Stephenson among others, but at the moment I do not know whether any of them are true, and I do not understand why the resignations have happened when they have. Perhaps that will become clearer later on.
I understand that Sir Paul and Assistant Commissioner Yates will give evidence tomorrow to a Select Committee of the House of Commons. I look forward with great interest to what comes out of that. I hope that the wide-ranging investigation that has been announced, along with other commendable actions, will be undertaken with all due dispatch so that people can understand that these matters are now being gripped and we will get some clarity on the situation.
Baroness Browning
I thank my noble friend for that. The inquiry by Lord Justice Leveson will be in two parts, as noble Lords will know. We hope that some aspects of the inquiry will be moved along more quickly than others. We must let the inquiries have enough time to get the outcome of full transparency and disclosure. Therefore, I am tempted not to say that I want them to be hurried up, because we need to get this absolutely right. The Home Secretary announced an HMIC inquiry today, from which she has asked for immediate feedback later in the summer.
Lord Dear
My Lords, I, too, declare an interest. As some noble Lords know, I, too, served at a senior rank in the British police service. I make no apology for revisiting an issue that I raised in your Lordships' House as recently as Wednesday last week in the debate that followed the Statement on phone hacking. My contribution can be found in the Official Report of 13 July, in column 732.
I do not believe that it is unduly repetitious to remind ourselves that leadership is important in any organisation and that in the police service it is absolutely essential. Today, even more than last week, the issue is paramount. For years, successive Governments have failed to address adequately the problem of providing leaders in the police in sufficient numbers to provide a critical mass that can influence events and, in particular, ethics and attitudes in the service. Today we see the Metropolitan Police—a great force, as we all know—in what is colloquially known as “a very bad place”. We see that there is no clear succession plan in place for the commissioner and, worse, that there is a marked shortage of suitable candidates.
In the light of recent events, will the Minister go further today than the Leader of the House was able to go last week when he replied to me and give your Lordships' House a firm reassurance that, after the publication of the Winsor report at the end of the year, the Government will address the question of recruiting people of the highest quality into the police in sufficient numbers, and of their training and deployment into positions of intermediate and high rank on a structured basis. I venture to suggest that this can be implemented, notwithstanding the several reviews that have been mentioned. Can the Minister therefore indicate any appetite in Her Majesty's Government for such a review of leadership as a matter of urgency?
Baroness Browning
My Lords, I am grateful to the noble Lord, who, in the course of the Bill, has given advice and a very clear steer on the need for a pool of senior officers for whom leadership is a key component in their training and development. The Government take police leadership and issues affecting it very seriously. Police leadership is key to ensuring that officers across England and Wales are able to provide a high-quality service to the public. Peter Neyroud set out his views on the future of police leadership and training in his report of 5 April. The Government are currently considering the responses received during the consultation period on the report. We will set out our position in due course, and we will set out our response to the second part of Tom Winsor's report following its publication next year.
I hope the noble Lord is reassured that we are taking on board the need for leadership to be placed at the heart of policing. I have asked, during the passage of the Bill, for volunteers to come forward and advise on the development of a pool of senior officers so that, for example, when there are vacancies, there will be a good choice from as large a pool as possible of people of the right standard, qualifications and leadership skills.
Lord Clinton-Davis
My Lords, would it not be infinitely preferable for the Government, and particularly the Minister, to consider the events of the past few hours and days with some calm, and therefore to postpone reflection on the Bill until the Government have had a chance to come to a sensible reaction?
Baroness Browning
My Lords, I can only repeat to the noble Lord what I said to others who sought to identify this as a matter that should result in halting legislation on police reform and social responsibility—I believe that around the country police forces and communities are crying out for the sort of reform that the Government are bringing forward. I have not changed my mind since I made that point five minutes ago.
Lord Prescott
My Lords, the whole House recognises the importance of the Metropolitan Police’s contribution to safety and security in London and elsewhere. However, I must say that I welcome the resignation of Sir Paul Stephenson and John Yates. Both had a long and unhealthy relationship with the Murdoch press over a good period of time. Is the Minister aware of Sir Paul's statement that he did not know anything about phone hacking? Does she accept it, and is she also aware that Sir Paul visited the Guardian in December 2009 and February 2010 and asked the paper to desist in its investigations, because the explanation of one rogue reporter had been accepted by the police and presumably by him?
Does the Minister also accept, with Sir Paul complaining that officers had not supported him, that Mr Yates has admitted that there were sacks of evidence that he was not prepared to open to see whether there were other cases of phone hacking? Did he then tell the commissioner, “Don’t worry, this one story is all right.”? Did he tell the commissioner that the bags of evidence were available but that he had decided not to open them? Frankly, considering Mr Yates’s resignation, the fact that he misled the House, the actions that he has been involved in and the fact that Sir Paul thought this man should not have resigned, did the Minister think of sacking him, because that would have been sufficient evidence to have anyone moved out of that kind of position of trust?
Baroness Browning
My Lords, the noble Lord, I know, has been a victim of phone hacking and raises important issues. That is why the judicial inquiry and the two inquiries that are being overseen by Sue Akers in the Metropolitan Police have been set up. I have every confidence in the Sue Akers inquiries. It is not for me as a Home Office Minister to intervene in police operational matters, but I hope that the noble Lord’s points, which are very important, will be dealt with by the inquiries.
Defence Transformation
(12 years, 11 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, I would like to repeat a Statement that was made earlier by my right honourable friend the Secretary of State for Defence.
“Mr Speaker, I wish to express my condolences to the family and friends of Lance-Corporal Paul Watkins of the 9th/12th Royal Lancers, who was killed in Afghanistan on Sunday. My thoughts and prayers are with them at this very difficult time.
I wish to make a Statement on the next steps in implementing the strategic defence and security review (SDSR). This Government inherited both a national economic disaster that represented a strategic threat and a defence programme undermined by a £38 billion black hole. Without a fundamental review for 12 years, our Armed Forces were still largely configured for the 20th century, despite a decade of sustained operations in Afghanistan and Iraq. This failure to set out a coherent, long-term strategy for defence and to match commitments to resources effectively is one of Labour’s worst legacies. However, it is not enough to deal with the mess we inherited. We need to build something better for the future.
So right from the start, this Government have been determined not to repeat the mistakes of the past and to make the difficult decisions that were ducked by the previous Government. We are determined to be bold and ambitious and build formidable, well managed Armed Forces, structured for the rigours of future conflict and supported by an affordable defence programme. The SDSR has mapped out our long-term goal for Future Force 2020. The report of the Defence Reform Unit announced to the House on 27 June was part of this process.
Today I want to set out the next phase of defence transformation: bringing the Army back from Germany, creating a better future for our Reserve Forces and delivering on our commitment to agree a 10-year defence equipment budget. I have written to Members of both Houses and the devolved Administrations whose constituencies and interests are affected by the decisions we have taken.
Commitments must match resources in order to achieve a balanced budget. As part of the preparation for this year’s planning round, we have identified a number of adjustments to the defence programme. This includes rationalising vehicle acquisition to make the best use of those we have procured to support operations in Afghanistan and continuing to bear down on non-front-line costs, where we will aim to deliver further substantial efficiencies in support, estate spending and IT provision.
Against this background and as part of this overall approach to balancing the programme, I have agreed with the Treasury that the MoD can now plan on the defence equipment and equipment support budget increasing by 1 per cent a year in real terms between 2015 and 2016, and 2020 and 2021. I am grateful to colleagues, particularly the Prime Minister, for their support in this process. These and other changes will enable us to proceed with a range of high-priority programmes set out in the SDSR.
I can now give the go-ahead for the procurement of 14 additional Chinook helicopters, the upgrade of the Army’s Warrior vehicles, spending on the Joint Strike Fighter, the procurement of the Rivet Joint intelligence and surveillance aircraft, the cat and traps for the Queen Elizabeth class carriers, and the development of the global combat ship. This equipment can now be bought with confidence, ending a decade of uncertainty for our Armed Forces and for industry. But similar discipline will be applied in future— we will only order what we can afford to buy.
Today I am placing in the Library the report of the review into the Reserve Forces, Future Reserves 2020. I would like to thank General Sir Nick Houghton, Lieutenant-General Graeme Lamb and the honourable Member for Canterbury and Whitstable for their excellent report. The report makes it clear that our Reserve Forces make an outstanding contribution to operations but have been shamefully neglected in recent years. For example, by some estimates the Territorial Army has a trained and active strength as low as 14,000. So I am pleased to announce that the Government will proceed with a £1.5 billion investment package over the next 10 years—£400 million in this Parliament—to enhance the capability of the reserves and consequently increase their trained strength.
The Government will work with employers and legislate if necessary to ensure that the reserves are more readily usable on operations. This significant investment will also build up the capacity of the reserves to contribute to homeland security, consistent with the adaptive posture set out in the SDSR. As the capability of the Territorial Army improves, this will allow a progressive adjustment of the regular/reserve balance of the Army while maintaining the land forces’ capability set out in the SDSR. This will include the delivery of the multi-role brigade (MRB) structure of Future Force 2020. By 2020, if the Territorial Army develops in the way that we hope, we envisage a total force of around 120,000 broadly in the ratio of 70:30, regular to reserve. This will be more in line with comparable countries such as the United States, Canada and Australia.
Let me turn to basing. The decisions we have taken in the SDSR to reduce aircraft types, bring the Army back from Germany and form the Army into five multi-role brigades enable us to rationalise the defence estate and dispose of high-value sites no longer needed. The security of the nation and the requirements of defence were paramount in our analysis but we have also considered the impact of changes on local communities, the impact on service personnel and their families, and the current pattern of the Armed Forces in Britain. Army brigades currently stationed around Catterick and Salisbury will make up three of the five MRBs. The other two MRBs will be based on the east coast of England, centred on Cottesmore, and in Scotland, centred on Kirknewton, south of Edinburgh.
The MRB centred in Scotland will require a new training area, and positive discussions are being taken forward with the Scottish Executive. Two major units and a formation headquarters will be based at Leuchars. Consequently, the Typhoon force due to be built up there will instead be built up at RAF Lossiemouth. Other MRB units will be moved into Glencorse, Caledonia, Albemarle Barracks and eventually Arbroath, since over time we intend to bring the bulk of the Royal Marines together in the south-west. We are also planning to place Army units in Kinloss in around 2014-15. Taken together, this represents a significant increase in the defence footprint in Scotland of well over 2,000 posts. This is in line with the Scottish tradition of supporting our Armed Forces and a recognition that these are United Kingdom forces under the Crown, protecting the citizens and interests of this United Kingdom.
With the move to five multi-role brigades, we have concluded that 19 Light Brigade in Northern Ireland will be disbanded. Other units returning from Germany will move into those bases vacated. We remain committed to maintaining a permanent military garrison in Northern Ireland, and 160 Wales Brigade will remain in Brecon. We will retain St Athan at its current size and intend to increase its usage. RAF Marham will remain as a base for Tornado GR4. More details of these and other estate-related decisions are in the Written Statement I have laid today.
The planning work, including the investment required to adapt sites, will now get under way based on this strategic direction. It will involve consultations as appropriate with local communities and other statutory obligations we will need to fulfil. I am very conscious of the uncertainties that these changes will cause for service personnel and their families. Let me reassure them that the majority of the moves I have announced today will take place after 2015. In both basing and reserves, we have sought wherever possible to strengthen the strong and natural links between local communities and the Armed Forces. I do not underestimate the importance of these ties in underpinning the military covenant.
The overall package I have announced today is good news for our Armed Forces and means that they can look forward to the future with renewed confidence because the defence programme I have announced is underpinned with real resources. This investment in people and equipment is not the wish list of the past but is certainty for the future. I commend these decisions to the House”.
My Lords, that concludes the Statement.
Lord Rosser
My Lords, on this side, we, too, wish to express our sincere condolences at this very difficult time for them to the family and friends of Lance Corporal Paul Watkins who was killed in Afghanistan the other day.
I thank the Minister for repeating the Statement made a few minutes ago in the other place by the Secretary of State for Defence. It covers a number of big policy areas: the RAF basing review, Reserve Forces, the financial settlement and cuts to the Regular Army. The Statement, as did the strategic defence and security review, repeats the Government's line about the financial position they inherited, which arose as a result of a global economic recession which was not sparked off in this country. The Statement refers to a £38 billion black hole, but that figure assumes a flat line in cash terms in the defence budget over the coming years; in other words, a decline in real terms, which is unlikely. It also assumes that every commitment, including equipment, will be adhered to.
The National Audit Office 2009 report into major projects at the Ministry of Defence stated:
“If the Defence budget remained constant in real terms, and using the Department's forecast for defence inflation of 2.7 per cent the gap would now be £6 billion over the next ten years. If … there was no increase in the defence budget in cash terms over the same ten year period, the gap would rise to £36 billion".
I appreciate that this Government have managed to reduce the rate of growth during their period in office, but presumably even this Government intend to ensure that growth in the economy, from which additional resource can be provided, returns at some stage in the not-too-distant future.
The recent strategic defence and security review, which seems, with every MoD Statement, to be becoming less related to reality and expected reality, stated:
“Further work is required to determine the numbers of personnel that will be required to man the 2020 Force Structure. The Defence Reform Review, the review of Reserve Forces, further efficiency measures and changes in the policy context will all need to be taken into account at the next Strategic Defence and Security Review, which will set out detailed plans for the five years beyond 2015 ... We will also, for now, assume that by 2020 we will require a Royal Navy of 29,000 personnel, an Army of 94,000 and an RAF of 31,500”.
Yet the Government have announced cuts to the Army of 17,000—a sixth of the entire force—in just 10 months. However, in opposition, the Government said:
“In the real world the only logical conclusion you can come to is that the army is already too small”.
The SDSR referred to members of the Reserve Forces performing outstandingly well in Afghanistan, and we share that view and pay tribute to the commitment and dedication of our Reserve Forces and to the real contribution they play in protecting our own citizens and the lives of others in operations abroad. The SDSR also referred to the six-month study being undertaken into the future role and structure of the Reserve Forces and the Statement today includes the Government's response to that review. We, too, would wish to place on record our thanks to General Sir Nicholas Houghton, the Vice-Chief of the Defence Staff, and his two colleagues who undertook the review. Will the Minister say whether the review suggested that the reductions in the Regular Forces should be made in the light of their recommendations on the Reserve Forces?
The Government have said that they will be undertaking a strategic defence and security review every five years. They now appear already to be making policy decisions on the structure and composition of our Armed Forces for the five years between 2015 and 2020, the period to be covered by the next defence review. What then are the strategic decisions and goals that have been made and determined for the five years from 2015 to 2020 which the decisions announced in the Statement today are presumably intended to deliver? Is it the Government's approach that our strategy for the five years from 2015 to 2020 will be determined by the Armed Forces that we have decided we will have rather than our required defence strategy for those years being determined first and then consideration being given to how to provide the Armed Forces needed to support and deliver that strategy?
If the Reserve Forces are to constitute some 30 per cent of our forces, rather than less than 20 per cent, to what extent will they become stand-alone units? There will be concerns if bespoke standing units of reservists were to become the norm since this could increase the commitment required from civilians and therefore potentially hinder recruitment. Will this approach not also undermine the one army concept? It appears as though the review highlighted the cost of Reserve Forces compared with the cost of Regular Forces. In view of the proposed increase in the percentage of our Armed Forces who will be reserves and the significant reduction in regulars, how do the Government evaluate the abilities, experience and expertise of our Reserve Forces against those of the Regular Army personnel? Do the Government consider them less effective, more effective or of equal worth and value person for person? How is such an assessment made and by whom? The boost to our Reserve Forces is, it would seem, intended to make up for the fact that our Regular Forces are being reduced.
The Statement, referring to the Army, indicated that two major units and a formation headquarters will be based at Leuchars. Does this mean that RAF Leuchars will close? Will the Minister for clarity say how many personnel and what personnel are currently based at Leuchars and how many personnel and what personnel will be based at Leuchars once these changes have been implemented? What will be the cost of that change, who will be paying for it, and how long will the time lag be between the moving out of present personnel from Leuchars and the moving in of the new personnel? What is the Government’s assessment of this change on the local economy?
The Statement referred to the savings that would be realised by the reduction in regular personnel. It stated that money would therefore become available for reinvestment in our Reserve Forces and also for the construction of additional Chinook helicopters, which was an undertaking the Prime Minister gave. We welcome any additional investment in our Armed Forces, and not least the £1.5 billion investment package over the next 10 years to enhance the capability of the reserves, and the increase in the defence equipment and equipment support budget by 1 per cent a year in real terms—though we note that that is not until 2015-16. Can the Minister confirm, though, that this means there will be no increase in real terms in the rest of the core defence budget from 2015-16 to 2020-21?
We are seeing additional resources having to be devoted to our operations over Libya, which is being paid for from the general reserve, and also the need to finance the additional Chinooks promised by the Prime Minister. To conclude, what meaningful assurances can the Minister give that today’s further announcements, which we will certainly wish to study in far more detail than we have been able to so far, have not been influenced by financial considerations, but purely by military considerations?
Lord Astor of Hever
My Lords, I am very grateful to the noble Lord. He asked me lots of questions which I was writing down as fast as I could. I will do my best to answer as many as I can, and if I do not answer them all, I undertake to write to him.
The noble Lord first asked about the SDSR. In announcing the SDSR, the Prime Minister was clear that in his view the Future Force 2020 structure would require real year-on-year growth in the defence budget beyond 2015. The announcement today that the MoD can plan on an increase in equipment and an equipment support programme in the years before the spending review settlement means that the department has a firm base for its longer term plans. This will enable the department to make better value-for-money decisions, and makes clear this Government’s commitment to deliver the forces necessary to meet our future commitments.
The noble Lord then asked if there are going to be reductions in the regular Armed Forces because of cuts in reserves. We are confident that with the additional investment, the reprioritisation and efficiency improvement and the planned withdrawal from combat operations in Afghanistan we can rebalance the Army in particular, so that we can have a whole force of around 120,000 with a ratio of about 70 per cent regulars to 30 per cent Territorial Army. This will allow us to maintain an enduring commitment at brigade level as described in the SDSR. As the Secretary of State has said, the role of the Territorial Army has been greatly undervalued too often in the past. It will continue to have an important role in the Army.
The noble Lord then asked about strategic decisions and the Future Force 2020. We are confident that with the additional investment, the reprioritisation and efficiency improvements and the planned withdrawal from combat operations in Afghanistan, together with a rebalancing of Regular and Reserve Forces, we can generate the forces required to achieve the objectives in the SDSR, including the ability to maintain an enduring commitment at brigade level as described in the SDSR.
The noble Lord asked about the expertise of reservists. I have some personal experience: I was for a number of years colonel of a Sapper TA regiment. They had expertise of a very high order, they were very highly trained, and whenever they went out to Afghanistan they were very much respected by the Regular Forces with which they trained. This is an issue that we will be working on. Clearly, recruiting, which the noble Lord mentioned, is vital. A recruiting and training surge will be needed to meet the demands of the revised reservist roles, and to provide for more viable unit strength. The establishment of an effective recruiting and training mechanism to handle the potential surge requirement will be an essential precondition of success if reserve manpower decline is to be arrested, initially, and then increased. This should include rapid changes to existing processes and regulations to make it more attractive for ex-regulars to join the reserves on leaving.
The noble Lord then asked whether RAF Leuchars is closing. Leuchars is not being closed. It will become a major Army base. Following the SDSR, the Royal Air Force needed three, not four, RAF fast-jet bases. It could not make military sense, and would be uneconomic, to close RAF Marham or RAF Coningsby. A decision had to be taken that was best for defence as a whole. With the Tornado force drawing down at Lossiemouth, we concluded that we could build up the Typhoon force there rather than continuing at RAF Leuchars, enabling Leuchars to be utilised for the MRB to be based in Scotland.
The noble Lord mentioned the Chinooks, and I can confirm that we will be ordering the 12 plus the two very early on in the autumn. He welcomed the 1 per cent increase and asked if would it affect the rest of the defence budget. Her Majesty’s Treasury has agreed that we may plan on the basis of an uplift of equipment expenditure, and equipment support year-on-year of 1 per cent above inflation in the years beyond the current spending period. Finally, all these decisions were taken solely on military considerations.
Lord Lee of Trafford
My Lords, first, I join these Benches in the earlier tribute. Very recently, the Leader of the Opposition offered talks with the coalition Government on the future of financing long-term care in this country. I suggest that, important as long-term care is, defence is of equal importance. Would it not make sense for the coalition Government to attempt to talk to the Opposition about getting a unified approach to defence spend? That is my main point.
I would like to put two smaller points to my noble friend. First, will he confirm that the proceeds of the sale of valuable defence sites and buildings will be retained within the defence budget? Secondly, can he indicate the total costs of withdrawal from Germany and the necessary rehousing of those units in this country?
Lord Astor of Hever
My Lords, I am grateful to my noble friend for his tribute. As for as his question about opening discussions with Her Majesty’s Opposition, he has raised this before; I am very happy to take it back to my department and come back, and I will let my noble friend know what the answer is. As far as proceeds of defence sales are concerned, the answer is yes: they will remain in the MoD budget. As far as the total cost of withdrawal from Germany is concerned, I do not have any figures on this at the moment. We are working on it, and as soon as I have some figures I will let my noble friend know.
Lord Stirrup
My Lords, having served as honorary colonel of a TA Royal Engineer regiment I confirm what the Minister has said about the TA’s expertise and utility. However, in repeating the Statement made in another place the Minister referred to models from other countries: Canada and the United States. Part of the reason for the success of the reservist element of their forces has very much to do with the culture of those countries and the background from which those people come. It has to do with the way that reservists are honoured and celebrated within society; the view that ordinary citizens and employers across the board take of their service.
I do not for one moment suggest that we could not have a similar culture in this country but it would be a change from that which we currently have. As we recognise, change in culture is a difficult thing to do. It takes time, commitment and a sustained effort across that period of time, and it has to be led from the top. What strategy does the Minister have? What strategy do the Government have for this transformation of culture, which will be essential if the very demanding recruitment targets he has outlined today for the TA have any hope of being met in the future?
Lord Astor of Hever
My Lords, the noble and gallant Lord makes an excellent point about the culture of the reserves in the United States, Canada and other countries. We are aware that this area will need a lot of work and we are determined to make this whole issue of the reserves successful. We will work on it. Part of this issue is mentioned in the booklet. I very much look forward to discussions with the noble and gallant Lord about any further ideas on how we can take this forward.
Lord Davies of Stamford
My Lords, given the shortage of time, let me focus on just the procurement issues. My noble friend has dealt with the £38 billion myth. I am very sorry that the Government are still descending to using it. It is of course a completely bogus figure based on, as he said, quite unreasonable assumptions. It is really a very silly, as well as a very disingenuous, piece of propaganda.
Apart from that, perhaps I may surprise the noble Lord—because I believe in giving credit where credit is due—by congratulating him. I do not think that 1 per cent in real terms is enough. I would rather have 1.5 per cent, which is what we had when we were in Government. Of course, the sustainable long-term growth rate of the economy is generally reckoned at being 2.25 per cent. Nevertheless, 1 per cent is considerably better than what we have now got. The noble Lord and his ministerial colleagues are to be congratulated on a reasonably successful outcome on what must have been a very difficult negotiation with the Treasury and, no doubt, with No. 10 Downing Street, but I do not think that they understand much about military matters these days.
I do not resile at all from the critiques I have made in the past, particularly about the disappearance of carrier strike capability, but the announcements that the Minister has made today on procurement are extremely important. I am delighted about the Warrior upgrade. That was the only project, which was a priority of mine, that I failed to get through in my time of office and would have been my first priority after the election if we had won it. The Rivet Joints are an enormously important intelligence asset and it is great news that that is going through.
Fourteen Chinooks is not as good as the 22 which we were going to order but, again, it is a good deal better than nothing, which has been happening up until now. Will the noble Lord say the projected in-service dates for these Chinooks? Obviously, there will be different dates. What are the in-service dates for the Rivet Joint aircraft? What are the expected in-service dates for the new upgraded Warriors with the 45 millimetre cannon and so forth? Will he say how many of the Rivet Joint aircraft and how many of the upgraded Warriors the Government intend to procure?
Lord Astor of Hever
My Lords, I am very grateful to the noble Lord for his support. Perhaps I may correct him on what he said about the Prime Minister. I have had a meeting on defence issues with him and I can assure the noble Lord that he takes the whole issue of the Armed Forces and equipment very seriously. Defence of the realm is the first duty of a Government, which he takes very seriously. I am sorry to disappoint the noble Lord there.
The noble Lord welcomed the Warrior upgrade and the Rivet Joint. I can confirm that we will order three Rivet Joints. I do not have the in-service date for the Chinooks. We are very near a point where we can go ahead with the ordering and as soon as I have the in-service date I will make a point of writing to the noble Lord to let him know the answer to that.
Lord Freeman
My Lords, my noble friend the Minister, I am sure, will realise that this Statement will be warmly welcomed by the Reserve Forces, in particular by the Territorial Army, which over the past decade has seen a dramatic reduction in their numbers and their utility in the field of conflict. Will my noble friend convey to the Ministry of Defence and General Houghton—I, together with my colleagues pay tribute to the diligence of his work over the past two years in this regard—to please look at the skills required by the Reserve Forces in conjunction with the demands not only of employers but also their willingness to identify the skills that could be available? I see the Reserve Forces as playing a crucial role not only in homeland security but abroad within specific skill sets.
Lord Astor of Hever
My Lords, I am very grateful to my noble friend for his question. I agree that we have seen major reductions in the TA recently. I will convey his congratulations to my department and to General Sir Nick Houghton and his co-members for their excellent work on Future Reserves 2020. I know that they spent hours and hours agonising about this review. I will also ask my department to look at the issue that he raised about the skills required and how we can work on that with employers.
Lord Maginnis of Drumglass
My Lords, while welcoming the general trend of this Statement—it is 30 years since I was involved actively in military matters—will the Minister clarify exactly what he is saying in terms of Northern Ireland? As regards recruitment in Scotland, I read that certain things will happen,
“in line with the Scottish tradition of supporting our Armed Forces”.
At the same time, I think I read that there will be a virtual disconnection between the military in Northern Ireland and pertaining to Northern Ireland in the future. That is totally unacceptable. There is a tradition—I am proud to say that I was part of that tradition for a number of years—in Northern Ireland, which was highlighted during the Troubles and during the invasion of Normandy. Most recently, when I visited troops in Afghanistan, the commander in charge of Camp Bastion said of the 2nd Battalion Royal Irish that they have achieved more in four months than would have been expected of them in a full tour. Is that going to be sacrificed? Are we going to have another instalment of what I would call “Heathism”; that is, detaching Northern Ireland from the rest of the United Kingdom? If that were to happen, the resentment in Northern Ireland among those who have served faithfully for so many years and at such a cost would be deeply felt.
Lord Astor of Hever
My Lords, I am well aware of the tradition in Northern Ireland of support for our Armed Forces. I served in Northern Ireland as a soldier and I am well aware of that. Indeed, my driver came from Northern Ireland. I can confirm that we have no wish whatever to detach Northern Ireland from the rest of Britain. The Statement makes clear that other Army units returning from Germany will move into those bases that were vacated, and we remain committed to maintaining a permanent military garrison in Northern Ireland.
Lord Burnett
My Lords, I apologise to the House for missing the very earliest part of the Statement, which I welcome. Our reservists do outstanding work. Will my noble friend confirm that the reserves will continue to welcome retired servicemen into the reserve service? Will the outcome of this Statement make the reserve service more attractive to former servicemen? I would remind the House that Corporal Croucher, George Cross, a Royal Marines reservist, was a regular Royal Marine, as was Corporal Seth Stephens, Conspicuous Gallantry Cross, a special boat service reservist who was killed in action in Afghanistan last year.
Lord Astor of Hever
My Lords, I am very grateful to my noble friend for his support. Service personnel, the Veterans Agency and the single services are working together to simplify their business processes and ensure that their advice and guidance help to improve transfer between commitments; that is, to make it easier for transfer between the regulars and the reserves. A service-terms and conditions-of-service subject-matter expert has been appointed for each service to advise and educate those involved. Work continues to look at ways of streamlining the processes. My noble friend makes a very important point: we want to get as many former regulars into the reserves as possible.
Lord Bilimoria
My Lords, the Minister has outlined some very welcome news about the reserves in particular and the increase in spending by 1 per cent in real terms. When I speak to senior people in government, the answer to my first question about defence is, “There’s no money”. When I speak to senior service officers, they talk about “mitigating” and “removing capability”. This Statement shows that the Government are willing to listen. With Libya, we have seen that we could have done with an aircraft carrier, that we could have done with Harriers and that we could have done with the Nimrod, yet the Nimrod was just dismantled. Was it really worth doing that? Was it not short-sighted? What if something happens in the Falklands? What about our nuclear submarines having AWACS cover? Have we not learnt? Have we been penny-wise and pound-foolish? Have we put means before ends?
Lord Astor of Hever
My Lords, I am very grateful to the noble Lord for his support. We inherited a very difficult situation; it was not perfect. We tried to do the very best we could under the circumstances. I did not feel comfortable with a lot of the cuts, but under the financial circumstances, we had no alternative.
Lord West of Spithead
My Lords, I thank the Minister for the Statement. It is highly complicated and will take a lot of study before one can give very sensible comments on it. In general terms, I have no doubt that we need a greater increase in defence spending and I would hope that both sides of the House felt that was appropriate in the future. I am very supportive of the withdrawal from Germany—it should have happened previously; it has cost us a huge amount of money having those forces there. I like the basing of the marines down in the south-west. My question is brief, just for clarity. The Statement said:
“I can now give the go ahead for … the cat and traps for the Queen Elizabeth class carriers”.
Cats and traps is shorthand for catapults and arrester wires. Do I assume, because the Statement seems to say it, that we are intending to put catapults and arrester wires on the “Queen Elizabeth” and the “Prince of Wales”?
Lord Astor of Hever
My Lords, I agree with the noble Lord that this is a very complicated issue which will take a lot of study. I am very happy to organise further briefings for noble Lords if they would like on any particular issue, be it on the reserves or basing or anything else. I am grateful that the noble Lord supports the increase in spending, albeit of 1 per cent, which will enable us to do quite a lot. I can confirm that the cats and traps will be for one carrier—at the moment, we do not know which one it is. Whether to equip the other carrier with them will be a decision for the 2015 SDSR.
Lord Grenfell
My Lords, perhaps I may put a question to the Minister on reserves. Any declaration of interest that I might make would probably be otiose in light of the statute of limitations, since it is 55 years since I joined the Territorial Army. I joined the very happily named Queen’s Westminsters and spent nine years feeling that we were doing something useful. Of course, in those days, we had already done two years’ service, which meant that, when we arrived in the territorial battalions, we knew a little bit about what we were expected to do having had some training and felt that we were ready for anything. That may partly answer the very good point made by the noble and gallant Lord that the culture has changed. In those days, the culture in the country was much more receptive to the idea of territorial service.
I welcome what was in the Statement that the Minister has repeated to us. It is true that, as the decades have passed, as the noble Lord, Lord Freeman, pointed out, the Territorial Army has suffered from the depredations of the Treasury. Therefore, I welcome what the Statement says about its strengthening. It is right that we should try to bring the regular-to-reserve ratio further into balance; I think 70:30 is right. I spent many years in the United States and was very impressed by the fact that there was a culture there which made that ratio possible. It is possible to recreate it. Are the Government fully aware of the enormous value of service in the reserves, not just for an increase in military capacity but also because of the social and community value that it represents? It provides young people of both sexes with experience that enhances their working-life prospects. Will the Minister assure us that, in the important recruitment that will have to take place if we are to achieve that balance, sufficient resources will be devoted to the recruitment programme? Our ability to reach 70:30 will depend on us being able to convince a sceptical public that service in the reserves is worth while. Her Majesty's Government would gain greatly from paying attention to the social and community value of the reserves and from making sure that the regular forces are fully engaged in helping in that recruitment drive.
Lord Astor of Hever
My Lords, I am grateful to the noble Lord for his contribution. I know what a distinguished officer he was, both in the regular Army and the reserves. Indeed, the noble Lord looked very military in his regimental tie laying a wreath at the Cenotaph yesterday.
I am grateful for the noble Lord’s welcome of the 70:30 ratio from his experience of living in the United States. Of course, we understand the value of service in the reserves and will do our very best to ensure that sufficient resources are given to the reserves to make this all possible.
Lord Mayhew of Twysden
My Lords, in the rebalancing of the Army into multi-role brigades, is any role to be retained for the main battle tank? If there is, where will the training for it be able to be done, one wonders, with the loss of the training grounds in Germany. If there is not to be any role for it, what consequential plans are there for those regiments at present equipped with or trained for the use of Challenger?
Lord Astor of Hever
My Lords, I can confirm that we will have fewer numbers of Challenger 2 tanks, but we very much value their use. There is of course the training area on Salisbury Plain—where I spent many happy hours. We are also in discussions with the Scottish Executive about the use of some land in Scotland for training.
Local Government Finance
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, with the permission of the House, I shall now repeat a Statement made by my right honourable friend the Secretary of State for Communities and Local Government. The Statement is as follows.
“I would like to update the House on the Government’s review of local government finance. The past year has seen the beginnings of a long-awaited and much-needed shift in power: from national to local; from Whitehall to the town hall. But if localism is to reach its potential, the new legal freedoms must be matched by freedom over finance. This is not a new idea. Reviews from Layfield in the 1970s onwards have emphasised that increasing local financial control is key to strengthening local democracy.
Strangely, the previous Government did nothing to reform the system, despite a local government finance Green Paper, a local government White Paper, the balance of funding report and the Lyons inquiry. They did not even bother to issue a formal response to Lyons’ 400-page report.
By contrast, the coalition Government are delivering radical change. During the past year, we have begun the phasing-out of ring-fencing, freed up £2.1 billion from restrictions and simplified more than 90 separate funding streams to fewer than 10. This is real progress. But today we are committed to going further still: to restoring our councils’ financial autonomy, while ensuring a fair deal for all communities whether in the north or the south.
In the first phase of our review of local government resources, we have focused on local retention of business rates. As the House will know, the Government have already taken action on business rates. We have introduced a more generous small business rate relief scheme; we are making it easier to get that relief without filling in paperwork; and we have scrapped the unfair and regressive ports tax. Now we are looking at what business rates mean for councils themselves.
Councils in England collect some £19 billion of business rates each year. No sooner has the cash come in than it is gathered up by the Treasury, and then redistributed to councils according to a complex formula. This approach has major shortcomings: it denies councils control over locally raised resources; it deprives them of the certainty they need to plan their finances for the longer term; and it creates a disconnection between the success of local businesses and the state of their own finances. Surely it is common sense for the system to encourage councils to boost local jobs and growth. Radical change is needed, and councils themselves agree.
In a major step for transparency, my department is publishing today every representation made to the recent local government finance settlement. There is a common theme. Councils believe the current system is complex and opaque. They have to talk down their successes, and talk up their difficulties, in order to secure the best possible deal from Whitehall. To address this, mere tinkering—adjusting the formula here, amending the area cost adjustment there—will not be enough.
This Government are determined to repatriate business rates. Today, I am publishing a consultation outlining our proposals. No more will proud cities or historic counties be forced to come to national government with a begging bowl. Councils will have greater control over cash, helping them plan for the longer term. Tax increment financing will let them borrow against anticipated increases in rates, giving them a new way to invest in infrastructure, from transport projects to regenerated town centres. Councils should see a direct link between the success of local businesses and their own cash flow. This will create the right incentives for them to work closely with local businesses.
I am determined that the transition to a new scheme must be both responsible and fair. The Government’s overriding priority continues to be deficit reduction. In the spending review, we have set out the level of resources available for local government for the next four years. In the interests of financial stability, for the first two years of the retention scheme we intend to stick to these spending plans, but we will allow authorities to benefit from any growth in business rates above forecast levels. Beyond this spending review period, we will look to align more closely local authority functions and total business rate income.
It is also of paramount importance to ensure our proposals on local government finance are balanced, fair and equitable, creating the right incentives for all areas to grow while protecting the most vulnerable. We propose a number a measures and safeguards to achieve this.
First, poorer places will share in the increase of growth with more prosperous areas. Those places with greatest dependency should, and will, continue to receive support while being allowed to keep the products of enterprise, and those places which raise the greatest sums through business rates should expect to make a contribution. A system of tariffs and top-ups will make sure that we start from a fair base. As the Deputy Prime Minister told the Local Government Association last month, we will ensure that no one will be worse off when the new system is introduced than they would have been under the old system.
Secondly, as the House will well know, some areas have strong natural economic advantages such as high-value industries or concentrations of skilled workers. There will be no cap on the amount of business growth councils can benefit from. A council will always be better off as a result of growth. But if an area benefits disproportionately from growth in business rates, we propose to introduce a special local levy to capture a share of that benefit. The money raised would be used, in the first instance, to fund a safety net, and this safety net would protect authorities experiencing exceptional shocks to their business rate take.
Thirdly, our proposals include the option of resetting the whole system. If councils no longer had enough resources to meet local needs, the Government would be able to recalculate the level of tariffs and top-ups across the whole system.
Fourthly, support for mandatory and discretionary rate relief will continue. Rate relief to the needy will be unaffected. National discounts and rate relief will continue to be supported, meaning no adverse change to such groups as charities, amateur sports clubs, voluntary groups, those in hardship and eligible rural or small firms.
Finally, we have reflected carefully on what our new system means for business. Businesses—the creators of local jobs and wealth—need stability in this process. They need certainty to plan for the long term. So let me spell out in no uncertain terms that local firms will see no difference in the way they pay tax or the way the tax is set as a result of these changes.
I am placing in the Library a plain English guide so that honourable Members’ constituents can understand what our proposals would mean for them. We intend that business rates should be repatriated in 2013. We will bring forward a Local Government Finance Bill to give our proposals legal effect.
The publication of this consultation begins a debate that I hope will be wide-ranging and constructive. I want to work with all local authorities, representative groups and political parties and build a consensus for lasting change. That consensus will be built on, putting power back in the hands of local councils and communities; supporting local jobs and local firms; and creating the conditions for renewed, sustainable economic growth”.
My Lords, that concludes the Statement.
Lord McKenzie of Luton
My Lords, I thank the noble Baroness, Lady Hanham, for repeating the Statement on local government finance and for the offer of a plain English guide to be placed in the Library. I also thank her for the prospect of another local government Bill which might keep us busy for a few days.
In a recent publication on local government finance, the Smith Institute observed that local government finance has been a backwater for most national politicians. Since the poll tax debacle, Ministers have been cautious about reforming local taxation, not least because the issue is seen as divisive and complex. The challenge is to seek a lasting consensus on how to change the system in a way which satisfies councils which are rich as well as those which are poor. Indeed, that is the test for these proposals.
That is why we will look closely at the Government’s announcement because the devil is, of course, in the detail. We should make it clear, as we did in another place, that we back a funding system for local authorities which supports jobs and growth and encourages enterprise. We support the taking forward of tax increment financing and the continuation of small business rate relief, and we welcome the publication of the responses to the consultation. Yes, we support localism—but true localism, which is why we have opposed the raft of centralising powers that the Secretary of State has taken to himself in the Localism Bill. We also support localism in matters of finance.
We hear today that the proposals on local government finance are balanced, fair and equitable, I think was the term, but the precedents are not good. Where, for example, is the fairness in the cuts we are seeing right across the country to home helps and care services, to street cleaning and bin collections? The Statement reiterates what the Deputy Prime Minister told the LGA last month: no one will be worse off when the new system is introduced. Even if that is the case at the point of introduction—and we are not all reassured by cast iron promises from the Deputy Prime Minister—what will the position be at the end of year one, year two or year three? Perhaps the Minister can tell us.
The Minister tells us that the spending review totals are to remain unchanged. Therefore, if there is a fixed pot of money for any council to gain, logically others must be losing out. Can the Minister say what assessment has been made of winners and losers, and how this squares with the assurances of the Deputy Prime Minister?
We recognise some of the weaknesses in the current system. However, a local government finance system that does not reflect needs and available resources could have disastrous consequences for some councils, while others would enjoy large surpluses compared to existing budgeted expenditure. It remains to be seen whether the proposed detailed system of tariffs and top-ups is a fair mechanism to ensure that all local authorities have resources that are adequate to deliver services that are needed and that will allow all communities a chance to prosper. Our fear is that the poorest areas, with the most deprived communities and the smallest business base, will again miss out. Those very communities that saw their area-based grant cut, putting services like children’s centres at risk, through a finance settlement that singled them out for the heaviest cuts, will now lose out on the localising of the business rates.
We know that currently the formula grant is financed significantly by local business rate income, and the latter is forecast to grow as the grant is forecast to fall. The Government are planning to hold back something like £2 billion in local business rate income to give effect to these cuts. Business rate localisation would clearly be one way of stopping this. However, what will happen to the surplus business rate, amounting to some £2.2 billion in 2014-15? Will it now be available to local authorities or will it be retained centrally? Can the Minister tell us the forecast baseline above which local authorities will be able to benefit from growth in business rates? The Statement refers to an area benefiting disproportionately from growth in business rates, which will be subject to a special local levy to capture a share of the benefit. How will it be determined that an area is benefiting disproportionately from growth in business rates?
Cutting funding to areas with the highest need does not free councils from central control or empower them. It stops them from doing the things that their communities need of them. If people do not believe that their council can make a difference, it does not encourage civic activism; it undermines it and fuels a sense of disengagement from the political process. We want a funding system that supports jobs and encourages enterprise. However, as the Minister recognised, not every area has the same ability to attract investment and new businesses. Not everywhere can be like Westminster or the City of London. Areas with the highest levels of deprivation and the weakest business base need the most support; they do not need funding cuts. We will support incentives to boost enterprise and put councils and communities in control, but fairness must be at the heart of the system.
Baroness Hanham
My Lords, I thank the noble Lord for his comments and contributions. From the outset, I remind noble Lords that this is a consultation. Therefore definitive answers may not be pouring out of my mouth, although I will do my best to answer as much as I can about the consultation. However, technical documents will be ready by August to back up the consultation, so some of the points will be considered there.
I am grateful to the noble Lord for his indication that he supports funding for jobs and enterprise. Naturally that is what we are trying to achieve. I am also glad that he supports the tax incentive finance, which will come about as a result of business growth and will be a useful area for borrowing.
The noble Lord referred to the fairness in cuts. The whole process will start in 2012. At the start of this spending review, for the first two years there will be no change at all. Only in year 3 will we begin to see the changes with the business rate being kept within the local community. We are proposing that in years 1 and 2 it will stay as it is, and in year 3, instead of the local authorities collecting the business rates and passing them on to the Treasury, they will collect the business rates and, under an arrangement, pass some of them on to the Treasury. The rest will be held by local government in year 3 and subsequent years.
With regard to the tariffs and top-ups, the control totals will not change within the four-year spending review. However, in areas where we believe the business rate is in excess of those totals, a tariff will be levied that will help poorer areas, about which the noble Lord spoke in terms of top-ups. There will be a swing of money between one and the others, so the poorest areas will be given the help that they need.
The £2.5 billion that will be held by local authorities will be directed to other local grants. It is suggested that the levy, which again is a matter for consultation, will be on top of the business rates, from which local authorities make what is called in the consultation paper a disproportionate amount. They will then share that through a top slice with other authorities.
Lord McKenzie of Luton
The Minister answered a number of the questions I raised. Could she tell us how the test of disproportionately benefiting from business rates is going to be set?
Baroness Hanham
My Lords, I think I am going to direct the noble Lord to the consultation, because this is one of the areas where we want to talk to local authorities to understand the nature and impact of that issue. At the moment, I do not think I can give a substantive answer, but it will be in an authority that has access to far more business rates than perhaps other local authorities comparably.
Lord Tope
My Lords, I thank the Minister for repeating the Statement in this House, and also for the plain English guide being put in the House of Lords Library, which I am sure will sell like hot cakes before the summer holidays. I also congratulate the Minister on resisting the temptation to start answering the questions posed in the consultation document before that document has actually been seen by those being consulted.
I warmly welcome the commitment of the coalition Government to start delivering on a promise that I think has been made by every opposition party since the Conservative Government first nationalised business rates over 20 years ago. It is understandable that local authorities will want to look at the detail and consider particularly the proposed equalisation scheme. Does the Minister agree that, when they have done so, this proposal is likely to receive a warm welcome throughout the country by councils under any political control? Does she agree that probably the repatriation of business rates is arguably the best boost to business regeneration that this Government—certainly her department—can provide? Finally, will she confirm that the setting of the tax rate will continue to be done centrally in line with the retail prices index; and can she say whether, at any stage in the future, the Government propose to introduce an element of localisation into the setting of the tax rate?
Baroness Hanham
My Lords, I thank my noble friend Lord Tope for his kindly and warm welcome for this consultation document. I agree with him that local government will be content with this proposal; whether it is content with all the details will come out in the consultation. As long as I have been involved in local government, and since the rate began to be set centrally, local government has looked to having the business rate repatriated—in that it does not go out and come back in again but is contained within local authorities. The repatriation of the business rate is a good thing. The setting of the rate for the grant will continue to be set centrally, for the time being at least. As far as I know at the moment, that will continue to be the situation.
Lord Beecham
My Lords, to follow the pointed last question of the noble Lord, Lord Tope, does it not make rather a nonsense of the fine phrase about “freedom over finance” when all that is being restored is the right to retain business rates at a level decreed by the Government, with no capacity to vary it one way or the other at the local level? Is it not also the case that the vaunted reduction in ring-fencing, which in principle is to be welcomed, really amounts at present simply to more freedom to spend less and to incur the odium of taking the decisions over cuts in services that the Government are imposing on authorities through the significant, massive and unprecedented reduction in the government grant?
There is a sentence in the Statement that says:
“Beyond this spending review period, we will look to align more closely local authority functions and total business rate income”.
What does that mean? What are the implications of that sentence?
As for the fairness between authorities, is it not striking that the City of London stands to gain £545 million a year in increased business rate income and the entire authorities in the north-east of England stand to lose £544 million a year? For how long and to what extent will losses in authorities such as those in the north-east be compensated? There are many others; Birmingham, for example, will lose £300 million. Will the losses be fully met and, if so, for how long? Is the Minister aware that in a debate in Westminster Hall, Andrew Stunell, who is a Minister in the department, seemed to indicate that it would be for a year? Is that the position?
Finally, how will this compensation adjustment be made? Is there any detail in the consultation paper about how these huge imbalances are to be addressed, or is it another case of politics in the style of the late lamented Tommy Cooper, whereby things will happen “just like that”?
Baroness Hanham
The noble Lord said it so nicely, he will almost be able to go on the stage and do Tommy Cooper, but I am sure he does not really want to do that.
At the outset I remind the noble Lord that local government finance is at the level that it is because of the disastrous deficit that had to be met. Local government has had to take its share of that. The noble Lord knows that if a Labour Government had come into power, they too would have had to make very substantial reductions. Local government would have been left facing very similar problems and decisions to reflect those reductions.
The compensation system will be the tariffs and the top-ups. The expectation is that the control totals that are in place at the moment for the four-year spending review will stay in place. However, with the retention of the business rate, as the noble Lord has rightly said, some areas will have a far higher business rate than others and will be able to generate more. At the start, the tariff will be set at the level of those that have higher rates; the expectation is that, above that, money will be taken off and passed to those in the poorest areas. There will be a sort of balancing between them.
The noble Lord asked how there would be growth. The rate will encourage local government to talk to businesses and encourage the development of businesses, because they will be able to retain some of the extra rate that comes from that. I hope that that answers the noble Lord’s questions.
Lord Jenkin of Roding
My Lords, I, too, like my noble friend Lord Tope, warmly welcome the main thrust of what is proposed in this consultation paper. Like him, I admire my noble friend’s refusal to try to answer the questions that are asked in the consultation paper. We are very grateful for the repetition of the Statement; indeed, it reads very well.
I have two points to make. I was the Secretary of State who introduced the nationalisation, as it has been called, of the business rate. One has to remember what lay behind that—namely, that 20 years ago we examined the question of the local authorities and who paid, who benefited and who voted. This was not a coterminous group, although there were some overlaps of course, but businesses, particularly small businesses, felt that they were being overcharged by local authorities fixing the rate to get the benefit of the revenue so that they could provide extra benefits for those who voted but who perhaps did not contribute any rates. That is what my noble friend has to avoid. What has been proposed in this consultation paper goes a long way towards that; it was very reassuring when she said that the business rate would still be set nationally and that it would not be open to local authorities to change that. While one would like to feel that setting the rate could make it more responsive to business requirements, the fact of the matter is that we had many years of experience of that and it did not work.
The one point on which I disagree with my noble friend Lord Tope is that I hope that the Government are not tempted to go down the road of letting local authorities fix the business rate themselves. They do not vote and yet they would be asked to pay what might be quite substantial sums. Indeed, when I had to deal with local authorities, they were asked to raise very substantial sums. I just issue that warning to my noble friend.
I end by saying that I think this is a valuable first step. I am not sure that I will take the Green Paper away with me during the Recess, as I have a number of other papers to read as well, but I look forward to studying the paper, particularly when some of the details, which my noble friend said would be published later, are available.
Baroness Hanham
My Lords, my noble friend was a much respected Secretary of State. I still remember the reasons why business rates were centralised. There is no intention of allowing local government to set the business rate; businesses will in effect see no change. The business rate itself will be set nationally, as it is; the discounts, the valuations and the rates that are paid will be the same, so in effect they will be unaffected. However, the area in which we hope and expect to see change is in encouraging local authorities to make sure that they are well in tune with their local businesses, that they try to see their businesses grow and that enterprise and employment follows from that. If business grows, local authorities will be able to benefit from that. I hope my noble friend will understand that the business rate will be as he put it—set nationally.
Baroness Quin
My Lords, given the responsibility of Governments to promote balanced economic growth across the country, will the Government give a commitment that the north-south divide, and indeed the gap between the less well-off and better-off areas, will not be allowed to widen as a result of these measures? Could I tempt the Minister to disagree with the Secretary of State in another place, who is reported as saying that at the moment there is no motivation for councils to support local firms or to create new jobs? Gateshead, the council that I have had the closest involvement with in recent years, has been a splendid public entrepreneur in working with private industry to do precisely that. There is therefore a great motivation simply to promote the economic well-being of the area that local councils represent.
Baroness Hanham
My Lords, with reference to the noble Baroness’s last question, of course there are local authorities that have been working assiduously to promote economic growth all over the country. Authorities both north and south have worked very hard. On the other hand, they are not really benefiting from that because they are getting nothing back from the business rate. The spending totals remain the same; the control totals stay the same. If they can encourage more enterprise, or more firms into their areas, they will get some of that growth back above the tariffs. That will be helpful because they will be able to reinvest that and to promote the economy better. There is an advantage, but I would certainly not underestimate the amount of work that local authorities have already done. I have seen quite a lot of it during my year as a Minister, so I am grateful for it.
Within the spending review, the control totals will remain the same, although, as I have explained, between the tariffs and the top-ups there will be a switch of resources from those that have more business rate to those that have less. I do not think anyone will be any worse or better off as a result for the time being.
Baroness Kramer
My Lords, the Minister will not be surprised that as well as welcoming the announcement of this Bill in general I am particularly delighted that tax increment financing is included in the Statement. I have two things to ask her. First, could she ensure that, during the consultation, there will be the widest possible definition of tax increment financing rather than the sometimes very narrow definition that gets touted around, since the purpose of this is to ensure economic growth and maximum advantage for developing business in local communities and regeneration?
Secondly, I ask her to look favourably at the amendment which the noble Baroness, Lady Valentine, will move on Wednesday that would allow tax increment financing to go ahead much more immediately in London, thereby providing a good pilot for this new approach in the UK to financing and encouraging economic growth at a time when it is so highly valued.
Baroness Hanham
My Lords, I know of the noble Baroness’s interest in this. A consultation is a consultation, and if people have ideas about how wide they want the tax increment financing to go they will be able to say so in the consultation. I do not think there is anything in the consultation questions that would prevent that from happening. I am not in a position at the moment to say what my response will be to the amendment tabled by the noble Baroness, Lady Valentine.
Lord Shipley
My Lords, while welcoming the Minister’s announcement, it is important not to misinterpret what is being proposed. While this is being billed as being about the repatriation of business rates from 2013, that is strictly speaking not the case because firms will see no difference in the way in which they pay tax, or in the way in which the tax is set, as a result of these changes. In this sense, therefore, this is not about repatriation. However, for all the reasons that my noble friend Lord Jenkin identified, it is very important that the repatriation of business rates is seen to be fair by the firms and businesses that are paying these rates. For this to be maintained at a national level is, at least for the foreseeable future, the right thing to do.
What matters in this proposal is that it encourages growth and enterprise. For this reason, it is important that the deal that has been announced is seen to be fair and does not simply redistribute from poorer areas to richer areas. Setting an insurance scheme against shocks enables poorer areas to do more for themselves and to generate income that will make them richer. In that sense, a virtuous circle can be created.
The consultation is very welcome. I have been a firm advocate of the repatriation of business rates now for many years, so I welcome the direction that the Government are setting.
Finally, I have one question about tax increment financing. There is no date in the Minister’s Statement for when tax increment financing will come into play. I assume that it will be in 2013, but it is very important that, as part of the whole package of repatriation of business rates from this date, tax increment financing is part of it.
Baroness Hanham
My Lords, the answer to the noble Lord’s final question is that the Government are committed to introducing tax increment financing as soon as possible and will move as quickly as possible to deliver it. It is being introduced through the local government finance Bill alongside the local retention of business rates. Once again, I thank the noble Lord for his support for this.
On the repatriation of tax revenue for business rates, while businesses will not see an immediate change to the way they pay the tax, they will see a greater interest from local authorities in the rates. They are important anyway, but I expect and hope that they will be even more important because there are lots of incentives for business not only in the Localism Bill but in the consultation that has been announced today. Yes, this is absolutely all about encouraging growth and enterprise, and the expectation and the ability to keep extra business rates in areas that need to do more to encourage business will do exactly what the noble Lord, Lord Shipley, has said: they will help the poorer areas perhaps to try to generate a little more business activity in the areas they represent.
Supply and Appropriation (Main Estimates) Bill
Finance (No. 3) Bill
(12 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord De Mauley
My Lords, 21 speakers have signed up for the debate on the Second Reading of the Finance (No. 3) Bill and the report on the Finance Bill 2011. If Back-Bench contributions to the Bill are kept to seven minutes, the House should be able to rise this evening at around the target rising time of 10 pm.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, as noble Lords are aware, this Government have taken difficult decisions in our two Budgets to tackle an unenviable inheritance—the largest peacetime deficit on record and an economy struggling to recover from the financial crisis. We have taken the necessary decisions to eliminate our structural current deficit over the coming four years and stimulate a private sector recovery. One is the vital precondition of the other, and our approach has been endorsed by the IMF, the OECD, the European Commission, credit-rating agencies and businesses across the UK. This Government have set the agenda on using the tax system to encourage growth.
The Plan for Growth, published in March, set out a range of supply-side reforms to improve the UK business environment. At the heart of that plan is an ambition to create the most competitive tax system in the G20 through our corporate tax reductions, reform of controlled foreign company rules and simplification of the tax system. We want to make the UK the best place in Europe to start, finance and grow a business by reducing the regulatory burden on business and ensuring that credit flows to businesses. We want to encourage investment and export as a route to a more balanced economy by investing £200 billion over the next five years in UK infrastructure, setting up 21 new enterprise zones and entrenching a green recovery. We also want to create a more educated workforce that is the most flexible in Europe by providing 50,000 additional apprenticeships, an additional 80,000 work experience placements and expanding the university technical colleges from 12 to at least 24 new colleges by 2014.
The Bill boosts our international competitiveness by reducing corporation tax by a further 1 per cent this year and to 25 per cent next year, towards a rate of 23 per cent by 2013—the lowest rate in the G7 and the 5th lowest in the G20. It encourages growth by doubling entrepreneurs’ relief to £10 million, increasing R&D tax credits for SMEs to 200 per cent and cutting the small profits rate to 20 per cent. The Bill also ensures fairness for all by increasing personal allowances by £1,000. Together with the increase to £8,105 announced at the Budget, this will remove 1.1 million people from income tax altogether. The Bill also introduces a supplementary charge on profits from oil and gas exploration in the North Sea, which allowed us to cut fuel duty by a penny on Budget day, and introduces a bank levy to discourage risky behaviour by banks, the proceeds of which will fund the £250 million investment in the Firstbuy scheme for new homes.
I turn now to the Economic Affairs Committee’s report into the 2011 Finance Bill. First, I thank the committee for its comments in recognising the substantive changes that we have made to the way that tax policy is developed, communicated and legislated. The committee considered the Government’s new approach to tax policy-making, which sets out the principles that the tax system will be more predictable, more stable and simpler to understand.
Last autumn, we published the majority of the Finance Bill legislation to provide the opportunity to develop and refine our proposals. We received over 200 responses to the consultation and many of the clauses were changed as a result. This is just the first year of this new approach, as the Committee noted. Many interested parties have expressed their pleasure with an approach that puts emphasis on consultation and this process has worked extremely well, as in the cases of corporate tax reform and pensions tax relief changes. Indeed, these specific examples were noted by members of the committee. Of course, we will continue to learn lessons and make improvements for the future and, in doing so, HMRC and the Treasury will take into account the recommendations of the committee.
We have also taken steps to address the web of tax reliefs and exemptions that complicate our tax system. The Office of Tax Simplification, set up last summer, has already provided its first series of recommendations and this Bill takes the first steps towards simplification by removing seven tax reliefs from the system. We will be bringing forward further abolitions next year after a period of consultation. The Government are committed to greater consultation on tax policy changes. However, it will not always be appropriate or proportionate to consult at all five stages for each tax policy change, as set out in the tax consultation framework. The Government will always need to retain some flexibility on tax policy. Generally speaking, the Government cannot and will not consult on rate changes or where consultation would otherwise present a risk to the Exchequer.
Your Lordships’ committee, as well as witnesses and other interested parties, has taken particular interest in the disguised remuneration legislation. I remind noble Lords that this legislation tackles the practice whereby well-paid individuals disguise their remuneration as loans which are never repaid, resulting in a loss to the Exchequer. This is a significant measure, raising over £700 million a year, and was the first substantial piece of anti-avoidance legislation introduced under the new approach to tax policy- making. There are valuable lessons to learn from the experience.
The committee has asked HMRC to look at alternatives to the disguised remuneration legislation. HMRC has already carried out a review of alternative approaches as part of the policy-making process, which concluded that the approach taken is the most effective in the long run. HMRC will, however, continue to review the effectiveness of this legislation as is normal procedure in maintaining tax policy. It should also be noted that HMRC’s new anti-avoidance strategy, which was published alongside the Budget, sets out how the department will prioritise and allocate resource to make the right decisions about how to respond to avoidance risk.
In its report, the committee has also highlighted tax evasion. HMRC recognises the significant risk to the Exchequer of tax lost through evasion and already has in place a business strategy allowing it to develop a thorough understanding of its customers. This approach helps HMRC ensure that compliance efforts and interventions are focused where they will have the greatest effect. The Government have underlined their commitment to tackling tax avoidance and evasion with a £900 million reinvestment in HMRC over the spending review period. This will transform HMRC compliance activities and bring in additional revenues of £7 billion a year by 2014-15, on top of the £13 billion additional revenues to which HMRC was already committed.
The third area that the committee considered was the approach to corporate tax reform. As I have already said, a competitive tax system is at the very core of our plan for growth. Last year we published our corporate tax road map, setting out our plans for reform over the next five years and the principles underlying them. This gives businesses the certainty they need and the confidence to invest. This Bill takes the first steps on this road by introducing changes to foreign branches and controlled foreign companies rules. Corporate tax reforms will reduce the cost of new investment and incentivise activity across the economy. I welcome the committee’s comments on the corporate tax road map, which noted:
“It should promote the stability, consistency and certainty which many of our witnesses saw as so important”.
The committee also expressed some concern around the timing of reviews of tax reforms. I assure the House that we recognise the value of monitoring and evaluating tax policy. HMRC and the Treasury are currently looking at ways in which evaluation can be better embedded in the policy-making cycle.
Regarding policy development within the Treasury and HMRC, we have noted the committee’s comments about the policy partnership. I can tell the House that the Treasury and HMRC continue to look at all aspects of their work. It is vital that both departments consider how they engage with taxpayers and how their partnership can be strengthened to achieve better engagement. There is a senior governance group in place between the departments to oversee and monitor allocation of resources to policy work in the partnership. This new governance group is also looking at how best to raise the level and effective use of skills and experience across the partnership, another area that was of particular interest to the committee. We fully recognise the importance of incentivising and retaining the best talents in the tax policy field. The establishment of a new tax academy in HMRC will improve the focus on raising skills standards. That academy will engage with stakeholders to identify shortcomings and put in place measures to address them. It will use and build on the existing range of tax training available to improve skills across the board.
This Bill sets out changes to improve our competitiveness, encourage investment and support our businesses through the recovery. Of course, we have always said that recovery would be choppy, but the last year has given us cause for cautious optimism. Output is growing and half a million new private sector jobs have been created, the second-highest rate of net job creation in the entire G7. However, there is no room for complacency, and our plans necessarily incorporate a degree of flexibility. On this point, I would like to confirm that this flexibility refers to the automatic stabilisers that allow government spending to move up and down with the economic cycle. I apologise to the noble Lord, Lord Barnett, for the confusion that arose on this point in response to his Question on 6 July. I can confirm that he correctly quoted my right honourable friend the Chancellor of the Exchequer on this issue.
To conclude, this Bill builds on the progress that the Government have made to date to help families, help business and support economic growth. I look forward to hearing this evening’s speeches, particularly the maiden speech of my noble friend Lord Magan of Castletown, and I commend this Bill to the House.
Lord Myners
My Lords, the Minister has treated us to a rich helping of palilalian piffle when it comes to the performance of the economy. His speech would be a comedy if the underlying story were not a tragedy. At least we know that the Minister is not guilty of being involved in disguised remuneration because, as we well know, he is not being remunerated at all.
Let us remind ourselves of the economic facts. In the period 1997 to 2007—for 10 years—the UK recorded the highest GDP per capita growth in the G7 countries. This was achieved against a background of low inflation and the period described by the governor of the Bank of England as the NICE decade—non-inflationary consistent expansion. Public sector net debt had fallen from 42.5 per cent of GDP in 1997 to 36.5 per cent in 2007—the second lowest level in the G7. The Conservative Opposition had committed to match Labour’s expenditure plans.
In 2007 the world was hit by a global financial crisis. The Labour party has expressed its regret that financial sector regulation was not as effective as it should have been and that that was a contributory factor to the crisis. Alistair Darling took the right decisions as a consequence of the crisis and he implemented them successfully. The financial system was stabilised under the Chancellor’s direction. Appropriate stimulus action was taken. Unemployment was lower than would otherwise have been the case, as were business failures and repossessions. The Chancellor introduced a strong framework for fiscal stabilisation going forward. I pay great tribute to Alistair Darling whom I think history will judge to be one of the great Chancellors, given the extraordinarily difficult global circumstances with which he had to deal. Last spring, after a very tough time for the economy we were turning the corner. The economy was growing. Over the second and third quarters of 2010, growth was 1.8 per cent—ahead of the USA and ahead of the EU average. Inflation remained low and unemployment was steadily coming down.
What has happened since the election? The economy has stopped growing. The Minister refers to growth but the facts are that since the Government came to power the UK’s growth record is 21st out of the 24 countries in the EU. The OBR has had to revise down its growth forecast on four separate occasions since it was established. We are the only major economy in the world that is not growing. On 26 July the Office for National Statistics will produce its initial estimates for second quarter GDP. I believe that these may well show that we are back into a recession. Inflation continues to be running at well over double the targeted level. The Minister last week completely failed to answer a question from my noble friend Lord Eatwell to explain why, if inflation was due to global circumstances, the UK was experiencing such a poor inflation record compared with other EU nations and the United States. The OBR is now forecasting that the combined effect of very low growth—if any growth at all—and inflation running well above target is that borrowing will be £46 billion above the level that the OBR expected at the time of last autumn’s spending review. I am confident that that figure will increase further when we see the second and third quarter GDP figures for 2011.
This is the context in which this House looks at the Finance Bill, described by the Chancellor of the Exchequer in his Budget speech as the “march of the makers”. The march of the myth makers, I would suggest. It is the myth around expansionary fiscal contraction, taking demand out of the economy when the economy is already suffering from underused capacity, particularly in the labour market. In the first quarter of 2011, UK GDP was much the same as it had been in the third quarter of 2010, but worse, it was still 4 per cent below the level before the global financial crisis and 11 per cent below the level that it would have been, had we extrapolated economic performance in 2007 through and beyond the financial crisis.
The Government’s response to that horrendous decline in achieved economic output is to announce a succession of policy initiatives that will have the effect of taking demand out of the economy. The Budget had nothing to offer. Growth has been hit and we are now teetering on the verge of recession. We already are in recession in terms of domestic demand. Household income is falling. Indeed, it is falling to the lowest levels in relative terms for 20 years. Real incomes fell last year for the first time since 1981. This is the background of economic achievement for which the Minister invites us to express our appreciation. Consumer confidence has slumped—I will revert to the critical issue of confidence in a moment. Business investment and confidence have also collapsed. Insolvencies are increasing. Banks are not lending. The Merlin agreement, which the Minister trumpeted, is a worthless piece of paper, as the noble Lord, Lord Oakeshott, described it. Merlin has no teeth. It does not even require the individual banks that have signed it to commit to individual lending figures. It is an aggregate figure—not an individual bank-by-bank figure. The ICB, so worthily established by this Government, has nothing to say about promoting greater competition in an oligopolistic domestic banking market.
Why is confidence so important? Notwithstanding the Government’s remonstrations about a debt-fuelled economy, the OBR assumes that household debt will increase further. At the moment, household debt is 165 per cent of GDP. The OBR assumes that it will rise to 175 per cent by 2015. That compares with 114 per cent 10 years ago. But that will not happen, and Ministers must know that that is the case. Households will not borrow more unless they are compelled by dire financial circumstances to do so involuntarily. We must remember that interest rates have yet to normalise. It is not surprising that the Bank of England warns of the consequences of rising interest rates and points to a very delicate situation for some banks if their customers are obliged to pay the sort of interest rates that would be more consistent with a rate of inflation of 4.2 per cent. Nor will the corporate sector financial surplus reduce, which is another key assumption of the Government and the OBR because why would companies run down their corporate financial surplus when the economy is experiencing such an abundance of unused capacity and declining demand?
Expansionary fiscal contraction assumes that a tight fiscal policy can lead to looser monetary policy and stimulate private investment and consumption. It is a form of the Ricardian equivalence in which almost no one believes. There can be no crowding out of private sector demand by the Government if demand is too low. The Government’s Budget strategy is simply not working. The economy is clearly not springing to life on a wave of confidence on the back of the picture painted by the Government. Monetary policy is already too loose and will have to be tightened fairly soon. The economy is stagnating but the Government propose a reduction in real government consumption, at constant market prices, of 10 per cent between now and 2015. This is a dangerous nonsense.
It was for many a forgettable Budget, an exercise in sleight of hand, but it was not forgettable if you are on a low income because you are going to be hit proportionately more than those on higher incomes. It was not a forgettable Budget if you are young and unemployed—a cohort of the economy and society that is increasing dramatically. It was not a forgettable Budget if you are female, experiencing the highest rates of female unemployment for 15 years. It was not a forgettable Budget if you are trying to buy a house or even keep your existing one. It was not a forgettable Budget if you are eking out an income from your savings when they are being reduced in real value by loose monetary policy. It was not a forgettable Budget if you are a small company seeking support from the banks. It was not a forgettable Budget if you care about the environment, because everything that was said about a green government policy was reversed in this Budget. It was not a forgettable Budget if you are a charity because of the reduced incentives to which you are now entitled as a result of tax adjustments.
The consequence of this is that we are facing the weakest economic recovery from a recession since the 1920s—the weakest economic recovery from a recession for 90 years. We are the only major economy in the world not experiencing economic growth. Regrettably, the Chancellor of the Exchequer has talked himself into a corner with irresponsible speeches about national bankruptcy and misleading references to “maxing out”—a horrible phrase which I am sure an Old Pauline should not use—the nation’s credit card. The Chancellor has talked us into this recession. As John Maynard Keynes wrote in the Times in May 1933, in words that are as apposite now as they were then:
“Unfortunately the more pessimistic the chancellor’s policy, the more likely it is that pessimistic anticipations will be realised”.
What should be done? First, Labour should acknowledge that its management of the economy during the middle part of the first decade of this millennium was not as good as it should have been. In particular, we ran a deficit while the economy was already running at full capacity and we failed to acknowledge the narrowing of the fiscal base. I have said this before and I will continue to say it because I believe it is important that we admit, with the benefit of hindsight, that mistakes were made. The economy is now in need of acute help. There should be a temporary cut in VAT. We should bring forward capital investment. Now is the right time, when there is excess capacity, to spend on government capital projects, including, in particular, social housing. We should take action to get credit flowing. I notice that the noble Baroness, Lady Noakes, has joined the board of Royal Bank of Scotland. When I sat where the Minister is sitting, I was regularly chastised by the noble Lord, Lord Noakes, who I see in his place, and the noble Baroness, Lady Noakes. I am sorry, I meant the noble Lord, Lord Newby. I made this mistake when I was a Minister and I have now done it again. I apologise to both the noble Lord and the noble Baroness. The noble Lord, Lord Newby, and the noble Baroness, Lady Noakes, both used to chide me about my inability to get the banks to lend. I ask the Minister the same question: what are you doing, Minister, because bank lending to SMEs is declining? Bank lending for housing and domestic mortgages is at a 10-year low. The Minister shakes his head, but I encourage him to become the master of his brief, be on top of the facts and realise that lending to UK SME companies is continuing to decline.
As I said, the Chancellor has left himself with no options. There would be no place to which he could turn in terms of a policy adjustment without damage to his reputation and the need to admit that Alistair Darling was correct in his fiscal judgment. The price the nation pays for the Chancellor’s and the Minister’s pride is that we are pushed back towards recession.
Lord Forsyth of Drumlean
Before the noble Lord sits down, there have been many glowing references to Alistair Darling and how wonderful he was as Chancellor, but no references at all to Gordon Brown. Was that a coincidence?
Lord Myners
We are time limited in this debate. In closing, I say how much I look forward to hearing the maiden speech of the noble Lord, Lord Magan of Castletown, who will no doubt enrich the House with his knowledge of banking both in the United Kingdom and in Ireland, where the noble Lord had a number of important banking roles. I also look forward to the contribution from the noble Lord, Lord MacGregor of Pulham Market. I congratulate his committee on its extremely good work. Finally, I express my appreciation to the Minister for his apology to my noble friend Lord Barnett.
Lord Newby
My Lords, it is always a great pleasure to follow the noble Lord, Lord Myners, particularly when he has just misled the House with regard to my surname. I am afraid that the noble Baroness, Lady Noakes, will not speak to me for a month. It is also a great pleasure to hear him speak again so eloquently from the Dispatch Box.
These are clearly extremely nervous times for the economy. Growth is very low at best, business confidence is poor and inflation is relatively high and squeezing real incomes, so it is not surprising that we hear many voices, including that of the noble Lord, Lord Myners, calling on the Government in effect to throw caution to the winds, abandon their deficit reduction plan and stimulate the economy by some combination of tax cuts and greater public expenditure. It is very tempting, but with a couple of relatively minor exceptions to which I shall come later, I think that such a policy would be misguided. There are a number of reasons why growth is disappointing, but the Government’s fiscal policy changes are at most only one of many reasons. Imported inflation via commodity and food prices clearly is one, so is a nervousness by the banks and businesses to lend and invest, brought about in considerable measure by international events, particularly in Europe. How can the noble Lord, Lord Myners, even in a time-limited speech of a mere 15 minutes, not mention Europe once? It is as if the Labour Party is unable to see across the channel at what is happening there; namely, the largest financial and fiscal crisis that Europe has seen since the Second World War. Banks here are concerned about what is happening in Europe, members of the eurozone or no, because their direct liabilities are some £20 billion to bonds issued by the weaker, and potentially defaulting, eurozone countries, and their broader liabilities, via interlinked banks, are much greater. Therefore, they are extraordinarily worried about what is happening there and that is affecting what they are doing.
Businesses for which Europe is the single biggest export market are also not surprisingly nervous about what they see across the channel. At the same time, consumers who are faced with higher than expected inflation and very tightly constrained income rises are seeing their real income falling, so it is not surprising that there is a tendency on all sides for people to sit on their hands and not make that investment, take on that additional staff member or buy that new car or television.
In this situation, what should the Government do? In an era when credit-rating agencies appear to hold the fate of economies and Governments in their hands, it would surely be foolish to throw away the credibility that the Government currently enjoy by tearing up the deficit reduction plan. It would also be foolish in the light of the recent Office for Budget Responsibility report, which shows that the longer-term prospects for our fiscal position, given an aging population, are extremely challenging. The idea that if we can only deal with the current crisis, we will somehow reach a sunlit upland where funds would flow into the Treasury and all would be well, is belied by last week’s report. The truth is that we face a long-term challenge in raising the taxes we require to fund the public services that people want. Spending more now, as the Government plan to do, would make the task of dealing with that longer-term situation even worse. Indeed, although the noble Lord, Lord Myners, does not seem to acknowledge this, in the other place the Opposition seem to recognise, at least in part, that they had better be careful what they do. They had three opportunities to vote against the VAT increase, and three times they sat on their hands. Could it be that despite the rhetoric and all appearances to the contrary, Mr Balls knows the true cost of fiscal recklessness?
If growth comes in lower than the Government have predicted, as seems likely, I do hope that, as the Chancellor has indicated, there will not be further tightening of fiscal policy. A hair-shirt approach, beyond what we already have, would be unnecessary. However, if I am not advocating a plan B, then what do I think might be done to promote confidence and growth? I would like to make three specific suggestions to the Minister.
First, we currently have a national insurance holiday for staff taken on in new businesses. This should be extended to all micro-businesses. The number of new businesses being established is much less than the projections in the Government’s plans, and so it would be possible to extend that scheme, and give confidence to small businesses, within the existing planned expenditure envelope. Secondly, the Government should investigate the costs and benefits of reducing VAT on refurbishments, from the current level to 5 per cent. This is a long-standing policy on these Benches, but now, when we have simultaneously a housing crisis and a crisis in the construction industry, it requires further investigation. Finally—a King Charles’ head of mine—the Government should bring forward the point at which the green investment bank can borrow. In an emergency situation, accounting rules should not stand in the way to prevent that happening.
In the short time available I would like to make two comments on the very impressive report from the Select Committee. First, I am extremely concerned about the ongoing problem between HMRC and HMT on tax policy. The report says:
“There appears to be a severe, and worrying, disconnect between the perceptions of HMT and HMRC and those of their customers about how well the policy partnership between the two departments is working”.
We have real cause for concern. I find the arguments made by the Treasury officials completely unconvincing.
Finally, the report talks about enhancing the role of the committee in the scrutiny of tax legislation. With the new approach to tax legislation, under which you have a draft Finance Bill, there is plenty of scope for this committee of your Lordships’ House to undertake a serious piece of work, at that point, so that the committee does not have to do all its valuable work in such a short period, as it currently does. It could get started a lot earlier on, and I think its role would be enhanced, which would benefit the administration of our tax system.
Lord MacGregor of Pulham Market
I am very tempted to range more widely, as the noble Lord, Lord Myners, and my noble friend Lord Newby, have done. However, I think it is my role to introduce and invite the House to take note of the report of the Finance Bill Sub-Committee of the Economic Affairs Committee, of which I am chairman. I think, for once, this is not a Back-Bench contribution. I am grateful to the Minister for already giving some comments on our report; I would like to put on record in Hansard some of our main points, and hope that I may tempt some other answers from him later.
The report of the Economic Affairs Committee on the Finance Bill 2011 is the eighth report in a series which has now become well established and confirms the role of this House in the parliamentary scrutiny of Finance Bills. The report contains 32 conclusions and 15 specific recommendations, so I must be selective. I believe that our sub-committee provides a forum for taxpayers, and many leading experts outside, to express their concerns to Parliament. This includes all the institutes of chartered accountants, the Hundred Group of finance directors, the Chartered Institute of Taxation, the Association of Taxation Technicians, the CBI, the Institute of Directors, the Engineering Employers Federation, and various small business organisations. We also had the valuable session with senior officials from the Treasury and HMRC, which enables them to respond before we draw up our report. I believe this is becoming an increasingly useful forum—more of that in a moment. It means we have to work at speed, as my noble friend Lord Newby recognised, because we cannot begin until the Finance Bill is published, and have to report before the Report stage in the other place.
I would like to thank my fellow members of the sub-committee for their knowledge and wisdom, and their speedy and intensive work. Some who have not been able to be here tonight send their apologies. I am also most grateful to our witnesses, professional and official, our specialist advisers, the clerk, and our secretary administrator.
Not least for reasons for reasons of speed, the sub-committee has to focus, and this year it examined three topics: the Government’s new approach to tax policy-making; anti-avoidance, with special reference to one of the measures in the Finance Bill—disguised remuneration—on which my noble friend has already commented; and the corporation tax reform package.
The first topic we chose to look at this year was the Government’s new approach to tax policy-making. The new approach commits the Government to full and open consultation at each stage in the tax policy development process, except in exceptional circumstances. It alters the policy-making cycle to allow for such consultation, by publishing most of the Finance Bill in draft form some three months before it is published formally. This reflects the recommendations in our earlier reports, for full and effective consultation in developing tax policy, so the sub-committee considered it particularly important to have an early look at this new approach, and how it had worked in its first cycle of operation leading to the present Finance Bill.
We concluded, as did nearly all of our witnesses, that the new approach was a very welcome development. Great credit is due to the Government. Inevitably it was not a perfect operation, and in one point I will refer to more specifically, it was far from perfect. However, a report concentrates on where there are still issues or where improvements can be made, and in so doing I take it as read that the Government have made significant and positive steps forward.
We thought that most of the measures in this Finance Bill had followed the new procedures. They had been consulted on from the outset, and draft legislation had been published in December. As a result, there was little controversy surrounding most measures. But there were exceptions. By far the most important was the consultation on the clauses to tackle disguised remuneration, which began far too late. There was no consultation of any kind before the increase in the supplementary charge on oil and gas profits was announced in the Budget.
As a former Treasury Minister and as Chief Secretary taking Finance Bills through the other place—and there is another former Chief Secretary about to speak in the debate—I recognise that there are exceptional circumstances where the Government cannot follow their new approach to the letter, as did our committee. We do not think either of these cases fit that Bill. Even where open consultation before the Budget was not possible, informal, confidential discussions would have helped reduce the risk of unintended consequences.
Before I come to specific measures, there was a general refrain from many of our witnesses, whom I would describe as old hands in the tax system. They were concerned about the quality of some of the teams working on tax policy in HM Treasury and HMRC, and my noble friend Lord Newby referred to this. They complained of frequent changes of personnel, a general lack of tax and business knowledge, especially in the Treasury, and the difficulties both departments had in attracting the best talents to tax policy work. We share these concerns. There appears to be a severe and worrying disconnect between the perceptions of HM Treasury and HMRC, and those of their customers, as to how well the policy partnership between the two departments is working.
Now, HMT and HMRC officials put up a spirited defence and I recognise the difficulties that they have. The culture in the Treasury of moving highflyers on from one department to another to give them much wider experience is very well understood and I am afraid that very often some of HMRC’s best tax experts are poached by the private sector. I noticed, when I raised this point with members of the Institute of Chartered Accountants who had raised the matter, that there was a wry smile on their faces. Nevertheless, for the new approach to work, it is vital to have tax policy teams that are knowledgeable, experienced and stable and that they operate effectively across departmental boundaries. That is why our report also recommends a comprehensive skills audit and the publication of the findings of a recent internal review.
There are two other points that are worth stressing. First, although we support the new approach to tax policy, we think it can be improved and strengthened. The track record of consultation with big business is commendable, but there is still a long way to go in building effective arrangements for consulting smaller businesses. As a former Minister for small businesses—or small business Minister, as I was sometimes described—I recognise the difficulties of communicating with small businesses. Many of them do not want to belong to big organisations. Their organisations are not as well manned, financed and established as, say, the CBI, but they are a very important part of the economy and much affected by tax legislation. I believe that more can be done to consult them. I welcome the fact that HMT and HMRC now recognise that.
We also think—here I have in mind a recent debate on the working practices report in this House when there was much emphasis on post-legislative scrutiny—that there should be more emphasis on reviewing and evaluating tax changes after they have been implemented to see how well they have achieved their objectives.
I now turn to a point which my noble friend Lord Newby raised, not for the Minister and not even for our sub-committee. Time and again we were struck by the fact that while all our witnesses welcomed the extra opportunities, time and information for scrutinising tax policy, most also thought that there was scope for more effective parliamentary scrutiny of tax legislation, in particular drawing on the experience and skills of Members of this House and the time that we can give to this onerous work. Indeed, I have noticed that others, like Kitty Ussher, a former Treasury Minister, recommended, in a recent pamphlet, exactly the same points and suggested that it was a role that the House of Lords could perform. One particular suggestion made to us was that the remit of our sub-committee should be adapted to allow it to examine tax proposals that were being consulted on during the autumn, as well as inquiring into the draft Finance Bill when published in December. A more modest suggestion would amend the remit to allow the sub-committee to examine the draft Bill only from December onwards. Of course, these are not matters for the Economic Affairs Committee, but for the whole House to consider. We refer to them in our report because the need for greater parliamentary scrutiny of tax legislation, particularly in advance, formed a consistent theme in the evidence that we received.
For our second topic, we looked at tackling avoidance of tax, both generally and in a specific Finance Bill provision which seeks to address avoidance by so-called disguised remuneration. We fully agree with the Government's strategic commitment to tackle avoidance early, which is particularly important when avoidance has the potential to mushroom and lead to a large tax loss. I was somewhat astonished when I saw the proposals in the Budget to discover that the loss of revenue from disguised remuneration was calculated at £750 million a year. Many of our witnesses thought that it was probably a good deal higher than that because disguised remuneration had become a very well marketed process which many were taking up. Clearly, that had been allowed to grow. We believe, in the light of that, that HMRC should review why action was not taken earlier and learn lessons for the future.
Even with subsequent amendments, including many during the Commons stages of the Bill, there remained a deep and widespread unhappiness with this legislation. I should have mentioned that when the disguised remuneration draft proposals were produced in December, I think there were something like 25 clauses but by the time it went through the process of consultation, the number grew to nearly 60 and then there were many subsequent amendments in the other place. Our firm view was that had there been consultation at an earlier stage, this complexity could have been addressed and the legislation would have been better targeted. The criticisms that we received of disguised remuneration were very striking indeed, including, for example, some who argued that this was the worst legislation that they had ever seen. So clearly, the new approach to tax policy-making fell down in this case. All our witnesses agreed that this avoidance had to be tackled, but their concerns were about the way in which the legislation to tackle it had been framed. It was not a good advertisement for improvement through consultation.
Our report recommends that HMRC should carry out an in-depth examination of the alternative approaches that the legislation could have taken which should enable lessons to be learnt and similar pitfalls to be avoided in future. I recognise that the new Government and the Treasury Ministers had been in place only for a short time, with many other crucial issues absorbing their attention. Therefore, I understand why this may have happened on this occasion. I am clear that in future it is going to be very important that a different approach is taken to some of this consultation.
One other point is that the disclosure rules have made a major difference. I am sure that the new disclosure rules led to much of the legislation in dealing with disguised remuneration and they should enable HMRC now to frame more precise legislation on other avoidance disclosures in the future.
The Minister mentioned evasion and the tax loss through evasion far exceeds that from avoidance. We recommend that the Government should publish an anti-evasion strategy to complement their anti-avoidance strategy. According to the HMRC figures, I understand that the tax loss from all forms of evasion is £22 billion compared with £7.5 billion for avoidance.
Finally, on CT reform, the last two Budgets and the CT road map, published last November, contained proposals for reform of the corporation tax regime. We welcome the CT road map which should help to promote the stability, consistency and certainty which many of our witnesses saw as so important. It is an excellent example of a strategy outline which we think would strengthen the new approach if adopted more widely. Indeed, the reforms should make the UK's corporate tax regime more competitive, as we concluded. However, some of our witnesses were concerned at the overall balance of the package and that it might disadvantage some sectors, particularly smaller businesses and manufacturing. We consider that post-implementation reviews of outcomes are particularly important so that early action could be taken if the reform package proves to disadvantage some businesses.
We thought that there was much to commend in the Finance Bill and the processes that led to it. Our report has concentrated on recommendations that are intended to be helpful in taking forward this new advance and we see the desire for greater parliamentary scrutiny as an important issue for this House. I commend our report to the House.
Lord Barnett
My Lords, I thank the noble Lord, Lord Sassoon, for his personal apology to me for saying that I was wrong when I quoted the Chancellor as saying that flexibility was built into his plan. I am bound to tell the noble Lord, for whom I have a lot of respect, that it was wrong not to make a personal statement at an early time, apologising to the House for misleading the House, quite clearly, in his reply to me. I know what happened. He took personal advice from a leading source—I think I know the source—who must have told him that this was a major political difference of opinion so he did not need to give a personal apology. I can only advise the noble Lord that in future he should not take any advice from that particular noble friend.
I readily admit that there was a political difference between us because clearly a major political difference was at the heart of my question and there needed to be some flexibility of a kind that was not enumerated by the noble Lord. Indeed, when I asked him whether the flexibility related to the Treasury’s special reserve, he said, “Definitely not”. On the other hand, could he tell us, as he did not tell me at the time, how much of the Treasury special reserve has already been used for the MoD, for unexpected expenditure in Libya, and for other departmental budgets that have been overstepped? Could he tell us what is left in that reserve to allow any flexibility to decide what should happen to the Chancellor’s plan? There cannot be any doubt that it was misleading. To say to the House, “What I was telling them was wrong”, is misleading the House. It was a major matter, and he refused to make a personal statement, and he was wrong in that. But I leave that alone.
My question had at its centre this political disagreement, a crucial disagreement between us. I do not for a moment regret having gone into that political difference, because political difference does not mean you cannot mislead the House. What it does mean is that the Government are ignoring this central problem of whether there should be some flexibility that could amount to a plan B. I have always said that no Chancellor could ever announce that he is introducing a plan B, because it immediately kills plan A. However, there may be other means of slowing down the cuts, which would help to introduce a sort of secret plan B. But the noble Lord, Lord Sassoon, denied all of that, and said that he was not misleading the House. Indeed, he nearly went as far as maligning that distinguished business editor of the BBC, Robert Peston, the son of my even more distinguished noble friend Lord Peston, by suggesting that it might have been in his mind or in that of the interviewer that there were some special flexibility built into the plan.
While I have had to read some difficult briefs in my time, listening to the noble Lord this evening and his degree of optimism about everything in the Finance Bill and the economic situation, I cannot believe that he could have believed what was in his brief. He should have deleted it. How can there be any degree of optimism about the economy and economic prospects at the moment? I would not propose to quote many of the numerous comments from truly independent forecasters about what is likely to happen to the economy in the next few months, let alone years. However, I would not mind just quoting one, before the noble Lord encounters what my dear old friend Denis Healey—the noble Lords, Lord Healy always said: the advice that, “If you’re in a hole, stop digging”. The noble Lord—Lord Sassoon, is digging deeper and deeper. If he is not careful, he will have to apologise not only to me—which I do not mind—but also to Robert Peston and many others for pretending that one can have any degree of optimism at the present time.
The flexibility that should exist is not there. I will refer to one particular statement from an authority that may not be as independent as some, but it is certainly independent of the Labour Party. I refer to Deloitte, the well known, major accountancy firm, which audits many large companies. It stated that finance directors in Britain’s largest companies say that business optimism has fallen at a faster rate since the collapse of Lehman Brothers in 2008, and that one in three thinks there is a chance of a double-dip recession. I do not believe there is a chance of a double-dip recession; it seems unlikely, but certainly there are no grounds for optimism about what is happening in the economy. It is pretty clear that we can look forward, as my noble friend Lord Myners said, to many periods yet to come of low levels of economic growth, if not an actual downturn.
I do not doubt that there would have been some flexibility, but to compare it with the automatic stabilisers I find incredible. Surely the noble Lord, who is a very clever fellow, must have checked the Oxford English Dictionary and found that “stabilise” is somewhat different from “flexibility”, to put it mildly. I will not read the summary of the long points made about the two words in that dictionary that I received from the Library, but to say that there is no difference and that he was therefore answering my question is ludicrous.
Answering my question is not important. What is important is that the economy should truly move forward, and that we should be a little more optimistic about the likely outcome for the economy in the coming year, let alone in the coming years. If this means that the Chancellor has in mind in his plan to slow down the cuts, I am very glad to hear it. If he does not want to call it a plan B, I do not mind that either. He can call it anything he likes, as long as he has it in mind to do it, because that is the one way that he can truly make us all a little more optimistic.
Lord Bilimoria
My Lords, the philosopher Kierkegaard said:
“Life can only be understood backwards; but it must be lived forwards”.
Right now the Opposition blame our current economic difficulties on the global economic crisis which started with the subprime crisis five years ago, and the current Government blame the previous Government’s mismanagement of the economy, resulting in the huge deficit and the high levels of borrowing which have, in turn, led the Government to embark on a programme of cuts across the board, and a tax policy to try and address the deficit as well. Unfortunately, the current Government are also going to have to blame the woes on the European sovereign debt crisis and the eurozone crisis, neither of which are of this country’s making.
There is no question that public expenditure under the previous Government reached levels that were far too high—50 per cent of our GDP when it should have been 40 per cent. Reducing this to 40 per cent would sort out our budget deficit in one swoop: but it cannot be done overnight. The imbalance between the public and private sectors has finally come to a head. The Government are finally starting to address this, but again it will take time.
As to monetary levers, the Bank of England is forced to keep interest rates at 0.5 per cent in spite of ballooning inflation because of the fragile state of the economy. Of course, the final lever that the Government have is the Finance Bill and taxation. Before I go into detail, I will highlight the 10 tenets of a better tax system, as laid out by the Institute of Chartered Accountants in England and Wales, of which I am proud to be a fellow. They are: statutory, certain, simple, easy to collect and to calculate, properly targeted, constant, subject to proper consultation, regularly reviewed, fair and reasonable, and competitive. Does the Finance Bill tick all these boxes?
I was proud to serve on the Finance Bill Sub-committee of the Select Committee on Economic Affairs, and I thank our chairman, the noble Lord, Lord MacGregor, his staff and advisers and the rest of the committee for the excellent work that they performed. There was a clear consensus among our witnesses that, if implemented consistently, the Government's new approach to tax policy-making would represent a major step forward on the road to better tax legislation for this country. I do not wish to blow our own trumpet, but most witnesses proposed that better use should be made of the expertise and experience of the House of Lords in matters of tax policy and legislation.
We have far too few Joint Committees of our two Houses. We all know about the new Joint Committee that has been set up to deal with reform of the House of Lords. However, given that as things stand the House of Lords does not have the power to vote on Finance Bills, would it not be wonderful if we had a Finance Bill Joint Committee of the two Houses, on which, sitting around the table, the expertise of this House could be brought to bear side by side with those who are going to legislate on the matter? There should be more Joint Committees of our two Houses. This would lead to both Houses working more closely together and to better mutual understanding—an understanding that at the moment is greatly lacking in the other place. This has been openly admitted by many Members who came from the other side of the building and who concede how little they knew and understood of the workings of this House. Will the Government consider this suggestion?
A serious matter that was spoken about in our sub-committee was the worrying disconnect between the workings of Her Majesty's Treasury and Her Majesty's Revenue and Customs, and the lack of specialisation in either. The sub-committee also looked at tax evasion and tax avoidance. More and more, the lines between evasion and avoidance are being blurred. As the noble Lord, Lord MacGregor, said, on the basis of HMRC's figure, the Exchequer loses £22 billion from evasion compared with £7.5 billion from avoidance. We have therefore recommended that the Government should publish an anti-evasion strategy as well as an anti-avoidance strategy.
Lowering the corporation tax rate was seen as a very good move, as headline rates matter, especially in attracting global inward investment: but, sadly, the impact of these reductions is lessened because capital allowances are being changed, meaning that the effective rate of corporation tax for many businesses will not be reduced. That is particularly the case for small businesses and manufacturers.
We still have the 50p rate of tax that the Finance Bill did not address. This desperately needs to be removed, especially if we want to attract inward investment and the best talent from around the world. Many of our taxes are far too high. For example, and declaring my interest as the founder of Cobra Beer and chairman of the Cobra Beer Partnership, a joint venture with the global brewer Molson Coors, we in Britain have one of the highest rates of beer duty in Europe. Points have been made about how the Treasury says it is tackling problem drinking by increasing the tax on higher-strength beers and trying to stimulate the market for lower-strength beers. However, this is toying at the edges as it represents a very small portion of the beer market.
Meanwhile, the Government's ban on low-cost selling, covering VAT and duty only, means that, given tax anomalies, £20 could allow retailers to sell up to 40 cans of beer at 4 per cent ABV—70 units—10 bottles of wine at 14 per cent ABV—98 units—seven bottles of fortified wine and up to 103 cans of cider, making a total of up to 340 units. What will the Government do to assess alcohol taxation in the light of maximizing revenue and minimizing harm?
In conclusion, we know that high taxes stifle not only consumer spending but businesses and growth. What the economy desperately needs is confidence and growth, and the Finance Bill should do its best to encourage growth. In the other place, we were told that between 2008 and 2009, nominal GDP fell by 1.8 per cent, which cost £20.6 billion, and tax receipts dropped by 3.7 per cent, costing £19.9 billion. That shows that growth more than anything else—more than the cuts—will bring down our deficit and our borrowings. However, with high taxes across the board, we are stifling growth. As long as we do that, with the best will in the world, consumption will continue to falter, inward investment will continue to be deterred and the economy will continue to bump along the bottom.
I welcome much of the work that the Government have done in reforming taxation policy: but going back to Kierkegaard's words, the future has to be lived, and the future should be about a simple, competitive tax policy that generates growth for our economy.
Lord Higgins
My Lords, we are really having two separate but related debates: on the one hand, on the report of the Finance Bill Sub-committee on the Budget of 2011—I congratulate my noble friend Lord MacGregor and his committee on what they have produced—and, on the other hand, more generalised debate about the state of the economy.
I begin by commenting on what is said in the report of my noble friend Lord MacGregor. It refers to a new approach to tax policy-making involving the tax consultation framework. The idea that this is new is rather surprising. It is a very long time since I was involved in producing a draft set of clauses on VAT legislation. The more we can have consultation in advance of the tax proposals, the better. The other aspect of this side of things is the question of how the proposals, when they arrive, are considered. I was tempted to go back into the archives and look at the first report from the Select Committee on Procedure (Finance) for the Session of 1982 to 1983, which it so happened I chaired. It had a distinguished membership, including Mr Enoch Powell. The proposals that it brought forward are still relevant and particularly in the context of my noble friend’s Bill. Perhaps his committee might like to look at this report, which I think is very valuable and still relevant to our situation.
We said that there should be a division in the Finance Bill and that there should be a taxes management Bill, which would be introduced at the beginning of the Session. This would involve the mass of technical—I am inclined to say—junk, which appears in this massive document that we have in front of us this evening. The actual Finance Bill would be as far as possible only concerned with tax rates and the management side of them. There is a strong case for this division and, as we went to suggest, for a separate Bill if a new tax were being introduced. But, the present arrangement that we have with Finance Bills so far as scrutiny is concerned is not satisfactory. Perhaps my noble friend could tell us how many of the clauses in the Finance Bill were debated in detail in the Commons; it would be interesting to know. With this legislation, the Commons does not have the longstop that your Lordships have of being able to look at it, which they have for other legislation.
I turn now to the other aspect of the matter. I am becoming increasingly heretical over the idea that the case for absolute minimum rates of interest has been made. We ought to consider the considerable disadvantages of a hyper-low interest situation. My former constituents in Worthing living on fixed incomes, having been prudent all their lives and having saved, are being devastated by the low interest rates which they can now get. It is a major disincentive to saving, which is very important in the present context, not least in relation to the extent to which there are bank deposits which might enable the banks to lend more.
On the other side of the argument, this does mean that we have a lower exchange rate than we would otherwise have. This may be important as far economic growth is concerned but people are also being misled into believing that this hyper-low interest rate policy will go on indefinitely. A large number of people are taking out mortgages and borrowing on the expectation that interest rates will not go up further. This policy is being sustained only because the Bank of England has effectively given up any prospect of using interest rates to control inflation. That cannot go on indefinitely. There is bound to be a significant increase in interest rates, which could have devastating consequences. I am very concerned about that.
More particularly—this will not be news to the usual suspects in this debate—I am concerned about the way in which the Bank of England is preoccupied with the price of money—that is to say interest rates, and not the quantity of money. Fascinatingly, having thought at the weekend of what I might say today, I suddenly found on my desk this morning a report by the Institute of Directors on the big picture and on whether we are we making a big mistake. It stresses the importance of the money supply. It also—and this is interesting politically—says:
“There is a real risk of economic weakness as a result of the money supply”—
it means the lack of money supply—
“is mistakenly attributed to the Spending Review and tight fiscal policy”.
I recommend this report to your Lordships. It even goes on to refer to the monetary equation MV=PT which the noble Lord and I had exchanges about when he was a Minister. That shows its credentials are good.
In any event, it points out about the level of increase in the money supply that:
“Broad money growth is now the lowest it has been on a sustained basis since modern statistics were first compiled in their present form in 1963”.
Since 1963, we have not had such a low level of monetary growth. Whether you are a Keynesian, a Friedmanite or whatever, it cannot be the case that if money supply is falling over a sustained period, we find ourselves getting economic growth. We must consider very strongly indeed the case for further increases in the money supply—for quantitative easing, which was rightly introduced at that time by the noble Lord opposite—against the background of such low interest rates that are failing to stimulate the economy. I fear that there is a lack of overall comprehension of policy because of the way that things have been divided between the OBR, the Bank of England and the Treasury and because of the Chancellor not taking an overall view of the picture.
Lord McFall of Alcluith
My Lords, I was privileged to be a member of the Finance Bill Sub-committee under the excellent chairmanship of the noble Lord, Lord MacGregor of Pulham Market. It is good to have the opportunity this evening to debate a number of those issues and put them in to a wider context.
I want to look first of all at corporation tax. One aspect examined by the committee was the road map for corporation tax. There has been a focus on whether this would make the UK economy more or less competitive. The context for this is that the Chancellor in his Budget in March announced that he would cut corporation tax by an additional 1 per cent over and above the cuts previously announced. This was a flagship measure, but to fund it, this year's Finance Bill will bring in a reduction in allowances available to firms which make significant investments.
The Government's The Plan for Growth states:
“Growth was concentrated in a few sectors of the economy and in a few regions of the country”.
I welcome that sentiment. A specific aim of the plan is,
“to encourage investment and exports as a route to a more balanced economy”.
This change to corporation tax would appear to run contrary to that aim. As the Institute for Fiscal Studies said earlier this year:
“The largest beneficiaries from the package of measures will be high-profit, low-investment firms”,
which would include, for example, financial services. Meanwhile the IFS says that cuts to capital allowance will,
“have the largest impact on those firms with capital-intensive operations”,
which include manufacturers. Major investors who are considering the UK as a site for investment are not so easily swayed by a cut in the headline rate when allowances are also being cut. This change could drive investment away from the UK and help the economy to become more focused on the financial sector by raising the effective tax rate for manufacturers.
There are also issues regarding the carbon-floor price system for energy-intensive industries. It has been suggested that this has been implemented in such a way that, according to a report by Thomson Reuters earlier this year, it will place additional costs on businesses amounting to £9.3 billion. Given that these businesses are major employers and, in many cases, major exporters, it goes against the Government’s proposals in The Plan for Growth. There has to be further scrutiny of the impact of these changes. It is important that the whole context of taxation on businesses is taken into account, not just the headline rate of corporate tax.
Oil taxation has been mentioned. This was nothing other than a hasty, politically motivated initiative with no consultation, and we have seen this before: we have seen it with Labour Governments. What happens is that when these proposals are implemented they do have long-term adverse consequences for these industries. As the Chartered Institute of Taxation has said,
“the last minute and precipitate change in Oil tax rates for an industry that is particularly dependent on long-term planning seems wrong”,
and it goes against the Government’s proposals for stable tax planning. The Government should take that issue into consideration. The sub-committee did note that the Government need to retain the flexibility to deal with immediate issues, but informal consultation should still have been possible and witnesses to the sub-committee said that this would have enabled better policy-making, so I hope the Government take that issue on board.
An issue has been mentioned regarding HMRC, which the sub-committee discussed, particularly the skills and resources available and whether it was able to carry out the Government’s new approach to tax legislation. Perhaps more importantly, the committee also heard concerns over whether HMRC was fully able to implement the legislation once it was made, given its staffing problems. By some estimates, tax evasion costs up to £1 out of every £8 that should be collected in taxation, and therefore we need a good staff. This is particularly important given the sheer complexity of legislation being proposed in this Bill—and particularly the proposals on anti-avoidance, which the sub-committee scrutinised at some length.
I welcomed the £900 million the Government have pledged to invest in HMRC to tackle tax evasion. The principle behind this is right: investing more in HMRC staff will save the taxpayer money by helping to close the tax gap. But I am concerned it is insufficient, particularly at a time when cuts have been made to HMRC’s budget; when HMRC is still attempting to absorb the loss of over 20,000 staff since 2004; and when tax legislation is becoming more complex. In the evidence sessions of the Finance Bill sub-committee one tax specialist said of HMRC that:
“a lot of very skilled people have left, that morale is very low, that people are given work that they are not being trained properly to do”.
There is both a short-term and a long-term problem here for the Government. I have raised this issue before in another place when I was Chairman of the Treasury Committee. We said then, even six years after the merger of the Inland Revenue and HM Customs and Excise took place, that the merger,
“had a knock-on effect on performance”,
and we were,
“deeply concerned about employee engagement at HMRC”.
There still exists today the danger that the Government may focus too much on creating complex anti-avoidance legislation, rather than addressing the more fundamental issue of ensuring HMRC is fully resourced to implement that.
Lastly, I turn to something that the committee did not look at: the impact on ordinary people. The flagship policy for ordinary people in this Finance Bill is the significant increase in the tax-free personal allowance for income tax and national insurance—a welcome move, as it will benefit lower income households. However, this is also an area where we need to see the changes made in a wider context, rather than focusing on a single change. For example, the rise in VAT at the beginning of this year is reported to cost the average family with two children £450 a year. That is more than 10 times the benefit that is gained by low-income families from the rise in the personal allowance. That rise in VAT also added nearly 3p to the cost of a litre of fuel—or nearly three times the amount of the reduction in fuel duty that the Government bring in with this Bill. There is a need here to ensure that we take the full context of tax changes into account, and I hope the Government will realise that.
Looking to the future, there are inauspicious signals. Next winter the Chancellor cannot blame the snow. The cuts are coming, and the pressure on wages will not abate until 2015—and that is the Governor of the Bank of England talking when he appeared before the Treasury Committee in another place. I suggest to the Government that they need to be cautious, and I leave them with this important message, given these cuts. Economic prosperity is built on a platform of social stability. If the Government forget that rule they are going to get themselves into more problems. Let us hope they heed it.
Lord Magan of Castletown
My Lords, it is an honour to rise to speak in your Lordships’ House for the first time. My journey here has, I suspect, been a slightly less conventional one than most. I left school, aged 17, with only one rather poor A-level, and then, at the age of 18, I started work as a clerk in the City of London. Since that time I have had a career of nearly 50 years in the financial services industry. Therefore, I believe that I have a contribution to make in this evening’s debate on the Finance Bill. At the outset, I should like to express my gratitude to my two noble friends, the noble Lords, Lord Northbrook and Lord Howard of Rising, who acted as my supporters when I was introduced into this House. I should like in addition to thank all those who work here in your Lordships’ House for their highly professional and courteous assistance.
I was born in New Delhi in November 1945 when the sun was beginning to set on the British Raj. My father, Brigadier WMT Magan, was born in 1908 in County Westmeath in the south of Ireland, and sprang from an ancient Irish landed family. He was an officer in Hodson’s Horse, a famous cavalry regiment in the Indian Army. Rather unusually for a cavalry officer, he ended up as a director of MI5 and was regarded as one of the leading figures in post-war intelligence. My father died last year at the distinguished old age of 101 and a half. My mother, who is now aged nearly 95, was born in Rawalpindi. Her father, Sir Kenneth Grant Mitchell, was a distinguished servant of the Indian Government. Her uncle was a distinguished Governor of Kenya and her great-uncle was a famous admiral who founded the Royal Australian Navy.
While the empire is thus very much in my blood, Ireland, where we have a family home, continues to be of absorbing interest. The noble Lord, Lord Myners, has already referred to this. The Ireland of today is completely transformed from the Ireland I knew as a boy. The large subvention payments Ireland received from the original EEC, extremely well strategically invested under the aegis of the Irish Development Agency, coupled with significant taxation advantages, have resulted in the complete modernisation of the economy. The European headquarters for so many cutting-edge multinationals now located there have established Ireland’s very strong export base. This radical modernisation, coupled with the transformed relationships between the Governments in Dublin and Westminster, is wonderful progress. The recent courageous and hugely successful visit to Ireland by Her Majesty the Queen indeed marks a watershed moment in the relationships between our countries.
However, following what was clearly an uncontrolled nationwide overindulgence in real estate activity, and its consequent devastation of large parts of the Irish banking sector, we can now see what the current constraints are for Ireland in its membership of the euro. Look at this straitjacket: Ireland cannot manage her own currency; she cannot set her own interest rates; she cannot through fiscal stimulus give a much needed boost to her domestic economy; she cannot through credit stimulus, which is particularly necessary after the deflationary effects of the credit crunch, increase money in circulation; and she is largely beholden to a single creditor, the European Central Bank. Ireland is very significantly driven back into the most uninviting prospect of all—that of slashing, and then slashing again, the national budget in an environment where growth has very significantly deteriorated.
Our decision in this country not to join the euro was a most judicious one. We may have been overdosing on Keynesianism but we have at least remained unfettered in the management of our own financial affairs—and while we are riding through a great storm, which could get worse, we are still at the helm of our own ship. However, we cannot hope to re-achieve real national greatness until we put the nation’s house in order. That means, in particular, putting the nation’s long-term finances in order.
Let me now make certain comments on the Finance Bill which I hope—as I know is customary on these occasions—to lift above tendentious hyperbole and rhetoric. It is clearly necessary to fully recognise also that the current Administration have been in office for just over one year. When we look at this year’s Budget, we see that the combined spend on welfare, health and education is just under £450 billion—getting on for two-thirds of the total budget of £710 billion. One might also note that the payment of debt interest will be £50 billion, which will comfortably exceed the defence budget of £40 billion. Incidentally, this year’s defence budget for the United States is set at the equivalent of some £500 billion, which is more than 12 times our commitment, and yet its population is only five times the size of ours.
Further, we can also see that UK government receipts for this year are budgeted at only £589 billion, compared to a total spend of £710 billion. Therefore, the deficit for this current year will still be a whopping £121 billion, even though it is substantially reduced from £146 billion and £156 billion in the two previous years.
The spend on welfare of £232 billion is the largest single element of the Budget, and of this, getting on for £100 billion will be disbursed on dependency payments. There are some 40 million people of working age in this country. Some 2.5 million people who are looking for employment are categorised as unemployed, and there are a further 3.4 million people who are receiving out-of-work benefit payments; these people are primarily long-term unemployed and have no intention—or, through incapacity, are unable—to seek work. A total, therefore, of some 5.9 million people will claim some sort of support from the state; in other words, 15 per cent of the working age population. Yet, as we are constantly being made aware, several million new jobs in this country have been created in recent years, the vast majority of which, however, have been taken by immigrant workers.
Looking further, you have to search the Budget Red Book in considerable detail before you eventually find, in the small print on page 95, the figures for the public sector debt. Only then can one see its remorseless and alarming historic and continuing increase. We have to be brutally frank: the nation’s long-term financial condition needs radical overhaul.
Twenty years ago, our national debt was £150 billion; today, it is closer to £900 billion. Even if the Budget is brought into near-balance by 2015-16 in line with the objectives of the current Administration, the national debt will by then have risen to more than £1,350 billion, getting on for a tenfold increase in our national debt over a 20-year period. Even allowing for inflation and for the considerable growth in the economy, this remains a staggering increase in the nation’s indebtedness. Twenty years ago our indebtedness was around 25 per cent of national income; this now looks set to increase to some 70 per cent of national income. Even by this more conservative measure, the level of our nation’s indebtedness will have nearly tripled.
We also have to recognise that the state has additional massive contingent financial obligations, particularly in connection with unfunded public sector pensions and PFI obligations. It is estimated that these additional contingent liabilities will amount to a further £1,100 billion. As Shakespeare, the immortal bard, reminds us,
“borrowing dulls the edge of husbandry”.
I will tell your Lordships something else that dulls the edge of husbandry: the liberal spending of other people's money.
Let us be absolutely clear: our total national debt, including contingent liabilities, is heading towards £2,500 billion, a number so large that the figures are almost impossible to comprehend. What is more comprehensible is that this total level of national debt will be roughly the equivalent of some £100,000 of additional indebtedness for every household in this country.
The Office for Budget Responsibility must be only too well aware of this developing financial horror story. There is a suggestion that the unacceptable widening of what in economics-speak is referred to as the “fiscal gap” could be brought back into line by, say, an increase of 13p in the basic rate of income tax, from 20p to 33p, or by an increase of 13 percentage points on VAT—that is, a VAT rate of 33 per cent. This is the scale of the financial challenge that we as a nation are facing, but surely such grotesque rises in either direct or indirect taxation would be completely unacceptable to the British people. I suggest that there is an alternative, and much more palatable, remedy to get the country back into financial good health. But it is time to wake up, and wake up fast.
What is clearly beyond any doubt is that the world has moved on with tremendous panache in what is now the post-communist age. We have witnessed on a global basis the collapse of faith in communism—the dismantling of the Berlin Wall just 20 years ago was one clear manifestation of this. Yes, the Long March is well and truly over. We have as a consequence seen extraordinary vigour and growth from so many emerging countries. There has truly been a Great Leap Forward.
Let us look specifically at China. Sixty years ago, China was in a chaotic condition. It was only some 30 years ago that it started to reform and modernise its economy, embracing the markets and encouraging private enterprise, albeit within a totalitarian framework. It is really only within the past 20 years that we have witnessed the truly dynamic surge in growth from China, as well as, of course, more recently, from India and Brazil. China's economy is now 90 times larger than it was 30 years ago. Growth has lifted 300 million people out of poverty. Only five years ago, China’s economy was half the size of Japan’s; but because of its continuing phenomenal growth since then, China has recently passed Japan and has been propelled to the world’s second largest economy, with $5.5 trillion GDP, second only to the USA’s $14 trillion GDP. If present trends continue, China will pass the USA as the world’s largest economy by 2030.
There are some real lessons here for us. The keys to our recovery are very clear to see. We must as a nation unequivocally take every conceivable initiative to unleash the forces of enterprise. We must remember that wealth is not finite; there is infinite opportunity to create additional wealth. We must continue with real vigour the fundamental overhaul of our bureaucratic and regulatory constraints on enterprise. We must undertake a fundamental overhaul of our taxation regime, which clearly in so many ways at present stifles enterprise and growth. We must be clearly aware, particularly at HM Treasury, that lower rates of tax do not inevitably translate into lower revenue flows for the Exchequer—in fact, the empirical evidence is frequently quite to the contrary. We must understand that government of itself does not create wealth. The Government cannot do it all. The Government’s job is to distribute fairly the wealth they receive and to manage the nation’s finances prudently.
We must appreciate that while we are physically a small island, this of itself should not be a bar to achieving and sustaining high rates of growth and prosperity. Singapore is even smaller, and look what has been achieved there. Look at our regions that are crying out for development and growth. We must not forget that we as a nation have a long and hugely successful history as traders in global markets. Over and above that, many of the world’s major financial and other markets are made here in London. There is tremendous opportunity from our own existing strengths and skills sets to give a huge boost to the country’s trade in goods and services, as well as to commerce and industry.
We are one of the most talented and creative peoples of the world. Over the centuries we have absorbed millions of additional diverse, highly-talented, enterprising people, many of whom have sought refuge here. We have to face up to reality. We, too, in this country could, if we really had the collective mindset to do so, completely transform our economy and the prosperity of our people in a relatively short timescale. China has achieved a stunning economic revolution in 20 years. We in this country have to ask whether we can move from being a major debtor nation with relatively low rates of growth and whose relative competitiveness continues to deteriorate—in reality, this has been our condition for far too much of the post-war period—or whether we can transform our economy, sustain very high rates of growth, create opportunity and prosperity for all and become, once again, a major creditor nation.
This is the big issue. This is where we should be having the big debate, and we in this House should be at the forefront of stimulating and leading this big debate.
Lord Anderson of Swansea
My Lords, I shall not add to the justified praise of the report prepared by the noble Lord, Lord MacGregor, and his committee, nor shall I contribute to the macroeconomic other debate which is taking place. First, it is with sincerity that I congratulate the noble Lord, Lord Magan, on his felicitous maiden speech. He clearly comes from a good stable, as he has said, from Ireland and from India. He has had over 50 years’ experience in the financial services industry and it clearly shows. I hope that that experience will be seen again in this House. It was a well-delivered, felicitous speech and I am sure that he will make a number of excellent contributions in that vein.
I shall not speak on the macroeconomic level but I shall deal with one corner of the canvas and ask the Government a number of questions on a matter which was raised in the course of the Bill’s progress through the other place. The Government responded with some positive noises but gave no firm conclusions on the timetable. I recall that in the other place much of the Finance Bill was consigned to Committee, where often it appeared to be accountants talking to accountants. However, beneath those dry as dust phrases, often there were real values. One such is the recognition of marriage in the tax system. Many commitments have been made by the Government—by the Prime Minister himself over a number of years in opposition and indeed in government—but there has been no actual result as yet. I hope that when the Minister replies—he is already sharpening his pencil—he will give a firm and clear commitment on how the Government will implement the many promises that have been made. I need not take him down the road in great detail, but I can quote seriatim a number of commitments made by the Prime Minister over the years. He said, for example,
“we will give a tax break for marriage and end the couple penalty”.
He said on another occasion:
“A Conservative Government will support marriage, through the tax and benefit system and remove the 'couple penalty' from the benefits system which will lift 300 000 children in two parent families out of poverty”.
Similar sentiments were expressed by Mr David Willetts and a number of other Members. Before the 2010 general election, there was great support for the measure. It was even made official Conservative Party policy and was put into the 2010 Conservative general election manifesto. A number of statements have been made by the Prime Minister since the general election, but action there has been none.
I think that it is generally accepted that marriage is of fundamental importance to a stable society; but, equally, marriage rates are at an all-time low in this country. Family breakdown is a major social and financial problem. One knows from surgery experience in the other place that most single parents do a great job in very difficult circumstances, but stability—or lack of it—does matter. On average, children brought up in married families do better than those in single-parent families by every significant measure—of educational achievement, health and propensity to commit crime. Even after discounting certain socioeconomic factors such as age, income, education and race, the fact remains that the poorest 20 per cent of married couples are more stable than all but the richest 20 per cent of cohabiting couples. It is therefore surely in the interests of society that, by the tax system and other mechanisms, any Government should do their best to encourage the institution of marriage and should in no way discourage marriage. It is then hardly surprising that, apart from Britain, only 18 per cent of people living in OECD countries are subject to a tax jurisdiction that does not recognise marriage in the taxation system; and the great majority of those thus excluded live in Turkey and Mexico.
Furthermore, the latest international tax comparisons show that the tax burden on one-earner married couples with children in the UK is nearly 40 per cent greater than the OECD average. What is worse is that, if all the tax and benefit changes in the Finance (No. 3) Bill and those proposed for 2012-13 are introduced, the burden is projected to increase to over 50 per cent of the OECD average. Therefore the indices are moving against the pledges made by the Government and are hardly consistent with the Government’s manifesto commitment. By contrast, the tax burden on single persons on the same wage is actually falling and is now below the OECD average. Clearly the UK is mightily out of step with the OECD majority.
I fully recognise that there are a number of mechanisms for encouraging marriage by tax incentives, including some relating to property. However, a transferable allowance is the main device debated, as in the UK the unused tax allowances cannot be currently transferred from a non-earning spouse to an earning spouse. Thus, depending on how it was introduced, it would be the whole allowance or part of it; whether it was limited to couples with children under a certain age or limited to tax at the basic rate, it is clearly important that this be considered seriously by the Government. Therefore, with one moving in the wrong direction from the OECD average, surely it means that the issue is both important and urgent. Unless action is taken, the easy slogans of the Government about making the UK the most family-friendly country in Europe will appear ridiculous.
I noted in the Centre for Social Justice report card published in May that the Government were given two out of 10 for their efforts to tackle family breakdown. Clearly, on the current projections, that will get even worse. So I am bound to ask, in conclusion, when in the circumstances the Government are planning to introduce the necessary budget resolution. Even if the Government, understandably perhaps, are reluctant to give a firm date for implementation, can the Minister in replying give your Lordships' House at the very least the assurance that preparatory work is already under way in the Treasury and HMRC? How long is this work likely to take? One hopes it is under way.
Surely, if there are no positive replies to these questions, in spite of the repeated assurances and grave commitments made by government spokesmen, both in opposition and in government, one is likely to conclude that they were empty words—and, as is often said by wags about US politics, electoral platforms are platforms to run on and not to stand on. Certainly the Government ran on this particular platform; it remains to be seen whether, over the next year or two, they will in fact stand on it.
Lord Browne of Belmont
My Lords, following on from the noble Lord, Lord Anderson, I, too, would like to express my concern that the Government are taking so long to honour their very important commitment to recognise marriage in the tax system. It was not that long ago that the Conservative Party, when in opposition, talked regularly about the problem of broken Britain, and they were absolutely right to do so. Of course, we do not hear that phrase on their lips very much now that they are in office. The truth is that no Government could sort out broken Britain in just over a year, and the problems of social breakdown remain as real today as ever.
One of the principal sources of that social breakdown is family breakdown, which has such devastating implications for child development. As a Minister said in a speech in February:
“The Centre for Social Justice has found that those not growing up in a two-parent family are 75 per cent more likely to fail at school, 70 per cent more likely to become addicted to drugs and 50 per cent more likely to have an alcohol problem. The Joseph Rowntree Foundation has found that children from separated families have a higher probability of living in poor housing and developing behavioural problems”.—[Official Report, 10/2/11; col. 389.]
They also suffer from a host of other damaging outcomes whose effects spill over to the rest of society.
What promotes couple stability? In engaging with this question, we must look at many factors, one of the most important of which, unsurprisingly, is the nature of the relationship between partners. In this regard, the research findings are very striking. If children are born to cohabiting parents, they have a nearly one in two chance of finding themselves in a one-parent family by the time they reach their fifth birthday, whereas those born to married parents have only a one in 12 chance of finding themselves in this situation.
I know that some will respond to this by saying that those who marry also tend to be wealthier, and that this is the real reason for their greater stability. Given that material need generates added pressure on relationships, it would be very strange if wealth were not a relevant consideration. The notion that it is the only relevant consideration, however, is rather odd. Mindful of this, it is no surprise to me that research demonstrates that the poorest 20 per cent who make a public “till death do us part” commitment in front of their families and friends are more stable than all but the 20 per cent richest cohabiting couples.
The truth is that marriage sealed by a public “till death do us part” pledge, rather than a “let’s move in together and see how it goes” commitment, is, unsurprisingly, an independent promoter of stability. In this context it is clear that, at the very least, the Government should do everything they can to develop public policy that does not make it more difficult for couples to marry in this country than in comparable countries. This is where our failure to recognise marriage in the tax system is so important.
In introducing the subject of marriage and tax, let me be clear from the outset that I do not believe that people fall in love, and then decide they want to be together for fiscal reasons. When they fall in love and decide that they want to be together, however, they face a choice: will they marry or will they cohabit? This is a very important decision, for the reasons we have considered, and it will inevitably be informed by all relevant considerations, including financial ones.
Britain used to recognise marriage in its tax system, but it has not done so since 1999-2000—unless those concerned were born before 1935, or one or both are blind. As CARE's latest international tax comparison—The Taxation of Families 2009/10—reveals, apart from Britain, just 18 per cent of citizens of OECD states live in countries that do not recognise marriage in their tax systems. The majority of these people live in just two states: Turkey and Mexico. We are completely out of line with the developed countries with which we are usually compared—for example, France, Germany, Japan, and the USA—in not recognising marriage. This inevitably makes it more difficult financially for couples in this country to choose to marry than in other developed countries. Indeed, if we look at the tax burden that they bear, it is a staggering 39 per cent greater than the OECD average. What really is concerning, however, is the fact that the latest projections suggest that the tax burden on such families will be more than 50 per cent greater than the OECD average by 2012-13—unless, of course, there is an offsetting measure such as recognition of marriage in the tax system.
One of the statistics that fascinates me is that, in the midst of all this, 90 per cent of young people say that they aspire to marry; and yet our marriage rates tell a very different story. Given that we make choosing to marry fiscally more difficult than in other OECD countries on average, the disconnection between the aspiration to marry and marriage is of no great surprise. Happily, the coalition agreement commitment provides us with the opportunity to change this and to ensure that it is no more difficult to marry in this country than in other developed countries such as France, Germany and America.
I am of course aware that recognising marriage in the tax system has cost implications, but these were considered at the time the commitment was made last year. Moreover, the very real costs associated with not recognising marriage are of great importance. The £550 million cost of the very modest partially transferable allowance proposed at the general election represents just 1.3 per cent of the direct costs of family breakdown, as calculated by the Relationships Foundation, and just 2.3 per cent of the costs of family breakdown, as calculated by the Centre for Social Justice. Moreover, it would cost just 4.4 per cent of what we are in the midst of paying to raise individual allowances to £10,000—the overall cost is estimated at approximately £12.5 billion. This is a policy that greatly benefits single people, and certainly does not benefit one-earner married families.
The Government were absolutely right to make provision for the commitment to recognise marriage in the tax system in the coalition agreement. We owe both the next generation, which would benefit from an increased chance of a two-parent home experience, and our young people who aspire to marry the opportunity to live in a country that does not make it more difficult than in comparable developed countries. In May, the Government were given a score of just two out of 10 in the Centre for Social Justice’s report card for their efforts to combat family breakdown—an extraordinarily poor result given the great emphasis the Conservatives placed on fixing the broken society before the election. I very much hope that the Minister will be able to assure us that things will be very different in the coming year, and that recognising marriage in the tax system will be a high priority.
Lord Mackay of Clashfern
My Lords, I congratulate my noble friend’s committee on its excellent report. I am also extremely glad to notice the development of a consultation system on detailed tax provisions. When I was at the Bar, I spent quite a lot of my time trying to understand the tax provisions that were then extant in order to try to advise people as to how they might conduct their affairs. It was not easy then but, looking at the tax legislation that has come along in the quite long time since, the problems are no easier now than when I was looking at them. I hope that this system will indeed make it easier for advisers reliably to tell people what their tax liabilities will be if they pursue a particular course of action.
My principal point is not on what is in the Finance Bill but, rather, on what I would have liked to see in it in relation to marriage being recognised. The noble Lords who preceded me have shown that this Government agreed in their coalition, as I understand it, to recognise marriage in the tax system. I am in the happy position of having been born before 1935, so I may have the benefit of the provision to which the noble Lord who immediately preceded me spoke. I am therefore not talking about anything affecting me personally. However, I believe that this is a very important and fundamental part of dealing with the situation in our society. Those of your Lordships who were in the House then will remember that, towards the end of the previous Conservative Government, I spent quite a lot of time trying to put through a Bill to ameliorate the situation when marriages broke up. I am glad to say that the Bill was passed and is still on the statute book but, so far, it has not been implemented. I hope that may some day be rectified.
What is apparent is that if nothing is done soon on this matter, the projections are that the tax burden on one-earner married couples with two children on average wages will rise so that it is more than 50 per cent above the OECD average by 2012-13. If your Lordships look at that as against the burden in the OECD on a single person, it will increase to an incredible 80 per cent while the comparable burden in the OECD is just 52 per cent. It is obvious that this is going to get considerably worse. The primary reason for that is that when tax goes up on the individual, unless the marriage is recognised it becomes worse from the point of view of comparing a married couple with two children and a single person with no dependents.
It would perhaps take some development of the Inland Revenue computer system to recognise marriage easily in the tax system. I believe that it is important to make the necessary preparations. Apparently they are able to do it for older people without too much difficulty, as far as I can judge. I hope that they may be able to do it for the younger people as well, but I believe that that may require some preparation.
The commitment given by the coalition could wait until towards the end of the coalition period which, as we know, in the first instance will be in May, at the end of the five-year Parliament that has been provided for. That five-year period is the timetable within which this ought to be done if it is to be implemented. From my point of view, the system is so damaging to the institution of marriage that the sooner it is done, the better. Therefore, rather than leave it to the very end of their commitment, it would be extremely wise and beneficial for the Government to do it soon. I hope that my noble friend can give us some encouragement that the Government intend to do just that.
Lord Desai
My Lords, I welcome the debate. I have nothing particular to add to what other noble Lords have said about the interesting report of the noble Lord, Lord MacGregor, which I welcome. I especially welcome the transparency and the consultation that the Government have introduced in deciding their tax legislation.
I want to concentrate on why the recovery is so slow and faltering. That is an important question that we all ought to take up. The general proposition in many quarters is that somehow the Government have gone wrong and they need a plan B—or C or D, I do not know. I think that we face a very different kind of crisis from those we are normally used to. Recessions normally happen because of a lack of effective demand, and we know the standard games and policies that we have to follow. We got into this crisis not because of a lack of effective demand but because of overspending and overborrowing. When you have to carry an economy through a crisis in which the major consideration is deleveraging by both households and Governments, you need a very different kind of strategy from the one you normally encounter in a standard recession.
That said, we do not have a road map for such crises. Normally all economic theory is about the other kind of crisis. There is a paradoxical conclusion that we might follow. If the task is to deleverage, we ought to hurry that up. That leads to the idea that we should not have low interest rates at all; we should have proper high interest rates so that households that falsely think they can afford their mortgages should be told that they have negative equity and cannot afford them. That is a cruel thing to say, but right now we are postponing deleveraging rather than assisting it. That is a choice that the Government can make.
We have, of course, decided to deleverage public debt at a rate that is now known, and the task of eliminating the deficit within five years has been adopted. The problem of deleveraging is not just a problem of the recession. We are observing from the crises of both pensions and elderly care that we, not just in the UK but in western economies, are suffering from a serious undersaving problem. We have been undersaving for far too long and we will completely have to change our habits of thinking, living, taxes, and so on. The task of the tax system should be as far as possible to tax consumption and not income, to tax pollution but not work. I do not know at what stage we will get into those kinds of discussion. I welcome the proposal to merge income tax and national insurance contributions. I have never understood national insurance contributions because they are a tax on earned income, while unearned income gets taxed less, which is a very peculiar thing that successive Governments have tolerated.
If we are to face up to the challenge of saving seriously, we will have to adopt something like what Lord Kaldor talked about in his expenditure tax proposal. We may have to move to an expenditure tax proposal as that would reward savings much more than we have done so far. We have been led to think that expenditure leads to income. I am sorry that the noble Lord, Lord Skidelsky, is not in his place as we have had long arguments about this. If you think that expenditure leads to income and income then leads to output that leads to inward gain, we have a certain trajectory. Our problem is that we cannot go through the politics of income growth if there is consumption expenditure.
The gap is in investment. The Government face the challenge that despite the quantitative easing that they have been practising for a couple of years, the money is there but no one is investing. That is very much the reason why the money supply is not expanding, as the noble Lord, Lord Higgins, said. People are not borrowing the money that is available. Therefore, there is a lack of investment by the private sector despite the fact that interest rates are low and people should be encouraged to invest. This is a difficult thing to do. I do not believe that it is necessarily within the Government’s control to encourage investment if they can no longer pick winners or horses that will start a race. However, the Government ought to concentrate on how they can give a certain boost to new investment proposals, perhaps in green technology. Unless they get an investment programme going, they will find that even if people decide to save they will be frustrated.
Whichever way the Government go—I welcome some of the taxation proposals—they should be aware that in the short term and in the long run the crisis arises from undersaving. We have to try to correct our overborrowing and then provide for a proper level of saving to finance the problems created by longer life expectancy and people needing elderly care. If these two challenges are properly thought through and met, we may yet have a prosperous future.
Lord Watson of Invergowrie
My Lords, when introducing the Budget, the Chancellor told us that it was about reforming the nation's economy so that we have enduring growth and jobs for the future and about doing what the Government could to help families with the cost of living and the high price of oil. Four months later and after 14 months of the coalition Government, that is not how it feels for many people. As the cuts begin to bite, the popular perception is that it is hurting but it is not working. Inflation remains high, the recent small drop in unemployment is not expected to be repeated when the next figures appear, and the economy is clearly not “in recovery”, as the Chancellor claimed.
That is also the view of the independent National Institute of Economic and Social Research, which has as its president the noble Lord, Lord Burns. That organisation dismissed the Chancellor’s claim that cutting the deficit more slowly would cause a collapse in market confidence as “fundamentally flawed”, adding,
“The real hit to credibility comes from sticking to unsustainable policies. If Mr Osborne really wants a budget for growth he should amend his plans”.
It is basic economics that deficit reduction will slow growth. I echo the national institute’s calls for a major house-building programme, and measures to boost youth employment, to restore the education maintenance allowance that keeps poor students in school, and to reverse the cutting of student visas, because universities are a dynamic export industry.
None the less, I concede that the Budget contained measures that are to be welcomed. Next year the personal tax allowance will be increased to more than £8,000. Temporary tax relief for small businesses is to be extended to October next year. The Chancellor deferred for a year the proposed rise in fuel duty, until April 2012, and cancelled the fuel duty escalator for the remainder of Parliament. He increased the supplementary charge levied at North Sea oil and gas companies to 32 per cent, generating a possible £2 billion, although he has since handed back around a quarter of that in exploration allowances.
Public spending measures that included an extra 40,000 apprenticeships for young people out of work, and 100,000 new work experience placements, are also to be welcomed, although I fear they will be less worth while than the genuine jobs of the future jobs fund that the coalition has axed, which paid the minimum wage. There are also doubts as to whether employers will offer the extra apprenticeships and work placements unless they are forced to do so. There is to be a consultation on long-term plans to merge income tax and national insurance, and I echo the comments of my noble friend Lord Desai that this is long overdue. This is planned with a view to simplifying the tax system, although I am disappointed that the review will not go as far as a full merger with income tax.
I will now focus on a narrow but crucial casualty of the Government’s restructuring of the economy, and one that the Chancellor failed to address properly in his Budget speech in March. In fact, it relates to an issue highlighted by the Chancellor in last year’s Budget of a commitment that the Government made then and have since failed to honour. I hope the Minister will be able to offer an explanation as to why the Government have let down low-paid workers in the public sector across the United Kingdom, to whom they made promises before the general election and in the Budget of June 2010. At that time the Chancellor of the Exchequer announced to Parliament that:
“the Government are asking the public sector to accept a two-year pay freeze, but we will protect the lowest paid … They will each receive a flat pay rise worth £250”.—[Official Report, Commons, 22/6/10; col. 171.]
He said that the earnings level at which people would qualify would be £21,000 a year, and he estimated that 1.7 million people would benefit from that pay increase. In the Budget Statement this year, the Chancellor had a different message for low-paid public sector workers, when he said:
“I can confirm today that in the coming year all workers in the armed forces, the prison service and the NHS, and teachers and civil servants, earning £21,000 a year or less will receive a pay uplift of £250”.—[Official Report, Commons, 23/3/11; col. 963.]
That is considerably less than the promise delivered nine months earlier, and it means that only about one-third of those originally earmarked will be guaranteed to receive the £250 payment. What the Chancellor meant in effect was that only those working under ministerial control, and those whose pay and conditions are subject to pay review bodies, would be guaranteed to receive the payment. Between one Budget and the next, goalposts have been shifted with a vengeance. Research commissioned by Frank Field MP from the House of Commons Library shows that the Chancellor, in his 2010 Budget Statement, could not have been referring only to workers under ministerial control and those with pay review bodies. The Chancellor’s figure of 1.7 million workers was precisely the total number of public sector workers earning less than £21,000 in 2009, which at the time of the Chancellor’s Statement were the most recent available figures.
The Commons Library further calculated that the most reliable current estimate for the number of public sector workers under ministerial control or covered by pay review bodies is 715,000. That equates to just one-third of the 1.7 million figure, and when the most recent official statistic for 2010—that is, 2.2 million—is introduced, it leaves up to 1.5 million public sector workers denied the promised pay rise, and the victims of a deception.
Two weeks ago in another place, Frank Field introduced an amendment to the Finance (No. 3) Bill with the aim of securing justice for these low-paid public sector workers. Mr Field’s amendment, which he did not press to a vote, sought to reduce the tax liability of all public sector workers whose earned income does not exceed £21,000 in this tax year, by £250. That would have had the effect of ensuring that around 1.5 million public sector workers who are currently being denied that promised pay rise of £250 would have received it, as the Government had led them to believe. The total cost to the Treasury has been costed at around £500 million. To government Ministers, or indeed to your Lordships, £250 does not mean a great deal—indeed, it is less than our daily allowance—but for many people, £250 means a great deal.
In that debate on the Bill in another place, the Government's reasoning for abandoning their commitment was based on the unconvincing grounds that this protection will now be extended only to those workforces directly under ministerial control or whose pay and conditions are decided by pay review bodies. Not only was this not made clear at the time of the Statement, the figures the Chancellor quoted in his 2010 Budget speech made it clear that this was not what he intended.
David Gauke, the Exchequer Secretary to the Treasury, said in another place that civil servants, nurses, prison officers and the Armed Forces had already received the £250 increase and were to receive it again next year, but whether other public sector work forces, mainly in local government, received that payment was not a matter for the Minister. In most cases they will not receive that because, as Mr Gauke told the other place on 4 July:
“Decisions on the pay of local government work forces are for local government employers, rather than central Government, to negotiate. Provision was made in the local government settlement for local authorities to pay the £250 increase”.
So the Government have handed them that money. He continued:
“We gave them the opportunity to pursue the policy that we are pursuing at national level, but it is ultimately for them to decide how to pay their employees”.—[Official Report, Commons, 4/7/11; col. 1335.]
However, it has emerged that many local authorities have allocated the money to other budgets and have not given it to their low-paid workers. Despite that, the Government have said that they have no plans either to compel local authorities to spend the money in the way that was intended or to recall the money. Is that not a shocking example of the Government promising with one hand but taking away with the other?
I urge the Minister to take this matter on board for further discussion within the relevant departments and to reconsider this approach. The Government need to act to ensure that those promised the additional £250, those expecting it and those desperately needing it receive the payment that the Chancellor, less than a year ago, told them they would receive.
Lord Ryder of Wensum
My Lords, I applaud the general direction of the Chancellor’s attack on public spending, yet I nurse concerns about the Government’s economic coherence. The Government’s growth strategy is deficient. Growth requires stronger supply-side measures, starting with deregulation. I tabled a Written Question when the Government had been in office for almost a year, inviting Ministers to set out the number of regulations revoked since the general election. The answer was none. It appears that despite languishing in Opposition for 13 years, the Conservatives were unprepared for Government, otherwise action would have been taken by now.
Is not the Chancellor at least willing to remove reams of onerous employment laws, bearing in mind that expensive regulations to meet environmental targets lurk in the pipeline? The ligature of red tape stays tight around our businesses and their growth is further hampered by high tax rates. The Institute of Directors has just gauged that taking all taxes into account, the overall tax burden for a medium-sized firm is no less than 43 per cent.
The Chancellor has asked HMRC to examine likely tax revenues from different rates of personal taxation. I had half hoped that Mr Osborne’s apparent belief in the enterprise culture would have informed his opinions without this digression. The noble Lord, Lord Myners, quoted John Maynard Keynes in 1933. I am sure that he knows even better than I do that this was the year in which Keynes advised the then Government to cut taxes. Now, even the IMF has urged our Government to slice tax rates. So there is no deregulation, no lower taxes, except corporation tax, and to compound these defects the Government also harm our economic recovery and competitiveness and fuel inflation at the same time with so-called green measures. Last year, the Government raised £40 billion from green taxes with householders paying an extra £200 in hidden charges on gas and electricity bills. The Global Warming Policy Foundation has shown that one-fifth of our soaring energy bills are accounted for by the hidden subsidies and other costs to decarbonise our electricity industry. This injures our recovery. The cost of the low-carbon economy will be £13 billion a year, soon rising to £18 billion. China, India, and to a lesser extent the USA, have rejected constraints on carbon-based energy. Investment and jobs will be forced overseas by the Government’s actions. The director-general of the CBI has wryly observed that green taxes on cement, steel and lubricants will mean that even windmills will soon be too expensive to manufacture in this country.
We cannot afford such follies. Last year our trade deficit was £50 billion, despite the 25 per cent devaluation. The benefits of devaluation in terms of exports have been so marginal that I query whether they are worth the manifest inflationary costs condoned by the Monetary Policy Committee.
Lord Spicer
My noble friend is making a very important speech, and I am particularly struck by what he is saying about inflation. Will he accept that the problem with inflation is that it can get out of control so that it becomes cumulative? I wonder whether he had in mind any figure of inflation at which that might occur. My own view is that it is between 5 and 7 per cent, but I wonder what his view is.
Lord Ryder of Wensum
My noble friend has consistently warned about the dangers of inflation over the past 30 to 40 years. As I recall, in his maiden speech last year he highlighted this threat. I agreed with him then, and I agree with him now, because inflation, as he knows, has been above target for more than four of the past five years. We can feel very thankful that the MPC members are not paid performance bonuses. The Business Secretary gently chided me for complaining about inflation in a debate a year ago, implying that it had little to do with the Treasury. Up to a point, Lord Copper, only up to a point. I confess to acting as a foot soldier, like my noble friend Lord Spicer, in the battles against inflation during the 1970s and 1980, sharing Milton Friedman’s belief that,
“inflation is one form of taxation that can be imposed without legislation”.
I wager that inflation is built into every economic calculation made by the Treasury. The suppression of inflation may not be the Treasury’s responsibility but it is, I say to the Minister, its lasting burden.
A week after the general election, the Prime Minister, eager to encourage economic growth, implored the Foreign Office to play a livelier role in helping our export drive, though it later took him seven months to put a trade Minister in post. How can the Prime Minister’s wishes be achieved when the Foreign Office budget has been slashed with severity? DfID’s budget will soon exceed that of the Foreign Office by a factor of five. We donate in this country twice as much as Japan and nearly twice as much as Germany. Our Government raise the equivalent of £300 per household for overseas aid. Surely a segment of that figure would be better deployed in the Foreign Office to promote British exports?
The late Lord Bauer, who I know worked closely over many years with the noble Lord, Lord Desai, at the London School of Economics, argued about overseas aid transfers cash from poor people in rich countries to rich people in poor countries. Indeed, the DfID Permanent Secretary admitted earlier this month that the department had no idea how much British aid is being lost to fraud and corruption, thus underlining a recent World Bank investigation unearthing massive corruption in the aid field. Rumours still persist about the Karzai clan’s links with new blocks of flats in Dubai, partly through the collapsed Kabul Bank. Yet we continue to pour aid into Afghanistan. Parents of dead soldiers must rue the extravagance of the aid budget when compared with the lack of military equipment given to their sons and daughters. I would prefer my donations to be voluntary. In other words, I opt, even if the Prime Minister does not, for the free-will offerings of the big society over the compulsion of big government.
I am pleased that the Prime Minister went to Africa to preach the gospel of free trade. I hope that on his journey he found time to read Dambisa Moyo’s book, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, in which the leading Zambian economist argues that aid fosters poor government, dependency, corruption and poverty. To paraphrase Bill Clinton, economic success is not a matter of chance but of choice. Let chance be the road not taken and choice of the economic road taken, with belief and without fear.
Lord Sheldon
My Lords, in a debate on the Finance (No. 3) Bill in the House of Commons on 26 April this year, the Labour Party set out how the fundamental policy of the Government was putting jobs and growth at risk. There was a risk there. One important result of the Government’s actions was that bank lending to small businesses fell in the first quarter of the year. The problem was that lending to small businesses was important to the economy and was not succeeding at all.
A major problem facing the Government was that one in five young people was not employed. The Budget produced by the Government forecast higher levels of unemployment. This was serious, and it was the consequence of the Government’s decision. In the Finance (No. 3) Bill debate, Malcolm Wicks, the member for Croydon North, speaking on the Department for Work and Pensions, said that 11 million people alive today can expect to live to 100. Democracy is becoming much advanced.
When Members of Parliament retire, they leave the labour market and draw the state and occupational pension at a later stage. The problem here is class variations, and variations in life expectancy depending on geography, constituency, north or south residence or work undertaken. There is considerable inequality. One-fifth of men have routine occupations. There is a class of workers in these routine occupations such as cleaners, packers, van drivers and unskilled labourers, many of whom started work at the age of 15 or 16. Many of them are dead before the age of 65 and so do not draw the state pension. Women undertake similar work but there are not similar problems.
The problem with increasing the state pension age is that one category does not cover everyone. If the pension age is raised to 67 or 68, this will be considered by many to be a serious change. However, there will be a considerable difference for poorer men and women, who will receive a further pension penalty. Many of the poorest men and women have shorter lives. What we see now is what should be the basis of the increase in the state pension age, which may be raised to 70.
Those who are in major businesses and other highly paid undertakings can undertake working extensive practices by consulting, writing articles, considering other matters and other aspects of their work. However, others undertake basic works, as Malcolm Wicks set out. He stated:
“These people might be able to continue their work, but what about the van driver, the bus driver, the woman who cleans offices, the steel workers, the people with creaking backs and aching limbs who come their 60s need to retire in a very old-fashioned sense?”.—[Official Report, Commons, 26/4/11; col. 103.]
That refers not to the higher social classes—they commence work in their mid-20s—but to those hard workers who frequently start at the age of 15 and 16 and who need to retire much earlier and have a reasonable rest.
Malcolm Wicks pointed out that those who start basic work at an earlier age should draw their state pension four years earlier than most; that is, those who undertake routine employment just might be considered by their employers as candidates for taking a state pension at an earlier stage. The major issue is that given the age of the state pension, many people start work at the age of 25 and have 40 years of work, and then have 30 more years in retirement with considerable pay.
As people live longer, longer retirement has to be paid for. There is the possibility that a state-pension age of 66 to 70 may not be an acceptable arrangement. Such an arrangement may need to be changed as factors in medical work and in people’s backgrounds increase life expectancy; and life expectancy will increase over many years to come. Those who are in work must be aware of such a charge.
Lord Tugendhat
My Lords, this debate has ranged very widely but I shall confine my remarks to the sub-committee’s report. As I am a member of the Select Committee but not of the sub-committee, I can say with a clear conscience how very good the report is.
We are debating the report against the background of a number of far-reaching constitutional changes, some actual and some prospective. Often, the most far-reaching changes are those which are least noticed when they are introduced and appear to be the least spectacular. That may very well prove to be the case on this occasion with the Government’s new approach to tax policy. It represents an interesting new direction and will, I think, have a considerable impact on the formation of policy in the future. I congratulate the Government as did the noble Lord, Lord MacGregor, on its implementation.
I should like to make a few I hope helpful suggestions. My first hope is that that the Treasury and future Chancellors will not be afraid of being boring. The temptation inherent in producing an annual draft Finance Bill will be to cut a dash and to make an impact. There will be some years when that will be the right thing to do, when it will be appropriate to serve up a delectable menu of substantial changes. That will not be the case every year and quite likely it will not be the case in most years. I hope that the new approach will lead not only to a more consultative approach to tax policy, but also to one that is more measured and selective, and that Chancellors will not be judged by how far-reaching or how dramatic the changes are from one year to another.
My second hope is that the Treasury and future Chancellors will not be afraid of disregarding occasionally the constraints imposed by the new approach. I noted what the Minister had to say on that point when he opened this debate. I agree with the sub-committee’s strictures on the disguised remuneration measure and the supplementary charge on oil and gas profits. However, there will be occasions when it will be right for the Government of the day to act quickly in response to a difficult or crisis situation. The banking crisis of 2008 and its aftermath provide a case in point. There is a good general rule that should normally be observed, but there will be occasions when Chancellors will be right to take more immediate action.
My third hope is that the draft Finance Bill will spark off what might be termed an iterative process with a set of proposals for action in one area sparking suggestions for action in another. We see an example of this already in the way that taking evidence on tax avoidance has prompted the committee’s request for the Government to follow up their anti-avoidance strategy with one for tackling evasion. Given that HMRC calculates that the loss from all forms of evasion and default is £22.6 billion versus £7.5 billion for avoidance, this seems highly desirable.
Finally, I turn to the role of the Economic Affairs Committee, or rather its sub-committee. I strongly agree that the new system provides an admirable opportunity to make better use of the experience and expertise of Members of the House of Lords. This is exactly the sort of role that the present House of Lords is well qualified to perform. The report puts forward two possible options in paragraph 122. I suggest that consideration should also be given—as the noble Lord, Lord MacGregor, pointed out, this is a matter for the whole House—to establishing the sub-committee on a permanent or semi-permanent basis. I am not committed to that formula, but I want to ensure that a variety of possible options is explored in order to ensure that the experience and expertise in the House of Lords is harnessed in the most effective way, whatever that may be.
To conclude, I congratulate the Government above all on the introduction of the new approach to tax policy and on the way in which they have started the implementation of that policy. While one should, generally speaking, adhere to the rules, there will be occasions when it will be appropriate to go outside them.
Lord Haskel
My Lords, I did not serve on your Lordships’ Economic Affairs Committee, but I congratulate the noble Lord, Lord MacGregor, and his committee on the report. It was very sensible.
By tradition, the Second Reading debate on a Finance Bill in your Lordships’ House is an occasion to consider the country's economic situation. As my noble friend Lord Myners explained, it is not going as well as we would like—that is an understatement. The accusation by the shadow Chancellor that the Government have recklessly been cutting too far and too fast is beginning to stick. The noble Lord, Lord Owen, put it rather well in last week’s House Magazine. He said:
“There is a scratching air of general incompetence beginning to infiltrate this coalition Government”.
Why? I think it is partly because this Government have fallen into the age-old trap which has pervaded economic life in this country over many years. It is the trap of separating the financial sector from the rest of the economy. Many business people complain of this. It is the kind of thing that JK Galbraith was referring to when he spoke of the belief that monetary policy is the highly professional preserve of the financial community and has to be protected from interference by the rest of us.
What has been the effect of the Government’s handling of the debt crisis? What it seems to be doing is transferring the debt from the Government to the citizen. The Joseph Rowntree Foundation recently reported that if you have suffered the average cut in pay and require childcare, your standard of living will have gone down by 10 per cent. As the noble Lord, Lord Myners, said, we are told by the OBR that it expects families to go deeper into debt between now and 2015. The result of the Government’s policy will be Government debt perhaps down, family debt certainly up—a typical financial solution which ignores the rest of society and incidentally discourages investment, as many other noble Lords have pointed out.
The Government speak of balance in the economy, but balance in their sense is a compromise. You achieve real balance by working on the whole economy. The noble Lord, Lords Higgins, spoke of this, and he is right, because the line between financial and other services and manufacturing has now become so blurred that it is frequently difficult to tell on which side of the balance an activity lies and what impact it has on jobs. The Government’s growth paper ignores this, and the “march of the makers” also ignores this. Selling IT services and software that challenge established businesses is an example of this. Earlier this year, President Sarkozy commissioned from McKinsey a report about this for the G8 summit in Paris. That report calculated that for each of the 500,000 jobs lost in France due to internet innovation over the past 15 years, 2.4 new jobs had been created. These services create manufacturing growth.
Another area where the real world and the financial world seem to be out of kilter is in the matter of enterprise zones. The Government want to encourage them through tax incentives, rate relief and other financial tricks. In the real world, business believes in clusters. The old ways of the supply chain, consisting of standard services or standard components, is giving way to much more complex systems. Advance manufacturing needs particular products and services, and this is why they all need to be together. They need each other’s skills and services to stimulate and find new products. This is where the incentives are needed, but the Government have dismantled the mechanism to do this.
Another area where the balance has got out of kilter is in the taxing of overseas profits. It may have satisfied the financial sector, but some see the low tax on overseas profits as an incentive to export jobs overseas and bring back the profits at a low rate of tax.
The Government talk about being green. The noble Lord, Lord Ryder, does not like green taxes because they encourage carbon leakage. However, the green taxes which the Treasury has imposed are not what the Office for National Statistics calls green. The recent House of Commons report quite rightly says that they should be justified by finding a way of showing that taxing pollution goes towards green expenditure, such as less polluting vehicles or better public transport. This is just another example of financial considerations ignoring the rest of us.
Another area where the Government know that there is potential for growth, and about which they should be making many more encouraging noises, is the single market, particularly in services and the digital single market—and this in spite of what the noble Lord, Lord Newby, said about the euro crisis. The single points of contact are well established. Indeed, they are all in English, and if the Minister and other noble Lords would care to look at them, they would be quite impressed. So why have the Government not been giving their wholehearted enthusiasm and support for British business to grow through greater participation in the single market? Because they are afraid of ridicule in the press and criticism in the City. I hope that the new relationship between politics and the press, which seems to be emerging during these past few days, will extend to something as important as our membership of the European Union and that we will see enthusiastic encouragement for the business opportunities in the single market.
It has always seemed to me that there is a distinctively British way of doing business; that is, providing services and goods based on honesty and integrity. Encouraging the proper kind of balance has an important role to play in this, which is an important part of our economic success. In today’s commercial world, people have to know what you stand for. Winston Churchill famously said that America will always do the right thing but only after having tried everything else. I have a terrible feeling that that is what is happening here.
Lord Northbrook
My Lords, it is interesting how the noble Lord, Lord Myners, praised Alistair Darling in his opening speech but not the previous Chancellor’s budget deficit expansion. I should like to remind the House that in an interview in August last year, he reflected that the Labour Government had abandoned fiscal responsibility; that Gordon Brown “grew to forget” the golden rule; that Labour ran large deficits in the middle part of the previous decade when the economy was clearly running at full capacity; that the party needed to come clean on what cuts it would make; and that it needed to prove once again that it is a credible party of economic management. The noble Lord criticised the current shadow Chancellor. He said:
“I don't agree with Ed Balls. I do think the Labour party has to wrestle with the fact that it tends to leave office with large deficits. And I think its licence to govern is … weakened in the future—if it could not produce credible arguments … that it is capable of sound economic management through the cycle”.
The country is still recovering from the debt binge.
Once again, we are assembled here to debate the Finance (No. 3) Bill, the majority of which I support. We are also grateful to the noble Lord, Lord MacGregor of Pulham Market, and his committee for their excellent report, which again generally speaks favourably of the Finance (No. 3) Bill. His report applauds the introduction of a new approach to tax policy-making by the coalition Government with the aim of bringing about a clearer, more stable and more predictable tax system. This approach seeks to produce better tax legislation and more effective scrutiny of tax changes. I agree with the report’s conclusion that this has produced a Bill, the content of which has generally reflected early and fuller consideration than in the past. The report quotes two good examples of this with which I fully concur—first, corporation tax reform and, secondly, the area of changes to pensions tax relief.
However, the report rightly is critical of two other areas where this new approach has not been adopted. There is disguised remuneration. The new provisions against tax avoidance in this area take up no fewer than 60 pages of new legislation. Surely this would not have been necessary had there been more consultation beforehand. Likewise came the change to the oil and gas tax regime by way of the supplementary charge. No consultation had been made with either industry. It was not until there was a great deal of criticism that exploration in these areas would be seriously affected that at the last minute the announcement was made of an extension to the ring-fence expenditure supplement, which has persuaded companies like Statoil to resume its drilling projects.
Before moving to considering the Finance (No. 3) Bill as a whole, I wish to congratulate the Chancellor on his vigorous approach in tackling the appalling legacy of the Budget deficit left to us by the Labour Government. This had to be the first economic priority after the election. His deficit reduction policies have been approved by a whole range of organisations, including the IMF, the European Commission, the OECD, the Fitch rating agency and Timothy Geithner, the US Treasury Secretary.
Looking at the Finance (No. 3) Bill in more detail, first, I shall focus on help for businesses. I welcome the reduction in corporation tax for large companies from April this year, the reforms to the foreign profits legislation, the announcement of new enterprise zones and the proposed low rate of corporation tax for offshore finance companies. That will all be good news for larger companies. Moreover, the Chancellor has dealt a very generous hand to VCTs and EIS investors, increasing the tax relief and the amount of investment while rightly warning against abuse of the rules. The slight improvement in the capital allowance regime for short-term assets is good news. Those positive aspects of the Budget far outweigh the negative ones for a few sectors of the economy. Terry Scuoler chief executive of the EEF, the manufacturers’ association, while praising the Budget in the main, said that,
“the significant rise in energy bills threatened by the Carbon Price Floor is unwelcome”.
For smaller unincorporated businesses, the news on the tax front is more mixed. They should benefit from easier planning laws. They should also be helped by the decision to support innovation and manufacturing, with an additional £100 million this year for new science facilities and an increase in the SME rate of research and development tax credit over the next few years. However, two areas are definitely not to their advantage. The 50p income tax rate needs to be reduced as soon as possible, and the Equalities Act could well cause problems in taking on staff.
Regulation is also a major area of difficulty which I shall examine in more detail. For those not familiar with it, a new Cabinet sub-committee called the Reducing Regulation Committee was established after the coalition came to power. The committee has to review the quality and robustness of regulatory proposals. Astonishingly, its second report, which covers the period between September and December 2010, concludes that more than 40 per cent of the regulatory proposals that it considered were not fit for purpose. The main failing was a failure to produce cost-benefit analyses of proposals. This all might sound rather esoteric but is very important. If regulations are being spewed out that do not make sense, it is a big hindrance, especially to smaller businesses which do not have the back-office ability to cope with them all.
Let me give another example of difficulties for a smaller business. A friend of mine who is involved in a growing smaller company has been given the opportunity to pay his tax in instalments. However, something has recently gone wrong with the Revenue’s computer system which means that he has been asked to pay all his tax at once. He rang up the local Revenue office, which is a nightmare process, and took more than an hour to get through to anyone sensible. He was then told that this was an administrative mistake and that he need not worry. I fear that this may have happened to a lot of small businesses. Has the Minister come across any other cases in this area?
Overall, I welcome the Finance (No. 3) Bill 2011. The Chancellor has a difficult hand to play and progress may appear to be uneven at times. But his message is clear: Britain is open for business and it has produced major incentives to companies and individuals to create wealth, which I believe is the right approach for the economy.
Lord Myners
The noble Lord listed a number of organisations which endorsed the Chancellor’s strategy. Can he remind the House whether any of those organisations were successful in forecasting the crisis that hit us in 2007, including the credit rating agencies to which he referred?
Lord Northbrook
I would have to refer back to the noble Lord on those matters.
Viscount Hanworth
My Lords, the report of the Select Committee on Economic Affairs conveys one startling fact. We are told in paragraph 125 of the latest available estimate of the tax gap, which for the year 2008-09 was £42 billion. The gap is defined as the difference between tax collected and the tax that should have been collected.
This gap represents an enormous sum of money and one must look for ways of putting it in perspective. The comparison that comes to mind immediately is with the size of the budget deficit. Of course, this is a highly variable amount, but for the past two years it has been at roughly the same level. These deficits have been roughly four times as large as the tax gap and they were preceded by deficits that were virtually negligible.
The immediate cause of the rising deficit and the rising debt was the financial crisis. It was not, as some have suggested, the result of the profligacy of the then Government. The Government were constrained to buy a large proportion of the equity of the failing banks and to supply them with funds in other ways as well. To do so, they had to raise the money by selling bonds.
Following the crisis, there has been a savage fiscal retrenchment by the current Government, and one might have expected the debt and the deficit to have been reduced as a result. This has been a false expectation. In explaining the fallacy, one needs to make a firm distinction between the gross budgetary effect of a marginal reduction in the Government’s expenditure and its net effect. The net effect of a reduction of £1 of expenditure is the value of £1 less the reductions in the tax receipts occasioned by the additional unemployment and the reduction in economic activity, and less the consequent expenditure on unemployment benefit. In the present circumstances, a reduction in the expenditure has barely any effect on the net level of the deficit.
Given that this is the case, one is bound to wonder why the coalition Government have placed such emphasis on their strategy for reducing the budgetary deficit by reducing the expenditure. The answer may be twofold. First, there may be a mistaken belief in the effectiveness of such fiscal stringency in reducing the deficit and the debt. Secondly, it fits well with the Government’s political and economic philosophy to take steps to reduce the level of government economic activity.
The Government’s economic strategy may have been influenced by the desire to obtain the approval of the risible credit rating agencies. These agencies have been passing judgments on the viability of various European economies and on the likelihood that they will default on their sovereign debts. Perhaps, therefore, we should compare our economy with the economies that have suffered from the adverse effects of the assessments of the credit rating agencies and wonder whether it might reasonably be subject to the same aspersions.
It should be remarked at the outset that whereas those economies that are currently subject to debt crises have a substantial proportion of their borrowings in short-term loans from the money markets, UK debt is, by contrast, preponderantly of the medium and long-term varieties that have a limited exposure to the whims of the markets. The UK’s public debt as a proportion of GDP stands at 80 per cent. By comparison, Greece’s debts are 142 per cent of GDP, Ireland’s debts are 96 per cent, Portugal’s 93 per cent and even Germany has greater public borrowings than the UK at 83 per cent of GDP.
One should also compare the size of the annual deficits of the various countries. Here, at present, Britain does not fare so well. As a proportion of GDP, its current deficit is the third largest in Europe. It must be conceded that the UK could and should do better in reducing the level of its budgetary deficit. Given that this cannot be achieved effectively by reducing government expenditures, one must ask by what other means it might be reduced. The means must be by securing the growth of the economy and by increasing the levels of personal taxation.
There is ample scope for obtaining significant revenues by increasing the top rate of taxation. The current British rates are below those of other northern European countries and they have been at low levels ever since their radical reduction in the early years of the Thatcher Administration. The basic UK rate is at 20 per cent; the higher rate, which becomes effective for incomes above £35,000, is 40 per cent; and an additional rate of 50 per cent—which is a recent provision—is operative only for incomes in excess of £150,000. At the level of income where the additional rate is chargeable, it becomes common for remunerations to take various forms that are aimed at the avoidance of tax. Disguised remunerations are widespread throughout the financial sector and at the higher reaches of corporate enterprise. These sidestep income tax through awards or incentive payments mediated by trusts, third parties or offshore pensions. Non-repayable tax-free loans are also common. If the additional rate were raised and tax avoidance tackled, we should go a long way towards eliminating the budget deficit.
The Government are well aware of the problems of tax avoidance and they have widespread backing for their aim of stamping it out. There is much to be done before tax avoidance in the upper echelons is successfully quashed. To defeat the cunning of the tax avoidance industry requires an ongoing and sustained commitment to the task. The problems will not be overcome until the level of capital gains tax is further increased. It should be graded according to income so as to become commensurate with the levels of income tax. This is because much of the higher remuneration is gathered in the guise of capital gains.
The importance of the task and the reward for undertaking it are increasing as the distribution of income in this country becomes more unequal and as the ranks of the middle-income earners are decimated. It should be noted that the UK records the highest value in northern Europe of the Gini coefficient, which measures the inequality of income distribution. It remains to say how the economy should be stimulated. It should be stimulated not from the demand side but from the supply side by the provision of capital to businesses and enterprises, both large and small. The banks should be called upon to provide this capital, and they should be subject to severe penalties if they fail to do so.
The Government have recently declared bold plans for investing in renewable energy and in nuclear power generation, but these will come to nothing if the necessary capital is not available. At present, the encouragement to banks to lend more is akin to pushing on a string. The Government need to be far more commanding in their approach to this problem.
Lord Davies of Oldham
My Lords, I am conscious that the hour is moving on. Tempted though I am to summarise the contributions of all noble Lords to this debate, which has been absolutely fascinating, I will leave that particular joy to the Minister.
I will begin by emphasising those parts of the debate that I am sure will obtain the enthusiastic acceptance of the whole House. The debate was graced by the outstanding maiden speech of the noble Lord, Lord Magan of Castletown. We very much appreciated the forthrightness of his speech in the areas that he covered. It was a tour de force, and at times it was also somewhat of a tour d’horizon. The problem of a tour d’horizon in this House is that we do from time to time have to abide by certain time constraints. However, on his maiden speech he was able to deploy fully the arguments and we all very much appreciated what he had to say. We are also grateful to the Minister for introducing the Bill and for covering it in a very limited time, conscious of the fact that many dimensions of the Finance (No. 3) Bill would be covered in the debate, to which he would be expected to respond at the end.
There has been a great deal of approval on the speech and on the work of the noble Lord, Lord MacGregor of Pulham Market. We all appreciate the sterling work that he does for the committee. From the contributions to a debate of this kind we see the very constructive work that the committee does in discrete areas. I do not doubt that we all recognise the very serious recommendations about the degree of consultation that can go on with regard to taxation, encouraging the Government to go further than they have gone so far, although we recognise their good intentions. We also recognise the necessary work on anti-avoidance and in due course increased work on anti-evasion as far as taxation is concerned. In particular, I want to comment on his points about the Revenue staff. I understand fully why the committee reached its conclusions on anxieties regarding the competence of Revenue staff. We have only to compare the rates paid in the public sector against those paid to the adversaries in the private sector who seek to limit the taxation paid by companies to realise what an enormously difficult job the public sector has in those terms. That is to say nothing of the fact that it cannot help that part of the Government’s deficit reduction plan is to reduce HMRC staff. Of course that produces strains in the department in the crucial areas where extra revenues can be obtained.
All sides in the debate appreciate that this Budget has been produced at a time of great economic difficulty. We all recognise that there has been a global financial crisis which has led every country that does not have the strongest of economies into very real difficulties. We all recognise that we need to get deficits down. That is why we do not doubt that the Government had to take tough decisions on spending cuts. Nevertheless, the best way of getting the deficit down is to employ the assets of the country as fully as possible. That means retaining people in constructive work as best we can. However, a great deal of the Government’s strategy, particularly with regard to the public sector, is to reduce our productive units and the ability of people to work and to earn. People who do not earn do not, of course, pay taxes—nor do they consume or sustain demand. Therefore, it is of no great surprise, or it ought not to be, that this economy has staggered into a position of negative growth over recent quarters. It looks by all accounts, and all forecasts, as if it will be a very considerable time indeed before we see anything like significant positive growth, despite the fact that we can look at other countries—and Germany is the outstanding example—that have come through this crisis and have positive rates of growth as they tackle deficits. Of course, it is not the case, as it has been portrayed, that the United Kingdom alone ran into deficit. All these countries have had to wrestle with their budgetary plans. The problem is the extent to which they have savagely reduced demand, as this Government have—and the answer, on the whole, is that they have eschewed that.
I put it to this House that if the debate that is going on in the United States of America at present should be won by the kind of voices that we have heard from certain parts of the House on the government Benches today, by the right-wing Republicans and the Tea Party advocates, we will see a decline in the American economy that will render our capacity to recover extremely difficult indeed, if not impossible, by 2015. Therefore, we should recognise that when we are discussing this issue of global demand, we have our part to play in this, too. We have the greatest doubts about the particular strategy being followed by the Government. As the noble Lord, Lord Desai, said, it was a pity that the noble Lord, Lord Skidelsky, was not here in this debate, as he above all on these occasions has identified the strategy that a coalition Government pursued 90 years ago in the face of public crisis over finances. It took us almost to wartime and government expenditure in wartime to recover. We worry, and are critical of the fact, that the rate of deficit reduction that the Government are pursuing is one that may lead to similarly bleak prospects for this country over this period of time.
Of course, in the debate, there have been so many comments about the Bill itself, and it scarcely behoves me to seek to reply to all of them. But I hope that the Minister will pay some attention to those who have argued about particular aspects of the social impact of the Budget. I hope that he will respond to the arguments that my noble friend Lord Anderson and the noble Lord, Lord Browne, produced on the question of the extent to which the Government intend to pursue family-friendly policies, of which we have seen little at the present time. I hope that also he will appreciate those contributions of my noble friends Lord McFall and Lord Watson of Invergowrie, and several other noble friends. They emphasised the fact that the great danger is that we look once again as if we were concentrating overwhelmingly on the financial dimensions of the economy—a point that my noble friend Lord Haskell also brought late into the debate. The Government have said that it is their intention to rebalance the economy, but it is quite clear that the manufacturing industry is not getting the support, resources or opportunities from the banks to borrow in order to invest that would help to put our economy on a sounder footing.
This debate has been extremely valuable, and we recognise the very constructive comments on all sides. We hope, however, that the Minister will also appreciate that, as far as Her Majesty’s Opposition are concerned, there is a real difference between our perspective on the strategy which ought to be pursued at this present time, and at the moment we are holding the Government to account where their case is remarkably thin.
Lord Sassoon
My Lords, we have had an interesting debate this evening, and I thank all the noble Lords for their contributions. In particular, I congratulate my noble friend Lord Magan of Castletown on what was—to echo the words of the noble Lord, Lord Davies of Oldham—a masterly tour d’horizon of the economic scene. I have to say that it was about the one thing on which I agreed with the noble Lord, Lord Davies, but let me come back to that.
As I said in my opening remarks, the Government welcome the constructive comments of the Economic Affairs Committee, and we will take these into account as we entrench a more predictable, stable and simple tax system. This year’s Finance Bill, the third of the current Session, has come through an unprecedented degree of consultation and engagement, and implements many of the changes announced at the Budget.
As we said at the Budget, and as we said last year, we are committed to growth through investment, through private sector recovery, and not through unsustainable deficits. This Bill moves us forward on that path to stability and recovery. It promotes our international competitiveness by cutting corporation tax by a further 1 per cent and by reforming our controlled foreign company rules. These are key steps to creating the most competitive tax system in the G20.
The Bill encourages growth by supporting our entrepreneurs and SMEs, by doubling entrepreneurs’ relief, increasing R&D tax credits and cutting the small profits tax rate. It embodies fairness by lifting hundreds of thousands of people out of income tax, and by ensuring that other sectors of society make a fair contribution to cutting the deficit and restoring sustainable growth. It provides for a better environment by incentivising investment in cleaner sources of energy. I am pleased to say that these points were picked up in different ways by a number of noble Lords in this debate.
Let me first take what I might call the pessimist tendency. The debate did not get off to a cracking start given the tone set by the noble Lord, Lord Myners, and followed up by the noble Lord, Lord Barnett, so let me talk to the pessimists for a moment. This is an economy in which the private sector has generated over 500,000 new jobs in the last year. Manufacturers are talking to me about shortages of skills; about the need for more engineers; about welcoming the Government’s apprenticeship schemes; and all the noble Lord, Lord Myners, does is talk down the prospects for the economy. To be fair to him, he recognises that the economy is in the difficulty it is in because his Government did not deal with the structural deficit when they could have done. I certainly applaud his frankness, but it is a frightening challenge; and a legacy which the previous Government left.
I am, however, encouraged. On Friday, I was in Manchester, the old stamping ground of the noble Lord, Lord Barnett, an area where the rebalancing from the public to the private sector is as challenging as anywhere. The latest quarterly survey from the Greater Manchester chamber of commerce points out encouraging signs. I think that some noble Lords need to get out and about around the country more.
On the specific point which the noble Lord, Lord Barnett, raised about reserves, it is a little late at night to go into details about this. However, I know that it is a point that bothers the noble Lord considerably so I will write to him.
Lord Sassoon
The noble Lord says “Don’t bother” so I will not. I do not know whether other noble Lords heard; as he tells me not to write, I will not, but I have made the offer.
As to the extraordinary speech from the noble Lord, Lord Myners, which continually came back to praise the former Chancellor, Mr Darling, I can only think that he read in the Sunday newspapers, as I did, that Mr Darling is coming close to finalising his memoirs. I assume that this was a late play to make sure that Mr Darling looks favourably on the noble Lord, Lord Myners, and his part in the previous Government, but we shall see. We then got away from the pessimists but came back to one or two a bit towards the end. I am sorry that the noble Lord, Lord Haskel, joined in by talking about the Government transferring debt to the citizens. The trouble is that the government debt is the debt of the citizens and that attitude, I fear, underlay so much of what the previous Government did. They completely failed to recognise that it is the citizens who, at the end of the day, have to pick up the debt.
In terms of unrealistic ways to go about getting us out of the challenge we are in, I have to say to the noble Viscount, Lord Hanworth, that one way in which we will absolutely kill growth is if we raise further the top rate of income tax from a level which is not one that this Government wish to see in the medium term. We desperately need to encourage entrepreneurship and growth and the one thing we should not think of doing is further raising the top rate of tax. I am pleased to see the noble Lord, Lord Myners, nodding in approval.
I do not recognise the picture which the pessimists paint. However, I recognise that there are a lot of serious challenges out there, which noble Lords pointed to throughout the debate. I cannot deal with them in detail but my noble friend Lord Newby was the first—and virtually the last—speaker to refer to the European dimension, which is very difficult, while my noble friend Lord Higgins again pointed out the real challenges that there are in analysing the monetary situation and taking lessons from it.
The noble Lord, Lord Desai, raised the question of the savings rate and I completely agree with the challenge that that poses. I am delighted that the noble Lord appears to have lost none of his vigour even though it appears that Delilah may have got at Samson. It was a great reassurance that he is still on fine form. My noble friend Lord Ryder of Wensum was also on fine form. He raised a lot of points but, yes, regulation and employment are very challenging. I would point out to my noble friend that we are in the process of putting 21,000 regulations on the Red Tape Challenge website. We will indeed eliminate significant quantities of regulation while on employment law, another key area, we have already made moves on unfair dismissal to right the balance between employers and employees. My right honourable friend the Chancellor has identified five other areas where we are looking at employment regulation at the moment.
The noble Lord, Lord Watson of Invergowrie, talked about the protection that is important to lower-paid public sector workers. The Government have indeed made the £250 payment for all those within central government and are encouraging all other public sector bodies to abide by that.
Lord Watson of Invergowrie
On that point, the Minister mentions all other public bodies but I mentioned that local authorities have been allocated resources for this specific purpose, yet the Government appear to be allowing them to spend the money on whatever they see fit. Surely, that defeats the Government's purpose in regard to the £250 that the Minister mentioned.
Lord Sassoon
My Lords, as I have said, and as the noble Lord recognises, the money is available and the Government are encouraging not just local authorities but all public sector bodies to stick to the rule that has been applied to central government employees.
The noble Lord, Lord Sheldon, drew attention to another important area; that of an ageing population and its complexities that cut both ways, as he explained. My noble friend Lord Northbrook brought us back to one of the key points, for which I am grateful to him, on the Budget that has pro-business tax changes as central to it.
In the middle of the debate, we had an interesting sub-debate around the importance of marriage and the family. Points were raised by the noble Lords, Lord Anderson of Swansea and Lord Browne of Belmont, and my noble and learned friend Lord Mackay of Clashfern. We are keen to send a clear message that family and marriage matter and that strong and healthy families help to create a strong and healthy society. In a little over a year, this Government have proved their determination to tackle the wider issues that can affect family stability. We have made great strides in improving outcomes for families, particularly those on low and middle incomes, through our work on welfare reform. Furthermore, the universal credit will ensure that people will generally keep more of their earnings for themselves and their families than is currently the case. However, we need to be realistic. It is not fiscally practical to introduce a transferable personal allowance for married couples at this stage. Having said that, our commitment remains clear.
We then had some interesting discussion referring specifically to the Economic Affairs Committee report, and I am grateful to my noble friend Lord, MacGregor of Pulham Market, not only for chairing the committee but for drawing out some of the critical points from the report. I am grateful to him and to my noble friend Lord Tugendhat for their general welcoming of the Government’s new approach to policy-making. I shall respond to a couple of areas that were specifically raised, such as disguised remuneration. HMRC had indicated through its Spotlights publication, in particular, that these schemes were generally not effective. The Government decided to publish draft concert legislation for consultation at the same time as introducing proportionate anti-forestalling rules, with effect from 9 December 2010, because we saw that as the best way of combining the necessary tackling of an exceptional situation, to take the phrase of my noble friend Lord Tugendhat, with an ability to consult on the rules.
I am grateful to the various noble Lords who talked about the road map on corporation tax. The noble Lord, Lord McFall of Alcluith, drew attention to it, and I agree with him that corporation tax reform is not just about cutting the headline rate, which is why in the broader package we are looking at such critical things as the patent box, the treatment of intragroup dividends, and so on. Also in the report, the question of evasion came up a number of times from my noble friend Lord MacGregor of Pulham Market. The noble Lords, Lord Bilimoria and Lord McFall, welcomed the £900 million of additional resources. HMRC is taking this very seriously. The noble Lord, Lord Davies of Oldham, is incorrect in his understanding. HMRC is increasing staff to tackle avoidance, evasion and fraud by around 2,500 full-time equivalent staff by 2014-15. It will consider the benefits of publishing a more detailed document, setting out its approach to evasion later in the year. It is getting late and I should and will conclude.
As noble Lords are aware, this Government came to power inheriting the largest peacetime deficit in the nation’s history and an economy on its knees. We have taken difficult decisions in our two Budgets to date to tackle this dire inheritance, eliminate our structural current deficit over the coming four years and stimulate a private sector recovery. This strategy has been endorsed by the IMF, the OECD, the European Commission and UK business organisations. Of course, we have always said that recovery would be choppy. Our plans necessarily incorporate a degree of flexibility through the automatic stabilisers to allow government spending to move up and down with the economic cycle.
This Bill further delivers our commitment to improve our competitiveness, encourage investment and support our businesses. At the same time it removes hundreds of thousands of individuals from income tax and helps reduce the cost of living for families across the country, and it makes these changes in a way that is fairer and more consultative than any previous Finance Bill. I commend the Bill to the House.
Finance Bill 2011: EAC Report
Lord MacGregor of Pulham Market
That this House takes note of the Report of the Economic Affairs Committee on The Finance Bill 2011. (6th Report, HL Paper 158)