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Clive Efford (Eltham) (Lab)
1. What recent assessment he has made of the level of taxation levied on the banking industry.
The Chancellor of the Exchequer (Mr George Osborne)
Her Majesty’s Revenue and Customs published details of total pay-as-you-earn and corporation tax receipts from the banking sector for the first time on 31 August. The official statistics show that tax receipts from the sector increased from £17.3 billion in 2009-10 to £21 billion in 2010-11. A number of other taxes are incurred by the banking sector that the Office for National Statistics did not include in the figures, including the new bank levy introduced by this Government, which we expect will raise an additional £2.5 billion net each year, which is more in each and every year than the previous Government raised in their one-off payroll tax.
Clive Efford
I am grateful to the Chancellor for that answer, but the truth is that the High Pay Commission has just published a report demonstrating that high executive pay bears no relation to the performance of companies and that nowhere is this more starkly illustrated than in the banking sector. Meanwhile, youth unemployment is going up. Is it not time we made the banking sector pay its fair share in order to do something for the young unemployed in this country, as advocated by the Opposition?
Mr Osborne
That is why we introduced the bank levy, which Labour had 13 years to introduce but did not. It raises £2.5 billion. We are also taking action to clamp down on tax avoidance. We recently proposed a measure to tackle something called disguised remuneration, whereby high earners, often in the financial services sector, disguise their income to avoid tax, but the Labour party voted against the measure.
Sir Peter Tapsell (Louth and Horncastle) (Con)
As we are discussing banking, may I again put it to the Chancellor that further delay in ring-fencing retail banking from investment banking can only perpetuate the appalling shibboleth that big banks cannot fail? Until we debunk that shibboleth, the capitalist system will remain at risk.
Mr Osborne
My right hon. Friend makes a powerful point. We must learn the lessons of what went wrong in the regulation of our banking system and ask deep questions about how, as an economy, we underwrite that system. That is why the Government asked John Vickers and his fellow commissioners to look at the structure of the banking system and at how we can ensure that Britain can be home to global banks but, at the same time, the British taxpayer can be protected should those banks fail. Of course, John Vickers will publish his final report next week and I am sure that there will be plenty of discussion about it.
Ed Balls (Morley and Outwood) (Lab/Co-op)
With the future jobs fund and education maintenance allowance abolished, Labour Members have been urging the Chancellor to repeat the bank bonus tax on top of the bank levy in order to get young people into work. The Chancellor claims that the economy is recovering, unemployment is falling and that such action is unnecessary, so will he tell the House how many more young people, compared with a year ago, are now not in education, employment or training?
Mr Osborne
The number of 16 and 17-year-old NEETs has actually come down, and more than 500,000 new jobs have been created in the private sector over the past year. The right hon. Gentleman talks about the bonus tax, and I will use not the advice I have been given by Treasury officials to respond, but the advice I have been given by the previous Chancellor of the Exchequer, someone we know he is very close to. The previous Chancellor said this of the bonus tax, and he after all is the man who introduced it:
“It will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and... will find all sorts of imaginative ways of avoiding it”.
That is why he did not want it to be anything more than a one-off tax, and that is why we introduced a much more permanent and sustainable tax on the banks, which the right hon. Gentleman never introduced when he was City Minister. It is a permanent bank levy that raises more net every year than the one-off bonus tax did.
Ed Balls
Unemployment is rising and the stock market is plummeting—it is no surprise that the Chancellor does not want to answer the question about youth unemployment. Let me tell the House that the number of young people between 18 and 25 out of work and not in education, employment or training has gone up in the past year by 18%: 119,000 more young people are unemployed. Let me tell the Chancellor what my right hon. Friend the Member for Edinburgh South West (Mr Darling) said on “Newsnight” last night:
“The government, by going so fast, is really strangling the economy…if you go too fast you stall”—
Mr Speaker
Order. I think the shadow Chancellor will want to refer to taxation levels on the banking industry.
Mr Speaker
Order. I say to the shadow Chancellor that what we need now is a very brief question. We need to move on; there are a lot of questions to cover.
Ed Balls
The question that people will be asking is if the Chancellor will not change his mind on the bank bonus tax, on VAT and on the pace of deficit reduction, why is he now changing his mind on stalling bank reform? He said that we were all in it together. Why is there one rule for the banks and another rule for everyone else?
Mr Osborne
Now we can see why the former Chancellor has said that the Labour party had no credible economic policy. The shadow Chancellor had all summer to think of that question, and the best he came up with was that we were not regulating the banks. He was the City Minister when the City exploded. We have taken action better to regulate the banks. We set up the commission that will report next week. As for downgraded numbers, the fastest falling numbers around here are his economic credibility numbers.
Mr John Redwood (Wokingham) (Con)
It would be good to get more tax out of RBS, a state-owned bank, but unfortunately it is still loss making. Will the Chancellor or a relevant Minister have an urgent meeting with its executives so that they can have a better plan for cutting risks, selling assets and making some money for the taxpayer?
Mr Osborne
My right hon. Friend is, of course, right that the British banking system has had its challenges—not least over the summer, with its share prices. We are in regular discussion with the banks about that, of course, and we will of course have many discussions about the future structure of banking. We need a profitable banking sector that lends to the real economy. We have in place targets to see an increase in lending to small businesses. But my right hon. Friend is absolutely right that a key part of the recovery is a return to health for the financial services industry and the financial system.
Vernon Coaker (Gedling) (Lab)
2. What assessment he has made of the effects on the economy of recent trends in domestic energy prices.
The Economic Secretary to the Treasury (Justine Greening)
The Office for Budget Responsibility is now responsible for independent economic and fiscal forecasts for the Government, and that includes taking account of trends in energy prices and their impact on the economy, including on inflation. The OBR will publish a fully updated forecast in the autumn.
Vernon Coaker
Thousands of people in my constituency of Gedling and millions across the country will be disappointed by that response from the Minister. Consumer Focus has said that, on average, energy bills will go up by £200 a year, which means that this winter many people —pensioners and families—will be worried about switching on gas and electricity. Has the Minister met the energy companies to discuss that, and will she specifically outline some measures that she and her Government intend to take so that people are not afraid to switch on the heating this winter?
Justine Greening
The hon. Gentleman is right to raise the issue because it is important. The challenge that we all face is to make sure that energy bills are affordable not just this winter—the point that he makes—but in winters in 10 and 20 years’ time. The problem that we have as a country is our dependency on fossil fuels. In the long term, we need to get ourselves off that dependency so that we are not so blown about by the international winds that see commodity prices go up and down. In the short term, we are taking steps to support the most vulnerable through the Warm Homes discount. Next year, we will introduce the green deal to help energy efficiency. The hon. Gentleman asks whether we have meetings with energy companies, and of course we do every day. I am sure that he will also—
Mr Mark Spencer (Sherwood) (Con)
The Minister will be aware of how rapidly fuel and energy prices have increased. Am I right in thinking, however, that if the Chancellor had not taken action in the Budget, fuel prices would be 6p a litre higher today?
Justine Greening
My hon. Friend is absolutely right. The action that we took, which was part of a £1.9 billion package to support motorists, means that fuel duty was 6p lower than it otherwise would have been under the previous Government’s proposals.
Mr David Hanson (Delyn) (Lab)
The Minister will know that the rise of several hundred pounds in energy costs will hit businesses hard, and that on top of VAT and price and pay freezes it will particularly hit consumers and pensioners. What is her assessment of the level of that price rise? How many meetings has she had with energy companies about the price of energy? What does she intend to do about the price of energy other than freezing the level of winter fuel payments for pensioners?
Justine Greening
I think I have answered those questions already; and perhaps the right hon. Gentleman should speak to his Back Benchers about their asking his question before he does. I know that it is his wedding anniversary today, and I hope that I do not upset him too much before he has dinner with his wife tonight. I can again assure him that we are absolutely committed to making sure that the Warm Homes discount scheme will support the most vulnerable people in our country so that they can afford to heat their homes.
Helen Jones (Warrington North) (Lab)
3. What recent assessment he has made of the effect on inflation of the increase in the basic rate of VAT.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Office for Budget Responsibility is responsible for producing independent economic and fiscal forecasts. The OBR published a full analysis of developments and the prospects for inflation in its forecast at Budget, and that can be found at its website. The Office for National Statistics estimates that the impact of the VAT rise on consumer prices index inflation was 0.76 percentage points.
Helen Jones
The Minister has failed signally to answer the question. Will he tell the House why only three European Union countries—Estonia, Lithuania and Romania—have inflation higher than the rate in this country? Is it not true that the failed economic polices pursued by the Treasury and the decision to raise VAT have more than doubled the rate of inflation compared with the Government’s target? When is he going to accept responsibility for that and do something about it?
Mr Gauke
I am afraid that the hon. Lady might not have listened to my earlier answer. The fact is that the primary cause of the increase in inflation has been global commodity and energy prices. It is also worth pointing out that our currency depreciated in value quite significantly a couple of years or so ago. The VAT increase was necessary in order to reduce the deficit—a policy that was recognised by the previous Chancellor of the Exchequer.
Gavin Williamson (South Staffordshire) (Con)
Did my hon. Friend inherit any work by the previous Government on plans to increase VAT if they had won the general election?
Mike Freer (Finchley and Golders Green) (Con)
4. What recent estimate he has made of the public sector borrowing requirement.
The Chief Secretary to the Treasury (Danny Alexander)
The July public sector finances release issued by the Office for National Statistics estimates that the out-turn for public sector net borrowing in 2010-11 is £142.7 billion, or 9.7% of gross domestic product—£14 billion lower than in 2009-10.
Mike Freer
Citibank economist Michael Saunders recently said that
“the major risk to the UK’s fiscal outlook and credit rating would be if the coalition fails to stay the course on fiscal consolidation.”
Does my right hon. Friend agree?
Danny Alexander
Yes, I very much agree with that. As my hon. Friend will know, the need to tackle the enormous economic problems that we inherited from the previous Government, including the enormous budget deficit, was the founding purpose of this Government. It is a purpose that we intend to see through, and he can be reassured that we will stick to our plans.
Chris Leslie (Nottingham East) (Lab/Co-op)
Given the Government’s poor performance on growth, lower tax receipts and higher welfare spending, will the Chief Secretary repeat—a simple yes or no answer will do—whether the Government are still committed to their target of falling public debt as a percentage of GDP by 2015? Yes or no?
Mr David Nuttall (Bury North) (Con)
5. What recent assessment he has made of the financial crisis in the eurozone.
Glyn Davies (Montgomeryshire) (Con)
12. What recent assessment he has made of the financial crisis in the eurozone.
The Chancellor of the Exchequer (Mr George Osborne)
The financial crisis in the eurozone is extremely serious. Fortunately, Britain is not in the euro; unfortunately, however, we are not immune to the instability on our doorstep. The euro area must implement its policy commitments to address the crisis, made most recently at the July summit. As I have said, the euro area should follow the remorseless logic of monetary union with greater fiscal integration. We must ensure that we are not part of that integration and that our national interests are protected and promoted at all points.
Mr Nuttall
I thank the Chancellor for that reply. Given that the crisis in the eurozone was caused by some member states having too much debt, would it not be a good idea—rather than increasing those debts with further bail-outs—for this country to press for the European treaties to be amended to allow a country to leave the euro while remaining in the European Union if it still wished to do so? As things stand, that is not possible.
Mr Osborne
As my hon. Friend knows, the treaty does not provide for a member state to leave at the moment, and there is no immediate prospect of major treaty renegotiation—something that the German Government have made very clear again this week. In other words, we need to focus on the task at hand, which is implementing all the agreements, communiqués and commitments made in recent months by the eurozone. That is absolutely crucial to the stability not just of the eurozone but of the wider global economy.
Glyn Davies (Montgomeryshire) (Con)
Is the Chancellor aware that under the previous Labour Government, of whom the current shadow Chancellor was a prominent member, a euro preparations unit with a staff of 17 worked for 13 years on 11,500 documents to prepare Britain for joining the euro?
Mr Speaker
Order. I am grateful to the hon. Member for Montgomeryshire (Glyn Davies), but his question bears no relation to the responsibilities of the current Government and we will therefore leave it there.
Mr Julian Brazier (Canterbury) (Con)
Would my right hon. Friend accept that the fact that the euro has strengthened as a currency indicates that the markets believe that the weaker countries will not be able to push water up hill for much longer and are bound to drop out of the euro before very long?
Mr Osborne
I do not think that it would be appropriate for me to comment directly on the value of the euro, but I would observe that we have a weak US dollar and that that may have had an impact on the value of the euro. As I said just now, it is important for us to focus on the task in hand, which is implementing the agreement most recently signed on 21 July by the eurozone. Of course we can and should have a discussion about the future of the euro and its governance arrangements—and that is important—but the euro is here to stay and we have to ensure that it works for Europe. I do not want Britain to be part of the euro, and there is no prospect of that happening—[Interruption.] Labour Members seem to forget that they are still committed in principle to joining the euro. This Government will not join the euro, but it is in our interests that the euro works.
Sir Stuart Bell (Middlesbrough) (Lab)
Is the Chancellor aware that, with the exception of Portugal, growth among member states of the eurozone is higher than ours? If fiscal union is to take place, and there is to be a common euro bond, in which order does he think they should come?
Mr Osborne
As I have been saying in recent weeks, we need to follow the remorseless logic of monetary union. That was one of the reasons I was against Britain joining the euro—I thought it would lead to greater fiscal integration and common budget policies. There is obviously an active debate about what that might mean, and I would suggest that the first thing that the eurozone countries need to do is to implement the package agreed on 21 July.
May I correct the hon. Gentleman? It is not the case—sadly—that Britain has the slowest growth in Europe. Actually, the problem is that German growth in the last quarter was 0.1% and French growth for Q2 was zero. That is the challenge—a eurozone where growth is faltering, and the situation in the United States. We have to deal with these international problems as well as addressing the very serious problems that we inherited.
Mr Speaker
I am grateful to the Chancellor. We do not want the slowest growth, but neither do we want the slowest questions and answers.
Mr Andrew Tyrie (Chichester) (Con)
The Chancellor has made it clear that he thinks that a monetary union requires a fiscal union. Can a credible fiscal union be put in place without a treaty change?
Mr Osborne
I think that we can take important steps towards greater co-ordination of fiscal policy by implementing, as I say, the agreements that the eurozone came up with before the summer. That is the task at hand now. Speculating now about major treaty change is unrealistic. It is not going to happen in the next few years. It would take several years to bring about such a major treaty change and get it ratified by all the national Parliaments, even if those Parliaments agreed to it. The challenge this autumn is to bring greater stability to the euro’s governance arrangement, which is what our colleagues in the EU want to do.
Ms Angela Eagle (Wallasey) (Lab)
The Chancellor recently boasted that Britain is a safe haven from the problems in the eurozone, so will he tell us which EU countries have grown more slowly than the UK in the past 12 months, not in the last quarter?
Mr Osborne
As I said, this year, unfortunately, the German economy, the French economy and other major eurozone economies—[Hon. Members: “Ah!”] If Opposition Members do not want to look at the most recent numbers, it is no wonder they have not got a credible economic policy. Until they get one, and take a view on the eurozone and what is happening in Germany, France and the United States, they are not going to be taken seriously, as the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), has reminded them.
Ms Eagle
I do not think that the Chancellor knew the answer to that question, but today’s euro figures have revealed that only two countries—Romania and Portugal—have done worse on growth than the UK in the past year. Only yesterday, the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), said from the Dispatch Box that there is a crisis of growth in this country. Was not the Chancellor’s friend, the new head of the IMF, Christine Lagarde, right at the weekend when she said that
“growth is necessary for fiscal credibility… We know that slamming on the brakes too quickly will hurt the”
economy “and worsen job prospects”?
We know that he will not listen to us, but why does the Chancellor not listen to sound advice from his friends, including, we hear, on this weekend’s draft G7 statement, which aims to slow the pace of deficit reduction—
Mr Speaker
Order. I am extremely grateful to the hon. Lady. I think that we have got the gist of it.
Mr Osborne
I can tell the House that Christine Lagarde will be in London on Friday. We will hear what she has to say then.
Paul Maynard (Blackpool North and Cleveleys) (Con)
6. What recent discussions he has had with his international counterparts on steps to reduce Government budget deficits.
The Chancellor of the Exchequer (Mr George Osborne)
At the last G20 summit, advanced countries committed to implementing clear, credible, ambitious and growth-friendly medium-term fiscal consolidation plans, differentiated according to national circumstances. I will further discuss fiscal consolidation plans in the G7, G20 and IMF meetings later this month.
Paul Maynard
Does the Chancellor agree with the IMF’s most recent assessment that strong fiscal consolidation remains essential?
Mr Osborne
That is, of course, absolutely what the IMF said in its recent article IV assessment—and we remember the article IV assessments at the end of the previous Labour Government. It asks explicitly whether the UK Government should change their policy, and it says no. That is the advice of the IMF. Last July, the Labour party voted against Britain paying its subscriptions to the IMF. Frankly, I do not think that Labour Members should talk about the IMF in Treasury questions until they agree with paying the subs.
Rachel Reeves (Leeds West) (Lab)
If the Office for Budget Responsibility downgrades its forecast for growth for the fourth time when it reports later in the autumn, and revises up its forecast for Government borrowing, would the Chancellor regard that as a success or failure of this Government’s economic policy?
Mr Osborne
Of course, the Government want economic growth and prosperity. We want a stable international situation in which we can trade. We have to take account of the fact that major trading partners, such as Germany, France and the United States, have seen either no growth or very limited growth as well. That is the challenge we face. As the right hon. Member for Edinburgh South West (Mr Darling) reminded us at the weekend, we can either have a credible economic policy that takes note of what is going on in the world or, as he put it, we cannot even be at the races.
Mrs Anne McGuire (Stirling) (Lab)
7. What recent assessment he has made of the potential effects on consumer confidence of the change in the basic rate of VAT.
The Exchequer Secretary to the Treasury (Mr David Gauke)
Sustainable public finances will support confidence in the medium term. Decisive action taken by the Government in the spending review and the June Budget, including the increase in VAT, will put the public finances and spending on a sustainable footing.
Mrs McGuire
The Stirling constituency has a large number of jobs tied up in tourism and hospitality. On 1 July, the Irish Government introduced a temporary reduction in the rate of VAT on goods and services related to the hospitality sector, realising that such a reduction has the potential to kick-start economic growth; indeed, the rate is now 11% less than the VAT rate in the UK. Given stalling UK economic growth figures, does the Minister not accept that he, too, should consider a temporary change in the rate for the sector, and if not, why not?
Mr Gauke
I have had meetings with representatives from the tourism industry at which they have made their case. We will of course keep all taxes under review, but we have to bear in mind the state of the public finances, our limited room for manoeuvre and concerns about adding complexity to our VAT system. None the less, we will look at those arguments.
Mr Andrew Turner (Isle of Wight) (Con)
8. What fiscal measures he is taking to reduce the costs of businesses which employ less than 25 staff.
The Financial Secretary to the Treasury (Mr Mark Hoban)
Small businesses play a vital role in the economy and the Government have taken a number of steps to support them. The Government have provided support for small businesses and employers by reversing the previous Government’s planned £3 billion tax on jobs, reducing corporate taxes and introducing a moratorium on new domestic regulation for micro-businesses.
Mr Hoban
My hon. Friend is absolutely right. We need to reduce the burden of red tape to encourage small businesses to set up and to create more jobs. That is one reason why, for example, we introduced a moratorium exempting micro and start-up businesses from new domestic regulation for three years from 1 April 2011.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
A year ago the Chancellor claimed that 400,000 small business start-ups would be assisted by the national insurance holiday in the regions. To date the figure is, I believe, 5,000. Will the Chancellor undertake to bring a report before the House saying how many new jobs have been created by those 5,000 new start-ups and what the cost to the Exchequer has so far been per job?
Mr Hoban
The hon. Gentleman should be aware that HMRC is writing to all new businesses set up in the last 12 months to ensure that they are aware of the scheme and to encourage them to apply for it. It is important that they do so, but this is just one of a series of measures that we have taken to ensure that more new jobs are created in the private sector. I would have thought that the hon. Gentleman welcomed the fact that over the last year there have been 500,000 net new jobs created in the private sector.
Elizabeth Truss (South West Norfolk) (Con)
9. What steps he is taking in respect of further supply-side reform of the UK economy.
The Financial Secretary to the Treasury (Mr Mark Hoban)
“The Plan for Growth”, published alongside the Budget this year, sets out the Government’s plan to put the UK on a path to sustainable long-term economic growth. The second phase of the Government’s growth review will report later this year.
Elizabeth Truss
I thank the Minister for his answer. In the last decade the UK has fallen from 14th to 89th in terms of burden of regulation and from 14th to 95th in terms of extent of taxation. Does the Minister agree that we should be freeing up companies, rather than spending money that we do not have, to drive economic growth?
Mr Hoban
My hon. Friend is absolutely right. Of course, it is part of the previous Government’s legacy that our competitiveness fell so far behind that of our international competitors. That is why we have taken action to reform corporation tax, for example, so that we have one of the best and most competitive regimes in the G20 and more businesses are encouraged to come to the UK. It is also why we are tackling regulation and red tape in the economy, which is why, as I said earlier, we have seen 500,000 net new jobs created in the private sector. That is three and a half jobs in the private sector for every job lost in the public sector, which shows the progress that we have made over the last year.
Stewart Hosie (Dundee East) (SNP)
Both this Government and the previous one have taken an axe to tax allowances for investment on the supply side of the economy—for example, the abolition of the industrial buildings allowance under Labour and the reduction of the annual investment allowance of £100,000 to only £25,000. Have the Government turned their face away entirely from the reintroduction of tax allowances, or will they listen to representations that demonstrate the positive growth in investment on the supply side from such tax allowances?
Mr Hoban
The reforms to allowances were used to help to fund measures such as the reduction in corporation tax rates for large companies and the reduction in the small companies’ tax rate from the 22p proposed by Labour when it was in government to 20p. We are therefore seeing changes in the rate of tax paid by businesses of all sizes, which is helpful in encouraging economic growth and job creation.
John Robertson (Glasgow North West) (Lab)
10. What his policy is on the pay of public sector workers earning less than £20,000.
The Chief Secretary to the Treasury (Danny Alexander)
At the June Budget in 2010, we announced that public sector workers earning £21,000 or less would be protected from the two-year pay freeze and receive at least £250 in each year.
John Robertson
I hear what the right hon. Gentleman is saying, but not giving those workers a pay rise of £250 as the Government said they would is tantamount to their not getting it. Freezing pay is not an increase. What is he going to do about this? Is he going to honour the undertaking in the Budget last year to give those hundreds of thousands of workers £250 or not?
Danny Alexander
The £250 increase applies to all work forces under ministerial control, and it was introduced this year. It will be carried through again next year to ensure that people on low incomes in the public sector continue to receive a pay rise.
Sajid Javid (Bromsgrove) (Con)
Will the Chief Secretary to the Treasury assure us that, in drawing up plans on public sector pay, the Treasury has not been impeded by a brutal regime in No. 10 Downing street?
Danny Alexander
I can certainly assure my hon. Friend of that. Unlike under the previous Government, No. 10 Downing street and the Treasury work very well together on these issues.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
11. What recent assessment he has made of the level of economic growth.
The Financial Secretary to the Treasury (Mr Mark Hoban)
Our economic policy objective is to achieve strong, sustainable and balanced growth, more evenly shared across the country and between industries. The independent Office for Budget Responsibility’s forecast, published at the Budget, takes full account of the policy measures announced in the spending review and in Budget 2011. The OBR forecast that the economy would grow throughout 2011, and in every year of the forecast. It will publish its updated forecast in the autumn.
Mr Hoban
It has been very clear, listening to all the international commentators talking about what is happening in the UK economy, that their advice has been to stick to the course and stick to plan A. That is the action that this Government are committed to—[Interruption.] This is interesting. We have one plan; the previous Government seemed to have more plans than they knew what to do with, and that is why they lost their credibility.
Claire Perry (Devizes) (Con)
What does the Minister think is more likely to encourage growth: cuts in corporation tax or the increases in national insurance that Labour was proposing?
Mr Geoffrey Robinson (Coventry North West) (Lab)
Will the Minister draw to the attention of the Chancellor the fact that economic credibility affects all Treasury Ministers in due course, and that in his case it is affecting him rather earlier than he might have thought? Can he not see that, with a lack of growth, he will not hit his deficit reduction target? Without hitting that target, he will not realise his plan, and without his plan—which is already in shreds—he will lack credibility, too.
Jake Berry (Rossendale and Darwen) (Con)
Given how badly prepared the UK economy was for the financial crisis, does the Minister think that it was delusional to believe that its effects would be over in six months?
Mr Hoban
The previous Prime Minister thought that what we now know to have been the longest and deepest recession since the war would be over in six months. That demonstrates the degree of delusion that existed under the previous regime. We are taking the tough and necessary decisions to tackle the legacy that we have been left by our predecessors.
Andrew Selous (South West Bedfordshire) (Con)
13. What recent assessment he has made of the effects on the economy of the public sector borrowing requirement.
The Chief Secretary to the Treasury (Danny Alexander)
Sound public finances are essential for sustainable economic growth. The action that the Government have taken to reduce public sector borrowing will help to mitigate the risks to the recovery, underpin private sector confidence and help to keep interest rates low, which will help families and businesses.
Andrew Selous
Was it because of a high public sector net cash requirement that forces up interest rates, makes it more difficult for businesses to borrow, increases taxes and means that money spent on debt interest cannot be spent on public services that the outgoing director general of the British Chambers of Commerce said when he left on Friday that, in order to keep the economy going, it is essential that we stick to the Chancellor’s economic plan?
Danny Alexander
I am sure that that was part of his reasoning and I very much welcome his endorsement, alongside that of all the other business organisations in the UK that continue to back the deficit reduction plan we have set out. It is worth observing that the proposals put forward by the outgoing director of the British Chambers of Commerce and other proposals are also being taken forward by this Government. There is very strong alignment between small businesses and this Government.
Tony Lloyd (Manchester Central) (Lab)
At what point, though, will Treasury Ministers realise that this austerity programme is damaging growth and that what the Government should be doing is beating a track round the world to make sure that there is an international commitment to putting growth back into the economy? That is the way we will get rid of the deficit in our economy.
Danny Alexander
This deficit reduction plan is essential to restoring credibility to British public finances, which is critical to keeping interest rates low, as low interest rates help to keep people in their jobs and in their homes. That is the argument for the plan.
Michael Fallon (Sevenoaks) (Con)
Will my right hon. Friend confirm that the borrowing and revenue figures are now completely independently audited by the independent Office for Budget Responsibility and are no longer the completely unreliable and overtly political forecasts that, as we now know, were forced on the previous Chancellor by the previous Prime Minister?
Danny Alexander
I can certainly confirm that the Office for Budget Responsibility is responsible for these matters and is independent. We certainly do not go in for the political fiddling of the figures that my hon. Friend described.
Rushanara Ali (Bethnal Green and Bow) (Lab)
14. What recent assessment he has made of the potential effects on the rate of inflation of recent trends in domestic energy prices.
The Economic Secretary to the Treasury (Justine Greening)
The Office for Budget Responsibility assesses the prospects for inflation, which of course factors in any changes in prices from Budget 2011. It will update its forecast this autumn.
Rushanara Ali
I thank the Minister for her answer, but with rising energy prices, stagnating real-terms income and rising unemployment, I ask her again what specific actions will be taken to help the more than 4 million households in England and one in seven households in my constituency that will face fuel poverty this year?
Justine Greening
We have already taken action in previous Budgets, not least by taking people out of paying income tax altogether by raising the personal allowance. As we have heard, we reduced fuel duty, in contrast to the previous Government’s plans to increase it. More than that, we are making sure that we target help at vulnerable people through the Warm Homes discount and next year, of course, we will introduce the green deal to help everybody to make their homes more energy-efficient.
Richard Graham (Gloucester) (Con)
Does the Minister agree that although policies to help people out of income tax at the bottom level will show positive results, it is important to maintain the pressure to provide new apprenticeships so that high-value exporting manufacturers, such as Severn Glocon in my constituency, can continue to generate significant foreign exchange benefits.
Mr Speaker
Order. The Minister will want to relate her answer to domestic energy prices. I feel sure that that is what she will do.
Justine Greening
I shall try. I am sure that many of those apprenticeships will be in green industry, which is part of how we hope to get this economy back on its feet.
Robert Halfon (Harlow) (Con)
15. What fiscal measures he is taking to reduce the costs faced by businesses.
The Exchequer Secretary to the Treasury (Mr David Gauke)
In addition to taking action to reduce the fiscal deficit, the Government are putting in place a number of measures to create the right conditions for businesses to grow. This includes reducing corporate taxes to encourage businesses to invest, establishing enterprise zones, and increasing the support that research and development tax credits provide to small and medium-sized companies.
Robert Halfon
Does my hon. Friend agree that the new enterprise zones will transform the fiscal situation for local businesses? As there is a new enterprise zone in Harlow, will he set out the tax advantages that we will gain and when they will start?
Mr Gauke
I am delighted that one of the two enterprise zones in the south-east local enterprise partnership will be in my hon. Friend’s constituency of Harlow; 100% of business rates collected on the Harlow site will be retained for 25 years and are to be spent on local economic priorities. This will be possible from April 2013, once the necessary legislation is passed. Businesses will also benefit from simplified planning and Government support to ensure that superfast broadband is rolled out throughout the zone.
Sammy Wilson (East Antrim) (DUP)
One proposal subject to consultation, which has now finished, for reducing costs in Northern Ireland is the devolution of corporation tax so that the rate can be reduced for that part of the United Kingdom. Will the Minister assure us that the devolution of corporation tax will not be set at a price that makes it impossible for the impact on the economy to be positive?
Mr Gauke
As the hon. Gentleman said, the consultation process is now completed. I know we will be in contact with the Northern Ireland Executive to discuss the results. No decisions have been taken, but we have clearly made progress in this area. I look forward to having future conversations with the hon. Gentleman, including about the particular issue of cost that he mentions, but it is right for the cost as well as the powers to be properly devolved.
Margaret Curran (Glasgow East) (Lab)
16. What assessment he has made of the potential implications for the economy of the most recent figures for economic growth.
The Chief Secretary to the Treasury (Danny Alexander)
Our economic policy is designed to achieve strong, sustainable and balanced growth that is shared more evenly across the country and between industries. The independent Office for Budget Responsibility has predicted that the economy will grow throughout 2011 and in every year of the forecast, and it will publish a fully updated forecast in the autumn.
Margaret Curran
Is the Chief Secretary aware of a survey produced this week by the Chartered Institute of Purchasing and Supply? It shows the sharpest slow-down in growth in the services sector for well over a decade. If Britain is such a safe haven, why is that happening?
Danny Alexander
I am aware of the survey, and of course many businesses are experiencing difficulties, not least owing to the headwinds in the global economy that we—along with other countries—are encountering. That is why we are taking measures to help businesses such as those to which the hon. Lady has referred, through our plan for growth and in relation to regulation, the planning system and investment in the transport infrastructure. I am sure she agrees that constitutional uncertainty about independence in Scotland is causing serious damage to businesses and business investment there.
Charlie Elphicke (Dover) (Con)
Is not the most important contribution that the Government can make to economic growth to be “united at the top” and to have “a credible economic policy”?
Danny Alexander
I agree very much with that. I believe that it is a quotation from the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). We are united at the top and we have a credible economic policy, while the Opposition—if I may use the former Chancellor’s phrase—are “not at the races”.
Mr Denis MacShane (Rotherham) (Lab)
Does the Chief Secretary—whom I fondly recall from the days when he was known as “Danny the euro”—agree that a big problem that we all face is the fact that the purchasing power of the pound internationally has sunk to an all-time low? Do we not have a real problem with the Osborne pound, which is now importing inflation, and do we not need to separate the two? We cannot get rid of the pound, because they will not let us, so do we not have to get rid of the Chancellor?
Danny Alexander
The right hon. Gentleman—I shall not tell the House what he was known as—should be aware that the reduction in the value of the pound took place under the previous Government, so he might direct his comments to them. He might also recognise, if he were being balanced, that that is having a beneficial effect on British exporters who are trying to sell into the eurozone, where the difficulties are, of course, affecting us as well.
Tracey Crouch (Chatham and Aylesford) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform banking, and manage the public finances so that Britain lives within her means. I can also announce today that the Office for Budget Responsibility will publish its economic and fiscal outlook on Tuesday 29 November, and that I will make a statement to the House on that day.
Tracey Crouch
Many hauliers in my constituency, like ordinary motorists, are concerned about the high price of fuel. Sadly, one Kent haulier went into administration during the recess, blaming diesel prices as a contributing factor. Can the Chancellor assure my constituents that he is listening to concerns expressed by fair fuel campaigners, and that he will do all he can to reduce the burden of high fuel costs on the motorist?
Mr Osborne
Of course I am well aware of the pain and burden that the big rise in the international oil price has caused to British businesses and, indeed, British families. That is why we took action in the Budget with a £2 billion reduction in fuel duty.
My hon. Friend mentioned hauliers in her constituency. The average haulier will benefit by approximately £1,700 this year as a result of the measures announced in the Budget, in comparison with the last Government’s fuel duty plans. Those measures were funded by an increase in tax on North sea oil companies, which was controversial and was opposed by the Labour party.
Mr Kevin Barron (Rother Valley) (Lab)
T2. The carbon price floor taxation policy within the electricity market reform is designed to push up the cost of electricity produced from high-carbon fuels such as coal. That could close what remains of indigenous coal production in this country, and also vastly increase the costs of energy-intensive industrial users such as steelmakers. Is the Chancellor prepared to look again at that policy, or consider compensating the industries that will fall foul of it?
Mr Osborne
We are looking specifically at the impact not just of the carbon floor price but of all the other environmental policies of recent years on energy-intensive industries. I hope, in the autumn forecast at the end of November, to give the House an update of what we propose to do to help.
Mark Lancaster (Milton Keynes North) (Con)
T3. As we approach its first anniversary, is the Chancellor happy with the performance of the Office for Budget Responsibility?
Mr Osborne
Yes, I am happy with the performance of the OBR, because we have created a new institution in Britain that produces independent fiscal and economic forecasts. The absolutely astonishing revelation of the former Chancellor’s memoirs was how—[Interruption.] Let me tell Labour Members this: that book has not even been published yet, but they will be hearing a lot more about it in the months ahead, because it reveals the truth, not just about the last Government but about how the current shadow Chancellor operated in the last Government—the poisoned politics, the paralysed Government and the lack of a credible economic policy.
Vernon Coaker (Gedling) (Lab)
T5. Thousands of working-age households in my constituency and millions across the country are set to lose up to 20% of their council tax benefit from April 2013. What assessment has the Chancellor made of the impact of that policy on incentives to work?
Mr Osborne
We published our impact assessments at the time of the spending review, and, like other savings in the welfare budget, the policy the hon. Gentleman mentions is designed to deal with a welfare budget that was completely out of control. Just a few weeks ago, the Opposition said they were going to come forward with a credible medium-term deficit reduction plan. Well, where is it? Every single measure we have put forward, they have opposed.
Miss Anne McIntosh (Thirsk and Malton) (Con)
T4. The Chancellor has stated his clear commitment to planning reforms, and local authorities are coming under increasing pressure to raise more locally than they receive centrally. Obviously, future developments are very attractive to them. Where in the planning reforms does the Chancellor assure the House there will be local democracy and a local voice?
Mr Osborne
We are giving a much greater role to local communities in determining their own local plan. We are also protecting the green belt and areas of outstanding natural beauty—of which I am sure there are a number in my hon. Friend’s constituency. I would make this point: these are sensible protections for the countryside, but we must also allow economically productive development in this country. We have to simplify a planning system that is completely unintelligible to most citizens. That is precisely what we are doing and I hope we will be backed on both sides of the House.
Mr Nigel Dodds (Belfast North) (DUP)
T6. Will the Chancellor give a categorical assurance to the House that the Government will swiftly and robustly reject any proposal from the European Commission, the European Parliament or any other European institution for a trans-European revenue-raising measure?
Mr Osborne
I can assure the right hon. Gentleman that I am certainly opposed to any new European tax.
Peter Aldous (Waveney) (Con)
T8. The Lowestoft and Great Yarmouth enterprise zone can play a vital role in promoting growth. Will the Chancellor accept an invitation from me and my hon. Friend the Member for Great Yarmouth (Brandon Lewis) to visit our constituencies to see for himself the area’s great potential and to hear from business and council representatives about the work being done to create new private sector jobs?
Mr Osborne
I certainly will visit Great Yarmouth and Lowestoft—and on a couple of occasions during this Parliament, I hope. I am delighted that the bid for an enterprise zone from Great Yarmouth and Lowestoft was successful. It was a very impressive bid, involving intelligent use of East Anglia’s offshore energy resources, and I look forward to seeing how work on that is progressing when I visit.
Rushanara Ali (Bethnal Green and Bow) (Lab)
T7. Given stagnating economic growth in the UK, US and much of Europe, and with forecasts predicting slow to no growth, will the Chancellor acknowledge that his economic plans are hurting but not working, and can he now tell us what his plan B is for driving growth in the UK?
Mr Osborne
I think that question involved a contradiction in that the hon. Lady pointed out that there was either slow or no growth in the United States and Europe and then somehow blamed my economic policies for that situation. That points to a broader observation: until the Labour party has some cognisance of what is happening in the world and how our policies are protecting the country with the largest budget deficit in the G20 from being caught in the firestorm that some other European countries have found themselves in, frankly it is not going to be at the races.
Stephen Williams (Bristol West) (LD)
Coming back to the crisis in some of the economies of the European Union, out of a crisis can sometimes come an opportunity. Will the Chancellor, next time he is meeting his fellow Finance Ministers, impress upon them the need further to deepen and reform the single market in order to promote trade and growth within the European Union?
Mr Osborne
I certainly will. I agree 100% with the point the hon. Gentleman is making, and on Friday we will be meeting as the G7, and then we have the ECOFIN meeting next week. He is absolutely right: as well as needing to tackle the fiscal policies and budget deficits, we need to make Europe more competitive. We need to make the whole of the European continent more competitive, and that involves supply-side reforms, deepening the single market and promoting free trade around the world, and I will be making that point today and in future.
Diana Johnson (Kingston upon Hull North) (Lab)
T9. Given the latest data on manufacturing, construction, exports and retail, can the Chancellor explain to me exactly where we will see growth and jobs coming from, especially in an area such as Hull?
Mr Osborne
I hope the hon. Lady welcomes the decision we made to make sure that Humberside had an enterprise zone. The way that this and other countries are going to get growth is not by taking yet another fix of the debt-fuelled spending bubble that got us into the mess we are in at the moment; it is by becoming competitive and having successful private sector businesses and a tax and regulatory environment that allows them to compete with not just the rest of Europe but the rest of the world.
Laura Sandys (South Thanet) (Con)
Like many of my colleagues, I want to thank the Chancellor for launching the enterprise zone and visiting—[Hon. Members: “Ah!”] Yes, in Sandwich. However, it is not just enterprise but trade and investment that need to come into the country. Does he believe that UK Trade & Investment is going to step up to the mark and ensure that we get the message across that Britain is open for business?
Mr Osborne
The short answer is yes. I was delighted to visit the new enterprise site in Sandwich with my hon. Friend, but we do need to promote exports. It is absolutely staggering that we export more to Ireland than we do to Brazil, Russia, India and China. That is the situation we inherited, and we have got to increase exports. The Chinese vice-premier will be in London on Thursday, and I hope we can fulfil our countries’ joint ambition to increase trade between the two countries.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T10. Given that increasing urban density increases economic productivity, and that countries with lax planning law such as Ireland, Greece and Spain are among the least competitive in Europe, why on earth is the Chancellor so intent on ripping up our planning system and destroying what makes England England?
Mr Osborne
I completely reject the premise of the hon. Gentleman’s question. As I say, green belt and areas of outstanding natural beauty will be protected, but we need to allow economically productive development. I have to say that his question is particularly puzzling as he represents the city of Stoke. Stoke applied for an enterprise zone, and one of the features of such a zone was that we were going to relax the planning rules.
Bob Russell (Colchester) (LD)
When the Eurostar is in France it is in a eurozone country, but when it comes through the channel tunnel into England’s green and pleasant land, the euro is not the sovereign currency. Last week, Eurostar refused to accept British money, even on the train in this country. Will the Chancellor make a robust complaint to Eurostar? [Interruption.]
Mr Osborne
The Opposition remind me of the very good election slogan that we had—although it was not particularly successful—which was “Save the Pound”. We have managed to save the pound on the Eurostar—or rather, the company itself has anticipated questions such as the one from my hon. Friend. I am glad to hear that, as he travels to and from Brussels and Paris, he will continue to be able to buy his meals in pounds sterling.
Stephen Timms (East Ham) (Lab)
Before the Chancellor meets the head of the IMF on Friday, will he recognise that in warning that slamming on the brakes too quickly will harm the recovery, she has a point? Does not Britain’s experience illustrate that?
Mr Osborne
The point that the IMF has made consistently over the last two years is that countries with fiscal space can of course use it, but that Britain does not have that fiscal space. It made that point in its article IV assessment of the UK just a few weeks ago, and that is also the view of Christine Lagarde. As I say, she is coming to this country on Friday and we will hear what she has to say.
Margot James (Stourbridge) (Con)
As the Chancellor has reassured the House that protecting the green belt is not incompatible with reforming the planning system, can he tell the House any more about how the Government can help to reduce the costs of the planning system for business?
Mr Osborne
Planning costs in Britain are among the highest in the world and planning delays are among the longest in the world. That is what we are seeking to deal with, so that we get economic development that is sustainable and protects our most cherished environments. That is what we are doing. What people are beginning to see, as this debate unfolds, is that we have to take some difficult decisions in this House if we are to have sustainable economic growth in a very competitive global economy. The planning reforms are part of that plan.
Albert Owen (Ynys Môn) (Lab)
The massive increases in energy prices are hitting every family and business in this country. Before the general election, the Conservative party, and indeed the Prime Minister, promised to take direct action and curb excessive rises. What action does the Chancellor intend to take to cure this problem now?
Mr Philip Hollobone (Kettering) (Con)
What would happen to domestic interest and mortgage rates were Britain to lose its triple A status by relaxing its financial deficit reduction targets?
Mr Osborne
Of course the benefit of having a credible economic policy and a credible fiscal policy is having low market interest rates. Greece today has one-year bond rates of 82% and Italy’s bond spreads have gone out in recent days. We are borrowing money at 2.3%, and that is, in part, because we have a credible economic policy. If we did not have plans to deal with the largest budget deficit in the G20, we would find ourselves in a similar position to Italy or Spain.
Naomi Long (Belfast East) (Alliance)
The Chancellor will be aware that air passenger duty has a particular impact in Northern Ireland, particularly as it places pressure on business and discourages tourism. What action does he intend to take, and when, to ensure that we can maintain our links, particularly our transatlantic ones?
Mr Osborne
I am very aware of the issue relating to the continental flight from Belfast to the eastern seaboard of the United States, and I have spoken to Northern Ireland’s First Minister and Deputy First Minister about it. I can see that there is a particular challenge because of the proximity of the airport in Dublin, and the British embassy in Washington has also been very active in dealing with the company in the United States. I can assure the hon. Lady that we are on the case.
Jo Swinson (East Dunbartonshire) (LD)
There is still huge public anger that taxpayers have had to bail out the very banks whose cavalier and risky behaviour led to the global economic meltdown. Further to the eloquent question from the Father of the House, the right hon. Member for Louth and Horncastle (Sir Peter Tapsell), when Vickers reports next week will the Chancellor ensure that he acts promptly to introduce any necessary legislation to implement the recommendations, in order to avoid a repeat of the financial crisis, and that he does not listen to the vested interests arguing for delay?
Mr Osborne
It was this coalition Government who established the Vickers report. Those questions were simply not asked by the previous Government—we are asking those questions. However, I am afraid that the hon. Lady will have to wait until Monday to hear the Government response to the Vickers report.
Mr Iain Wright (Hartlepool) (Lab)
Harold Macmillan, the most successful Chancellor and Prime Minister that Eton has ever produced, once said that effective Governments need to adapt to “Events, dear boy, events.” Could the Chancellor, dear boy that he is, outline to the House the events that would warrant a change in his economic policy, or is he woefully negligent, blinkered and complacent?
Mr Osborne
I think the hon. Gentleman is being rather harsh on Hugh Dalton, who I think also went to Eton.
Matthew Hancock (West Suffolk) (Con)
Do not recent revelations show that the previous Government were masters of nothing?
Mr Osborne
That is a brilliant plug for my hon. Friend’s new book. I am sure that the whole House will want to read it, because it will remind us of everything that went wrong under the previous Government.
Mr Speaker
Order. Time is up. I would love to call more hon. Members, as I enjoy nothing more than hearing my colleagues ask and answer questions, but I am afraid that we must move on to the ten-minute rule motion.
Currency and Banknotes (Amendment)
(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Douglas Carswell (Clacton) (Con)
I beg to move,
That leave be given to bring in a Bill to amend the Currency and Banknotes Act 1954 to allow banknotes in addition to those issued by the Bank of England to be legal tender; and for connected purposes.
[Interruption.]
Mr Speaker
Order. I am trying to be helpful to the hon. Gentleman and I apologise for interrupting him, but I appeal to Members who are leaving the Chamber please to do so quickly and quietly, extending the same courtesy to the hon. Gentleman as they would want to be extended to them in comparable circumstances.
Mr Carswell
Thank you, Mr Speaker.
My Bill would amend the Currency and Banknotes Act 1954 to enable a range of different currencies to be used as legal tender in Britain. The idea comes from a 1989 Treasury paper when John Major was Chancellor. What the Treasury proposed as theoretically possible 22 years ago, the internet now makes practically achievable.
The internet has given people unprecedented choice. We have access to a greater range of music, financial services, groceries and books than ever before, so why do we have legal tender laws that create a monopoly currency? Thanks to eBay and Amazon, it is possible to buy and sell hundreds of thousands of items at the click of a mouse. It is even possible to do so using whichever currency we please. By making a range of different currencies legal tender in the UK, my Bill would enable people to go a step further. People could buy things, store wealth and pay taxes in a range of different currencies too. Families would be able to plan their financial future without having to do so using a currency that is set to halve in value in the next 14 years. Businesses concerned about rising prices could protect themselves.
We would not need to carry multiple currencies about us in a multi-currency country. Non-cash payments, which since 2004 have exceeded cash payments, mean it would be as easy as using a debit or Oyster card. The 40 years since the collapse of Bretton Woods have been a grand currency experiment. People in Britain might have been using pounds as the unit of currency for centuries, but for the past 40 years the pound has been a fiat—or paper only—currency. Until 1971, the British state could not simply print as much money as it liked, but since then, a mere 40 years ago, the year that I was born, the number of pounds in circulation—the money supply—has been directed by Government and by the state. With a fiat pound, there has been no external constraint limiting the amount of money in circulation besides the self-restraint of the British state.
Government turns out not to be very good at restraining Government. UK money supply has grown from £31 billion in 1971 to more than £1,700 billion today—many times faster than the economy. For 40 years, monetarists have argued with those who claim that they follow Keynes about the rate at which the money supply should be increased. There has been much debate about which branch of the state should take the decision. Should it be Ministers, who are accountable to this House, or experts sitting in the Bank of England? Monetarists or Keynesians, the Monetary Policy Committee or Ministers: so long as it has been left to Government to manage our currency, our currency has been debauched. State officials proved to be no better at managing a nationalised currency than they are at running nationalised airlines or telephone lines.
Just as a broken clock manages to tell the correct time twice a day, our monetary managers have got the settings right on occasion. More often, however, we end up hearing how the state planners lacked the benefit of hindsight. Perhaps we should stop expecting planners to get anything right.
Our paper-only currency system emerged out of the 1960s and 1970s. Like many ideas that grew out of that technocratic age—such as urban tower blocks, child-centred education or DDT pesticide—what seemed terribly modern, forward-looking, progressive and scientific turned out to be a disaster. A small but growing number of academics now see the west’s unfolding financial crisis not simply as a banking problem. It was not simply caused by inadequate capital ratios or too much short selling. Instead, they see it as a fundamental failure of this fiat currency experiment.
A credit balloon was created by reckless management of the money supply. Using inflation, Governments were able to whittle away their debts. Monetary management favoured the debtor over the saver and the consumer over the producer. Monetary policy has encouraged us to over-consume and under-produce, to over-borrow and to save too little. In the space of a generation, fiat money has seen Government grow and the productive sectors of the economy shrink.
Under my proposal, we would no longer be forced to live under such a destructive regime. If the Bank of England keeps printing off more money—more quantitative easing, more loose monetary policy—there may be a fall in the value of its currency, but not necessarily in the value of the currency that the rest of us choose to use. At the click of a mouse, people and businesses would have an alternative. Incidentally, our ability to opt out as individuals and businesses from the MPC’s monetary monopoly might encourage it to stop taking liberties with our currency.
On both sides of the House Members recognise that choice and competition safeguard the interests of the consumer and the citizen. We do not think twice about people being able to tune into different radio and television stations or choose between different hospitals for medical treatment. One day, I hope that Britain will become a multi-currency country.
My proposal for competing currencies is not a new idea. It was the policy of the Conservative Administration in 1989. An excellent Treasury paper presented to this very House suggested competing currencies as an alternative to the European single currency. Perhaps the euro, which we mercifully kept out of, is the ultimate paper-only currency. It is not even backed by the fiat of a single state authority. It is, perhaps, the fiat currency to end all fiat currencies, although perhaps not in quite the way that the architects of economic and monetary union expected. If, as seems possible, the euro breaks up, we should revert to and revisit the ideas in that Treasury paper. By adopting competing currencies, Britain could save herself by her exertions, and save European economies by her example.
Replacing the monopoly of one failed fiat currency with multiple competing currencies would allow euro members the least painful means of extricating themselves from the monetary monster that holds them captive. With choice and competition, all Europeans might be free from the monetary mismanagement that always comes from on high.
John Mann (Bassetlaw) (Lab)
I rise to speak because I think it is appropriate that someone from the Labour Benches should oppose this true bastion of Conservatism. History demonstrates to us that, given the opportunity and power, the Conservative party will always attempt to undermine, whittle away and eventually destroy the great institutions of this country. We are seeing it with the police service and the NHS. But Conservative Back Benchers want to go much further. Here we have them proposing a motion, which they wish to become legislation backed by their Front Bench, to take on, challenge and destroy sterling. I think that we on the Labour Benches want to defend the great currency of sterling against such an imposition of Euro-fanaticism—for that is what we have grown to expect from the Conservative party, although it is never up front, never to the public.
One recalls of course that, after Harold Wilson, Denis Healey and others blocked European adventurism, it was the Conservative party, inspired by Sir Keith Joseph, that resolutely took us into the European Union. Who was it who introduced all these new employment laws—maternity leave, paternity leave, a range of rights at work? Indeed, we backed them on that, rightly. It was none other than Margaret Thatcher and the Conservative party, who signed Maastricht. That was the fundamental—
Mr Speaker
Order. I have been listening to the hon. Member for Bassetlaw (John Mann) in a variety of forums for 25 years, and I see no reason to cease doing so now. However, I gently remind him that the matter under discussion is the proposed amendment to the Currency and Banknotes Act 1954.
John Mann
I thank you, Mr Speaker. I was just drawing the parallels with this pernicious motion, which would destroy sterling at the moment of its introduction. We saw the coalition partner, the hon. Member for Colchester (Bob Russell) give an example this very week of how on Eurostar the euro is the currency of use, not sterling. The hon. Member for Clacton (Mr Carswell) wishes to impose the euro on every shop across the country, for every transaction. He would go further: he would allow the Iranian rial and other currencies to be used. When I go to buy my midget gems from the corner shop, I wish to use sterling; I do not wish to use the euro or the Iranian rial.
The idea was inspired by a paper from 1975 by Hayek, which dictated the monetary policy to which the Government are adhering. Hayek first made the proposal, to try to break down boundaries. The concepts of “ever onwards”, free trade, the breakdown of the nation state and the destruction of national currencies are really what Back-Bench Conservative Members are about; they would open the floodgates to euros at every corner shop in Britain.
We should not oppose the motion today; we should give it time, so that the arguments can be developed further, and so that we can hear the supporters’ true perspective—then we should vote it down. I resolutely stand up for sterling and the corner shop, and oppose the euro and the attempt to impose it on us, but I do not seek to divide the House. Let us give the hon. Member for Clacton more time to put his case, and let us then destroy him in the vote.
Question put and agreed to.
Ordered,
That Mr Douglas Carswell and Steve Baker present the Bill.
Mr Douglas Carswell accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 20 January, and to be printed (Bill 226).
Health and Social Care Bill (Programme) (No. 3)
(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:03 - The House divided: - Ayes: 299 / Noes: 232 - Question accordingly agreed to.
The Minister of State, Department of Health (Mr Simon Burns)
I beg to move,
That the Order of 31 January 2011 (Health and Social Care Bill (Programme)) as supplemented by the Order of 21 June 2011 (Health and Social Care Bill (Programme) (No. 2)) be varied as follows:
1. Paragraphs 5 and 6 of the Order shall be omitted.
2. Proceedings on Consideration shall be taken on the days shown in the first column of the following Table and in the order so shown.
3. Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in relation to it in the second column of the Table.
TABLE
Proceedings | Time for conclusion of proceedings |
|---|---|
First day New Clauses and New Schedules relating to, and amendments to, Parts 3 and 4 other than: (a) New Clauses, New Schedules and amendments relating to transitional arrangements for NHS foundation trusts, (b) New Clauses, New Schedules and amendments relating to private health care, and (c) amendments providing for commissioning consortia to be known as clinical commissioning groups. | 8.30 pm on the first day. |
New Clauses and New Schedules relating to, and amendments to, Parts 3 and 4, which relate to transitional arrangements for NHS foundation trusts or to private health care; amendments providing for commissioning consortia to be known as clinical commissioning groups. | 10.00 pm on the first day. |
Second day New Clauses, New Schedules and amendments relating to the provision of information, advice or counselling about termination of pregnancy. | One and a half hours after the commencement of proceedings on consideration on the second day. |
Remaining New Clauses and New Schedules relating to, and remaining amendments to, Parts 1, 2 and 5 to 12; remaining proceedings on consideration. | 6.00 pm on the second day. |
4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on the second day on which proceedings on consideration are taken.
I will speak briefly to the programme motion, as I am sure that all hon. Members who wish to take part in debate on the Bill would like to make progress and get on to the main core of the amendments before us. As they will see, we have set in train our plan to hold Report and Third Reading over two days, commencing now and continuing until 10 pm tonight, and resuming on Wednesday, after Prime Minister’s questions and any other business that takes place on that day. As is normal, Third Reading will take place an hour before the end of that day.
As we are all aware, we arrive at Report with the Bill having received extensive scrutiny in two House of Commons Committee stages. Our first Committee stage, in February and March this year, lasted 28 sittings. It was the longest Committee stage of any Bill since the Criminal Justice Bill of 2002-03. At the conclusion of proceedings, even the hon. Member for Halton (Derek Twigg), who led for the Opposition in that Committee, acknowledged that
“every inch of the Bill”––[Official Report, Health and Social Care Public Bill Committee, 31 March 2011; c. 1310.]
had been
“scrutinised”.
Following a listening exercise and the work of the Future Forum, the Bill was re-committed to a further Committee stage of 12 sittings. If that had been a stand-alone Committee stage, it would have been the longest for any Bill sponsored by the Department of Health since 2003. All that means that the Bill has been scrutinised for a total of over 100 hours, and has been the subject of 40 Committee sittings—more sittings than there has been for any public Bill between 1997 to 2010. I will dwell on that point for a moment, and remind hon. Members of recent Health Bills that predate this Government.
The Health Act 2009 was scrutinised over eight sittings, as was the Human Fertilisation and Embryology Act 2008. The Bill Committee for the Health and Social Care Act 2008, which among other provisions set up the Care Quality Commission, sat for 12 sittings, a number matched by the Health Act 2006. As the keener mathematicians among us might have realised, the total number of Commons Committee sittings for these four Bills was 40—the same number as for this single Bill. In these 40 sittings we had a great number of debates where the issues were fully debated, sometime more than once.
Having had such substantial debate in Committee, we feel strongly that two days on Report is a thoroughly appropriate length of time. I have heard the calls from certain Opposition Members that more time is needed. I find that intriguing, given the rarity with which two-day Report stages were granted under the previous Government.
Frank Dobson (Holborn and St Pancras) (Lab)
Is it not treating the people who work in the national health service with contempt to expect the House to consider more than 1,000 amendments and new clauses in two days? Is that not a disgrace?
Mr Burns
The right hon. Gentleman’s hyperbole does not match the facts. He mentioned 715 amendments —[Interruption.] Yes, but the right hon. Gentleman mentioned 715 amendments dealing with one issue within the more than 1,000 amendments. May I point out to him that 715 amendments are all technical amendments? They change the name of GP consortia to clinical commissioning groups, following the recommendations made by the Future Forum and others working in the health service, which I would have thought would be welcomed by the Opposition Front Bench team at least. That number bloats and distorts the total number. The other significant number of amendments—121—deal with the continuity of services, which is an issue that the Opposition Front-Bench team implored us to bring before the House, rather than allowing it to be dealt with another place. That is why we have done so.
If we are going to be somewhat churlish, let me point out that 100 amendments were tabled by the official Opposition, of which 41 have been selected, and the vast majority of those amendments have been dealt with in Committee in great detail. So in that respect we will be going over well covered ground.
I do not intend to speak for long as I do not wish to detain the House. There is work to be done. This Government have allowed four two-day Report stages in this Session alone. Let me remind the House of one of those rare Government Bills that was granted a two-day Report stage under the previous Government—the Planning Bill in June 2008, with which I know the right hon. Member for Wentworth and Dearne (John Healey) is extremely familiar and probably very fond of. For that Bill the Government of the day thought that two days were appropriate—an interesting judgment, given that they were tabling 29 new clauses and seven new schedules on Report. Indeed, by the end of Report, the Planning Bill had grown by 25%. That compares with the nine new clauses that the Government have tabled on Report for the Health and Social Care (Re-committed) Bill. So that those on the Opposition Benches get the message, that is nine new clauses under this Government, as opposed to 29 new clauses in the right hon. Gentleman’s Bill.
Let us give the Opposition the benefit of the doubt. They might have forgotten what the right hon. Gentleman said when the Planning Bill was, unusually, allowed two days on Report, so let me remind them:
“My reasons for moving this motion were straightforward… It is true that the Bill is wide-ranging and important, which is why we have, unusually, provided two full days for the Report stage… we have departed from the usual by giving two days to this consideration.”—[Official Report, 2 June 2008; Vol. 476, c. 507.]
He established the fact that it is highly unusual. The Health and Social Care Bill has had far more time in Committee than previous Bills, and we are giving an extra day to allow hon. Members the opportunity to contribute to debates, although I must warn my hon. Friends that some of the debates will be a repetition, particularly for those who served on the Committee. It is for those reasons that I urge the House to support the motion.
Liz Kendall (Leicester West) (Lab)
We oppose this programme motion because it fails to give hon. Members enough time to scrutinise one of the most important Bills of this Parliament and, indeed, of the 63 years of the NHS. It is one of the largest Bills of recent times and the largest ever in the history of the NHS, with 420 pages and more than 300 clauses. It is also one of the most controversial. It will force the NHS through a massive reorganisation, which is already happening even though the Bill has not been passed, when it should be focused on meeting the biggest financial challenge of its life and improving patient care. It also seeks to make fundamental changes to the way our NHS is run, driving competition into every part of the system whether or not it is in patients’ best interests.
Labour has led the arguments against the Bill since the autumn, helping to create the widespread opposition that has already forced the Government to pause and amend their plans. However, the Government, far from what the Minister said, refused to give the second Bill Committee enough time to scrutinise properly the changes after their so-called listening exercise. [Interruption.] The Minister tuts from a sedentary position, as is his wont, but 42 Government amendments and two new clauses were not debated in the second Committee due to a lack of time. They have not even bothered to publish the explanatory notes and impact assessment for the post-pause Bill, so the two days on Report that the programme motion proposes would have been insufficient in any case.
Then, on Thursday, three days before this debate, more than 1,000 new Government amendments were tabled, 363 of which are significant. They include a completely new set of proposals on whether local NHS services and, indeed, entire hospitals will be allowed to fail—proposals that could affect every constituency in England. It is a gross discourtesy to this House, not to mention to patients and NHS staff, to produce such important proposals and give such little time for scrutiny. I am sure that Members of the other place will take that into consideration in their deliberations on the Bill.
We are now faced with hundreds of significant new amendments and a series of fundamental questions about the post-pause Bill, and yet we have only two days for debate. Who will have the final say, and who is accountable for vital decisions about the future of local services? What will the Government’s health care market mean for expensive local services that do not make money, such as accident and emergency services and geriatric care, if hospitals lose services that do make money, such as hip and knee operations? How will NHS patients be protected if the private patient cap is abolished and hospitals are forced to take on more patients who pay in order to balance their books? What will be the true cost to taxpayers of the extra red tape and bureaucracy created by the Bill?
The Government’s failure to give the House sufficient time for scrutiny and provide proper answers about their Bill means that many NHS staff and patients remain deeply concerned. Unfortunately, that seems to have passed the Prime Minister by. Two weeks ago, he claimed:
“the whole…profession is on board for what is now being done.”
I wonder whether “the whole profession” includes the British Medical Association, which says—
Liz Kendall
The Minister groans. If he thinks that the body representing doctors in this country is worthy of that response, that is a disgrace. The BMA says that the Bill is still
“an unacceptably high risk to the NHS, threatening its ability to operate effectively and equitably now and in the future”.
It calls for the Bill’s withdrawal
“or at the very least further, significant amendment”.
Chris Skidmore (Kingswood) (Con)
Is the BMA not the same organisation that opposed the creation of the NHS in 1948?
Liz Kendall
The Prime Minister claims that the whole profession is now on board for the Bill, and that simply is not the case. Government Members, particularly those on the Liberal Democrat Benches, should remember that the Government have no mandate from either the election or the coalition agreement for fundamental aspects of the Bill. In fact, the coalition agreement promises to do precisely the opposite—to stop top-down reorganisations of the NHS.
The Government want to railroad the Health and Social Care Bill through the House in the face of widespread opposition and huge controversy, and with no mandate for their plans.
Liz Kendall
I will not, because we need to get on to the substance of the debate. The less time that the Government give MPs to scrutinise the Bill, the more people will think that they have something to hide; the more they hide, the longer it will take to get the Bill through the other place.
Unless hon. Members vote against the programme motion, it will be left to Members in the other place to provide the parliamentary scrutiny that the Bill needs and to get answers to the serious questions that remain. I believe that Members of this House should scrutinise legislation and get the answers to questions that our constituents need and deserve. The Government are refusing to give us the time to do our job. I urge Members to vote against the programme motion.
Mr Peter Bone (Wellingborough) (Con)
I start from the default position of opposing programme motions. The Government have consistently said that they also oppose programme motions and that they will overcome that problem by introducing a House Committee which will, of necessity, do away with programme motions, because the House will decide.
We have to look at programme motions now on the merits of each and every case. In this case, I have to say to the hon. Member for Leicester West (Liz Kendall) that I cannot agree with her. The Government have been very willing to listen to people—politicians—and to redo completely the parliamentary scrutiny of the Bill. They sent it back to Committee, from where it has come here. On this occasion, the Government have bent over backwards for scrutiny, and I will be voting with them in the Aye Lobby.
Question put.
Health and Social Care (Re-committed) Bill
(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:29 - The House having divided: - Ayes: 304 / Noes: 231 - Question accordingly agreed to.
20:48 - The House divided: - Ayes: 232 / Noes: 302 - Question accordingly negatived.
22:01 - The House divided: - Ayes: 239 / Noes: 292 - Question accordingly negatived.
Mr Speaker
Before the House embarks on the Bill, it may help if I deal with a matter that has been raised with me concerning the 715 virtually identical Government amendments changing the phrase “commissioning consortia” to “clinical commissioning groups”. These are the fourth group on today’s selection list. It has never been the practice of the House or its Committees to allow a single global amendment to make a series of identical or very similar amendments. The rule that any substantive change to the text of the Bill must be done by an amendment is designed for the protection of the rights of all Members and the integrity of the legislative process. I do understand that in this case it leads to a particularly bulky amendment paper. The fact that a practice is long-standing does not, in my view, mean that it is sacrosanct. Any hon. Member who wishes is of course free to ask the Procedure Committee to inquire into this matter. I hope that that is helpful.
I should also inform the House that amendment 781, which is printed on page 2985, should appear on page 3051, and amendments 945 and 946, which are printed on page 3138, should appear on page 3068. That has no material effect on today’s proceedings, but I know that the House will have wanted me to share those crucial nuggets of information with it.
Sir Peter Bottomley (Worthing West) (Con)
On a point of order, Mr Speaker. The House will have noted your comments about the repetitive amendments. Are we to take it that we have to go through quite a lengthy procedure in order just to be able to list the places where the words would be substituted? Is it not possible—is it not in your power or that of the Leader of the House—to make the change without having to go through weeks and weeks of Committees and other consideration? I do not necessarily need an answer now, but that is a consideration to which I would have thought a reforming Speaker might have found a solution.
Mr Speaker
I thought that I had found a very satisfactory way forward—one that should appease the hon. Gentleman and perhaps mollify him, putting him in a better frame of mind. There will be a grouping. If he is inquiring of me whether a separate Division will be required to give effect—
Mr Speaker
The hon. Gentleman is shaking his head from a sedentary position to indicate that that is not the burden of his proposition, in which case I am not sure what is. I can nevertheless assure him that no separate Division will be required. I think that at the end of our proceedings he will be in the good humour to which we know he is accustomed.
Sir Peter Bottomley
Further to that point of order, Mr Speaker. The point was the one that you have made, which is that the amendment has to be repeated, with different pages and lines. I suggest that an amendment might be tabled setting out a list of the pages and lines where it applied.
Mr Speaker
What I am saying is what I have already said, which is that there is no provision for a global amendment. An amendment is required to be made in each case. That does not entail a separate Division or what the hon. Gentleman in his first point of order described with some trepidation as a “lengthy procedure”. There will be no requirement for a lengthy procedure. Ministers seem sanguine; so am I—so, I think, should the House be. Perhaps we can now proceed to the business before us.
New Clause 2
Conditions relating to the continuation of the provision of services etc.
‘(1) The things which a licence holder may be required to do by a condition under section 104(1)(i)(i) include, in particular—
(a) providing information to the commissioners of services to which the condition applies and to such other persons as Monitor may direct,
(b) allowing Monitor to enter premises owned or controlled by the licence holder and to inspect the premises and anything on them, and
(c) co-operating with such persons as Monitor may appoint to assist in the management of the licence holder’s affairs, business and property.
(2) A commissioner of services to which a condition under section 104(1)(i), (j) or (k) applies must co-operate with persons appointed under subsection (1)(c) in their provision of the assistance that they have been appointed to provide.
(3) Where a licence includes a condition under section 104(1)(i), (j) or (k), Monitor must carry out an ongoing assessment of the risks to the continued provision of services to which the condition applies.
(4) Monitor must publish guidance—
(a) for commissioners of a service to which a condition under section 104(1)(i), (j) or (k) applies about the exercise of their functions in connection with the licence holders who provide the service, and
(b) for such licence holders about the conduct of their affairs, business and property at a time at which such a condition applies.
(5) A commissioner of services to which a condition under section 104(1)(i), (j), or (k) applies must have regard to guidance under subsection (4)(a).
(6) Monitor may revise guidance under subsection (4) and, if it does so, must publish the guidance as revised.
(7) Before publishing guidance under subsection (4) or (6), Monitor must obtain the approval of—
(a) the Secretary of State, and
(b) the National Health Service Commissioning Board.’. —(Mr Lansley.)
Brought up, and read the First time.
The Secretary of State for Health (Mr Andrew Lansley)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
Government new clause 6—Objective of trust special administration.
Amendment 10, page 83, line 5, leave out part 3.
Amendment 1225, in clause 57, page 83, line 13, leave out ‘monitor’ and insert ‘Integrated Health Service Regulator (elsewhere referred to in this Bill as “Monitor”)’.
Amendment 1226, in clause 58, page 83, line 20, at end insert ‘and
(c) is sufficiently integrated so as to reduce any risk to patient care and to provide continuity of service.’.
Amendment 1207, page 83, line 23, after ‘preventing’, insert ‘competitive or, as the case may be,’.
Amendment 1227, in clause 59, page 84, line 42, at end insert ‘bearing in mind that it should be balanced with ensuring the protection of health service integration.’.
Amendment 1228, page 85, line 2, at end insert—
‘(3A) “Integration”, in relation to health services, means the provision or commissioning of health services in a manner to ensure the viability of the full range of health and social care facilities which a community might reasonably expect from the NHS, including the provision of complex and commercially less attractive and difficult to provide emergency and other acute services which require to be provided on a site or in a manner which benefits from its collaboration with other acute health specialities or services.’.
Government amendment 87.
Amendment 1205, in clause 61, page 86, line 14, at end insert—
‘(n) the need to avoid existing NHS services, including but not restricted to, emergency care, intensive care, chronic and complex care, teaching, training and research, becoming unviable or unstable due to an unplanned reduction in income or case-load.’.
Government amendment 90.
Amendment 1208, in clause 70, page 92, line 7, after ‘in’, insert ‘competitive or, as the case may be,’.
Amendment 1209, page 92, line 8, at end insert—
‘(d) protect and promote the integration of health services and health and social care services,
(e) improve the equality of access to NHS services and healthcare outcome,
(f) do not undermine the stability of existing NHS services, including but not restricted to, emergency care, intensive care, chronic and complex care, teaching, training and research.’.
Amendment 1229, page 92, line 8, at end insert—
‘(d) do not act in a manner which risks undermining the viability of maintaining essential or designated core health services or the essential integration between health services.’.
Amendment 1219, in clause 74, page 94, line 22, leave out subsections (1) to (3) and insert—
‘(1) Part 3 of the Enterprise Act 2002 (mergers) applies (in so far as it would not otherwise) where two or more enterprises have ceased to be distinct enterprises and specifically the activities of one or more NHS foundation trusts and the activities of one or more businesses have ceased to be distinct activities.’.
Amendment 1220, page 94, line 29, leave out ‘subsections (2) and (3)’ and insert ‘subsection (1)’.
Government amendments 91 to 107.
Amendment 28, page 117, line 22, leave out clause 110.
Government amendments 113 to 115.
Amendment 44, in clause 119, page 123, line 30, at end insert—
‘(10A) A description for the purposes of subsection (9)(b) may be framed by reference to—
(a) the level of workforce training undertaken by the provider, and
(b) the extent to which the provision of its service leads to consequential costs for other providers.’.
Government amendments 116 to 136.
Amendment 29, in clause 130, page 132, line 34, at end insert—
‘(5AA) Regulations under this section must ensure that where transfers of property or liabilities occur, they can only be transferred to another NHS body.’.
Government amendments 137 to 164.
Amendment 30, in clause 134, page 136, line 26, leave out ‘licence holder’ and insert ‘NHS body’.
Government amendments 165 to 180.
Amendment 19, page 156, line 38, leave out clause 166.
Government amendments 181 to 184.
Amendment 1166, page 159, line 2, leave out clause 167.
Government amendments 185 to 187.
Amendment 20, page 163, line 14, leave out clause 176.
Government amendments 188 to 217.
Amendment 8, page 168, line 6, leave out clause 182.
Government amendment 218.
Amendment 9, page 168, line 39, leave out clause 183.
Government amendments 219, 220 and 366 to 372.
Mr Lansley
Our plans for modernising the NHS are focused not only on improving the quality of care of patients today, but on ensuring that the NHS is fit to face the challenges of tomorrow—to ensure that the NHS is always there, always improving and always based on the needs of patients, not their ability to pay. Parts 3 and 4 of the Bill are an integral part of achieving that aim. They take forward our commitment to protecting patients’ interests, by establishing a comprehensive system of regulation in part 3, and to promoting high quality services, by supporting all NHS trusts to become foundation trusts in part 4.
The regulatory framework that we inherited from the previous Government simply did not do enough to protect patients. It lacked a way to protect patients’ interests in relation to all types of provider. The previous Government set up two regulators—Monitor for foundation trusts and the Care Quality Commission—but forgot, or neglected, to create an explicit link between the two. They also left independent providers outside much of that regulatory oversight. We have proposed the development of Monitor as a health sector-specific regulator, establishing equivalent safeguards to protect patients’ interests in relation to all types of provider.
By contrast, let us look at Labour’s proposed amendment—amendment 10, in this group—which would delete all of part 3. That would leave the NHS in a position in which inconsistent regulation as between NHS trusts and foundation trusts undermined accountability and performance, in which independent providers were not regulated effectively, in which the Labour Government’s preferential treatment of independent sector providers could carry on, and in which politicians would continue to second-guess regulatory decisions, creating a double jeopardy for providers. On the Government side of the House, however, we recognise the needs of the NHS. We recognise the fact that patients’ interests must be protected, irrespective of the type of organisation providing their NHS services, in a clear, consistent, transparent framework.
These parts of the Bill have been scrutinised in the Bill’s two Committee stages and by the NHS Future Forum. I should like once again to thank Professor Steve Field and the members of the NHS Future Forum for their work in making recommendations on how to improve our plans. We then took those recommendations forward in the recommittal stage. As a result of the listening exercise, we made changes to introduce stronger safeguards, to ensure that fears of a market free-for-all could not happen. Monitor’s core duty has been changed to make it clear that it is there to protect and promote patients’ interests, and that it will not be required to promote competition as if that were an end in itself.
Chris Leslie (Nottingham East) (Lab/Co-op)
Do not the right hon. Gentleman’s changes to the Bill still emphasise far too much the supposed read-across with competition law, treating health provision as though it were simply another utility? With regard to mergers and changes, for example, the Office of Fair Trading will be the arbiter on competition duties. Why has he chosen the OFT as arbiter in such cases?
Mr Lansley
I am not sure that the hon. Gentleman has followed this closely enough. We do not do any of those things. We are very clear that, through the Bill, we are creating, in Monitor, a health sector-specific regulator that will be able to exercise competition powers in a way that is entirely sensitive to the duties that it has for sustaining high-quality NHS services. As I will explain later, there will be a role for the OFT. Indeed, it has a role now. Labour Members should know that the application of competition law inside the NHS at the moment is exactly the same as it will be after the Bill. However, instead of it being done through the OFT as principal competition authority, it will—with the exception of mergers, which I will talk about later—be done through the concurrent powers of Monitor. The NHS Future Forum helpfully discussed these matters at length with people throughout the country, and concluded that it would be in the interests of the NHS for the legislation to create concurrent competition jurisdiction for Monitor, thereby ensuring that the application of competition rules—which is not changed in its extent by this legislation—is achieved in a health-specific context.
Nick Smith (Blaenau Gwent) (Lab)
Why will Monitor have no duty to promote collaboration, as recommended by the Future Forum?
Mr Lansley
I am sure that the hon. Gentleman will want to look at clause 20, which is very clear about Monitor’s responsibilities. I am sorry—it is not clause 20; I will find it later. Monitor’s duties are very clear, and they include support for the integration of services and for the continuous improvement of quality of services. Across the NHS there is existing legislation making it clear that there is a responsibility for collaboration. As we have made clear in response to the NHS Future Forum’s report on the listening exercise, we are taking an evolutionary approach. The competition and co-operation panel was established under the Labour Government in January 2009. At that time, the panel made it absolutely clear that there should be a health basis for the implementation of competition and procurement rules in the NHS. That panel is now to be incorporated as part of Monitor. As its name implies, it examines both competition and collaboration. Monitor, like other bodies, has a duty to promote the integration of services.
Now, as I said, we have introduced safeguards against privatisation. This Bill, for the first time, stops the Secretary of State—and, indeed, Monitor or the NHS commissioning board—from trying deliberately to increase the market share of a particular type of provider. If the previous Labour Government had put such a requirement in law when they were office, hundreds of millions of pounds would not have been paid to independent sector treatment centres to carry out operations that were not required and never took place. If the Opposition had their way this afternoon, the safeguards that we intend to put in place would not be available.
Toby Perkins (Chesterfield) (Lab)
I am grateful to the Secretary of State for giving way. Does he think that the British Medical Association, too, is misrepresenting the position when it says that even after Report stage there will still be too much emphasis on using market forces to shape health services? Is the BMA misrepresenting the truth as well, or is it just the Labour party?
Mr Lansley
I was interested to read this morning a letter whose lead signatory was Hamish Meldrum, the chairman of the BMA council, whom I know well. It was curious because his objection to the Bill, which he wants to be amended, was about the introduction and extension of the role of “any qualified provider”. However, that extension is not in the Bill. It is not occasioned by the Bill; it is a consequence of the way in which commissioners—[Interruption.] No, it does not. If there were no Bill, it would be open to strategic health authorities and primary care trusts to extend “any qualified provider” and patient choice in the NHS to whatever extent they wished. The Bill does not make that happen.
The point is that under the legislation there is a stronger safeguarding process, because the commissioners—
Mr Lansley
I will finish answering the hon. Gentleman before letting him intervene again.
The safeguard structure will be stronger, because commissioners must ensure, for example, that they meet their duty of continuous improvement of quality, their duty of safety and their duty of integration of services and other duties, including a duty to promote patient choice—but of course they have to balance those duties. Whether they extend “any qualified provider” is a matter of judgment. If they took the view that the extension of patient choice would be inimical to the integration of services and the improvement of quality, they would not go ahead with it. The hon. Gentleman and his colleagues should recall that they have put in an NHS constitutional right for patients to exercise choice, so if the commissioners think it is possible to promote choice and improve quality by extending the any qualified provider remit, they can do it, but the Bill is not what enables it. It is therefore curious that the Bill should be attacked on that basis.
Toby Perkins
I am grateful to the right hon. Gentleman for giving way a second time. That was a very long answer to a short question, but I understand the Secretary of State to be saying that the BMA is wrong and the Labour party is wrong. Everyone I meet in the health service tells me that it is the Secretary of State who has got it wrong. He has come back here once again, confirming that he is not listening to what people are saying to him. He thinks the BMA is misleading people, but is it possible that he is the one who has got it wrong?
Mr Lansley
I will give the hon. Gentleman a shorter answer this time: he does not talk to enough people in the NHS.
Let me return to the important point that I was about to make. I was saying that criticism of the Bill has typically developed to the point of literally misrepresenting the facts in order to attack the Bill, as was the case with 38 Degrees. I am indebted to my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for sharing with me a letter that he prepared for the better information of his constituents. He looked at the legal opinion obtained by 38 Degrees and concluded that it did not support the views that those behind the 38 Degrees website evidently wished it did.
For example, 38 Degrees claims that the Bill removes the Secretary of State’s duty to provide a comprehensive health service. However, its own legal advice makes it clear that the Secretary of State has never had a duty to provide a comprehensive health service—only a duty to “promote” a comprehensive health service, which is exactly reproduced in clause 1.
Clause 1 also makes it clear that the Secretary of State must secure the provision of that service. The “duty to provide” certain services to which 38 Degrees refers is a duty that I, as Secretary of State, currently delegate to primary care trusts. In future, the Bill will—in exactly the same way—pass that duty of the Secretary of State to the NHS commissioning board and to clinical commissioning groups. In other words, the situation will be legally unchanged. The Secretary of State has a duty, and discharges it through organisations to which he or she delegates that power. Strictly speaking, they have more direct statutory duties, but the duty to provide will not change.
38 Degrees also claims that the Bill opens up the NHS to competition law, but its own legal advice—which it obviously did not like—made it clear that there would be no change between the present competition regime and that which would operate if and when the Bill became law.
I am very grateful to my hon. and learned Friend, whose forensic analysis accords with our own view. The provision, under the Bill, of a comprehensive NHS is watertight, and it is equally clear that the Bill does not change the extent of the application of competition law and EU procurement rules. The 38 Degrees campaign should be seen for the distorting and misleading political propaganda that it is.
Andrew George (St Ives) (LD)
I entirely endorse the Secretary of State’s point about the biased way in which the last Government advanced the private sector, but may I make a point about the changes that have resulted from the listening exercise? The Secretary of State has sought to reassure the House about Monitor’s role of integration and promoting collaboration. Would he be prepared to respond to, and perhaps even accept, amendments that I have tabled—for example, amendment 1226—which propose, I think reasonably and in a balanced way, that promoting the importance and the role of integration should be among the principal duties?
Mr Lansley
As we said in our response to the recommendations of the NHS Future Forum, we recognise the importance of integrating health and social care services—while concentrating on the needs of patients and their families—to the achievement of our aims. However, I do not believe that we would further those aims by changing Monitor’s name, as amendment 1225 suggests. Although I agree with the aims of my hon. Friend the Member for St Ives (Andrew George), we have an alternative approach.
Rather than making it explicit that the Secretary of State could impose requirements on commissioners in key areas through regulations, as my hon. Friend suggests in amendment 1209, the Bill proposes that commissioners should have clear statutory duties to reduce inequalities between patients, in relation to both access and outcomes. That is covered in clauses 20 and 23. Commissioners would also have to promote integration of services in carrying out those duties. That is covered in clause 20, which inserts new section 13M of the National Health Service Act 2006, and in clause 23, which inserts new section 14Y. Those clauses refer respectively to the NHS commissioning board and to clinical commissioning groups.
The Bill would also establish clear duties for Monitor to allow the integration of health care services and the integration of health care with other relevant services, including social care. We have already amended the Bill to make it clear that Monitor should not promote competition for competition’s sake: this is all about quality. However, integration can only ever be a means to that end, not an end in itself. Integration, like competition, is designed to secure continuous improvement in the quality of services and a reduction in inequalities, as clauses 20 and 23 make clear.
Although I understand the point that my hon. Friend is making, I ask him to not to press amendments 1225 to 1228 when we reach the appropriate moment.
Frank Dobson (Holborn and St Pancras) (Lab)
The Secretary of State has pleaded the legal view of one of his Back Benchers in rebutting the case made by others about the impact of the changes in his duties. Will he tell us what advice he received from the Department’s lawyers or the Law Officers of the Crown?
Mr Lansley
It is not the practice of Ministers to publish their internal legal advice, but what I will say to the right hon. Gentleman is very straightforward, because I have said it time and again: our legal advice clearly sets out the duty of the Secretary of State to promote a comprehensive health service and to secure the provision of a comprehensive health service, and that is also clearly set out in the Bill and our amendments to it. We are clear, too, that the Bill does not change the extent of the application of competition law and EU public procurement rules. I have taken the liberty of referring to the comments of my hon. and learned Friend the Member for Sleaford and North Hykeham on the basis that they entirely agree with the legal advice on which we have based our view.
Mr Lansley
I had better give way to the hon. Member for Pontypridd (Owen Smith) first, as no Opposition Front-Bench has previously intervened.
Owen Smith (Pontypridd) (Lab)
Is it not disingenuous of the Secretary of State to keep repeating that the application of competition law is not expanded or changed by the Bill? We know that the change in the architecture of the NHS—the use of competition law, the writing of competition law into the architecture of the NHS, and the entry of lots of other providers into a genuine marketplace—will lead to competition law increasingly being used by people who wish to provide NHS services, breaking up the NHS. Labour Members have repeatedly stated that, and it has been confirmed by independent legal advice. That is our point. It is straightforwardly the case, and I suggest that it is disingenuous to say competition law does not apply.
Mr Lansley
I did not say that competition law does not apply; if the hon. Gentleman is going to attack me, he might at least get what I said right. I said that the Bill does not change the extent of the application of competition law. The House should know that the debate about the extent to which competition law, and in particular EU competition law, is applicable within the NHS is a matter of debate among lawyers. That is because it has not been tested in courts, but it was always going to be tested in courts and it is much more likely to be tested in them if we do not pass this measure, which not only gives Monitor a responsibility to be the concurrent competition jurisdiction, but, through its licensing powers, allows it to take ex-ante steps. The hon. Gentleman therefore misses the point; the point is that by introducing the private sector into the NHS before the last election, his party’s Government inevitably extended the application of EU competition law in respect of NHS providers—not NHS commissioners, I might add. To that extent, he has therefore missed the point. EU procurement rules have applied, and continue to apply. We cannot change that.
Mr Lansley
I will not give way again, or Mr Deputy Speaker will chide me for not addressing the substance of the amendments.
During the listening exercise, we heard concerns about how we would secure continued access to NHS services in the event that a provider fails clinically or financially. We promised then to strengthen our proposals and bring back changes at the next possible parliamentary stage, and we have done that.
What should happen in the NHS when things go wrong has long been the subject of debate in this House, often without satisfactory resolution. Those of us who were in the House when my predecessor stood at this Dispatch Box and said that what happened at Maidstone and Tunbridge Wells was the responsibility of local managers, and that what happened at Mid Staffs was all a local issue, will recall how difficult it was then, and over the recent past, to know what the Secretary of State’s accountability for the NHS actually meant.
In 2003 the Labour Government said that they would put in place a legislative framework for dealing with the failures of foundation trusts. They then failed to do that. The Health Act 2009 regime was contradictory in respect of interventions, but in response to failure it simply enabled foundation trusts to be de-authorised, thereby undermining the integrity of foundation trust status and demonstrating a lack of confidence in foundation trust regulation. Evidence does not support that lack of confidence, however. Monitor has generally handled financial stability more effectively in foundation trusts than strategic health authorities have done in NHS trusts. Putting these measures clearly into legislation is necessary not because providers are more likely to fail—on the contrary, we are putting in place measures that make it less likely that they will fail—but because, as when writing a contract, in writing legislation one must be clear about what happens when things go wrong.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Did not the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns) say in Committee that under the relevant clause,
“the OFT could make a reference to the Competition Commission to review foundation trust mergers to test whether they gave rise to a substantial lessening of competition”––[Official Report, Health and Social Care Public Bill Committee, 17 March 2011; c.885.]?
Does that not undermine the democratic element that the Secretary of State has just tried to explain?
Mr Lansley
I said that I would come on to the continuing role of the OFT in relation to mergers, and I will.
Returning to this substantial group of Government new clauses and amendments, the purpose of which is to set out the regime for the continuity of services, our new proposals focus on five particular changes. Together, the proposed changes significantly improve upon the existing situation. First, the Bill puts clinically led commissioning at the heart of securing high-quality services for local populations. It is therefore right that commissioners should have a leading role when continuing access to services is threatened. Our amendments therefore strengthen the role of commissioners. For the first time, commissioners will have an explicit role in working with Monitor to agree plans to secure continuity of services.
There will also be an oversight role for the NHS commissioning board. Where issues involve more than one clinical commissioning group, it will be the board’s role to co-ordinate agreement so that a joint plan is agreed. Secondly, commissioners will need to be supported in acting with providers to ensure that they have access to the scope, quality and choice of services they need. It is about promoting high-quality, effective and integrated services, as set out in clause 58. This will be the task of Monitor.
If need be, when continued access to services is threatened because of failure occurring in a particular provider, Monitor will have a range of actions it can take. For example, it could take action to secure sustainability of essential services by adjusting prices. This would be necessary where a provider is otherwise unable to cover the costs of essential services—for example, because of lower patient volumes in more remote areas of the country. That was included in the Bill from the outset, and our amendments strengthen the provisions by ensuring that Monitor must agree the methodology with the NHS commissioning board.
Rosie Cooper (West Lancashire) (Lab)
Will the Secretary of State be clear on this issue? Can the enhanced tariff that I think he is suggesting Monitor can use to save a provider apply to private companies as well as the NHS?
Mr Lansley
It would apply in any circumstances where it was necessary in order to secure continued access to essential services for patients, so a methodology would be in place. As I have described, the intention is to have a regime through which, although specific mechanisms will be applied to foundation trusts and to other providers—of course, the overwhelming majority of activity is in the hands of foundation trusts—the principles of intervention will be the same between the two sets of providers. We want to arrive, wherever possible, at a consistent application of failure rules. Why? Our concern is to make sure that we deal with this, which has not been the case in the past. Under Labour’s regime, if a private sector or independent sector provider failed financially, there was no appropriate mechanism for intervention and continuity of services.
Mark Simmonds (Boston and Skegness) (Con)
Will my right hon. Friend confirm that the additional funding he is describing will not be used to bail out, in the traditional way, inefficient and ineffective health providers, but will be used to ensure that services continue to be provided, particularly in rural areas, where the cost base may, necessarily, be more than it is in the metropolitan cities?
Mr Lansley
Yes, I understand that and I think that my hon. Friend makes entirely the right point. This is not about a bail-out; the commissioning board and Monitor will need to agree the methodology, because neither side will wish to undermine the integrity of the regulatory structure and the price structure that Monitor is responsible for, nor will the NHS commissioning board and commissioners want to pay any more for services than is necessary to secure continued access. None the less, continuing access to quality services for patients is the essential principle, and so there will be circumstances, particularly where it has become evident that in the absence of this there would be an unacceptable deterioration in or failure of services, in which it is necessary for the methodology to add to the tariff price.
Fiona Mactaggart (Slough) (Lab)
The right hon. Gentleman will recall that very shortly after Monitor had approved the granting of foundation trust status to my local district general hospital, Wexham Park hospital, it ended up in very serious financial difficulty, and I was grateful to him when he arrived with a loan to ensure the continuation of service. What I am not clear about in the regime that he proposes is who will be able to provide those kinds of resources when something as important as the district general hospital’s future is at risk.
Mr Lansley
I am grateful to the hon. Lady for that. I will deal with that matter in a moment, because subsequent amendments in this group continue the capacity of the Department of Health, for example, to make a loan in those circumstances—that would not change.
Of the five principal changes that I was talking about—
Mr Lansley
I have reached the third of them, so I will carry on for a moment, if I may.
Thirdly, if a provider gets into significant difficulties, we have provided Monitor with powers to be able to try to turn around the provider. The aim would always be to support the recovery of the provider, wherever this was possible. Specifically, the amendments require Monitor to maintain an ongoing assessment of risk to the continued supply of NHS services. Monitor must then intervene proactively to help a provider to address problems and, where necessary, agree contingency plans with commissioners. New clause 2 and amendments 100 to 104 achieve this.
Fourthly, we have put in place provisions to deal with the rare event of a provider no longer being sustainable in its current form. In that instance, the priority must be to secure continued access to the services patients need. This protection is particularly important in relation to foundation trusts, which of course are the principal providers of acute, emergency and specialist hospital services.
So we have put forward amendments that would build and improve on the previous Government’s regime established under the Health Act 2009. The improvements would ensure that foundation trusts do not revert to being NHS trusts and that commissioners take the lead in securing continued access to NHS services, and they would increase democratic legitimacy by allowing the Secretary of State to intervene in individual cases to protect patients’ interests. At the same time, we are retaining Bill provisions to allow Monitor proactively to regulate to secure continued access of NHS services delivered by companies and social enterprises, through provisions on the health special administration regime, should these providers become unsustainable. New clause 6 and amendments 107, 188 to 193, 195 to 204, 217, 218 and 371 to 372 achieve this.
Fifthly, it is essential that political accountability runs through what hon. Members will all know is central to our responsibilities to our constituents. Our plans therefore strengthen political accountability at both the local and national level. At a local level, the amendments enhance democratic legitimacy by extending local authority scrutiny to all NHS services. That is in contrast to previous proposals, where only designated services would have been subject to such scrutiny. At a national level, we will establish a process for the Secretary of State to veto proposals, in individual cases relating to unsustainable foundation trusts, if he decides that they do not secure continued access to NHS services and, as a last resort, to intervene where he believes that the NHS commissioning board or Monitor has failed to discharge its functions. This veto will ensure that the Secretary of State retains all the powers needed to retain his role—
Mr Lansley
In a moment. I want to complete the five points; otherwise people might not see them in their entirety.
The veto will ensure that the Secretary of State retains the powers needed to fulfil his role in promoting a comprehensive health service. Amendments 205 to 207 and 208 to 216 achieve this.
Grahame M. Morris
Will the right hon. Gentleman clarify an issue to do with the Secretary of State’s powers to intervene in the event of failure? I am thinking in particular of the reports about freedom of information requests that appeared in The Guardian earlier in the week, which said that Department of Health officials had been in discussions with Helios about a potential transfer of between 10 and 20 NHS hospitals to the private sector. Is that a scenario in which the Secretary of State would use his powers?
Mr Lansley
I do not recognise such a scenario and in any case there will be no transfer of NHS-owned organisations and the estate and property of such to the private sector. We are not engaging in privatisation, so to that extent the question does not arise.
I must also make it clear that the implication of the proposals I have just described—
Mr Lansley
No.
The implication of these proposals is that we are not continuing with our previous proposals to have a system of prior designation. We are also withdrawing our proposals to apply insolvency law, including the health special administration procedure, to foundation trusts, so I hope that Opposition Members will not press amendments 29 and 30.
I hope that that explanation of the purpose of the substantive group of Government amendments will help the House. In a moment, I shall turn to some of the additional amendments that have been presented by other colleagues.
Owen Smith
Let me clarify a remark that the Secretary of State just made to my hon. Friend the Member for Easington (Grahame M. Morris). The Secretary of State said that there would be no instances where NHS properties might be transferred to private companies, but he will know that under schedule 23 there is provision for precisely that. Such companies are described there as a “qualifying company”. A licence holder could be a private company to which NHS material—even staff—and other liabilities might be transferred. Is that not right?
Mr Lansley
The point I am making is that we are not transferring foundation trusts or NHS trusts into the private sector. We are not planning to do that. The particular case to which the hon. Member for Easington (Grahame M. Morris) referred was misrepresented as a proposal to transfer the ownership of NHS organisations. There is no such proposal; we are not planning to do that.
As I have described, the Bill would establish a comprehensive system of regulation focused on protecting and promoting patients’ interests and applicable to all providers of NHS services. The purpose of part 3 is to protect our health services from the unrestrained operation of market forces—otherwise, why would we want this structure of regulation? That is why it is there. The provisions will ensure that services are not destabilised or undermined and will protect the public and patients’ interests.
Let us consider the implications of the Labour party’s amendment 10, which would remove part 3 of the Bill. The impact of removing part 3 would be to expose the NHS to the full force of competition law, as I described earlier, without the safeguard of a health sector regulator and without any sensitivity to the needs of patients, health services and our NHS. It should not be beyond the wit of Opposition Members to recall the impact on the health service and, in particular, on pharmacy services, when the Office of Fair Trading undertook an inquiry into the provision of pharmacy services from a competition perspective without any reference to the health perspective.
Mr Lansley
No.
That is what happened in the past and it is important that it does not happen in the future. We must have a health sector-specific regulator to see the health-related aspects of such matters.
Labour’s amendment 10 would potentially expose the NHS to practices that we do not wish to see. That would include paying over the odds for private sector services, as the previous Government did when they paid £250 million extra to the independent sector for operations that were never carried out; the cherry-picking of easier operations by the private sector, which is an issue in the NHS because the previous Labour Government let it happen; unreformed payment by results, losing the focus on outcomes and integration; and the retention of a system of payment based on price. We are not introducing payment by results; we are reforming it. Payment by results, as implemented by the Labour party, was simply payment for price and volume, not for quality.
Amendment 10 would leave independent sector providers of NHS-funded services, which serve hundreds of thousands of patients a year, unregulated by Monitor and unprotected if the service in which they are being treated gets into financial difficulty. So Opposition Members will wish to consider whether all of those things are what they want to be voting for when they walk through the Lobby later on.
Margot James (Stourbridge) (Con)
Does my right hon. Friend think that the previous Government set up the system for private companies so that they could fail without any redress on the part of the Government precisely because the companies had such a favourable financial regime bestowed on them that they could not possibly fail?
Mr Lansley
My hon. Friend is right in relation to the independent treatment centre contracts. They were constructed in a way that effectively removed most of the financial risk from the operators. For other private sector operators in the NHS that is not necessarily true. For example, most of us would recognise that private sector providers are instrumental to continued access to many NHS diagnostic services. There are providers who could fail and at the moment no regulatory structure is in place for that.
Let us continue down the path of the implications of the removal of part 3, which the Labour party proposes. Part 3 includes clause 60. I am sure that Opposition Members are familiar with clause 60, their having served in Committee for so long. It is the means by which, if the hon. Member for Islington South and Finsbury (Emily Thornberry) recalls, we can consider the application of Monitor’s functions to adult social care. So precisely when we are legislating to be able to consider whether the implications of an issue such as that at Southern Cross are such that there should be an additional prudential regulatory regime, the Labour party would take away that opportunity.
Emily Thornberry (Islington South and Finsbury) (Lab)
Does the Secretary of State agree that it is unfortunate that the Government have not had an opportunity to table detailed amendments on how they would deal with situations such as Southern Cross? To table an amendment that simply says, “At some stage in the future, the Government may be able to do something about a failing organisation such as Southern Cross”, is not necessarily adequate. Although there will be a White Paper on social care next spring, we understand that there are unlikely to be any further details until that point.
Mr Lansley
I am confused. I understood that the hon. Lady was a member of the Bill Committees. [Hon. Members: “She was.”] She does not seem to have learned what is going on in the Bill. Clause 60 was not an amendment; it was in the Bill from the outset. It was not introduced as a result of what happened at Southern Cross. We had anticipated the need to address the extent to which Monitor’s functions in relation to the health sector—
Mr Lansley
No. I will answer her question. The functions that it exercises in relation to health care include assessing viability and taking action if access to services or the interests of patients or care users are threatened. The Government can consider that by virtue of clause 60. It was not an amendment. So the idea that the measure could not be scrutinised is absurd. It has been in the Bill through all the 100 hours in Committee. If the hon. Lady never said anything about it, that is her own fault and as the shadow care services Minister she should have been more on the ball.
Mr Lansley
No. She can sit down.
Let me come to the other Opposition amendments. Amendment 10 would delete all of part 3, which would be absurd. Some of the other Opposition amendments are equally absurd. Amendment 28 envisages that part 3 would remain in place, but that Monitor would license providers of NHS services. However, it then takes away any means of enforcement. Perhaps the Labour party has forgotten that in government if you create obligations it is rather helpful to create a means by which they can be enforced.
Opposition amendment 44 would take the Bill down a slippery slope by trying to prescribe the range of factors that Monitor should reflect in setting prices for NHS services. Such a list could never be exhaustive and would inevitably suggest that some factors were more important than others. It would undermine our ability to hold Monitor to account for setting prices that promote patients’ interests. We must focus Monitor on its duties to promote the quality, efficiency and effectiveness of NHS services, not on trying to prescribe in legislation how it goes about it.
Labour Members have tabled amendments to part 4 that indicate that they either do not understand the Bill, or have abandoned their previous, repeated commitment to supporting all NHS trusts in becoming foundation trusts. They gave that commitment back in 2003, when they passed the necessary legislation, and repeated it in about 2006, when they said that trusts should all be foundation trusts by 2008. The Labour party manifesto from last year—2010—said:
“All hospitals will become Foundation Trusts, with successful FTs given the support and incentives to take over those that are under performing”.
Compare our programme for such hospitals as those in Trafford and Carlisle. The manifesto continued:
“Failing hospitals will have their management replaced. Foundation Trusts will be given the freedom”—
additional freedoms—
“to expand their provision into primary and community care, and to increase their private services”.
We will debate that later today, but I should complete the quote, or I might be accused of being selective:
“where these are consistent with NHS values, and provided they generate surpluses that are invested directly into the NHS.”
That is exactly what we are proposing.
The Labour party appears utterly confused. Does it support foundation trusts or not? The NHS Future Forum said that all NHS trusts should continue to work towards achieving FT status by 2014. It was right: achieving FT status is about demonstrating clinical and financial stability, and we think that all NHS providers should be expected to do that, in the interests of NHS patients and staff. If we maintained the NHS trust legislative model in statute, we would risk losing the change in mindset and the momentum that is being demonstrated by prospective foundation trusts.
Our consequential amendments 219, 220 and 367 to 370 will simply remove references to NHS trusts when they no longer exist—and not, of course, until then. For the hon. Member for Pontypridd, I add that our amendments 185 to 188 make it clear that—sadly for those in Wales—a foundation trust cannot merge with or acquire a Welsh NHS trust.
The Opposition want to take the retrograde step of de-authorising foundation trusts, retaining NHS trusts under the Secretary of State’s direct control, and having them dependent on the layers of bureaucracy that go with that. There would be all the regulatory requirements for foundation trusts and independent providers, and all the bureaucracy that has accompanied NHS trusts and strategic health authorities. That would undermine the FT regulatory regime and the objective of all NHS trusts becoming FTs. Opposition Members who voted in favour of the original legislation establishing foundation trusts in 2003 can have no credibility in supporting Labour now, because the very purpose of that legislation was to give hospitals greater autonomy.
Other Opposition amendments would simply result in duplication and reduced coherence in the Bill. For example, amendments 1166 and 19 seek to retain controls on goods and services, and borrowing and property, but that would duplicate Monitor’s powers through the licensing regime. Deleting clause 166, as the Opposition propose would undermine our intention of increasing transparency in the public financing of foundation trusts. I am looking for the hon. Member for Slough (Fiona Mactaggart); this would have been her moment. Through our amendments, we can show how we can maintain support for FTs, if necessary, in a transparent fashion, including through a requirement, which the Labour party apparently wants to delete, on the Secretary of State to publish an annual report showing what form of financial support has been given to foundation trusts.
I turn to the amendments tabled by my Liberal Democrat friends below the Gangway, who expressed their intention of improving NHS services and ensuring sustainable access for patients. We all share those aims, but I believe that we have in place alternative approaches to meeting those aims. The hon. Member for St Ives tabled a series of amendments emphasising the need to secure sustainability in the provision of NHS services. Securing sustainable access to meet patients’ needs is fundamental to good commissioning. We would expect the board to ensure that there was sufficient competency over issues when it authorised clinical commissioning groups to take on their new responsibilities, and when holding them to account for doing that job.
As the Government have said many times, our focus is on outcomes, including ensuring that patients have access to the services that they need when they need them. That the outcomes must be sustainable is obviously implied, but that is not necessarily the same as saying that commissioners must ensure the sustainability of particular providers or particular services, as amendments 1205 and 1209 suggest when referring to the sustainability of “existing NHS services”. In some cases it will not be in the interests of patients to maintain the status quo—for example, where those services may be unable to improve in line with new standards of clinical best practice, or where there is clear evidence that centralising specialist services on fewer sites would improve health outcomes, as we have seen in examples relating to cardiac, stroke and trauma services. So although I agree with the intention behind these amendments regarding the role of commissioners, I must urge the hon. Member for St Ives not to press them.
I addressed earlier the hon. Gentleman’s amendments about integration and collaboration. On integration, we agree with the conclusion of the NHS Future Forum that integrating services around the needs of patients and giving patients greater choice over who provides those services are not mutually exclusive. As the NHS Future Forum made clear, this is a false dichotomy. As the NHS Future Forum’s report stated:
“If commissioners want to commission integrated care they will only succeed in doing this by creating a new market in integrated care services and stopping the current commissioning of episodic services from different NHS organisations.”
As the hon. Member for St Ives will recognise, his amendments 1207 and 1208 are based upon that dichotomy, so I ask him to withdraw them.
Mr Lansley
No. I do not want to intrude on the time of other Members.
Amendments 1219 and 1220 tabled by my hon. Friend the Member for Southport (John Pugh) would apply the Enterprise Act 2002 to mergers of the activities of foundation trusts with businesses, but would exclude from these arrangements mergers between foundation trusts. I have given careful thought to this proposal, but I am not convinced that it would address two of the problems of the existing regime.
There is currently legal uncertainty as to when and where the 2002 Act would apply to mergers of foundation trusts. As a result, under the current arrangements for the review of mergers involving foundation trusts by the Co-operation and Competition Panel, there is always a potential risk of duplication—or worse still, double jeopardy. The risk arising from a separate regime for foundation trusts would be increased where a trust’s activities extended beyond Monitor’s remit—for example, where a foundation trust provided social care or supplied goods. Consolidating oversight of foundation trust mergers under the Enterprise Act, as proposed by the Bill, would avoid the risk of double jeopardy and eliminate the uncertainty of the current approach.
Mergers are a specialist area. Hence, we think it is right to maintain existing responsibilities and expertise within the Office of Fair Trading and the Competition Commission, rather than resource a further body to consider potential mergers in health care. It may reassure my hon. Friend if I say that the OFT and the Competition Commission would consult Monitor to ensure that they had a full understanding of the health care issues involved.
Mr Lansley
No.
The OFT and the Competition Commission would obtain Monitor’s view on how a proposed merger would affect competition in the sector and whether it would bring benefits for patients. These views would then be considered, along with other evidence. However, the OFT would have discretion not to refer, where patient benefits outweighed any adverse impacts on competition—further illustration of the fact that competition law is not about promoting competition as an end in itself.
In conclusion—
Mr Lansley
No.
I return to the choice offered in this group of amendments between the Government and Opposition Members. The Government are putting forward a range of amendments to protect patients’ interests and to safeguard them when providers run into difficulties and access to services is threatened. The amendments show that the Government have listened and improved the Bill. These amendments are on top of the changes made at earlier stages to strengthen the safeguards and protections offered by Monitor as a new provider regulator.
The Opposition simply want to delete the whole of that part—delete the safeguards to stop price competition, delete the means to stop cherry-picking, delete the means to enable NHS providers to work on a level playing field. The Government’s new clauses and amendments move us forward with the right safeguards in place. Labour would take us back. I urge the House to support the Government new clauses and amendments in this group—specifically, new clauses 2 and 6 and amendments 90 to 107, 113 to 220, and 366 to 372.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Secretary of State has insisted that the amended Health and Social Care Bill shows that the Government are listening, but despite their reassurances there are many reasons why the Bill remains a threat to the future of the NHS. Central to the reforms is the proposal to increase competition across the NHS by opening it up to providers, particularly those from the private sector. The Government claim that increasing competition drives down costs and improves quality, but overwhelming international evidence suggests that this simply is not the case in health care.
Chris Skidmore (Kingswood) (Con)
Is the hon. Lady placing on the record her party’s opposition to any form of competition in the NHS?
Debbie Abrahams
As we have shown, we are not opposed to private sector involvement in the UK’s health system. What is important is that it should add value and capacity. The Government’s proposals are a completely different ball game.
Debbie Abrahams
No, I will make some progress.
The listening exercise failed to register the concern of many health professionals. Despite what the Government say, many health professionals feel very concerned about the amended Bill. Instead, the Government changed Monitor’s duty from one of promoting competition, as set out in the first version of the Bill, to one of preventing anti-competitive practice. The lawyers will have an absolute field day with that one. The Government talk of reducing bureaucracy, but I think we will see even more bureaucracy as a result of this.
Fiona O'Donnell
Does my hon. Friend recall, as I do, that time and again in the recommitted Bill Committee we asked Ministers and Professor Field what the impact of that change would be? We are still waiting for a satisfactory answer.
Debbie Abrahams
There are many unanswered questions about the Bill, which makes it particularly dangerous.
By opening up competition under the guise of increasing patient choice and clinician-led commissioning, the Government are trying to increase both demand and supply for these services, but the implication for a single-payer health system with a fixed budget, such as the NHS, is that this will inevitably lead to financial meltdown. The only way this can be avoided is by injecting extra capital into the system and the Bill achieves this in many ways. We need to look at not only this cluster of amendments but all the amendments and clauses in the Bill as a whole, because they are interrelated.
First, the Bill allows foundation trusts to borrow money from the City to invest. This is supported by the opening up of EU competition law. Foundation trusts are currently social enterprises and are exempt from part of EU competition, but this opening up will open the flood gates. It means that the trusts will have to compete for tenders with private health care companies. They will have to repay the money they have borrowed by treating more and more patients, including private patients, which will be aided by the abolition of the cap on income from private patients. However, many foundation trusts will still struggle, so the Bill introduces a new insolvency regime to enable private equity companies to buy NHS facilities and asset-strip them, which has direct parallels with the demise of Southern Cross.
Secondly, waiting lists will go up. We are already seeing that across the country, including in my constituency. We have seen that already because unrealistic efficiency measures mean that cash-strapped primary care trusts are rationing access to treatment such as cataract surgery and hip replacements.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
Does the hon. Lady not accept that waiting lists have not gone up in England but have gone up in Wales, where Labour is in control of the NHS?
Debbie Abrahams
It is very interesting that the Government have changed how they measure waiting lists and now use an average, so those indicators are a movable feast.
As waiting lists go up, new health insurance products on the market are enticing people to believe that all their treatment and care can be met fully by the private sector. This will be complemented by new insurance markets set up for top-ups and co-payments. We know from the United States that people on low incomes will be less able to afford these products directly, which will impact on the existing health inequalities that the Secretary of State has stressed his commitment to reducing. Why are we doing this? It will increase and exacerbate the inequalities that already exist in accessing care.
Finally, the Bill allows both the national commissioning board and clinical commissioning groups to make charges. I foresee that in the next Parliament there will be more direct patient charges if this Government get in again. As the NHS budget is fixed, the drive for excess capacity will drain that budget rapidly. That will result in clinical commissioning consortia increasingly becoming rationing bodies. As waiting lists increase, they will attempt to manage the issue by reducing the number of core services. That will drive foundation trusts into further debt, forcing closures, mergers and private management takeovers, and we are already seeing that.
Tom Blenkinsop
On the point about foundation trust mergers, when was the last time the Office of Fair Trading was in charge of a merger of one foundation trust and another? Was it not in fact the Co-operation and Competition Panel, which, according to the Bill, will sit within Monitor?
Debbie Abrahams
I am grateful to my hon. Friend for drawing that to my attention. He is absolutely right.
The Secretary of State’s duty to secure and provide a comprehensive health service is a key issue and needs protecting in full. It should not be changed at all. Why are we changing it if is already acceptable? I am sure that we will revisit the matter tomorrow.
Although the Government have supposedly made concessions, recognising that attempting to privatise the NHS, just as the utilities were privatised in the 1980s would not be acceptable to the public, they have changed tack, not direction. Opening up the NHS to EU competition law may dramatically increase the amount of capital available to bring into our health service, but ultimately that capital will flow back to investors at a profit, at the expense of patients and the UK taxpayer. That will only increase income and health care inequalities even further—another way in which the Secretary of State’s duty will not be met. It is clear that the NHS cannot survive the Bill. The NHS needs appropriate reform and proper accountability, but definitely not an opening up of the market in this way.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the hon. Lady acknowledge that when her party introduced foundation trusts back in 2003, many of us warned that it would lead to precisely the kind of privatisation that is now being threatened? Does she now regret that?
Debbie Abrahams
Fortunately, I was not a Member of Parliament at that time. As I said earlier, I have no problem with the private sector’s being part of our health system when it adds capacity and value, but the Bill is a whole new ball game.
Tom Blenkinsop
There is a fundamental difference between this Bill and any other on the health service. The Government are writing the Enterprise Act 2002 directly into the Bill, which means that it refers to foundation trusts as enterprises and businesses. That extends the ability to merge with business, not just within the NHS framework. That means that the Government have potentially opened up the NHS to European and UK competition law, and they know that full well.
Dan Byles (North Warwickshire) (Con)
What does the hon. Lady say to Professor Stephen Field, who was the chairman of the independent NHS Future Forum? He told the Bill Committee:
“When we spoke to the Government and…a lot of senior staff at the Department of Health…we did not, at any time, pick up any feeling that anyone wanted a free open market where people could come in and privatise the NHS, as some people have said in the press.”––[Official Report, Health and Social Care (Re-committed) Public Bill Committee, 28 June 2011; c. 15, Q26.]
Debbie Abrahams
I would be happy to forward to the hon. Gentleman a British Medical Journal article that reproduced in full the concerns of health care professionals that were not included in that account. Unfortunately, there is an element of bias in how they have been reported.
Frank Dobson
Steve Field was a great asset to the Government when he was president of the Royal College of General Practitioners and overwhelmingly welcomed everything that they were proposing. That was probably why he was replaced by a new president who does not do that.
Debbie Abrahams
I thank my right hon. Friend.
When I raised these issues in the recent recommitted Bill Committee, the Minister suggested that I was scaremongering and, with the rest of those on the Government side, refused to accept any of our amendments—not a single one. Given what recent revelations are proving, perhaps he would like to withdraw some of his comments and concede that I have not been scaremongering.
I urge Liberal Democrat MPs who have felt compelled to support this Bill and their Front-Bench colleagues but whose conscience tells them that it is wrong to vote against the amendments and the Bill. This is not what they signed up to.
Mr Stephen Dorrell (Charnwood) (Con)
I welcome the amendments that the Government have tabled for consideration. I also welcome the very detailed way in which my right hon. Friend the Secretary of State introduced what is, as I am sure he will acknowledge, a substantial group of amendments. He emphasised that their purpose is to give effect to the undertaking that the Government gave when they set up the NHS Future Forum to ensure that the findings of that forum are reflected in the legislation, and that the Bill, when it reaches the statute book, is built on the work of Professor Field and his colleagues.
One purpose of the amendments is to respond to many of the points that have been made, throughout the passage of the Bill, about the role of Monitor. I completely agree with my right hon. Friend that many of those observations about the supposed role of Monitor have been based on a misunderstanding, whether deliberate or otherwise, of the intention behind the Bill when it was first introduced. Whether the misunderstanding was deliberate or accidental, the Government are responding to virtually all those points in order to make it clear that, in the context of the Bill, the central purpose of Monitor is not to be a blind economic regulator based on the assumption that the health service is simply another utility. Various loose words have been used that bear that construction—but never by Ministers, and the implications of those observations have never been accepted by Ministers. As I have understood it—this is why I have supported the Bill throughout its passage—the Government’s intention has always been to ensure that the new NHS envisaged by the Bill gives effect to the basic commitment on which the Government were elected to ensure that the health service secures equitable access to high-quality health care for all patients regardless of their ability to pay.
Fiona O’Donnell
The right hon. Gentleman referred to a misunderstanding of the original Bill. The Secretary of State said that that arose because he was a poor communicator. Do so many organisations still oppose the amended Bill because he is still a bad communicator or because it is still a bad Bill?
Mr Dorrell
In considering these amendments, it is important to refer to the individual functions of Monitor envisaged in the amended Bill and test them against the assertions that have been made, throughout the passage of the Bill, about what Monitor is there for. We must also test them against the Future Forum’s recommendations about how the role of Monitor should be clarified in order to remove these misunderstandings.
First—I warmly welcome this—it is made clear in the Bill as amended and the supporting documentation from the Department that although the Government intend to continue, as did their predecessor, to encourage the conversion of NHS trusts to foundation trusts, there will be no reduction in the standards required to qualify for the status of foundation trust. The registration principles established by Monitor, which are broadly welcomed throughout the health service, are intended to justify the independence that comes with foundation trust status. Those standards will continue as a gold standard under the new NHS, and achieving them, rather than meeting some artificial deadline, is the key determinant of whether a trust achieves foundation trust status. I welcome the fact that the Government have made that clear. It responds to a specific recommendation by the Future Forum, and it is exactly right.
Mark Simmonds
As always, my right hon. Friend is making an extremely powerful speech. Does he accept the need for Monitor to ensure that foundation trusts not only continue to meet basic standards but continue to improve those standards year on year, and thereby improve patient outcomes?
Mr Dorrell
I absolutely agree with my hon. Friend. One of the further important clarifications in their position is the stress that the Government have placed—rightly—on the importance of the link between Monitor and the Care Quality Commission to ensure that standards in foundation trusts are not just about the achievement of financial targets, but are about standards of care quality delivered to patients. The link between the two regulators—one of quality and the other of financial standards—is an important part of the regulatory structure that the Government are introducing.
Andrew George
I entirely endorse the point that my right hon. Friend makes about the need to uphold standards and the role of Monitor in that respect. However, with regard to the Secretary of State’s response to me about the sustainability of essential services—acute emergency trauma centres—does he agree that Monitor must safeguard those services and not allow them to be eroded by the competitive environment in which they will operate?
Mr Dorrell
I agree that the sustainability of essential services—or, in the Government’s wording, the continuity of essential services—is a key role of Monitor. If I may interpret what my right hon. Friend the Secretary of State said, the patient’s interest is continuity of service, but not necessarily from the same provider for ever more. There has to be a commitment to sustain the service, and if there is to be a change of provider, the service has to be sustained through the change of provider, but the service does not necessarily have to be sustained by the same provider. Nor has there ever been such sustained service. There are not many people who rely on the service once provided by the Westminster hospital, as it is now a block of flats. I believe, however, that the service delivered to patients in this part of London is better as a consequence of the change that resulted from that decision.
Grahame M. Morris
As always, the Chairman of the Health Select Committee, is making a powerful contribution. He has really hit the nail on the head. The fundamental point, as evidenced in the Bill, is not that the provider could change—that has happened in the past, as he said, although the provider has always been a public sector provider, either in an NHS trust or an NHS foundation trust—but that, under the Bill, the provider could well be a private sector provider.
Mr Dorrell
I am grateful to the hon. Gentleman, who is a member of the Select Committee, because he provides me with a link to my next point—I was beginning to wonder how I was going to get on to it.
The health service has not always provided services from a public sector provider. Until this Bill and the powers it gives to Monitor, regulatory bodies in the public sector had not had the opportunity to inquire into the sustainability of services provided by private sector providers. My right hon. Friend the Secretary of State made the point that the role of Monitor under the Bill is to ensure first—if I may repeat myself—that foundation trusts are of a high quality when they are launched; secondly, that they are accountable for retaining their high standards; thirdly, that we intervene early if they start to go off the rails; and, fourthly, that if they get into serious difficulty, we have the capacity, through Monitor, to continue to deliver continuity of service to those who rely on public health provision, whether from an NHS foundation trust or, as a result of the Bill, for the first time from the private sector. I regard that as a significant step forward in the delivery of continuity of care for NHS patients, whether provided, as the vast majority still will be, by public sector institutions or by some of the independent sector treatment centres introduced by the previous Government.
Rosie Cooper
Does the right hon. Gentleman think that standards can be maintained, and be seen to be maintained, in foundation hospitals if they are allowed to do what they are currently doing, which is not to disclose all information relating to, for instance, complaints procedures or whatever? Furthermore, does he not think that board meetings should be held in public?
Mr Dorrell
My understanding is that the Government have clarified that foundation trust board meetings should be held in public and that, in future, it will be a requirement of licensing by Monitor. On the much broader point, I absolutely agree—the hon. Lady, who is another member of the Select Committee, knows that I agree—that providers of care to NHS patients, whether public or private, ought to have an obligation to provide information on the outcomes that they achieve and certainly on any complaints and other processes initiated by patients about the care they receive. That was one of the strong recommendations that the Select Committee made following its work on complaints. I think that that obligation ought to rest on all providers of care to NHS patients, whether they are foundation trusts or any other form of provider.
Barbara Keeley (Worsley and Eccles South) (Lab)
Will the right hon. Gentleman provide some clarification? I think that he said “should” and not “must”. For other functions, particularly relating to local government, the Government seem to be into dropping standards and codes of conduct—that is certainly the case in local councils—but surely trusts “must” have meetings in public, not “should”.
Mr Dorrell
Ministers can correct me, but my understanding is that, under the obligation being introduced, they “must” meet in public. I have no authority to speak for the Government, but I believe that that is what the Government intend. For myself, as a patient of a trust or other NHS provider, whether in the public or private sector, my interest lies in ensuring that the information about my—
The Minister of State, Department of Health (Mr Simon Burns)
Will my right hon. Friend give way?
Mr Dorrell
I am grateful to my right hon. Friend, who answers the hon. Member for Worsley and Eccles South (Barbara Keeley) with very much more authority than is at my disposal.
I want to make one final point and it is a direct response to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). Of all the misrepresentations about the intentions of this Bill that we have listened to since the White Paper was published over a year ago, the most persistent is that this is somehow a Bill—a ramp—for the privatisation of the health service.
I was first a Health Minister more than 21 years ago. Throughout that period I have listened to speeches directed first at my right hon. and learned Friend the current Justice Secretary, when he was Health Secretary, and subsequently at all his Labour and Tory successors, including me, although probably excluding the right hon. Member for Holborn and St Pancras (Frank Dobson). All their legislative and other proposals to introduce more flexible and patient and standards-oriented structures in the health service were opposed by somebody or other on the grounds that they were going to privatise the health service. If that was the purpose of those policy initiatives, the one thing that they all have in common is that they have been singularly unsuccessful. If it is the policy purpose of this Bill to privatise the health service—which I do not for one moment believe it is—it will, I am sure, be as unsuccessful as all the other measures that went before it.
Frank Dobson
I begin with a reminder. I was one of those Labour people who voted against the establishment of foundation trusts and the setting up of Monitor. In doing so, I was supported by those on the Conservative Front Bench, so I do not think that the Conservatives should claim any consistency in these matters.
My second point is that although one would never dream it was true from listening to Ministers or their supporters, it is quite clear that the national health service is now working very well and is more popular than ever; and yet we are told that it needs a radical overhaul. However, the popularity of the national health service at the time of the last general election probably explains why both the Conservative party and the Liberal Democrats promised that there would be no top-down reorganisation of it. However, if neither the Bill as originally produced nor the post-pausal Bill that we have now is top-down change, God knows how one would define it.
The whole purpose of this Bill is to shift us away from the basic collaborative approach to the provision of health care in this country and to substitute a large amount of competition, gradually involving more and more of the private sector and, I believe, privatisation. In order to put things in perspective, it is worth pointing out that when the right hon. Member for Charnwood (Mr Dorrell), ceased to be the Secretary of State for Health, the national health service was performing 5.7 million operations a year in its hospitals. When Labour left office, it was performing 9.7 million operations a year, an increase of 58%. That was the result of improved working practices developed by—
Frank Dobson
No, not for the minute.
That change was the result of improved working practices developed by the people working in the national health service, not the result of any structural changes. It was also partly the result of the biggest hospital building programme in history, as well as a lot more new and better equipment, newer GP surgeries, 78,000 extra nurses and 27,000 extra doctors. Those were among the reasons that the NHS became so much more popular. It is popular because, for most people in most parts of the country most of the time, it is already doing a very good job. However, that is now going into decline, because many people working in the NHS carrying out pre-legislative preparatory work on the proposed changes are having to divert their efforts into bringing about structural change. That is one of the reasons waiting lists and waiting times are going up—something that the Government deny is happening.
Lyn Brown (West Ham) (Lab)
Bearing in mind the lack of popularity of the proposals among our constituents, is my right hon. Friend as worried as I and my constituents are about the £850 million that is being spent on redundancies and the projected £2 billion of primary care trusts’ budgets that is being held back from patient care to cover the risks and costs associated with the reorganisation?
Frank Dobson
I entirely agree. Nobody could possibly claim that redundancy payments constitute money being spent on improving services for our constituents. That is just money down the drain as far as patient care is concerned.
The fundamental problem behind the proposals is that the Government are, in effect, proposing a further major fragmentation of the national health service. In the past, up to the point at which the previous Tory Government introduced an internal market, the spending on administration in the NHS amounted to 4% of the total. That was largely because great big slugs of money were transferred round the system, and I am prepared to accept that there might be some disadvantages in that arrangement. Since then, however, under that Government and the Labour Government, the system has changed to one in which the money follows the patient. That has led to the creation of all sorts of exceptionally expensive systems to bring about individualised transactions, which has resulted in the cost of administering the national health service rising to 12% of the total—an increase of 8%. The NHS is spending about £100 billion a year at the moment, so an extra £8 billion that should have been spent on patient services is now being spent on the administration of the semi-fragmented system. What is now being proposed will involve yet further fragmentation, and I shall explain why I believe we will end up spending yet more money, but not on patients.
Chris Skidmore
The right hon. Gentleman has mentioned the £8 billion being spent on administration in the NHS. I assume that he therefore welcomes the coalition Government’s decision to cut the administration budget by £5 billion by 2015. In his speech so far, however, he seems to be suggesting that the status quo is acceptable. I believe that it is unacceptable. Does he welcome the fact that we will be putting an extra £12.5 billion into the NHS?
Frank Dobson
If the hon. Gentleman—and, for that matter, the Secretary of State and the Chair of the Health Select Committee—had ever listened to what I say, they would know that I think that we need change. We need organic change, however, rather than structural change, because structural change generally costs more than it provides. If the hon. Gentleman thinks that introducing a system in which virtually every transaction will be a legally binding document, with herds of lawyers grasping their share of proceedings, will reduce the amount spent on administration, he obviously believes in Father Christmas and various other mythical figures.
Barbara Keeley
Before we get into any more claims of more being spent, I want to touch on two examples of cuts, caused by the cuts and efficiency savings, which I raised with the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow). The most deprived ward in my constituency is losing its NHS walk-in centre and all the people with long-term conditions are losing active case management. I raised those two cuts made by Salford PCT with the Minister in an Adjournment debate, to which I have received no answer. There is no answer. People in the most deprived wards with the greatest health inequalities are suffering from these cuts. I will not hear any more about more investment being made, because all I see as a constituency MP is less investment.
Frank Dobson
I agree entirely with my hon. Friend. A further point is that I doubt whether there is a single constituency anywhere in the United Kingdom of Great Britain and Northern Ireland that has seen more change in health provision than mine. There are not many places where a virtually trouble-free amalgamation of two major and famous teaching hospitals into one has taken place successfully. There are not very many places that have seen more small GP practices getting together in one location and improving their performance. Those things have always been done with my strong support, even when on some occasions, at least at the outset, the ideas were not popular with some local people. Therefore, I do not accept that I do not believe in change. I believe in sensible change, not stupid change, but stupid change is what we seem to be getting.
Mr Stewart Jackson (Peterborough) (Con)
I admire the right hon. Gentleman’s chutzpah, but I wonder whether he was missing in action during the last Parliament. Some of us were saying in 2008 that the imposition of independent sector treatment centres—Darzi centres—would have a direct impact on the budget of primary care trusts and would cause the development of structural deficits that would impact directly on poorer areas with smaller primary care facilities. Where was the right hon. Gentleman then, when it came to attacking his own Government on that specific issue?
Frank Dobson
I was attacking them! I am sorry if the hon. Gentleman did not notice, but I believe I was the first person to expose the fact that on average the private sector was paid 11% more per operation than the NHS was getting for the equivalent operation. I shall take no lessons from anybody when it comes to opposing some of the daft things that went on. I did oppose them and I am proud to have done so. What is being proposed now, however, goes far beyond that. As my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who has a great deal of knowledge in these matters, has pointed out, there is scarcely any evidence from anywhere in the world to show that a competitive system delivers better health care than a collaborative system.
To ask the essentially collaborative health care system in this country to turn over to being competitive is a bit like asking the Meat and Livestock Commission to promote vegetarianism: it is simply not what people want to do; it is not their approach and nor should it be. It remains the case that Monitor is still rigged in favour of promoting competition. Let me point out—hopefully without putting my glasses on—that clause 58(3) states:
“Monitor must exercise its functions with a view to preventing anti-competitive behaviour in the provision of health care services for the purposes of the NHS which is against the interests of people who use such services.”
However, it does not say that “Monitor must exercise its functions with a view to preventing competitive behaviour in the provision of health care services which may be against the interests of the people who use such services”. Apparently, then, there is a basic, intrinsic and fundamental assumption that competition must be beneficial and non-competition must be harmful. If the Government say that Monitor is neutral, it should be given a neutrality in respect of competition and non-competition. As I think the hon. Member for Peterborough (Mr Jackson) would agree, the unfair competition of some of the independent treatment centres was harmful to and threatened the services provided by neighbouring NHS hospitals. There is clear evidence here of problems within the private sector.
I recall that, a few years ago, United Health—a subsidiary of the US United Health—took over three GP services in my constituency. It bid that it could provide the range of services for less than the local GPs, so it got the contracts. It has not complied with all the conditions that were set, but the primary care trust decided that it could not take it to court because it would be such a lengthy and expensive exercise and it feared that the PCT might not win. Not content with that, United Health recently announced that it was selling the franchise to another private outfit. It did not consult the staff. It did not consult any elected local representatives—neither me nor councillors. Above all, it never consulted the patients. These private sector outfits regard patients as part of the chattels that they can dispose of to maximum benefit and maximum profit.
That illustrates the fact that if we are to have contract-based provision of services, a huge amount of lawyer effort will be put into trying to draw up watertight contracts. What one lawyer thinks is a watertight contract, another lawyer will make a leaky contract by puncturing a hole in it, and we will go over to the system in the United States, where zillions of dollars are spent on court challenges or settlements with the providers of health care.
Furthermore, there is virtually no major American supplier of health care that has not been indicted for defrauding federal taxpayers, city taxpayers, state taxpayers, doctors or patients—and sometimes all five. I thus asked the Secretary of State whether he would rule out giving any NHS contracts to any organisation that had been indicted for defrauding people in another country. He gave me about a page-long answer, which could be summarised as, “No, he would not rule them out.”
We are thus talking about the possibility of European competition law being used to force our Secretary of State to allow people to give contracts to American companies whose greatest claim to fame is that they have defrauded innumerable Americans. I think that that is intolerable. I would have thought that all these anti-EU Conservatives found it rather embarrassing to think that European law was going to be used to allow fraudulent Americans to get contracts working in our national health service. All those things, however, will be possible under the system proposed by the Secretary of State.
Grahame M. Morris
May I take up my right hon. Friend’s point about effective scrutiny and the assurances that Ministers have given the House? The knives prevented us from debating two of the Bill’s most significant clauses in terms of costs and implications, clauses 29 and 30, which deal with the abolition of strategic health authorities and primary care trusts. The redundancy costs will amount to more than £1,000 million.
Frank Dobson
I entirely agree with my hon. Friend. I think that nowadays those who call themselves members of the Conservative party only purport to be Conservatives. The basic Conservative approach in this world is, broadly speaking, not to make great changes without being absolutely certain that substantial benefits will result from them. A proper Conservative recognises the problems that arise during the process of change, and the unpredictability of things in human life. What we have now, certainly in relation in health and possibly in other spheres, is a Government who are going ahead with something which—good God!—cannot be regarded as well thought out, given that they have tabled 1,000 amendments on Report.
Barbara Keeley
I winder whether my right hon. Friend heard the Leader of the House say to the Hansard Society that
“it has simply become too easy for the Government to sideline Parliament; to push Bills through without adequate scrutiny; and to see the House more as a rubber-stamp than a proper check on executive authority.”
He also said that, in the Government’s view,
“a strong Parliament leads to a better Government.”
Does my right hon. Friend believe that the Bill, and the very shortened debate on its recommittal, constitute a good illustration of that?
Frank Dobson
In fairness, I think that given the accuracy of the present Government’s aim, if they tried to rubber-stamp something they would probably miss.
Frank Dobson
People have described me as old Labour, but I have moved on from that. I am now heritage Labour. Part of our heritage, however, is the national health service, and it is not the Tories’ heritage either. Those who play with the national health service—which is what I think the Government are doing, purely for ideological reasons—do us a disservice in two ways. They threaten the likely performance of the national health service and the people working in it, and they threaten the relationship between the British people and the national health service.
Frank Dobson
No, I will not.
I believe that the national health service is popular for two reasons: because, in most parts of the country and for most of the time, it does a good job for people; and because people value the thought that it not only looks after them but looks after their families, looks after their neighbours, and looks after all of us. I believe that, in many ways, that is its most important function.
We live at a time when everyone is filled with growing concern about the divisive elements in our society, and the national health service, along with the feeling that people have for it as a collaborative organisation, is one of the few exceptions to that. The health service does not just bind the wounds of people in this country, but helps to bind us together. That, I believe, is why it is so dangerous that the Government are going against its basic principles, thus risking not only its performance, but its relationship with us and its binding function in our increasingly divided society.
John Pugh (Southport) (LD)
I wish to speak to my amendments 1219 and 1220, and against amendment 10. The House is right to be sceptical about the blessings of the internal market in health. It is right to be worried about price competition, which everyone thinks is a race to the bottom. It is right to be concerned about the reckless extension of “any willing provider”, and it is correct in fearing that health services will be increasingly exposed to competition law, including EU competition law. It should fear the huge transactional costs that will be incurred in the hardening of the commissioner-provider split. It should fear the threat to integration, and it should fear cherry-picking, particularly in a narrow tariff system based on payment by results. It should also fear the blurring of the difference between public and private hospitals, and the financial incentives given to the private sector under the banner of choice.
That is why I dislike the greater part of what Tony Blair did to the NHS. Those who are now Opposition Members voted for all that, and that is where we are now: it is the default position. As one Opposition Member said, Labour has put all the bricks in place. A few moments ago we witnessed the strange anomaly of the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) complaining about a feature of foundation trusts—their ability to borrow on the private market—which I consider to be a direct consequence of Labour legislation.
The choice for the House is not between Aneurin Bevan’s NHS and the Bill, but between Blair’s NHS and Secretary of State’s version. If I were to sum it up neatly, I would say that the Secretary of State’s version most closely resembled Blairism with clearer and more equitable rules. First, there is an overt sector regulator instead of the powerful covert regulating body, the Co-operation and Competition Panel, which has been making all the decisions that Monitor will make in a more overt way. Secondly, there is the outlawing of subsidy to the private sector, which is perfectly possible: the Secretary of State is not minded to take such action at present, but current legislation does not prohibit him from doing so. Thirdly, as Members must acknowledge, the Bill makes a clear attempt to forfend cherry-picking and protect clinical networks by safeguarding integrated provision. It is possible to have an argument about how well that is done, but there is certainly an explicit intention to do it—as, to be fair, there was in some of the activities of the CCP, although in that instance the constraints were somewhat weaker.
Fourthly, since the pause a clear attempt has been made to ensure that Monitor merely regulates, without performing a strategic role in promoting much except the interests of patients. It functions as a regulator and adjudicator on what it is intended to do, rather than occupying an unaccountable strategic role in promoting competition. Clearly much will depend on the mandate that it continues to be given and on its personnel: that will vary over time, and we should be watchful in that regard.
I recently had the benefit—as I think other Members have, too—of the legal advice of 38 Degrees, which is in danger of rapidly becoming the provisional wing of the “Evan Harris organisation.” I carefully read what Mr Roderick said, and I would like to share the details of his comments with the House. He says:
“contracting out services to the private sector is anything but a novel proposition in the NHS”
and
“the government has for some years rolled out the policy of Any Qualified Provider”.
Presumably, that is a reference to the previous Government, not the current one.
Mr Roderick also says:
“the application of procurement law is not by any means new to the NHS”.
Referring again to Labour party principles, he says:
“the current internal Principles and Rules for Cooperation and Competition”—
which were set up by Labour—
“seek to inject…promotion of choice and competition principles into the operation of the NHS”.
On the thorny subject of the definition of “undertaking”, which we debated ad nauseam in Committee, he has this to say:
“The NHS has already developed a structure whereby it is more likely than not that NHS Trusts are undertakings for the purposes of competition”.
Mr Roderick is often cited by Labour Members as representing independent legal advice, but that is what he says. He concludes by saying that Labour’s
“recent reforms…have done much to alter”
the basic
“landscape, even in the absence of legislative change.”
As we have both commissioning and a mixed economy—people are not saying that we ought not to have such an economy—there is a chance that there will be challenges from disappointed providers, and we must try to understand how that would go. In terms of EU law it does not matter how many providers there are out there, as even one will do, and it does not even have to be in the UK. The law can be applied in such circumstances. If these issues are to be taken up by providers who are disappointed in one context or another, it is better for that to be handled by a sector regulator such as Monitor than by the Office of Fair Trading, which would be the default situation.
Diana Johnson (Kingston upon Hull North) (Lab)
I have been listening carefully to the hon. Gentleman’s contribution. He has been talking a lot about Labour party principles—but I wondered about Liberal Democrat principles, and whether he feels completely relaxed about the opening up of the NHS to privatisation.
John Pugh
Perhaps the hon. Lady has not understood the point that I was making. Her own Government were responsible for the opening up that she talks about and fears, and most Labour Members voted for it. I did not vote for foundation trusts, nor did many of my party colleagues. Clearly Labour Members did, however, and we will return to that.
It is a fair point to say that if we have Monitor, that does not take us out of the whole legal web, as it cannot stop other legal processes, or a disappointed provider going further. However, it dramatically lessens the impact, and dramatically reduces the probability of that happening. We can only escape this legal web effectively if we take Mr Roderick’s advice and re-examine each and every element and characteristic of the NHS structure—or, to put it simply, if we reverse Blairism.
Grahame M. Morris
I am privileged to have the opportunity to speak in this debate on an issue close to my heart. A number of Opposition Members—and perhaps Members across the whole of the House—have taken advantage of the opportunity to spend a day with the NHS to see at first hand some of the issues and problems and to discuss with staff and patients their concerns. Many Members have received e-mails and letters from constituents and from various interest groups, and the issues we are considering this evening are very important.
As my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said during his contribution, the NHS holds a very special place in people’s affections. In many respects it is viewed not unlike a religion, in so far as it is loved and cherished. Members who have had the opportunity to travel to other countries and see different health systems will no doubt be well aware of the high esteem in which our own health service is held throughout the world. It is a real exemplar—a model of a publicly funded, publicly provided health service. As an aside, I point out as a member of the Select Committee on Health that we have a very frugal Chairman, and the furthest we have travelled is to Hackney. My knowledge is therefore based on reading and on evidence submitted to the Committee.
Let us consider the problem we face with the Bill and the amendments and new clauses. I listened carefully to the Secretary of State’s statement, and the real concern among patients, the public and the Opposition is, what are the motivations behind these reforms? I worked in the health service for a dozen years or more and have taken the trouble to look into the various options in some detail. Ministers have said that there are precedents for Bills of this complexity, but I would be staggered to find that there are. It is incredibly complicated and has been subject to numerous amendments. As members of the Bill Committee who are in the Chamber this evening know, many of the arguments originally made by Government Front Benchers were turned on their heads in Committee, and some of those that were rubbished by the Opposition were taken up and rehashed as part of the Future Forum.
Nicky Morgan (Loughborough) (Con)
I am listening very carefully to the hon. Gentleman, as I did in Committee. Indeed, those of us who served on both Committees—the original and the re-committal—deserve a badge of honour. He talks about the Bill being complex. Does he not think that the process has been made more complex by the use of misinformation and emotive language, and by campaigners obscuring the Bill and needlessly causing patients to worry about their ability to access the health service once the Bill has been passed? The point is that free access at the point of need is not changing, and that is what most patients care most about. Does he not agree?
Grahame M. Morris
I am afraid I do not agree with the hon. Lady, as she might expect. The Secretary of State said that it was a question of communication, but I suspect that part of the problem with the Bill is that, far from there being additional clarity, the more that Members of Parliament, the medical profession, health care workers, members of the public and informed commentators have examined the proposals in detail, the greater the number of concerns that have arisen.
If the Secretary of State had been open and honest about the direction of travel and the motivation for these health reforms, perhaps we could have avoided some of the confusions that have arisen. There is no electoral mandate for a huge structural review and reorganisation. I suspect that there is something seriously wrong with the whole privatising agenda and philosophy, which the Secretary of State denies.
Rosie Cooper
Does my hon. Friend believe that misinformation and emotive language almost began and ended when the Prime Minister said that the NHS was safe in his hands? The misinformation began when he fooled the British public into thinking that the NHS was safe. This is the result.
Grahame M. Morris
I am grateful to my hon. Friend for raising that issue, which I will return to later. There were assurances that there would be no top-down reorganisations, but we should note the scale and complexity of this huge, top-down reorganisation. The Government alluded in Committee to the costs of administration, as did other members of the Committee. During Health questions and in Committee, I raised the question of the huge costs of administering Monitor, which have grown exponentially. We have had various estimates from the Government about the true cost, but over the lifetime of a Parliament it could be as much as £500 million, once we know the full extent of the legal challenges that Monitor will be expected to defend. That is a colossal sum.
I wanted to intervene when the Secretary of State referred to clause 60 of the original Bill and the intention to extend the duties of Monitor into the social care element of health and social care, but he would not allow me to do so. I wanted to ask whether any estimate has been made of the cost of such an extension of Monitor’s remit, which I suspect will be considerable.
Pat Glass (North West Durham) (Lab)
The Secretary of State mentioned 38 Degrees, which clearly has touched a raw nerve. Quite apart from the people from 38 Degrees who have contacted me, huge numbers of my constituents have contacted me to express real worries about this issue. Given the concerns of the Opposition, the press and, most importantly, the voting public, how does my hon. Friend think that we all got so out of step with the Prime Minister and the Secretary of State?
Grahame M. Morris
I am grateful to my hon. Friend for expressing that concern, which many people share—even among the Government, although perhaps they conceal it. Such concerns are not restricted just to 38 Degrees and Opposition politicians. Lord Tebbit of Chingford, an outspoken man who could hardly be described as a left-wing agitator, raised real concerns about what he described as these privatising reforms. He said that there is something seriously wrong, and that
“What worries me about the reforms…is the difficulty of organising fair competition between the state-owned hospitals and those in the private sector. In my time I have seen many efforts to create competition between state-owned airlines, car factories and steel makers. They all came unstuck. The unfairnesses were not all one way and they spring from the fact that state-owned and financed businesses and private sector ones are different animals”.
I have rarely found myself in agreement with Lord Tebbit, but on this occasion his analysis is extraordinarily insightful. His comments underline many of the basic contradictions in the Bill and in the subsequent amendments, which number more than 1,000.
Fiona O'Donnell
Apart, perhaps, from his warm comments about Lord Tebbit, my hon. Friend is, as ever, making a well-informed and considered contribution. We face a lack of information, inaccuracy and changing numbers. Does he therefore agree that what we also need, given the concerns raised by many hon. Members about the potential for an increased health inequality gap in this country, is an equality assessment of the Bill?
Grahame M. Morris
I am grateful for my hon. Friend’s contribution, as that is an excellent point. If hon. Members will bear with me, I shall discuss new clause 6 and what I believe the implications of the Government’s proposal would be for the Bill and for health inequalities. I was intrigued by the Secretary of State’s assurances in his opening statement about the responsibilities being conferred on him in the Bill that did not apply when Labour was in power. I believe he said that those powers were devolved to primary care trusts, but if PCTs are disappearing or clustering and strategic health authorities are disappearing over time or being clustered, surely it is right that the Secretary of State, as an accountable politician, should have these powers clearly defined in the Bill. I did not mean to digress, Mr Deputy Speaker. Those remarks related to clause 1 and I shall confine myself to the provisions before us.
As I have said, many concerns have been raised about the approach being taken to this cherished institution, not least those set out by my right hon. Friend the Member for Holborn and St Pancras about patient perception.
Jim Shannon (Strangford) (DUP)
Is the hon. Gentleman aware of the survey carried out among the 50,000 members of the Chartered Society of Physiotherapy? It indicated that 81% do not agree with the proposals for NHS reform—that touches on the issue that he just raised. It also indicated that 89%—almost nine out of 10 of those who work in the health service—believe that patient care will suffer and that 84% do not believe that the Government have considered these changes. Does he believe that the level of concern among those workers in the health service, and among the general public, means that whenever the vote takes place tonight hon. Members should be very careful and should oppose the Bill?
Grahame M. Morris
I am grateful for that information. I know that other hon. Members have spent a day with the health service and I am sure that Ministers take soundings, but I can honestly say that what the hon. Gentleman describes is the feedback I have received from talking to health professionals, patients and so on. I recognise that the Secretary of State has said on numerous occasions that a substantial body of GPs support this approach. When I tuned in to this morning’s “BBC Breakfast” I saw Professor Chris Ham of the King’s Fund being interviewed. He is an eminent and respected commentator on health service issues who has given evidence to the Public Bill Committee and the Health Committee. He gave his view that it was a small cohort of GPs who were signed up and committed to these reforms. I agree with his assessment.
These provisions deal with the role of Monitor, the relevant implications and changes to the failure regime. A “Panorama” documentary on the BBC featured Sir Gerry Robinson, who has some standing in the business community and for previous journalistic investigations into the NHS. The conclusion of his report was that he thought that these reforms could mean
“the end of the NHS.”
That is his conclusion. Even after meeting the Secretary of State he remained unconvinced of the value of the reforms.
The Secretary of State has failed to persuade the public and he has failed to persuade NHS staff of his approach. That has been illustrated by various surveys, through the British Medical Association, by personal contacts and in other ways. Even elements of the business community recognise the level of public opposition and concern. It seems that the principal backers are overseas US-style private health groups, whose interest is not philanthropic. They see the prospect of substantial profits and unprecedented access to billions of pounds soon to be available from NHS coffers. We hear Ministers and Government Members saying that the NHS was open to private sector providers under the previous Administration, and a very small figure—5% or so—was cited in the Public Bill Committee proceedings.
Frank Dobson
My hon. Friend may like to know that even in the final year of the Labour Government just 2.1% of operations were carried out by the private sector.
Grahame M. Morris
I am grateful that that information has been put on the record.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is right to talk about the potential role for overseas health companies. He might have seen the article in The Guardian yesterday stating:
“A German company has been in talks to take over NHS hospitals, the first tangible evidence that foreign multinationals will be able to run state-owned acute services”.
That has become apparent only through freedom of information requests. Does my hon. Friend think that this is the slippery slope that this Bill is going to usher in?
Grahame M. Morris
That point was raised during the Secretary of State’s earlier remarks. [Interruption.] Well, it came in response to a freedom of information request. I thought that his response was illuminating, as he assured us that that would not involve the transfer of NHS real estate, although he did not rule out the possibility that private sector providers would take over the running of these things. The report that I saw said that they would take responsibility for the management and staff, and he gave no rebuttal of that report.
Grahame M. Morris
I will give the Minister an opportunity to do that, if he so wishes.
Mr Burns
There is an air of déjà vu to this debate now, although I am delighted to be taking part in a debate with the hon. Gentleman yet again. May I point out that the only example of what he is saying relates to Hinchingbrooke hospital? What happened there was started by the previous Labour Government—his Government.
Grahame M. Morris
I do not wish to labour the point, but the report in The Guardian said that freedom of information requests to the Department of Health indicated that discussions were taking place between officials in respect of the transfer of between 10 and 20 NHS units—[Interruption.] I am simply reporting what I have read in the paper.
Mr Burns
May I say to the hon. Gentleman that that report is unadulterated claptrap? The trouble is that it was a misunderstanding of the contents of the e-mails. [Laughter.] The right hon. Member for Holborn and St Pancras (Frank Dobson) may think that that is funny, but the e-mails were not about these bodies taking over NHS hospitals; the e-mails were about discussing what their views are on hospitals that are struggling. The e-mails were part of an information-gathering mechanism to find out how policy in the NHS could be improved to deal, within the NHS, with hospitals that might be struggling as part of the foundation trust pipeline.
Grahame M. Morris
I do not find this at all funny. I would find it really worrying if this report is an indication of what is in store. It is rather ironic that the Secretary of State quoted from the Labour party manifesto. Perhaps it might be instructive if I were to quote from the Conservative party manifesto. It said that the Conservatives would
“defend the NHS from Labour’s cuts and reorganisations”.
If this Bill is not the biggest reorganisation that we have ever seen—[Interruption.] Well, it is, even though the Conservatives said that they would not proceed with any such huge reorganisation.
Mr Kevan Jones (North Durham) (Lab)
Would not the Secretary of State be able to clear that up tonight by giving a categorical assurance that no hospital will be transferred to or run by a foreign entity?
Grahame M. Morris
I am happy to give way to the Minister, if he wishes to give that assurance from the Dispatch Box. It would reassure staff and members of the public. Perhaps we can read something into the Minister’s reluctance to give such an assurance.
The Government, despite the spin, are delivering one of the most radical reorganisations ever and in the view of many Opposition Members it will undermine the basic principles of the NHS. When the Health Secretary was shadow spokesman for the then Opposition, at no point did he explain his plan to apply 1980s-style privatisation mechanisms to the NHS. I am an avid follower of health policy and the idea of creating an economic regulator—as we have discovered through a series of parliamentary questions, the costs of Monitor could be £500 million in a single Parliament—is again ironic when we hear the Government talk about waste and bureaucracy.
As for exposing the NHS to competition law, I accept the point made by the hon. Member for Southport (John Pugh), which was also made by my own Front Benchers, that it is not the provisions on the face of the Bill but the changes to the architecture of the NHS that will expose the NHS to European competition law—the same law, as we have heard, as applies to the utility companies. Health would be considered a commodity and £60 billion of the NHS budget would be handed over to private bodies, by which I mean those bodies that were the GP commissioning consortia, now renamed clinical commissioning groups. Despite the assurances about openness, transparency and accountability, those would be private-sector companies and my understanding is that they would not be open to FOI requests. That must be of huge concern to people who champion civil liberties, freedom and transparency. Over the past six years or so, we had no indication from the Secretary of State that he was planning such a radical change.
On the subject of the new failure regime, as set out in the amendments, having sat through the Public Bill Committee on the initial Bill as well as that on the re-committed Bill and having listened intently to the arguments, I cannot decide even now whether this is a U-turn or a side-step. I have read this huge document—the weighty tome that makes up the Bill, with all its various chapters and parts—as well as the impact study and the whole justification behind the Ministers’ arguments was that the NHS needed a market and a failure regime to boost productivity. Has that whole idea been left by the wayside?
Dr Poulter
Does the hon. Gentleman accept, however, that the previous Government failed to put in place any adequate failure regime to deal with situations such as that which occurred at Stafford hospital and that the Bill is a step towards providing a proper overview of what to do when trusts fail and let down patients?
Grahame M. Morris
I am not suggesting in any way, shape or form that every NHS organisation—be it an NHS hospital trust or a community-based organisation—is incapable of improvement. My philosophy, as someone with a bit of a scientific background, has always been that we should assemble an evidence base, pilot a proposal in one area, establish best practice, see where the faults lie, tweak it if necessary and then, if it works, roll it out. This leap-in-the dark approach is flawed and will end in tears. The service is hugely important and touches everybody’s life in this country at one time or another. The whole concept of the Bill is flawed and the way it has been prosecuted is compounding the problem.
Grahame M. Morris
Absolutely. At this late stage in the process, however, these are huge and significant changes.
Nicky Morgan
Just to help the hon. Gentleman, a number of the amendments relate to the continuity of services, which his party and those on his Front Bench asked to have considered by this House on Report rather than being left to the Lords. I am sure that the Ministers can help, but if that subject was not included, I suspect that the number of amendments would be significantly smaller. It is right that they should be considered in this House at this time—does he not agree?
Diana Johnson
Does my hon. Friend agree that if this Bill had been properly drafted in the first place and there had been proper pre-legislative scrutiny, we would not have to have this cartload of amendments brought in at the last moment?
Grahame M. Morris
Again, that is a really good point. An incredible number of complex and detailed changes have taken place during the passage of the Bill, including the listening exercise and the consideration of a series of complex amendments, and even they did not address every issue that had been raised. Essentially, I am trying to say in a clumsy kind of way that the Bill is poorly thought out. I think it is a bad Bill, and if it is implemented it will cause real problems for the service and the people who use it.
Nic Dakin (Scunthorpe) (Lab)
I do not think my hon. Friend is making a clumsy speech at all; he is making a lot of very good points. His point about the Bill being badly drafted and set out is why I have been inundated over the past few days with messages from a range of professionals and service users who are very concerned about where things are going. I applaud my hon. Friend’s approach.
Grahame M. Morris
I am grateful to my hon. Friend for his point and for his kind words. My contention is that the problem with all these reforms is that they tend to unravel once there is an opportunity for not just Members of Parliament but health care professionals and the broader public properly to scrutinise them. Once people have the chance to consider the proposals in detail, there is an outcry such as that described by my hon. Friend.
I have tried to understand the thinking behind the Government’s changes and amendments. As I mentioned earlier, many of the changes fly in the face of the logic of the arguments originally made in Committee and when the Bill was first published. The obvious logical conundrum, if that is the term, can be seen in the fact that the original impact assessments, which were very comprehensive, said that it was essential to create a functioning market to gain the benefit of the reforms. A whole section of the impact study explained why “market exit” was fundamental to reforming the NHS. I heard what the Minister said earlier and I have read the Government’s amendments, but I am not quite convinced—perhaps I am a bit of a cynic—that this is a real concession. If we follow the Government’s logic, that makes the Bill as a package at best inconsistent and at worst it removes the possible benefits that Government Members may wish to promote in terms of the costs of any market system. Instead, we are subject to a strange system. The Secretary of State initially mentioned creating a level playing field to allow access for private health care firms as well as existing NHS and public providers. There are therefore some basic contradictions in the rationale behind some of the reforms, if there was any merit in the arguments initially.
Tom Blenkinsop
Is my hon. Friend concerned, as I am, that 2% of PCT budgets—approximately £2 billion—is being used for this reorganisation? There is a direct effect on my community and the Redcar and Cleveland PCT, where almost £4 million has been taken from health inequality budgets, which could have been used on the front line.
Grahame M. Morris
I am making rather slow progress, but I did want to get on to health inequalities. My hon. Friend makes an excellent and important point. We touched on it briefly in the Bill Committee and it relates to new clause 6. I was concerned about the reports that in the allocations to PCTs and SHAs, the element set aside for addressing health inequalities had been reduced. That should concern us all, especially those who represent areas that suffer high levels of health inequality and deprivation.
It is a bit of an achievement that the Government could take the NHS at its most successful point and turn it around. Government Members have highlighted particular failings, but the NHS had a record number of doctors and nurses and a hospital building programme. There had been a transformation from waiting times of 18 months for routine operations such as knee and hip replacements or removal of cataracts to only a few weeks. The previous Government should be given some credit for that. The improvement was confirmed in patient satisfaction surveys and it is a great shame that the Government have decided not to commission the Department of Health to conduct such studies in the future. I suspect their motives in that regard.
Dr Poulter
That is a good point. Under the previous Government cataract and hip operations were done more quickly, but that was because the Labour Government commissioned private providers. The unfortunate thing was that the providers cherry-picked services and did not provide the integrated health care that this Bill will provide.
Grahame M. Morris
We had this exchange many times in the Committee on a variety of clauses. We need to give some credit to the previous Government. I am old enough to remember when people routinely waited a year, 18 months or longer for life-changing operations such as knee and hip replacements. It is a real quality-of-life issue if someone has cataracts and has to wait a long time for an operation. I accept that Labour used the private sector. I am a socialist and make no apology for that, and I want the provision to be public sector. I was not a Member of Parliament and did not vote for the commissioning of private providers, but I acknowledge that the private sector played a role in bringing extra capacity and some innovation to the service.
Barbara Keeley
My hon. Friend is making a wonderful speech. I wanted to make this point when my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) was speaking about the number of operations and the improvements during Labour’s term of office.
In the 1997 general election when I was campaigning in Wythenshawe and Sale, East constituency, I met someone who had been told that he had to wait two years for vital surgery and was desperately worried that he would die while he was waiting. I met someone in my constituency in last year’s general election campaign who received a diagnostic test on Monday, found he had cancer on Tuesday, went into hospital on Wednesday and was operated on on Thursday and his life was saved. From two years to four days—I thought that was the best testament to the improvement that Labour had brought about in the NHS.
Grahame M. Morris
I am grateful for that example. It illustrates the importance of that improvement, the value that people place on it and how critical it is to people’s health and well-being.
I know that we shall come later to the clauses that lift the cap on private patient work, which the Minister mentioned in his opening remarks. If the cap on private patient work in NHS foundation trusts is lifted and those trusts are under financial pressure—those of us who are in touch with our hospital trusts know that they are under financial pressure, with the reductions in the tariff and other issues—the level of private sector involvement in NHS trusts will increase.
Rosie Cooper
The hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who is also a member of the Select Committee, pointed out that Labour reduced waiting lists and private providers were involved. Does my hon. Friend agree that the general public now face longer waiting lists and more private providers?
Grahame M. Morris
This is the danger. Labour Members have attempted to highlight it, and people are increasingly aware of it.
Frank Dobson
Does my hon. Friend accept that if we want to look at how best to increase the number of people who are treated, the best thing to do is go to the people who do the treatment? When I was Health Secretary, the NHS was doing 160,000 cataract operations a year. Following discussions with the experts, some changes were made—no structural changes—and in the last year for which figures are available the NHS did 346,000 cataract operations a year. The private sector’s contribution averaged 6,000 a year.
Grahame M. Morris
I am grateful to my right hon. Friend for putting those important statistics on the record. Government Members often raised these issues in the Bill Committee so it is helpful to have that clarified with such precision.
I want to deal in more detail with health inequalities, if that is in order, Mr Deputy Speaker. While serving on the Bill Committee and as a member of the Health Select Committee, I have always tried to champion the cause of reducing health inequalities. In the Bill Committee, Opposition Members pushed for greater duties to reduce health inequalities to be placed on the new bodies being created by the Bill.
I am conscious that there has been some movement in this direction. New clause 6 is relevant to the special administration of services and makes references to health inequalities. I would be grateful if the Minister gave some clarification in respect of the point that I wish to make. I am delighted that the Government have recognised that a market system in health care will only worsen health inequalities. My rationale in making that statement is that at least new clause 6 says that services must be kept open where closure would adversely impact on or increase health inequalities. Opposition Members are not convinced that the safeguards are strong enough, that the safeguards could not be overturned or that inherent health inequalities that areas such as mine suffer from so terribly, largely reflecting socio-economic patterns in society, would not be exacerbated.
Jeremy Lefroy (Stafford) (Con)
I have been listening carefully to the hon. Gentleman. Will he accept and welcome the fact that clause 3 imposes on the Secretary of State a duty to reduce inequalities? Is that duty not a welcome innovation in legislation that he expects the Secretary of State to apply with rigour?
Grahame M. Morris
That is a good point. Like the curate’s egg, the Bill is good in parts—and bad in parts. I am prepared to acknowledge the commitment on health inequalities but, as I have mentioned, there are contradictions in the Bill, and that is what I seek to highlight. My concern is that the new structures proposed in the Bill move us away from a co-ordinated health service and towards a competition-based health service. Failure has been touted by Ministers as a driver of improvement, but following the latest U-turn, that commitment seems to have been dropped. I would welcome Ministers’ views on that.
Our concern is that the health service will be left to the worst elements of privatisation, without the supposed benefits of market competition. Members have referred to the British Medical Association and its calls for a co-operative and co-ordinated environment, which an open market would make impossible. When Dr Clare Gerada, the chair of the Royal College of General Practitioners, gave evidence to the Bill Committee, she raised a number of concerns about the clauses that we are discussing—concerns
“about the duplication of care and fragmentation…the under-provision of care once competition starts kicking in, the pace and extent of change, and the capability capacity and competence of GPs”
to deal with the extent of health needs. Most importantly, she said that
“the Bill risks widening health inequalities and could lead to worse patient care”.––[Official Report, Health and Social Care Public Bill Committee, 8 February 2011; c. 43, Q94.]
Julian Sturdy (York Outer) (Con)
The hon. Gentleman talks about health inequalities, but does he accept that under the current system primary care trusts have brought about a number of health inequalities? Certainly in my area of north Yorkshire, the PCT has brought about a number of health inequalities, and I think that that is the case in other areas, too. The system is already delivering that; that is why we need the change.
Grahame M. Morris
The picture is incredibly variable. We should consider many of the policies that the Government are pursuing, not least that on public health observatories, which collect the evidence on which many public health interventions are based. The sustained cuts to their budgets—there is a cut of 30% this year, and 30% next year—are exacerbating the situation. Some PCTs are performing well in this regard, and some are not performing as well. If there are measures that can strengthen our performance, they ought to be welcomed.
We have in the past mentioned some of the public health issues. As far back as 1977, the Department of Health and Social Security’s chief scientific adviser, Sir Douglas Black, commissioned a report on the extent of health inequalities in the UK. The Black report, published in 1980, brought about a sea change in how Governments would respond to health inequalities and reduce their worst effects, particularly for the lower social classes. It is generally acknowledged in more recent reports by Professor Sir Michael Marmot that the NHS can only do so much to address the situation. There are general issues that must be addressed through a whole plethora of Government policies—child benefit, improvements in maternity allowances, more pre-school education, an expansion of child care, and better housing. I mention that in relation to the amendments that we are discussing to highlight the stark danger of a reversal in relation to health inequalities, which are not only influenced by decisions of the Health Secretary, but greatly influenced by decisions taken across Government.
I shall draw my remarks to a conclusion. I am sure that Government Members will be relieved to hear that. [Interruption.] Well, I could go on for longer if they want; I have another six pages. I draw the House’s attention to the real concerns that the general public, the medical profession, staff who work in the service and patients have about particular details—about the new and expanded role of Monitor, and about the implications for the new NHS. It will not necessarily be Monitor that decides the future of failing services; in the end, that will be decided in the courts. Finally, in parts 3 and 4, we are dealing with some of the most contentious issues in the Bill, and I urge Members to consider the issues very carefully and to think about what is at stake, before deciding how to vote on the amendments.
Mark Simmonds
I draw the House’s attention to the Register of Members’ Financial Interests.
I congratulate the hon. Member for Easington (Grahame M. Morris) on a thoughtful, balanced and considered contribution, albeit somewhat lengthy. Some of the key points that he made are worthy of comment. He is absolutely right to highlight the importance of the issue of health inequalities, and it is absolutely right to make sure that the House understands that the Secretary of State and his Ministers are absolutely determined to narrow those inequalities; that is why the Secretary of State has ensured that that is in the Bill.
The hon. Member for Easington is also right to point out that health inequalities are determined not just by health policy. A whole range of factors influence health inequalities, and the best synthesis and summary that I have seen—if he has not read it, he should—is in a report by Professor Marmot.
Mark Simmonds
The hon. Gentleman has read it, which is very good; I see him nodding his head. He also asked a key question about the Government’s motivation for bringing forward the Bill.
Mark Simmonds
I shall finish this point, and then I will happily give way to the hon. Gentleman, because he was extremely generous in giving way. Let me summarise the Government’s motivation in five areas. The first is to improve patient care; the second is to drive up the quality of services; the third is to improve patient outcomes; the fourth is to ensure better value for taxpayers’ money; and the fifth, and perhaps most important, is to ensure that our much-loved national health service has a successful future as a service that is free at the point of need, and a service that is based on requirement, not ability to pay. There should be continued equity of access and, even more importantly, excellence for all.
With the honourable exception of the hon. Gentleman’s contribution, all the contributions from Labour Members, including those on the Front Bench, have completely misrepresented the Bill. There is a degree of complacency creeping into the Labour party. The view that it puts forward—that there is nothing wrong with the national health service, and that it is a perfect, utopian service—is clearly not correct. Its view that no reform or innovation is required is not correct. Its view that no productivity improvements can be made is clearly not correct. The view that there is no problem with patient outcomes across a whole range of clinical indicators compared with the outcomes in our developed-world comparators is clearly not correct. The Labour party’s view that there is no need to reduce the cost of administration and get more resources to front-line patient care is clearly not correct; nor is it correct that there is no need for greater clinical involvement in commissioning and for greater patient choice. The Labour party’s position is purely political. It is not clinical and it does not have the best interests of patients at heart. I urge the Secretary of State and his ministerial team to reject the amendments tabled by Labour.
Valerie Vaz (Walsall South) (Lab)
Does the hon. Gentleman recall these words—“NHS” and “no top-down reorganisation”, said by one David Cameron, leader of the Conservative party?
Mark Simmonds
I do remember that. The changes outlined in both the original Bill and the amendments that have been tabled as a result of the considered and very professional work of Professor Field and his team demonstrate the desire of the coalition Government to make sure that the national health service survives for future generations as a taxpayer-funded service free at the point of need. All the changes set out in the Bill are determined by that.
The hon. Member for Leicester West (Liz Kendall), who spoke for Labour in the programme motion debate, should be wary of praying in aid the BMA. Not only did it object back in the 1940s to the setting up of the national health service, but just prior to the last election, it said that the Labour party was the enemy of the national health service. We need to engage with all the clinical groups within the national health service to ensure that we deliver the best possible patient outcomes for the amount of resources that we can put in.
I am slightly surprised at the repetitive nature of the debate. I have been told by my hon. Friends who sat on the Bill Committee that many of the points that were made in Committee have been made again today. The Government amendments that we are discussing are a direct result of the forum chaired by Professor Steve Field. I thought it unedifying of the right hon. Member for Holborn and St Pancras (Frank Dobson) to try to undermine Professor Field, who does excellent work in a very socio-economically deprived part of Birmingham. If the right hon. Gentleman has not visited Professor Field and seen the excellent work that he does, I suggest he does so.
Mark Simmonds
I give way first to the hon. Member for Worsley and Eccles South (Barbara Keeley).
Barbara Keeley
The speech of my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) is one of the best I have heard in the Chamber, as I think Opposition Members would agree. People outside the Chamber are saying that too.
On repetitiveness in the points that are being made, Report stage allows Members who did not serve on the Committee to say the things that they want to say. It is our chance right across the House to comment on the Bill, so that is not a valid criticism of what is going on in the debate.
Mark Simmonds
I hope the hon. Member for Easington has a better intervention to make.
Grahame M. Morris
Can we agree on one thing—that opinions should be evidence-based? I was amazed that when Professor Steve Field was asked whether the Future Forum had taken independent legal advice on the contentious issue of whether European competition law would apply as a result of the reforms—the matter was raised in the Bill Committee or the Select Committee—he said no, he had not taken independent legal advice. That was a major omission.
Mark Simmonds
I will not get into the nuances and the legal battles that other hon. Members have raised. Professor Steve Field and his team did an excellent job thoroughly and comprehensively in a relatively short time. To be fair to the Secretary of State and his team, they looked carefully at the suggested changes and have incorporated some of them in the clauses before us. I agree with many of them, and I highlighted some of these points on Second Reading—a greater emphasis on integration, wider engagement with a broader range of clinical commissioning teams, and greater protection for services which, in financial or quality terms, may not be providing the service that patients expect. All those have been changed in the Bill.
Almost all the Members on the Government Benches would not support the Bill if it was about privatisation of the national health service. It is not. It tries to ensure that the national health service has a future, and that the organisation that is in the best position to provide a particular service in a particular geographical locality has the ability to do so. That is not just the private sector; it is the voluntary sector, the charitable sector, the not-for-profit sector and the social enterprise sector. The mantra coming from the Opposition seems to dictate that those organisations should not be allowed to provide health care—that unless health care is provided by the state, it should not be allowed. That clearly is wrong. What is important is not the delivery mechanism, but patient outcomes and the quality of service provided.
I shall deal specifically with new clause 2 and amendments 100 to 104, 106 and the subsequent related amendments. They ensure that equity of access continues, irrespective of whether the provider is in a good financial state or not. My right hon. Friend the Member for Charnwood (Mr Dorrell) put his finger on exactly the right point, as he so often does. What matters is continuity of service, but not necessarily from the same provider.
The national health service has always changed in that way. It has always reconfigured services to make sure that the patient receives care of the best possible quality. New clause 2 puts in place an essential mechanism to ensure continued access for patients to NHS services. It is right that the Government are putting in place safeguards to protect patients and taxpayers, but the clause does more than that. It also enables commissioners to replace services with higher quality and better value options. Among the major failures of the last decade in which Labour was in charge of the national health service was not only the decline in productivity, but the fact that there was insufficient decommissioning of poor services and insufficient replacement and improvement of poor-quality service provision. Nowhere is that more marked than in Tunbridge Wells and Stafford.
The primary purpose is to enable Monitor to support commissioners to access services and place conditions on a licence holder. Some of those conditions are set out in the Bill. All hon. Members know that there is considerable variation in performance of organisations within the national health service. Providers who are providing excellent services should be allowed to thrive, innovate and drive the quality of clinical care. Those that are under-performing will require challenging, and support where necessary. Ultimately, if they cannot respond to that support and that challenge, they should be replaced by an alternative provider. That should apply both to the independent sector and to state sector provision. It is not acceptable that, purely because a service is provided by the state, it should be allowed to continue as a substandard service.
Some of the key changes in the new clauses and amendments allow that to happen. They make sure that funding is much more transparent. The existing framework has allowed hidden bail-outs to take place, which all too often have hidden poor management, poor service provision, and the need for clinically appropriate and evidence-driven reorganisation. All too often that has not happened, to the detriment of patient care.
I was pleased to see that the Secretary of State had allowed a safety valve in this part of the Bill, which would enable tariffs to be topped up, particularly for the provision of services in rural areas, such as my constituency in Lincolnshire. This must not be seen as an opportunity for the Department of Health to support and subsidise inefficient management and service provision. All too often there are inefficient cost bases and money could be transferred instead to front-line patient care.
I would be grateful if the Minister, when winding up, confirmed some specific points relating to new clause 2 and the subsequent amendments. Will he confirm that the new system will ensure that innovation is not inhibited—that providers and clinicians will have to configure services not only to satisfy patients, but to improve the quality and productivity of services, which, as we all know, have been very poor in the past decade or so? Will he confirm that the structure set out in the new clauses will enable Monitor to intervene early to ensure that the service provided is safe and provides good-quality, patient-centric services?
Will the Minister also confirm that the proposals build on the system set out in the Health Act 2009, which is in line with the Secretary of State’s consistent assertion that the Bill is about evolution, not revolution? Ministers must not allow the importance of integrated services, vital though they are, to be an excuse to maintain poor-quality providers. In the interests of patients, underperforming incumbents must be challenged and continued innovation must be facilitated and incentivised.
If the Minister has time when winding up, I would like him to address the point that I made to my right hon. Friend the Member for Charnwood, which is that the new clauses seem to ensure that Monitor will maintain minimum-based standards, particularly as they relate to acute foundation hospital trusts. We need commissioners, the Care Quality Commission and Monitor to work together to ensure that there is continuing improvement in patient care and continuing determination and drive to make sure that services are better the next year than they were the previous year. It is unclear from the amendments who will be responsible for co-ordinating that effort to drive up standards continually.
I have two final questions. What will happen if Monitor has to step in to provide advice, shore up a service or provide an alternative service provider, but the commissioners cannot agree on who should be the subsequent service provider? Who will resolve disputes between two commissioning consortia? Will it be the NHS commissioning board, Monitor or the Department of Health? Where a provider delivers a service to more than one commissioner, and one of the commissioning groups has access to an alternative provider already in existence but not another, who decides who will provide the service that has failed?
I will draw my remarks to a close. I am, as I believe are most Government Members, an avid supporter of the national health service. I defer to no other group more than I do to those who work tirelessly in the NHS to provide the excellent care that, more often than not, is delivered, and not only in the state service but across the range of NHS providers. However, if we are to continue the NHS, free at the point of delivery and based on need, not ability to pay, it must reform and change. We cannot allow it to stand still. I believe that these clauses and amendments provide an essential framework to ensure continuity of access to service, value for money for taxpayers and better quality patient care.
Rosie Cooper
Members of the public listening to Government Members this afternoon might wonder whether we were having this debate in a parallel universe, because they have heard the Prime Minister promise that there would be no top-down reorganisation of the NHS, and what did we get? We got the biggest reorganisation in the history of the NHS. The Prime Minister said only recently that everyone was on board and behind the Bill, and yet we find that clinicians, professionals and the public are far from being on board. The Government talk about the protection of services, but the public will have read only yesterday that the Government are meeting McKinsey about the possible transfer, albeit a slow transfer, of up to 20 hospitals.
Rosie Cooper
The Minister keeps saying no, but the reality is that, as I told the Secretary of State, you may very well be fooling yourselves, but you are not fooling the public, and the Bill was wrong. That was followed by a pause, and when you admitted that you had got various bits of it wrong, you then said—
Mr Deputy Speaker (Mr Nigel Evans)
Order. The hon. Lady must desist from using the word “you”, as it refers to the Chair.
Rosie Cooper
I apologise, Mr Deputy Speaker. Each time I said “you”, I meant the Secretary of State.
The Secretary of State simply threw the Bill at the British public after the Prime Minister had promised that this would not happen. I have been very clear in the speeches I have made so far on the Bill that the only people the Secretary of State is fooling are those in the Tory party. He has made changes to the Bill, but we are now beginning the great mix-up and going back to exactly where we were.
The hon. Member for Boston and Skegness (Mark Simmonds) said that Labour did not want progress and good value, and that the coalition programme was all about ensuring that the NHS survived and getting a good return for the taxpayer. Let me tell him that I am absolutely passionate about the NHS. I expect value for money, cutting-edge treatment, efficiency and the best possible care for everyone in this country. The lives of every taxpayer and every family depend on the care they get from the NHS. Second rate will not do for me at all.
However, I do not believe that throwing a grenade into the NHS systems will achieve that. Even breaking big promises will not achieve that, because that will break the trust. I suggest to the Conservative party that the Great British public gave tentative support during the general election and will now withdraw that support rapidly as the Bill progresses. The Conservatives expect the public to believe that the party that promised no top-down reorganisation and then broke that promise can be trusted when it says that there will be no privatisation of the NHS, yet evidence comes to light via freedom of information requests that that is not the case.
What are patients out there actually experiencing? Again, Conservative Members can fool themselves. When they went to accident and emergency units they saw that the four-hour waiting time was being exceeded, so they abolished it. It is already taking longer to treat fewer people, which does not strike me as particularly efficient or good value for money. It took 13 years of a Labour Government to rebuild the NHS after what the previous Conservative Government did to it. Labour reduced waiting lists from two years to 18 weeks. It has taken the coalition Government less than a year to wreck it all again. Broken promises are leading us to an NHS that is broken again.
Let us look at what is currently happening in the NHS. There are two different processes at work: financial efficiency gains and structural reform. The idea was to ask the system to make efficiency gains of 4% each year for four years. On top of that there is the reorganisation, which a Conservative Member has likened to tossing a grenade into the system. We have had muddle, pause, fog and are now effectively back to where we were some time ago.
The reforms do not address the financial challenges, especially the Nicholson challenge. This is costly—making people redundant, throwing organisations into disarray and telling people, “You don’t have a future, you might have a future,” “Let’s have a cluster, let’s not have a cluster,” “Where are you going to work?”, “It’s all going to disappear by 2013,” “There are no PCTs—well, they’re there really, but clusters will do the work,” “No, we don’t have strategic health authorities—well, okay, we’ll keep four of them.” The Marx brothers would be proud of the stops, turns, U-turns, pauses and muddle that there have been. But the bottom line is that the great British public have to watch those antics and are worried about their health service.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does my hon. Friend have any idea of how much the reorganisation is going to cost? The hon. Member for Boston and Skegness (Mark Simmonds) made a very reasonable speech, but I noticed that he was confessing at the end that he did not know how some of the central parts would work, and he posed those questions. Does my hon. Friend have any idea of how it is all going to work at this stage, and what it will cost? If not, does she think it conceivable that enough members of the public can know, and have any confidence in the changes?
Rosie Cooper
I can categorically say that we have asked the questions over and again and we do not get any answers.
Rosie Cooper
How much? I will give way if the Minister tells me exactly how much it is all going to cost. I shall happily sit down; there you go. [Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
Order. This is not a conversation but a debate. I do not think that the Minister indicated that he wished to intervene.
Rosie Cooper
Thank you, Mr Deputy Speaker. You will forgive me; my lip reading was obviously slightly wrong. He looked as if he was trying to tell me something, and I hoped that it might be the answer.
In all such situations I always say, “Follow the money.” What is actually going to happen? If this is costing a lot of money—there is a lot of muddle—it has to be really clear that the driver of the reforms cannot be, as the Secretary of State has previously said, the idea that the NHS is unaffordable; we seem to be able to afford a lot of other things. If the reason is not financial efficiency, it has to be purely ideological.
I understand that 85% of respondents to the NHS Confederation survey were very clear: the hardest job that they could have is to deliver both NHS changes and savings simultaneously. That makes it harder for them to deliver objectives for improving efficiency and quality—but that is what I am told that Government Members are all about; the Bill is supposed to improve efficiency and quality.
Who is going to deliver the health care? The Royal College of Nursing suggests that 27,000 front-line jobs, equivalent to nine Alder Hey children’s hospitals, will disappear. I asked the NHS Confederation whether we would see hospital closures, and it is clear that we will; we are seeing that in various reports. The Bill is three times longer than the Act that created the NHS, and it leaves more questions than answers. I say to the Government that if they believe that the great British public will be fooled by any of this, they are sadly wrong.
I do not normally make personal statements about anybody, but Roy Lilley, a former NHS professional, writes a blog in which he refers to the Secretary of State as “LaLa”; I am sure the Secretary of State has seen it. I have been hearing “La la” all afternoon. This is just nonsense. Just because the Secretary of State or the Tory party says that the world is square, that does not mean that it is. They are insulting the public if they think that they will go along with them.
Monitor makes decisions about the future sustainability of individual services and the patterns of local health services under the failure regime. It is unclear how those decisions would be made, and how and to whom Monitor is accountable. Technically it is an independent body and it should be responsible to Parliament and the Secretary of State, but perhaps the Secretary of State will clarify that.
As the economic regulator, Monitor is given a whole series of powers that ultimately focus on enforcing competition in the NHS. There are still fundamental gaps in how that organisation will be held to account. There is a lack of clarity about how health services can engage with and influence the work of Monitor. Having been chair of a foundation trust hospital, albeit only for a month—because I stood for Parliament and had to resign—I can say that Monitor was a law unto itself. And before the Health Committee, Monitor likened the NHS to utility companies, which does not give me any confidence whatever.
I want to talk about Monitor not consulting commissioners on changes to enhance tariff. Private providers can apply to Monitor for an enhanced tariff to preserve the services that they, as private businesses, are providing to the NHS.
Tom Blenkinsop
One essential point that we have to raise about Monitor is that it is a replica of an economic regulator of the utilities. The four to six companies in the energy sector have just raised gas prices by 18% and electricity by 11%. How does my hon. Friend think Monitor will be able to cope with private companies and health?
Rosie Cooper
I would suggest that it is a failing model, and not one that we should be looking at.
I should like to look at the idea of risk pooling, in which Monitor will have a role. Monitor will be required to top-slice the budgets of foundation trust hospitals to obtain that pool of money. The problem is that if the trust is already in financial difficulty, the fact that Monitor needs to top-slice the FT hospital’s budget could tip it into being unsustainable, and then Monitor would have to act. Does that not seem back to front? It needs looking at. If the foundation trust is unsustainable, Monitor has a duty to take action, yet Monitor may well have precipitated the situation; there seems to be a conflict at the core of that relationship. There is no clarity about how top-slicing will be calculated, or what it will involve. Will the Secretary of State please comment on that?
I shall bring my comments to a close with a quotation that I used in a speech I gave a while ago. In “This Week”, Michael Portillo was asked by Andrew Neil why the Government had not told us before the general election about their plans for the NHS. He replied:
“Because they didn’t believe they could win the election if they told you”—
the public—
“what they were going to do. People are so wedded to the NHS. It’s the nearest thing we have to a national religion—a sacred cow.”
He could not have been more clear. The Government intended to misrepresent their position and mislead voters. I believe that this is the latest stage of that misrepresentation, and the Government must be held to account if they force the Bill through in its current form.
Dr Poulter
I was hoping to begin on a more consensual note, picking up on a few things that have been said around the Chamber on which I thought we could all agree. However, I will first remind the hon. Member for West Lancashire (Rosie Cooper) of why the Government are introducing this Bill. We do have problems in the NHS. Far too much money—about £5 billion a year—is wasted on bureaucracy and could be much better spent on front-line patient care. Over the past 10 years, the number of managers in the NHS has doubled, going up six times as fast as the number of front-line nurses; the hon. Lady is very concerned about that. A lot of things need to change in the NHS so that the service can become more patient-focused and patient-centred. That is why we are making these changes and why the reforms in this Bill have to go through the House.
Particularly important—this has come out of the pause for reflection and the Future Forum report—has been an increased focus on one of the key challenges for the health service and for adult social care: better care of our growing older population. People are living a lot longer and living longer with multiple medical conditions, or co-morbidities as they would be termed in medical parlance. That is a very big human challenge for the NHS, and also a very big financial challenge. We must have a service that better meets and better responds to those challenges. The pause for reflection has led to much more focus on improved integration of care, and that will be very much to the benefit of the older patients and frail elderly whom we all care about.
We have had a lot of discussion about the benefits, or otherwise, of using the private sector. The case for the private sector may have been made much more eloquently by Labour Members than by members of the Government. The hon. Member for Easington (Grahame M. Morris) argued that because the previous Government used the private sector to reduce waiting times, it was effectively used to improve patient care for patients with cataracts and for those needing hip operations or waiting for heart operations. That, in itself, was a good thing, but the problem was that the previous Government used the private sector far too much in a way that allowed it to make profits but not to look towards the integrated care that Government Members would like to see as a result of these health care reforms. As regards looking after the frail elderly, for example, there was cherry-picking of hip operations as part of orthopaedics but without the follow-up care that was required—the physiotherapy, occupational therapy and social services that those older people so badly needed. Yes, the private sector can bring value and benefits to the NHS, as the previous Government recognised, but it has to be done in an integrated way, and that is what we will do as a result of these health care reforms.
Why else do we need to reform the NHS? Are we really happy with the status quo?
Steve McCabe
Before the hon. Gentleman moves on, I want to make sure that I have understood him. Is he saying that under these plans the private sector is to be given a bigger share—a more total share—of areas of care and that it will not be isolated as a bit of expanded capacity to reduce waiting lists? Is he saying that it will have a broader role involving a total package of care for particular sectors? Is that the aim?
Dr Poulter
The aim is consistent with that of the previous Government in bringing in the private sector—to improve patient care. Where the private sector can deliver high-quality patient care—for example, by reducing waiting times—that is a good thing. The private sector can deliver high-quality care but in an integrated way. That is particularly important in the elderly care setting and in rural communities. That is absolutely consistent with what the hon. Gentleman’s Government did and what this Government are trying to build on and develop as a part of this package of reforms.
Are we really happy with the status quo—with the NHS as it stands? I have alluded to some of the waste and bureaucracy and the £5 billion that could be better spent on front-line patient care, but that would be a simplistic view of why we need to improve the NHS. We have heard the names of various bodies being bandied around today. However, on-the-ground surveys of front-line doctors and nurses show, as in a survey conducted in 2009, that in the current NHS the majority of health care staff in hospitals do not believe that looking after patients is the main priority of their NHS trust. What could be more important to a hospital than looking after its patients? The reason for that finding is that the bureaucracy in the processes of health care has often got in the way of delivering good care. Recently, a number of CQC reports throughout my part of the world—the east of England—have indicated failings, particularly in elderly care. The main focus of those reports was that staff were too bogged down with bureaucracy and paperwork and unable to look specifically at the needs of the patients right in front of them.
Barbara Keeley
I think that a few Labour Members are quite surprised by what the hon. Gentleman has said, and the Hansard writers might ask him where it came from. He cannot get away with making a statement like that and not saying where it came from—he should be quoting it. He is saying that the majority of people working in the NHS surveyed in 2009 did not put patient care at the top of the list, and he should quote where that information comes from.
Dr Poulter
The point is—I speak as a front-line doctor who still practises in the NHS—that far too often we see form-filling that gets in the way of our doing our job as doctors in hospitals, and that is not for the benefit of patients.
Dr Poulter
No, sit down. The hon. Lady should listen to this, because it is important. The point is that doctors and nurses need to be allowed to get on and do their jobs.
A key focus is not just about putting more money into front-line patient care but making sure that we have clinical leadership of services. Form-filling for the sake of it does not benefit patients; what benefits patients is allowing doctors to treat those in front of them. Under the perverse incentives that were created previously, the four-hour wait in A and E means that a patient with a broken toe is just as much of a priority as someone with potentially life-threatening chest pain. That is the problem with the service that we have, and that is why the clinical leadership and focus that this Bill is bringing will be so important.
Dr Poulter
I am going to make a little progress. Other speakers want to contribute, so I hope that the hon. Lady will forgive me for not taking her intervention.
The Bill focuses on integration and looks to improve the care particularly of our frail elderly. There is too much silo working in the health service—in primary care, in secondary care and in adult social services. The Bill seeks to integrate services through the role provided by Monitor in helping to provide an overarching view of value for the patient and through the setting up of health and wellbeing boards at local level. That is intended to provide better integration of adult social care with NHS care, which has not happened in all parts of the country.
The hon. Member for Easington made a very good speech in which he said that care was hugely variable throughout different parts of England. That is because in many areas we do not have properly joined-up thinking about how things are done. For example, hospitals are paid on payment by results, but there is no incentive necessarily to reduce admissions and to provide much more focused community care, which would be so important in improving the care of the frail elderly in their communities and in their homes. The Bill is starting to take the first steps towards that sort of joined-up thinking.
If Labour Members are concerned about this, the point was well made by Lord Warner in his recent comments as part of the Dilnot report. The right hon. Member for Holborn and St Pancras (Frank Dobson) laughs, but he served alongside Lord Warner in the previous Government.
Dr Poulter
The right hon. Gentleman did not give way to me, but I will give way to him in a moment and listen to what he has to say. He sat alongside Lord Warner as a member of the Government, and Lord Warner has said that the previous Government did not pay enough attention to how we are better to integrate services and provide adult social care in the context of the NHS and other services.
Frank Dobson
I am glad that when I was Secretary of State for Health, Norman Warner did not get anywhere the Department of Health. I can report, on behalf of my London colleagues, that when he became an arbiter of the future of health care in London he must have been about the most unpopular person who has ever had that job.
Dr Poulter
The right hon. Gentleman was a part of the party of Government at that time. Lord Warner was a leading member, and it is fair to point out that he has come forward with some good cross-party recommendations that we very much welcome. The recommendations point to the fact that the key challenge for the NHS is better integrating services and providing high-quality patient care, especially in elderly care and adult social care. That has not happened as effectively as it should have done in the last 10 years and we need to ensure that it does happen. That is why this Bill is a good thing.
Members on both sides of the House have generally welcomed the use of the private sector where it can add value to the NHS, especially for patients. That has to be a good thing, but we need to ensure—as the Bill does—that we do not have the cherry-picking that we saw in the past. We need to ensure that we have a health service that provides better value for money, better care and more integrated adult social care and health care for the frail elderly.
Liz Kendall (Leicester West) (Lab)
This is a crucial part of the debate that we will have over the next couple of days. Parts 3 and 4 of the Bill are at the heart of the Government’s proposals for the NHS and of the concerns that professional bodies, patient groups, members of the public and Members—at least on this side of the House—have about those proposals. These parts will introduce a new economic regulator for the NHS, modelled on the same lines as those for gas, electricity and railways. They also enshrine UK and EU competition law into primary legislation on the NHS for the first time.
We have also been discussing crucial new amendments that, despite what the Secretary of State says, have not been scrutinised by the Future Forum, about the Government’s new failure regime. That essentially addresses which local services and hospitals—such as we all have in our constituencies—will be allowed to fail.
Each of these subjects should be subject to separate and far longer debates, because they are of such importance to our constituents, our local NHS staff and our local services. However, because the House has been given so little time and the Government have tabled so many amendments, we have been forced to take these huge issues together—[Interruption.] As always, the Minister of State groans from a sedentary position, but Members have a right to question the Government on their proposals for local hospitals and services, and three or four hours is not sufficient. I hope that the other place will take that into account.
The Bill establishes Monitor as an economic regulator, modelled on the same lines as those for gas, electricity and railways. The explanatory notes make this explicit. Page 85 states that clauses in part 3 are based
“upon precedents from the utilities, rail and telecoms industries”.
Indeed, in an interview with The Times earlier this year, David Bennett, the new chairman of Monitor, confirmed that that was the Government’s plan, saying that Monitor’s role would be comparable with the regulators of the gas, electricity and telecoms markets.
Labour Members have consistently argued that such a model is entirely wrong for our NHS. People’s need for health care is not the same as their need for gas, water or telecoms. There is a fundamental difference between needs, ability to benefit, the complexity of services and the fact that they are far more interlinked. The NHS is not a normal market. It is not like a supermarket, or like gas or the railways. There are much more important issues at stake.
The Government have made some minor amendments to Monitor’s duties, but they will not ensure the integration and collaboration that many hon. Members recognise is vital to improving health, especially for patients with long-term and chronic conditions. As my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said, the duties still rig Monitor in favour of competition. It is not only Monitor’s duties that do that. Chapter 2 of part 3 contains 12 clauses that explicitly introduce competition law into primary legislation on the NHS for the first time. The clauses give Monitor sweeping powers to conduct investigations into NHS services; to disqualify senior staff in hospitals and other NHS services; and to impose penalties for breaches of competition law, including the power to fine services that are found to have broken the law up to 10% of their turnover. Not only that, but third parties, including competitors, can bring damage claims against those services.
The Government claim, as the Secretary of State did earlier, that somehow those provisions will not change anything. In that case, why bother to have the clauses in the Bill? As the hon. Member for Southport (John Pugh) said, Labour Members have argued not that the Bill extends the scope of competition law, but that it extends the applicability of competition law to the NHS. It is not just the clauses on Monitor and competition law that do this, but others such as those that abolish the private patient cap on foundation trusts, and other Government policies, such as that of “any qualified provider”.
Andrew George
I hope that the hon. Lady shares my disappointment that, despite the fact that we have debated this issue for four hours and that I have tabled nine selected amendments, I have not had the opportunity to explain the purpose of those amendments—even though the Secretary of State referred to them in his opening remarks. Does she accept, for example, that amendment 1207 relates to clause 58(3) and balancing competition versus anti-competitive behaviour? The other amendments seek to give integration a greater priority for the regulator to enforce.
Liz Kendall
I understand why the hon. Gentleman tabled those amendments and I understand his concerns. Opposition Members have consistently argued that the Bill threatens to pit doctor against doctor and service against service when they should be working together in the best interests of patients. Our view is that a far better approach than seeking to amend the Bill would be to delete part 3, because it is a fundamentally wrong way to treat our NHS. A few small changes to Monitor’s duties would not alter what the Bill seeks to do, and that is why amendment 10 proposes deletion of part 3.
The Bill will guarantee that the NHS will be treated as a full market, and the providers of services will, for the first time, be treated as undertakings for the purpose of competition law. The Secretary of State said that the Bill would not increase the applicability of competition law, but the Minister of State confirmed it when he told the Committee:
“UK and EU competition laws will increasingly become applicable…in a future where the majority of providers are likely to be classed as undertakings for the purposes of EU competition law, that law…will apply.”––[Official Report, Health and Social Care Public Bill Committee, 15 March 2011; c. 718.]
If the Government wish to claim that that would not be the effect of the Bill, they should publish any legal advice they have taken. Again, we have two different stories. The Minister of State says that the Government have taken legal advice, but in answers to parliamentary questions we hear that the Government have not taken legal advice. Members deserve to know what the advice is about the implications of this Bill.
NHS staff, patient groups and members of the public have very real fears about the consequences of the Government’s proposals and the full market that is envisaged in the Bill. The previous Government saw that giving patients more choice and a greater say in their treatment, and bringing different providers into the system—including from the private and voluntary sectors—can bring real benefits, including improving outcomes and efficiency, especially in elective care. But we always did that using clear national standards that this Government are abolishing and with the ability to manage the consequences that choice and competition bring.
John Pugh
Is there not a big difference between making fundamental decisions, as we accept Monitor will sometimes have to do, and what the hon. Lady has just described, which is about taking the lead in the integration and sourcing out of services, which presumably is what the commissioners do? If she has read the other bits of the Bill, as I am sure she has thoroughly, she will be aware that the commissioners have a pivotal role in determining the shape, structure and character of local services.
Liz Kendall
I should add that, as the hon. Gentleman will see, page 6 of the briefing notes that the Government published on the Bill says that clause 104 would
“give Monitor discretion in determining where it is appropriate to include standard licence conditions for the purposes of securing continuity of services”.
As the NHS Confederation asks, how will Monitor have the local information and intelligence to make such complex judgments? How should patients and the public be involved? Monitor then has to keep the level of risk of the service under review, as well as taking decisions about whether and how to set differential prices for providers, to ensure the continuity of the process. How it is supposed to do that and how Members of this House, patients, the public or local councils are meant to hold it to account for that process is far from clear.
My biggest concern about the proposals is that they leave Monitor to intervene proactively to prevent services from reaching the point of failure. None of us wants such an outcome, but it is completely unclear when or how Monitor would do that. Page 10 of the technical annexe to the proposals said that the Government would
“expect Monitor to establish transparent and objective tests to determine when intervention is necessary and what level of support a provider would require”,
and claims that
“This would provide certainty to patients and providers”.
However, we have seen none of those details, and nor do we have any way of changing or influencing what Monitor does about the process, which is a real issue for hon. Members. Even under this Government’s flawed approach, it is astonishing that they say that they would only “expect” Monitor to publish criteria for early intervention. Why is that not in the legislation? Why is Monitor not required to publish and widely consult?
I want briefly to set out a couple of other concerns about the process. If it ends up not being possible to prevent a service from failing, what happens next? A trust special administrator will be appointed to take control of the hospital and report to Monitor and then to the Secretary of State. However, there is nothing in the legislation to say that local clinicians, let alone locally elected representatives, have to agree or sign off such proposals. Indeed, page 15 of the technical annexe says that “where possible”, the trust special administrator should
“secure agreement from clinical senates and clinical advisers”.
The idea is that clinicians would not be required to sign off the decision—the trust special administrator might also consult the health and wellbeing board, for example—about which I know many Government and Opposition Members have been concerned. There is nothing in the proposals to say that Monitor has to look at the impact of decisions in one part of a hospital or service on either the rest of the hospital or the wider health community. With the abolition of strategic health authorities, which take that regional view, that becomes a real concern.
The reason these proposals are so important is that there is a risk that there will be more failing services in future, and not only because of the financial squeeze that the NHS is facing—many hon. Members have talked about the real issue out there, which is that services are struggling to keep going, experiencing problems in balancing books and keeping on NHS staff—but as a direct result of Government policy to drive a full market into every part of the service, albeit without any ability to manage the consequences. In fact, the Government’s own documents make it clear that that is the point of competition. Paragraph B112 of the explanatory notes to the Bill states:
“For competition to work effectively, less effective providers must be able to…exit the market entirely”.
The Secretary of State likes to try to explain his way out of this system, but he cannot have it both ways. Either he wants that—for services to fail and new providers to be brought into the system—or he does not.
Madam Deputy Speaker (Dawn Primarolo)
Order. If the hon. Gentleman will resume his seat, let me say that the knife comes down at 8.30 pm and I would like the opportunity to give the Secretary of State five minutes at the end of this debate. I would therefore be grateful if the hon. Gentleman would watch the clock and bear that in mind.
Andrew George
No pressure, then. I will be as brief as I can. I tabled nine of the amendments in this group, and I had hoped to spend a little more time on them than I have been given this evening. I accept new clause 2, which I shall be supporting; the purpose of that proposal is primarily to rearrange the deckchairs on the Titanic, so that they do not get in the way of the lifeboats. I am happy to support new clause 2, although I have already made clear my views on the Bill and the general direction of the Government’s policy. I am not persuaded by many aspects of the Bill; indeed, I am very unhappy about them. I was very persuaded by the coalition agreement and felt that the balance of policy proposals in it was pretty much right. There were a number of debating points about the role and dynamics of “any willing provider”, but apart from that the themes were absolutely right. However, they were not reflected in the White Paper.
That said, the purpose of my amendments—the right hon. Member for Holborn and St Pancras (Frank Dobson) articulated this point far better, I am sure, than I am about to—is primarily to ensure that Monitor’s role to ensure that anti-competitive behaviour is kept in its box is balanced by looking at the impact of competitive behaviour that might undermine the ability of NHS services to collaborate.
The underlying purpose of amendments 1207 and 1208 is to neutralise or balance the new duty on Monitor to prevent anti-competitive practices that are against the interests of the people who use the services—in other words, patients—by also applying a duty to prevent anti-collaborative practices that would have the same effect. The Government say that that would result in Monitor preventing all practices that were against the interests of patients, but I disagree. Some unsafe practices would be neither competitive nor anti-competitive. The amendments would result in there no longer being a focus mainly on dealing with anti-competitive practices. I believe that that would strengthen the role of the regulator. This is a question of putting competition in its box, and it is important to ensure that it is put properly in its box, properly defined, and that the lid is put on. The purpose of the amendments is to achieve that outcome.
The Secretary of State told me, in response to an intervention relating to amendments seeking to secure a far better ability for Monitor to regulate the integration of services, that it should not be Monitor’s role simply to sustain services that are presumably otherwise unsustainable. The problem with that, in relation to my amendments 1205, 1209, 1229 and others, is that we need to ensure that we sustain the essential services. The important point here, which others have articulated, is that certain services clearly need to integrate. An example is acute emergency trauma centres. If the orthopaedic, paediatric or ophthalmology services were removed from such essential centres, their ability to deal with a wide range of emergencies would be fundamentally undermined. They serve populations of between 250,000 and 500,000 people—sometimes more—and they are absolutely essential. We must ensure that we do not end up with a regulator that allows them to be undermined by imposing a duty on them not to act in an anti-competitive manner.
The purpose of the amendments is to probe these issues, but the Government have made it clear that the NHS will no longer be the preferred provider, which leaves a question mark over the future of those essential and acute services. I will sit down now in order to give the Secretary of State more time than you requested for him, Madam Deputy Speaker, but I want to emphasise that I shall support the Government’s new clause. My amendments are probing amendments, but I wish that we had more time to debate these issues. This is very frustrating.
Madam Deputy Speaker
Order. I just remind the hon. Gentleman that the timetable for the debate was not set by me. I am merely assisting the House to meet its deadlines.
Mr Lansley
I am grateful to my hon. Friend the Member for St Ives (Andrew George) for the additional time, and I appreciate what he said in his speech. On securing continuing access to essential services, we are in exactly the same place. If a service is essential, it will be the responsibility—and, indeed, the objective—of the commissioners of that service to make it clear that they expect the regulator, or the administrator on the regulator’s behalf, to secure access to those services.
That was one of the three points that the hon. Member for Leicester West (Liz Kendall) mentioned. I thought that she made rather a good speech, but its basic premises were flawed. She also said that Monitor would be responsible for making decisions on what happened to services in the event of a failing or failed provider, but that is simply not true. The whole point of this group of amendments, including new clause 6 and amendments 198 and 199, is to make it clear that commissioners will lead in those circumstances. The proposed structure in the event of failure, through the administrator and the regulator, must be led and approved by the commissioners, who will be clinically led. The fact that the hon. Lady can look at the consultation with, for example, clinical advisors and clinical senates, does not preclude the fact that it will be local clinicians leading the process. Nor does it preclude the fact that local authorities will have an opportunity to intervene, through the scrutiny powers that the amendments will bring in. Indeed, even the Secretary of State will have the opportunity to intervene. It will not simply be a matter of Monitor doing this; the process will be led by commissioners and clinicians, and local people will have the opportunity to intervene.
The hon. Lady also mentioned competition. The Labour party seems somehow to have turned against competition, in a complete shift from where it was in 2006. My hon. Friend the Member for Southport (John Pugh) said that we were bringing in Blairite health reforms-plus, but I think that we are doing something altogether more coherent, purposeful and positive. I would far rather that the comparison involved the focus on quality that the noble Lord Darzi brought in when he was a Health Minister. In so far as Mr Blair pursued these objectives when he was Prime Minister, I think that we are doing it much better.
The amendments, and the Bill, will not allow discrimination in favour of the private sector in the way that the last Labour Government did. We are going to stop that. We are going to stop cherry-picking, because variation in price could not be by virtue of the specific characteristics of the provider. Clause 58(10) makes it clear that Monitor cannot discriminate in favour of the private sector. When the hon. Lady’s predecessor as Member for Leicester West, a previous Secretary of State, set a target for the private sector’s proportion of activity in the NHS, she was wrong. We are not going to do that. The only objective is to secure providers that deliver the best quality for patients. That is what we are all about.
I am grateful to other colleagues for their contributions to the debate, to which I cannot do justice. My hon. Friend the Member for Boston and Skegness (Mark Simmonds) asked whether commissioners would lead improvements in quality. The commissioning board will sort out disagreements, monitoring the commissioners, and together they must draw up plans to deal with providers that have failed.
My hon. Friend the Member for Southport asked whether Monitor or the Office of Fair Trading would deal with mergers. If we were to decide that it should be Monitor, the OFT would still have jurisdiction through its merger regime, so we would be duplicating that regime. I can assure my hon. Friend that, when the OFT is involved in any FT mergers, it will seek sectoral advice from Monitor, and that patient’s interests will always be central to the considerations during the merger.
The hon. Member for Easington (Grahame M. Morris) and other Labour Members were going on about the takeover of failing hospitals by foreign companies. Let me make it clear to them that the last Government, in the National Health Service Act 2006, enabled the franchising of an NHS trust to a private company. That is the legislation under which the last Government initiated the franchising of management at Hinchingbrooke hospital. The last Labour Government then passed legislation in the form of the Health Act 2009, which would have enabled exactly the same thing to be done for foundation trusts, following de-authorisation. Our proposals would specifically prevent that, because we prevent de-authorisation in that way and we are withdrawing the 2006 legal framework for NHS trusts, which, in the long run, of course, will cease to exist.
This group of amendments is part of ensuring that the NHS is and always will be there when we need it. Through this Bill, we will strengthen our confidence in continued access to the services patients need. By contrast, the Opposition would leave the NHS stranded; they would take it back; they are by turns reactionary and opportunist. I invite the Opposition to withdraw their amendments and, if not, I invite the House to reject them. I understand the positive intentions of my hon. Friends who have tabled amendments, but I also ask them to withdraw them. Strengthened by our continuing commitment to listen and to respond, I invite the House to agree to the Government new clauses and amendments.
Question put, That the clause be read a Second time.
The House proceeded to a Division.
Madam Deputy Speaker (Dawn Primarolo)
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
The Minister of State, Department of Health (Paul Burstow)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following:
Government new clause 4—Orders under section [Duration of transitional period] that apply to only some trusts.
Government new clause 5—Repeal of sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts].
Government amendments 88, 89 and 108 to 112.
Amendment 17, in clause 117, page 122, line 3, leave out subsection (12).
Government amendments 282 and 285.
Paul Burstow
These Government amendments will make important changes to extend Monitor’s intervention powers over all foundation trusts until 2016. This would give additional time for foundation trusts’ governors to build the capability that they need to be able to hold their boards to account.
As my right hon. Friend the Secretary of State has described, through part 3 of the Bill, Monitor as the sector regulator would have permanent intervention powers over all providers, including foundation trusts. These will allow it to fulfil its duty to protect and promote the patient’s interest and its functions include supporting commissioners in securing continuity of services. That is why we believe that Opposition amendment 17 is not only ineffective, based as it is on non-existent terms of authorisation, but also redundant.
My right hon. Friend the Secretary of State has already confirmed that we agree that it is essential that Monitor, as health sector regulator, can take action to secure patients’ continued access to NHS services, and our plans ensure this. Monitor would have powers under its licensing regime to require a provider to take specific actions if it gets into difficulties. These will be effective safeguards to protect patients’ and taxpayers’ interests, and will support commissioners in securing continued access to services that patients depend on for their care. I hope, therefore, that the hon. Members who tabled the amendment will not press it.
However, the NHS Future Forum raised concerns about the current readiness of foundation trust governors to take on the strengthened role that the Bill provides for them in holding foundation trusts to account as autonomous NHS providers. In response, the Government have agreed that Monitor’s intervention powers should apply to all foundation trusts until 2016, to allow time for their governance arrangements to become fully effective. The amendments provide for the transitional powers to continue until 2016. They also make corresponding amendments to clause 117 on licence conditions supporting use of the powers, and remove clause 116, about identifying which foundation trusts would be subject to the powers.
The amendments do not change the nature of the transitional intervention powers set out in clause 117. Monitor will continue to have the power to remove or suspend members of the board of directors or members of the council of governors. Monitor would also be able to direct a foundation trust to do or not to do specific things within a specified timetable. These powers are similar to those currently available to Monitor in its role as foundation trust regulator, and would allow Monitor to continue to protect the taxpayers’ interest in foundation trusts.
The powers go beyond those that Monitor would have over all providers, under part 3, as sector regulator. They will help to ensure a smooth transition from the current arrangements for NHS foundation trusts. The amendments would allow the Secretary of State to seek further parliamentary agreement to extend the powers beyond 2016 for all or some foundation trusts for up to two years at a time. That power could be used, for example, if there was a significant remaining concern about the governance of some foundation trusts.
If it were decided to extend the powers for some, but not all, foundation trusts, Monitor would be required to go through a process similar to that originally envisaged in clause 116. It would have to publish the criteria that it would use to decide which foundation trusts would remain subject to its intervention powers. Those criteria would be subject to consultation and would require approval from the Secretary of State. The amendments will ensure that the transitional regime proposed in the Bill provides a more secure safety net while foundation trust governors develop the skills and capabilities necessary to hold their boards to account.
The amendments would enable Monitor to rectify avoidable difficulties at a foundation trust while foundation trust governance arrangements developed, ahead of normal regulatory intervention through the licensing regime. They also provide for the extension of the powers, should that prove necessary. I commend them to the House.
Owen Smith
I do not intend to take long, because we must get on to the important next group of new clauses and amendments, which is on the private patient cap; there will be huge interest in that outside this place, and there is far too little time to discuss it. I shall say right at the outset that we will not press amendment 17, because we accept that, as the Minister said, it is effectively made redundant by other amendments that have been tabled.
In some respects, the amendments in the group before us tell the story of the Bill in microcosm. Throughout the progress of the Bill, the Government have responded in two ways. One has been to bolt endless obfuscation and compromise on to the Bill to obscure its true intentions. There was clarity at the outset, in the Bill’s first iteration; it clearly aimed to break up a publicly owned, collaborative NHS and replace it with a competitive, market-driven NHS. The Government have sought to obscure that throughout the Bill’s progress, and have done so relatively effectively. Certainly, more gullible Government Members, perhaps even including the Deputy Prime Minister, have bought into the double-speak about this now being a question of preventing anti-competition, as opposed to promoting competition, but we Labour Members still do not buy that.
Nor do we buy the idea that the other amendments that we have considered today add clarity. In truth, they add to the confusion—the chaos, indeed—that will follow the implementation of the Bill. As the Minister has outlined, the clauses that we are considering effectively extend Monitor’s existing compliance and regulatory roles over foundation trusts to all FTs through to 2016. That is what the Future Forum recommended to Ministers, but they did not do that last time, although they did get rid of the arbitrary 2014 deadline that they had introduced. They are now going a step further and extending Monitor’s compliance functions. That might not be such a bad thing, and perhaps many people will agree with the idea; certainly the Future Forum will. The trouble with it, of course, is that it extends the critical conflict of interest that is at the heart of Monitor’s role.
There is a conflict between what is clearly Monitor’s principal function—as an economic regulator, designed to prevent anti-competitive behaviour and facilitate the exit of providers, such as hospitals, from the marketplace—and its compliance role, which is ostensibly about allowing FTs to flourish, and making sure that they do not fail. How will the Government deal with that apparent contradiction? To use their own words as set out in the original explanatory notes, how will they
“mitigate and manage potential conflicts of interest”
between the transitional functions and Monitor’s new functions? Well, rest easy, because the Government have made a very simple suggestion as to how Monitor should square that circle, which I am sure all Members will find satisfactory, as I do. Clause 62(3), subtly amended by Government amendment 89, explains that Monitor must simply
“ignore the functions it has under section…117 when exercising…its functions”
relating to competition, price-setting, or the licensing of NHS services.
So there we go: in Monitor there are to be Chinese walls, as Ministers colourfully put it in Committee. Monitor retains its role in trying to keep FTs from failing, but it also takes on a role in exiting them from the market and helping other providers—Bupa, perhaps, or Helios, which we know are sniffing around the Department of Health right now—to step into the breach. Chinese walls, competition and confusion: those are the key words for this botched Bill.
Question put and agreed to.
New clause 3 accordingly read a Second time, and added to the Bill.
New Clause 4
Orders under section [Duration of transitional period] that apply to only some trusts
‘(1) Where the Secretary of State proposes to make an order under section [Duration of transitional period] in reliance on subsection (2)(b) of that section (“a section [Duration of transitional period](2)(b) order”), the Secretary of State must notify Monitor.
(2) Monitor, having received a notification under subsection (1), must set the criteria that are to be applied for the purpose of determining to which NHS foundation trusts the order should apply.
(3) Before setting criteria under subsection (2), Monitor must—
(a) consult the Care Quality Commission and such other persons as Monitor considers appropriate, and
(b) obtain the approval of the Secretary of State.
(4) If the Secretary of State approves the proposed criteria, Monitor must—
(a) publish the criteria,
(b) determine, by applying the criteria, to which trusts the order should apply,
(c) notify the Secretary of State of its determination, and
(d) publish a list of the trusts concerned.
(5) If the Secretary of State does not approve the proposed criteria, Monitor must propose revised criteria; and subsections (3)(b) and (4) apply in relation to the proposed revised criteria as they apply in relation to the criteria previously proposed.
(6) If, having received a notification under subsection (1), Monitor proposes to set criteria the same as those it set on the last occasion it received a notification under that subsection, it need not comply with subsection (3)(a).
(7) A section [Duration of transitional period](2)(b) order—
(a) must apply to all the trusts that are determined under subsection (4)(b) as being the trusts to which the order should apply (and to no others);
(b) may specify the trusts to which it applies by reference to their inclusion in the list published under subsection (4)(d).
(8) Subsection (9) applies where —
(a) a section [Duration of transitional period](2)(b) order is in force at a time when there is in existence an NHS foundation trust authorised after 1 April 2014, and
(b) the initial two-year period in relation to that trust has yet to come to an end.
(9) Monitor must—
(a) determine, by applying the criteria it applied under subsection (4)(b), whether section 117 should continue to have effect in relation to the trust after the end of the initial two-year period,
(b) notify the Secretary of State of its determination, and
(c) publish its determination.
(10) If Monitor determines under subsection (9)(a) that section117 should so continue to have effect, the trust is to be treated as if it had been authorised on or before 1 April 2014 and as if the order referred to in subsection (7)(a) applied to it; and section [Duration of transitional period] (5) is accordingly to apply in relation to the trust.
(11) If Monitor determines under subsection (9)(a) that section 117 should not so continue to have effect, section 117 ceases to have effect in relation to the trust immediately after the end of the initial two-year period.’.—(Paul Burstow.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 5
Repeal of sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts]
‘(1) Sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts] are repealed immediately after section 117 is repealed; and in consequence of that—
(a) in section 62(2)(a), omit “or under sections 117 and [Orders under section [Duration of transitional period] that apply to only some trusts] of this Act (imposition of licence conditions on NHS foundation trusts during transitional period)”,
(b) omit section62(3),
(c) in section 94(4), after paragraph (a) insert “and”,
(d) in section 94(4), omit paragraph (c) and the preceding “and”, and
(e) omit section 302(5)(e) and (8A).
(2) This section is repealed immediately after sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts] are repealed.’.—(Paul Burstow.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 19
NHS Foundations Trusts: phasing out of provision of private health care
‘The Secretary of State must make regulations which provide for NHS Foundation Trusts to be prevented from providing services other than those of the health service in England within three years of Royal Assent of this Act.’.—(Andrew George.)
Brought up, and read the First time.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following:
New clause 22—Private health care: rules—
‘(1) Section 44 of the National Health Service Act 2006 (Private healthcare) is amended as follows.
(2) Insert new subsection (A1) as follows—
“(A1) NHS Foundation Trusts must act in accordance with the following rules when carrying out their functions under this section—
(a) NHS Foundation Trusts are not permitted to operate NHS functions or contracts in a manner which promotes their private healthcare operation;
(b) any private healthcare service offered should only be within the provision of the services and procedures which are not also duplicated by the Trust’s NHS functions or contracts; and
(c) the Trust should at all times operate any private healthcare interest in a manner which in no way conflicts with its responsibility to provide unfettered access of its NHS patients to its NHS services.”’.
Amendment 1165, page 159, line 24, leave out clause 168.
Andrew George
The new clauses deal with a totemic issue that has bedevilled the debate throughout and raised concerns. The question whether to raise the cap or leave it where it is is a ham-fisted reaction to our current situation in the Report stage of a re-committed Bill. There should be an opportunity for further consideration, and I hope the issue will be examined in another place.
There has been much hyperbole about the privatisation of the NHS and other themes that have run through the debate. The general concern is that, as a result of various genies being let out of bottles and caps being lifted, we will end up with an NHS driven more by concern with private profit than by concern with matters of patient care. There is a slippery slope, of which that issue is symptomatic, throughout the Bill.
The purpose of the new clauses is to address that issue and retain the cap to ensure that the matter is kept under appropriate control. The rough and tumble of political debate means that we will end up scoring points off each other and asking who introduced foundation trusts and so on. We have been through that playground before and I do not intend to go in that direction, but I want to make sure that we have an opportunity to explore the matter. We do not have much time so I will not detain the House unnecessarily.
The removal of the cap will give more scope for NHS trusts to compete in the market, which will make them more likely to be considered undertakings for competition law purposes, even in respect of NHS services which the hospitals claim their private work subsidises, thus allowing competition law to reach further and more firmly into the NHS. The Government briefing does not even dispute that fact, as far as I can see. Also, if NHS foundation trusts can muscle in on the private market, rather like the BBC, private providers will feel more justified in arguing for the right to compete for far more NHS services, and the courts may well agree.
New clause 19 recognises that pay beds in the NHS represent a challenge, both ethically—it is about how beds can be reserved for paying patients in the same hospitals where poorer patients with higher needs must wait—and with regard to competition law. It would phase out the reserving of beds for paying patients in NHS hospitals by 2015.
New clause 22 would put a bar on foundation trusts offering private services where that would compete with their NHS provision. I certainly know, having undertaken surveys of the NHS 12 years ago, that the specialties with the longest waiting times—I will not say which, but Members might guess—happened to be those in which the most private practice was going on. One might argue that the private practice resulted from the long waiting times, but the long waiting times could have been part of a system that enabled the private sector to flourish. I fully accept—to save the Minister a lot of time in his response—that the new clause is technically very deficient, so I will not press it to a vote, but I want to express my concern and probe the issue in debate.
I know that there are ethical considerations here and that the General Medical Council and others would not only frown on the kind of practices I am implying might go on, but would rule against them. The concern is that the trusts, or those working for them, might be seduced into behaving in ways that drive their NHS patients into the arms of their private wings. Once we go down that road, many conundrums will arise and will need to be sorted out. I do not believe that the Government entirely have a handle on the issue, which is why I believe that simply lifting the cap, despite all the justifications they have given, needs a serious rethink.
Emily Thornberry
I would like to speak to amendment 1165, which stands in my name and those of my right hon. Friend the Member for Wentworth and Dearne (John Healey), my hon. Friends the Members for Leicester West (Liz Kendall), for Halton (Derek Twigg) and for Pontypridd (Owen Smith), and the hon. Members for St Ives (Andrew George), for Southport (John Pugh) and for Leeds North West (Greg Mulholland). It would delete clause 168, which abolishes the cap on the number of private patients who can be treated in foundation trust hospitals. There has been much interest in this issue, and we will seek a vote on the matter if possible.
Earlier, the Secretary of State assured us that the legislation would not result in a market free-for-all. “That will not happen if this Bill is passed,” he said. But close examination of the clause shows that we will certainly be getting a step closer. It will mean that our national health service, where people are tended by our NHS-trained doctors using our NHS equipment, will be full of private patients, who are able to pay more. Hard-pressed hospitals facing increasingly large shortfalls, desperately trying to balance their books, are bound to take in increasing numbers of private patients.
We have been here before. Many of us remember the last time the Conservatives were in power, when there was a two-tier health service: those who could pay got faster treatment and could skip the queue, while those who could not afford to go private had to wait, and many of them had to die.
I am pleased that the Secretary of State has seen the letter in The Times today. It is often concerning to see how he assimilates data, because he seems to listen only to some things and not to others; he listens to what he wants to hear. I hope that he has realised that in The Times today the doctors, nurses, midwives, psychiatrists, physiotherapists and occupational therapists have said that the Bill will destabilise the national health service. They are particularly concerned about the removal of the private patient cap. Why is that? The Government’s own impact assessment, at B156, acknowledges that
“there is a risk that private patients may be prioritised above NHS patients resulting in a growth in waiting lists and waiting times for NHS patients.”
We could not have put that better ourselves, and it is in the Government’s own impact assessment of the Bill.
If we lift the cap on the number of private patients in the time of crisis that the national health service is about to go into, as night follows day the number of private patients in hospitals will increase, forcing out national health service patients. As a result, waiting lists will go up, and what will the public make of that?
Dr Poulter
As the hon. Lady is well aware, the previous Government introduced the private sector in a number of hospitals, and at the moment the private sector works alongside the NHS, helping to cut down on waiting times and the like. She is concerned about the private sector working alongside the NHS in hospitals. Does she have any concerns at the moment based on what the previous Government did in introducing that side-by-side service?
Emily Thornberry
What is extraordinary is that many people who used to go private felt that it was not necessary to do so under a Labour Government because they did not have to wait as they had to under the Conservative Government—that is one thing that I certainly remember. Yes, we have used the private sector as and when it has been necessary to reduce waiting lists, but we are not talking about that now. We are talking about whether there should be a cap on the number of private patients in national health service beds.
Dr Poulter
The hon. Lady is very kind to give way twice. She makes well the point about why the private sector is beneficial. We either agree that the private sector adds value to the NHS and patients or we say that it is a bad thing; it is either working at the moment for the benefit of patients and will work that way in future, or it is not and will not. Which way does the hon. Lady see it?
Emily Thornberry
I am sure that that contribution was of some use to someone in this debate, but I am not going to bother to respond to it.
Helen Jones (Warrington North) (Lab)
Does my hon. Friend agree that the real difference between what was happening under the Labour Government and what is proposed in this Bill is that we used the private sector to treat people on the basis of need identified by the NHS, not ability to pay? This Government propose to allow more people to pay to jump the queue. In that sense, if waiting lists go up, that helps the private sector: there is no point in paying to jump the queue if there is no queue.
Emily Thornberry
Exactly; I am very grateful to my hon. Friend.
The Secretary of State, like the Minister of State, the right hon. Member for Chelmsford (Mr Burns), is fond of quoting the Future Forum. I have a quote from Professor Steve Field that I hope will be of assistance to the House when it comes to discussion of the cap. He said in evidence to the Committee:
“if you opened the cap, it made you more likely to be under attack from EU law, competition and Monitor”.––[Official Report, Health and Social Care (Re-committed) Public Bill Committee, 28 June 2011; c. 14, Q24.]
That is one of the arguments that he used. If the Future Forum is concerned about this being another reason why we should not lift the cap, I hope that the Minister will at least listen to its arguments.
As we heard in Committee, a number of criticisms have been made on both sides of the House about the details of the cap and how it is implemented. Indeed, it is common ground that there ought to be some changes to it. We have no problem about changing and modifying the cap and making it more appropriate, but we do not understand why, just because the cap needs changing, it is simply being lifted completely.
A parallel can be drawn with the carbon emissions cap. If I were working in the Potteries in Staffordshire, I am sure that I would believe that the carbon emissions cap was unfair and went against my personal business. One would need to look at the cap and change it as appropriate in order to make it work properly; one would not get rid of it completely just because there are criticisms of it, unless one had another agenda.
The question is why on earth the Government are considering allowing as many private patients as wish to do so to go into our national health service at a time of crisis, pushing out national health service patients. [Interruption.] If the Minister believes that that is wrong, I will be interested to hear an intervention from him in which I hope he will be able to give us a complete assurance that that will not happen. The fact of the matter is that there are not the necessary safeguards. As we understand it, there will be absolutely no limit. We have no idea how foundation trusts are going to respond to the lifting of the cap. We do not know and neither, with great respect, does the Minister. Why is he allowing this great risk to be taken with our national health service? The clause needs to be looked at very carefully in this place, and I know that it will be looked at very carefully in another place.
Nicky Morgan
I am not sure whether the hon. Lady has seen a note from the Foundation Trust Network that was, I believe, circulated to all Members of the House and sets out six positive reasons why the private patient income cap has worked: it has allowed hospitals to build new units, to buy leading-edge technology, to extend mental health support, to offer fertility treatment, and to provide maternity services. There is also the fact that rental income is caught by the cap. There are some positive benefits in allowing private patients access to be treated by hospitals. In particular, at a time of financial crisis, bringing new technology into the NHS must be a good thing.
Emily Thornberry
I am grateful to the hon. Lady. I think that if we were to stop and walk away from party politics, we would be quite close on this matter. We do not have a problem with there being a cap; the problem is how it is implemented. I think that, deep down, she agrees with us. The difficulty is that her party wants to get rid of the cap completely, and that will have a completely different effect on the national health service. We are happy to sit down and talk to the agencies that will be affected and to make improvements in the working of the cap, but getting rid of it completely is behaving recklessly with our national health service.
Nicky Morgan
The misinformation and emotive language that has been used throughout the whole debate has been using patients at the heart of this. Everything we have heard so far on both sides of the House, perhaps prompted by the hon. Lady’s remarks, has been about how bringing in private patients is bad for the NHS. In fact there are some good aspects. I am pleased to hear that there can be some agreement between both sides of the House.
Emily Thornberry
That is why I have been relying on the Government’s impact assessment as perhaps the strongest part of my argument. I have also relied on what Professor Field has had to say. I would now like to turn to Baroness Williams, who wrote an article published on 4 September that I commend to the House, in which she says:
“One thing that remains…is the decision to lift the cap on private beds in foundation hospitals. Not only could that mean that many of our finest hospitals would gradually become private, it also means that inevitably foundation hospitals would be subject to European and British competition law.”
Many organisations and people agree with us on this, and that is why the House should pause and think about what we will be doing to the national health service if we accept this clause. I also pray in aid the Royal College of Nursing’s briefing, which Members who are closely following this debate will have read, in which it says that it is against the removal of the cap and does not believe that it will not have an effect on NHS patients’ access to health care. The BMA has said the same thing.
In essence, the argument is about whether we should have a cap or not. If the House votes tonight to lift the cap, our constituents will ask how it can be that their representative has voted for a clause that allows private patients to fill up the national health service hospital paid for by those constituents’ taxes so that they will be pushed out of it.
Mr Simon Burns
I am grateful to my hon. Friend the Member for Cornwall—I mean the hon. Member for St Ives (Andrew George)—for moving the new clauses and amendment, especially for the constructive and reasonable way in which he did so. He raised several issues and, if I understand him correctly, he sees the amendment as a probing amendment that also puts across several of his concerns about this issue. I hope to deal with the main thrust of his concern in my contribution.
I am also grateful to the hon. Member for Islington South and Finsbury (Emily Thornberry) for her contribution. Her amendment and indeed her comments were more controversial and I have far more disagreement with several of the contentious things that she said, although she will be unaware that I am saying that because she is not listening. She might argue that she is not missing much.
I shall start with a fact. It may have got lost in the telling, but I assume that the hon. Lady realises that there is no cap at the moment for NHS trusts. There is only a cap for foundation trusts. She has not seen the difficulties that she forecasts in NHS trusts, and I hope—although I am not confident of success—that I will convince her that her fears are unfounded.
The Government believe that keeping the cap would damage the NHS and patients’ interests. Removing it would allow foundation trusts to earn more income to improve NHS services, and I will address the safeguards that will be in place to ensure that the armageddon that the hon. Lady predicted will not happen and that my hon. Friend’s concerns are needless.
Removing the cap will enable foundation trusts to earn more money to improve NHS services, and those trusts are telling us that they must be freed from what is an unfair, arbitrary, unnecessary and blunt legal instrument. I do not want to go too far down memory lane, but I must remind the House that there was no intellectual case for bringing in the cap in the first place. It was introduced in 2002-03 in the relevant legislation as a sop to old Labour. The right hon. Member for Holborn and St Pancras (Frank Dobson) says that he has moved on, but he still has the Neanderthal tendencies of old Labour—[Interruption.] Before the Opposition Whip says anything, I should point out that the right hon. Gentleman takes that as a compliment. I am being very nice to him and probably enhancing his street cred. He would not thank the Whip for diminishing that.
The point is that the cap was not brought in after some coherent intellectual argument about protecting the NHS or preventing private patients from overrunning the NHS. It was brought in because the then Health Secretary, Alan Milburn, and the then Prime Minister, Tony Blair, were having considerable problems with some of their Back Benchers on this issue. To avoid a defeat on the Floor of the House, they brought in the cap as a sop to those Back Benchers to buy them off. But it was not introduced consistently for both NHS trusts and foundation trusts—just for the latter.
The cap is arbitrary and unfair. Several NHS trusts that are not subject to the private patient income cap have private incomes well in excess of many foundation trusts. Last year, four of the top 10 private income earners were NHS trusts—that is, without a cap. A few FTs have high private incomes simply because they did a few years ago. The cap locks FTs into keeping private income below 2002-03 levels and means that last year about 75% of FTs were severely restricted by caps of 1.5% or less. Meanwhile, patients at the Royal Marsden benefit from its cap being 31%, and it has consistently been rated as higher performing by the Care Quality Commission.
Andrew George
The Minister is making an interesting point. Will he elaborate further on the proportions of the private work to which he refers? Is that private work for private patients or private work for research, innovation and training, which are important functions of hospitals but are often lost in the debate?
Mr Burns
The hon. Gentleman raises an important point, but the simple answer is that it is a combination of both.
The cap is unnecessary. I remind Opposition Members that the original proposal was not to have one. To suggest that NHS patients would be disadvantaged if the cap was removed, as the hon. Member for Islington South and Finsbury did, is pure and simple scaremongering. Existing and new safeguards will protect them. NHS commissioners will remain responsible for securing timely and high-quality care for NHS patients. The Bill will make FTs more accountable and transparent to their public and staff, allowing us to require separate accounts for NHS and private income and giving communities and governors greater powers to hold FTs to account in performing their main duty, which is to care for NHS patients.
Mr Burns
No, because others want to speak.
I can assure the House that FTs will retain their principal legal purpose—to serve the NHS. This means that the majority of their income will continue to come from the NHS. With no shareholders, any profit they make will have to be ploughed back into the FT, and so will support that purpose of caring for NHS patients. The vast majority of FTs have little, if any, potential to increase private income, never mind the desire to do so. For them, NHS activity will remain the overwhelming majority of the work they do, if not all of their work. It is extremely unlikely that even the most entrepreneurial FTs with international reputations would seek to test the boundaries. Their commissioners, public and NHS staff governors would hold them to account in fulfilling their duties and serving their NHS patients.
For these FTs, however, the cap is a blunt instrument that harms NHS patients. FTs tell us that there is potential to bring extra non-NHS income into the NHS, for example, by developing the NHS’s intellectual property, from innovations such as joint ventures and by using NHS knowledge abroad. Additional demand and income can help organisations to bring in leading-edge technology faster, including in the important area of cancer treatment. I hope that that goes some way to helping my hon. Friend the Member for St Ives. Opposition amendment 1165 would harm the NHS, and new clauses 19 and 22 would stop FTs providing private health care altogether. Many of the other protections proposed would be almost as damaging and reduce income.
We want to ensure that safeguards are appropriate, not harmful. For example, a prohibition on FTs offering privately the same services that they offer on the NHS would rule out most of their current private health care. It could even create perverse incentives to stop providing some services for some NHS patients. We are confident that private income benefits NHS patients. On reflection, we are proposing to explore whether and how to amend the Bill to ensure that FTs explain how their non-NHS income is benefiting NHS patients. We will also ensure that governors of FTs can hold boards to account for how they meet their purpose and use that income. I believe that that is an important move forward.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Will the Minister give way?
Mr Burns
I hope that the right hon. Gentleman will forgive me, but I will not give way, because other hon. Members wish to speak and the debate finishes in 20 minutes.
To my mind, the private patient cap and the proposed new restrictions are both unnecessary and damaging. Indeed, I know that this will drive some Opposition Members potty, but the former Labour Minister responsible for the cap, Lord Warner, repented his sins in the other place, describing it as
“wrong and detrimental to the NHS.”—[Official Report, House of Lords, 12 May 2009; Vol. 710, c. 936.]
I urge Opposition Members not to repeat that mistake and to heed Lord Warner’s advice. I appreciate that the Opposition Benches are not full of champions of Lord Warner—particularly not at that end of the Chamber from which we heard the earlier comments about him—but he is a respected former Labour Health Minister and I would suggest that he knows what he is talking about.
Let me deal briefly with two final points that were made by the hon. Members for Islington South and Finsbury and for St Ives about the safeguards that are in place to offer protection and ensure that NHS patients would not lose out with the removal of the cap. First, the NHS commissioning board and clinical commissioning groups would be responsible for ensuring that NHS patients are offered prompt and high-quality care, and that good use is made of NHS resources, whoever provides care, through robust contracting arrangements. NHS patients will also maintain their right in the NHS constitution to start treatment within 18 weeks of referral. Secondly, as foundation trusts do not have shareholders and cannot distribute surpluses externally, and as their principal legal purpose will remain to serve the NHS, all proceeds from non-NHS work would be reinvested in the organisation, ultimately adding to the level and quality of the NHS service.
The Bill will make FTs more accountable and transparent to their public and NHS staff. Our commitment that FTs will produce separate accounts for their NHS and NHS private-funded services—as well as Monitor’s use of its regulatory powers to ensure a level playing field between providers—will also help to avoid any risk of NHS resources cross-subsidising private care, thereby protecting NHS money. I believe that those five safeguards will protect NHS patients and the NHS, and will not lead to the situation that the hon. Member for Islington South and Finsbury described in her speech.
Emily Thornberry
I do not mean in any way to suggest that the right hon. Gentleman does not believe what he has just said, but what if he is wrong? It is all very well for him to say, “We’re going to lift the private patient cap—we have these safeguards and I believe they’re sufficient to ensure that NHS patients won’t suffer,” and he may be right. However, the difficulty is that he may be wrong, so why are we taking this risk at a time like this? What is the point? What is the benefit?
Mr Burns
I do not think that this will come as a surprise to the hon. Lady, but I do not think that I am wrong, and I say that for the following reasons. First, there has never been a cap on NHS trusts, and the problems that she has speculated about during this debate have never occurred where there is not a cap. Secondly, the reasons that I have outlined would suggest to me that there will not be a problem, particularly as the one hospital that I singled out—the Royal Marsden—has an income cap of 30.7%. Nobody is suggesting that NHS patients are suffering as a result of that, and that is where a substantial income comes from non-NHS work. Finally, the five safeguards that I have highlighted will be powerful measures to ensure that what she describes will not happen.
For those reasons, I would be grateful if my hon. Friend the Member for St Ives did not press his new clause to a vote. I would also hope that, on reflection and having made her points, the hon. Member for Islington South and Finsbury will resist the temptation to press her amendment to a Division. I fear, however, that she is not going to heed my advice, and she will regret it.
Mr Speaker
Order. Four Members are seeking to catch my eye, and I should like to give the person who moved the new clause a couple of moments to speak. Members can do the arithmetic for themselves.
Caroline Lucas
New clauses 19 and 22 also have my name on them, and I should like to say a few more words in support of them as I have not been reassured by the Minister. I find it unacceptable that taxpayers’ money has ever been used to allow private patients to jump the queue and use NHS facilities. The history of the cap was all very interesting, but the bottom line is that it serves an important purpose, which is why it should stay. The Government argue that income from private patients is put back into the NHS and ultimately benefits the health service, but the reality is that when people become ill and need treatment, it is hard to justify asking them to wait longer because capacity in our NHS hospitals is being taken up by private patients. The bottom line is that an NHS hospital has to treat NHS patients, and I do not believe that we have adequate spare capacity sloshing about in the system to justify private queue-jumping.
Some Members will recall that foundation trusts were brought in after Alan Milburn visited the state-owned but privately run Fundación hospital in Madrid. The then Health Secretary was apparently impressed when he was told that the foundation hospital outperformed the Government-controlled hospitals. However, he ignored the argument put forward by the local unions that it was able to do so precisely because the more costly and difficult patients were sent to the fully public hospital nearby.
It is often argued that foundation trusts are about choice, but I would argue that such private treatment should be offered only when there is surplus provision in the system. It is one thing to talk about a choice of general goods and services, but it is enormously inefficient and massively costly to apply that mentality to the health service. Now, we see the present Government trying to use the model introduced by the previous one to allow foundation trusts to do as they please, and lifting the cap on the income that can be derived from private sources.
The hundreds of constituents who are contacting me about this do not want private queue-jumping; they want NHS services paid for from taxation. The future of the NHS should be about developing whole systems, not isolated institutions, and private health care in the NHS should be phased out. The NHS needs to be about building networks across professional and institutional boundaries, not about creating new barriers. It needs to be about IT and information sharing, not reducing connectivity, and about getting more people treated in the community and in primary care. The danger with this Bill is that it will do exactly the opposite and return us to the fragmentation of the time before the NHS.
John Pugh
I supported the amendment tabled by the hon. Member for Islington South and Finsbury (Emily Thornberry)—or, rather, I tabled it independently. I accepted at the time that it was not the most elegant way of dealing with the problem, but I recognise that there is a problem, as do foundation trusts. The cap as it stands has certain perverse consequences, and the NHS cannot fully profit from sources such as intellectual property. NHS profits help to subsidise public services. As the Minister has pointed out, there is no cap on non-foundation trusts, and the current format was to some extent a political compromise because Labour Members raised certain considerations during the passage of the legislation on foundation hospitals. That does not mean that their concerns were not valid at the time.
I am not concerned by the prospect of dramatic privatisation overnight; nor do I think that queue-jumping is the real danger. By abolishing the cap altogether, however, we run the risk that foundation trusts will run on the wrong side of state aid rules, and that their activity will be perceived as economic activity under EU competition law. The more they subsidise general NHS services, the more they will be perceived as engaging in economic activity.
I do not take a doctrinaire view on this issue. Very sensible people, such as Steve Field and the NHS Confederation, have raised the matter. The hon. Member for Leicester West (Liz Kendall) raised it, as did, if I recall correctly, the hon. Member for Islington South and Finsbury in a spirit of compromise in Committee, making the point—I think I am quoting her correctly—that the only alternative to a bad cap is not no cap at all.
There is a genuine fear, however, among people who are far more expert than most hon. Members in this field, which is caused by the blurring of the boundaries between public and private hospitals. We could end up theoretically with a private hospital that has 90% of its patients provided by the NHS. I know we cannot end up with an NHS hospital filled by 90% of private patients, but there is a threshold at which things could quite easily start to become complicated. This a critical issue, which will have to be dealt with in the House of Lords.
Emily Thornberry
The hon. Gentleman has quoted me, so let me clarify that I was quoting the Deputy Prime Minister when I said that the only alternative to a bad Bill was not no Bill at all. I was talking about a Bill as opposed to a cap.
John Pugh
I may not have paraphrased the hon. Lady correctly, but I believe that the sentiments I described were expressed by her in discussions of a particular amendment on this subject, but we can go and look at the Committee proceedings to find out whether I am right.
It seems to me that what has happened on this occasion is that the Secretary of State has rehearsed the arguments that we have already heard in Committee. That does not advance things massively. He has supplemented that by saying that better efforts should be made to explain how the cap operates by the foundation trusts themselves, which will be more accountable, as I think he said, to the governing body of the foundation trust. That is an explanation and good explanation is to be desired. The point is, however, that expert opinion—independent of this House— perceives this to be a problem, but it has not been addressed.
Chris Leslie
I intended to make only a short intervention, but given the Minister’s cap on interventions, I decided that I needed to find a brief opportunity to say that removing the private patient cap is the wrong thing to do. The Minister’s basic argument— “I do not think I’m wrong”—really does not cut it. Removing the cap will remove an incentive for reducing waiting lists. The two issues of waiting lists and waiting times and the degree of private business within the NHS cannot be separated: they go hand in hand.
In a sense, a bit of ancient history is required, because it is important to note that the previous Labour Administration reduced waiting times so much that many of the private health insurers were, frankly, complaining. Long waiting lists matter because they are also the lifeblood of the private medical industry. We need only look at the advertising slogans of many private medical insurers to see how they try to entice people with promises of “speedy service” and “getting your health situation sorted out quickly”. This, however, can happen in the context of NHS hospitals.
What we must do is ensure that we put the needs of NHS patients first. My worry about removing the private patient cap is that it changes the incentives relating to how the foundation trusts will work, putting revenue generation ahead of patient treatment. The allure of revenue will, of course, be there, but keeping waiting lists high is, in a sense, part of ensuring that revenue continues to come in. I want to see trusts focused absolutely and completely on reducing waiting times. That is incredibly important.
It has been interesting to hear some of the important points raised by some Government Members—and not just about state aid rules. To me, however, the issue of waiting times and, particularly, this Administration’s watering down of the targets set for them and the issue of removing the patient cap are two sides of the same coin. It is all about driving people to go in a direction that they often do not want to go. People might have some savings and feel they have no choice but to use them for private provision because of the fear of long waiting lists in future. That might be the only way people feel that they can get treated quickly. It is all part of the design to change the whole fabric and nature of the NHS. That is the wrong direction in which to head, and I hope that we can retain the private patient cap.
Diana Johnson
I support amendment 1165. Although I have a great deal of respect for the Minister, his comments did not persuade me. The proposal to remove the cap is an example of the shambolic way in which the Bill has been presented. There seems to me to be very little evidence to back up what the Minister thinks might happen. He thinks that everything will be OK, but the NHS has never been in the position of having to make £20 billion-worth of efficiency savings—or cuts, which is what they really are. I believe that when the cap is removed, trusts will want to increase the income that they can obtain from private patients. My hon. Friend the Member for Warrington North (Helen Jones) made the good point that when waiting lists lengthen—which we know they are already beginning to do—those who pay will do so in order to receive the medical treatment that they want.
After 1997, NHS waiting lists in Hull fell to their lowest ever level. A private hospital that sat in the middle of an NHS trust—it was then the Hull and East Riding acute trust—was sold to the NHS. It had not been getting enough business, because the NHS was doing so well. We have heard in today’s debate about the high level of support for the NHS and about the current high levels of satisfaction, and I do not think that we should take this step.
Earlier, I spoke of the lack of principles that the Liberal Democrats were exhibiting yet again in respect of the NHS. It was interesting to hear the hon. Member for Southport (John Pugh) say that he was not doctrinaire on the issue. So the hon. Gentleman has no principles, and is not doctrinaire either. I recall that, in 2010, the Liberal Democrats campaigned in my constituency on a platform of saving the NHS, not increasing the number of private patients. I think that when this measure reaches the House of Lords, Liberal Democrat peers must stand up and be counted, because it is a disgrace that Liberal Democrat Members should support it today.
My main concern relates to evidence. Where is the evidence that removing the cap will work? I do not think that the safeguards exist to ensure that NHS patients will be protected, and I know that waiting lists are rising, which means that people in my constituency, and in poorer parts of the country, will not be able to gain the access to health care that they deserve. I believe that removing the cap is entirely wrong.
Andrew George
It is a pleasure to follow the hon. Member for Kingston upon Hull North (Diana Johnson), but I do not think she did herself or her party any favours in trying to persuade my Liberal Democrat colleagues and me to follow her or her party’s lead by launching a completely unacceptable attack on my hon. Friend the Member for Southport (John Pugh).
The Minister seemed to be trying to win me over by describing me as “the hon. Member for Cornwall”. His description stimulated my Cornish imperialist tendencies, and I was tempted to change that to “Cornwall and bits of England”. However, I shall leave it for another Bill, perhaps one relating to boundary reviews.
In his response, the Minister said that the cap was a “blunt instrument”. I acknowledged that in my opening remarks: it is indeed a blunt instrument, which does not achieve what I think we all want it to achieve. However, although the current situation is not satisfactory, neither is the proposal to lift the cap. That too is a blunt instrument, as was made clear by many speakers this evening. I do not think the Minister entirely acknowledged that this is a conundrum that needs to be resolved. As I have said before, the Government are right to address the issue and are doing so with the best of intentions, but they have come up with the wrong answer. Indeed, lifting the cap is not an answer at all. Further work is needed, and deleting clause 168 would be a good start.
As I have said, mine are probing proposals. I will support amendment 1165, but I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
Business without Debate
(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Northern Ireland Grand committee
(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Metal Thefts (Electricity Industry)
(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Graham Jones (Hyndburn) (Lab)
I start by declaring an interest, as my partner and my son are employees of Electricity North West and it is her and her colleagues’ constant concerns that have drawn my attention to this very serious matter.
The increase in metal theft in the UK and elsewhere in the past few years has been alarming. Electricity North West has seen a 40-fold increase in thefts over the past 10 years and there is a growing body of opinion that those involved in organised crime, buttered by the benefits of high scrap prices for copper, aluminium and brass, have a free hand without disruption to steal, sell and profit.
The shocking figures speak for themselves. In 2009 there were about 100 reported metal thefts per month according to the Energy Networks Association, which represents the electricity and gas network and utility companies. Two years later, in 2011, that figure has risen to 700 thefts per month, and in one calendar month—March this year—it rose to a record 900 reported thefts. We can contrast that with March 2009, when there were around 70 thefts. That is an increase of more than 1000% in two years.
The Association of Chief Police Officers put the annual cost of metal theft to the communications, energy, transport and water industries at £770 million per annum. It is not just electricity that is being targeted, however. The Energy Networks Association and Electricity North West both believe organised crime is involved and thieves are stealing from telecommunications, gas and water infrastructure, rail and tramways, local authority street furniture, such as manhole covers and gates, housing, schools and other buildings. BT reported in October last year that it had had 900 cable theft attacks on its network in the previous six months, affecting more than 100,000 customers. Virgin Media says that the cutting of cables in Teesside alone has cost £166,000 and 1,700 stolen back-up batteries have cost the company a further £680,000. The British Transport Police estimate that over the last three years cable theft has cost the rail industry £43 million and led to more than 16,000 hours of delays. There is evidence that the theft of gates from railway stations is leaving rail networks dangerously exposed. Metal thefts affecting the supply of gas equipment have resulted in fires and explosions.
There is a human consequence to all these thefts. I visited Electricity North West and was told by staff that there is daily worry about people’s safety as a result of metal theft. Innocent children gain access to unsecure substations. Customers receive dangerous high voltages. There is danger to those illegally entering substations and a danger to staff undertaking routine maintenance.
Just over two months ago a 16-year-old boy died in an electricity substation. This happened in the course of an alleged theft of copper cable. According to the Energy Networks Association, there have been four such deaths so far and at least 50 injured. In June this year, many saw the BBC TV news item of a Leeds man with electricity cable burns from a 21,000 V strike from a live power line—burns so bad his own daughter did not recognise him in hospital. The impact blew part of his skull off, leaving his brain exposed. Leeds magistrates gave him a 12-month community service order for burglary.
The reality is that on a daily basis thefts are taking place against our national energy infrastructure across the UK. These are malicious and leave sites unsafe as well as causing disruption to the public and the economy. These thefts have led to 750 cases of loss of supply to at least 25,000-plus homes. Of these there were over 2,500 cases involving damage to customers’ TVs, computers and boilers as a result of the outages. In addition there have been 23 environmental incidents and at least 60 fires. A recent theft in Yorkshire cost local residents and insurers over £500,000 in broken electrical equipment and boilers as a result of a theft of just £40 of copper when customers’ voltage rose from 240 V to a dangerous 430 V.
In Castleford two houses blew up after the neutral wire was removed, resulting in a 430 V current in a cooker burning through a gas pipe. The incident was caught on video; it is lucky no one was home. Until this year, thefts had been mainly from substations, but Electricity North West, like elsewhere, has seen an increase in thefts of overhead line wires from the top of 30 metre pylons carrying 132,000 V. In one incident in Chadderton recently a business owner noticed that a power line had collapsed on to his roof when he arrived for work. The thieves had climbed up an electricity pylon and cut the wire. The thieves did this at two further pylons, managing to steal two 400-yard lengths of copper cable. The nearby Crown Business Centre at Failsworth has been hit five times by copper thieves this year, frequently leaving their telephone lines down. Nothing is stopping the thieves. Only days after the Chadderton theft, thieves struck in Middleton where National Grid discovered that another piece of copper cabling running between two tall pylons had been cut down.
In Accrington this week, thieves have even taken to stealing the brass locks from numerous substations leaving them accessible to inquisitive young children. Earlier this year, the theft of a £5 brass valve from an oil-filled transformer resulted in 30,000 litres of oil leaking out. Luckily, this was contained within the site, but if it had not been, it might easily have caused road accidents or damaged the local environment.
Every day ENW suffers theft. Some substations are robbed repeatedly, where even electrified fencing has failed to keep the thieves out. Only last month and for the first time, National Grid suffered the theft of the earth wire from one of the larger pylons carrying a 275,000 V power line. The anti-climbing guard was cut and the pylon was climbed in broad daylight. The earth wire was cut, fell to ground and was then cut up. That all requires specialist knowledge and cutting gear.
The earth wire could easily have fallen on to the live wires below, which could have disrupted the supply of electricity to in excess of 100,000 people. Had it been one of the largest pylons carrying 400,000 V, then this figure would have disrupted electricity supply to some 500,000 people.
Frankly, the police and the Home Office have not taken the issue seriously enough. The paltry amount of Government focus on metal theft and a lack of consistent police action across the country have quietly allowed serious organised criminal groups to muscle in on an increasingly lucrative trade. We are talking about the organised thieves with protected rounds who cruise my back alley each week—and other back alleys in Haslingden and Hyndburn—and expert criminals with know-how. The Government must take the issue seriously; I ask the Minister to consider it at the Energy Emergencies Executive Committee.
In March, two men were sentenced to 20 months for the theft of metal from two substations in Kent. The theft caused £125,000-worth of damage for copper that was estimated at less than £100 in value. The reality is that apprehension for metal theft is rare. If the thief is caught, the offence is punishable only under the Theft Act 1968. While most thefts do thousands of pounds-worth of damage, the law considers only the scrap value, which is a few pounds, and the result is usually just a community sentence, which is completely disproportionate to the consequences of the crime. Metal theft from Electricity North West’s network costs customers approximately £2 million a year.
The electricity and gas industry network companies can only do so much to address the problem. Safety remains their paramount concern. They are making infrastructure as secure as possible, but there are hundreds of thousands of individual sites. In the UK, companies and industries have attempted to deal with the issue by deploying various types of defence, including closed circuit television, forensic marking systems, improved building security, locking and fencing, including electrified fencing, which is used in my area.
Even close collaboration with the police, of the kind that takes place in Greater Manchester, has not stemmed the increase in theft. It appears simply to move the crime to another area, company or private property. It has proved almost impossible to prevent metal theft in a cost-effective way. No industry affected by such crimes has found an effective and enforceable system to deal with the receivers of the metals or deter the perpetrators. With copper prices at £6,000 per tonne, and sky-high aluminium prices, Electricity North West believes that the majority of the metal stolen from its network is either stolen to order and sold through poorly regulated scrap dealers, or bulked at a predetermined location and exported to overseas foundries.
At a recent visit to a reputable wholesale scrap metal dealer, Electricity North West found on site some of its equipment, which had been stolen and had entered the cash-only, no-questions-asked system. The UK is at risk from theft tourism, as our European counterparts are implementing robust regulatory systems governing how metals may be bought and traded. That means that organised crime may choose the UK as a soft option for metal theft. France and Belgium are implementing a process of cashless transactions for scrap metal, and other countries are beginning to address the problem. It is clear that current legislation is not fit for purpose. Even allowing for the redoubling of efforts by companies, metal theft continues to rise at an alarming rate.
There is overwhelming evidence that the Government need to focus on the supply chain, and to reclassify criminal deterrents so that the sentence fits the crime. There must be a focus on the people to whom the thieves sell their stolen metal; they are not always scrap metal dealers. As Electricity North West found out, we may be talking about a container collection point beside the motorway, for movement out of Hull sea port. It is therefore imperative that we close down all means of disposal of stolen metal, and do not just target scrap metal dealers.
So far, the Government have stood idly by, relying on legislation from the age of “Steptoe and Son”. They seem incapable of taking, or unwilling to take, reasonable steps to stamp out criminality and organised crime, despite the warm words of Baroness Browning. The Scrap Metal Dealers Act is from 1964. It imposes no obligation on scrap metal dealers to comply with the law; in fact, it does the opposite. Those who register under the Act can be visited by the police, while those who do not need be visited only if there is a reasonable suspicion that they have stolen metal on their site. That is ridiculous.
I call on the Government to consider making the following changes. They should amend the Scrap Metal Dealers Act 1964. Instead of the current registration scheme, the UK needs a robust licensing regime, with scrap metal dealers paying a licence fee to fund the regulation of the licence. Property obtained through theft should be regarded as criminal assets; that would allow the provisions in the Proceeds of Crime Act 2002 to apply. In line with alcohol licensing powers, police authorities should have the power to search and investigate all premises owned and operated by a scrap metal dealer, and to close scrap metal dealers where criminally obtained materials are discovered. We should restrict trade in scrap metals to cashless payments, and introduce a requirement that scrap metal must not be sold or processed until payments have been cleared. Photo identification and CCTV should be used to identify sellers of scrap and their vehicles. Magistrates should have powers to add licence restrictions and prevent closed yards from re-opening, and criminal gangs should be charged in a way that is proportionate to the consequences of the crime, not the scrap metal value. I ask the Minister to use all his efforts to ensure that something is done before it is too late.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I congratulate the hon. Member for Hyndburn (Graham Jones) on securing the debate and thank him for the well researched, thoughtful and constructive way in which he addressed the subject. He has undoubtedly highlighted an issue that is growing in occurrence and severity, and he is right to say that more needs to be done. I hope to set out how we intend to go about dealing with it. I am grateful to the hon. Gentleman for raising the matter today.
In my response I shall focus on three things—the risks posed by metal theft to the electricity industry, what we are currently doing to tackle metal theft in the electricity industry, and how the Government propose to tackle the problem in the future. Let me be clear that the Government fully recognise the serious consequences of metal theft. This is not a victimless crime, as the hon. Gentleman made clear. As he said, a young teenager was recently killed attempting to steal copper cable from a substation in Leeds. That is a terrible thing for all concerned to deal with, and unfortunately was just one of several fatalities that occurred over the past year, along with countless injuries to the thieves themselves and the risk to engineers who are called out in the middle of night to make safe equipment that has been damaged.
It is not only those lives that are put at risk, but those of innocent householders whose appliances can be damaged or catch fire because of a metal theft in their area. The lives of our emergency services attending fires caused by metal theft are also at risk. I, too, was shocked to see the recent footage of a gas explosion at a house fire in Castleford on 8 July. It appeared to me that it was only by pure luck that the firefighters in attendance avoided death or at least serious injury.
Lives lost are not the only consequence of metal theft, as the hon. Gentleman pointed out. Across the energy sector, the main risks are disruption to electricity supplies affecting businesses, households and communities; risks to public safety, including through the loss of communications—999 calls, for example, loss of street lighting, traffic lights and safety-related equipment; and financial losses to businesses. Metal theft does not affect only the energy sector. For example, only this morning thousands of commuters from the south-east, including many from my constituency, were subjected to severe disruption when metal thieves stole 50 metres of signalling cable in the London Bridge area.
I understand that Network Rail has provisionally estimated that the cost of this incident is likely to run well into hundreds of thousands of pounds. Sadly, such thefts cause misery for thousands of commuters, cause damage to the economy and are out of all proportion to the value of the cable stolen. This evening I spoke to the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), about that mindless, irresponsible and utterly foolish attack on the rail network. We are like-minded in our resolve to take action to tackle the problem, and a meeting has already been convened for Ministers across Departments next week to discuss the issue and all its ramifications.
The hon. Gentleman mentioned an incident that occurred in July 2009 in the area around Dartford in Kent, where up to 100,000 properties were left without power as a result of a suspected attempt to steal metal from four 132 kV copper cables. The extent of the damage meant that it took EDF four days to restore supplies fully, causing widespread disruption to homes and local businesses. Ironically, though this incident cost hundreds of thousands of pounds in damage, compensation and goodwill payments, it is thought that no metal was actually stolen.
Owing at least in part to increasing commodity prices, the electricity industry continues to see an increase in the number of incidents of metal thefts experienced across its networks. Figures supplied by the Energy Networks Association, which hosts the security incident reporting system, show that the average number of incidents per month for 2010 was 440. By July this year, after only seven months of data, the electricity industry is experiencing on average 627 attacks every month.
The exact cost to the United Kingdom of metal theft is difficult to ascertain. There is significant under-reporting of incidents and it is not possible to identify and record every cost associated with an incident. In 2010-11, between 80,000 and 100,000 metal theft-related offences were recorded by police. Last year, the Association of Chief Police Officers estimated that the cost of metal theft to the United Kingdom was £777 million a year. The victims cover all sectors of the community, from power and communication supplies and the rail network to local communities, with church roofs and street furniture being stolen.
As we know, and as the hon. Gentleman rightly pointed out, metal theft is driven by a range of factors. Metal is a sought-after commodity, with prices increasing steadily. Current prices on the global exchanges put the value of copper at between £5,500 and £6,000 a tonne. The expectation is that commodity prices will continue to rise in coming years, so we can assume that the incidence of metal theft will continue to rise unless action is taken, which is what we are determined to do.
We take the issue very seriously. Through the security task force of the Energy Emergencies Executive, the Department of Energy and Climate Change and the electricity network operators meet regularly to discuss a range of security issues, and metal theft is a standing item on the agenda. The chair of the task force also represents the electricity sector at the Association of Chief Police Officers’ metal theft working group. Working with the Home Office, we have secured the inclusion of metal theft in its recently published organised crime strategy “Local to Global: reducing the risk from organised crime”, which shows that we share the hon. Gentleman’s view that organised crime is involved in this activity.
The inclusion of metal theft in the organised crime strategy will help to raise the profile of this increasing problem across several critical national infrastructure sectors, including energy, and increase the priority it is given by relevant enforcement agencies. The multi-agency ACPO metal theft working group, which is chaired by British Transport police, has developed a new strategy to tackle metal theft. The working group comprises members from across law enforcement, the utilities sector and Government Departments.
The new strategy covers four objectives: increasing the effort required to steal metal; increasing the risk to offenders; reducing the ease and rewards for offenders selling stolen metal; and increasing the risk for scrap metal dealers of handling stolen material. Progress is being made on a number of actions from this strategy, ranging from developing metal alternatives and considering how to make metals more difficult to steal, which is very much a longer-term action, to developing a more co-ordinated law enforcement approach and intelligence sharing across the utilities sector and police forces on a regional basis.
Although individual progress is being made by police forces and the electricity industry to tackle metal theft, we are conscious that more effort is required if we are to address this problem seriously across all critical national infrastructure sectors. The Government are looking at what more can be done. Discussions, led by the Home Office as the lead Department for crime prevention, are under way with a number of Departments, including DECC, to identify further options for tackling metal theft.
At the recent parliamentary event to which the hon. Gentleman referred, hosted by the Energy Networks Association, my noble Friend Baroness Browning set out the Home Office’s proposals for taking this work forward. This focused on a number of key areas. First, it focused on exploring the feasibility of introducing tighter regulations on the scrap metal industry in order to tackle the ready market for stolen metals. This includes, as he has asked, looking at modernising the Scrap Metal Dealers Act 1964, which does not reflect the current £5.6 billion scrap metal recycling industry. It will also include looking at amending and improving the existing scrap metal dealer registration regime.
Graham Jones
I appreciate the Minister giving way on this point and the fact that he is looking at amending the legislation. Will he indicate when he thinks legislation might be brought in to have an impact on scrap metal dealers, or give a time frame?
Charles Hendry
The first priority, as I am sure the hon. Gentleman understands, is to decide what are the best courses of action and determine what needs primary legislation and what can be done through secondary legislation. We are at the stage before that, but I hope that I am showing him that, with the new Minister, Baroness Browning, coming in, a great sense of urgency is being given to the sort of solution he has been highlighting.
Baroness Browning also spoke about closer links to environmental legislation and the licensing requirements for waste management and the need for more stringent identification requirements when selling metal, to identify both the seller and the owner of the material. The current regime requires little more than any name written down on the dealer’s records. The power to close scrap metal yards where there is clear evidence of sustained illegal activity is being considered, as is the possibility of moving away from cash as a method of payment for this industry, thereby removing the perceived easy access to cash. We are absolutely looking at the issue the hon. Gentleman has highlighted. If there are any other issues on the list he set out, I will ensure that they are on the agenda for the meeting so that we look at the full range of possible options.
Jim Shannon (Strangford) (DUP)
There seems to be an insatiable demand for scrap metal in other parts of the world. Like many others in the Chamber, I suspect that the metals are ending up in the far east. Does the Minister intend to have more stringent export controls?
Charles Hendry
Part of the purpose of looking at the issue as an organised crime activity is that it gives us a much greater ability to look at it internationally. The hon. Member for Hyndburn highlighted how action is being taken in other European countries, and there is certainly a need for an international co-ordination of approaches—better understanding and better information sharing—so that when things are happening through an international chain, we can pursue them and make sure that the relevant people are brought to justice in the most appropriate regime.
The Government have no desire to target or hinder the perfectly legitimate and valuable green economy work undertaken by the vast majority of law-abiding scrap metal dealers. However, elements of the industry are facilitating the theft of metals, and steps must be taken to shut such disposal routes.
I thank the hon. Member for Hyndburn for securing this important debate. I assure him and the House that the Government take the issue very seriously. We will be having the meeting next week, on a cross-departmental basis, and the issues that he has highlighted will be addressed then. As I have explained, we are determined to address the issue, which is causing massive inconvenience, great threats and a really serious challenge to people working in the industry.
Question put and agreed to.
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Westminster Hall
(13 years, 3 months ago)
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Bus Industry
(13 years, 3 months ago)
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Graham Stringer (Blackley and Broughton) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Streeter. It is now 25 years, a quarter of a century, since buses outside London were deregulated following the Transport Act 1985. We have a great deal of experience of what the implementation of the Act meant. By and large, it has been a very poor experience. It is sensible to call it a disaster for the bus-travelling public. In Greater Manchester, in the past 20 years, approximately 30% of the number of people who travelled by bus no longer do so. Bus deregulation has meant higher fares in real terms, a reduction in the networks and less reliability. It is not surprising, therefore, that the number of passengers has reduced.
I will not say that everything about bus deregulation has been awful—most of it has been. If I had to put a figure on it, it would be approximately 80%. A great deal of it has been bad. Bus deregulation has been successful on radial routes in major urban conurbations, where the service in peak times is often better than it was. The old transport authorities and county councils were guilty of having inflexible bus routes and of sending buses to where people lived 30, 40 or 50 years previously, before areas were demolished and rebuilt elsewhere. The commercial flexibility of the deregulated system has had some benefits, but overall the impact has been negative.
How does one disaggregate that from the natural trends in bus ridership in the past 25 years or so? Well, that is fairly easy because we have a precise comparison. When bus services were deregulated in the rest of England and Wales, they were not deregulated in London. Between 1986 and when the office of the Mayor of London was introduced in 1998, the regulated franchise system in London retained its passengers with very little subsidy. From the time of the election of Ken Livingstone in 1998, the number of bus passengers in London increased and the network became more extensive because a considerable increase in subsidy was put into the system. The period after 1998 does not offer an exact comparison, but the period between 1986 and 1998 offers a very good comparison. Bus passengers were retained in this city, but they were not retained elsewhere. The simple conclusion is that that is because of bus deregulation.
Behind all the statistics that I will use in my speech, there are real people. If people want to get a sense of the damage that has been done to individual lives by the loss of bus services—it affects family life and the ability to get into employment—I suggest that they read the recent Transport Committee report, “Bus Services after the Spending Review”. That report has example after example of people’s lives being blighted, their ability to obtain employment diminished and their ability to see their families reduced because bus services have disappeared.
I thank the officials at the Passenger Transport Executive Group, Sir Howard Bernstein, chief executive of Manchester city council, and his officials at Transport for Greater Manchester. They provided a lot of the statistics in this speech about transport in Manchester and transport nationally. Two thirds of all public journeys take place by bus, even after the reduction in numbers following deregulation. We are therefore talking about something that is important to many people’s lives, often the poorest people in our communities, and something that is vital to the economy.
My main point in this speech is that there will be cuts to an already reduced system. I do not want a sterile debate in which the Government say that it is all the fault of the previous Government that they are making cuts, and we on this side of the Chamber say that the cuts are too fast and too deep. Both those points have their place. What is interesting is that, because we are dealing with cuts to a deregulated system, it is possible to diminish the impact of those cuts by looking carefully at what are likely to be the recommendations of the Competition Commission, and by trying to use more effectively and directly the facilities in the Local Transport Act 2008. That is what I want to concentrate on.
To get some sense of the size of the impact of the cuts that are likely to happen, I will go through what the bus system is faced with. First, there is the 28% reduction in local authority grants, which will affect buses. Then there are changes in the formula for concessionary travel. Estimates on the impact that that will have on the bus system vary between £50 million and £100 million. The best estimate is approximately £77 million. From 1 April 2012, there will be a 20% reduction in the bus service operator grant. In passing, I say to the Minister that BSOG is not used in the most effective way. As a general grant to the bus industry it is fine—it helps. However, it would be better if it were given to transport authorities and passenger transport executives so that they could direct it to environmental improvements or particular enhancements to transport, rather than it just being given generally to bus companies.
Those are the three big areas where there will be cuts, but there is also the abolition of the rural bus grant and the 50% reduction for small and medium-sized public transport schemes from the integrated transport block. There will, therefore, be major changes and reductions in bus services in the coming years. PTEG has tried to estimate what will happen and its conclusions are pretty stark and frightening. It estimates that by 2014 fares will have gone up by 24%—nearly a quarter—in real terms, there will be a decline in service levels of 19%, which is nearly a fifth, and patronage will be down by about a fifth. That is in metropolitan areas, which is what is covered by PTEG.
According to the Transport Committee report, 70% of local authorities in non-urban areas have already cut their grants for buses and transport. My hon. Friend the Member for Hartlepool (Mr Wright) is present and I look forward to listening to his contribution later, but in Hartlepool 100% of the bus services subsidy has been removed, as is the case in Cambridgeshire, although I understand that that is currently subject to legal challenge. In Somerset, North Yorkshire, Shropshire and Northamptonshire, there have also been significant cuts, while in Luton and Peterborough there have been no cuts. The situation around the country is varied but, overall, it looks pretty bleak, given the PTEG projections for urban areas and the known cuts identified in non-urban areas by the Transport Committee.
Transport is a function devolved to local transport authorities but, I ask the Minister as the Transport Committee did, surely central Government have a responsibility, not to make local decisions but to know what is happening in every area, so that when the Government make decisions about their grants and where they spend their money, they can do so as accurately and effectively as possible, and that requires knowledge.
The Office of Fair Trading decided that it would refer the bus industry to the Competition Commission. There was already a great deal of evidence from Greater Manchester and other places that monopoly behaviour was effectively taking place. It has taken the competition authorities a long time to get around to looking into it. More than 10 years ago I wrote to the competition authorities and asked them to investigate—I was not the only person who did that—and they said, “Please produce written documentation of unlawful agreements between different bus operators.” Of course I could not do that—those documents would not be available to a Member of Parliament or anyone else, if indeed they existed—but by looking statistically at what is happening, we can see all the signs of real monopoly behaviour, and that is what the Competition Commission has found.
I will go through some statistics for Greater Manchester. In Oldham, for instance, 85% of the services are provided by First. In my own constituency the figure is about 67%, in Salford 77% and in the whole of north Manchester 70%. In south Manchester, we can see a mirror image of those figures, with Stagecoach monopolising: in Stockport it provides 82% of services, and in the whole of south Manchester about 74%.
My constituents suffer a real disadvantage in fare levels. I was told when I put my case to First that not many people buy the one-off fare, but that people buy weekly tickets. Even the weekly tickets bought from First by people in north Manchester are 47% higher—£17, compared with £11.50—than the price people pay in parts of south Manchester, where the average income is about £10,000 higher than for my constituents. So if they need to use buses, they are paying twice the percentage of their income on fares. Frankly, there is little on-road competition, which is what was originally intended to be the driver of better, more effective and more responsive services under bus deregulation.
Another indication of monopoly or anti-competitive behaviour is what in the system is called gaming the market, where bus companies use the fact that two different transport systems are in operation—the deregulated system, under which anyone can operate a bus service having given a small length of notice, and the subsidised, tendered services. In designed deregistration, the bus company is really saying, “We can make more money from this service, because it is an important service for the public, if we deregister it and then get the transport authority to tender it out.” Then, if it loses the tender, and a tendered service is running, the company reregisters the services, or parts of them, to undermine the subsidised service. An awful lot of such anti-competitive behaviour goes on.
As I said, the competition authorities were slow to get off the mark and to look at the area, but they have got off the mark, and credit to them for that. They have found that profits are much higher in the deregulated area than in London. In the past 24 hours Go-Ahead, for its out-of-London services, has just announced record profit levels of up to 10.4%.
Mike Weatherley (Hove) (Con)
The hon. Gentleman mentioned that anyone may enter the bus market, but does he agree that one of the faults of deregulation was that it did not create a perfect market? There are significant barriers to entry, even if one does not go through the subsidised route but sets up an independent service.
Graham Stringer
The hon. Gentleman makes a perfectly sound point, which I will come to in my conclusions. The large operators own the garages and can afford to subsidise competition if there are new entrants to the market—it is a long way from being perfect competition.
I was talking about the profits of Go-Ahead but the profits of Stagecoach are truly staggering, especially when the economy is flatlining and we have been in recession. They are up to £153 million from £126 million, which is an increase from 14.4% to 17.1%. In the friendly debates I have with Brian Souter of Stagecoach, he once called Gwyneth Dunwoody and me “dinosaurs” because we believe in going back to a sane system of regulated buses—he even set up little models of dinosaurs. I do not know how many people in the Chamber remember the film made of the James Clavell book, “King Rat”. When the Japanese prisoner-of-war camp in Singapore was liberated by allied forces, there was one very fat prisoner among all the other prisoners, whose ribs were showing—they were starving to death. At a time of austerity and the economy not doing well, Brian Souter and Stagecoach are the King Rats of the British economy, doing enormously well out of public subsidy when everyone else is struggling to get to work and make a living. They are, in effect, subsidy junkies.
The figures in the Transport Committee’s report show that the bus industry outside London receives from the fare pot about £1.8 billion in a total income of £3.4 billion, so 47% of the bus industry’s income comes from taxpayers. It is as simple as that. Whenever a bus leaves a depot, an average of 50% of its costs are paid by taxpayers. Given what has happened with deregulation, is that sensible use of taxpayers’ money? Are we receiving the best possible value?
Mr Andrew Turner (Isle of Wight) (Con)
The hon. Gentleman may not know that in my constituency there is only one bus company for the whole island, and there is no competition. What prevents large companies from competing in the parts of Manchester that he mentioned, where that seems not to happen?
Graham Stringer
I am the wrong person to ask, but my view is that companies do not compete because then they can exploit the market using informal agreements or in nods and winks, by putting up fares in their own areas without the cost of competing. The statistical evidence in their profits and fare levels is that they are exploiting the market compared with what happens in the London market. That is voluntary. Companies are happier operating in their own areas. They say that they do not like the extra dead mileage if buses must be driven into areas where other companies operate from their depots, but that is a weak argument. They simply do not want to compete because it is more profitable for them not to.
The making of high profits was the first major finding in the Competition Commission’s interim report. The second was that many operators face little or no competition. It is welcome that the commission finally got around to writing the report, but it is flawed in many ways, as such reports tend to be because they look at statistics over the past five years, but the economic world is now different and more difficult. They estimate that anti-competitive behaviour costs £70 million, but they do not include the cost when people abandon buses; if that were included the real cost to the public would be much higher. In addition, they do not look at how the current bus system inhibits the use of simple integrated ticketing, which would drive up the number of passengers using buses.
I have a few requests for the Minister. First, when the Competition Commission’s report is published and he is considering what to do about buses, will he bear in mind that there is a lot of information out there, but it has to be culled at great expense from surveys and other sources, because the bus companies keep much of their information private, despite receiving 50% subsidy? Good-quality information is vital for local transport authorities when planning their services.
My second request is for through-ticketing. We know what brings people back on to buses: a simple, low-fare structure with through-ticketing. It is estimated that if fares are cut by 20%, passenger numbers increase by 13%, with a further increase if the ticket structure is simplified with through-ticketing. What can the Minister do to help that?
My main question, which goes back to the beginning of my speech, is how can the Minister support and help to build on the powers and structures in the 2008 Act? I know that he understands the legislation thoroughly, because he and I served on the scrutiny Committee. There are many barriers facing South Yorkshire, West Yorkshire, and Tyne and Wear passenger transport authorities. They are considering moving back to a regulated system of quality contracts, because the buses, bus drivers and depots are in the hands of the bus companies, which have rubbished the Competition Commission’s interim report—well, they would—and are threatening a scorched earth policy for any passenger transport executive or authority that decides on re-regulation. What help can the Minister give those transport authorities?
Everyone knows that we are dealing with a coalition Government. The Minister’s views are well known from the time before he was a Minister, as are the Secretary of State’s. The Secretary of State is more of a free marketeer, and the Minister believes in the instruments in the 2008 Act, but when the bus industry is declining, the balance between the two parts of the coalition, resulting in a watching brief and agnosticism on the industry’s future, is not satisfactory. I should be grateful if the Minister told us his view.
My final point is that the present Government and Governments for the past 25 years have not done enough for the quarter to one third of people who do not have access to a car and rely completely on buses. One of the most appalling sarcastic comments made by the last Prime Minister, in response to a Birmingham Member who asked what he would do about the loss of a bus service in Birmingham, was that he would immediately call a Cabinet meeting. He said that sarcastically, but Cabinet Ministers should discuss bus services. They are vital for many millions of people in this country and they have been neglected or given too low a priority for long enough. I look forward to the Minister’s support in protecting and helping the bus industry at a time of inevitable cuts. That is possible.
Mike Weatherley (Hove) (Con)
I congratulate the hon. Member for Blackley and Broughton (Graham Stringer) on securing this debate. Although passenger numbers are on the decline throughout the country, I understand that buses remain the most popular form of public transport. Usage is on the increase in Brighton and Hove, which bucks the national trend.
In the city of Brighton and Hove, which includes my constituency of Hove and Portslade, we are fortunate to have a good bus service. We benefit from a network of many routes, frequent buses, and well-maintained bus shelters. I pay tribute to the managing director of Brighton and Hove Bus and Coach Company, Roger French, for his excellent management of the network in previous years. Increasingly, the company has been able to make use of new technology, such as real-time information screens at bus stops and smartcard readers on buses. While that is great news for residents of Brighton and Hove, I would argue that more competition is needed to protect the interests of bus passengers in future.
The Brighton and Hove Bus and Coach Company is owned by Go-Ahead, one of the five biggest bus service providers that together account for 69% of the country’s bus services. In areas such as my constituency, where one company operates over 95% of the public bus services, not much can be done when fare rises are proposed, as will happen later this month. Passengers cannot go elsewhere to get a cheaper ticket.
More competition would go some way towards maintaining best value for consumers and continuing to keep pressure on efficiencies. As the situation stands, however, the many barriers faced by new companies that are setting up bus services effectively restrict competition. Although in theory schemes are open to all companies that wish to take part, the costs of doing so are so prohibitively high that in practice they are open only to large companies that can afford to take part. A case in point is the real-time information system. Electronic display boards are now located on most bus stops in the centres of Brighton and Hove and provide real-time information about bus times. I have witnessed at first hand the system in operation at the Brighton and Hove Bus and Coach Company’s operational centre, and it is very impressive. The system is open to all bus operators, but only if they pay substantial costs for the on-bus radio system, transponders and any necessary back-office equipment.
Some charges levied on transport companies are implemented in a way that penalises small companies. Although some charges vary according to the number of vehicles a company operates, meaning that larger companies pay more, other charges are fixed irrespective of size. Such fixed charges mean that small companies effectively end up paying a higher proportion of their income than larger ones. Charges for the registration of a public service, for example, or an application for an operating licence or a transport manager’s certificate of professional competence, are the same regardless of the size of the company or the number of routes and buses involved, meaning that larger companies can absorb the cost more easily.
In my constituency, there is a small bus company called The Big Lemon that runs its buses on waste cooking oil from local restaurants. It has been beset by problems as a result of being a smaller company, to the extent that, as I understand, it has had to submit evidence to the Competition Commission and the Office of Fair Trading in order to protect its interests and, ultimately, to prevent it from being forced to cease operations. Fare increases have recently been announced by the Brighton and Hove Bus and Coach Company, and much has been made locally of the scale of those increases. In some places, fares will rise by as much as 20% and on most routes a return fare will cost as much as £4. However, on routes where The Big Lemon is in direct competition with the Brighton and Hove Bus and Coach Company, the fare will be only £2.50. That means that passengers in some parts of the city will pay 60% more than in other areas where competition has forced competitive pricing.
The Brighton and Hove Bus and Coach Company has stated that the fare increases are being introduced to reflect the rising price of fuel. However, as the managing director of The Big Lemon, Tom Druitt, pointed out, fuel does not cost more on different routes, and the difference in price seems designed to stamp out the competition represented by the smaller company. The Big Lemon also encountered a barrier to extending competition in the city when it attempted to join the quality bus partnership. As I understand it, that partnership is an informal agreement between the Brighton and Hove Bus and Coach Company and the council, and is not open to other companies or routes at present. The Big Lemon has also encountered difficulties in publicising information and timetables. It found that priority for such matters was given to the Brighton and Hove Bus and Coach Company, with the main information about fares and timetables on the council’s website referring to services provided by the larger company. Smaller providers are mentioned and a link to their websites is provided, but the main emphasis is on the Brighton and Hove Bus and Coach Company. That situation could easily be rectified at no cost to the taxpayer, and it would encourage competition.
The attitudes and actions that I have mentioned are obstacles to increasing competition. If one small company has encountered such difficulties, how many more companies are experiencing problems around the country? Bus companies that benefit from large Government subsidies naturally have an advantage that small start-up companies do not have. In my constituency and across the city, the Brighton and Hove Bus and Coach Company receives a large subsidy from the city council—money that would make a huge difference to small operators such as The Big Lemon. There is a compelling argument that we should encourage the distribution of subsidies on so-called loss-making routes towards new, smaller, innovative companies, thereby increasing competition and benefiting passenger choice and transport quality in Brighton and Hove and beyond. As councils do not have direct control over the fares levied by bus companies, that is one way in which greater competition in bus services could be encouraged.
As mentioned earlier, there are other ways in which the council could assist in making the market more competitive such as providing fair website information and the quality bus partnership scheme. In summary, I would like to see measures implemented that are focused on delivering sensible competition and a code of practice that would put new operators on a level playing field, thereby reducing barriers to entry in the market.
Mr Iain Wright (Hartlepool) (Lab)
Let me begin by saying what a pleasure it is to serve under your chairmanship, Mr Streeter. May I congratulate my hon. Friend the Member for Blackley and Broughton (Graham Stringer) on securing what I think is an important debate? He was kind enough to mention my constituency in his opening remarks, and I think that the example of Hartlepool and its bus users provides an almost perfect case study to illustrate why competition in the bus market is not working.
I would not disagree with the notion of competition in the bus market if it resulted in wider choice and a better-quality service for passengers. We would all agree that in an ideal situation, competition should keep operators on their toes, as they would be mindful of rivals securing a greater share of the market and would offer a more comprehensive service, a better fare and ticketing structure, more punctual journey times and more modern vehicles.
The situation in my constituency, however, is particularly frustrating because Hartlepool has all the ingredients for a good and comprehensive bus service. It is a relatively compact town; there are outlying villages, which I will mention in a moment, but at its heart is an urban centre just 2 miles wide and 5 or 6 miles long. Travel is self-contained and most journeys in Hartlepool take place within that urban centre, which therefore lends itself to a rapid, reliable, co-ordinated and integrated public bus transport system. About 40% per cent of households in my constituency do not have regular access to a car, which feeds into the need for a comprehensive public transport service to avoid isolation for many of my constituents.
Further afield, Teesside university in nearby Middlesbrough, the petrochemical and process industry cluster in Wilton, and the new logistical and distributional commercial opportunities at Teesport could mean that many of my constituents would have access to better employment rates and opportunities to participate in higher education if those places were connected by better public transport links. My constituency would benefit in every possible sense. From my experience in Hartlepool, however, it is clear that no effective market is in operation. My hon. Friend the Member for Blackley and Broughton touched on that with an example from Greater Manchester, and I will discuss that point in more detail later.
Bus services are dominated by one provider, Stagecoach, which has a significant share of the wider UK bus market. Such dominance has led to inefficiencies and distortions in the market—that is true not only in my constituency but, as we have heard, across the country. My hon. Friend quite rightly mentioned the profits made by Stagecoach, and it is worth reiterating that point. For the year ending 30 April 2011, Stagecoach made operating profits of about £200 million. Over three quarters of that operating profit—some £153.1 million—was generated solely through its UK bus operations. The profit margin of its UK bus division was 17.1%, as opposed to a 6.5% profit margin for its north American operations and 4.5% for its UK rail division. In its annual report Stagecoach states—boasts—of “sector leading profit margins” within its UK bus operations.
How was that allowed to happen? The answer is contained in the company’s annual report. Its operating and financial review states that its business model for its UK bus operations in the regions is based on an
“emphasis on lightly regulated bus operations enabling management to vary prices, operating schedules and timetables in response to developments in each local market—”
and this is the key phrase—
“without significant hindrance from regulation.”
It is therefore clear that Stagecoach seeks to cherry-pick profitable routes and discards socially or economically vital services the moment the taxpayer fails to take the risk on its behalf and subsidies are ended. The company is able to do so without the hindrance of an effective regulatory regime that could insist that such services are maintained for the good of the community.
The business model boasted about in the annual report is shown to be true when one looks at my constituency. As I said earlier, Stagecoach is by far the most dominant bus operator in Hartlepool. Arriva and Go North East provide a small number of services that travel in and out of the constituency, but in the main Stagecoach has a monopoly on the market, with about 80 % to 85% of market share.
The bus market in my constituency is striking for the absence of medium-sized bus companies. It has been difficult, as we have heard in relation to other places, for small and new entrants to the market to gain ground. Promising new entrants such as Tees Valley Coaches have provided some new routes, but have found it difficult to gain a foothold in the market and are now pulling back from providing routes.
A far too dominant player in the market has ensured that there is no incentive to improve services. Punctuality is poor. The traffic commissioner’s target is that 95% of buses should be on time. In Hartlepool, that figure is 81%. As my hon. Friend the Member for Blackley and Broughton said, ticketing arrangements, too, undermine choice and competition. In my constituency, Stagecoach operates a ticket discount scheme, but it is available only for Stagecoach services, rather than bus services across the town. Passengers are dissuaded from using other operators—of which they have only a limited choice—because of the additional cost of buying yet another ticket.
Most damning of all—my hon. Friend kindly mentioned this—is the abrupt cancellation of services, which leaves my constituents without access to transport. Hartlepool borough council faces cuts in its budget from central Government of about 25%, and it has decided to stop all subsidised services. That means that there are in effect no bus services in my constituency after 6 pm or on Sundays. Some outlying areas of my constituency—villages such as Elwick or Dalton Piercy, as well as the central area of the Burbank estate—now have no bus service whatever, which has left residents in those areas completely isolated.
The recent report by the Select Committee on Transport, “Bus Services after the Spending Review”, cites many comments from residents of my constituency. Miss Raw, for example, says that the bus service from Elwick to Hartlepool has been withdrawn, leaving the village completely cut off from Hartlepool. She states:
“I do not drive and therefore am finding it very difficult to shop for essentials, visit doctors, dentists, opticians, banks, hospital visits etc. Also I no longer visit friends, go to the theatre, or cinema, especially in the evening. In fact we are completely isolated.”
Susan Elan Jones (Clwyd South) (Lab)
Does my hon. Friend agree that whatever one’s general view on the bus deregulation of the 1980s, the one thing that we know is that it was an unmitigated disaster in villages and very rural areas, as buses were reduced either to a highly limited service or, in many cases, withdrawn altogether? That compounded the problem of rural poverty, which is often not addressed in an urban environment.
Mr Wright
My hon. Friend makes an important point, and my hon. Friend the Member for Blackley and Broughton referred to the same issue. Economic activity is very much contingent on the availability of good transport and connectivity. Concerns have been raised with me both by constituents living in the urban part of Hartlepool and by constituents living in outlying areas, who say that they cannot take up a job because they cannot get to the place of work as a result of the absence or removal of the bus service.
Another of my constituents cited in the Select Committee report is Mrs Powers, who states:
“Since the removal of the bus service my daughter…has NO way of getting to and from college…Is she surely not entitled to the education she deserves? My daughter works very hard and gets excellent grades and I feel appalled that her future education is being jeopardised in this way!”
It is important to mention the importance of access to education in rural areas. My hon. Friend the Member for Clwyd South (Susan Elan Jones) will be concerned about that as well.
It is clear that competition in the bus market in Hartlepool has failed. Deregulation since the mid-1980s has not proved to be a success. The market is characterised by too dominant a player, making excessive profits by cherry-picking the busy and popular routes and ensuring that passenger choice is left behind. For those services that remain, punctuality rates are behind what should be expected, because operators do not fear that another company might come along and provide a better service that takes away their market share.
Mr Andrew Turner
It is not the case that things have been tested and found to fail—they have not been tested. We have to try the competition route, which should be given the chance to work under the new system. We have to make it work, rather than pretending that it has already happened and been found to fail.
Mr Wright
The hon. Gentleman makes an interesting point, but I would suggest that we have had more or less the possibility of open competition and certainly deregulation since the mid-1980s. I accept the point that perhaps that has not meant free and open competition and there may be barriers to entry because of the structure—the way in which the legislative framework has been put in place. However, looking at the examples from my constituency, I would suggest that there has been market failure and, as a Labour politician, I would suggest that where there is market failure, the state should intervene. The hon. Gentleman and I will possibly disagree in our analysis of the reasons for that, but certainly we would agree that there has been market failure. I will ask the Minister, in trying to respond to the issue of market failure, to consider a number of things.
Graham Stringer
I acknowledge the weight of my hon. Friend’s remarks. Does he agree that where serious competition has taken place in Glasgow, Edinburgh, Preston and Manchester, where bus companies have set about competing with one another and where, in the short term, bus fares have dropped and there has been a conveyor belt of buses, the consequences have been worse congestion and pollution and then one bus company withdraws?
Mr Wright
That is one of the fears because of the way in which the bus market currently operates, with the dominance of four or five big players in the market. They have the bargaining power and, frankly, the cash to be able to hound smaller operators out of business. For example, in the north-east a number of years ago, a new and ambitious operator wanted to come into the market, but the big dominant operator of the time, which was Stagecoach, hounded it out by providing zero fares—free fares—at certain times. Stagecoach had the cash flow to be able to do that, so there is market failure, with domination by big players.
I hope that the Minister will respond to a number of points. I urge him to be bold when considering the Competition Commission’s report on bus services. He needs to examine why there has been so little take-up of the quality contract partnerships introduced by the previous Government. I urge him to undertake further work to see whether such partnerships need to be made easier to operate and enforce. To help with that, the Minister should consider whether franchising of local bus services within an area such as Hartlepool could provide a better quality of service and ensure that local authorities can determine the priorities on behalf of their residents. The Government need to be bold and radical for the good of passengers in Hartlepool and elsewhere. I strongly believe that they should re-regulate the market to ensure that local bus services are run for the benefit of passengers and communities, rather than purely for shareholders.
Andrew Gwynne (Denton and Reddish) (Lab)
I congratulate my hon. Friend the Member for Blackley and Broughton (Graham Stringer) on securing this very important debate, as I know that he has taken a keen interest in these issues for a number of years. I welcome the chance to contribute to the debate from the Opposition Front Bench. It is a pleasure to see you in the Chair, Mr Streeter.
On the specific issue of competition in the bus industry, we need to examine the deregulation of the buses to understand how we have ended up with the current situation. As my hon. Friend outlined, it is now 25 years—almost to the day— since the deregulation of the bus industry outside London. Of course, in London, Transport for London, which is accountable to the Mayor, specifies in detail which services are provided. It decides the routes, timetables, fares—everything down to the colour of the buses. The services themselves are operated by private companies through a competitive tendering process, but there is no on-road competition.
In the rest of the country, such as in the Greater Manchester constituencies that my hon. Friend and I represent, there is, in theory at least, a free market, so anyone can start up a bus service as long as they meet minimum safety and operating standards. Bus operators are practically free to run whatever services they like, charge whatever fares they like and, as we saw with the UK North debacle in Manchester, use whatever vehicles they like. Monitoring and regulation of reliability and vehicle cleanliness is largely minimal. Although it is supposed to be a competitive market, the majority of services are provided by just a few bus companies. As my hon. Friend correctly outlined, the vast majority of commercial services in my south Manchester constituency are operated by Stagecoach, in contrast to his north Manchester constituency, where the predominant provider is First. Local authorities will fill the gaps where there is an inadequate commercial service, and such local authority-funded routes are operated by private companies through a competitive tendering process.
My hon. Friend was right to raise concerns about how some of these big companies play the deregulated system. In 2004, before I came to the House, I was a local councillor on Tameside metropolitan borough council. Just before the general election in 2005, Stagecoach Manchester removed the well-used 375 bus service, which used to link Stepping Hill hospital in Stockport, Stockport town centre, Denton, Ashton town centre and Tameside general hospital. That service between the two district general hospitals was an important link for the communities along the route.
The route was commercially viable, making about £50 a week profit, but it was never going to make Stagecoach Manchester a lot of money. Nevertheless, it was a commercial service, it was commercially viable and it made a profit, albeit at the margins. However, Stagecoach decided to withdraw the service to the two district general hospitals, so that the route went only to Stockport and Ashton. Anyone who wanted to go to the hospitals had to get on another bus at Stockport bus station or Ashton bus station.
Stagecoach then decided to split the new service in two. The 375 became the 317A and the 317B. In the middle of the route, people had to get off one bus and wait for the next one to arrive. That made the service non-profit-making overnight. There was no change to the route, but splitting it in two meant that it was not commercially viable. Stagecoach therefore went cap in hand to the Greater Manchester passenger transport authority for not one public subsidy, but two. That highlighted loud and clear how Stagecoach Manchester played the system, turning a service that was profit-making—albeit marginally—into two subsidised services, which is outrageous.
Across the country, the picture on deregulation is mixed. In some areas, services have undoubtedly improved, as we heard from the hon. Member for Hove (Mike Weatherley), and some bus companies have invested in new bus fleets. In many areas, however, it is fair to say that deregulation over the past 25 years has resulted in a much worse service, which costs taxpayers and passengers alike much more. Figures produced by the Passenger Transport Executive Group on behalf of the passenger transport executives in the six metropolitan conurbations outside London show that bus fares have increased by 94% in those areas in the years since deregulation, while the number of those using buses has fallen by 46%. In some PTE areas, the decline has been even greater, with ridership down by 65% in South Yorkshire since deregulation.
Deregulation has had a number of other negative knock-on effects. It is much harder for local authorities to put in place long-term bus networks or to properly integrate bus services with other transport modes, such as rail and light rail, particularly where those services are operated by competing businesses, as in north Manchester, where, until recently, the trams were operated by Stagecoach and the buses were predominantly operated by First. As my hon. Friends have said, deregulation also makes it much more difficult to provide a competitively priced multi-modal ticketing system like the London Oyster card.
One of the more worrying aspects of the changes is the effect on socially necessary bus services, as we heard from my hon. Friend the Member for Hartlepool (Mr Wright). There has been a gradual reduction in off-peak and lifeline estate services, with more focus on more profitable major bus routes. In a market-driven environment, commercially driven bus operators will of course concentrate more on the more profitable commuter routes and less on socially necessary services. With the scope for cross-subsidy removed, the cost of the diminishing subsidised network has increased massively—
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
It is 10.24.
Mr Gary Streeter (in the Chair)
Order. The debate continues until 11 o’clock. Continue.
Andrew Gwynne
With many bus services used disproportionately by people on lower incomes and by those without access to a car, the socially excluded are worst hit by service reductions. For example, two out of every five jobseekers say the lack of transport is a barrier to getting a job.
When considering bus services, we really must take account of the policies being implemented by the current Government. Many of the cuts are happening not by chance, but by choice. The Government have made a number of critical decisions that I do not just fear but know will have a real effect on bus services. First, as my hon. Friend the Member for Blackley and Broughton said, there is the 28% cut to local authority funding for local transport, which includes money for subsidising unprofitable bus routes. Support will be reduced by £95 million between 2010-11 and 2011-12.
Secondly, the Government are changing the way councils and bus operators are reimbursed for the concessionary fares scheme for older people, taking £223 million from the scheme between 2010-11 and 2011-12. Thirdly, from January 2012, they are reducing by a fifth the rebate for additional fuel costs for running unprofitable bus services, and that will particularly affect rural areas, as my hon. Friend said. That will take away a further £254 million in support for bus services between 2010-11 and 2011-12.
We are already seeing that these changes mean the end of council-funded rural, evening and weekend buses in many parts of the country. With rising costs, the need to maintain profit margins and the state of local budgets contributing to fare rises, the changes will largely mean service reductions in some of the most isolated parts of the country.
When the Prime Minister made his election pledge to protect free bus travel for pensioners, or at least to protect their passes, he did not tell them that, in doing so, he would take away their bus services instead. The sad fact is that the situation on bus cuts is likely to get worse. Forecasts by PTEG show that, by 2014, fares will have increased by a further 24% in real terms in metropolitan areas, while service levels will decline by 19% and patronage will decline by 20%.
Mr Andrew Turner
It is interesting to look at what the Prime Minister said before the election. In my constituency, at least some pensioners would rather pay half fares than face the possibility of having no buses at all. They would like to pay their bit on the buses.
Andrew Gwynne
Indeed. In places such as Greater Manchester, there was a long-standing concessionary fares scheme before the national bus pass scheme was introduced, and pensioners paid a small amount. Under the bus pass scheme, the concessionary fare was available on peak services until it was removed this year—in the peak period, pensioners now have to pay the full fare. My constituents make the same point as the hon. Gentleman’s and would sooner pay something than lose their service altogether. It is clear that all parties at the last general election pledged to protect the bus pass, but there is no point people having that bit of plastic if they do not have the buses to use it on.
The situation is already bad, but it will undoubtedly become increasingly difficult to maintain current service levels when spending reductions deepen in successive years. In non-metropolitan areas outside London, there have been significant cuts to supported bus services, with some local transport authorities withdrawing funding from all such services, and we have heard first hand about the appalling situation in Hartlepool.
Let me turn briefly to the level of competition between the bus companies. As we know, the Competition Commission is investigating the local bus market and published its provisional findings in May this year. Its provisional findings included the view that profits are higher than they would be if the market were competitive and that too many operators face little or no competition in their areas. The competition authorities recently looked at tactic co-ordination between bus companies, and that has certainly raised a few questions about how truly competitive the bus industry is. The interim report also found that short-term bus wars on the streets, such as we experienced a few years back in Manchester, when the big bus companies used an extremely aggressive approach to drive out the smaller competition and secure their monopolies, were not the way forward, and that more should be done to facilitate multi-operator ticketing. Although we await the full report later this year, the interim report makes interesting reading and helps to inform our debate today.
Of course it was the previous Labour Government who set the ground for improvements to be made to local bus services. We set in progress ways of tackling some of the worst effects of deregulation. Indeed, quality contracts—or the provision for them—were introduced by the previous Government as a key to improvements in bus standards. In hindsight I think that our party would like to have gone further with those improvements to service provision for passengers, and with the implementation of quality contracts. Certainly, those contracts could allow bus companies to concentrate on developing the local market for bus travel, but it is understandable, given the points that have been raised by my hon. Friend the Member for Blackley and Broughton, and given the burden of risk on local authorities as opposed to the bus companies, that those measures have not been pursued as vigorously as they should have been. Quality contracts would help to set minimum standards, making it possible for them to be more stable, with less frequent changes to fares, times and frequencies. In turn that would help bus services to be more reliable, because they would be monitored and good performance would be incentivised.
It is fair to say that the current set-up does not always benefit the passenger, and we need to consider other ways of making our local buses work more effectively. We need to think about ways of addressing the issues that have been raised today, and ways of empowering local authorities and communities, allowing them more of a say in the way their bus services are run, and what the routes should be. Perhaps we need to look at ways to make it easier for passenger transport executives and local transport authorities to enter into voluntary partnerships, statutory quality partnerships and a more balanced quality contract system. That could allow for a system of franchising bus services to local transport authority specifications, similar to the system used to provide bus services in London, allowing a service that is responsive to what passengers want and reintroducing some long-term planning to the system.
I want to ask the Minister what consideration the Government have given to allowing local authorities more powers over local bus services. What assessment has the Minister made with regard to quality contracts? Does he view them as a way to set minimum standards and to make service levels more stable and reliable? What assessment has he made of the greater powers that Transport for London has over local buses and the performance in relation to bus services in London, as compared with what happens outside London, particularly in major conurbations, although the problem is not exclusive to big cities, but also exists in large and medium-sized towns and rural areas?
There is clearly a wider debate to be had about the way we look at restructuring our bus industry. Deregulation has largely failed, and that has been recognised in the debate. We need to think about restructuring our bus industry. I am sure that the discussion we have had today will help to inform the ongoing debate.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I thank the hon. Member for Blackley and Broughton (Graham Stringer) for raising this important subject and doing so in his usual measured and thoughtful way. His knowledge is considerable, as I discovered when we served in Committee on the Local Transport Act 2008. I am delighted to have rather more time than I thought I might to respond to the debate.
The Government are committed to supporting local bus services and markets through concessionary travel reimbursement, direct operator subsidy and our funding of local government. However, as I have made clear before, with those significant amounts of public expenditure invested in the bus market, it is only right to consider whether it is delivering the best service for bus passengers and best value for the taxpayer. The Competition Commission has identified, in its provisional findings, aspects of the local bus market where competition is restricted, prevented or distorted. That cannot be good for passengers if it means that they enjoy less frequent services and have to pay higher fares as a result. If that in turn means that fewer people are able to make use of their local bus, and instead have to travel by other means or cannot travel at all, that has wider, and unwelcome, societal and environmental impacts.
Of course, bus markets are local in nature. Many of the effects will be localised, and I have encouraged the Competition Commission to set out where and in what circumstances it believes competition is failing to materialise. It is important that it should be specific in its comments in the final report. One of the concerns raised by the Competition Commission, which I share, relates to profitability—a point raised by the hon. Members for Blackley and Broughton and for Hartlepool (Mr Wright). Excess profitability is an important indicator of ineffective competition. Evidence commissioned by the Department for Transport suggests that profits are particularly high in the largest metropolitan areas, so I have asked the commission to consider whether it can identify specific areas where ineffective competition is most prevalent. A key test of potential remedies will be whether they result in more people travelling on buses and bring about wider benefits to society by helping to create growth and cut carbon emissions.
The inquiry is ongoing, and with representatives of local government and passenger and bus operators, my Department continues to engage with the commission as it prepares to publish its provisional remedies later this month. Hon. Members will understand why I do not propose to anticipate those remedies in my remarks today: it is important that we let the commission, as an independent body, come to its conclusions on the basis of the evidence placed before it. However, I will take this opportunity to respond to the points raised during this debate.
The Local Transport Act 2008 made changes to the provisions of quality contract schemes and partnerships and introduced new forms of legal partnership working. It came into force only in 2009, and the Competition Commission has indicated that quality contracts and quality partnerships may be remedies for the competition problems that it has identified. It is therefore sensible to wait for the final outcome of the inquiry at the end of the year before deciding whether further changes to the regulatory regime are needed.
The hon. Member for Blackley and Broughton asked about the coalition policy as it relates to the 2008 Act. It is on the public record and therefore no secret that the two coalition parties, when in opposition, had differing views on the Act. The Conservatives were more sceptical about the value of quality contracts than were the Liberal Democrats. When the coalition was formed, the decision was taken that, as the process was already under way, the sensible course of action was to wait for the Competition Commission to analyse the market and produce its findings, so that we could proceed on a sound basis, free of prejudice, relying on proper analysis and collated evidence. That remains the position. I do not accept that that is agnosticism—the term used by the hon. Gentleman. It is a sensible decision to wait for the evidence, at which stage we shall analyse it internally and decide what action, if any, we should take in response to the findings of the commission. That process is under way in relation to the structure and landscape of the market.
The hon. Gentleman no doubt expects me to make the point that the landscape about which he and his colleagues complain is largely the one that their party’s Government created, which we inherited. He and the hon. Members for Hartlepool and for Denton and Reddish (Andrew Gwynne) will also be aware that it is on the record of the Local Transport Bill Committee that, had the amendment that I tabled been accepted, many of the actions that Opposition Members now ask for would be unnecessary—the measures would already be law. We did not make more progress at that time because of the then Government’s reluctance to go further.
Before the Competition Commission report is published, however, I want to encourage joint working between bus operators and local authorities. We have seen good results, with local authorities and operators working effectively in partnership to improve bus services in places such as Birmingham, Brighton and Oxford.
My hon. Friend the Member for Hove (Mike Weatherley) and I are lucky in having good bus services in our area. I too pay tribute to Roger French, who has been most effective in driving up bus patronage. He has shown that it can work and that the moaning Minnies who say that bus patronage is going into decline are wrong, as the examples of Brighton, Hove and other places prove. My hon. Friend complained about the effective monopoly that operates in Brighton and Hove and the difficulties faced by the Big Lemon service; he clearly wants to give the Big Lemon aid in some form. The monopoly of which he complains is not terribly different from that which the hon. Members for Hartlepool and for Blackley and Broughton complained about. One operator having an 85% to 90% market share inevitably makes it difficult for other companies to enter the market, and it can be difficult to challenge. My hon. Friend is right to say that the cost of fuel does not relate to the route on which it is used and that differential pricing is clearly a result of competition along those routes. The absence of competition clearly enables Brighton and Hove to charge a higher rate for its bus services. That is a striking example, but I shall ask my officials to ensure that the entire report of our debate is passed to the Competition Commission so that it can see what has been said and take it into account, albeit quite late in its deliberations.
I want to encourage more of that sort of partnership activity so that bus passengers get the services that they deserve and expect. More partnerships need to tackle punctuality, which is the No. 1 priority for passengers and which can be compromised by any number of issues, from road works to poor planning. It is not clear whether the 81% punctuality figure referred to by the hon. Member for Hartlepool was the result of a failure of the bus company or of, for example, congestion, which is a problem for the local authority. Punctuality is not a matter only for the bus companies; there is also a local authority aspect. That demonstrates the need for authorities to be fully involved and to work sensibly with bus companies in their areas.
The Government are looking for operators and local authorities to work in partnership, sharing punctuality and traffic management data to benchmark and improve performance. To facilitate this, a significant number of Vehicle and Operator Services Agency examiners are being trained to engage proactively with operators and local transport authorities to ensure that proper procedures and lines of communication are in place. That new approach is being introduced gradually and has been in place in the north-west since June. I assure hon. Members that traffic commissioners will continue to take effective enforcement action when performance is poor, and that any lessons learned from the north-west will be absorbed before full roll-out takes place. The hon. Member for Hartlepool may want to contact his local traffic commissioner if he is concerned about punctuality in his area.
As the hon. Member for Blackley and Broughton said, another important concern for passengers is integration, especially in fares and ticketing. I share his view that what he described as a simple fare and ticketing structure, with through-ticketing, can be effective in driving up passenger numbers. I absolutely agree and the Department is focusing on that aspect. My vision is of seamless end-to-end journeys, with tickets being available at a decent price and being valid on all services in a city, not only those of the dominant operator.
I shall continue to encourage the development of integrated multi-operator ticketing schemes, and my officials are actively engaged with the Competition Commission and bus operators in helping to remove barriers to their successful implementation. I firmly believe that bus tickets should be valid with more than one operator, but they should also be valid over much wider areas and easy to use. That will be of clear benefit to passengers. That is why I am committed, with operators and public sector bodies, to delivering the infrastructure necessary to enable most public transport journeys to be undertaken using smart ticketing by December 2014.
In many places, including in Greater Manchester and other large metropolitan areas, smart ticketing is already being introduced by local authorities and major national bus operators. It is fuelled by the smartcard incentive offered by the Government through the bus service operators grant and other pump-priming schemes that we have offered since the election. The hon. Member for Blackley and Broughton referred to the use of BSOG, saying that there was a better way of targeting it. If I understand him correctly, he believes that it may be more effective to hand it to local authorities to be used for general transport uses. However, it is difficult to square the complaint that the money being made available for buses is diminishing with the argument that what is available should be deployed for wider transport purposes.
Graham Stringer
I apologise to the Minister if I did not make my position clear. I suggested handing the money to PTEs and local transport authorities, not for general transport use but for the targeted improvement of bus services. It should be used to help particular bus services, not for other transport schemes.
Norman Baker
I am grateful to the hon. Gentleman for that clarification; he wants the money to be ring-fenced for bus services.
My right hon. Friend the Secretary of State has asked me to initiate a review of BSOG to see whether it is deployed to the best advantage. As far as possible, our time scale is designed to coincide with the Competition Commission report, so that if changes are necessary to the landscape of the industry or to that form of financial help, things could be combined at that stage. To that end, I have been in discussion with the industry and local authorities to hear their aspirations and views on the matter. I shall try to come up with a solution that is satisfactory for both parties—I shall then go on to deal with the Israel-Palestine problem. I hope that we might make some progress. It is in the interests of local authorities and bus operators to come to a sensible arrangement on BSOG.
We understand that good bus services can contribute to both of the Government’s key transport priorities—creating growth and cutting carbon emissions. By providing an attractive alternative to the car, not only can we cut carbon but we can unclog the congestion that chokes off our local economies. However, it must be remembered that we also have to deal with the budget deficit.
I do not want this to be a sterile debate—a phrase used by the hon. Member for Blackley and Broughton—about why we are where we are, but I have to respond to the comments of the hon. Member for Denton and Reddish, the Opposition spokesman. It would have been helpful if he and his colleagues had acknowledged some responsibility for the financial situation in which we find ourselves, rather than pretending that the cuts are somehow malicious and optional, and could have been avoided. That is not the case. I would like to think that we could work across the House to ensure that the impact on bus services is minimised in the constructive way suggested by the hon. Member for Blackley and Broughton.
I shall deal briefly with the three elements of funding referred to earlier. About 80% of bus services are run commercially. I will leave aside questions about the consequences of that for the market and for local government support. The money from the Department for Communities and Local Government is not relevant to those services. At present, local authorities rely on BSOG. The reduction in that grant was trailed long in advance, at the time of the spending review, and it will not take effect until April next year. There has been an 18-month lead in, and the cut was much less than the bus industry anticipated—and much less than Members of Parliament expected. At the time, the Confederation of Passenger Transport, which represents the bus industry, indicated that the cut was manageable and could be introduced without a diminution of services or general fare increases. That is what it said. It is important to point out that bus companies can take the BSOG arrangements in their stride. That should not, therefore, lead to cuts in services.
The basis of the reimbursement arrangements has not changed one iota. The hon. Gentleman will know that primary legislation stipulates that bus companies should be no better and no worse off from handling concessionary travel. That legislative requirement has not changed, and local authorities are required to reimburse bus companies accordingly. All that has happened is that the Department for Transport has issued some guidance to help local authorities to calculate how they should reimburse bus companies, and that, as Members will appreciate, is quite a complicated business. The ultimate test remains the same. If bus companies are unhappy with the reimbursement they have received from a local authority, it is open to them to appeal and their case will be handled independently.
One of the changes that I have made is to ensure that, if there is an appeal, it is possible for a local authority to win. Hitherto, when bus companies have appealed, their contribution has either been reduced or it has stayed the same. Now the appeal process can assess whether local authorities have had to pay too much and reduce the costs to them. That seems to be a much fairer way of dealing with those matters. The appeal process is open, fair and independent and can deal with any complaints that people have.
As for cuts in funding to local authorities, we all accept that local authorities have a challenging settlement. That is particularly the case, may I say for the benefit of the Member who has disappeared, for rural areas and for those services that are supported by local authority funding because they are not commercial to run. Having said that, the pattern of responses from local authorities across the country is varied. Unfortunately, some councils have taken something of an axe to local services, while others have made very few cuts. That is a matter for localism. It is up to local councils to exercise their increased freedom and to decide how they are going to spend their pot of money. We will increasingly see a situation in which one person living in an area will say, “Why is it that my county council has cut these bus services when the county council next door has not cut bus services at all?” That is a perfectly proper question to ask and one that we are trying to encourage in our drive towards localism.
Mr Andrew Turner
Will the Minister consider the wish of some elderly people, in areas where buses have been withdrawn altogether, to make a contribution? At present, the system is no buses, no pay.
Norman Baker
I well understand why my hon. Friend made that point, which has been made by a number of others. All I can say is that the Prime Minister has made it clear that the concessionary fares regime for local bus travel is not to be compromised and that requiring a charge would do just that. All I can undertake to do is to ensure that my hon. Friend’s comments are passed up the chain so that others are aware of that view.
The hon. Member for Blackley and Broughton mentioned the monitoring of cuts. Let me assure him that we are taking steps to establish the picture. I have asked my officials to do so on a rolling basis. We are checking where services are being significantly cut and where they are being protected. Ultimately, it is a matter for localism, but we have to understand what is happening.
The hon. Gentleman failed to mention the introduction of a £560 million grant, a significant amount, from the local sustainable transport fund, which can be used to drive up the number of bus services in a particular area as part of an integrated package to create growth and cut carbon. That has been well received. If we take the total package of measures under the loose heading of sustainable travel, the £560 million represents an increase in funding compared with what was available under the previous Government. Therefore, despite the difficult economic circumstances and the budget cuts that have taken place, we have made an increase in funding, which has been well received by councils. Every council that could qualify under that scheme, with the exception of the Isles of Scilly, has applied for funding. We had a good first round. I am happy to say that, in Manchester, the key component bid was approved, which is a cycling project for the city. Moreover, a large project from Manchester has applied for a significant amount of money and it has been shortlisted for the final approval process. Therefore, steps are being taken to address the issue of sustainable transport more widely as well.
Graham Stringer
I am not sure whether the Minister is referring to the cross-city bus scheme in Greater Manchester. If he is, will he agree to have a meeting with me to discuss it, because the scheme is not as good as it could be and it is not well thought out?
Norman Baker
I am happy to say that I was referring to an entirely different amount of Government funding that may be forthcoming depending on the outcome as regards the local sustainable transport fund. However, I am happy to meet the hon. Gentleman to discuss the particular scheme. He just needs to contact my office to arrange a time.
I am interested that both Conservative and Labour Members have indicated unhappiness—perhaps for different reasons—with the present arrangements in the bus market. Their comments are useful and timely given the nature of the Competition Commission inquiry and its report. I will pass on to the commission a copy of the transcript of this debate from Hansard so that it is aware of the comments that Members have made. I will continue to study carefully the representations not just from hon. Members but from people outside to ensure that we proceed in a sensible way.
Graham Stringer
The Minister is being generous with his time. Both he and I have had a lot of time in this debate because it has not been as well attended as it might have been and that is because it clashed with the Transport Committee, so some of the hon. Members who would have been most interested in contributing are on duty elsewhere. Mr Streeter, I wonder whether we could tell Mr Speaker that this has happened and in future scheduling of these debates, we could look to avoid such clashes of obvious interest.
Norman Baker
That is not a matter for me, but the comments have been heard and will no doubt be passed on.
The hon. Member for Denton and Reddish mentioned the situation in London. He was advocating that the powers that are held by TFL might be extended to the rest of the country, which would be quite a change in the arrangements. I am not quite sure whether that is official Labour party policy. If it is, I am interested that he has put it forward today. Although his argument interests me, it is not quite the panacea that some people think. For example, when competition started in Manchester, we heard how there were queues of buses down the main street. I have to say that we get queues of buses in London, many of which are empty, because they have, in some cases, been overprovided, so similar problems arise with one operator—TFL. It is also the case that London buses are much more expensive to run overall and there is quite a cost to the public purse. Although I am not negating the argument in total, I am just making the point that counter-arguments have to be taken into account when we consider the landscape after the Competition Commission has reported.
To conclude, buses matter to this Government. My focus is on ensuring that the right funding and regulatory framework are in place to ensure that passengers receive the best possible service, and that taxpayers receive the best possible value from public expenditure.
Care (Older People)
(13 years, 3 months ago)
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Tracey Crouch (Chatham and Aylesford) (Con)
Thank you very much, Mr Streeter, for calling me to speak. It is a pleasure to serve under your chairmanship for, I believe, the first time, which is an honour.
I am grateful for the opportunity to hold this important Adjournment debate on care and services for older people. As part of the younger generation of MPs, I am proud to initiate a debate on a subject that I hope will be of interest not only to those who are in their third phase of life but to the next generation and to the generation after that who will one day find themselves in need of care and services. The statistics show that those of us who are in our thirties will fuel the ticking time bomb that is the ageing population, so it is incumbent on us to try to provide solutions to meet this challenge.
My initial interest in care for the elderly stemmed from my late grandmother, who worked in community care for much of her life. She strongly believed, as I do, that people want to live in their own home and community for as long as they can physically do so, and that the delivery of certain services can prevent people from entering residential care, which benefits both them and the state. It was with that in mind that I chose such a wide-ranging title for this debate. It is very easy to focus entirely on the issue of funding care, but there is more to looking after our older generation than the issue of how to pay for their care. Services for older people, whether delivered by volunteers, charities or local authorities, also need our attention if they are to be developed and improved.
I want to start, however, by expressing my very strong support for the campaign to appoint an older people’s Minister. I believe that if that post had a cross-departmental remit, as there is for equalities or for women and equalities, it would be of huge value to the Government. Some of the issues to which I will refer do not fall within the portfolio of the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), and although I have the greatest respect and admiration for what he is doing to improve social care, he is not responsible or accountable for issues such as transport policy, local authority spending or the provision of financial products and education.
Having said that, if the Government maintain their opposition to the creation of another ministerial post, perhaps they would consider two other options. First, we could establish a new Cabinet Committee on older people’s issues that would effectively scrutinise emerging policies. Secondly, we could consider introducing a new test within regulatory impact assessments that would specifically examine the effect of proposals on the over-65s, as other tests do for other defined sectors of society. We need to pay much closer attention to the impact of national Government policies on the older generation, and I believe that a Minister for older people or a new Cabinet Committee would help to do that. However, there should also be a far greater assessment of the impact of policies at local level and I would welcome the Minister’s views on that matter when he responds to the debate.
The publication of the report of the Commission on Funding of Care and Support—the Dilnot report—was welcomed as a much-needed examination of how to fund care in the future. It is an accepted fact that we are all living longer and that our care needs are greater but that funding in social care has not increased by anywhere near enough to match our requirements. Significant demographic change is not something that should surprise us—it has been predicted for many years—yet the long-term care system has remained unreformed. Dilnot’s findings are very sensible, and hopefully they will achieve the better and fairer funding system that we need. However, there are some questions that arise from the report that I hope the Minister will address.
The Commission set out a reasonable timetable for the implementation of reforms. If we are to begin a new programme of funding, one that should perhaps be aligned to some of the other changes affecting future pensioners, we need to ensure that legislation is passed soon. It may be brazen for me to say so as a new MP, but Governments of all colours appear to be adept at pushing difficult issues into the long grass and waiting for the next Government to address them. We are seeing that at the moment on public sector pensions, which is another ticking time bomb issue that was ignored for decades; dealing with it now will cause more pain than if it had been dealt with sooner. We must not let the funding of social care become the next big but continuously ignored problem.
With that in mind, I should be grateful if the Minister provided us with an update on the public consultation on the Commission’s proposals and told us when he will publish the White Paper on social care. Does he expect a Bill on this issue to be included in the 2012 Queen’s Speech and will implementation of changes to funding begin in 2013, as per the Commission’s timetable? It would help all of those who are involved in delivering care and those people who are planning for their retirement if we received some clarification at the earliest opportunity about the timetable for implementing the Commission’s proposals.
The Dilnot report rightly focuses on the issue of financial advice, guidance and product availability. It is estimated that about 130,000 people enter residential care each year. Under the current system, around 41% of those people are self-funders—in other words those who have assets exceeding £23,250. The increase in the threshold will raise that figure to £100,000, but given how much wealth is tied up in fixed assets such as housing, that will not necessarily change the numbers dramatically.
I am concerned that self-funders deplete their assets paying for care and end up becoming reliant on local authorities for future care funding. Earlier this year, the Local Government Information Unit estimated that a quarter of all self-funders fall back on the state, costing local authorities up to £1 billion per year. The unit’s own report indicates that key decision makers in councils are unaware of the problem or underestimate its cost by 50%. I was shocked to read that 61% of authorities did not know how many self-funders they have or how many self-funders fall back on state funding.
While we need to improve local authorities’ understanding of funding liabilities, it is also clear that those who are in a position to fund themselves need much better financial advice and planning to mitigate the premature exhaustion of funds. Dilnot mentions the variety of financial products that are available, and I should say at this point that although I entered Parliament after working for an insurance provider I have no registered interest in the sector. Nevertheless, from my time in the industry, I think that it is fair to say that there is an appetite for providing products in this area, but the market is not as wide or as competitive as it could be.
I recently met representatives of Partnership, a provider of immediate needs annuities, which is a product to which Dilnot refers to in his report. Like the Dilnot report, Partnership made it very clear that there is a need for improved advice and education. Raising awareness of long-term care needs is essential, not least because people’s expectation is that when they get old they will be looked after for free. I am not convinced that the Dilnot report changes that expectation. Although care costs will be covered, the so-called “hotel costs” of food and board will not be covered, so we need to improve individuals’ understanding of what they will be required to fund themselves.
David Simpson (Upper Bann) (DUP)
I thank the hon. Lady for giving way and I congratulate her on securing this very important debate. I have not read the Dilnot report, but I understand that it indicates that we may have to increase taxes or cut public spending to provide care for senior citizens. All right-thinking hon. Members will agree that it is paramount that we provide that care. I may have misunderstood the hon. Lady, but is she suggesting that we should consider having some form of insurance policy to provide for future care rather than increasing taxes or cutting public spending?
Tracey Crouch
I am suggesting that we need to look at various ways to fund care in future. I believe that a market exists for this type of care insurance. There are people who can afford to take out such insurance, but they do not necessarily know that there are products out there that could prevent them from having to fall back on the state. For example, they could afford to take out a premium. It may be a hefty premium at the outset, but it could prevent them from draining all the assets from their home and then relying on state funding for residential care. Such insurance policies are certainly an option that we should look at, and indeed Dilnot himself looks at the financial services sector as one that could relieve some of the burden on state funding.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate my hon. Friend on securing this debate. With regard to the use of resources, we have looked at taxation but we must also look at Medway council, which is the local authority that she and I share and which was rated “excellent” in its use of resources by the Department of Health. Rather than increasing taxation, local authorities have a key obligation to ensure that resources for the elderly are available and are funded. For example, in Medway there is free swimming for the over-60s, concessionary bus fares start at 9 am rather than 9.30 am, and home library services are available for the elderly, so this issue is not simply about increasing taxation; it is about making better use of resources. Medway has done so and it is rated “excellent” by the Department.
Tracey Crouch
Indeed. This issue is about using resources wisely. However, it is very well discussing how resources are used now, but the problem lies in the future. At the moment, one in six people are over 65, but by 2050 one in four people will be over 65, and resources will only be able to stretch so far.
We spend a lot of time—rightly so—talking about financial education for young people, but I am enormously sympathetic to the suggestion that we should consider providing free financial health checks for people in their 50s and early 60s, possibly funded by using unclaimed assets in banks and insurance companies, and possibly delivered by financial advisers, charities or through the new money advice service. The provision of good quality care is an emotive matter for all involved. Standards of care, and indeed of care homes, differ dramatically, not just across the country but across constituencies. I recently visited Amherst Court in Chatham, a purpose-built Avante Care and Support home that supports residents with dementia. I was really impressed with what it offered and could tell that a lot of thought had gone into the building and the care provision. Such quality, however, has to be paid for, and unfortunately not all residential homes offer the same standards. When homes close, sometimes because the buildings are no longer fit for purpose, there can be uncertainty for residents and their families. It is that postcode lottery of care that we need to mitigate as best we can through the consideration of our long-term care requirements, which is why one policy that we need to get absolutely right for the benefit of our elders is the one on building more homes.
We have a massive housing shortage in the UK, but it is the older generation who have the least choice as to where they live. If they decide to downsize from their family home, they find that there are few bungalows or smaller houses being built. There are not many purpose-built retirement complexes, whether flats or houses, and any new development with social housing rarely, in my view, considers the needs of the elderly.
Jim Shannon (Strangford) (DUP)
There is a great focus on residential homes, but does the hon. Lady feel, as I do, that there should be a greater focus on letting people stay in their own home? They feel more confident there, and it is cheaper. I think that if they had a choice, a great many people would rather be in their own home than in residential care.
Tracey Crouch
That is precisely my point, and I hope that it will be the key theme to emerge from my speech. Homes must provide good-quality care for people who have to go into residential care, but we need to try to keep people in their own home for as long as possible. My late grandmother certainly believed, as do I, that if good-quality services can be provided people will have to rely less on expensive residential care, and we should therefore provide a greater choice of available private homes. Not many bungalows are being built, because their capital value is not that of a seven-storey apartment block on the same land, which poses a problem for our older people, who then have the choice of staying in their family home, which is incredibly expensive to heat and often impractical, or of moving into residential care.
We want to rely less on the state to fund our residential care, and it seems logical to put greater emphasis on ensuring that new developments have as much of a duty to provide for older people as for other younger sectors of society. The issue of choice extends into the social housing sector too. In my constituency, a few areas of social housing are allocated to the over-55s, but there is a huge difference in the lifestyles of 55-year-olds and 75-year-olds, which often leads to antisocial behaviour problems. I doubt that many people would consider 55 to be old, and therefore we perhaps ought to consider revising the age allocation up, to the over-65s.
I am pleased to say that Kent Housing Group, which is a partnership of developers and local authorities across the county, is looking precisely at housing for older people, and I look forward to seeing the outcomes of that work soon. However, I fundamentally believe that there is a role for the new homes bonus, which could incentivise authorities to build bungalows or complexes for older people and lead to much more housing choice for those who wish to stay out of residential care. That could be one policy that would have a positive impact on the welfare of older people, and it would also benefit the Treasury by keeping people out of the more expensive residential system.
The funding of social care might be the hardest single problem to overcome in this policy area, but we often forget that the services side is equally, if not more, important. Good delivery of services can prevent people from needing to enter residential care, or from staying in hospital longer than the average patient. We have some excellent charities and volunteers who provide an essential community service, and they can be vital to the health and well-being of the people they look after. As brilliant as individual schemes are, however, our overall community service for the elderly needs to be much better. I heard a heartbreaking story from the WRVS about a lady whose light bulbs broke. She was unable to fix them herself, and so for a month she sat in the dark. As she used her television for light, the electricity company noticed that her bills were unusually high, contacted her and discovered what the problem was. A WRVS buddy was sorted out, and her light bulbs were changed, but it took a month and a concerned utility worker to alert others before she was helped. In these modern days of instant connectivity, I find such isolation utterly unforgivable.
Penny Mordaunt (Portsmouth North) (Con)
I congratulate my hon. Friend on securing this debate. Does she think that when we are considering Dilnot and the future funding of care, we need to look not just at the baseline and at our well-recognised ageing population, but at the unmet need to which she has just referred? In Portsmouth, for example, which is a fairly compact city, we have 1,000 people with dementia who have no access to services.
Tracey Crouch
We need to improve the services available for different people with different needs as they age. I am vice-chair of the all-party group on dementia, but I decided not to talk specifically about dementia today because I am hoping for a future opportunity to do so. There are, however, some very good services. They are very localised, but often people do not know about them. For example, the wife of a constituent of mine who happens to be a good friend, has just been diagnosed with dementia. He found out about the excellent Admiral Nurses service by word of mouth; there was no one there to signpost him to it. He could have been provided with a hugely valuable service at the outset of his wife’s diagnosis. We need fundamentally to improve services across the country.
The Centre for Social Justice has produced a report, which I highly commend and which is entitled “Age of Opportunity: Transforming the lives of older people in poverty”. The report states that more than 1 million people aged 65 and over feel lonely, and a similar number feel trapped in their home. Charities can do so much but, as the CSJ says, there is a fundamental role for the state in preventing such isolation. So many older people are already known to statutory bodies, so providing the link to charities is essential. The CSJ recommends a greater role for neighbourhood policing teams, in engaging with extremely isolated older people, and the extended use of the increasing number of health visitors. Those are sound recommendations, which would help to deliver a new relationship between the voluntary and public sectors, and also reduce social isolation.
The authorities and partnership organisations to which I speak are desperate to provide good services, but they are hampered by finances. Although we have to be realistic about the need to make efficiency savings across various services in the short term, that needs to be balanced by an understanding that good-quality services can benefit public finances in the long term. Keeping retired people active, for example, keeps them healthy and less in need of acute primary care. Helping those nearing retirement to plan financially prevents them from draining their assets before falling back on the state. Providing company for people in social isolation not only enriches their lives but improves mental and physical well-being. Good-quality housing designed for the older generation provides greater choice for people wishing to remain in their communities. All those areas are interlinked, and better delivery could save the state a significant amount of money in the long term, but for the people who need care we must ensure that it is of good quality and sustainable for our ageing population, but also fairly funded.
If we are to improve the standard and delivery of care and services for older people we need to deal with this issue today, and I urge the Minister not to let it get kicked into the medium or long grass, and to consult on and implement reform of the system as soon as possible, for the benefit of this and future generations of pensioners.
Jack Dromey (Birmingham, Erdington) (Lab)
It is a pleasure to serve under your chairmanship today, Mr Streeter. I congratulate the hon. Member for Chatham and Aylesford (Tracey Crouch), both on securing the debate and on the sincerity that shone through in her contribution. I strongly agree with a number of the points that she made.
During the summer, I addressed a meeting convened by the Birmingham branch of Carers UK—an outstanding organisation nationally and in Birmingham. What shone through was that there is no more noble cause than caring. At that meeting, 200 were present, including people who were cared for, carers and the organisations that support them. Deep concern was expressed on two fronts, the first of which relates to an issue that we are not here to debate: the cuts to benefits and the work being done by the Hardest Hit coalition, which includes the Royal National Institute of Blind People, Mencap and others. The second issue relates to the growing crisis in social care. In one sense, the crisis is the consequence of a good thing—people are living longer—but there are undoubtedly two major problems. One, I agree, is that successive Governments have failed to implement a long-term solution to the growing crisis in social care. The other is the impact being felt now of cuts in public expenditure. The Government are going too far too fast, and that is having an increasingly serious impact on the most vulnerable in our society.
Looking to the future, the Dilnot review offers a new dawn. Its recommendations have been widely welcomed across the political spectrum. As we move towards implementation, it is key that Dilnot is fully funded and that its recommendations in respect of eligibility are carried through, so that what happened in Birmingham—I will say more about that later—never happens again. I agree strongly with the hon. Member for Chatham and Aylesford that its recommendations must be acted on as soon as possible. She is right that there has been a propensity in the past to kick such issues into the long grass. That cannot be the case in future. I sense that, across the spectrum, there is a desire in the House for the Government to act as soon as possible. They will unquestionably have the full support of the Opposition if they do.
Margot James (Stourbridge) (Con)
I share the hon. Gentleman’s enthusiasm for enacting the Dilnot report in law as soon as possible, but I have reservations about whether we should enact it in full as recommended. To give one example of my concern, does he agree that the £50,000 cap above which nobody should have to pay out of their own purse for long-term care or personal care at home might represent a large proportion of some people’s savings and assets, but that for home owners in the property-rich markets of the south-east, it might represent a small proportion? I am concerned on that and various other points. We should not rush but should subject Dilnot to proper critical investigation.
Jack Dromey
I accept that some of the issues that Dilnot identified will have to be worked through, but I think that there is a broad welcome for Dilnot ending what has caused so much grief in the past. People have had to sell their homes. People who spent their lives hoping to pass on wealth to their children have found in the twilight of their years that that is not possible. We can have an intelligent debate about the detail of Dilnot, but the cap is welcome. The sooner we implement Dilnot, the better. The problem is that, even if everyone gets a move on, that might be some years away, in which case we must address the here and now during the next two to three years.
WRVS has done excellent work in the field, and has said rightly that the Government must both address the adequacy of the funding that they have made available and ensure that it is wisely spent and properly monitored. The inescapable reality is that the consequences of the cuts to public expenditure are devastating for the most vulnerable in our society. To use the city that I represent as an example, Birmingham city council has cut £212 million from its budget this year—the largest cut in local government history. It cut £51 million from the social care budget, rising to £118 million over three years, and consequently sought to remove substantial need provision for 4,100 people. The council was prevented from going down that path only by a judicial review taken by four brave families, whose cases were heart-breaking.
I have seen some of the consequences in my own experience. One example is an absolutely wonderful couple, Faith and Frank Bailey. Faith Bailey is terminally ill. She left hospital some months ago, so that she could spend the remainder of her time on earth with her husband. They are a devoted couple; it is wonderful to see them holding hands at the age of pushing 80. The problem was that when she left hospital, her night-time care was restricted to two nights a week. She struggled as a consequence, and the impact on her husband was devastating. He was becoming increasingly exhausted, and neither of them could cope. The situation was causing them great distress. I am pleased to say that they are now in the admirable New Oscott village, where they will be cared for properly. However, those decent people who built Birmingham and Britain looked forward, in the twilight of their years, to being together for the remainder of her time, and to see them suffer in such a way was heart-breaking.
This is not just about the human consequences. As the hon. Member for Chatham and Aylesford was right to highlight, it is also about the financial folly of failing to recognise that not investing might cost more in the medium to long term. The King’s Fund report charts what happens in social care as a result: the number of people admitted to hospital rises. I am sure that we have all seen that in our respective constituencies. I remember one example in the constituency next door to mine in Birmingham. A fine young man who was seriously assaulted spent 18 months in hospital as the consequence of a failure to provide a social care package. After he had spent just over 12 months in hospital, he was told that he could leave if an adequate social care package were provided for him, but because it was not, he stayed in hospital. He was desperate to go home and his family wanted him back, and it was costing the national health service £2,400 a week in net additional costs to support him. That cannot be right. The impact on the national health service is an issue.
To give another example from Birmingham, all parties supported building 10 centres, such as the admirable Perry Tree centre, across Birmingham to provide intermediate care as a bridge between leaving hospital and going back home or into a home. Perry Tree is outstanding, and the atmosphere is wonderful. However, sadly, no more centres will be built. That will mean bed blocking on a massive scale in the national health service.
Tracey Crouch
Is the hon. Gentleman aware of the report by the all-party group on dementia that highlights that issue specifically? Dementia patients are extending their stays on hospital wards because they cannot go straight back to their residential care homes, and it is costing the NHS about £20 billion a year. It is a massive issue. Intermediate provision must be considered more closely to alleviate that financial pressure on the NHS.
Mr Gary Streeter (in the Chair)
Order. Before the hon. Gentleman responds to that point, I would like to say that five other colleagues are seeking to catch my eye and the wind-ups will begin at 12.10 pm. If colleagues can moderate their speeches, I would be most grateful.
Jack Dromey
Thank you, Mr Streeter.
The work that the hon. Member for Chatham and Aylesford has done, together with the all-party group, is admirable. She is absolutely right to highlight the dilemma. Before I conclude, I will give one other example of the impact of what is happening in Birmingham. It is a combination of the cuts to big society organisations on the one hand and the impact on carers on the other. On big society organisations, the budget of Age Concern Kingstanding—my constituency is one of the 10 poorest in Britain, and Kingstanding is the poorest area in Erdington—is being cut. A particularly heart-breaking case concerns a group called Elders with Attitude. It has one co-ordinator and a range of volunteers. I remember the first time that I met them. They are inspirational. People were brought together around a table and told their story. One individual—another Frank—said he had had a terrible stroke and had thought that his life was over. The group meets twice a week and, in his words, it brought him back to life. His granddaughter, who was sitting alongside him, burst into tears and said, “My granddad used to just sit at home, looking at the wall. This has given him a fresh lease of life.” This is essentially a voluntary initiative and initiatives of that kind should be supported, not least because, as the hon. Lady has said, stimulating people is of the highest importance to their quality of life and, ultimately, to their not having to go back into a hospital.
I want to give one other example of the impact on carers. In Birmingham, thousands of carers are employed directly by the council. I remember meeting a group of 20 of them in July. They were women who had worked for 10, 15, 20 or 25 years. They were the kind of women who go the extra mile in the job that they do. I remember meeting one of them coming out of Sainsbury’s in Castle Vale the Easter before last. She had a bag of Easter eggs. I asked, “Who are those for?” She said, “Half a dozen people I care for.” I asked, “Who’s paying for it?” She said, “Oh, I am of course.” She was buying Easter eggs for people who would not otherwise get them. Such was her bond of love and affection for the people for whom she cared. Sadly, she and all the people like her are now going to see cuts. They earn typically £14,000 a year. They will see, under the proposed Birmingham contract, a cut of £4,000. That is absolutely devastating.
What I hope unites us here is the focus on the need for the new dawn to be realised and for all parties to work together to put in place Dilnot’s recommendations, and to do so as quickly as we possibly can. Crucially, however, it is about what happens in the meantime, because the hallmark of a civilised society is whether we care for the most vulnerable in our ranks.
Anne Marie Morris (Newton Abbot) (Con)
This is an important issue and probably one of the most important topics that we as a Government and a Parliament will need to consider. On current estimates, the number of 85-year-olds will double by 2026, so it is a serious issue and I congratulate my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on securing this timely debate.
Dilnot focused on the financial issues and found that the current system is not fit for purpose. I think that there is another issue in relation to quality. The Government clearly want to ensure that we have a system that, ultimately, is fair, affordable and sustainable. They want to invest in a system that will ensure that we have more care and support in the community, so that we can keep people in their own homes rather than force them into residential care as the only option. However, if we want that quality, we need to ensure that there is proper monitoring and proper regulation. Although I am not a great fan of over-regulation, we have to bear in mind in this particular argument that we are dealing with consumers who are often not very vocal or not able to be very vocal. Therefore, it cannot necessarily be assumed that the way in which a market would normally self-regulate will be the way in which this market will regulate itself.
My comments are based on conversations I have had with the Care Quality Commission, a number of local authorities and private providers. I have a long-term interest in the issue. I was a county councillor and chairman of the health overview and scrutiny committee, and in Devon we currently have the largest number of retired individuals in the country. I will turn first to residential care, then to domiciliary care, look at how they are regulated and monitored, and raise some concerns that need to be addressed by the Minister.
Residential care is commissioned by the local authority. Although provision is monitored by the CQC, the commissioners, per se, are not. I have a concern about that, because it is the local authorities that are determining whether to commission in their own homes—where one might argue that they have a conflict of interest—or in the private sector. What I have found particularly disturbing is the price that is paid for each of these contracts. I hear that local authorities—I give this by way of an example—are paying £700 in the public sector, compared with £350 for a private provider. Whatever the savings might be, there is no way that, for half the price, the same quality of care can be provided.
There is no standardisation of contract in the current system. Although choice is clearly important, I think that, for a consumer who has a difficult time getting their voice heard, it is difficult to ensure that they get consistently good quality. If we are to ensure that there is real choice, genuine quality and fair pricing, we need to look seriously at how the commissioning bodies—the local authorities—might be monitored and regulated in future. I believe that the Government have looked at HealthWatch as a possible source. My concern about HealthWatch is that, first, it does not yet exist and, secondly, it seems to have been conceived as a reactive rather than proactive body.
The provider of residential care is, principally, either the local authority or the private home, and here CQC does monitor. Although the intention was to set out a new framework that, rightly, was more outcome-focused than process-focused, the challenge for the care homes is to comply with this new care quality regulation. I have talked to a number of homes and the majority have indicated that they expected a light touch from Government. They expected that they would be able to provide evidence of compliance and that there would not be many onerous visits. I hear that there are many visits, which surprises them and surprises me. They are saying that it is taking up an awful lot of administrative time. Given that, as a Government, we are committed to cutting red tape, something is clearly not working somewhere. The position needs to be reviewed. Clearly, it is important, because we need to guarantee quality, but let us find a way of doing it better. The other concern that homes have expressed to me is that, with the new outcome framework, there is no guidance as to how to meet the new requirements. In the old days, the CQC used to provide guidance, but now it does not see it as within its remit.
Domiciliary care is, perhaps, one of the most tragic and most important areas of concern. Commissioning of domiciliary care is done by local authorities. Here again, there is no monitoring and, I understand, no regulator; I would love to hear the Minister tell me that I am wrong. I cannot therefore see how we can ensure that our local authorities are really making sensible, informed choices about how they award contracts for domiciliary care. Indeed, I have heard stories of local authorities trying to take out costs and to subcontract their role to lead providers, who then take on the role of subcontracting further to find individuals and more providers of domiciliary care. In all that process, the quality control and the quality test seem to be lacking. I have talked to providers in the private sector who have seen some of what goes on, and the stories are horrifying.
Let me give one example. A provider indicated to me that she had gone into the home of an elderly person who was having to be put on to the toilet. The lady was literally sitting in her chair eating her sandwich lunch and the providers came in and lifted her up in a way that is apparently not appropriate or correct from a nursing perspective. They put her on the toilet, went out, smoked a cigarette and came back in. The sandwich was still in that poor old lady’s mouth. They then took her and stuck her back in her chair. That does nothing for the dignity of the older person.
The provider of domiciliary care is sometimes the local authority but, increasingly, it is the private sector. Unlike the residential end of care, there is no Care Quality Commission monitoring domiciliary care and I understand that there are also no spot checks. Although there is an obligation on local authorities to have a watching brief, what I am hearing anecdotally shows that very little of that is actually happening.
The concept of e-monitoring was introduced to try to assist with that. The idea behind e-monitoring is that, when someone goes in to provide care in a home, they pick up the phone in the individual’s residence and log in. When they have finished dealing with the client, they log in again through the telephone. However, the reality is that once someone has logged in, frankly, they can do almost anything. As in the case I mentioned, that could be putting a lady on the toilet and then disappearing outside and having a cigarette. Therefore, e-monitoring is not an effective way forward. The other thing happening is that, because there is no monitoring of quality, cost rules and consequently quality are going down.
I shall make this a very short contribution. In conclusion, the Minister should carefully consider having a regulator to deal with the monitoring process for commissioners both of residential and domiciliary care. In addition, certainly with regard to domiciliary care, some urgent and immediate action needs to be taken to examine current practice.
Alison McGovern (Wirral South) (Lab)
I congratulate all hon. Members who have spoken so far, especially the hon. Member for Chatham and Aylesford (Tracey Crouch). I feel sure that her grandmother would be incredibly proud of her today. Her contribution was important and she made many points that I wholeheartedly support.
I want to follow on from the comments of the hon. Member for Newton Abbot (Anne Marie Morris), who articulated part of the problem very well. Although we have focused on Dilnot, the review and funding, I argue alongside her that we cannot talk about money without talking about what people get for that money. What people are prepared to pay surely depends on the quality of care that they are going to get.
Rehman Chishti
The hon. Lady makes a point about resources. A crucial issue linked to resources is that of the principle and presumption of early intervention and prevention in improving the quality of care for the elderly.
Alison McGovern
I agree. In a moment, I will talk about some of the problems that local authorities are currently facing. They have had bigger cuts than any part of Government in Whitehall. Although I wholeheartedly agree with what the hon. Gentleman said, it is a challenge to all of us to support local authorities in that prevention role.
The hon. Member for Newton Abbot rightly made the point that quality matters above all else. Some of the examples given by her and others were compelling in terms of the moral requirement on us all to stand up for the dignity of older people. I firmly believe that, when we hear examples such as the one just given, we know what is happening is wrong. I have heard examples from my constituents: for example, older people are told that a “breakfast” visit to get them up can take place any time between 6 am and 11.30 am, regardless of their personal preference. That is not good enough and is an offence to somebody who prior to needing care was independent and perfectly capable of looking after themselves. We all know that instinctively.
The question is: how do we get from where we are to where we would like to be? I want briefly to make two points on the subject. First, I shall mention enforcement and some of the professional development issues. Leading on from that, I shall talk about the market for care provision and why there is an interesting and difficult problem that the Government will have to tackle regarding the market for providing care. I agree with many of the points made by the hon. Member for Newton Abbot about some of the anomalies surrounding enforcement. I repeat that local authorities are having to struggle with the fact that, if they were a Government Department, they would be experiencing the biggest cuts in Whitehall. That makes the job of having responsibility for the care of older people, which is a fixed cost, very difficult.
Margot James
Does the hon. Lady agree that, when we consider expenditure, part of the problem is that, over the past 10 years, the increase in local authority budgets for adult and social care has been minimal compared with the increase in many other local authority budgets, particularly that for children and younger people’s services, to name but one? With adult and social care, we are starting from a base that is already very low, which is one of the problems and is why local authorities are struggling so much.
Alison McGovern
I do not know the statistics on that, so I am hesitant to comment. If the hon. Lady says that that is the situation, of course, I believe her. However, I do not know off the top of my head whether that is the case comparatively. I will make some comparisons with children’s services because there are some interesting parallels. If, as she mentions, the budget for children’s services has increased, I can only think that that is a good thing given the importance of child protection and youth services. I live in hope that we can move towards having better funding for older people’s services in the near future.
I return to the point I was making on enforcement. We have all had cases—since I was elected, I have had many cases—of people coming to surgeries who feel that the care provided is not sufficient. There must be a clear, easy process to follow for relatives or those concerned about a poor standard of care. At the moment, the system is confused. I will not repeat what has already been said, but that is my conclusion. If someone feels that the quality of care they have received is poor, the process they have to go through is not easy.
Some of the issues raised by constituents at my surgery have stemmed from the absence of professional development for those providing care. I have seen extremely good quality examples of both residential accommodation for older people and care provided in people’s homes but, by and large, the work force who provide that care are underpaid and neglected. It has to be said that that work force are mainly women who often have not received much workplace training over many years and are some of the lowest paid people in our society. Frankly, it does not do much for the dignity of older people that the job of looking after them is one of the lowest paid and least respected in our society. It is about time that we put that right. We should make it clear that looking after older people and protecting the dignity of our society is an important job. We ought to pay those people a decent wage and give them the training and support that they deserve.
The example of e-monitoring has been mentioned. In my surgery, I have been given examples of that. People are given time to look after people but not enough time to travel between appointments, and they are for ever catching up after themselves. By and large, the whole system is set up to make a profit for the company concerned, rather than to think first about the quality of service for the person receiving care.
[Mrs Anne Main in the Chair]
On the profit issue, I am not an unreconstructed left-winger. [Interruption.] To the chagrin of some, I am not one who thinks that the profit motive has no place at all in public services. However, there is a structural issue here. We have a large amount of competition for the provision of care. Price competition, in an industry where greater profit cannot be extracted through the use of technology—this is a person-to-person service with a one-to-one relationship with the person, so we cannot invest in technology to make more profit—means that wages are the only expenditure that can be driven down. In an environment where the work of care is seen as low, wages have been driven down. There has to be a response from the Government on the structure of the industry, which effectively means that wages have been pushed down lower and lower, and people’s skills and time are not being invested in.
I draw an analogy with the child care industry. In the 1980s and early 1990s we had a similar situation. Frankly, those involved in child care were seen as the lowest of the low and were paid as little as humanly possible to look after children. Those days are over now. By and large, those who look after children are now paid a bit better and are likely to have qualifications. Can we not set ourselves the challenge of better wages and a better skill level for those working in care for older people? That would meet the aspirations of the hon. Members who have spoken so far and would do a great deal to improve the quality of care. That would help us to deal with some of the funding issues. People would feel that what they paid for was worth having and worth investing in. Hopefully, it would also meet the challenge set to me earlier and ensure that the case is made to local authorities to pay for quality.
In conclusion, I agree with the comments that have been made so far. There has to be attention to quality and to standards, and an ability to uphold those standards. There is a problem, however, in the market for care that is forcing a driving down of the quality, and it could be dealt with.
Tony Baldry (Banbury) (Con)
I am definitely going to send for a subscription to “Elders With Attitude”. It sounds like a very commendable organisation.
An aspect of public policy that is far too little debated is the consequences of us all increasingly living with an ageing population. It was about two years after I was first elected that I heard the word “Alzheimer’s”, but if I go around a nursing home in my constituency now, pretty much everyone there is suffering from age-related dementia of some sort. In my brief comments, I shall relate that to the problem of delayed discharge, or what is known as bed blocking. That is where the system needs improving.
Money has tended to be allocated to local authorities based on population and a multiplier of deprivation indexes, but I am not sure that those formulae take sufficient account of the ageing population. When a person is old, their requirements for care and support do not depend on their social background, but that is not sufficiently recognised in the formula. In medicine, at one end people stay for ever-shorter periods of time in hospital—one can now do such things as hysterectomies by keyhole surgery, which was impossible a few years ago, so some people go into hospital and come out very quickly—but at the other end, some people go into hospital and stay longer; largely, they do not need to be there, but an appropriate place cannot be found for them.
I understood, for example in domiciliary care, that the introduction of individual budgets would give individuals more control over their care provision. One hoped that that would lead to more providers coming into the system, but I see no evidence of that in Oxfordshire. Likewise, I do not see, and would be very surprised to see, substantial, or indeed any, increase in nursing home provision on what there was 10 years ago.
If one thinks about it and visits nursing homes, one sees that the point about wages is a good one. In the past decade, most nursing homes in my patch have managed by employing—I mean this in no pejorative sense; it is just the reality—Filipinos and paying them the minimum wage. At the end of their training, they have then gone on to find work in the NHS, and even though, with the cap on non-EU migration, that has become increasingly difficult, nursing home providers find themselves squeezed. On the one hand, the amount of money they receive from local authorities for placements is getting ever tighter; on the other hand, their wage bills and regulatory costs are becoming ever greater. There is little incentive for existing nursing home providers to increase the size or the provision in their own nursing homes, and there is certainly very little incentive for any new providers to come into the marketplace. There is a certain amount that the NHS or primary care trusts can do to fund intermediate care beds, but there is a limit to that and the cost still falls on the NHS.
We need to take a much better grip. I am not entirely confident about who has a grip on domiciliary care and is trying to ensure that there are sufficient providers of day care for those who need it. If we are to avoid ever-increasing fractiousness between the NHS and the social service providers over the thorny issue of delayed discharge, we will have to give more thought to how to ensure that there are sufficient places in the nursing home and residential care sector.
I agree with the point made by the hon. Member for Wirral South (Alison McGovern) about enhancing the professionalism of care staff. Those who provide domiciliary care in residential care homes provide a very important personal service. We should look at ways to enhance their reputation and status and encourage more colleges to offer HNDs and other courses for care staff. We will require more people in care services in the future, so it needs to be seen as an honourable occupation to which people aspire and where there are the highest standards of professionalism. There are important questions that need to be answered about the funding for local authorities for social care and how, with that funding, they are able to support both sufficient nursing home places and sufficient domiciliary care places.
For some time, many nursing homes were able to cross-subsidise, using the fees from private residents to subsidise the fees from local authorities. What I see in my patch is, effectively, two types of nursing home provision. Some nursing homes are now almost entirely privately paid; they are very expensive and provide a very good service. That means, however, that the only source of income for those nursing homes that provide residential care for patients funded by local authorities is the money that they receive from local authorities. They are stretched extremely tight to deliver a good service and have little incentive to expand that service. If we do not get our policies right, all that will happen is that the NHS will spend significant sums of money keeping in hospital people who no longer need to be in hospital and who could be discharged if there were places to discharge them to safely and properly.
Gareth Johnson (Dartford) (Con)
I congratulate my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on securing the debate. She feels passionately about the subject and made a robust and fair-minded speech.
Care and services for older people are of increasing importance, and I agree with the sentiments already expressed about how we must deal with the issue sooner rather than later. It is a growing mushroom that must be dealt with fairly soon because the population in this country is getting older, which is placing strains on our systems. That is a good and positive thing—too often we hear about longevity in a negative way, but it is a marvellous tribute to medical science that we have people living longer than they previously did—but greater reliance is placed on our care home provision and local authorities have to adapt to the changes in pressure placed on them as a consequence. I have disagreed publicly with my local authority, Kent county council, on decisions it has made about care home provision in my constituency of Dartford.
I accept that the future lies in a public-private partnership in care provision throughout the country. The Government face a dilemma: they cannot afford indefinite free care home provision and they do not want to penalise those who have saved for their retirement. Free care home provision for all without tax rises is completely unaffordable—I agree with my hon. Friend the Member for Banbury (Tony Baldry) about that. Such rises, especially in the current climate, would have a huge negative impact on the finances of this country. Equally, we should not be punishing prudence and forcing the elderly to sell their homes to pay for care. Prudence should be rewarded by the state, not punished.
Health and safety legislation has often added to the cost of care provision. The apparent necessity for all rooms in a care home to have en suite facilities was used as part of a reason to close care homes in my constituency, yet residents in those care homes would say that what they want is their home preserved and not the health and safety considerations met. I recently visited Emily Court care home in Wilmington in my constituency. The residents echoed the sentiments I have heard in every care home I have ever gone to: they like the facilities, but what is most important to them is that it is their home. That drives the affinity they have for the place.
What has staggered me since the upheaval in my area with the closure of care homes is how easy it is in this country to close them. I find it incredible that no real security of tenure exists for residents in a care home. Travellers have some rights over land they settle on—that is obviously an argument for a different time—and squatters have rights over empty properties that they occupy, yet residents in care homes can be moved almost on a whim. That might need further investigation, because the consultation exercises before any care home closes concentrate a bit too much on the bricks and mortar involved and not enough on the people.
Alison McGovern
The hon. Gentleman says what a bugbear health and safety legislation was and then mentioned the lack of security of tenure for residents. I find it difficult to know whether he thinks we need more or less regulation, legislation or sub-legislative guidance. What mechanism does he think is best to improve some of the standards?
Gareth Johnson
The two issues are separate. When Southern Cross went bankrupt, for example, it blamed in part the increase in health and safety legislation, some of which was sensible and some completely unnecessary. Ensuring that people who reside at care homes have some rights over the land that they are living on is a separate matter. I do not see that as placing increased burdens on those running the care homes; it simply gives the individual residents the same rights that we would have if we leased a flat. Those living in residential care homes, who are perhaps among the most vulnerable in society, should surely have that extra protection. The challenge for the Government is to find a solution that is both affordable and fair—affordable, so that the Government can cope with the ageing population and the increasing demand on care homes, and fair, so that the elderly are not forced to sell their homes and lose out because of their earlier, sensible financial decisions.
Esther McVey (Wirral West) (Con)
I am delighted to take part in the debate, which echoes the conversation I had earlier in the week with the residents of Hoylebank in West Kirby about the diverse and huge issues involved. Those residents believe that they are part of an invisible generation. They would like to be visible and, like my hon. Friend the Member for Chatham and Aylesford, they are calling for a Minister for the elderly to go through everything thoroughly.
Gareth Johnson
I am sure that the residents in Hoylebank have similar difficulties to many residents all around the country: they are often screaming loudly and not being heard by anyone. It is incumbent on Government to listen to the messages we hear from care homes and to see where we can make improvements to their rights to ensure that their homes are protected as well as possible. We need to find a more sensible balance than is currently in place. Care homes provide a vital link in the health chain. The hon. Member for Birmingham, Erdington (Jack Dromey), who is not now in the Chamber, made the important point that if we reduce the availability of care home provision, the amount of so-called bed blocking in hospitals will inevitably increase, with all the extra difficulties and costs arising.
We all want to facilitate elderly people remaining in their homes as much as possible, but the ideal should be about choice and not about forcing people who want to go into a care home to stay at home, or forcing people who want to remain in their own homes to go into care. Their individual choice should be paramount, and their opinion should count for a great deal. I therefore look forward to the spring, when the Government intend to announce their intentions regarding the Dilnot report and what happens thereafter. I look forward to finding a balance that works for the whole of the older generation.
Emily Thornberry (Islington South and Finsbury) (Lab)
It is a great pleasure to serve under your chairmanship today, Mrs Main. I congratulate the hon. Member for Chatham and Aylesford (Tracey Crouch) on securing this hugely important debate.
The terrible consequences of the massive spending cuts are becoming clearer and clearer. They focus in particular on underfunding in the social care system, which is getting to breaking point. Earlier I shared with the Minister my research on the effect of the cuts on local authorities and on adult social care. I am sure he is pleased to hear that I am doing further research.
My preliminary research, which I put together with the House of Commons Library and which is a clarification or an interpretation of data published by the Department for Communities and Local Government, shows £1.3 billion in real-terms cuts in local authority spending on social care in both 2010-11 and 2011-12. For the oldest and most vulnerable, the picture is especially dire, with real-terms spending on social care for the over-65s lower than in 2009-10 by £60 million in 2010-11 and £1.3 billion in 2011-12. The Association of Directors of Adult Social Services has indicated that demographic pressures from an ageing population, physical disabilities and learning disabilities have placed a £425 million squeeze on social care funding in 2010-11, with fewer than half of local authorities allocating the funds to cover the bill. I believe that the Department of Health continues not to be able to provide a borough-by-borough analysis of adult social care funding, so when I have my full report available next week, I assure the Minister that I will let him have a copy.
As a consequence, care packages and care services are being renegotiated, with new and increased charges being imposed. Others are being denied state-funded care altogether, because of changing eligibility criteria. A recent report from Age UK warned that of 2 million older people in England with care-related needs, 800,000 receive no formal support from public or private sector agencies. With spending cuts, that number is likely to top more than 1 million between 2012 and 2014. The evidence is piling up.
The Minister may have heard yesterday’s “You and Yours” programme on the BBC, in which the UK Homecare Association gave an analysis of its recent research that showed a pattern of care in the home being taken away from people. In the cases that it looked at, 82% of councils were reducing the amount of time that people have with carers in their home, there was a widespread increase in very short visits—for example, the notorious 15-minute visits—75% of councils were reducing the number of visits per week, and 50% were trying to reduce the money spent on an hour of care. Fewer safety checks were being made on older people at home, there was a widespread reduction in the time allowed for bathing and washing, and social services were being cut completely. They include a range of services that are not personal care, but help people to stay in their home—vital services such as help with laundry and shopping and decisions about finances. With the cutbacks in all those services, we are heading for crisis.
In making the changes, councils are often failing to consult. My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) referred to legal challenges resulting from lack of consultation. I believe that the number of judicial review cases has increased by 45%. The renegotiation of fees for residential care provision by councils is also putting great pressure on the care home market. That was not the only reason for the collapse of Southern Cross, but it was certainly one of the reasons.
I welcome the Minister’s statement today on Southern Cross, and I will take the opportunity to ask him three questions arising from it. First, has he established who all the landlords are? Secondly, he said that there is an expectation of a formal transfer of the care homes, with the second wave by the end of October. That expectation sounds similar to aspiration. How confident is he that that will happen? The third and most important question relates to the reference the hon. Member for Dartford (Gareth Johnson) made to residents’ rights, including their right to know what their future is and where they will live and not have their care home closed. Can the Minister help us by saying whether any Southern Cross homes are likely to be closed; if so, how many and at what stage will residents be told? My fear is that they will be the last to know.
Those are not the only continuing problems. There is a continuing and exacerbated postcode lottery for who gets what services. Tower Hamlets spends five times as much on each older resident as Cornwall, and such disparity leads to unfairness. Our social care system is definitely creaking at the seams.
The good news concerns the Dilnot commission. The Opposition have made it clear that we will work with the Government to find a solution to long-term funding of care based on the Dilnot recommendations, but funding is not the only matter dealt with in the recommendations of Dilnot and the Law Commission. They include less complex matters that may be less financially challenging, such as recommendations to improve available information, to support carers, and to enable portability of care. We want to ensure that that happens, and quickly. Will the Minister assure us that there will be legislation during the next session of Parliament to deal with the Dilnot recommendations? We all agree that we must get on with this.
We must also ensure that the present strains on the care system are dealt with. The concern is that even if we find a solution for the long-term funding of care, we may look at our care system in a few years, and wonder what is left. That is a genuine and continuing concern for all those involved in the sector. I understand that the business in the main Chamber includes an amendment to the Health and Social Care Bill which may help to regulate providers such as Southern Cross, but we have only 10 hours to discuss more than 1,000 amendments, so perhaps the Minister will take this opportunity to explain whether the Bill has been sufficiently changed to ensure that we will be able properly to regulate social care providers, particularly providers of residential care to elderly people, and whether the legislation will be able to help with that.
I welcome the partnership on dignity and care that has been established by the NHS Confederation, Age UK and the Local Government Group to look at standards of health and social care. I agree with many of the contributions that have been made today. There is concern not only about the funding of care, but about the standard of care. I listened to the passionate speeches by many hon. Members about the dreadful way in which some people have been treated. It is clearly hugely important to keep standards are high as possible. I look forward to the report of the Equality and Human Rights Commission, which I understand will be issued in the next few months.
That brings us back to the cuts. I do not want to sound like a broken record, but I take this opportunity again to warn the Minister that if the Government continue to cut local government funding as they are doing, the biggest area of discretionary spend, which is adult social care, will continue to be cut. The much vaunted additional £2 billion that the Minister says is available for adult social care is simply not sufficient. He must not continue to close his eyes to the situation. I know that he feels passionately about the issue, as do we all, but we must be realistic and more must be done to protect the elderly. We must put more money and more investment into social care and ensure that it is not cut to the bone.
The Minister of State, Department of Health (Paul Burstow)
It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on securing the debate. The speeches and interventions have demonstrated why we need Back Benchers such as my hon. Friend to raise such subjects, which Parliament has not debated enough over the past 10 or 15 years. That may be one reason why, as several hon. Members have said, social care has historically been the poor relation of the NHS and inadequately funded relative to the NHS.
We should not delude ourselves that many of the problems and pressures that have been amply and passionately described in our debate have emerged in the last 12 months. Indeed, if one takes a run through Hansard reports of the past 30 or 40 years, one sees that they have been raised previously. I do not say that to excuse the obligation that rests with the present Government to address the issues, but I ask hon. Members to bear in mind the fact that we should come to the debate with humility and recognition that past responsibilities were perhaps not fully met.
Attention was drawn to the fact that by 2033 almost a quarter of the population will be over 65. Indeed, some parts of the country have already reached that proportion—my hon. Friend the Member for Newton Abbot (Anne Marie Morris) referred to the situation in Devon. I agree entirely with the point made by my hon. Friend the Member for Dartford (Gareth Johnson) that all too often in these debates we use the language of time bombs and consternation instead of celebrating not just the successes of our health and social care system in supporting vulnerable and frail people, but the contribution that, in turn, older people make in our society, often to their fellow citizens. We should do more of that and I want to make sure that we do.
It is worth saying that if the NHS and social care are to cope, some systems and processes need to change; I will say more about that shortly, but it is also necessary for older people themselves and their families and carers to call the shots about the decisions that affect their lives, so that the system can provide the care that people want, need and feel comfortable with. The whole agenda of personalising services so that people have the resources to be able to make choices and to be in control of those services is important, and the Government are determined to turn that ambition into reality.
Let me say something about the coalition’s commitment to see health and social care provided in ways that achieve better outcomes and deliver more personalised services. A thread running through the comments from hon. Members during the debate is the role of integration, which is a key element in realising better outcomes and better quality in the system. Integration is about care services working together in the interests of people and the local populations they serve, and about learning from one another’s experience and ending up with care and support that is of higher quality, safer, and more comforting than ever before.
We also need a sea change in the nature of the working relationships at local level, so that closer working relationships between local authorities and the NHS become the norm rather than the exception. That is one reason why we have made extra funding available. We can debate and will continue to debate in the House whether that funding is adequate, and I have no illusions about the challenges facing local authorities, but the Government have done much to ensure that local authorities have the resources to address them.
NHS funding that goes directly to local authorities for measures that support social care and benefit health will rise to £1 billion per year by 2014-2015. It is the first time that any Government have made such a significant transfer of resources. This year, £650 million has been allocated to PCTs and transferred to local authorities to invest in social care services. That will benefit health and have an overall impact on well-being. I am under no illusions about the interdependencies between health and social care services to which many hon. Members have alluded during the debate. One must look at both parts of the system to understand and mitigate the impact.
I look forward, as ever, to the next chapter of the report on social care by the hon. Member for Islington South and Finsbury (Emily Thornberry). From what I see, however, and from discussions I have had, I know that the picture is far from clear; it is mixed and different authorities are adopting different approaches to the challenges they face in meeting the Government’s deficit reduction targets. Some local authorities are being smart in the ways they confront those challenges and are looking at using telecare and telemedicine, investing in relevant services, and redirecting resources into earlier interventions that can make a big difference up stream. Other authorities—the ones we tend to hear about in debates such as this—are adopting more of a slash and burn approach and tightening eligibility without thinking through the consequences of such decisions and the impact on services. We need to challenge such actions not only in the Chamber but in our constituencies as constituency MPs. These pressures on the system are not new and we have seen such features for many years. Indeed, the vast majority of local authorities already used substantial need as a basis for eligibility and access to services before this Government came into office.
The £650 million that is being transferred to local authorities from the NHS is on top of the £530 million from the Department for Communities and Local Government that will go directly to social service departments.
Paul Burstow
If the hon. Lady will forgive me, I want to ensure that I answer two or three of the key points raised by my hon. Friend the Member for Chatham and Aylesford. One key issue concerned the role of a Minister for older people. I certainly share my hon. Friend’s view that we must ensure cross-governmental dialogue and gain a much clearer understanding of the interdependencies between different policies and actions across the Government as they affect older people. The Government are not currently minded to appoint a Minister with specific responsibility for older people, but my hon. Friend has made a number of suggestions that could be a way to look at the issue. I undertake to take the point away and discuss with colleagues how we might join up services in a better way. A number of colleagues across Government have various responsibilities and we must find ways to ensure a clear articulation of the Government’s approach to ageing and an ageing society. We must ensure that that happens not only nationally but locally.
It would be remiss of me not to pick up on the comments about Southern Cross. I did not quite catch the second question, so the hon. Member for Islington South and Finsbury may wish to remind me of it so that I can answer. She asked about landlords, and the answer is that work to ensure that the transfers could take place required that measure to be concluded. As I understand, all landlords involved have now been identified, but if I am misinformed I will write to the hon. Lady and give her the details.
The hon. Lady also asked about home closures. In the past, I have said that when Southern Cross first made its proposals for restructuring the organisation, it suggested that the medium-term future—the next three or four years—would involve a limited closure programme. It did not specify a number and has not done so since. In some ways that programme is no longer the programme being followed; Southern Cross is effectively managing its own demise and passing homes on to new operators, which will have to make judgments about the economic efficiency of those businesses and the welfare of the people living in the homes, and decide whether they can carry on. We must have good advice and support to manage any closures that take place, which is why I have said on a number of occasions that I welcome the work done by the Association of Directors of Adult Social Services.
The hon. Member for Dartford raised an important point about tenure to which we must give serious consideration. I do not want to make a policy announcement about that today because the issue is complicated. We do, however, need to look at how we can give people a greater sense of confidence in the place they consider their home, and ensure that in the future they cannot be lightly tipped out to find a new care home. I will write to the hon. Member for Islington South and Finsbury about the second question to ensure that she gets an answer.
I appreciate the warm words of support—broadly speaking—that have come from all parties about the Dilnot inquiry and the appetite to get on with action. I will ensure that that appetite is well understood across Government. We are clear that the report submitted by Dilnot in July makes an excellent contribution to providing a framework or scaffold around which we can take forward a wider reform of social care for the future. We will soon set out a further process of consultation not only about the details of implementing the Dilnot inquiry—he sets out a number of parameters in his report that are up for further discussion, not least the one mentioned earlier in an intervention—but about the wider issues of quality in social care that were referred to by the hon. Members for Wirral South (Alison McGovern) and for Newton Abbot. We will approach all those issues in a combined way that will lead to a White Paper next April—that answers the question raised by the hon. Member for Chatham and Aylesford.
It is above my pay grade to announce what is in the Queen’s Speech; that has to be someone else’s job—probably Her Majesty, when she sets it out in detail, and the Prime Minister and the Cabinet who make those decisions. The Government remain committed to legislating at the earliest opportunity to bring in the Law Commission’s reforms and address the question of funding reform. I hope that answers the points of concern that have been raised.
The hon. Member for Chatham and Aylesford also mentioned housing, and she was right to talk about choice. That underscores the need for a cross-departmental approach to ageing and an ageing society, and I will raise her comments with my right hon. Friend the Minister for Housing and Local Government. Given his responsibilities for supporting people, it is important that I do that.
Prevention underlies many points that have been raised today and there is much we can do both to prevent admissions into hospital appropriately and to manage hospital discharges better. The increased roll-out and use of personal budgets will play a part in that, and will provide people with more control over the packages and nature of the care they receive.
The contribution made by the voluntary sector and charities has rightly been highlighted in this debate, in particular the role that such organisations can and do play in tackling social isolation. They also provide practical, low-level help—for example, helping to change a light bulb, which sometimes seems to take for ever. We must ensure that communities feel confident to give that help and are given support to provide mutual aid. Through our work on the big society we are determined to see that through. Local councils have an important role in improving health and well-being through commissioning those low-level services, and that has been well described in the debate.
The hon. Member for Newton Abbot expressed some concern about the role of the CQC. Like her, I met representatives from the care sector to discuss their views about what will soon be the first full year of operation for the CQC. The CQC was established in 2009 but has been fully operational only since October last year. Not all of what it does and will do has been explained to care providers as clearly as it should have been, but some of those defects are now being remedied. Just last week I had the opportunity to visit the CQC and see the work it is doing to establish a new, much simpler website. That website will provide a lot more information to providers about how issues of compliance with essential standards are being addressed.
Energy Powers (Wales)
(13 years, 3 months ago)
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Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Prynhawn da, Mrs Main. It is a pleasure to serve under your chairmanship. I appreciate the opportunity to open this debate on the Government’s policy on devolution of energy planning powers to Wales, and I look forward to the Minister’s response.
I wished to give this speech in the report stage of the Localism Bill in May, when my new clause 11, relating to the transfer of powers to grant consent for electricity generating stations in Wales, was selected for debate. However, I was not called, as almost 50 amendments were selected for debate within two hours, and the guillotine prevented me from making a contribution. I am therefore grateful for the opportunity to make points today that I wished to make then.
That new clause related to schedule 13 of the Localism Bill, which scraps the Infrastructure Planning Commission, transferring its power to the Secretary of State. During my 2010 general election campaign—as my constituency neighbour, the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), will be aware—I stood on a specific pledge to scrap the IPC. I am therefore delighted that Ministers in London have delivered for me to a certain degree on that point. At the time of the Planning Act 2008, my party, Plaid Cymru, along with the Conservatives and Liberal Democrats, opposed the creation of the IPC by the then Labour Government as undemocratic and taking political responsibility and scrutiny away from Ministers. We therefore welcome the Government’s decision to pull the plug on the organisation. The question, as it was in those debates in 2008, is where those powers should now reside. I fear that is where the coalition Government are undermining the second half of my election pledge, and where there is clearly some convincing work left to do.
The successful referendum in Wales earlier this year showed support and an appetite for devolution among the Welsh public, with around two-thirds voting in favour. The topics included in that referendum did not come from a wider discussion on the whole issue of the devolution settlement, but were chosen by the former Labour Government and included in the Government of Wales Act 2006. The referendum was fought within the narrow confines of the 1997 settlement regarding devolved policy fields. The key point about the referendum was that the yes campaign—which secured an overwhelming victory, far beyond anything I envisaged—used parity with Scotland as its battering ram. Equality with our Celtic cousins is a powerful message in my country, and it is a very dangerous political game for those who underplay that fact.
Mr Mark Williams (Ceredigion) (LD)
I congratulate the hon. Gentleman on securing the debate. He will be relieved to know that at the time of the Government of Wales Act 2006, Liberal Democrats tabled amendments to seek the devolution he seeks on energy matters.
There is another inconsistency—not just the territorial one between Scotland and Wales—which is felt by many local people. On the one hand, in TAN8—technical advice note 8—strategic areas are defined by the National Assembly, yet the ultimate planning decisions for power installations over 50 MW rest in Westminster. Many people find it difficult to grapple with that inconsistency.
Jonathan Edwards
I am grateful for that intervention, and I am glad that the hon. Gentleman takes a consistent position. I will address some of those concerns later and will allow him to intervene if he wishes to do so. I am glad to hear the thrust of his comments.
We believe that unfinished business with the devolution settlement remains, which will come as no surprise to colleagues. Polls in Wales agree with us that criminal justice and policing should be devolved, as should broadcasting and financial powers. Natural resources and energy are other areas that we believe should be devolved to the National Assembly and our own democratic institutions in Wales. That is not a new discussion point. Indeed, the first bids in relation to the devolution of powers in the area of energy and natural resources were made in 2003, and a not particularly successful working group from the Wales Office, the Welsh Government and the UK Government tried to resolve the situation. The issue was raised again in discussions on the 2007 White Paper which preceded the Planning Act 2008, which created the IPC.
The argument is largely one of common sense, to add to the points made by the hon. Member for Ceredigion (Mr Williams). Local planning authorities in Wales, under Welsh Government policy, currently have the power to consent to new or increased electricity generating stations up to 50 MW, but anything greater on land is dealt with currently by the IPC and—following the introduction of the Localism Bill—by the Minister in London. My key point is that in Scotland planning powers for all energy developments are fully devolved. The 50 MW limit was written into the Electricity Act 1989 and imposed on the National Assembly on its creation in 1999. The 50 MW appears to be an arbitrary figure with no real justification for its existence. It makes little sense that a generating station of 49 MW should be decided upon in Wales, but 51 MW by the IPC in London or by UK Ministers. The issue is one of consistency of approach and of planning.
Glyn Davies (Montgomeryshire) (Con)
This matter relates to discussions we had before the general election, when the Assembly seemed to be looking at changing that level from 50 MW to 100 MW. I have a fairly open mind about these issues and, as we have just had a referendum, I am reluctant to consider a change now, which is a point that the hon. Gentleman addressed earlier. Does he feel it is 100 MW—including everything, in Pembrokeshire as well—for these power stations?
Jonathan Edwards
That would be the difference between me and some of the London parties. I would favour full sovereignty over energy powers. I will address the specific point that the hon. Gentleman raises about the 100 MW level later and will happily allow him to intervene.
The National Assembly’s research service tells us that 39% of applications have been submitted to the IPC, the body that is about to be abolished; 26% of applications are with the UK Government’s Department of Energy and Climate Change; and 36% are decided by local planning authorities. Therefore, only a little more than a third of all decisions on applications to do with energy generating stations in Wales are based on planning policy devised in Wales. In my view, that is clearly unsatisfactory, as the purpose of devolution is to reflect Welsh feeling and attitudes. There is no denying that Wales wants to be a greener country and wants to specialise in renewables and the green economy. Indeed, sustainable development is written into the constitution of the National Assembly. However, if two thirds of planning applications are decided outside our borders and our jurisdiction, even though they may impact on us on a day-to-day basis, that is not power devolved, but power retained. I would hope that as part of the respect agenda, the UK Government would want to address that enormity.
The Plaid-Labour one Wales Government, to whom we were proud to belong, were very much in favour of transferring further powers to Wales. They were not alone, with environmental and civic organisations such as the Campaign for the Protection of Rural Wales and Friends of the Earth indicating their support and including it in their manifestos for this year’s National Assembly elections. The issue was raised during consideration of the Planning Act 2008, when the IPC was first created. My right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd) tabled an amendment in Committee, but it was not moved. The Liberal Democrats then moved a similar amendment on Report.
The right hon. Member for Wentworth and Dearne (John Healey) told the House:
“We have had detailed discussions, not just with the Department for Business, Enterprise and Regulatory Reform but with the Welsh Assembly Government and the Wales Office.” —[Official Report, 2 June 2008; Vol. 476, c. 518.]
However, there is no easily available record of what those discussions entailed or what the conclusions were. I can only assume that the Labour Government in London denied their colleagues in Wales the right to have the powers I have set out.
To return to the 2008 Act, the Liberal Democrats pushed their amendment to a vote, seeking specifically to exclude Wales from the remit of the IPC. Labour voted against the amendment, and the Conservatives abstained. The Liberal Democrats, of course, voted in favour of their amendment, as did my colleagues and I. Those who voted for it included the right hon. Member for Eastleigh (Chris Huhne), who is now the Secretary of State for Energy and Climate Change, and the right hon. Member for Sheffield, Hallam (Mr Clegg), who is now the Deputy Prime Minister.
Since then, the Welsh Conservatives have published their 2011 National Assembly election manifesto, which commits them to increase the present level from 50 MW to 100 MW. Likewise, Labour in Wales supports raising the bar. Even 100 MW is an arbitrary figure, but it represents a significant improvement on the current situation, specifically in relation to renewable energy-generating developments.
There therefore seems to be cross-party agreement in Wales, and there needs to be progress on the current situation. I can only hope that the London parties’ Welsh colleagues have agreed their proposals with their bosses in London, because there seems to be a divergence between the views of the parties in Wales and what is being said down here in Westminster.
My hope is that the issue can be dealt with in the Localism Bill, and my noble Friend Lord Wigley will table amendments to it in the other place. If the Bill cannot do so, however, I hope that it will be dealt with by the new commission that the UK Government have announced will look into further powers for Wales over the next few years.
I would like to highlight a point that makes a mockery of the current system in my constituency. My constituency is home to TAN8 areas. Those are specific strategic zones, which have been designated by the Welsh Government for the location of large onshore wind projects. Where there is a concentration of such developments, there will understandably be a public backlash, and the hon. Member for Montgomeryshire (Glyn Davies) has been vociferous in setting out his concerns about developments in his constituency.
To mitigate such concerns, councillors in Carmarthenshire have proposed that the local planning authority adopt an enhanced 2 km buffer zone between individual projects and inhabited areas, and the proposal has great support among local people. However, even if Carmarthenshire county council adopts the policy, it will apply only to developments below 50 MW. Clearly, many developments in TAN8 areas will be above 50 MW. It is no wonder local people are confused; to be honest, I am confused myself. It is not only my constituents and me who want clarity. During a recent visit by the Select Committee on Welsh Affairs visit to Düsseldorf, we met renewables investors, who informed us that having different planning guidance was a disincentive to invest.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
On that point, the hon. Gentleman will be aware of the proposal for the Atlantic array, which will construct 417 turbines 15 miles off the south and west Wales coast and also have an impact on the north Devon coast. How would his plans take effect when two countries and a number of other parties have an interest in such a major offshore development?
Jonathan Edwards
I was going to say something about that in my concluding comments, so if the hon. Gentleman will bear with me—
Jonathan Edwards
That saves me having to rewrite my speech halfway through.
Jonathan Edwards
Thank you, Mrs Main.
Let me return to the new clause that I proposed to the Localism Bill. It would have included generating stations not only on Welsh dry land but in Welsh territorial waters. The intention was once again to ensure consistency between the aims of the Welsh Government and actions around the Welsh coast. Under the Marine and Coastal Access Act 2009, consents for generating stations up to 100 MW are given by the Marine Management Organisation and, for levels above that, by the IPC. I see no reason why those powers should not be wholly transferred to the Welsh Government.
This is not an idle debate about devolving powers. A forward-thinking Welsh Government should look at the significant potential of our waters—the chance to generate clean, green energy and the economic potential that arises from it. The most prominent example of that would be the opportunity to develop a tidal lagoon in Swansea bay, which is usually quoted as being able to generate about 60 MW of electricity. The plan has been in the pipeline for decades, but we are still discussing how we can bring it into being. Giving the Welsh Government powers over electricity generating station consents at all levels would allow consistency of approach, add coherence to planning regulations and end the anomaly based on arbitrary figures for megawatt production.
During Third Reading of the Localism Bill, I made an intervention on the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), who agreed to meet colleagues and me. It was a constructive session, and I thank him for the manner in which he listened to the points made by my hon. Friend the Member for Arfon (Hywel Williams) and by me. He has since written to me to confirm some of the points raised in that meeting on 13 June.
First, the right hon. Gentleman confirmed the disparity between energy legislation powers in Wales and Scotland. It exists because, before devolution, planning law was devolved to Scotland but not to Wales. Therefore, the energy consenting role was transferred to the Scottish Parliament on its inception, but it was not given to the National Assembly for Wales. That historical precedent suggests that with planning powers now in the hands of the Welsh Government, energy consent functions should also be transferred. Will the Government confirm that they plan to honour that precedent in the long term?
The right hon. Gentleman’s letter also confirmed that there were more recent discussions with the Welsh Government in September and October last year. At the time, the relevant Welsh Government Minister argued that renewable energy consents in Wales should be increased from 50 MW to 100 MW, a position that has since become the official Labour line and has been taken up by the new Government in Wales. It was rejected by the Secretary of State for Energy and Climate Change, who said that UK Ministers are responsible for meeting the UK’s renewable energy target and therefore best placed to take decisions on applications for larger renewable projects, and that UK Ministers are responsible for drawing up and designating national policy statements. I hope the Minister can explain why the Secretary of State has changed his mind and why he has performed a 180° turn on the position he voted for in opposition during consideration of the Planning Act 2008. I am sure the hon. Member for Ceredigion would like that clarification, as would I.
The argument seems to be that UK Ministers have decided the rules, so only they can participate in the game. That does not make for a coherent argument in a devolved United Kingdom, and it makes for even less of a coherent argument on energy, which is an international issue. On an issue where there is agreement across the board on the need for change in Wales, I would welcome an indication from the Minister that there will be proper bilateral discussion and debate, and that would probably best take place during the proposed Welsh Calman process, which will happen in the next few years.
It is clear that on energy, as on other devolved issues, communication is paramount. The hurdles can be overcome if the UK and Welsh Governments wish to overcome them. To address the point raised by the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), my colleague Lord Dafydd Elis-Thomas told the National Assembly in a similar debate on 6 July:
“There is no reason why there should not be a renewable policy that could be co-ordinated between the nations of the UK. It is not for the United Kingdom to keep responsibility for itself in taking actions on behalf of Wales and Scotland, but a matter on which we should work together.
To finish, Wales should have the same responsibility as Scotland over the utilisation of its natural resources. Diolch yn fawr.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
It is a pleasure to serve under your chairmanship today, Mrs Main. I congratulate the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this important debate. I think I am going to disappoint him to a certain degree in not being able to agree with him on several matters of substance, but I am glad that we were able to start on a strong degree of consensus, by agreeing that scrapping the Infrastructure Planning Commission is important—not least to help him to deliver on his own manifesto commitments. He raised important issues to do with how major energy infrastructure projects in Wales should be determined in future. I congratulate him on the cogent and articulate way in which he did so.
I have 10 minutes to reply. I will write to the hon. Gentleman to make clearer any points that I am unable to cover in detail. He raised the Localism Bill, the abolition of the IPC, the referendum in May, inconsistencies between devolution settlements in Scotland and Wales, applications for consent under section 36 of the Electricity Act 1989, and recent discussions on devolution of major energy infrastructure. He also raised cross-party agreement in the National Assembly about devolution in Wales, several issues to do with technical advice note 8 strategic search areas, the impact on wind farm developments, particularly in his constituency and the wider area, and the different bodies making decisions on energy developments of different sizes in the same area; I agree that that can seem confusing, but we think that it has some strong underlying logic.
Overall, the Government’s policy on the area in question is clear: subject to the Localism Bill receiving Royal Assent, we believe that the right decision maker for major strategic energy infrastructure in England and Wales is the Secretary of State for Energy and Climate Change. We believe that a streamlined planning system that minimises delay and unpredictability and, importantly, ensures investor confidence, is best delivered through a unified strategic planning system for major energy projects in England and Wales. Some may argue that it is not appropriate for UK Ministers to make decisions on major infrastructure applications in Wales. We would strongly disagree. UK Ministers are as accountable to Welsh voters as they are to English voters and, in the absence of any compelling evidence to support a change, we vehemently believe that it is appropriate for UK Ministers to take those important decisions on major infrastructure of national significance.
A number of reasons have been set out to show why Welsh Ministers should make major energy infrastructure decisions, and I appreciate the points that the hon. Gentleman made, but the Government see no evidence for reconsidering our strongly held position. The coalition Government’s policy on the matter is exactly the same as that of the previous Labour Administration. It is important to consider the referendum on further Welsh devolution that was held on 3 March. There was a 63.5% vote in favour of the Assembly being able to legislate in a further 20 areas. I take this opportunity to wish the Assembly every success as it takes on that large tranche of new responsibilities. However, so soon after an important referendum on the scope of the Assembly’s powers, now is not the time to start to unpick things and revisit the question; it is not an appropriate moment to consider substantive changes to the devolution settlement as it affects energy consents. We need to leave the settlement as it is.
Jonathan Edwards
Does the hon. Gentleman recognise that his party fought the recent National Assembly elections, after the referendum, on the basis of increasing the threshold to 100 MW? Is he saying that those manifesto commitments were not worth the paper they were written on?
Gregory Barker
No. What I am saying is that the overarching decisions in the area are informed by the coalition agreement of the Government. That is the basis on which we make our important decisions, and we stand by those.
In Wales, the Holtham report suggested that Wales is underfunded, and recommended borrowing powers and devolution of some taxes. The Government have said that they will consider the Holtham report with the Welsh Government and, following the commitment in the coalition agreement, will establish a commission to consider funding and finance for Wales. The Secretary of State for Wales has announced the outline of that, and there will be further announcements to follow.
The Localism Bill is currently going through Parliament. The Bill would amend the Planning Act 2008, abolishing the Infrastructure Planning Commission and returning decisions to democratically elected and accountable Ministers. The Government believe that the Planning Act regime and the changes proposed in the Localism Bill need time to bed in to ensure that important matter of investor certainty. That is another reason why we do not believe we should take the hon. Gentleman’s suggestions forward. It is important to note that the impact of the abolition of the Infrastructure Planning Commission for Wales is minimal, and no different from the impact for England. The pre-application and examination procedures will remain the same and they will be handled by the Major Infrastructure Planning Unit, the IPC’s successor. However, final decisions will be made by Ministers accountable to Parliament.
It has been pointed out by the hon. Gentleman that the current planning system is confusing, as different authorities determine different-sized energy projects. That was an important part of his argument. We acknowledge that, for example, wind farms of different sizes in the same area are given consent by different bodies in both England and Wales: so a wind farm of 50 MW or less would be given consent by a local authority, while a neighbouring wind farm with a generating capacity over the 50 MW threshold would be determined by the Infrastructure Planning Commission, or, following its abolition, by Ministers at the Department of Energy and Climate Change. We believe that thresholds must be set somewhere, and that on balance those I have outlined are the right ones for the national interest. There is still significant scope for smaller projects to be determined by the local authority. Major energy infrastructure, given its national significance, should be determined at a national level.
On whether there is already enough planned energy infrastructure capacity, it is sometimes argued that there is enough in the pipeline. However, projects under construction or with planning consent would only replace the capacity lost through closures, which is currently expected to be about 22 GW. That does not take account of the need to move to low-carbon sources of generation, or of the need to increase the amount of capacity available to take account of the switching that we will need from fossil fuel to low- carbon electricity in domestic heating and transport. There is no guarantee that any given project will receive consent, or, having received it, will be built. When projects have been registered with the IPC those are not applications for consent; the companies have registered their interest in the application process. Projects in the pre-construction phase are not guaranteed to be built. The Department’s White Paper on market reform shows that up to £110 billion of investment in electricity generation and transmission is likely to be required within the next decade.
We also acknowledge that Welsh issues should be taken into careful consideration for major energy infrastructure applications within the Principality, and, of course, they already are. Currently, IPC commissioners with expertise in Welsh issues are appointed to panels for Welsh applications. It is very important that, following the abolition of the IPC, Welsh issues should continue to be considered in major infrastructure applications.
Options are still being considered for how the new unit will work within the Planning Inspectorate. Welsh Government officials are significantly involved in that integration work. The national planning statements require decision makers to take into account where appropriate the technical advice notes in Wales, which have been mentioned at length in the debate. So Welsh policy issues have significance and will be taken into account when an important planning decision is made. We certainly regard the views of local people as important. All major applications for energy infrastructure in Wales are dealt with on a case-by-case basis, after the views of local people have been taken into account. There are two opportunities for local people to have their say: first, when applications are being prepared for the submission to the IPC, the developer must consult widely with the local community; secondly, during the IPC’s examination of an application, any member of the public can submit evidence to the IPC.
The review of TAN8 is a matter for the Welsh Government. If there is a review, we shall take due account of its progress while considering individual applications in respect of which it is a material consideration, but we would not expect to suspend our consideration of applications while any review of TAN8 is being carried out, unless requested to do so by the developers concerned.
I am sorry that, because of limited time, I have not had the opportunity to reply at length to the questions posed by the hon. Gentleman but, as I said at the outset, I shall be happy to write to him on further specific points.
Special Needs Education
(13 years, 3 months ago)
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Annette Brooke (Mid Dorset and North Poole) (LD)
I shall begin by declaring an interest. I am patron of Diverse Abilities Plus, a Dorset charity that, among a range of activities, runs Langside school. I have a long acquaintance with the charity, which was formerly known as Dorset Scope, and with the school. I have seen the school’s intake change over many years; the children now have extremely complex needs. It is a fantastic school. Sadly, since the last boundary changes, it is no longer in my constituency, but I share its concerns about the future. The Minister will be aware that I have an equal passion for Montacute school, a maintained school that I expect to gain academy status; the children there also have complex needs. I believe that the schools complement one another, and that both should be allowed to thrive to ensure that we give children with disabilities the very best start in life. The charity’s name change reflects well on the positive outcomes that can be achieved with the right support.
I welcome the Government’s recent Green Paper on special educational needs, and its vision to improve outcomes for children and young people who are disabled or who have special educational needs. In particular, I believe that there is widespread support for a joint education, health and care plan, and I share the Minister’s aim to minimise the adversarial nature of the system for families. The role of special schools in providing specialist expertise is also recognised. However, concerns have been expressed about the provision of special needs education by non-maintained and independent special schools, which cater for around 13,000 of the most vulnerable children in the country who have wide-ranging but complex needs.
As well as Langside School, I have been contacted by the National Association of Independent and Non-Maintained Schools—NASS—which reminds me that I know well and value highly another of its members, the Victoria centre in Poole. I have also heard from I CAN, the National Autistic Society and Ambitious about Autism. I CAN has two special schools, Meath school in Surrey and Dawn House school in Nottingham, which specialise in providing intensive support for pupils aged four to 19 who have severe or complex language and communication needs. As well as supporting children directly in their settings, I CAN schools provide outreach to the mainstream, facilitate academic research and provide an assessment service for local authorities and parents. Both schools were rated as outstanding in the 2011 Ofsted inspection care reports.
The National Autistic Society provides six specialist schools for children with autism and complex needs. Inspectors recognise that those schools are excellent and provide good out-of-school services. Ambitious about Autism runs the TreeHouse school, with its outstanding provision; I am proud to have visited it. I mention those schools to give a flavour of the type of school that I wish talk about today.
I thank the Minister for generously allocating time to meet representatives from NASS earlier this year. However, its concerns remain and I am pleased to have secured this debate so that I can seek further clarification about the future of the sector in the Government’s vision for provision for children with special educational needs. There is deep concern that non-maintained and independent special schools are misunderstood or have been overlooked by policy makers. As a result, the sector faces a number of challenges in connection with its funding arrangements and the policy environment in which it must operate.
Ambitious for Autism has written to me, and I would like to share what it says with the Chamber. The Minister will be aware there are over 70 non-maintained special schools; they are approved by the Secretary of State for Education under section 342 of the Education Act 1996. To become approved, the schools have to be non-profit making and have demonstrated that they operate to a level at least equivalent to state maintained special schools. Their day-to-day running must be controlled by a governing body, the articles and instruments of which are to be agreed by the Secretary of State. To keep that status, schools must comply with the non-maintained special school regulations. Local authorities fund pupils to attend them. The schools cater for pupils with extreme and/or low incidence difficulties, and they provide specialist schooling.
The charity writes:
“While we welcome the diversification of provision for children with special educational needs, the creation of special academies and special free schools has created additional complexities and uncertainties for the special school sector.
Non-maintained special schools share many key characteristics with special academies and free schools, in that they are effectively special schools with freedom from local authority control but are not independent schools. However, the funding systems for these types of schools are all different, which creates unnecessary complexity and confusion in the system, as well as the potential for an unfair playing field.
Furthermore, special schools are being asked to apply to become special academies and special free schools without adequate information about the funding implications. This information is essential if the Government is asking schools to consider these options and make informed decisions.
Ambitious about Autism is increasingly concerned that a new and separate model is being developed with very little regard for the impact that this may have on a large number of highly successful schools that continue to provide an excellent education to some of the most complex children in England. We would welcome the opportunity to further engage with Ministers about new funding arrangements.”
For the purposes of this debate, I turn to the Green Paper on SEN, and specifically to page 52, which clearly states that parents will have the right to express a preference for any state funded school, including academies and free schools, but that does not seem to extend to non-maintained and independent special schools. That is despite the Government’s commitment to develop a national banded framework for funding provision for children and young people with SEN that has the potential to create greater transparency of funding. That needs clarification, as both non-maintained and independent special schools are usually funded by local authorities rather than parental placements, which means that in legal terms they are similar to academies and free schools and have less in common with the mainstream independent sector.
NASS is concerned about a response given by the Minister to the Select Committee on Education, which it says implies that parents will get the choice of a non-maintained and independent special school only after other local options have been considered. The association believes that this exclusion is based on untested assumptions that non-maintained and independent special school placements are always more expensive than similar placements in the maintained sector, and it calls on the Government to give parents the right to express a preference for a non-maintained or independent special school.
I hope that the Minister recognises those concerns and that she will give a clear answer on whether parents will be able to choose non-maintained or independent special schools. We also need to know why parents are given the choice of free schools but not schools from the non-maintained or independent sector.
The perception is that places at non-maintained special schools are consistently more expensive than local authority provided packages of support for children with the same level of need. NASS quotes the Minister as speaking of parents pressurising local authorities for expensive independent school places, but that should not be needed if the Government get early intervention right. There are two issues here: is provision more expensive, and will early intervention obviate the need for highly specialist provision?
On the first, as a former chair of education for a small local authority, I understand only too well the financial pressures of providing expensive placements. The costs of providing the right services for a child with complex needs are high. However, a local authority should not have to fund entirely these low-incidence cases, as such highly specialised provision is likely to be provided over a wide area.
In a recent constituency case, a young person with autism needed a highly specialised course that entailed residential provision. Some children and young people with autism and many other conditions have extremely complex needs and need highly specialist provision with perhaps a 24-hour curriculum. Obviously, in this period of reduced resources, it is crucial that the Department for Education and local authorities do more to achieve better value for money in the commissioning and delivery of special educational needs. As there is lack of information available in the SEN sector about cost-effectiveness, I urge the Department for Education to commission research on the cost of placements in the non-maintained and maintained special school sectors. The non-maintained sector obviously has accommodation, social care, health and allied therapy costs that will be reflected in direct financial transactions, so we need true costings for both sectors. That would go some way towards ensuring that there is a level playing field between the non-maintained and maintained special school sectors and that value for money is delivered at this time of fiscal restraint.
What evidence can the Minister point to that indicates that places at independent and non-maintained special schools are consistently more expensive than local authority packages of support for children with the same level of need? If there is no evidence on that at the moment, can it be collected?
There cannot be any disagreement about the value of intervention in early childhood for children whose needs can be identified early. In addition, the SEN Green Paper asserts that good early intervention will reduce the need for placements in non-maintained and independent special schools. NASS is concerned that that reinforces the view that placements in its sector are made only as a result of family breakdown or poor early placements. The small group of children who actively benefit from residential placements would like the Green Paper to say more about the role of residential provision and how it will be supported or explored further. Will the Minister provide some comment on that matter?
NASS would like greater recognition by the Government of early intervention for emergent special educational needs later in childhood. Although those often relate to early life experiences, some social, emotional and behavioural difficulties are not apparent until later in the child’s life. Often such young people are then subjected to multiple interventions before specialist assessment and support is offered. NASS would like to see this group of children and young people better reflected in the Green Paper.
I have two specific concerns about the treatment of this sector compared with the maintained sector, particularly bearing in mind the fact that 99% of places are funded through the public purse as a result of local authorities making placements. In legal terms, it is very similar to academies and free schools, and it has less in common with the mainstream independent sector.
One concern relates to specialist school funding. NASS discovered by chance that funding for non-maintained special education schools had not been allocated as part of the move to direct school grant funding. It was concerned about that, especially as it seemed that those schools under local authority control had actually received a commitment that money would still be passed on to them. It seems that there was a communication problem within the Department, and the schools will now receive only a proportion of the money they were originally expecting. Clearly, there are some concerns, especially around communication.
At the end of July, NASS was made aware that new non-maintained special school regulations had been laid before Parliament on 8 July—they came into force on 1 September 2011. Neither NASS nor the schools had been made aware that that had happened. By then, schools were on summer holidays and were unaware of the new regulations to which they were returning in September. I am aware that NASS contacted officials at the Department for Education and also wrote to the Secretary of State for Education in August 2011, but it is still awaiting an official response.
Finally, special schools in the independent sector are concerned about Lord Hutton’s recent review of public service pensions. There is great concern that teachers in the independent sector might be excluded from the pension scheme, which would affect movement between the two different sectors quite considerably and could affect the supply of highly qualified and specialised teachers.
In conclusion, will the Minister provide assurances that the excellent specialist provision that the sector provides for some of the most complex children is recognised and is not hindered, and that there will be a level playing field in which such schools can operate?
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing this important debate. May I also say that it is a pleasure to serve under your chairmanship, Mrs Main?
I should like to cover three specific points that the independent sector has raised with me. First, will personal budgets proposed in the SEN Green Paper be available to enable parents to purchase provision in the independent sector? Secondly, is there any desire to implement the auxiliary aids and services provisions for education in the Equality Act 2010? That could have a huge impact on independent schools, with schools having to fund additional provision which, historically, individual parents have paid for under their contractual arrangement with independent schools.
Finally, if an independent school does not offer a place to a pupil with special educational needs, the school could be open to a disability discrimination challenge, while mainstream pupils who are refused places have no such rights. Is it right that an independent school should find itself in such a position? The place will have been refused for sustainable reasons yet the schools are “forced” to spend thousands in order to defend their position with no prospect of being awarded costs even if they are successful in defending the claim at a tribunal. I said that I would be brief. Those are the three specific points on which I seek clarification from the Minister.
The Minister of State, Department for Education (Sarah Teather)
It is a pleasure to serve under your chairmanship, Mrs Main. I think it is the first time that I have been in Westminster Hall when you have been in the Chair.
I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing this useful and timely debate. I am aware of her long-standing interest in this issue. She kindly mentioned that I attended a meeting that she called with a number of schools from her area and nationally. I am grateful to have this opportunity to place some issues on the record and to clarify some of the points that she has raised.
Independent and non-maintained special schools play a valuable role in supporting some of our most vulnerable children and young people, many of whom have very complex needs, and they also have considerable expertise to offer other schools. My hon. Friend mentioned a number of schools in her constituency, outlined their particular expertise and what they are able to offer to children and families. I pay tribute to the impressive work that schools in her constituency and across the country do in supporting children and families. They make an invaluable contribution to supporting children and to the sector as a whole. Independent and non-maintained schools are an established part of the landscape of special educational needs provision in this country and they form an integral part of the diverse range of schools that we are seeking to establish, in order to improve choice for parents and support for children and young people.
In the time available to me, I want to try to pick up on the points that were made by my hon. Friend and by the hon. Member for Gillingham and Rainham (Rehman Chishti). Both hon. Members will be aware that this debate takes place relatively soon after we published a Green Paper on SEN and disability. We carried out a consultation that received 2,400 responses and we are going through all those responses. They were very varied, coming from education professionals, including teachers, families and health workers. Later this year, we will publish a formal response. So I take this debate in the spirit of that consultation. We are still in a period of gathering information and views about our Green Paper before deciding how to work through some of the proposals that we made and to ensure that we get the detail correct. During this period, we are also establishing local pathfinders to test out some of the best ways of delivering the change that we have proposed. We will announce details of those pathfinders later this month.
My hon. Friend made a number of specific points about naming schools and school choice. It is perhaps worth my placing on record what the Green Paper says. We are widening the range of schools from which parents can choose by enabling parents, teachers and others to set up free schools and by allowing existing schools to become academies. The free schools route also provides an opportunity for non-maintained schools to seek academy status if they wish to do so. We intend to change the law so that parents of children who would have an education, health and care plan have the right to express a preference for any state-funded school and to have that preference considered on the same basis, whether it is for a special school, a mainstream school, an academy or a free school.
My hon. Friend asked why we have not made a similar provision for parents to express a formal preference and then for local authorities to name a school if it is a non-maintained school or an independent school. It is about the original purpose of the legislation, which is to ensure that parents get that choice—often when a school may not choose to take the child. As she will be well aware, the process is that parents are able to express a preference and the local authority will then consider whether that is the right placement for that child, subject to the legal provisions about the best use of resources and whether it will have any detrimental effect on the education of other children. At that point, if the local authority agrees—if it does not meet the conditions, it has to agree—to place the child in that school, it formally names that school and the school is forced to take the child.
Of course, non-maintained schools and independent schools do not want to be forced to take a child and, in a sense, that is a point that the hon. Member for Gillingham and Rainham made when he raised wider issues about disability discrimination legislation. We have a diverse range of schools and there are balances of freedoms and restrictions applied to different schools. If non-maintained schools want to take on slightly different freedoms but also different restrictions, they have the freedom to apply for academy status, and independent schools have the ability to apply for free school status, as I outlined a while ago. In doing so, they trade some of the freedoms that they already have and gain different restrictions. Therefore, it does not make sense in that situation to extend the legislation so that schools would be forced to take a child, and I do not think that that is something that those schools would want to do. However, I stress that parents will continue to have the right to make representations for a place at a school that is not state-funded and the local authority must take those representations into account when it makes its decisions on placements. We are not proposing any change to that process in the Green Paper.
My hon. Friend raised points about whether non-maintained special schools and independent schools are always more expensive. She quoted some things that I had said at a hearing of the Select Committee on Education. I think that they have been taken very slightly out of context. It is true to say that some independent schools and some non-maintained schools are more expensive than state-funded provision, but I have not said at any stage that all non-maintained special schools and all independent schools are always more expensive. It would simply be incorrect to say that. We have spoken to the National Association of Independent Schools and Non-Maintained Special Schools on this point and we have tried to encourage it to submit its own evidence about costs to the review about school funding, which is ongoing. We are out to consultation until about mid-October and we encourage those in the sector to submit what evidence they have about costs and to say whether full costs are being taken into account. Such evidence would be very useful when we are considering what we do with pupils, particularly those high-cost pupils about whom my hon. Friend spoke earlier.
It is also worth saying that local authorities are obliged to make decisions about placements on an individual basis. There is no doubt that for some children attending an independent or non-maintained special school will be absolutely the appropriate and right course of action for them, and the local authority is then required to fund a place for the child at that school. In fact, the number of children who are being educated in the independent sector has risen, not fallen, during the past five years.
My hon. Friend made some points about a local offer and the information that is available to parents. Local authorities already have a statutory duty to give parents information about non-maintained special schools and independent schools in their area. It is up to local authorities to decide whether to include that information in their local offer and that is something that we would like local authorities to develop on a local basis.
My hon. Friend did not mention the issue of the work force, but I wanted to make a couple of points about that because NASS raised it with us in its response to our consultation on the Green Paper. Independent and non-maintained special schools can now apply to become teaching schools if they are rated “outstanding” by Ofsted and have experience of collaborating with other schools. As I said earlier, however, those schools have such a lot of expertise that I want to encourage them to join an alliance with other schools in their area to form a teaching schools partnership, so that we can ensure that we are making use of the expertise that they have.
My hon. Friend very fairly made some criticisms about communication between the Department for Education and other organisations, particularly NASS, in the past few months. Those criticisms are absolutely fair and valid. Indeed, I wrote to Claire Dorer of NASS just this week to say that some of the failures of communication have been, in my view, inexcusable and that I am absolutely determined to ensure that they are not repeated. The Department is in regular contact with NASS on many of the points that my hon. Friend has raised. It is not an excuse, but by way of offering an explanation I will say that there has been some reorganisation within the Department about responsibility for some of these issues and unfortunately that has led to some issues of miscommunication.
I will come back to the other points that my hon. Friend made, but first I will address the specific questions that the hon. Member for Gillingham and Rainham asked. He asked about personal budgets and whether parents would be able to buy provision in the independent sector. The answer is yes, but we think that it is unlikely to apply to the whole school place. That is something that we are testing at the moment through our pathfinder schemes, but we think that it is unlikely to be practical to apply to the whole school place. Of course, as I stated a short time ago, if that provision is correct for a child, local authorities are already bound to fund the whole school place anyway, but they may well be able to pay for some of the extra provision that might be offered in a particular school.
Are we going to implement the auxiliary aids and services regulations? It is our intention to do so. There has been some delay in our doing so. Of course, the regulations will apply to all schools and not just to independent schools; all schools will be bound by them.
The hon. Gentleman also made the point about independent schools being open to disability discrimination challenge if they fail to accept a child. That is the flipside of the other point that my hon. Friend the Member for Mid Dorset and North Poole made earlier about naming a school. If a school is state-funded, the local authority can specifically name it and ensure that it is forced to take a child. It is a similar attempt to protect things for families.
In the last minute available to me, I want to respond to the points that my hon. Friend made about the Hutton report. We are, of course, looking at this issue as we consider how to deal with the detail of the recommendations made by the Hutton commission. There will be some issues to balance about what we do and there are, of course, pros and cons attached to private sector bodies’ participation in public sector pension schemes. That is something that we will have to consider with the teaching profession as a whole, but I understand the points that my hon. Friend raised.
In the time available to me today, I have done my best to answer all the points that my hon. Friend has made. There are two other points about funding on which I will respond to her in writing, but I hope that I have responded to all the other points that she has raised.
Palestinian State (UN Membership)
(13 years, 3 months ago)
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Richard Burden (Birmingham, Northfield) (Lab)
I am very grateful, Mrs Main, to have the opportunity to debate this very important and timely issue. I thank the Minister for being with us today; I realise that since he has been in government, as Minister for Europe, this matter has not been his brief, but I know that he is well versed in it because it was part of his shadow brief. I very much hope that he will be able to give us some idea of the UK Government’s current thinking. I thank also the hon. Friends and hon. Members on both sides who are present; the level of attendance reflects the interest in the subject.
The context of this debate is the early-day motion that was tabled yesterday by my right hon. Friend the Member for Cynon Valley (Ann Clwyd). She wished to be with us today but unfortunately could not be. The early-day motion calls on our Government to recognise an independent Palestinian state, alongside Israel, and to support its admission to the United Nations. The early-day motion is already supported by over 40 right hon. and hon. Members, and I am sure that more will add their name in the coming days.
Time is very limited, and before I move on to the issue of Palestinian statehood, I want to say that recent weeks have given us all a timely reminder that this conflict has already claimed far too many lives. We have seen Israeli and Palestinian civilians killed, including children on the Palestinian side. At least 15 Palestinians and nine Israelis have been killed in the past few weeks, and many more have been injured. I am also concerned about reports that the Israeli military is apparently planning to train settlers in the west bank and arm them with tear gas and stun grenades, and that it is talking up confrontation around the possibility of a vote at the United Nations in a few weeks’ time. I would be grateful if the Minister briefly explained what representation the UK Government are making to the Palestinian Authority, the Israeli Government and others, to encourage them to avoid any escalation of violence or confrontation in the run-up to the UN meeting.
Every debate and I think virtually every Foreign Office questions I have attended since I have been in this place in which the subject of Palestine and Israel has come up has returned to the fact that we all support a two-state solution. Based on what we say, I think that few things have a greater degree of consensus in this House, but what the Palestinians are asking of us now, in their initiative at the United Nations, is no more and no less than for us to mean it—to do what we say. The Palestinians are not asking for anything that Israel has not demanded and had recognised by the international community for more than 60 years.
I hear opponents of recognition suggest that the recognition of Palestine as a state and its admission to full membership of the United Nations should be treated differently—that somehow it is a way of avoiding the urgent need for a negotiated settlement. I do not believe that those two things are contradictory.
Alex Cunningham (Stockton North) (Lab)
I congratulate my hon. Friend on securing this debate at such an important time. I have recently returned from a trip to the Gaza strip, where I learnt at first hand about the plight of the Palestinian people. A third of them depend on food aid, which is under threat. From talks with politicians, the United Nations and others, it appears—
Mrs Anne Main (in the Chair)
May I ask the hon. Gentleman to keep his remarks brief? A lot of people might make interventions.
Alex Cunningham
Okay. In talks that I was involved in, it was clear that the Palestinians felt that they did not have a voice. Does my hon. Friend agree that the granting of UN membership will provide them not only with that voice but with equality with others on that world stage?
Richard Burden
My hon. Friend makes a very good point about equality, because Israel is recognised as a full member of the United Nations and I am not aware of any state that says it should be derecognised as such. Israel has internationally recognised borders, delineated by the green line, and that has not been seen as an impediment to a negotiated settlement; indeed, in some cases recognition of Israel is seen as a precondition to a negotiated settlement. The Quartet has even suggested that individual political parties should be excluded from peace talks unless they sign up, unilaterally and in advance, to recognition of Israel.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Will the hon. Gentleman give way?
Richard Burden
Before I give way I want to say that I will take as many interventions as I can, but we are limited to half an hour and I want to allow the Minister time to make some remarks.
Jack Lopresti
Does not the hon. Gentleman agree that granting the Palestinian Authority UN membership would embolden extremists, who would view it as a reward for refusing to make concessions for peace?
Richard Burden
No, I do not agree. If the hon. Gentleman wishes to talk about the fact that having extremists in government should be an impediment to recognition of the state that that Government represents, he could perhaps look at some members of the Israeli Government, particularly the Foreign Minister.
As I have said, the Quartet has even suggested that some parties should be excluded from peace talks unless they sign up in advance to recognition of Israel, but if recognition is so fundamental in respect of Israel, what is the problem with recognising Palestine as a state, as requested by the Palestinian people, and accepting it as a full member of the same United Nations, with precisely the same borders as those that are recognised for Israel—in other words, the green line?
Jeremy Corbyn (Islington North) (Lab)
Does my hon. Friend not recognise that a big problem is that Israel is occupying large parts of Palestine and, more importantly, that Israel refuses to recognise what its own borders are?
Richard Burden
Israel does appear to have the problem of not being able to decide exactly where its own borders are, but the international community is very clear about where they are, as are successive United Nations resolutions: the green line.
What the early-day motion simply says, and what I and the Palestinians are saying, is that the same border should apply on both sides, for a Palestinian state and an Israeli state. When the Minister responds, will he give the UK Government’s view on that? Does he see recognition of a Palestinian state as an obstacle to a negotiated settlement, and if so, what impediments has he identified, and why does he believe that they would hinder such a settlement? Why, if they are impediments to the recognition of Palestine, are they not seen to be impediments to the recognition of Israel that we all accept? If the Minister does not agree that recognition is an obstacle, does he agree that recognising Palestine at the United Nations would not prevent the future negotiations, which we all agree are needed to reach a lasting settlement, from taking place?
Jim Shannon (Strangford) (DUP)
I declare an interest as a member of Friends of Israel. Does the hon. Member agree that Palestine should also recognise Israel in every sense of the word, and that part of that recognition should be that terrorist attacks coming from Palestinian lands towards Israel should cease? Does he agree that that would be a gesture that should be done as well?
Richard Burden
I and, as far as I know, everyone in this room is on record as calling on both sides to cease violence against the other. If the hon. Member is active in Friends of Israel he would perhaps already be aware that Israel is recognised: Palestine recognised Israel many years ago. Israel is a member of the United Nations and no one has called for it to be removed, or for its derecognition.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
When we visited Lebanon in January, we were impressed by the offer by that country’s Prime Minister that if the Palestinian Authority or, in fact, a UN-recognised Palestinian state, gave an identity card to the people of Palestine living in Lebanon, those people would be freed up to take up employment and break through all the barriers that do not allow them to have a decent life in that country. Is that not another incentive for the UN to recognise the state of Palestine?
Richard Burden
My hon. Friend makes a very good point. I am not alone in making the points that I am making in this debate. As the early-day motion tabled by my right hon. Friend the Member for Cynon Valley notes, 122 countries, representing nearly 90% of the world’s population, recognise Palestine. Even among Israelis, polls suggest that 48% support recognition and only 41% oppose it.
What is more, last year, President Obama set a target of September 2011 for welcoming the independent sovereign state of Palestine as a new member of the United Nations. That aim was endorsed by the UK last year. The Palestinian Prime Minister, Salam Fayyad, has been congratulated many times by the international community and in this place for the state-building work that he has led, and the Palestinian Authority have been congratulated by many leading international organisations. Recent reports by the World Bank, the International Monetary Fund, the EU and the UN have all said that not only is Palestine ready for statehood, it already operates as a state in many ways. Does the Minister share the view of those major institutions that Palestine has proved itself ready to function as a state? If not, what more does Palestine need to do either to be recognised as a state or to gain full membership of the United Nations? If the two differ, what must Palestine do to meet each requirement?
Statehood does not solve everything. A negotiated settlement will still be needed, and the parties will still need to come together to agree the many difficult issues that lie at the heart of the conflict in the middle east. However, the Palestinians look at it in this way. The international community’s continuing unwillingness to make recognition of Palestine’s right to statehood more than theoretical means that in practice, Palestine’s chance of achieving a two-state solution shrinks with every month that passes. It shrinks with every settlement built or expanded in the west bank. It shrinks with every roadblock that cuts the west bank into Bantustans. It shrinks with every Palestinian home demolished in east Jerusalem, with every Palestinian farmer cut off from the land that he or she cultivates by the construction of Israel’s barrier within the west bank rather than along the green line and with every olive grove destroyed by Israeli settlers. It shrinks with every Gaza fisherman prevented from fishing in waters off the Gaza coast, with every Palestinian workshop prevented from exporting its goods from Gaza into Israel or the wider world and with every truckload of reconstruction equipment prevented from entering Gaza to rebuild homes shattered by war.
That is why Nabil Abu Rudeina, the spokesman for President Mahmoud Abbas, said recently:
“As long as Israel’s settlement activities continue and as long as Israel refuses to accept the 1967 borders, after 60 years of occupation, we have no other choice but to turn to the international community. We are not declaring war. We are applying to the United Nations.”
After the Arab spring, at a time when the UK Government have been at the forefront of support for people calling for self-determination across the middle east, are we really saying that the Palestinian people should be different? If not, we return to the essential question. It is not about what we keep saying; it is about deciding what we are going to do.
The EU has said clearly that individual states must make up their own minds on the matter at the UN. When will the UK decide whether it will recognise Palestine and support its admission to full UN membership, if that is the recognition that the Palestinians ask for? In practical terms, what is preventing the UK Government from doing so now?
It is time to help to level the playing field and to support alongside the independent and recognised state of Israel an independent and recognised state of Palestine. Both peoples’ legitimate right to self-determination must be realised. The two states can then enter into negotiations on an equal footing to agree the details of a lasting and peaceful two-state solution and the final borders between those two states based on justice and international law. That is all that the Palestinians ask. Why is it so difficult for us to agree to it?
The Minister for Europe (Mr David Lidington)
I thank and pay tribute to the hon. Member for Birmingham, Northfield (Richard Burden) not just for securing this important debate but for the way in which, for many years, he has championed the cause of the Palestinian people with commitment, passion and, in my experience, always with immense courtesy to other Members, whether they agree with or differ from him on the issue. The events in the middle east are important to him and to everybody in the House; the attendance at this debate demonstrates the importance that the House gives to the matter.
It is also right for me to say that despite everything else that has been going on the Arab world in the past 12 months—in north Africa, Syria and Lebanon—the Foreign Secretary and the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North East Bedfordshire (Alistair Burt) have consistently held the view that finding a just and peaceful settlement between the Israelis and the Palestinians must remain a central part of British and international policy towards that region. I have heard my right hon. Friend the Foreign Secretary say on many different occasions that what has been happening in the Arab world makes it more urgent, not less, that the international community should use every bit of leverage that it has and every bit of diplomatic energy that it can spare to press for that settlement to be agreed sooner rather than later.
This is the 20th year of the middle east peace process, and it has been 20 years since the Madrid conference was launched, but if we are honest, not much has changed for Palestinians and Israelis in the 20 years since the Oslo accords were signed. Israelis continue to face threats from violent extremists, and Palestinians, as the hon. Member for Birmingham, Northfield said, still have no state. The United Kingdom Government, whatever party has been in office, have long made it clear that peace in the middle east enabling a resolution of that long-running dispute has enormous importance for both global and regional security. The goal of the international community should be to ensure that this is the last year of process and the beginning of a lasting agreement between the parties.
After the events of the past few months, the world can no longer claim that change in the middle east will come slowly and incrementally, nor can we allow the middle east peace process to limp along indefinitely as it has done. If the peace process becomes a casualty of wider regional change, that will feed instability and violence rather than democracy and human development.
The Government believe that there is no alternative to negotiations to address all the fundamental issues at the heart of the Israel-Palestine conflict. A solution cannot be imposed from outside, although other countries can influence those directly involved. We want the parties themselves to redouble their efforts to break the impasse and resume negotiations for a two-state solution before the window to such a solution closes. Bold leadership is needed on all sides. Neither Israel nor the Palestinians can afford to let the opportunity for peace slip further from their grasp. In our view, the two-state solution, however difficult it is and however narrow the remaining window of opportunity, is the only way to realise both the aspiration of Palestinians for a state of their own and the long-term security that Israelis deserve.
This month marks the time frame set out by President Obama for welcoming Palestine as a full member of the United Nations. September also marks an important waypoint in the Palestinian Authority’s good work on their state-building programme. I applaud and welcome the progress made by the Palestinian Authority on institution-building and financial management initiatives, which the United Kingdom has supported. We recently signed a memorandum of understanding to continue to support the Palestinian Authority in their work to build up the institutions of the embryonic state and support the Palestinian people. In the current financial year, the Department for International Development expects to provide almost £80 million to this end as part of a total of £275 million allocated to the occupied Palestinian territories for the next four years. We hope that the Palestinian Authority will complement this admirable work on state building with the necessary progress on the political track.
I understand clearly, and remember from the visits that I paid to the occupied territories during my time as shadow spokesman on the middle east, the sense of anger and growing frustration that exists among ordinary Palestinians at the things about which the hon. Gentleman has spoken—the settlement building, the roadblocks, the demolition of Palestinian homes and the construction of a barrier, the reason for which one can understand in terms of Israel’s security needs, but which goes beyond the green line and which, as the hon. Gentleman has said, in too many places separates working rural families from their farmland or makes it more difficult for Palestinian workers to travel to their accustomed place of work in Israeli-administered areas.
The Prime Minister made our position on UN recognition of a Palestinian state clear during President Obama’s visit in May. He agreed with the President that a Palestinian state was a legitimate goal, but the best way of achieving this was through a comprehensive agreement between Israel and the Palestinians.
This is an important issue for Britain for four key reasons. First, as I have said, the Israeli-Palestinian conflict remains one of our top priorities. Secondly, there is a sense of growing frustration and pressure among the Palestinian people, which threatens the stability that we have seen over the past year. At a time when we have seen people all around the Arab world fighting for, and realising, their rights to shape the societies and Governments under which they live, it is only just that the Palestinians too should realise their goal of an independent, viable state of Palestine.
Thirdly, the security of Israel and her prosperity matters deeply to the United Kingdom as an important strategic partner and friend. We have long said that Israel’s own need for long-term security can only be assured if there is a comprehensive settlement to the Israel-Palestine dispute, including the creation of an independent, sovereign and contiguous Palestinian state.
Ian Lavery (Wansbeck) (Lab)
Does the Minister agree that, under international law, Palestine fulfils all the requirements to become a recognised state?
Mr Lidington
I think that one could find different lawyers who would be prepared to argue almost any point of detail on that question. I want to come on to the point about national recognition and the UN position. I make it clear that the Government’s position is that we believe that, whatever we say or vote for in this Chamber and whatever is voted for in the United Nations, whether in the Security Council or the General Assembly, a lasting, enduring, peaceful settlement on the ground is something that, in practice, will only be secured through negotiation, not by resolutions passed in a particular place.
Mark Durkan (Foyle) (SDLP)
In the context of all the negotiations that have taken place or that have, at times, broken down, we have often heard from Israel that the problem from its perspective is that it does not have a reliable, equivalent partner with which to negotiate. Would not some progress in terms of recognition of statehood remove some of the claimed problem that Israel says it has in the context of this very frustrating negotiating process?
Mr Lidington
I understand the hon. Gentleman’s argument, but we also have to accept the political reality that various acts have taken place in the past few years that have made it difficult to keep negotiations going. Direct negotiations of a serious character are not now taking place. In the absence of such negotiations, I think that there is simply going to be greater bitterness, greater difficulty and the narrowing still further of that window of opportunity for the successful creation of a two-state solution. I think that the emphasis for the United Kingdom and the international community should be on trying to get those negotiations back on track.
My fourth and final point about why this matters to Britain is that, of course, the dispute deeply affects the politics of the broader region, and the fluid dynamic resulting from the Arab spring makes the prize of stability that would come from an Israel-Palestine agreement even more significant.
We want to see a return to negotiations on the basis agreed by the Prime Minister and President Obama. The United Kingdom Government want to see borders based on 1967 lines with mutually agreed swaps, security for Israel, and the right for Palestinians to govern themselves in a sovereign and contiguous state. We see Jerusalem as being a shared city which will be the capital of both countries, and we also of course accept that there needs to be an agreed and just solution for Palestinian refugees.
Jeremy Corbyn
I thank the Minister for giving way; he is being most generous with his time. Can he cast any light on the Government’s views on the plight of Palestinian refugees in Lebanon, Syria and Jordan in particular, and what would happen to their status in respect of recognition of a Palestinian state?
Mr Lidington
The detail of that is something that will have to be worked out in negotiations. I think it is fair to say that the negotiations that took place between President Abbas and former Prime Minister Olmert began to address the issue of refugees, even though no final agreement could be reached before Mr Olmert left office. Our view on the humanitarian treatment of those people, particularly in Lebanon where there are some serious problems concerning the treatment of Palestinian refugees, is that we urge the host Governments to treat those Palestinian refugees fairly, humanely and equally.
Mr Lidington
I will give way, but I am conscious that I want to respond to the key point of the hon. Gentleman’s speech.
Richard Burden
I hope that the Minister will do that and I will make my question brief. I agree completely with what he has said about the need for a comprehensive settlement to achieve peace, but my question is: do the UK Government see the recognition of a Palestinian state as an impediment to achieving that comprehensive settlement? If not, why do we not do it?
Mr Lidington
We think that the recognition of a Palestinian state is something that needs to be achieved within the framework of negotiations. That is certainly the best way in which to go about it. It now looks as if Palestinian action at the United Nations this month is increasingly likely. We are working closely with partners to build consensus on a way forward that recognises the progress Palestinians have made on their state-building efforts, that meets Israel’s legitimate security concerns, and that avoids confrontation at the UN, which would have a damaging effect on the resumption of negotiations. Whatever action is taken in New York, it is important that that increases and does not diminish the prospects for a return to negotiations. We have reserved our position on the question of recognition of a Palestinian state while we continue to urge all parties back to talks. Recognition is a matter for each Government to decide bilaterally and, if needed—no resolution has yet been tabled—we will take a decision nearer the time, in consultation with the European Union and other partners.
It is important to remember that action in the UN is not an end in itself. September is not the closing date for resolution of this conflict. What happens afterwards is vital, which is why our goal remains ensuring that steps are taken now to pave the way for significant and conclusive talks, and why we believe it is vital that any action in the UN does nothing to endanger the prospect of such talks.
Martin Horwood (Cheltenham) (LD)
As co-chair of the Liberal Democrat international affairs committee, I would welcome a British yes vote in September. Is not the irony of the American and Israeli position in opposition to this that both the United States and Israel themselves declared their own statehood in advance of the final resolution of their negotiated borders and many other issues?
Mr Lidington
The hon. Gentleman makes his point tellingly and well, but I will not be drawn into 1776 and all that. We want the new generation of Palestinians to grow up in hope, not despair, believing in a peaceful settlement with Israel, and not impoverished and not susceptible to terrorist recruitment. I want to assure the House that this Government will not cease in our efforts to support the parties in finding a long-term sustainable solution to this conflict that will make that vision a reality.
Written Ministerial Statements
(13 years, 3 months ago)
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Capital Allowances Anti-avoidance
(13 years, 3 months ago)
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The Economic Secretary to the Treasury (Justine Greening)
On 12 August 2011 the Government announced a change in legislation to prevent tax avoidance. The Government have set out a clear strategy on preventing tax avoidance and will not hesitate to take action to stop those who seek to obtain an unfair advantage by exploiting unintended tax loopholes. This measure demonstrates the Government’s commitment to act quickly to close loopholes when this happens.
The Government became aware that an avoidance scheme was being promoted that sought to take advantage of an exception from certain capital allowances anti-avoidance rules provided by section 230 of the Capital Allowances Act 2001 (CAA). The scale of the tax potentially put at risk by the scheme was such that the Government decided to announce that section 230 CAA will be repealed by legislation introduced in Finance Bill 2012 in relation to expenditure incurred on or after the beginning of 12 August 2011, to the extent that section 230 provided an exception from section 217.
HMRC published a statement on their website (www.hmrc.gov.uk/budget-updates/hmrcstatement-12Aug.pdf) on 12 August explaining the change, together with a technical document containing draft legislation which the Government intend to include in the next Finance Bill.
Prisoner Voting Rights
(13 years, 3 months ago)
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The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
In November 2010, the European Court of Human Rights in the case of Greens and MT v UK found that the UK’s ban on prisoners voting was in breach of article 3 of the First Protocol of the European Convention on Human Rights (the right to free and fair elections). In the judgment the Court prescribed a timetable for the introduction of legislative proposals to amend the blanket ban, namely a period of six months from when the judgment became final (which was 11 April 2011). The Government have since been considering the appropriate course of action in order to respond to the Greens and MT judgment.
In July, the Grand Chamber of the European Court of Human Rights accepted a referral in the case of Scoppola (No.3) v Italy. A hearing before the Grand Chamber has been scheduled for 2 November. The legal issues which arise in Scoppola under article 3 of the ECHR are analogous to those which arose in Hirst v UK and Greens and MT.
Given the close relationship between the cases, the Government have sought leave to intervene in the proceedings before the Grand Chamber in Scoppola. The Government also requested an extension to the deadline set in Greens and MT to enable it to take account of the Grand Chamber’s judgment. The Government were notified on 31 August that the Court has granted an extension of six months from the date of the Scoppola judgment, and on 5 September that the Government will have the opportunity to express our views on the principles in the Scoppola case.
The Government welcome the decision of the Court and believe it is right to consider Scoppola and the wider legal context before setting out the next steps on prisoner voting.
Southern Cross Healthcare
(13 years, 3 months ago)
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The Minister of State, Department of Health (Paul Burstow)
I wish to update the House further on the situation regarding Southern Cross Healthcare.
Throughout, the Government’s overriding concern have been for the welfare and safety of the 31,000 residents in Southern Cross’s care. We are clear that this must be the paramount concern for all parties involved in the discussions about the future of the company.
Over the summer, officials have kept in close contact with Southern Cross’s senior management, landlords and lenders as the negotiations to achieve a consensual and solvent restructuring of the business have developed.
I have previously told the House that the intention is that the company will be wound up and its business transferred to other care operators. This will be done in such a way as to have minimal impact on the residents and staff of those homes. Until a new operator is registered and takes over the services in any care home. Southern Cross will continue with full responsibility for continuity of care.
In the last month, each of Southern Cross’s landlords has been considering which new care operator it will work with. Those discussions have progressed well and now all bar a handful of landlords are coming to the end of finalising the commercial arrangements that will apply in future. Within the next few weeks, we expect agreements to be signed that will effect the transfer of the business and assets of each home operated by Southern Cross to the new operators. The expectation is that formal transfer of care homes will be achieved in two waves, with around 330 homes transferred at the end of September and the remaining 400 homes transferred at the end of October. At that point Southern Cross will no longer be responsible for providing care anywhere in the country and the company will be wound up. Throughout, the Government have strongly urged all parties to agree their plans as swiftly as possible so as to offer reassurance to residents, staff and families. The company has informed all Southern Cross staff, together with residents and their families, of these plans in order to provide reassurance.
Last week, the Association of Directors of Adult Social Services published information for each of Southern Cross’s homes about the position it has reached in its transition to a new care operator. The information also included details of any inquiry or helplines set up locally or regionally by the company and by local authorities which can be accessed if further information is needed. As the new care operators are settled, their names will be added to the information. Within the next few weeks we expect the complete picture to emerge for each care home, and it will be clear who is the landlord and who is the new operator. Members may wish to draw this information to the attention of any constituents that are concerned or have relatives in Southern Cross’s homes. A link can be found at:
www.dh.gov.uk/health/2011/09/transfer-of-southern-cross-healthcare-to-new-operators/
The process to register the new care operators with the sector’s regulators in each part of the United Kingdom and to cancel Southern Cross’s registration has begun. No transfer of homes will take place without new operators having been approved and registered. Alternative operators will need to demonstrate to the regulator that they are capable of delivering high-quality care and of meeting all regulatory standards in the homes they take over. It is important that this process moves quickly and smoothly and, in respect of operators in England, the Care Quality Commission have assured us that they have the resources to complete the necessary regulatory work in time. However, regulators will not lower the regulatory threshold or reduce the rigour of the registration process to achieve that. Standards will not be compromised.
I understand that staff consultation under the TUPE regulations has also commenced and that the staffs elected representatives and the incoming operators are to be invited to attend a series of meetings to discuss these arrangements.
Notwithstanding the good progress that has been made, it is important that I restate the Government’s commitment that whatever the outcome, no one—state-supported or self-funded—will find themselves homeless or without care. We remain in close touch with the Association of Directors of Adult Social Services to ensure that in all parts of the country they are ready to respond to any potential disruption to the continuity of care and to ensure that all residents are protected.
I have previously told the House that the Government will be considering what measures may need to be put in place to prevent similar situations from arising again. Options for financial regulation or other measures will be considered as part of the development of the forthcoming White Paper on social care. To that end, we will shortly publish a policy paper setting out an analysis of the possible options and seeking views.
I will update the House as the situation develops.
Cohabitation: Financial Consequences
(13 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I wish to make the following statement to the House announcing the Government’s response to the Law Commission’s report “Cohabitation: the financial consequences of relationship breakdown”.
The Law Commission published its report on 31 July 2007 but no action was taken by the previous Administration who wished to first seek research findings on the Family Law (Scotland) Act 2006. This Government have now carefully considered the recommendations of this thorough report, together with the outcomes of research on the 2006 Act.
The findings of the research into the Scottish legislation do not provide us with a sufficient basis for a change in the law. Furthermore, the family justice system is in a transitional period, with major reforms already on the horizon. We do not therefore intend to take forward the Law Commission’s recommendations for reform of cohabitation law in this parliamentary term.
Convention on Torture (Periodic Report)
(13 years, 3 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I have today placed in the Libraries of both Houses copies of the UK’s fifth periodic report under the convention against torture and other cruel, inhuman or degrading treatment or punishment. I intend to send the report to the United Nations Committee Against Torture immediately, with a request that the committee post the report on its website.
The report sets out how the UK is fulfilling its undertakings under the convention, and updates the UN on developments since the examination of the UK’s fourth report in November 2004. It draws attention to recent initiatives with regard to the treatment of people in detention: publication of guidance on the treatment of detainees, and establishment of the detainee inquiry. Non-governmental organisations and members of civil society in the UK have had the opportunity to comment on the report in draft, and the Government have taken into account many of their comments and suggestions.
Transparency in the Justice System
(13 years, 3 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
Open justice is a long-standing and fundamental principle of our legal system. Justice must be done and must be seen to be done if it is to command public confidence.
This Government are determined to open up the justice system and have ambitious plans to increase transparency at every stage to allow everyone to see what is happening and how the system works.
Central to achieving this objective is a plan to publish far more and better data on justice:
On 29 September 2011, my Department will publish statistics by region which show the efficiency of the courts and tribunals in progressing cases. This will include brand new statistics on the time from the date an offence is committed to the date the case is finally dealt with by the criminal courts, whether at a magistrates court or the Crown Court.
On 12 January 2012, this will be extended down to court level. These data will include the number and type of cases dealt with at each court or local justice area, how long cases take to complete, as well as how many criminal trials could not commence on the scheduled date and how many had to be abandoned. The data will also allow the public to see the number of civil hearings and trials dealt with at courts in their area, how long it takes these cases to progress, and in family courts how long it takes for care proceedings cases to complete.
On 27 October 2011 we will publish reoffending rates for every probation trust and prison in England and Wales, along with anonymised datasets showing whether individual proven offenders go on to reoffend for each local area.
On 24 November 2011, we will publish, alongside our regular quarterly criminal justice system statistics, anonymised datasets on each case sentenced. This will include the sentence given, the court, the age group, gender and ethnicity of those sentenced, and the time from when the offence was committed to when the case was complete.
From May 2012 onwards, the national crime mapping website, police.uk, will provide the public with information on what happens next for crimes committed in their streets, so they can see what action the police took and the outcome of any subsequent court case.
In addition to providing more data, I am determined to reform fundamentally the way the justice system operates so it is more open. The names of offenders who are unlawfully at large can be—and often are—published by police forces to help bring these people back to custody—where they should be. We are committed to removing all unnecessary barriers to the naming of these offenders and to promoting best practice and consistency across all police forces.
Today, I can also announce my intention to legislate, as soon as parliamentary time allows, to remove the ban on cameras in courts.
As a starting point, judgments in the Court of Appeal will be broadcast for the first time. I want to see this expanded to the Crown Court, but I will work closely with the Lord Chief Justice and Judiciary on how this could be achieved.
I will consult further on the detailed approach, but I am clear that this must not give offenders opportunities for theatrical public display. We will work to ensure this does not hinder the administration of justice and that it protects victims, witnesses, offenders and jurors.
Collectively, these plans will open the justice system in an unprecedented manner, allowing the public to judge for themselves how we are performing and to hold us to account.
Chief Electoral Officer for Northern Ireland (Report 2010-11)
(13 years, 3 months ago)
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The Secretary of State for Northern Ireland (Mr Owen Paterson)
The Chief Electoral Officer for Northern Ireland is responsible for all aspects of electoral administration in Northern Ireland, including the successful running of the parliamentary general election held on 6 May 2010. Section 14 of the Electoral Law Act (Northern Ireland) 1962—as amended by section 9 of the Northern Ireland (Miscellaneous Provisions) Act 2006—provides that the Chief Electoral Officer must submit an annual report to the Secretary of State. The annual report of the Chief Electoral Officer for Northern Ireland for the year 2010-11 has been laid before Parliament today.
Grand Committee
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Armed Forces Bill
(13 years, 3 months ago)
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The Deputy Chairman of Committees (The Countess of Mar)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells ring and will resume after 10 minutes.
Lord Craig of Radley
“Armed forces covenant339A””
Lord Craig of Radley
My Lords, at Second Reading I drew attention to the Government’s positioning of this important clause in the existing Armed Forces Act 2006. Clause 2 is entitled in bold type, “Armed forces covenant report”, and the wording is to be inserted after Section 359 into the 2006 Act as new Section 359A. Section 359 is one of a number of sections towards the back of the 2006 Act, listed as “Miscellaneous”. I pointed out that Section 359 concerns “Pardons for servicemen executed for disciplinary offences: recognition as victims of First World War”. This is an unfortunate juxtaposition for the requirement to report on the covenant, a covenant to which the Prime Minister and many members of the Government have given their strong support. I invited the Government to think again about the placing of this provision because appearances can be important. In winding up, the noble Lord, Lord Wallace of Saltaire, accepted that this could be reconsidered.
At Second Reading I criticised not only the placement of Clause 2 but made what I hope was a sensible suggestion for it to be inserted immediately after Section 339 rather than Section 359 and numbering it Section 339A. This would place it in Part 14 of the 2006 Act, headed “Enlistment, Terms of Service etc”. During the Recess I had a letter from the Minister which indicated that, following inquiries with parliamentary counsel and the House authorities, it should be possible to arrange for the position of the Armed Forces covenant section to be changed so as to insert it in the 2006 Act as new Section 353A in Part 17, entitled “Miscellaneous”. I responded saying that I would not challenge the Minister’s intention that the new section should be placed in Part 17 rather than in Part 14 as I had proposed, even though I think that the covenant is rather more important than a miscellaneous adjunct to the Act.
Noble Lords will also have spotted that my amendment inserts the words “Armed forces covenant” as an italic centre heading to the new section, while the Minister proposes to use the words “Armed forces covenant report” as his italicised centre heading. These words are also in bold font at the start of the new section. My service writing directing staff would, I am sure, have red-inked the same phrase appearing in a centre heading and an immediately following side heading. Omitting the word “report” from the italicised centre heading would also allow any further new sections about the covenant to be added at a future time if that were required, without a change to the centre heading. I should be grateful if the Minister would consider this, and explain why, as his letter claimed, it might be possible to achieve the positioning of this new section by a “printing change”, which is a new concept for me. If this is not achievable, can the Committee expect the Minister to table an amendment on Report to reposition this important clause?
As I am on my feet, and with the leave of the Committee—I have already spoken to the right reverend Prelate—may I speak to Amendment 3, which is also in my name? It is, of course, a probing amendment. To save space and complexity in the Marshalled List, I have amended only the first reference to “Secretary of State” in the new section. He is repeatedly referred to, and my proposal should be read to apply to the words “Secretary of State” throughout it.
Why do I think that the Secretary of State is not the right person to report on veterans affairs? I made some comments on that on Second Reading and do not wish to go over all that now. I think that the Committee shares the feeling that someone other than the Secretary of State is the person who should make the annual reports. The Minister will be able to judge for himself the strength of that feeling as we debate the issue.
What should be done instead? On Second Reading, I drew attention to the arrangement made when the noble Lord, Lord Morris of Manchester, was made the first Minister for the Disabled over 40 years ago. He specifically did not wish to be embedded in the department for health or any of the other departments that would have an interest in and responsibilities for the disabled. He wished to be able to operate across departments and to bring together their specific involvements with the disabled, which of course cover many issues of interest to veterans too—health, education, local community support and so on. Indeed, there is a good list of appropriate fields in Amendment 5. A Minister for Veterans would be well placed in the Cabinet Office. The Prime Minister of the day accepted the arguments and reasoning of the noble Lord, Lord Morris, and we all know how successful the noble Lord was and has been ever since in his support and advocacy for the disabled. The arrangements made by Command Paper 7424 in July 2008 for the external reference group, now the covenant reference group, to operate within the Cabinet Office seem an excellent start on which to build and establish a Minister with responsibility for veterans policy in the Cabinet Office. If this idea were taken up, it would also give a far greater indication of the Government’s commitment to veterans and their interests.
In the United States, there is of course a separate Department of Veterans Affairs. Our veteran numbers are no match for the United States, but the principle of separating defence policy and policy for overseeing veterans affairs is a sound one. We should adopt it too. The noble and gallant Lord, Lord Boyce, who added his name to my two amendments, is unfortunately away from London at this time. I beg to move.
Lord Ramsbotham
My Lords, my Amendment 12 is also in the name of the noble and gallant Lord, Lord Boyce. It refers specifically to the Minister for Veterans Affairs being in the Cabinet Office rather than the Ministry of Defence. Like the noble and gallant Lord, Lord Craig, I have raised the matter on a number of occasions. The comparison with the success of the Minister for Disabilities, which he mentioned, is mirrored by another appointment by the previous Government—the Minister for the Third Sector, who was able to speak from the Cabinet Office and unite the activities of the voluntary sector across the whole spectrum of ministries. It seemed to work extremely well.
I have always gone further. To my mind, the Government have created the ideal post in the Minister for Civil Society, who already has to pull together all the people responsible for the support of veterans in the community as a whole. Rather than necessarily appoint another separate Minister for Veterans Affairs, it would seem logical that that could be added to the portfolio of the Minister for Civil Society, who is already there with a role that precisely mirrors what is required for veterans.
As we have seen, the Minister for Veterans Affairs actually covers every other ministry, including the Ministry of Defence, but has no real rights to interfere with their activities from where he currently is. In addition, the Minister who has the responsibility for veterans affairs now has a very large number of responsibilities, which may in fact inhibit his ability to speak with all the ministries—those of health, transport, work and pensions, communities and local government and so on—that are so vital in veterans affairs. He is responsible for the approach to service personnel and civil servants, reserves, cadets, the Defence Vetting Agency, the MoD Police and Guarding Agency, the People, Pay and Pensions Agency, service children’s education, the Met Office and the Hydrographic Office, in addition to the Service Personnel Veterans Agency. He is already a very busy man. If he has all those responsibilities I do not see how he can carry out all the responsibilities for veterans, particularly as foreseen in the report that is going to have to be made by this covenant. If he were in the Cabinet Office, to which everyone had to report, then you could establish a mechanism to make certain that all the right ingredients were in the report when it was presented to Parliament.
The Deputy Chairman of Committees
My Lords, if I might interrupt, it might help the Committee. There are a large number of amendments in this group under different noble Lords’ names and I do not know whether they are aware that they should be speaking to them now—they will not get a chance later on.
Lord Lee of Trafford
My Lords, I wish to speak to Amendment 9. This is a cross-party amendment and I respectfully point out that three of the four signatories are in fact former Defence Ministers, and the fourth—the noble and gallant Lord, Lord Stirrup—is of course the former Chief of the Defence Staff.
My understanding is that, in preparation of the covenant report, the Secretary of State will consult and liaise with the Secretaries of State covering the areas of health, education and housing. However, we believe that to actually change the Bill so that there must be specific statements from the Secretary of State for Health, the Secretary of State for Education and—covering housing—the Secretary of State for Communities and Local Government would considerably enhance the Bill. It would also give those respective departments much greater ownership of the covenant and would certainly add to it. This relatively simple amendment would considerably strengthen the covenant. Of course, it also touches on Amendments 5, 11 and 13. Therefore, I commend it to the Committee.
Lord Stirrup
My Lords, I speak in support of Amendment 9, to which my name is appended. As I said at Second Reading, it seems to me that many of the most intractable issues with regard to the Armed Forces covenant are not within the remit of the Ministry of Defence to attend to: health, education, social services and so on. If the only provision in the Bill for bringing people to account is for them to answer to Parliament for their performance that year, Parliament must be able to probe the Secretaries of State of the relevant ministries, otherwise there is no effective enforcement mechanism and the whole purpose of this part of the Bill will fail. Having the relevant Secretaries of State append their signatures to the relevant parts of the annual report is the very minimum that we should be doing. Indeed, I would go further and seek to ensure that the relevant Secretaries of State are answerable to, and do answer to, Parliament on the anniversary of the Bill and on the annual performance report. This seems at the very least a starting point and will give Parliament the opportunity to probe Ministers on the statements they have made and to which they have appended their signatures in the annual report.
Baroness Taylor of Bolton
My Lords, I wish to reinforce what has just been said and emphasise the all-party nature of this amendment. As the noble Lord, Lord Lee, has said, people with significant experience in the Ministry of Defence have attached their names to it and it has been tabled it in an attempt to be helpful to Ministers in that department. Several of us have stood at the government Dispatch Box and have had to refuse amendments even though they were helpful, and defend the Government’s position in so doing. We are considering a wide group of amendments and I can well understand that the Minister might feel that he has to resist an inclination to respond favourably in all cases. However, this amendment is different from all the others and constitutes probably the minimum that the Government should seek to do, as the noble and gallant Lord, Lord Stirrup, said. It would protect Ministers in the MoD. If Secretaries of State are not responsible for their input into the report, we will have second-hand information. Although I am sure that there is no lack of trust between Ministers, it ought to be clear where responsibility lies. This mechanism would enable a better buy-in from other government departments. We have made significant progress in that regard in recent years but we need to consolidate and work on it. Therefore, I hope that the Minister will look favourably on this amendment.
Lord Palmer of Childs Hill
My Lords, as someone from the ranks, as it were, not having been a Defence Minister, I add my voice to those of former Defence Ministers and speak to Amendment 10 standing in my name. Other amendments in the group concern important matters such as who should prepare reports. My amendment concerns the more mundane but nevertheless important matter of a covenant with our Armed Forces which must note what improvement has been made to the dire condition of too many of the 44,000 forces family homes in the UK.
As noble Lords will remember, the housing was sold off but the MoD is responsible for repairs and maintenance. That is not necessarily a good deal. The MoD has not had the will or the funds to keep many of these properties in a good state of repair. It is clear to me from the inquiries I have made that the coalition Government accept that this problem goes back many years and recognise that something needs to be done. I also accept that in these times of cuts and reductions in expenditure there are unlikely to be sufficient funds radically to improve the existing housing stock. I hope that the purpose of my amendment is simple; namely, to think outside the box. If the MoD does not have the funds to carry out this work—I am told that it does not—and if the freeholder will not do the work because the properties were sold off to a housing association, we should look at other funding streams, as is the case with social housing in the public sector. The amendment is meant to be helpful in terms of directing thought towards other methods.
The amendment asks for a report on the progress being made between the Ministry of Defence and housing associations to improve the accommodation for servicepeople. I am sure that this is not an original thought, but I envisage a round table of housing associations active in garrison towns to build new homes for service personnel or to renovate existing stock to a high standard. A few minutes ago, at Oral Questions in the Chamber, people were reminiscing about World War II. For people of my age who were born during that war, the saying was “homes for heroes”, but I am afraid that we do not nowadays have “a fair deal for squaddies”.
The Lord Bishop of Wakefield
My Lords, I shall speak to Amendment 2, which is in my name and co-sponsored by the noble Lords, Lord Ramsbotham and Lord Touhig. Perhaps I should begin with a mild apology for being slightly overdressed for this Room but, with the warning that there might be a Division, there would not be time to get backstage to get sorted out in time for that.
I begin by thanking the Minister for making so much time available earlier today in his “open house” at which this amendment was given the chance of some airing. It was a most constructive lead into this debate and confirms the willingness of Her Majesty’s Government to engage in dialogue over the Bill. At Second Reading, the introduction of Clause 2 was welcomed generally by this House. However, there remains a concern from a wide compass of people as to whether the reporting mechanisms envisaged in Clause 2 are sufficiently robust and adequately objective. In earlier debates and in the very helpful briefings arranged by the Minister, I have raised this issue.
Perhaps a key to our discussions is the covenantal relationship between the nation, the Government and the Armed Forces. Covenant is a concept with clear foundations within the Jewish and Christian religious traditions. Essentially, it is rooted in trust between various parties. Such trust is made secure only by setting the covenant within properly defined parameters.
This amendment seeks to address two issues. It is notoriously difficult for any institution or organisation to stand outside itself in an objective critical fashion. This is to expect more than is reasonable from either the Ministry of Defence or the Secretary of State. But a second issue is of equal importance. Vital in all our discussions is the proper, just and generous treatment of veterans, which has been referred to already today. The media have had a field day in the past couple of years in focusing on untreated post-traumatic stress disorder. This is of course a crucial matter to address but, as we have heard, the range of concern facing veterans runs far more widely than this alone. Included here will be issues relating to education, welfare and social security, and to areas relating to social services—family breakdown or even homelessness.
It is unrealistic to expect the Ministry of Defence and thus, by virtue of that, the Secretary of State, to have the ability to respond in each of these areas, including health and notably post-traumatic distress. The MoD has neither the competence nor the facilities to cover this enormous range of challenging concerns. There must be one integrative reviewer who can bring together the resources of the various government ministries. This person will need to respond to individual cases effectively and to engage with local authority provision where necessary. These are matters which each of us will have seen testing the resources in all the localities in which we live.
This amendment aims to provide flexibility in response through the presence of the independent reviewer of armed services welfare. It would allow for such findings to be reported to Parliament annually. It may be that Her Majesty’s Government, in framing Clause 2, took some of these issues and proposals into account. If so, it would be good to know why such a reviewer was not included in the proposed legislation.
Once again I want to emphasise how encouraged I have been by the willingness of Her Majesty’s Government to take the military covenant so seriously and their being prepared to move things on. None the less, at present I am clear that further strengthening is essential if the numbers of our Armed Forces, both serving and retired, are to receive what they undoubtedly deserve. I do not intend to press the amendment at this stage—certainly from how I feel things are going so far this afternoon—but I shall bring the amendment back should that seem necessary at a later stage in the proceedings.
I am most grateful to my two co-sponsors, and indeed to the noble Lord, Lord Dannatt, for their encouragement and advice on this.
Lord Touhig
My Lords, I have no doubt that the approach outlined in Amendment 2, spoken to by the right reverend Prelate, is one to which we should give careful consideration, which is why I put my name to it. For any report to Parliament on the operation of the military covenant to have credibility, it should be underpinned by an independent review of the welfare needs of both existing service men and women and our 5.5 million veterans. In that way the operation of the military covenant will be properly audited.
On Second Reading I was not alone, I think, in expressing concern that there are just three areas listed in the Bill on which the Secretary of State should report—healthcare, education and housing. The Secretary of State alone would decide whether to report on anything else. If Parliament enacts this Bill as it stands, there would be precious little opportunity for future Parliaments to do anything about the issues to be reported. It would be entirely a matter for the Secretary of State. In the coming years there might be many other areas of concern about the welfare of service men and women—and veterans—that should be included in a report to Parliament. The amendment tabled by the right reverend Prelate, if accepted, would afford that flexibility. In my experience, all too often Governments as a rule, Ministers in some instances, and the civil servants always like to have things buttoned down in legislation, leaving little room for manoeuvre or interpretation. I was a strong advocate for that when I sat on the other side.
The scope of this amendment would, I believe, better fit the need of implementing the covenant without being overprescriptive. Under the broad heading of “welfare”, it would be possible to widen the areas to be examined and reported on from the three specified in the Bill without the need to resort to further primary legislation.
I was also concerned on Second Reading to understand how the Secretary of State for Defence would, without being given some special powers, be able to examine and report on healthcare, education and housing for veterans when these responsibilities were held by other Ministers in the devolved Administrations and other bodies that are not answerable to him. I suggested at that time that the National Audit Office, for which I have a high regard, could carry out an independent audit. It has a fine track record and an international reputation for thoroughness. I took the view that such an audit could be presented to Parliament at the same time that the Secretary of State makes his annual report. I think that the noble and gallant Lord, Lord Stirrup, and the noble Lord, Lord Selkirk of Douglas, also supported the idea of an independent audit when they spoke on Second Reading. My experience of serving on the Public Accounts Committee in the other place taught me that there is very much merit in monitoring and auditing new systems of service delivery, and the military covenant is certainly that, which is, of course, at the heart of this Bill.
I believe that appointing an independent Armed Forces reviewer, which this amendment proposes, dedicated to looking at matters concerning the welfare of service men and women and veterans alone, is even better than my suggestion of bringing in the National Audit Office.
Lord Kakkar
I speak to Amendment 11 in my name and that of the noble Lord, Lord Patel. The matters I wish to cover in this amendment were dealt with at Second Reading in my own contribution, and relate to the obligation as part of the covenant to make an annual report with regard to matters of healthcare that attend former or current membership of the Armed Forces.
The amendment proposes that that report be properly informed through the collection of objective evidence that will allow us to ensure that the conclusions reached with regard to the impact of service on health status and the requirement to access healthcare facilities are properly recorded, and that conclusions derived from that report can be used to inform the provision of services in the future.
The health consequences of membership of the Armed Forces receive coverage regularly in the media, but much of that is anecdotal reporting. It does not provide the opportunity to constructively understand the implications of service, or how health services should best be provided to ensure that those who have served our country in such an important way have available primary and more acute hospital services that meet their needs. A report to Parliament dealing with the healthcare consequences of membership of the Armed Forces is very welcome. If it is not properly informed by prospective research, however, it will be meaningless and provide little opportunity to report anything other than anecdote.
These two amendments are not onerous. They just ensure, in moving forward a report on the question of healthcare and health status, that questions are posed at the beginning of any reporting cycle; that objective evidence is collected using established public health methods to answer those questions; and that those questions are reported in a systematic fashion to inform future development of policy, and to ensure that we are not in any way denying services or the best possible health outcomes for those who have served our country.
Lord Davies of Stamford
My Lords, I say, first, that the Bill is extremely welcome. It is clear that Clause 2 is very well intended by the Government, but also that there has been a consensus among the contributions in Committee so far this afternoon that it does not go far enough and is inadequate. I congratulate all four supporters and proposers of the amendments who spoke; their contributions were extremely helpful. I will make one or two comments on each, starting with Amendment 11, tabled by the noble Lord, Lord Kakkar.
I totally agree with him that it is important that we should have professional analysis of the problems in the medical field before we start reporting on how adequate the medical facilities are, either for those who are serving or for those who have served. Clearly, we need to know what the problem is before we can assess the effectiveness of any solution that is proposed or implemented. However, with great respect to the noble Lord, I say that his amendment has it the wrong way round. It is wrong to wait for the stage after the reviewer has produced the review, at the point where the Secretary of State is going to publish the report, to have that specialist professional work done. We should start with that; it should be the evidential basis on which the reviewer works. He should compare the facilities in place with the professional advice on what the facilities ought to be. That work should be done at the outset, and I hope that if the reviewer is doing his job he will commission such work.
Under the proposals tabled by the right reverend Prelate the Bishop of Wakefield, my noble friend Lord Touhig and the noble Lord, Lord Ramsbotham, as well as in the original draft of the clause, there is provision for the reviewer to receive remuneration. Therefore, I do not see a problem in that. Perhaps we should not tell the reviewer exactly how to do his job, but we should express the hope, here and in other contexts, that he will commission professional work of the kind that has been suggested—or else there should be an obligation on him to commission the work. We should not leave it to the second stage of the Secretary of State.
I find myself entirely in agreement with Amendment 10, tabled by the noble Lord, Lord Palmer of Childs Hill. I do not know why anybody would disagree with it. The issue is one of making sure that the report covers what progress has been made in the provision of housing. This is not in any way a prescriptive obligation placed on anybody; it is purely descriptive and sets out the facts. I do not see why Parliament should resist a proposal, which is not unreasonably costly, that we should be given the facts when we ask the reviewer to review the state of housing. We need to know the facts relating to the portion of housing that is in the hands of housing associations. I am very much drawn to the proposal.
I turn to Amendment 9, put forward by the noble Lords, Lord Lee of Trafford and Lord Glenarthur, the noble Baroness, Lady Taylor, and the noble and gallant Lord, Lord Stirrup. At first sight I thought that it was a splendid proposal, but it is a little ambiguous. It states that the covenant report must include a statement that,
“the provisions of the report are compatible with subsection (2)(a)”.
I am not sure what that is intended to mean. Is it that the statements of fact in the reviewer's report are a correct description of the facts in the respective areas of health, education and local government? Or does it mean that any shortcomings that have been identified, and any recommendations that have been made, have been resolved and implemented by the time that the three Secretaries of State signed the statement? It is slightly unclear what is intended. If it is the latter, that has cost implications of a potentially unlimited kind, so the Treasury may see some difficulty in that. If it is merely a matter of the three Secretaries of State explicitly endorsing a description of the facts that the reviewer has uncovered, I see no objection at all: indeed, that would be extremely helpful.
Amendment 2, the key amendment in this group, is in the names of the right reverend Prelate the Bishop of Wakefield, and the noble Lords, Lord Ramsbotham and Lord Touhig. It is designed to address an obvious inadequacy in Clause 2 as produced by the Government; namely, first, the reviewer has to report only on “healthcare, education and housing” and, secondly,
“such other fields as the Secretary of State may determine”.
We know that “healthcare, education and housing” are not the full picture as far as the covenant is concerned. Several issues have been raised, notably veterans, which is terribly important. But there are also such issues as, for example, coroners’ inquests—this is a big issue which we will need to discuss during these proceedings and has been left out—and many other things.
Another aspect which concerns me is any potential discrimination which may exist against members of the Armed Forces. I am sorry to say that when I chaired the National Recognition of the Armed Forces report some years ago, we uncovered and documented in that report a number of cases of serious discrimination against members of the Armed Forces in this country. Luckily, we have not had incidents of that kind—at least not that I am aware of—in the past few years. But should such a situation arise again, the issue very much should be the target of a report by the reviewer on how the covenant is being implemented. I think that all sides of this Committee are agreed that there are many issues other than those three provided for in Clause 2.
Surely, the idea of the,
“other fields as the Secretary of State may determine”,
is ludicrous. This Bill would be a laughing stock if it went forward in that way. That someone should decide what aspects of fulfilment, responsibilities or behaviour should be reported on would be regarded as ludicrous in any other context and is, indeed, ludicrous in this context. That certainly should not stand.
Therefore, the proposals put forward by the right reverend Prelate the Bishop of Wakefield are very much to be welcomed. I see no obvious difficulties with any of the text of this provision and no reason why I should not support it if it comes to that point. It is again not a provision that places significant financial obligations on the Government. Of course, the reviewer has to be paid and he is allowed to run up some expenses and to pay his staff, which must be reasonable. We have already gone through one aspect of where he may legitimately incur expenses—for example, on professional medical advice. But these are small sums and very small beer. It could hardly be considered to be a serious financial liability.
I hope that the amendment commends itself to the Government. If they were to accept this, I believe that they would find immediately that there was a qualitative enhancement in the credibility and impact of the Bill as it becomes an Act of Parliament. It would make a real, historic change in the way in which this country regards the covenant, to which we all feel an obligation for the men and women who serve in our armed services.
Lord Freeman
My Lords, I shall speak briefly about Amendment 2. First, I pay tribute to the right reverend Prelate the Bishop of Wakefield for raising this whole issue and for speaking so clearly and comprehensively about his amendment. I speak with some trepidation because I spot five former Defence Ministers in Committee and three very distinguished former senior officers in the Armed Forces. But I believe that we need a moment of caution before we separate responsibility for looking at and making sure that the covenant is properly observed and pointing out difficulties and failure to achieve objectives from ministerial responsibility.
Like many of my colleagues of all parties, I speak as having served twice in the Ministry of Defence. I believe strongly that the responsibility of the Secretary of State, through his junior Ministers—Ministers of State and Parliamentary Under-Secretaries—should not be in any way compromised by attempting to shuffle it off to an independent reviewer. This is a bureaucratic point, not one of principle. It is a point about how the Ministry of Defence works.
Lord Dannatt
My Lords, I rise principally to support Amendment 2, tabled by the right reverend Prelate the Bishop of Wakefield. I also support Amendments 3, 5, 9, 12 and 13. It seems to me that those amendments get to the person, position and authority required to fully deliver on the Armed Forces covenant.
Despite the best efforts of the Secretary of State for Defence and his predecessors—and of their junior Ministers—who have been charged over the years to deliver what we now know as the Armed Forces covenant, we have not been able to do enough to bring it into balance. On the one hand, the so-called covenant recognises the legitimate work given by the elected Government of the day to those members of the Armed Forces and their predecessors to do what they are required to do in the best interests of the nation, while on the other hand providing for the legitimate needs of individual servicemen and their families—and of their forebears, the veterans. That is why we are at a balance.
Amendment 2 is about a reviewer. That has much to commend it. The others that I referred to are about the ministerial responsibility. The idea articulated particularly by the noble Lord, Lord Ramsbotham—that the Minister should be not in the Ministry of Defence but in the Cabinet Office, and therefore with pan-Whitehall observation and ministerial responsibility for veterans affairs—has a lot of merit. This once-in-five-years opportunity should be seized. There is a mood in the country at present that we must do better for our veterans, and indeed for our current service men and women and their families. Therefore, I ask the Minister to pick up that mood and reflect with other members of the Government on whether this is an opportunity to improve things in the best interests of those who lay their lives on the line for the nation, those who have done so in the past, and their families.
Lord Patel
My Lords, I have my name down to support Amendment 11 in the name of the noble Lord, Lord Kakkar. The comments that the noble Lord, Lord Davies of Stamford, made about the amendment in no way diminish the important point that it tries to make. It is about collecting information relating to healthcare needs “affecting service people”—that is specified by the amendment, and includes families—
“including issues related to access to healthcare”.
There was a clear deficit in access to healthcare by service personnel and their families.
In my time, I have had the privilege to serve on the peer review board, ably and effectively chaired by the noble Baroness, Lady Dean, and as a member of the Armed Forces equality and diversity advisory group, and I have come across many service personnel and their families. Being the only doctor on the board it was inevitable that they spoke to me about health issues. There was a clear deficit in access to healthcare by service personnel and their families, and in the kind of care offered to those who suffered injuries and whose surgical repair required long-term care, particularly physiotherapy, to make them fit again. That was absent. To have a covenant that requires the authorities to produce a report that tracks the healthcare needs of service personnel and their families is extremely important. We need a commitment to look after them as they move about. Their usual comments were that they had to join the end of the queue again on the waiting list as they moved from one place to another. The amendment makes a commitment to collect that information. Although the amendment refers to “research” it is not research in the true sense, but collecting information. I do not believe that the amendment would add an extra burden in any way.
Lord Judd
My Lords, I hope that the Minister will take seriously the arguments that have been put forward this afternoon. With the tremendous demands that we make on our armed services and the way in which they discharge their responsibilities, our responsibility is redoubled to make absolutely certain that whatever the good intention of the new legislation—the proposals are impressive in many respects—it is not allowed to become a formality in which the real application of its spirit becomes minimalist rather than maximised. We need to be clear that effective muscle is in place.
It is a long time since I had the privilege of being a Minister at the Ministry of Defence. In those days we had Ministers responsible for the services and I had responsibility for the Navy. I can remember clearly that issues were raised about the welfare of personnel in the Navy even back then in the early 1970s. The Seebohm report was produced by the distinguished man of that name, who wanted to put in place effective arrangements to ensure that there was proper provision for the welfare of naval personnel. In those days it was regarded as a very hostile concept. There was a lot of defensive reaction within the service for which I was responsible because it was felt that it was undermining the responsibility of leadership in the services. There were well informed and courageous officers at that time who were saying quite the reverse and that the responsibility of leadership is to make sure that things happen and are well done. If we know that we do not have professional insights or experience that is relevant to proper provision, we have a responsibility as leaders to ensure that it is available. The report prevailed.
I make that point because it seems that our attitude has come on by leaps and bounds, and I can do nothing but welcome how those with a great deal of highly relevant and recent senior service experience are seeing all this as part of discharging our responsibilities to the personnel who serve us so well.
Baroness Finlay of Llandaff
My Lords, I wish briefly to add a comment to Amendment 11, which is in the names of my noble friends Lord Kakkar and Lord Patel. We have a changing system of healthcare delivery for those coming back from active service, with an increasing number now being looked after in primary care and in hospitals nearer their own homes wherever those are. It is important that we monitor the quality of care. In meeting service personnel who have been severely injured, I have been struck that one of the problems that they are now hitting relates to limb fitting and rehabilitation services that go along with that. That is from the perspective of the recipients, and maybe we need to think of more cost-effective ways of meeting the very specific needs of those who have become multiple amputees through an incident on the battlefield, for example.
There is another aspect to this, however. If we do not collate this information we will not get the information on the best way to deal with the trauma when it occurs in the battlefield. The way that trauma is inflicted on our troops is changing very rapidly as enemies use different methods and different types of improvised devices to cause injury. The speed of response of our services and medical services at the front line, and indeed the other members of the forces who are with them at the time, makes the difference between survival and death.
Survival figures from battlefield trauma are a credit to those medical services. They are astounding and I have had the privilege of having discussions with some of the medics who have been in the front line doing the trauma. They also need the information, however, in the longer term of whatever they do out in the field. There are very clear clinical indications for the management of trauma on the battlefield, wherever it happens, to make sure we save more lives and that we maximise the chance of recovery. All those lessons spill over into civilian life as well, where there are multiple accidents, explosions and other forms of trauma. The way that our ordinary civilian paramedical services deal with trauma is often based on lessons learned in the battlefield.
I commend Amendment 11, which might seem as if it sits a little outside the others in this group but actually will have some very important long-term implications. It is an opportunity lost if we do not collect the data.
Lord Burnett
My Lords, I hope the Committee will forgive me for arriving late for the sitting this afternoon and I apologise for that. I will say a few words on Amendment 2 and then a few words on Amendment 9. I agree with my noble friend Lord Freeman when he says that the thrust of Amendment 2 tends to derogate from ministerial responsibility. It is also bureaucratic and likely to be expensive. It is after all the privilege and honour we have in this House and in the other place that we continually monitor these matters.
Amendment 9 is in the name of my noble friend Lord Lee and others. As I said on Second Reading, I hope the Government will think hard about this amendment or something in similar terms. It is the duty of the Secretary of State to liaise with these departments of state and these other Secretaries of State. The comments of these Secretaries of State should be confirmed and validated by written assertions in the terms outlined in Amendment 9 and I hope that great consideration will be given to those matters.
Lord Rosser
My Lords, I wish to speak to Amendments 4, 5, 16, 18 and 19. Most of the comment on and interest in the Bill has centred on the Armed Forces covenant and the Secretary of State’s report. It is therefore not surprising that by far the largest single group of amendments should relate to this issue.
The Bill places a duty on the Secretary of State for Defence to produce an annual report to Parliament on the effects of membership or former membership of the Armed Forces on servicepeople. In preparing the report, the Secretary of State must have regard in particular to the unique obligations of and sacrifices made by the Armed Forces, the principle that it is desirable to remove disadvantages arising for servicepeople from membership or former membership of the Armed Forces, and the principle that special provision for servicepeople may be justified by the effects on such people of membership or former membership of the Armed Forces.
However, it would appear that these principles apply to issues within the Armed Forces covenant report, but which will include only those issues that the Secretary of State decides to include. These principles should be applicable to government policy, and my amendments include provision for the principles to apply to all public policy by stating that, in preparing policy, public bodies and Ministers must have regard to those matters to which the Secretary of State is to have regard in preparing an Armed Forces covenant report, and must also consider whether the making of special provision for servicepeople or particular descriptions of servicepeople would be justified. There should surely be an obligation on all public servants to take heed of the principles of the covenant if we are to be confident that the covenant is to be fully applied. Further, there is provision in my amendments for the Parliamentary and Local Government Ombudsmen to investigate complaints from service personnel that a public body or local authority has failed to meet the commitments outlined in the Armed Forces covenant and The Armed Forces Covenant: Today and Tomorrow.
The Bill provides for the Secretary of State’s report to cover healthcare, education and housing, but anything else is left to the Secretary of State to determine. As the Minister put it in his opening speech at Second Reading:
“Other issues will only emerge at the time, so the Bill leaves this flexible”.
The difficulty is that leaving out everything apart from healthcare, education and housing provides an opportunity for any Secretary of State to seek to sideline other important issues, perhaps because they are difficult or awkward. Indeed, the Secretary of State would appear to be reporting on what other departments or devolved Administrations are doing in respect of healthcare, education and housing, for which he is not directly responsible, but not reporting on the work of his own department for which he is directly responsible. My amendments propose a much longer list in order to overcome this potential problem and limit the extent of any Secretary of State to decide which issues are relevant to current or former servicepeople. After all, if in the opinion of a Secretary of State any of the headings listed in my amendment are not worthy of reporting on in the Armed Forces covenant report in any one year, that is all the Secretary of State need say in his report, and then see if Parliament and others are of the same opinion.
At Second Reading the Minister said that,
“the process of preparing reports will evolve over time. We are breaking new ground. We will learn from experience, listen to comments, and move forward in a positive way. I am clear that that is the right way to do it, rather than making the legislation excessively prescriptive.—[Official Report, 6/7/11; col. 272.]
I am not as convinced as the Minister that the Government intend to listen if they have already decided that a specific reference to anything more than healthcare, education and housing as set out in the Bill is being “excessively prescriptive”. Bearing in mind that we normally have an Armed Forces Bill only every five years, and that the Ministry of Defence adopts the approach of keeping proposals requiring primary legislation until the next Bill is due, we need to get the wording in this Bill right on the extent of the issues which must be addressed in a Secretary of State’s Armed Forces covenant report.
My amendments, unlike the Bill, mention specifically the external reference group. At Second Reading the Minister accepted that concerns had been raised about the independence of the annual report, concerns that will relate to any Secretary of State and any Government of whatever political colour. The Minister said that the Government have undertaken to publish alongside the annual report whatever observations the external members of the covenant reference group choose to make on it. Since the issue of the independence of the report is not directed at any one Secretary of State or any particular Government, a requirement to publish any observations from the external reference group—apparently now called the covenant reference group by the Government, and confirmed by the Government as a permanent body—should be on the face of the Bill, as should the results of any additional consultation with service charities and groups and other interested parties both inside and outside government.
At Second Reading, the Minister said:
“In preparing annual reports, the Ministry of Defence would consult widely with interested parties inside and outside Government”.—[Official Report, 6/7/11; col. 272.]
My amendments extend the list of issues to be addressed in the Secretary of State’s annual report to 10 headings, including accommodation, healthcare and education. Six of the additional headings cover,
“mental healthcare … pensions and benefits … employment and training … support for reservists and their employers … the running of the Armed Forces Compensation Scheme, and progress on Armed Forces rehabilitation schemes”.
I would hardly have thought that any of these headings made the legislation “excessively prescriptive”, since they are all issues of considerable importance to serving and former service personnel, of whom, with their families, there are around 10 million, or one in six of the population.
The last heading in my amendment is,
“such other fields as the External Reference Group may determine”,
instead of as in the Bill,
“such other fields as the Secretary of State may determine”
Since all of the rest of the report will be under the auspices of the Secretary of State, the independence of the report will be enhanced by the ability of the external reference group to determine what, if any other fields should be addressed apart from those specifically provided for in the Bill, and to make their own observations on the content—or lack of content—of the report, as the Government intend. We do not want a process that is simply Ministers reporting on what Ministers deem fit to report on. My amendment also sets out the broad composition and role of the external reference group and provides for it to be independently chaired.
On this point, it would also be helpful if the Minister could clarify what is meant by the wording in the Explanatory Notes to this Bill, in paragraph 18. One sentence says:
“If the Secretary of State considers that any of the fields of healthcare, education and housing is not relevant to a particular description of people covered in a report, the requirement to report on each of those fields is relaxed to that extent”.
Can the Minister confirm that that means the Secretary of State is the sole arbiter on whether there is a need to report on anything in the covenant report, including healthcare, education and housing? I hope that he will make a positive response to my amendments, which strengthen the covenant and accountability for its implementation across public life. I also look forward with interest to his response to the other amendments which have been so thoughtfully and powerfully moved.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, this first group of amendments to Clause 2 consists of some 12 items, and deals with many aspects of the Armed Forces covenant and the proposed annual report. I am very grateful for the Committee’s patience, especially as, in order to draw out some common themes, I will not keep to the strict numerical order of amendments.
Amendment 1, in the name of the noble and gallant Lords, Lord Craig and Lord Boyce, would change the position of the provision for the Armed Forces covenant report in the Armed Forces Act. At Second Reading, the noble and gallant Lord referred to an “unfortunate juxtaposition” if the new provision were inserted directly after Section 359, which deals with pardons for servicemen executed during the First World War. I am most grateful to the noble and gallant Lord for the helpful and constructive way in which he has approached this issue. In their amendment, the noble and gallant Lords propose that the new provision should be moved to follow Section 339. This would place it in Part 14, which covers topics such as enlistment and terms of service. We do not favour that, because we see the annual report and the Armed Forces covenant itself going far beyond enlistment and terms of service.
I had hoped that we could arrange a printing change, such that the new provision was inserted into the 2006 Act at new Section 353A, under its own italic “Armed forces covenant report” cross-heading. As the noble and gallant Lord said, I wrote to the noble and gallant Lord, Lord Craig, in these terms. I thought that we had a deal.
Regrettably, I have now been advised that the Public Bill Office has declined to make the proposed change in printing points, having originally said that it was acceptable. Nevertheless, I reassure the noble and gallant Lords that there is no significance in the current proposed location next to Section 359. The two provisions are unrelated but are both properly categorised as “miscellaneous”. No relationship is implied by their positioning. Therefore, I do not consider that there is a major issue about the correctness or appropriateness of the new section.
Three other amendments in the group deal with the annual report of the covenant. Amendment 10, tabled by my noble friend Lord Palmer, concerns housing. The noble Lords, Lord Kakkar and Lord Patel, focus in Amendment 11 on healthcare research. The noble Lords, Lord Rosser and Lord Tunnicliffe, propose a longer list of additions in Amendment 5. The amendments draw attention to very important subjects. Amendment 10, tabled by my noble friend Lord Palmer, requires the report to provide an update on progress with housing associations towards improving service accommodation. In practice, housing associations may contribute more to helping service leavers and veterans to find suitable housing than helping those in service. Our successful pilot shared-equity scheme is managed by a housing association. Housing is one of the core topics mentioned in Clause 2 and the Government regard it as one of the most important elements of the Armed Forces covenant. We have been very active in exploring the scope to do more for our people, for example through the housing summit organised by the Housing Minister in May this year. Some housing associations are already doing excellent work in this field, and we will always be interested in good ideas from the housing sector.
Similarly, in response to Amendment 11, proposed by the noble Lords, Lord Kakkar and Lord Patel, we recognise the importance of commissioning and reporting on research designed to underpin healthcare for servicepeople. Very valuable research has already been commissioned by my department, such as the work of Professor Simon Wessely and the King’s Centre for Military Health Research, comparing the health of those who deploy on operations with a control group. We will continue to support research into healthcare issues affecting servicepeople, both in-house and, where appropriate, through external funding. Other bodies inside and outside government will also commission relevant research. This is a hugely important subject and we take it very seriously.
The noble Lords, Lord Rosser and Lord Tunnicliffe, tabled a much longer list of subjects to be covered in the report, which I suspect is designed to cover everything relating to the covenant. The assumption that the amendments have in common is that the best way to ensure that the annual report covers issues that matter is to name them in legislation. We disagree. Any attempt to write a comprehensive list is unlikely to be successful. Even if it captures everything today, it will be out of date tomorrow. Topics which became less important over time would still have to be covered every year. The annual report could become a box-ticking exercise.
We feel that it would be much better to have a short list of three enduring topics, as the Bill proposes. There are certain to be issues relating to healthcare, education and housing, and to at least one section of the Armed Forces community, in every year of the report. That is why we believe that they should be included as indicative of the coverage of the report. Beyond that, we should allow the Secretary of State to exercise his discretion on what to cover and for Ministers to defend their decisions.
Lord Craig of Radley
I thank the Minister very much for that comprehensive Answer. As regards my Amendment 1, I would like to be clear that if the printing change is not acceptable the Government intend to move their own amendment to correct the present position as regards Section 359. If that is not the case, I shall certainly want to return to that. However, in the mean time, I beg leave to withdraw the amendment.
Lord Judd
My Lords, I shall speak also to Amendment 8. These amendments have been tabled in the name of my noble friend Lady Drake, who is sorry not to be here; she is involved in the work of a Select Committee this afternoon. We will all remember her particularly telling speech at Second Reading on the matters covered by these amendments. At the outset I should also like to pay tribute to my noble friends Lord Rosser and Lord Tunnicliffe on their Amendment 22, which underlines some of the objectives of these amendments.
I will argue that the MoD has a legal duty of care to all service personnel. In the case of personnel aged below 18 years, additional legal and moral obligations arise due to the fact that they are minors and recognised as children in national law. The MoD has to ensure and demonstrate that it is meeting these specific obligations, including through the regular and transparent publication of relevant data for public and parliamentary review. The purpose of the amendment is to ensure such a review by requiring the Secretary of State, in preparing the Armed Forces covenant report, to include a report on the position of minors under the age of 18 with regard to their physical and mental welfare, education and employment.
The need for constant vigilance regarding the welfare of minors in the Armed Forces is a particular priority given that they constitute a very high percentage of new recruits each year. In the financial year 2010-11, minors alone constituted 29.8 per cent of new Army recruits: some 2,400 individuals. Averaged across the three services, minors constituted 24.1 per cent of the intake in the same period. As far as I am aware, no other ministry or department directly employs such a significant proportion of minors, making the MoD’s duty of care obligations quite unique.
The British Armed Forces offer new recruits of all ages a unique lifestyle and unique career opportunities. Many individuals thrive on the excitement, challenge and personal reward which this entails. At the same time, an Armed Forces career is extremely demanding, and the risk of serious physical harm and psychological pressure faced by service personnel both in training and on active service should never be underestimated. To ensure that the MoD is adequately discharging its duty of care, evidence is needed to demonstrate that recruiting minors does not place them at excessive, unnecessary or disproportionate risk of such harm as a result of their age and reduced maturity.
These concerns arise in particular in relation to evidence that the youngest Armed Forces recruits are more susceptible to serious mental health problems than older colleagues. The MoD itself has published interesting research demonstrating that the suicide rate among soldiers aged 19 and below is 50 per cent higher than the rate among equivalent males in the general UK population. Conversely, older Armed Forces personnel have significantly lower suicide rates than their civilian peers. Analysis has also indicated a link between vulnerability to post-traumatic stress disorder and youth in soldiers. If it is the case that younger personnel are at risk of such difficulties, proper measures obviously need to be taken to redress the problem. The gathering and review of comprehensive data on this matter is an essential preliminary step.
While recognising the potential opportunities offered, the recruitment of minors into the Armed Forces is nevertheless in stark contrast to the age limits imposed on other dangerous work, for example in the police, fire or ambulance services. The recruitment of minors is also the exception rather than the rule among armed forces internationally. Fewer than 60 countries still recruit minors, and fewer than 20 recruit 16 year-olds. To justify these exceptions and demonstrate that current policy reflects the best interests of the child—a key principle in national and international law—continual evidence-based review is surely required.
One of the Government’s primary duties to young people is to ensure their education, both as a means of personal development and as an essential prerequisite for a life of gainful employment. The Armed Forces offer recruits a variety of training and educational opportunities. However, as the number of teenagers staying on in education to at least the age of 18 in the country as a whole increases each year, along with the quantity and quality of qualifications they gain, it is necessary to ensure that recruits who join the Armed Forces while still of school age are not placed at any long-term disadvantage.
Lord Judd
My Lords, I have a dilemma. Some colleagues have suggested that I should go back to the beginning and start again. That would be a bit onerous. On the other hand, I have a note from Hansard asking for my speaking notes, which is a bit premature because I have more to say.
The education and training provided to minors in the Armed Forces not only must be adequate for their immediate situation but should ensure that they have the necessary qualifications to succeed at work within and outside the Armed Forces for the rest of their lives. If young recruits do not gain recognised transferable qualifications while in the Armed Forces, they are likely to encounter far greater difficulties finding employment if and when they return to civilian life. Despite the vital importance of education, the MoD has stated that it does not keep any comprehensive record of the qualifications achieved by minors in service. The amendment seeks to redress this absence and to ensure that adequate standards are met.
While the Armed Forces have always been proud of the educational opportunities that they provide for young recruits, recent evidence indicates that the basic educational provision for minors may now be falling behind the levels expected in mainstream education. Minors training at the specialised Army Foundation College in Harrogate study a very limited academic curriculum, covering English, maths and IT only, at a level equivalent to a low-grade GCSE pass. They do not study for GCSEs, A-levels, BTECs or similar qualifications. It should be noted that this is in contrast to the excellent academic results achieved at the Welbeck Defence Sixth Form College, where students who are not Armed Forces personnel but who wish to pursue a career in the forces study a range of A-level subjects alongside military-style training to prepare them for a future military career.
Would it not be more beneficial for both recruits and the Armed Forces if the career entrance path for minors was focused on education until recruits reach 18? Vocational training leading to recognised transferable qualifications could form the basis of education for recruits who are less academically inclined. Once again, I suggest a comprehensive assessment of data on this issue is necessary in order to ensure that the MoD is fully discharging its obligations towards minors in its care and employment. The need to ensure that recruits enlisting as minors do not suffer disadvantage as a result is made more acute by the fact that the majority of those enlisting below the age of 18 come from socially and economically disadvantaged backgrounds. These young people seek an opportunity to improve their prospects and make something of their lives. The Armed Forces have the potential to make this happen, but, I would argue, only if adequate attention is given to the recruits’ long-term needs. Minors who leave mainstream education early in order to enlist must be guaranteed adequate training and qualifications. Education has long been recognised as the path out of poverty and social deprivation. Failure to ensure that young recruits complete a thorough education will condemn them to long-term disadvantage.
While the majority of minors joining the Armed Forces each year enjoy the experience and wish to stay, we have to recognise that a significant minority do not. Last year alone 27 per cent of recruits enlisting as minors dropped out of initial training. This is significantly higher than drop-out rates for older recruits, which it seems average at 15 per cent. In the financial year 2009-10, one in three minors left within a year of enlisting. The high drop-out rate is important in this context for two reasons. First, it demonstrates the importance of ensuring that young recruits gain adequate qualifications to pursue a career outside the armed services. Secondly, it places an obligation on the MoD to ensure that minors leaving its care make a successful all-round transition to civilian life. Evidence shows that early service leavers—service personnel who leave without completing their minimum period of service—are at greater risk of experiencing difficulties making the transition successfully to civilian life. This includes greater susceptibility to homelessness and criminality. Despite their greater vulnerability, early service leavers are entitled only to reduced resettlement support compared with longer-serving personnel. The high and rapid drop-out rate of minors means that they constitute a high percentage of early service leavers. Therefore, I argue that the MoD should pay particular attention to ensuring that they make a successful return to civilian life both in the short and longer term. Once again, specific data are needed to demonstrate that this duty of care is being fulfilled.
In the present economic climate the high drop-out and discharge rate of minors in the Armed Forces also places an obligation on the MoD to demonstrate that the expenditure on recruiting and training recruits at high risk of dropping out is a financially sound policy. Adequate data are required to demonstrate that these resources are well spent both on those recruits who leave the armed services as well as those who remain.
Finally, recognising that under UK law minors cannot have a contract enforced against them, it is important that recruits who enlist below the age of 18 should be required to re-enlist upon attaining legal majority. This is why my noble friends’ Amendment 22 is so important. Indeed, the British Armed Forces Federation stated in its evidence to the Armed Forces Bill Select Committee that the current system,
“does not adequately provide informed consent as an adult”,
and suggested that minors should reaffirm their enlistment at, or shortly after, their 18th birthday. Such a system would ensure that all Armed Forces personnel are serving on the basis of free, informed adult consent. It would also relieve parents of the moral burden of responsibility for their child’s service—a particularly poignant issue in the case of those who are killed or gravely injured. I beg to move.
Lord Tunnicliffe
My Lords, I rise to speak to Amendments 6, 8 and 22, the latter of which stands in my name and that of my noble friend Lord Rosser. The Committee will be relieved to hear that I intend to speak briefly as it seems to me that the burden is very much on the Government to explain their position on these matters and give appropriate assurance.
The noble Lord, Lord Judd, has raised some extremely serious issues on Amendments 6 and 8. I look forward to the Minister’s response to those issues. We will consider his response and judge whether to support those amendments on Report. However, I put down a marker to the Government that we will be looking to hear a very good response, otherwise we will probably support the amendments on Report.
I would like to make clear that the Opposition are not against people under 18 serving in the Armed Forces. We think it can be good for those young people and for the Armed Forces. However, as the noble Lord, Lord Judd, has just so eloquently set out, there must be the right safeguards. There are obvious safeguards to do with combat and other issues that we believe are in place—and of course we will be constantly seeking assurances that they are in place—but we think Amendments 6 and 8, as a basis for reporting, and our Amendment 22, tie the whole thing together.
We have been assured privately that there are mechanisms in place whereby all young people under the age of 18 are able to leave the Armed Forces at any point up to their 18th birthday if they wish to. That is an absolutely key safeguard but it is a safeguard with which we are uncomfortable. The noble Lord, Lord Judd, has hit the nail on the head: there is no process for informed consent. There is no clear process of audit. We believe that the proper way forward is an affirmative, signed statement by that young person that they wish to continue their service in the Armed Forces, and we will be pressing this point on Report unless we can be convinced by the Minister between now and then that such a clause is not required in the Bill.
Baroness Dean of Thornton-le-Fylde
My Lords, I would like to speak to these amendments but this also gives me the opportunity of giving my sincere apologies to the Committee for not attending Second Reading. It was for family reasons and I did notify the Minister.
The accountability of any employer, including the Armed Forces, to young people is essential. In the Armed Forces I think it is even more essential. I do not know if the noble Lord, Lord Judd, has been to Harrogate. I have been on a number of occasions and I was extremely encouraged by the work being done there with young people. For the first time in their lives, for many of them, someone was taking an interest in them, investing time and money in them. In fact, if they left the services at 18 they would have been in a far better position to get employment than they would have been if they had been left in the streets where they were—and many of them told me that. When I met them, many of them told me that they would go on leave at weekends and they were quite often glad to get back because they realised what a cul-de-sac their life had been before they joined the Armed Forces.
There is a responsibility and I welcome this discussion, but I would not like to see attached to that any kind of assertion that the Armed Forces have been irresponsible with young people—because they have not. Indeed, I would also refer to A-levels. Many of these kids, boys and girls, go into the services because they have no chance of getting any further education; it is not within their sights. Their parents do not encourage them, the community they live in does not encourage them, and if you said, “You’re coming in here and you’re going to go away with A-levels”, they would run a mile; they would not join up. It is very important that we handle this sensitively. We have an accountability and maybe including a reference to it in the covenant report is the way to deal with it. I would certainly welcome that, and would welcome not tying youngsters in so they feel they cannot get out if they find it is not for them.
However, it would be wrong in Committee for it not to go on the record that the training that the young people get in Harrogate is good and gives them confidence in life they would not have got elsewhere. One of the bugbears I remember having as chair of the Armed Forces Pay Review Body some years ago was that the services did very good training but they did not keep a record of it; they did not have accreditation that could be used outside in employment. That has changed considerably—a lot of progress has been made—but if we could make sure that the investment that goes into the youngsters and what they give back was recorded and was available, it would help broaden their lives but would also recognise more fully the good work that the Armed Forces do with young people.
Lord Young of Norwood Green
I would like to make a short contribution to this debate and declare an interest as a former member of the Armed Forces Pay Review Body. I echo the comments of my noble friend Lady Dean because my experience was very similar. I met lots of young people whose lives were going nowhere and whose education was little or nothing. They owe a debt of gratitude to the Armed Forces for turning their lives around, giving them some education, giving them a sense of purpose in life, enabling them to work as part of a team and so on. There are therefore a lot of positive things that the Armed Forces do that we ought to pay tribute to.
I am not one of those who feel we have to apologise for recruiting people at the age of 16. Along with that right there is a responsibility and we need to make sure we get the balance right in terms of vocational training. If we tried to propel all these people down the A-level route, it would not fill them with glee. Getting the right balance of practical vocational training along with accredited educational achievements is something they would aspire to. Some of them will go on and a lot of latent talent will emerge.
Along with the right to recruit people at that age, there is also a responsibility. The question of informed consent exercises a number of us. When they reach the age of 18, or just before, as suggested under my noble friend Lord Rosser’s Amendment 22, there ought to be a proactive process within the Armed Forces whereby they contact the young person concerned, make them aware of what stage they are at, and help them to make an informed decision.
My last point is that the Armed Forces do great things. My noble friend Lady Dean pointed out that when young people are part of the Armed Forces, they have a sense of direction and know where they are. Unfortunately, we know that when people leave the Armed Forces they no longer have the comfort of being part of the organisation, so the point about getting resettlement right for those who decide they do not want to stay in the Armed Forces any longer is an important one.
Lord De Mauley
My Lords, before I respond to these amendments, I should declare two interests—one as President of the Council of Reserve Forces’ and Cadets’ Associations and the other as Colonel Commandant of the Yeomanry.
The amendments in this group all deal with the matter of under-18s serving in the Armed Forces. I welcome the efforts of noble Lords in reminding us that the welfare of those who join under the age of 18 is very important indeed and I thank all those who have moved amendments and spoken today. I can assure your Lordships that the Ministry of Defence is well aware of the need to ensure that these young people live and work in an environment which safeguards their interests and wellbeing, and I thank in particular the noble Baroness, Lady Dean, and the noble Lord, Lord Young, for their helpful and positive comments to this effect. I welcome the suggestion of the noble Baroness, Lady Dean. Things have been improving and will continue to improve, but we can always do better.
A great deal of close attention has been focused on this whole area in recent years, especially after the tragic deaths at Deepcut. We now have robust and effective safeguards in place to ensure that under-18s are cared for properly. Moreover, as the noble Lord, Lord Tunnicliffe, suggested and I can confirm, no service person under the age of 18 is to be deployed on any operation which will result in them becoming engaged in or exposed to hostilities. And recently we announced a change to the right of discharge for those under the age of 18. I shall come back to this in a moment.
Through Amendment 6, the noble Lord, Lord Judd, seeks to include service personnel under the age of 18 as being within the group covered by the Armed Forces covenant report, which is a laudable objective. However, the guidance accompanying the Armed Forces covenant, which we published on 16 May, is quite explicit. It states that:
“Special account must be taken of the needs of those under 18 years of age”.
I can assure noble Lords that we will not forget this aspect of our responsibilities for service personnel. The Armed Forces covenant report is to be a report about the effects of service on servicepeople, so as regards Amendment 6, minors under the age of 18 are already within the definition of servicepeople in the clause. I hope that the noble Lord will accept that.
As regards Amendment 8, I have some difficulty with the wording proposed. Not only would the amendment require the Secretary of State to give particular consideration every year to the effects of service on those under 18 years of age, it would also require him to have particular regard to those effects right through until the individuals in question became veterans. It would oblige us to treat those who joined under the age of 18 as a separate category throughout their service, and perhaps even throughout their lives. I hope it will be apparent to noble Lords that that is not an appropriate distinction to build into legislation.
I turn now to Amendment 22, spoken to by the noble Lord, Lord Tunnicliffe. This provides that service personnel under the age of 18 will be required to confirm in writing that they wish to continue serving in the Armed Forces after their 18th birthday. This must be done at least three months before their birthday. As noble Lords will know, it has long been our policy to enable service personnel under the age of 18 to reconsider their choice of a career in the Armed Forces up until their 18th birthday, and indeed for three months afterwards if they have already declared their unhappiness. To that effect, we are travelling in the same direction as the noble Lord. In fact, these informal arrangements have provided our under-18s with six months more to think about whether they have made the right choice of career than would the amendment. But following a review of our discharge policy for the under-18s, this has been converted into a legal right. A regulation was introduced on 12 July this year for each of the Armed Forces to provide a new statutory right for all service personnel to claim discharge up to their 18th birthday. This new regulation is separate from and additional to the long-standing legal right of all new recruits, regardless of age, to discharge within their first three to six months of service, depending on their service, if they decide that serving in the Armed Forces is not a career for them.
Under the new regulation, everyone under the age of 18 serving in the Armed Forces already has a right to claim discharge up to their 18th birthday. For the first six months of service this is achieved by giving not less than 14 days’ notice in writing to their commanding officer after an initial period of 28 days’ service. At any other time after six months’ service, those under the age of 18 who wish to leave their service must give notice in writing to their commanding officer, who must then discharge the under-18 within the next three months. For those who give notice just prior to their 18th birthday, this means that the latest they will be discharged is at 18 years and three months of age.
The new right of discharge includes a cooling-off period to avoid the unintended consequence of a decision made in the heat of the moment. A shorter period may be agreed with the commanding officer, but three months provides the serviceperson under 18 with a period of due reflection, with appropriate guidance and the right to rescind their request for discharge. The amendment proposed by the noble Lords, Lord Rosser and Lord Tunnicliffe, adds no protection for those under 18 who are serving, and would put a staffing burden on the chain of command that I hope they will accept is unnecessary. The right of discharge is made clear to all service personnel on joining the Armed Forces. We wish to continue to ensure that those young men and women who wish to serve in the Armed Forces are able to do so, while those who realise that a service career is not for them can leave as a right. On this basis, I hope that the noble Lord, Lord Judd, will withdraw his amendment.
Lord Tunnicliffe
My Lords, will the noble Lord be kind enough to send me and interested Members of the Committee a copy of that regulation, and deposit a copy in the Library?
Lord Judd
My Lords, I hope that it will not embarrass the Minister if I say that in his peroration there was no difference between us. As somebody who joined the cadet force at 14, I am very much in favour of those who are considering an armed services career being able to prepare for it while enjoying the opportunities that this presents. I have no difficulties with that. However, we want to be certain that before people get into a situation that will take them into conflict zones, they can make an informed choice. We need to make sure that we have belt and braces on that, so that they will not feel in any way pressurised or expected to stay on and are able to make a balanced judgment. I hope that the Minister will be reassured by me that there is no difference between us on this, except that I want to see a really convincing arrangement.
I will dwell for a moment on the remarks by my noble friends. I have great admiration for the consistent work that they have done for the armed services, and for the great knowledge that they bring to these matters. I make the point again that while of course very imaginative work is done at Harrogate—nobody would question that—the issue is about how far what is done at Harrogate helps young recruits to keep up with what is happening in society as a whole. I find a paradox here. My noble friend is second to nobody in arguing for improving secondary education, and for making sure that, where secondary education is failing youngsters who are not getting qualifications and do not feel that education is relevant, a lot of imagination on both sides of the House goes into how this can be tackled. Should we not take the opportunity in the armed services to be leaders in this respect rather than just saying that this has worked in the past? We should be determined that none of our youngsters will be at a disadvantage when they come out and make sure that the new opportunities becoming available to the wider community in vocational and other education are also available to them.
Finally, I drew attention in an intervention on an earlier amendment to the fact that things have moved on by light years from the time when I was a Minister in defence. Again, I have nothing but admiration for those who have made this possible. However, we have to measure it against what is happening in society as a whole, and make sure that while there is an improvement in the armed services, the improvement measures up to the changes in society. When we read of the problems of suicide and so on among young people, there is a tremendously significant issue to be faced. If one is to do research into the mental problems of some youngsters that result from being in the armed services—obviously not the majority, but a significant number—it is no good just looking at the immediate effects; one must look at the longer span and at what damage may have been done to people in later life by experiences earlier on.
Having said that, of course I will listen very carefully to what the Minister and his colleagues have to say. I hope that equally they will listen to the voice of concern. It is a voice of concern that some of us are expressing, not hostility, and I hope similarly that it will be understood that I have no option in the convention of how Committees in this Room take place but to beg leave to withdraw the amendment.
Lord Rosser
“( ) in the operation of inquests;”
Lord Rosser
My Lords, the purpose of the amendment is to ensure that included in the issues that should be covered in the Armed Forces covenant report is the operation of inquests. This matter was raised on Second Reading, and in his closing speech the noble Lord, Lord Wallace of Saltaire, said that the Government’s plan was to transfer several of the functions of the office of Chief Coroner either to the Lord Chief Justice or to the Lord Chancellor rather than to abolish them.
Bearing in mind that the introduction of the office of Chief Coroner was supported on all sides in your Lordships’ House during the discussions on the Coroners and Justice Bill 2009, it is not clear how the operation of inquests will be improved by the abolition of the office of Chief Coroner and the implementation of the Government’s new plan, with a government ministerial board focusing on matters of policy, standards of service and other administrative aspects of the delivery of the coroner service, and the dropping of the new appeals system.
It was widely agreed that the introduction of the office of Chief Coroner would help to address these issues by ensuring that military inquests were dealt with by coroners with appropriate experience and knowledge of the Armed Forces; reducing the sometimes excessive length of time taken to hold inquests; ensuring that coroners and the coroner service have the confidence of the public, including the bereaved, by being, and being seen to be, independent of government; providing the required oversight training, consistency and, most importantly, accountability and leadership, including leadership for reform for the coronial system; and providing for the Chief Coroner to be at the head of an appeals framework for those affected by the decisions that coroners make and whose redress at the moment appears to be to seek a potentially costly judicial review.
In view of the concerns widely held about the present system as it affects Armed Forces personnel and their families, the change of approach by the Government to a ministerial board covering key areas, the end of the cross-party supported independent office of Chief Coroner and the end of the new appeals system, it seems only appropriate that the troubled issue of the operation of inquests is one on which the Secretary of State should report in his Armed Forces covenant report, as well as the issues of healthcare, education and housing.
Baroness Finlay of Llandaff
My Lords, this is a very important amendment because of what has happened to the Public Bodies Bill. As has been said by the noble Lord, Lord Rosser, the new Chief Coroner would have had a role in monitoring investigations into deaths of service personnel and in ensuring that coroners were suitably trained to conduct such investigations. However, that is not the situation at the moment.
The requirement in the Bill is that the Armed Forces covenant report includes information on the effects of membership or former membership of the Armed Forces on servicepeople, or descriptions of such people. It is really important to be aware in our deliberations that, while there are quarterly reports on those who die on active service overseas, a large number of serving personnel die on active service but not overseas. I have the data from 2000 to 2009. In 2009 there were 59 deaths during hostile action and 47 other deaths: four violent, four suicides, 22 accidents and 19 that were disease-related. The important point is that these deaths are not being catalogued anywhere. I am glad that the Government are continuing to produce quarterly reports on the inquests of service personnel who died overseas. The latest report was on 19 July 2011. A total of 476 inquests had been held into the deaths of service personnel who had lost their lives in Iraq and Afghanistan, including 12 service personnel who died of their injuries in the UK.
However, the way in which those inquests were handled raises some questions. There were 75 open inquests to be concluded into the deaths of service personnel in Iraq and Afghanistan: 21 involved deaths in the previous six months. The Wiltshire and Swindon coroner had retained 28 of the remaining open inquests, but there were 54 outstanding inquests, which meant that relatives had waited for more than six months. Thirty-five inquests were being conducted by coroners closer to the next of kin. That group becomes really important because, when one looks through the list of inquests from 2002 to August 2009, some were held by coroners who did more than five inquests a year but, in 2009, half of them were conducted by coroners who did fewer than five military inquests in their whole working lifetime. Sometimes the list may include one inquest done by one coroner over the whole period of the list being available. The problem is that those coroners may have no training in military inquests. The questions they ask may not collate the important and relevant information. That is because the role of the coroner’s inquest is to determine the cause of death and potentially make recommendations, but a lot more information needs to be gained.
The other concern is the experience of the bereaved families. I will quote one bereaved relative who said that when her sister died outside the military the police advised that they should get legal representation. She said that such advice was small comfort to the family at the time. That was in 2009. When a young man in the family lost his life on active service, the family went into the inquest blind and totally unadvised about the process.
In 2009, the Royal British Legion facilitated a meeting of bereaved families. The comments from that meeting are horrific. One woman said:
“Listening to your husband’s final words or viewing images on screen of his partial burial site is a very personal, emotional and private time. One should not have to see this for the first time in a court room”.
Another bereaved person said:
“Had we known before we went to the inquest, the agenda and the proceedings would have been entirely different and we could have provided more assistance to the coroner”.
The way that these inquests are currently being handled is excellent in some cases, but I am afraid that in others it is not good at all, but lamentable. That is despite the Ministry of Defence having published in 2008 the Boards of Inquiry and Coroners’ Inquests Information for Bereaved Families booklet. That booklet is not providing any support to these bereaved families.
The proposed Chief Coroner would have provided leadership over the way in which the inquests are conducted, the information to be collated from them and central information about all other military deaths which do not occur overseas. The problem is that when a body is repatriated to the UK, if only one person has died in that incident, the coroner—it has been the coroner from Swindon and Wiltshire—can allocate the inquest to the local coroner wherever that person is to be buried or cremated and have their final resting place. It is because of that that we have this lack of expertise across the whole country.
The other reason that it is important carefully to collect information from military inquests relates to a previous amendment that we discussed in the names of my noble friends Lord Kakkar and Lord Patel. It is important to do this because battlefield tactics change rapidly and therefore a coroner with relevant experience will have conducted inquests into contemporary military fatalities and will ask more pertinent questions and collect more appropriate data. The other problem is that when a coroner gives a narrative verdict, others with a legitimate interest may never see it. A coroner’s verdict will represent a summary of the evidence and ought to be a matter of written record but is currently not collated. Unless we include a requirement to report on the operation of inquests and not merely to collate their outcome, we will do a major disservice to those who have lost their lives while on active service for this country and to troops currently serving whose lives remain at risk because we are not collating information and learning lessons from deaths that have occurred, quite apart from not doing the right and best thing by those who are bereaved and left behind.
Lord Ramsbotham
My Lords, I will add one thing to what the noble Baroness has said. One of the bodies taking most action against the Government as regards the Chief Coroner is the Royal British Legion. It has worked with the charity Inquest, which looks after bereaved families, and has presented a powerful case. That case would be a great deal more powerful if the Ministry of Defence took as strong a line on behalf of serving people affected by this matter as the Royal British Legion is taking on behalf of veterans.
Lord Wallace of Saltaire
My Lords, inquests are a crucial part of how we now support those who have made the ultimate sacrifice in the service of their country. Previous generations had to make do with a letter which said little about what happened. Over the past 30 years military inquests have evolved. It is fair to say that they are still evolving. A decision has been taken not to go down the road towards separate military inquests but to allow inquests on deaths in the Armed Forces abroad to be conducted by the civilian coroner service.
It is fair to say that the majority of inquests have been very well conducted and have been very helpful to the families concerned; those families have made that clear. Inquests, of course, bring very mixed emotions. On the one hand, it is right and proper that families have the opportunity to learn in detail how their loved ones died, hear witnesses and ask hard questions. On the other hand, each inquest brings home to the family and to everyone else the tragedy of loss and the human cost of the operations on which we have embarked. As noble Lords have remarked, the change in the character of warfare means that the technical details that inquests now have to go into are also evolving. Ensuring that the inquest system is fit for purpose in meeting the needs and expectations of bereaved service families is an important responsibility for any Government. The Joint Ministerial Statement on military inquests made to Parliament each quarter—the noble Baroness, Lady Finlay, referred to this—bears this out and provides valuable information.
We recognise this topic as an important element of the Armed Forces covenant, particularly in the current sad circumstances where in recent years we have suffered a substantial number of casualties in Afghanistan. In current circumstances, we therefore fully expect it to be covered in the annual report. However, noble Lords can also imagine a happier time when the operation of the inquest system will be of less concern to the Armed Forces community because we might not then be involved in deployed operations or suffering fatalities. It is not a perennial issue like healthcare or education. The amendment would, however, force the Secretary of State to examine it in those circumstances as well as those of today. We would lose the flexibility to focus the report on the key issues of the day. Our concern with key issues changes over time, so our argument for flexibility in the report is precisely not to enshrine in statutory form today’s definition of what the most important issues are.
I therefore suggest that our own approach, giving the Secretary of State the discretion to decide which topics should be covered, is a better one. However, in no way does this fail to recognise the importance of the good conduct of inquests for the families of those who have died on active service abroad. It is an extremely important topic which the Ministry of Defence recognises and which will, under the current circumstances, clearly form an important part of any report. Having said this, I hope that the noble Lord, Lord Rosser, will not press his amendment.
Lord Rosser
My Lords, I thank the noble Baroness, Lady Finlay of Llandaff, for her major contribution to the debate on this amendment. I thank also the noble Lord, Lord Ramsbotham, and the Minister for his response. I note the gist of his reply, which is a feeling that the issue of the operation of inquests is not one that will be permanent or regular in the way that, for example, healthcare, education and housing are perceived to be. The only comment I would make at this stage is that the operation of inquests will certainly remain an issue until at least the next Armed Forces Bill, which is when we tend to review what the legislation states. I will withdraw my amendment, but I will reflect on the Minister’s response—as I imagine will other noble Lords—before deciding whether to pursue the issue on Report.
Lord Ramsbotham
“( ) An armed forces covenant report must state what contribution to the preparation of the report was made by each government department with primary responsibility for each field covered by the report.
( ) Where an armed forces covenant report states that special provision for former service people or particular descriptions of former service people is justified, it must also state in respect of each field covered by the report what particular duties are imposed on each government department with primary responsibility for each field.”
Lord Ramsbotham
My Lords, I shall speak to Amendment 13, but if I had seen them before, I would have spoken also to Amendments 14 and 15 because they say very much the same thing. They are an amplification of some of the points that have already been discussed in relation to this clause. I tabled this amendment because I had supposed that after the Grand Committee, the Minister would want to reflect before the Report stage on many of the things that had been put forward. Indeed, those of us who have tabled amendments have done so in order to make certain that what comes before the House on Report is a consideration of all that has been said related to the aim of the covenant and what it is trying to do.
My reason for tabling Amendment 13 is that I am uneasy about two subsections in their implications for veterans. I refer particularly to subsections (2)(b) and (c) which talk about the report looking at,
“the fields of healthcare, education and housing; and … in other such fields as the Secretary of State may determine”.
Presumably that is a reference to the Secretary of State for Defence. My other concern is about subsection (6)(a) which states that,
“the Secretary of State must consider whether the making of special provision … would be justified”.
I do not think that it is up to the Secretary of State for Defence to decide what it is appropriate for Parliament to be told about veteran affairs. As has already been said, veteran affairs are the responsibility of many other ministries which presumably will decide how they implement the responsibilities that are laid on them by the Government and the nation. It is not up to the Secretary of State for Defence to implement that. He is responsible for the application of the covenant to those people who are serving.
That is where I disagree slightly with the Minister because I think that there are two parts to this covenant. One is to do with the serving, which can be dealt with by the Ministry of Defence, and the other is to do with the veterans, which is dealt with by others. That is why I suggested that the Minister for veteran affairs should be somewhere else where he can co-ordinate that activity. Therefore, based on the suggestion that the covenant should be in two parts, it is important that, while I agree that you cannot list everything that should be there, there should be a very clear indication given by the Government to the ministries that have a responsibility for veteran affairs as to what those responsibilities cover. The Cabinet Office is well able to do this. For example, there is mention in the covenant book published by the Ministry of Defence that there is going to be a mental health well-being website, which it is the responsibility of the Department of Health to establish. Presumably, that department will report on that.
On prosthetics provision, I await with interest the report by Dr Murrison because, as I have mentioned in the House before, I had once to accept a cheque on behalf of a voluntary organisation, accompanied by a young Royal Marine who had lost two legs and one arm in Afghanistan. He had just returned from America where he had had his prosthetic legs serviced because the NHS was unable to provide technicians to service them. That is utterly unacceptable. The NHS must make provision for having artificial limbs serviced wherever the person happens to be. That is for the NHS to do and to report on, and not for the Secretary of State for Defence.
Changes to service pensions are for the Department for Work and Pensions. As regards social housing, I think that it is interesting that a number of counties have already come forward with their own version of the covenant as it applies in their county. I mention Hampshire in particular because I happen to have seen that version, which is very interesting. I suggest that this is a matter for the Department for Communities and Local Government to take an interest in to make certain that what is provided is consistent throughout the United Kingdom, and that it is not a postcode lottery as to where you happen to live as a veteran because one county is doing something and another is doing something else.
I am very glad that the noble Lord, Lord Young, mentioned those who get into the hands of the criminal justice system. I should also like to see an obligation for a report, for example, from the Ministry of Justice about how the problems faced by people ex-service getting into the hands of the criminal justice system are being catered for and how they are being helped to rehabilitate into civilian life after custody. The Ministry of Justice has not being doing that very well. Recently, the Howard League produced a report which covers some aspects but not as many of the practicalities as I would like. We want to see the practicalities in the covenant and the Ministry of Justice held to account for making certain that those things happen.
I put my name to Amendment 2 in the name of the right reverend Prelate the Bishop of Wakefield because its value is that it lists a whole lot of subjects that need to be covered. It is not specific in detail but it covers the aspects. It is very important to have somebody independent responsible to the Veterans Minister for co-ordinating the activities of the public, private and voluntary sectors in support of veterans. I am very glad to see that acknowledgement has been given to the role of the Confederation of British Service and Ex-Service Organisations, COBSEO, which is now seen as a representative of service charities, pulling them all together. The more one looks at this, it is a very fragmented area. The covenant provides a priceless opportunity to pull everything together in a more comprehensive and national way. Therefore, it is very important that those who have responsibilities in this area should be told the general areas for which they are responsible, and that should not be up to the Secretary of State for Defence to determine but for the Government, on behalf of the nation.
Lord Empey
My Lords, I wish to speak to Amendments 14 and 15 in my name and that of the noble and gallant Lord, Lord Craig of Radley. First, we welcome the fact that we have a military covenant in this Bill. I would also like to thank the Minister for being so accessible to colleagues by way of explanation of what is happening and the availability of his officials for consultation.
As I see it, the big issue, basically, is this. I would like a situation where all servicepeople, irrespective of postcode, can expect that they and their families will, as far as is practicable, be able to command and receive the services that we believe are necessary in the event of them getting into difficulties on the battlefield or, in the event of a fatality, back-up for their families, which is broadly the same throughout the United Kingdom. In other words, a serviceperson from a particular part of the United Kingdom should not go on to the battlefield with the thought hanging over his or her head that if anything went wrong they or their families would receive less help and service in some parts of the United Kingdom.
I think that it was the noble Baroness, Lady Taylor, who is not in her place, who said at Second Reading that we had some loose ends to tidy up, and I believe we have loose ends here. As has been stated by other noble Lords, including the noble Lord, Lord Ramsbotham, the issue is simply that the Secretary of State is not in charge of the delivery mechanisms that are required to ensure that the covenant means something to the people for whom it is designed. Not only does he not control other Whitehall departments, but it is perfectly obvious that in the age of devolution he does not control what the devolved Administrations do. As we know, they receive block grants and, as it so happens, are in charge of the three issues that have been highlighted in the Bill—health, education and housing. Therefore, we are trying to ensure that when the Secretary of State makes his or her report to Parliament, Parliament knows who is feeding input into that report so that it can judge whether or not it is comprehensive. I do not wish to unpick or interfere with devolution settlements. That is not what this amendment is about. This amendment is allowing Parliament to be informed as to who precisely is contributing to the report.
Turning to the Explanatory Notes, the end of paragraph 19 says:
“Under new section 359A(6) the Secretary of State must also consider whether effects covered by the report would justify making special provision for servicepeople, or a category of them. If the Secretary of State does consider that to be the case, the report must say so.”
If the Secretary of State subsequently decided that something under that heading would have to be done, they could not deliver—at least not in all parts of the United Kingdom. That is perfectly obvious, because the Secretary of State is no longer in control. Therefore, we have the pieces on the board that are necessary to deliver a covenant, but we have not put them together in the most effective way.
Lord Craig of Radley
My Lords, I think that the noble Lord, Lord Empey, has covered this topic extremely well so I do not wish to add much to it. The only point to stress is that the issue of a postcode lottery might affect not only those who are getting help from the various devolutions, and so on, but will affect everybody in the sense that they may fear that it might affect them. It is worth giving a lot of consideration to what can be done about it. I sense that there is an acceptance that it is bound to happen; there is not much we can do, so let it happen. But by the time the media get a hold of one or two cases that attitude will prove not to have been the best one to adopt. I hope that a real effort will be made to try to bring it together as far as is humanly possible, or to be seen to be trying to do so, to ensure that we do not have problems with that particular issue.
Lord Stirrup
My Lords, I rise to speak in support of Amendments 14 and 15. I recognise clearly the difficulties that come with devolution but it is an issue with which the Government now have to grapple, and do so successfully. I do not believe that we can accept a postcode lottery associated with devolved Administrations.
As the noble Lord, Lord Empey, said, our Armed Forces exist to defend the people and interests of the whole United Kingdom, not parts of it. The corollary is that the Armed Forces covenant and the consequences and implications of that covenant should cover the whole of the United Kingdom and not parts of it. When base closures are up for discussion, many devolved Administrations are only too keen to ensure that they retain military installations on their territory. The corollary of that is that they should accept all the consequences and implications of those bases, including with regard to the Armed Forces covenant. If they cannot or will not do this, the obvious alternatives are either to relocate those installations to England or to treat them as overseas postings, with all that that might imply in terms of the provision of service schools, access to hospitals and all the cost that goes with that.
It is not acceptable to say to our Armed Forces personnel, “You are posted to a base in an area of devolved Administration. You and your family will be disadvantaged as a consequence. Bad luck”. That would send a very clear signal that the Government are in favour of delivering on the military covenant only when it is easy to do so, not when it is hard.
Viscount Brookeborough
My Lords, I rise to support the amendments in general and to support adding more regulations and putting legislation behind them. The covenant is a very old understanding and we are talking about it because it is not working. It could be said that it is operated under voluntary support by the different agencies and the different people involved. It has not operated very well and that is why we are discussing it now. We must legislate. When talking of the covenant in this Bill, there is far too much “in the opinion of” and somebody should pay “due regard to”.
We have to be sure that the covenant means something. When people have an obligation to provide specialist help in housing, health or anything else, we have to know whether they have or have not done it. It must not be swept to the back of the annual report for a particular region, unread and ignored. We are very well aware of that, especially in Northern Ireland. I do not wish to go back into aftercare services and that sort of thing, but we go outside medical care. We go into people’s lives to find out whether they need retraining. We go into helping them thereafter.
The noble Lord, Lord Empey, said that there was a certain amount of linking-up and connection that did not always work. The noble Lord, Lord Ramsbotham, mentioned the covenant to serving people. I hope that our covenant to them is absolute from within the service because we know who they are and where they are. We know where we are sending them and everything about them. The covenant is equally important to veterans. We also have to do something about tying the Ministry of Defence into having a proper record of where those people are and of noting when they leave the service. The covenant relies on two parts: providing a service and a commitment that is honour-bound to those people. It must also have a way of making sure that they are connected with it. It is no good pretending that they leave the armed services with no injuries and bad effects from serving in Afghanistan, housing, or whatever. It is no good expecting those proud people to come crawling back to us for help.
Today in the Telegraph, I think, which I do not have with me, there is a small article saying that Combat Stress has done a survey—the same people that do the parliamentary one that we get, so they are perfectly well founded. The survey shows that a colossal percentage—70 per cent—of GPs are unaware of any links or effects between combat stress and the stressful conditions for ex-servicemen. I have said before that I can sell a bullock here that can go all the way round Europe and you can walk into any agricultural office to find out where it has been, what was wrong with it, and where it can go. Why is it that it is only recently that records have become available in civilian life on leaving the service? Unless you begged for them, they were incarcerated in Glasgow. Why is it that we have freedom of information about everything in our lives but have no freedom of information to find out whether a homeless person lying in the underpass at Knightsbridge is an ex-serviceperson? Something is clearly wrong. It cannot be an infringement of someone’s human rights that when you see a doctor about a member of your family who is too proud to say that something is wrong there is a red dot or something on the record so that the doctor can say, “Ah. I am aware that he is an ex-serviceperson. We have special ways and means of dealing with them”.
The covenant is very important but it needs legislation behind it. I think that we should demand that reports are made every year about how it is getting on. I also think that the MoD should be a lot more aware of who and where its veterans are.
The Lord Bishop of Wakefield
My Lords, I, too, rise to support these two amendments, and indeed the spirit of what the noble Lord, Lord Ramsbotham, said in his amendment. I wish to make a more general point and try to respond in part to the debate on my earlier amendment which got lost slightly in the excitement of all those votes. So many of the contributions seem to be saying things that resonate with each other, but most of them, if not all, celebrate the fact that the Government have taken action in establishing the covenant legally. At the same time it seems to me that there is a fairly clear sense of not quite consensus but a fairly considerable majority opinion from different people around this Room that things still need to be looked at further if the covenant is to be as effective as we wish it to be.
I do not want to repeat the points I or others have made, but between now and the Report stage, I hope very much that the Government will take these comments away. Clearly, if all these amendments were passed, they would duplicate or even collide with each other, but quite a lot of material has been offered throughout our debates today which suggests that there are ways in which the covenant could be more effective than it is as the Bill presently sets out. I hope that the Government will consider these comments before the Report stage so that we can see that we have moved on and do not have to come back with another set of amendments that try to address those areas where we feel that there are still vacuums.
Lord Dannatt
My Lords, in the spirit of not wanting to be guilty of repetition, I want to speak in favour of these three amendments. They highlight a number of the aspects that this debate is touching on. The amendment tabled by the noble Lord, Lord Empey, looks at the distinctions being made between England, Scotland and Northern Ireland. We have heard that distinctions quite rightly exist between the needs of serving service personnel and veterans. There are distinctions between that part of the welfare that can be dealt with by the Ministry of Defence and that which is dealt with by other government departments. Further, there are the things in the defence area that are properly dealt with by the Ministry of Defence and others which are dealt with by the service charities. Whichever way you look, there are lots of distinctions, and we have to agree that the situation is complex.
Complexity does not equate with saying, “This is too difficult so we are not going to address it”, but that there is no simple solution to governmental responsibilities. Ministers in various departments must retain responsibility for those things that are their responsibility, so the issue is finding a solution to the lack of co-ordination and dealing with complexity.
Currently, the Bill provides that, in effect, the Government are being asked to mark their own exam paper. I do not think that is right. We put a question to the previous Government, who chose not to go down the track, which I shall repeat. Would they consider putting in place a reviewer? The right reverend Prelate mentioned this, while earlier in his career the noble Lord, Lord Ramsbotham, was HM Chief Inspector of Prisons. If we had a commissioner looking into all aspects of this, he could bring together the Government, the public, private and the charitable sectors. That would not take away the challenge to the Government of Parliament, but someone would have the responsibility for drawing the threads together and holding all the bodies to account, which would give a comprehensive picture of the myriad dimensions I have described. Perhaps the Government would give this some consideration, and if it cannot be done, perhaps they will give us a cogent explanation of why it cannot be done.
Lord Tunnicliffe
My Lords, I rise briefly to speak to this group of amendments. The right reverend prelate the Bishop of Wakefield made a nice point when he said that there is a resonance in so much of what we have been talking about today. There is a consensus around the Committee that the Bill as it stands does not firm up the covenant provisions enough. I share the aspiration that the Government should come forward with proposals, and I have to tell them that we will be looking at the points which have been made in this debate. If the Government do not come up with proposals today, it is extremely likely that we will seek consensus on an amendment to be tabled at the Report stage to try to capture the way this debate has gone.
I thank the noble Lord, Lord Ramsbotham, for explaining his amendment, and we will look at it in the light of the Minister’s reply. It is a complex and subtle area, and we shall take a view on how it might form part of our general approach. Turning to the two amendments tabled by the noble Lord, Lord Empey, and the noble and gallant Lord, Lord Craig, this is an absolutely crucial area which the Government have to sort out. I do not agree that the covenant is in such a dire state. I think that we have made progress, both this Government and the previous Government. I commend the way that this Government have carried it forward, but it would be a disaster if we were to actually achieve it and end up with an England-only covenant. Amendments 14 and 15 may not be the right mechanisms but the Government must come up with a satisfactory mechanism to make sure that this is an all-GB covenant.
Lord Astor of Hever
My Lords, I want to start by assuring all noble Lords, noble and gallant Lords and the right reverend Prelate that we are listening very carefully and we will reflect very seriously on everything that has been said today before Report.
Amendment 13, tabled by the noble Lord, Lord Ramsbotham, and Amendment 15, tabled by the noble Lord, Lord Empey, take up a similar theme. The first half of each amendment requires the annual report to state what contribution has been made by other departments across Whitehall and in the devolved Administrations.
With regard to the contribution made by Whitehall departments, I believe that the point has already been answered in my response to my noble friend Lord Lee when we discussed Amendment 9. Although the report will be that of the Secretary of State, it will reflect the views of the Government as a whole and it will have been approved by the Government as a whole. There is no need to make that a statutory requirement.
The role played by the devolved Administrations is clearly different. We have always recognised that all the devolved Administrations should be engaged in the preparation of the report. We will invite their contributions and comments. We will make sure that we fully understand and take into account their reactions to anything we propose, and in particular whether they will support and implement what we propose. They have a place on the covenant reference group, which will be closely involved with the report. For example, if the annual report says something about healthcare in Scotland it must do so with the full involvement of the Scottish Government. The published report would naturally make this clear. Again, I do not believe that should be a matter of statute.
The second part of the two amendments requires the Secretary of State to declare what duties have been laid upon government departments and the devolved Administrations in cases where special provision is justified. I can envisage circumstances in which the annual report might do exactly that. But it will not always be possible to do so. It may take time to work out the right approach, or the solution may not be affordable for the moment. In some cases, implementation will not be a case of the Westminster Government laying duties on other bodies. It would be wrong to impose on the Secretary of State a statutory duty which, quite legitimately, he may be unable to fulfil.
I recognise the concern of noble Lords and noble and gallant Lords that the annual report may state conclusions, but have no teeth. They may see a risk of it being ignored due to resource or other considerations. I also recognise that it will be more difficult to produce the report if we do not have the co-operation of all the responsible authorities across the United Kingdom. Naturally, I very much hope that such a situation will not arise. Commitment to the Armed Forces covenant is strong across government and the United Kingdom. The record shows that we can work effectively with all the departments concerned. I believe we should proceed on the basis that those productive relationships will continue.
Amendment 14 highlights an important aspect of the Armed Forces covenant and the way it interacts with our constitution. In many cases special provision, in response to the effects of service in the Armed Forces, will not be a simple matter of issuing an edict from Whitehall. Responsibility may fall within the discretionary powers of local authorities or other local delivery bodies. More particularly, in terms of this amendment, it may fall to the devolved authorities in Scotland, Wales or Northern Ireland. Special provision for veterans in the areas of health or housing, for example, as has been mentioned, could fall into this category.
The key to success will, of course, be the quality of dialogue. The devolution settlement requires us to work closely together with devolved bodies. Whitehall officials are in regular contact with their opposite numbers and working relations are good. I repeat: working relations are good. Ministers in Edinburgh and Cardiff have underlined their commitment to the Armed Forces covenant. The situation in Northern Ireland is more complex but we are confident that we can maintain a fruitful dialogue to achieve our aims. We have, for example, succeeded in introducing the new arrangements for scholarships for bereaved service children across all the countries of the UK. The new transition protocol for injured personnel, designed to improve the handover of care from the military to civilian services, will be applied in all four countries. These cases show that the system operates effectively.
I welcome the reference in the amendment to special provision being “broadly the same” in the different countries of the United Kingdom. It is important to recognise that there is no virtue in complete uniformity here. Special provision clearly implies a divergence from the normal regime. Since the normal regime may differ in different countries of the United Kingdom, the nature of special provision may also have to differ. It is the outcome which matters; that is, making sure that we are doing the right thing for our people and honouring the Armed Forces covenant right across the UK.
The Government are sympathetic to the idea of consistency. However, the amendment takes the annual report several stages further than we envisage. It may not be possible, at the time of the publication, to set out detailed proposals for implementing the special provision that the Secretary of State considers to be justified in England or elsewhere. I can, nevertheless, give noble Lords, and the noble and gallant Lord, two assurances which I hope will respond to the points that they made. First, the annual report will contain references to the contributions which have been received in its preparation. Secondly, where the Secretary of State reaches the conclusion that special provision is justified, the annual report will seek to take into account the position across the United Kingdom. I hope on the basis of these assurances that the noble Lord will not press his amendment.
Lord Ramsbotham
My Lords, I thank the Minister. I am sure that all Members of the Committee respect him when he says that he will listen and reflect. That is the style that we have come to admire in his approach to everything placed in his way. I am very grateful for that attitude. I make no apology for raising my concern about a postcode lottery and for including the phrase,
“what particular duties are imposed on each government department with primary responsibility for each field”
for consideration. My noble friend Lord Empey widened that to include parts of the United Kingdom other than England. I am glad that that point was picked up by the Minister because it is very important. I am sure that he will also reflect on the contributions made in this interesting debate. My noble and gallant friend Lord Stirrup raised some spectres that are worth considering; I hope they do not arise. The right reverend Prelate the Bishop of Wakefield pulled a lot of points together, as he did earlier. I hope that the Minister will reflect that throughout all we have been saying today there is very genuine good will towards the idea of a covenant. All of us, not least those who have had the privilege of serving in Her Majesty’s Armed Forces, want to see the best possible outcome for all the constituents of the covenant. In that spirit, I beg leave to withdraw the amendment.
Lord Empey
“( ) Where an armed forces covenant report states that special provision for service people or particular descriptions of service people is justified, it must also state how the Secretary of State will seek to ensure that the special provision made is broadly the same in England, Northern Ireland, Scotland and Wales.”
Lord Empey
My Lords, I thank the Minister for his response. I agree with the noble Lord, Lord Ramsbotham, that the Minister and his colleagues will wish to reflect on the debate, and we will wish to reflect on what he has said. As the noble Lord, Lord Tunnicliffe, said, the phraseology that we have used in these amendments may not be ideal. Nevertheless, I think there is a consensus in the Committee that there needs to be some way—I do not wish this to clash with the devolution settlement in any way—of allowing Parliament to ensure that the various component parts of the UK are co-operating in this regard. If that is not done, they may diverge over time. That is something none of us would wish to see. As I say, we will wish to reflect on the Minister’s response.
Lord Rosser
“Armed forces advocates
After section 359 of AFA 2006 insert—
“359B Armed forces advocates
(1) The existing network of armed forces advocates will be extended through the nomination of supporting advocates at regional and local level to ensure that local authorities work together to identify and resolve issues in local policy or the delivery of services that may affect service people.
(2) In this section “armed forces advocate” means a public servant nominated to monitor and resolve policy or legislative issues that arise for service people.””
Lord Rosser
This amendment deals with Armed Forces advocates, which were raised at Second Reading by my noble friend Lady Taylor of Bolton. The amendment provides for the existing network of Armed Forces advocates to be extended at the regional and local level to ensure that local authorities work together to identify and resolve issues in local policy or the delivery of services which may affect servicepeople.
My noble friend Lady Taylor referred to the action of the previous Government in piloting an Armed Forces welfare pathway under which some local authorities appointed Armed Forces advocates to ensure that, as part of policy development, steps were taken to ensure that services provided at the local level appropriately recognised the specific needs of Armed Forces personnel, veterans and their families. The noble Lord, Lord Wallace of Saltaire, said in response that the Government supported the idea of Armed Forces advocates at the local level if that was the approach chosen by the local authority concerned. That was a rather disappointing response as it suggested that, despite the warm words, the Government intended to do nothing to promote Armed Forces advocates. As my noble friend Lady Taylor said, there are considerable pressures on local authorities at the moment. She asked what mechanisms the Minister thought should be put in place to ensure that local communities are protected and that real progress is made, along with effective monitoring at both the local and national level. It is important that we have Armed Forces advocates at the point of service delivery, where the test will come of whether the state’s commitments, on which there is a political consensus, are being realised.
I hope that the Minister, on behalf of the Government, will accept this amendment. If he is not able to do so, I trust that he will respond to the questions asked at Second Reading by my noble friend Lady Taylor of Bolton and spell out, bearing in mind the Government's support for the idea of Armed Forces advocates, what action they intend to take to encourage more local authorities to go down this road.
Lord Davies of Stamford
My Lords, I support the amendment of my noble friend Lord Rosser. I will make two points. First, the system that he proposes, as he is well aware, has existed for some time in France; I take it that the Government, too, have seen that. I believe it works extremely well. It is always sensible not to reinvent the wheel. If one finds a mechanism in a compatible country which is working well, that is evidence in favour of a proposal—or if it is not working well, it is evidence against. The French are very satisfied with the way in which this works.
Secondly, the position taken up to now by the Government—who have been very good at listening open-mindedly to these debates, so I trust that it was a provisional view—is that all we need to do is to facilitate local authorities to appoint Armed Forces advocates where they wish to do so, and that we do not need to intervene where they do not. This is a most illogical approach to the problem. Local authorities with the will to create the post of Armed Forces advocate have, by that fact, already demonstrated that they are alert and sensitive to this need. The problems arise with local authorities that are not inclined to set up Armed Forces advocates. Authorities which, either through mistrust of the military or sheer ignorance, have not focused on this and are not inclined to accept the proposal, are those where problems are likely to arise and where an advocate is most necessary. The more logical solution is the one proposed by my noble friend. I hope that it will find favour with noble Lords and with the Government.
Lord Astor of Hever
My Lords, I say at the outset that I regard Armed Forces advocates as an excellent idea. In UK government departments and in the devolved Administrations, they carry out two highly important roles. They ensure that their department’s policies take account of the special needs of the Armed Forces community, and they communicate their department’s perspective to others, including my officials and external stakeholders such as family federations or ex-service charities. Elsewhere, in local authorities or in NHS bodies, Armed Forces advocates or individuals with similar titles act as champions for service personnel, families or veterans. In some cases they are responsible for improving communications with the Armed Forces community to ensure that entitlements to services are properly understood. The exact role depends on the job to be done. There is no single model and neither should there be.
In answer to the question of the noble Lord, Lord Rosser, about the Second Reading speech of the noble Baroness, Lady Taylor, we want to ensure that best practice is promoted around the country, for example through the community covenant. We will be able to draw attention to successful uses of the advocate system, but it will be for them to decide what is best in their circumstances. I hope that that answers the question.
My difficulty with the amendment does not concern the merits of Armed Forces advocates at the local level; that is not in doubt. The case for them at the regional level is perhaps less obvious, but there is no need to legislate for their existence. The previous Government set up advocates without requiring any legislation and I commend them for doing so. I suggest to the Committee that the same logic applies and that we should not support the amendment. Therefore, I hope that the noble Lord will withdraw it.
Lord Davies of Stamford
Before the noble Lord sits down, I would be grateful for his reaction to my point that surely it is those local authorities least inclined to establish the post of Armed Forces advocate where it is most likely the Armed Forces will need such an advocate, and vice versa.
Lord Astor of Hever
The noble Lord makes a very good point. We will certainly look at this.
Lord Rosser
I would like to thank my noble friend Lord Davies of Stamford for his support for the amendment and also the Minister for his response. I will reflect on it, but in the mean time, I withdraw my amendment.
Lord Rosser
“Powers of the Service Complaints Commissioner
In section 339 of AFA 2006 after subsection (1) insert— “(1A) The report of the Service Complaints Commissioner (“the Commissioner”) made under subsection (1) may include the results of any investigation by the Commissioner into potential defects in the service complaints system, and any recommendations flowing from such investigations.””
Lord Rosser
Amendments 20 and 21 relate to the powers of the Service Complaints Commissioner. In her 2010 annual report, the commissioner said that while real progress had been made over the past three years in the new system for handling service complaints, delay remained the key area of weakness in the system, with delays particularly problematic in cases of bullying, harassment and discrimination. The commissioner said that many complainants simply give up and choose to drop their unresolved complaints after lengthy delays, which can and do lead to service personnel leaving prematurely. Justice delayed is justice denied.
The commissioner concluded her report by saying that her priority was to ensure that the Armed Forces had a complaints system that they deserved; namely, one that is fair, efficient and effective. However, she went on,
“For the third year running I have not been able to give Ministers and Parliament the assurance that the service complaints system is working efficiently, effectively or fairly”.
The commissioner called for a fundamental review of the service complaints system and for the powers of the Service Complaints Commissioner to be included in that review. Currently the SCC has no powers to ensure that complaints are dealt with properly and without delay, and in her report she states that the lack of a power to make recommendations in individual cases under the Service Complaints Commissioner’s oversight has led to inefficiencies and injustice in a number of cases.
The purpose of these amendments is to address key issues raised in the commissioner’s 2010 report. The first amendment makes it clear that the report of the commissioner can include the results of any investigation made by the SCC into potential defects in the service complaints system and any recommendations flowing from such investigations. The second amendment seeks to address the issue of the time taken to respond to issues raised in the Service Complaints Commissioner’s report by providing for the Defence Council to respond within six months of it being laid, and within three months if the report makes recommendations on an individual case.
The 2010 report does not paint a happy picture of the present system, albeit that it does say that real progress has been made in the last three years in the new system for handling service complaints. I hope that the Minister will be able to indicate in his response what action the Government are taking to address the concerns that have been raised as well as respond to these two amendments. I beg to move.
Lord Wallace of Saltaire
My Lords, noble Lords may be aware that the post of the Service Complaints Commissioner was established under the Armed Forces Act 2006 in December 2007 to provide independent oversight of the service complaints system, with one of the statutory functions of the role being to report each year to the Secretary of State on how fairly, effectively and efficiently the service complaints system is working. Three annual reports so far have detailed the work of the commissioner’s office. They have been thorough and critical in their assessment of all aspects of the complaints system.
The commissioner has commented and reported in detail on specific areas where progress has been made or where further improvement is required. Indeed, where the commissioner has investigated and identified areas for improvement, recommendations as to remedy have been made in her reports. A total of 27 recommendations were made in her first two reports, and this year she has made a further 20 recommendations, as well as four three-year goals setting out her vision of how the complaints system should be operating by 2014. This is therefore a new system, one that is still developing but, we would suggest, making good progress in changing the culture of the complaints process within the armed services.
Lord Rosser
I thank the Minister for his reply and for what he has said about the review of the complaints system. I do not think he said when he expected the review to be completed but I hope it will be dealt with fairly quickly rather than dragging on and on. I will obviously reflect on the Minister’s response, but in the mean time, I beg leave to withdraw the Amendment.
Lord Tunnicliffe
“( ) The Railways and Transport Safety Act 2003 is amended as follows—
(a) in Part 4 (shipping: alcohol and drugs), omit section 90 (crown application, &c);(b) in Part 5 (aviation: alcohol and drugs), omit section 101 (military application).”
Lord Tunnicliffe
My Lords, I want to make one or two general points about the approach to the Bill. We have a role as the Official Opposition to scrutinise the Bill thoroughly clause by clause. This is a particularly important role for the House of Lords and one we feel we need to discharge. In the event, Members of the Committee will note that only two amendments relate to clauses beyond Clause 2. I want the Committee to be in no doubt that this has nothing to do with the sloth of Her Majesty’s Official Opposition or other Members of the Committee, but is a commendation to the Minister and his officials on the very extensive consultation we have had, and the fact that many of the concerns we raised about the Bill have now been handled. We have been given assurances, so there is no need to bring forward amendments. I also particularly want to thank Mr Morrison for a long and complicated telephone conversation with me. I am not a member of Her Majesty’s Armed Forces, a lawyer or a former Minister in the Ministry of Defence, so frankly I did not understand how service law sits alongside normal criminal law. I thank him for taking me through it so painstakingly. It was particularly in pursuit of this clause that I sought his advice.
The basic rule is that service law and the criminal law of the land sit side by side. In round terms, a serviceman is answerable to the law of the land, and Clause 24 extends it to overseas, which seems complicated but is really very simple. A serviceman has to obey the criminal law and, broadly speaking, must obey service law on top of that. This part of the Bill is unique in that service personnel are excepted from a piece of the law which applies to civilians, and that is the Railways and Transport Safety Act 2003. Certain sections of that Act specifically except the military. The Explanatory Notes at paragraphs 36 and 37 highlight the fact that there is an exception. My first question is: why was this exception necessary? The Act itself is beautifully straightforward. I will not go into the railway area because it forms so small a part of military activity that it is not worth mentioning. How it relates to shipping is also extremely straightforward. Basically, the Act applies to,
“(a) a professional master of a ship,
(b) a professional pilot of a ship, and
(c) a professional seaman in a ship while on duty”.
The aviation part of the Act states that an offence is committed if,
“(a) he performs an aviation function at a time when his ability to perform that function is impaired because of drink or drugs”.
An aviation function is defined simply as,
“acting as a pilot of an aircraft during flight”.
Various other categories are mentioned, including members of cabin crew and air traffic controllers. It is difficult to understand why it was necessary to except the Armed Forces from this Act. I would have thought that, as a generality, one would not want the pilot of an aircraft, whether it be a military or civil craft, to have his performance impaired by alcohol. My basic proposal is to delete these two exceptions and to ask why they were necessary in the first place.
It seems that the Ministry of Defence has had second thoughts and sees the necessity of bringing a similar law into effect, which will be the effect of the various clauses set out in the Bill that relate to alcohol. However, a rather difficult idea is introduced. Instead of prescribing the roles and acts along the lines of the civilian law, the Bill states that a duty may only be prescribed if its performance while the ability to do so is impaired through alcohol and carries the risk of,
“(a) death;
“(b) serious injury to any person;
“(c) serious damage to property; or
“(d) serious environmental harm”.
The beauty of the Act is that it is extremely clear about what activities it applies to. The service law should be equally clear.
The issue of drink and safety-critical activities is close to my heart. I had an early career in aviation and then one in the railway industry. When I joined the railway industry, there were serious problems with drink and safety-critical activities. It is now a leader in the country in having a very strong campaign that has driven drink out of the industry in safety-critical areas. To do that, it uses not only the 2003 Act but also random testing. My second concern that I put to the Minister is this. In seeking to bridge the gap—obviously the department has felt it necessary to move into testing—why do the Government not produce a simpler piece of law by essentially adopting the Act and removing the exceptional clauses? Secondly, why do they not write into the Act—if they feel the need to do this by an Act—the capability of random testing, which has proved so effective in the railway industry and has contributed so significantly to the improvement in safety? I beg to move.
Lord De Mauley
My Lords, on behalf of the Bill team, I thank the noble Lord, Lord Tunnicliffe, for his very generous words at the start of his speech. In putting forward Amendment 23, the noble Lords, Lord Tunnicliffe and Lord Rosser, bring personal experience of the operation of the Railways and Transport Safety Act 2003 in the civilian environment, which is helpful to the Committee in considering the provisions for the Armed Forces set out in the Bill.
First, I will say something about our general approach when looking at whether to apply to the Armed Forces legislation that is aimed primarily at civilians and civilian institutions. In some areas of law, we follow closely—and in some cases apply directly—the general law that applies to civilians. As the noble Lord, Lord Tunnicliffe, said, this is most notable in the application of the criminal law and many aspects of criminal procedure and evidence. However, noble Lords will accept that the circumstances of Armed Forces life, and the need to ensure the highest standards of operational effectiveness, mean that we have to look very carefully at whether we need different provisions and solutions for the Armed Forces.
The Railways and Transport Safety Act applied the sensible principle of giving powers to test on the basis of a reasonable ground to suspect that someone carrying out navigational and other transport-related activities has taken drugs or alcohol. The Bill adopts this basic approach. However, in deciding what to put in place, we have also considered two special aspects of service life and defence needs. First, members of the Regular Forces, and members of the reserves when they are with the Armed Forces, are on duty or on call for duty 24 hours a day. Secondly, the range of their safety-critical duties is extremely wide. On operations and in training, members of the Armed Forces are constantly dealing with danger and with dangerous equipment and activity.
The approach we decided on includes a number of special aspects in response to these factors. It allows a commanding officer, with reasonable cause, to consider the testing of anyone under his command to establish whether they are unfit through drink or drugs to carry out any duty which they may be expected to carry out and which the commanding officer considers is safety-critical. In addition, it allows specific limits to be set by regulations for any safety-critical duty. This will allow us to develop a comprehensive regime for drugs and alcohol safety over the whole range of military functions.
There is another important difference from the civilian provisions. As I have mentioned, members of the Armed Forces are always subject to be called on to carry out duties. Many of them are living permanently on base and there is no easy way of saying whether, at any one moment, they are on duty or off duty. Moreover, the likelihood of their being called on to carry out dangerous tasks varies greatly in practice between locations—between Afghanistan and places of rest and recreation. We considered carefully how to avoid a necessarily wide power to test from becoming oppressive.
To deal with this, we have provided that it is the commanding officer who will decide, for example, when and whether those under his command are likely to be called on to carry out dangerous tasks. This will allow the chain of command to apply reasonably flexible policies on testing between different theatres and locations. By taking this approach we have tailored the scope and application of drug and alcohol testing to fit service life and needs. I hope that the noble Lord will feel able to withdraw his amendment.
Lord Tunnicliffe
My Lords, I note what the Minister has said and will read his words with care. I am less than convinced by the argument about always being on duty. The words that have been put forward are about specific tasks and it is entirely possible to bring this more in line with the 2003 Act. However, for the moment, I beg leave to withdraw the amendment.
“Procedure on arrest for substance abuse, violence against the person or damage to property
After section 74 of AFA 2006 insert—
“Procedure on arrest for substance abuse, violence against the person or damage to property
(1) If a person subject to service law—
(a) has been arrested on suspicion of committing an offence,(b) would be the person’s first offence, and(c) the offence is related to substance abuse, violence against a person or damage to property,prior to any decision as to charge, the prosecuting authority shall consider diverting the person for specialist services to assist with substance abuse and mental health treatment either in the community or through existing services in Her Majesty’s armed forces.(2) The prosecuting authority shall also commission and obtain a psychiatric assessment of the arrested person in order to assess that person’s needs and manage that person safely.
(3) No decision to charge the arrested person shall be made at the time of arrest and such a decision shall take place only when the prosecuting authority has consulted the specialist services involved and reviewed the psychiatric assessment.
(4) The above conditions do not apply unless, at the time of arrest, the arrested person was serving in Her Majesty’s armed forces.””
Baroness Finlay of Llandaff
My Lords, I know that the hour is late and I am grateful to the Committee for allowing me to move this amendment at this time. The basis of the amendment is to identify people serving in the Armed Forces who commit offences while fuelled by drugs or alcohol, and who therefore have related underlying mental health problems. There is a duty of care on the Ministry of Defence to afford special consideration to those people whose alcohol abuse or drug treatment has come as a result of their experience and to put them into appropriate programmes as soon as possible, preferably before any charging decision is made.
In civilian life, at the discretion of the police or the Crown Prosecution Service, there is the opportunity to permit a defendant to go into a treatment programme in the community rather than go before the magistrate and get a criminal record. The idea behind this amendment is that the Armed Forces covenant, which is the basis behind much of what we have been addressing today and is so important, in no way could inadvertently disadvantage someone in the forces.
The way in which military court services operate means that in-depth access to the defendant’s circumstances sometimes may not come to light. Therefore, mental health and substance misuse issues can be missed and could even be exacerbated, with disastrous consequences in the long term. Sadly, there are stories of really frenzied attacks and incidents that have been fuelled particularly by alcohol. An SAS veteran, Chris Ryan, pointed out that it is often 10 or 15 years after people have left the Armed Forces that they reach their lowest point.
The underlying premise of the amendment is that if you can pick people up early and treat the root cause when they are exhibiting the early symptoms of drug and alcohol misuse, you would prevent a long-term problem later. The Armed Forces operate a parallel structure of community mental health teams, so the infrastructure is in place. In his report of 2010, Fighting Fit, Dr Andrew Murrison MP noted that the linked issue of alcohol abuse is significantly associated with service in the Armed Forces and there is evidence that it is more common among combat veterans. This is not a small problem—it is one that needs to be addressed. It has been estimated that up to four out of five cases where military personnel have been involved with criminal activity may be fuelled by alcohol and drugs, and that they would not have committed the offences if it had not been for the excessive use of these substances.
There is an emerging problem in Afghanistan where heroin misuse is becoming particularly linked to criminal activity among serving personnel. There are community psychiatric nurses and consultant psychiatrists on hand in Afghanistan to deal with this, and there are very good outcomes when they deal with the problems immediately, in contrast to them becoming chronic problems. The US has learned lessons from its experience in Vietnam with drug abuse in particular and has realised that punishment does not actually work because you put these people into civilian life, but that early intervention is particularly helpful. One of the problems is that if people are discharged out into civilian life and do not have the infrastructure support they need, the outbursts and consequent violence often associated with them can injure and traumatise or even possibly kill people who are closest to the person themselves.
It has also been estimated that 25 per cent of all home repossessions are from people with a service background, and there is a suggestion that that may be linked to higher alcohol consumption and spending a lot of money on alcohol, because alcohol consumption is extremely expensive.
The idea behind this amendment is to reflect the reality that we are asking a lot from our troops—we are asking them to risk life and limb—and that some of them will find that the way they cope with the trauma they have experienced is to try to numb themselves using drugs or alcohol, and that when they are really fuelled up like that they then go and commit offences. Unless we intervene rapidly and pick them up we may be creating a lifetime of dependency and problems rather than intervening early. I beg to move.
Lord De Mauley
My Lords, Amendment 24, moved by the noble Baroness, Lady Finlay, would apply whenever a member of the Armed Forces was arrested for a first offence related to alcohol or unlawful drugs, violence or damage to property. Before it could charge the accused, the service prosecuting authority would have to consult specialist substance abuse and mental health services, and to obtain and take into account a psychiatric report on the accused. The importance of the psychological state of an offender and the appropriateness in some cases of a specialist social or mental health approach instead of prosecution is well understood in both the civilian and service justice systems.
When a case is serious enough to go to the service prosecuting authority, it must consider the evidence available as to whether the suspect had the necessary intent to commit the offence under consideration. It must also consider whether the public and service interests—the interests of justice—make a prosecution appropriate. It is also the responsibility of the service prosecuting authority to keep these issues under review during the proceedings. The defence routinely provide submissions to the service prosecuting authority about the accused’s state of mind and whether continued proceedings are appropriate. The service prosecuting authority is therefore able to review in context its assessment of what the interests of justice require.
It is also the service prosecuting authority's duty to disclose to the defence any facts it becomes aware of which go to mitigate the seriousness of the alleged offence. Where it seems to the service prosecuting authority that the interests of justice are not best served by prosecution, it can, and often does, go back to the chain of command to discuss how the chain of command can help to bring the suspect into contact with specialist services. This often forms part of a discussion on whether administrative action might be more appropriate than prosecution.
In court, in an extreme case, the defence may seek a decision that the accused is unfit to plead. There are special statutory provisions under which the judge advocate will consider and decide such applications. Where an accused is convicted, there are statutory provisions under the Criminal Justice Act 2003 for medical reports and pre-sentence reports. The court must generally obtain and consider a medical report before passing a custodial sentence where the offender appears to be mentally disordered. This is a report on the offender’s mental condition made by a specialist medical practitioner. A pre-sentence report must generally be obtained by a court whenever it is considering a custodial sentence for an offender. The aim of such reports is to assist the court in deciding the most suitable method of dealing with the offender. It is made by the probation service and must, of course, be disclosed to the offender. The same requirements apply in both the service and civilian justice systems.
I believe that the current role of the service prosecuting authority in deciding whether to charge is the right one. It should, and does, consider what the interests of justice require, and in particular whether prosecution is appropriate. It does so by taking into account the evidence before it. However, I hope the noble Baroness will accept that it would be going too far to require the service prosecution authority to consult specialist services and obtain a psychiatric report in every case covered by the amendment. To do so would confuse the role of prosecutor and the court. It is right for the prosecutor to have some discretion in whether to prosecute and to respond to what the interests of justice plainly require. However, there is an important boundary to be maintained between that role and the proposed role requiring the prosecution to obtain and weigh expert evidence in every case before it can bring a charge.
Furthermore, the requirement for a psychiatric assessment in all the cases covered by the amendment would be excessive, and even unfair to the suspect. It would involve a delay before a decision was made on bringing a charge even in the simplest case. It would appear to expect, or perhaps require, the suspect to submit to psychiatric assessment even where he or she was not raising any psychological issue and there was no reason to suppose that there was such an issue. In some cases it would be impossible to complete this process within the very tight statutory limits that apply in the service and civilian justice systems to keeping a person in custody before charge. In other words, it would go well beyond what the needs of a fair and efficient system of justice require.
Lastly, it would mean that the procedures before charge, and the role of the service prosecuting authority, were very substantially different from those in the civilian system. We recognise the importance of the psychological and social background of an offender, but I do not consider that there are grounds for such different approaches between the service and civilian justice systems. Therefore, I ask the noble Baroness to withdraw the amendment.
Baroness Finlay of Llandaff
I am most grateful to the Minister for his detailed response to my amendment. I had hoped that the words “shall consider” in the first part of the amendment did not create an obligation. However, in the light of what he has said, I can see that I do not have the right wording. I wish to read what he has said, possibly discuss the matter with him outside the Committee and then consider what to do. In the mean time, I beg leave to withdraw the amendment.
Lord Wallace of Saltaire
It may be convenient for the Committee to adjourn until Thursday at 2 pm.
House of Lords
(13 years, 3 months ago)
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Public Expenditure: Deficit Reduction
(13 years, 3 months ago)
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Lord Barnett
To ask Her Majesty’s Government how much public expenditure has changed in the Chancellor of the Exchequer’s deficit reduction plans through the use of the flexibility built into his plans.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the Government’s fiscal mandate targets a cyclically adjusted aggregate to allow some fiscal flexibility at a time of economic uncertainty and to allow the automatic stabilisers to operate in full. Automatic stabilisers are those features of the tax and spending regime, such as unemployment benefits, that vary with the economic cycle and so act to stabilise the economy. The forecast for total managed expenditure by 2014-15 increased from £737.5 billion in Budget 2010 to £743.6 billion in Budget 2011.
Lord Barnett
The noble Lord forgot to mention that he apologised recently for having denied that the Chancellor had said in terms that he had flexibility built into his plan. I assume that he is now admitting, despite all the figures that he has just given us, that that is the case. Therefore, should the Chancellor not be using that flexibility in the current economic circumstances? He said recently:
“The break-up of the euro would be economically disastrous, including for Britain”.
That seems all too likely at the moment. Given the lack of growth in the United States and Europe, is this not a good time to use that flexibility, rather than all that stuff that he does not believe in himself?
Lord Sassoon
I do not know to which “he” the noble Lord is referring, whether it is me or my right honourable friend the Chancellor, but we all believe in it and we are sticking to it. However, as I have explained, the cyclically adjusted nature of the mandate which the Chancellor has set means that, in times of economic uncertainty, factors such as varying levels of employment and inflation feed through so that the economy benefits, for example, from increased social security benefits and we do not in some slavish way have to cut back on other expenditure. The flexibility is there for very good reasons and it is operating.
Lord Renton of Mount Harry
My Lords, could I ask my noble friend perhaps a rather simpler question? Despite the dreadful headlines in today’s newspapers, to what extent does the Chancellor of the Exchequer feel that he is on course in deficit reduction?
Lord Sassoon
My Lords, I remind noble Lords, lest they forget it, that we have introduced an independent Office for Budget Responsibility so that we can no longer keep fiddling the numbers and restating the cycle like the previous Government did. The Office for Budget Responsibility’s latest numbers, produced at the Budget, confirmed that we are on track to meet the Chancellor’s fiscal mandate on the rolling five-year period.
Lord Howarth of Newport
My Lords, does the Minister really believe that the automatic stabilisers will do the trick? Is it not a mark of leadership to be able to admit that you have got it wrong? Is it not now time for the Chancellor and the Prime Minister to acknowledge that their strategy of drastically reducing public expenditure cannot enable the UK economy to revive when there is no sign anywhere else on the skyline of demand for what the UK economy is able to offer?
Lord Sassoon
I am not quite sure who should admit what they got wrong, but the former Chancellor, Alistair Darling, made a complete mea culpa when he said, “We got it totally wrong, raising national insurance and putting a tax on jobs”. He said that there was no credible economic policy at the last election, which is why Labour lost.
We have introduced a policy that is on track to get the economy growing. It is the underpinning of the economy by a clear fiscal plan on which we can build. The Chancellor and the Prime Minister are working very hard on the growth of the economy, which is founded on the stabilisation of the deficit that we inherited.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, there is time for both noble Lords. Perhaps we can hear from the noble Lord on the Cross Benches and then from my noble friend Lord Newby.
Lord Bilimoria
My Lords, the Minister talks about growth; we hear about the Chancellor sticking to his plans; but we also hear a clamour for Plan B. What is going on around the world is unprecedented; with the EU and the American debt crises there is so much uncertainty. By raising taxes the consumer is absolutely squeezed. As for perception and reality, there is a perception of cutting even though the cutting is not taking place as much as we all think. We all know that public debt was far too high under the previous Government. What are the Government going to do to generate growth?
Lord Sassoon
To generate growth the Government are, first—in answer to the charge on tax—lowering tax in critical areas, such as corporation tax, by increasing the tax allowances for those starting new businesses through, for example, the EIS scheme. We are insisting on a much cheaper and simpler planning system than the one which has been holding back business investment in this country for the past 50 years. We are also significantly increasing the number of apprenticeships—by 250,000 places compared to the previous Government’s plans over the spending review period. I could go on but we need time for other questions. We are working fundamentally on the growth agenda.
Lord Newby
My Lords, does the Minister agree that one of the keys to growth will be increased expenditure on infrastructure? It does not bring growth of itself but in the short term it brings many more jobs. When do the Government intend to bring forward the legislation to introduce the green investment bank, and when does the Minister expect that bank to make its first loans?
Lord Sassoon
I completely agree with my noble friend that capital and infrastructure expenditure is one of the keys to growth, which is why we were able in the spending review last year to increase the plans that we inherited—to increase, I say again, the spending plans that we inherited from the previous Government —by up to £2.3 billion a year. That is an additional £8.5 billion on capital expenditure in the review period. I therefore agree with my noble friend. As for the green investment bank, it is on course to start the first phase of operation in April 2012. Legislation will be brought forward as soon as the state aid approvals have been forthcoming from Brussels.
Lord Davies of Oldham
My Lords, the Minister referred to the predictions and forecasts of the OBR but those were produced nearly six months ago and forecasted 1.7 per cent growth at that stage. Ever since, everyone else’s predictions have been somewhat lower. In circumstances where the American economy is clearly in difficulty and we have crisis in Europe, are the Government going to continue to pursue a strategy which will take us headlong into recession, with the price being paid by middle England and low-income families if that occurs?
Lord Sassoon
It has never been on such a strategy, and therefore there is no question of it continuing on such a strategy.
Transparency International: Corruption Perceptions Index
(13 years, 3 months ago)
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Lord Harrison
To ask Her Majesty’s Government what is their reaction to Transparency International’s 2010 Corruption Perceptions Index.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the Government are committed to transparency, accountability and stamping out corruption across the board. I note that the UK has slipped down the corruption perceptions index. However, I am confident that recent legislation, such as the Bribery Act, together with our active enforcement record, will improve the UK’s position over the coming year.
Lord Harrison
My Lords, given our relatively low position in terms of public perception of corruption—we are 12th within the European Union and 20th within the world—how can the Government redouble their efforts to ensure that we satisfy all aspects of the UN Convention against Corruption? Secondly, would the Minister look at some aspects of what I call low-level corruption in this country, such as the failure to observe proper appointment procedures in jobs, and so forth, to help to improve our position over the coming years and fight against the social immobility that is sometimes the cause of our failure to prosper economically?
Lord McNally
My Lords, on that last point, which is slightly wide of the Question but nevertheless very relevant, the noble Lord, Lord Harrison, will have noted that my right honourable friend the Deputy Prime Minister recently initiated a public debate on this very problem of social mobility or immobility. I sometimes think that if we had had the social immobility that we have today I might not have got very far out of Blackpool.
On the broader issue, I understand the concerns about the perceptions, but it is a perception index that covered a period when there was a good deal of coverage of public life in this country—the problems with parliamentary expenses, et cetera. The Bribery Act and the actions taken by the Government to sharpen up the pursuit of corruption and economic crime will feed through into that index. Indeed, the OECD Secretary-General described the Bribery Act as reflecting the best international practice and praised the UK for being an active enforcer of bribery offences.
Lord Goodhart
My Lords, Transparency International UK, of which I am a member, published in June this year a document called Corruption in the United Kingdom. It concluded that corruption is a greater problem than has been recognised and is being recognised by Governments. Have the present Government considered that document and have they got the Serious Fraud Office adequately into the picture?
Lord McNally
Yes, my Lords, we have studied the document, and we keep close contact with Transparency International, which does a very effective job of keeping these matters before the public and before Governments. However, in this country there are two dangers. One is to say, “Oh, we don’t need to do anything because we are actually the ones who obey all the laws and it’s all the others who are corrupt”, and the other is to believe that we are somehow burdened down with corruption. Both extremes are wrong. There is corruption in this country, as in all countries, but it is not left untouched. As I say, the Bribery Act is in place, and my noble friend referred to the SFO, which is now playing an important part in the new structure of crime prevention set up by the Home Secretary. In consultation with law officers and other relevant colleagues, the Home Secretary is currently considering options for delivering the Government’s commitment to improve capability to tackle economic crime. The work of the Serious Fraud Office will play a key part in that strategy.
Lord Bach
My Lords, I am delighted that the Minister is praising the Bribery Act and using it in defence of the present position. He will of course recognise that it was an Act passed under a Labour Government, with support from all over the House. The worry is that it was not implemented until 1 July this year. My first question is why it took so long to implement and my second, bearing in mind that it has only been in force since 1 July, is whether there are any messages from the trenches. Is it working, or not?
Lord McNally
Of course it was, and all parts of the House can take credit for the fact that the Bribery Act was put on the statute book. The reason for the pause was for consultation and education, so that the Act was seen for what it is—a very useful piece of anti-corruption legislation. When we first came into office, there were lots of rumours going round that if you took a client out for a drink, for example, you would be charged under the Bribery Act, and various bodies, eager to make an honest penny, were offering consultancies to companies on how to avoid these various traps and pitfalls. So in consultation with the CBI, small business and organisations across the board, we worked very hard on guidance, which we published. The message from the trenches is that the Bribery Act is in place, it is effective, and if anybody is worried about its implications, the key thing to do is not to bribe.
Cohabiting: Law Commission Report
(13 years, 3 months ago)
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Lord Marks of Henley-on-Thames
To ask Her Majesty’s Government whether they will introduce legislation to enable qualifying cohabitants to apply for financial relief on the breakdown of their relationship, as recommended by the 2007 Law Commission report on cohabiting.
Lord Marks of Henley-on-Thames
My Lords, while declaring an interest as a barrister undertaking some family work, I beg leave to ask the Question standing in my name on the Order Paper.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, as has been confirmed in a Written Ministerial Statement, the Government do not intend to take forward the Law Commission’s recommendations for reform of the cohabitation law in this parliamentary term.
Lord Marks of Henley-on-Thames
My Lords, I thank the Minister for that Answer, although I confess it was disappointing. Does he nevertheless agree that it is unjust, as the slightly wider Bill of the noble Lord, Lord Lester, recognised some time ago, that cohabitants who separate, no matter how long they have lived together and even if they have children, cannot in England apply to the courts for financial relief to compensate for careers abandoned, time spent looking after children or contributions to their cohabitants’ success, and if so, is it not surely now time to implement the Law Commission’s sensible and limited scheme, which would not undermine marriage or civil partnership and which has been widely applauded by the judiciary and the family professions?
Lord McNally
My Lords, first, I pay tribute to the Law Commission for its work, not just on this matter but in general. I am a very firm supporter of the Law Commission and the work it does, and I know that this House has played an important role in bringing Law Commission recommendations into law. However, the Government have decided not to implement the Law Commission’s scheme in this parliamentary term, because major changes to family legal aid are being implemented next year, and further reforms of the family justice system are also on the horizon following the final report of the family justice review, which will be published in October. We do not believe it would be sensible to seek to implement further changes in the law governing cohabiting couples during this period.
Baroness Deech
My Lords, I put these points to the Minister on the basis of the hundreds of letters I have had from members of the public after lecturing on this subject, which go along these lines. First, people live together precisely because they do not want to be married and have that law applied to them, and they would see a cohabitation law as a sort of forced marriage—some of them said that they would fail to commit, or fail to stay, if the law were changed. Secondly, the financial relief law is so bad, so uncertain and so expensive that the assets of the couple would be eaten up and in the end the only beneficiaries, given that there will be no legal aid, might be the lawyers.
Lord McNally
My Lords, I think that intervention suggests that it is right for the Government in this case to err on the side of prudence.
Lord Tebbit
My Lords, would not the most sensible, the cheapest and the most effective way be for the cohabitants concerned to marry?
Lord McNally
I think in other circumstances the noble Lord is fairly outspoken against forced marriages.
Lord Lester of Herne Hill
Does the Minister agree that where a man leaves his common-law wife with children, it is quite wrong that the state should have to come to the rescue without any possibility of getting the man to pay? When he and his colleagues reconsider this matter, as I hope they will, will they have regard to the experiment in Scotland and the recent legislation in Ireland where, under the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, some perfectly sensible solutions have been included in the Republic as well as in Scotland?
Lord McNally
My Lords, when the previous Administration opposed my noble friend’s Private Member’s Bill on this they said that they were going to wait for research on the Scottish experience. We have looked at some of the preliminary outcomes of that research without seeing anything conclusive to persuade us to move more quickly on this issue. My noble friend makes the point, however, as do the Law Commission and many others, that there are confusions and injustices as the law stands. We have not ruled out the Law Commission’s recommendations for all time; we have simply decided that we are not going to do that during this Parliament.
Baroness Scotland of Asthal
My Lords, can the Minister give us a little more detail about why the Government did not find the Scottish research persuasive? Can he also say what the basis of any new review would be if the Government were not minded to take into account the very detailed work that the Law Commission was asked to undertake—it has now taken that into account—and why the Government think that the separation of the two issues is possible?
Lord McNally
First, the previous Administration did not proceed on this issue when they had the power to do so, although my noble friend Lord Lester had raised it. The Scottish scheme is different in various respects to the proposals for England and Wales made by the Law Commission, and the report on the Scottish scheme, which is only preliminary, acknowledged that its findings necessarily provide only an early-days impression at a time when there is relatively little reported case law under the 2000 Act, with judges and practitioners still feeling their way. The conclusion in the report is that the evidence to date in Scotland means that a similar scheme in England and Wales is unlikely to place significant additional demands on the courts system. The main message to concentrate on is that a significant period of change is due in the family justice system, which we are using to consider legislation in general. We have taken the Scottish research on board, but it is, as I say, rather narrow, very early and not enough to persuade us that we should implement the Law Commission’s recommendations now.
The Lord Bishop of Wakefield
My Lords, the noble Lord, Lord Tebbit, will be glad to know that the Church of England supports marriage. It is promoting weddings through expanding the choice of churches available to couples and through its weddings project. In our earlier submission to the Law Commission, we recognised that the welfare of children and the hardship and vulnerability of people whose relationships are not based on marriage ought to be addressed through legal rights. We stand by that, but could we be reassured that the Government will continue to promote the institution of marriage?
Lord McNally
One goes out on to very thin ice. I am not sure that it is for a Government to promote marriage any more than it is for them to promote any other forms of relationship.
Lord McNally
They say that Elizabeth Taylor was in favour of marriage, because she got married eight times. I understand where the right reverend Prelate is coming from. Of course, the Government try to create the framework within which the relationship of marriage is sustained. These issues are, frankly, intensely personal, and I do not think one should try to give a government or a ministerial answer to them. We live our lives, and we should get on with doing so.
Public Disorder: Social Networking Sites
(13 years, 3 months ago)
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Baroness Miller of Chilthorne Domer
To ask Her Majesty’s Government what steps they intend to take concerning the use of social networking sites during periods of civil unrest.
The Minister of State, Home Office (Baroness Browning)
Following the recent riots, the Home Secretary held a constructive meeting with ACPO, the police and representatives from the social media industry. Companies have made clear their commitment to removing illegal content and, when appropriate, closing accounts, whether at the request of the police or because of a tip-off from others. It was agreed to step up co-operation to ensure that these processes are working effectively. The Government are committed to a free and open internet, and we are not seeking additional powers to close down social media networks.
Baroness Miller of Chilthorne Domer
My Lords, I thank the Minister for her Answer. Can she confirm that the police are not, then, seeking powers to disable Twitter, for example, when they deem it necessary? Would she agree that there is an important balance to be struck between, on the one hand, catching and prosecuting those who use social media for anything illegal, whether incitement to loot or child pornography or any other illegal purpose, and, on the other hand, a wholesale surveillance and censoring operation that should remain totally unacceptable in this country? Can she assure me that the striking of that balance will be an open and accountable process rather than one decided behind closed doors by the owners of social media networks, the police and the Home Secretary?
Baroness Browning
I can reassure my noble friend. She will be aware that the police and other investigatory agencies are required to comply with the Regulation of Investigatory Powers Act 2000 and other legislation which seeks to bring that balance. It is not the case that they can do things unilaterally without being held to account.
Lord Rosser
My Lords, the Prime Minister said in the other place on 11 August,
“so we are working with the police, the intelligence services and industry to look at whether it would be right to stop people communicating via these websites and services when we know they are plotting violence, disorder and criminality”.—[Official Report, Commons, 11/8/11; col. 1053.]
On 25 August, the Deputy Prime Minister told the Daily Telegraph:
“I’ll tell you what is not going to happen – there is not going to be a Chinese or Iranian-style black-out of social media. And let’s not forget that during the riots, social media was very helpful to lots of people in finding out what was going on and in bringing communities together”.
Which of these two statements now represents Government policy?
Baroness Browning
My Lords, as always, the Prime Minister and the Deputy Prime Minister are as one. There is nothing incompatible in those statements. The Prime Minister did not say we wanted to close down networks; he said we would work with the police, industry and others to look at what would be right to do in order to prevent criminality. Anything that is a crime offline is also a crime online, and the companies that we have been consulting have made very clear their commitment to removing illegal content—something which I am sure the Deputy Prime Minister is very pleased to hear.
Lord Elton
Bearing in mind the advantage to our side in listening to radio transmissions by the enemy during the last war, what is the Government’s distinction between hacking, which is illegal, and listening in to subversive communications during riots?
Baroness Browning
I am a little young to remember exactly what happened during the last world war; I came in immediately after it, so I cannot comment exactly on the law that applied at that time. However, I can tell my noble friend that we in this country have clear legislation, with which both the police and the investigatory services are required to comply, that sets the important balance between the protection of the national interest and the protection of the public in terms of the way in which criminality may affect them and the right to a free society. It is for that reason that we are not seeking to close down networks.
Lord West of Spithead
My Lords, there is a difference between these sorts of networks, which are very open so that anyone can get on to them and listen in, and the other sorts of networks that we are talking about. It would be madness for us not to have our agencies—the police and others—looking at these areas. Could the Minister let us know that the Government have a clear policy on exactly how that is to be done? It is not breaking RIPA-type laws when you listen in to Twitter or something similar. Many of us listen in to Twitter and Facebook, and that does not break any laws. We need a mechanism whereby the police and other agencies can use the information on these networks to protect the public. Is there clarity about exactly what can be done?
Baroness Browning
We believe that there is a need for more training in police forces, and ACPO is taking the lead on this. For example, some police forces around the country use information from Twitter and other such networks more effectively than others, often because they have one or two individuals who themselves are hi-tech, have very good access and can use intelligence from the information that they glean from those networks. Through ACPO, we are seeking to improve that around the country. There is nothing illegal about that; it is something that we believe the police could use to better effect, and that training is an important part of it.
Terrorism Prevention and Investigation Measures Bill
(13 years, 3 months ago)
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Equality Act 2010 (Specific Duties) Regulations 2011
(13 years, 3 months ago)
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17:01 - Division on Lord Waddington's amendment. - Ayes: 126 / Noes: 258 - Lord Waddington's amendment disagreed.
17:19 - Division on Lord Low's amendment. - Ayes: 166 / Noes: 178 - Lord Low's amendment disagreed.
Baroness Verma
That the draft Regulations laid before the House on 27 June be approved.
Relevant document: 26th Report from the Joint Committee on Statutory Instruments.
Baroness Verma
My Lords, I am delighted to be leading this debate and to have the opportunity to explain the Government’s policy regarding the specific duties regulations.
I will first say a little about the equality duty, which these specific duties support. On 5 April this year, the Government brought into force the new public sector equality duty contained in Section 149 of the Equality Act 2010. The duty requires public bodies and those discharging public functions to have due regard to the need to eliminate discrimination and other conduct prohibited by the Act, advance equality of opportunity and foster good relations between people who share a relevant protected characteristic and those who do not share it. The relevant protected characteristics are age, race, sex, disability, gender reassignment, pregnancy and maternity, religion or belief, and sexual orientation, and, in relation to eliminating unlawful discrimination and harassment, marriage and civil partnership.
The objective behind the new equality duty, like the previous race, disability and gender equality duties, is to ensure that consideration of equality forms part of the day-to-day decision-making and operational delivery of public bodies. However, the new duty is considerably stronger than those previous duties. As well as extending to all nine protected characteristics, it also sets out in primary legislation for the first time what considering the need to advance equality of opportunity involves. Section 149(3) of the Equality Act 2010 makes clear that in particular it involves considering the need to remove or minimise disadvantages suffered by people who share particular protected characteristics, to take steps to meet their particular needs, and to encourage people who share particular protected characteristics to get involved in public life and other activities where their participation is disproportionately low.
This new strengthened equality duty will be supported by specific duties set out in regulations which we are discussing today. The purpose of the specific duties is to help public bodies carry out the equality duty more effectively. This is a very important point and I want to emphasise it strongly. The equality duty itself, set out in primary legislation, is the key provision. That is already in place, and, as I have explained, it is stronger and broader than the previous duties. The specific duties do not extend, restrict or change the equality duty in any way. They are simply designed to help public bodies to perform the equality duty better as was the intention behind the specific duties which supported the previous race, disability and gender equality duties.
However, having commenced the new stronger equality duty, the Government are putting forward a radical new approach for supporting specific duties. In the past, public bodies tended to get bogged down in detailed, bureaucratic, process-driven requirements such as producing vast equality impact assessments that ticked a box but had no impact on the decisions taken. Our approach is different. We want public bodies to focus on delivering real progress on equality and to be transparent about that so that the public can hold them to account. It is a fundamental shift from bureaucratic accountability for filling in the right forms to democratic accountability for delivering equality improvements for service users. The specific duties that we are proposing, instead of focusing on processes, require public bodies listed in the regulations to publish information to demonstrate their compliance with the equality duty and to set themselves equality objectives. The requirement to publish information to demonstrate compliance with the equality duty is a strong requirement. Compliance with the equality duty is an objective matter, determined by the courts. While there is flexibility in the regulations, each public body must publish information to demonstrate that it is complying with the equality duty. If it does not, the Equality and Human Rights Commission can issue a compliance notice which is also enforceable through the courts.
Case law on the previous duties, which is still relevant, provides useful guidance as to what is required to comply with the equality duty. In brief, public bodies must ensure that they have the right information to hand about equality issues to make informed choices and decisions and to ensure that this is rigorously considered before and at the time decisions are taken. Case law has also made clear that in some cases it will be necessary to consult relevant parties likely to be affected by a decision, such as local disability groups and women's groups. In order to demonstrate their compliance with the equality duty, public bodies will generally need to publish information about what they have concluded will be the effect of their activities on people with different protected characteristics and the information they considered in making their decisions, including those they have consulted and involved.
The regulations give public bodies flexibility to publish the information that they believe best demonstrates their compliance with the equality duty and which is most useful to their staff and service users in holding them to account for their performance on equality. This means that public bodies will be able to publish the information that is right for their particular circumstances. What is right for a small school will be different from what is right for the Department for Education.
We have two stipulations. First, public bodies must include information relating to people who share a relevant protected characteristic who are affected by their policies and practices—their service users. For example, we would expect a local authority to have considered how its provision of social housing affects women who have been victims of domestic violence, or disabled people who have particular access requirements. We would expect the local authority to publish information on this, and to explain how it considered it and whether it took action as a result. Secondly, public bodies with 150 or more staff must publish this information in relation to their employees. For example, we would expect a government department to have considered how its policies affect employees with different protected characteristics, and to publish information such as its gender pay gap and the proportions of staff at different levels who are disabled or from ethnic minorities.
We will ensure that there is sector-specific guidance from the Government and the Equality and Human Rights Commission to help different types of public body think through what sort of information they should publish. All public bodies listed in Schedule 1 to the regulations must publish this information by no later than 31 January 2012 and at least annually thereafter. Schools listed in Schedule 2 to the regulations must do the same, but by 6 April 2012 and at least annually thereafter. The additional time for schools—a full term—is to help them prepare and implement the new requirements in compliance with the preparation timescales for any regulations on schools recommended by the Merits Committee.
Turning to the specific duty to set equality objectives, each public body listed in the two schedules to the regulations must prepare and publish one or more specific and measurable equality objective. They are required to publish these objectives by no later than 6 April 2012 and at least every four years thereafter.
Baroness Verma
My Lords, if my noble friend will allow me to finish, he will see that this is exactly what we are doing.
The objectives set out should clearly illustrate the real equality improvements that the public body intends to deliver over the course of the business cycle. They should focus on the key inequalities that the body is in a position to affect, as highlighted in its published information, and identify achievable, measurable improvements. For example, if a local authority’s data show that very few older people access a service from which they might benefit, the authority might set an objective to increase the rate of take-up by a certain percentage within a specified period, to ensure that such services genuinely advance equality of opportunity for all. This requirement to publish equality objectives will help to ensure that the public and the voluntary and community sector organisations understand the key inequalities that public bodies are focusing on tackling and can track progress against these. The Government are commissioning the production of a toolkit to help voluntary and community sector organisations to use transparency delivered by the equality duty to hold public bodies to account for their performance on equality.
The regulations require public bodies, with the sole exception of schools, to publish information in advance of setting their equality objectives. This is to help to ensure that the public and voluntary and community sector organisations have the opportunity to consider the data that will inform the equality objectives that public bodies set themselves. This is a key element of the Government’s policy: to ensure that public bodies are transparent and accountable to the people they serve for delivering real equality improvements that will give people fair chances. I commend these regulations to the House.
Amendment to the Motion
Lord Waddington
As an amendment to the above Motion, to insert at the end “but that this House regrets that the Regulations seem likely to reinforce the failure of equality law to take proper account of freedom of religion and conscience; and notes that the Regulations appear to burden further the public sector with unnecessary bureaucracy and target-setting and will in effect promote equality of outcomes rather than equality of opportunity.”
Lord Waddington
My Lords, in speaking to the amendment in my name, I should make plain what I think is known to most people in the House: I am not a born rebel. The object of the exercise this afternoon is not to ask the House to vote down these regulations. It is an opportunity for all of us to express any concerns that we have about the development of what is loosely called the equality agenda.
None of us wants unfairness and injustice. However, these regulations are not really about unfairness and injustice. They are about the new bureaucratic burden to be placed on local authorities and public authorities, which are already overburdened with red tape, to push forward an equality agenda that has often produced unfairness rather than fairness and injustice rather than justice.
I have the greatest respect for the noble Lord, Lord Low of Dalston, but I have to say that his amendment to the Government’s Motion, with its references to equality analyses, reports on engagement with affected groups, annual reports, et cetera, serves only to highlight the morass into which we would have sunk up to our elbows had we been required to approve regulations in line with what was originally proposed. As it is, I suppose I can thank the Government for planning to have us sink only up to our knees, although I think that is bad enough.
The regulations are, of course, entirely irrelevant to the enormous problems that the country is now facing except for the sad fact that, as the equality agenda has been pushed forward by people with the best intentions, the established values, moral codes stressing the importance of the traditional family, with a man and wife sharing responsibility for the upbringing of children, and the very institution of marriage—as unfortunately was made plain today during Questions—have all been neglected and sometimes almost derided. We have seen some of the consequences of that recently.
I believe that the Government should not have spent the last few months cooking up new regulations. They should have spent the time, first, trying to find a way to mitigate some of the more baleful consequences of the equality agenda, and, secondly, looking for ways to stop public authorities practising gross unfairness in the name of equality law. Noble Lords may remember the following instances: the woman threatened with the sack for being unwilling to perform civil partnership ceremonies even though she had worked for the council before civil partnerships were even invented; the nurse suspended for offering to pray for a patient’s recovery; the five year-old girl reprimanded for discussing her faith at school, and her mother, a worker at the school, investigated for professional misconduct because she asked for her friends’ prayers in the matter; the BA employee sent home without pay for wearing a silver cross; the council worker in Wandsworth sacked for suggesting to a terminally ill woman that she should seek help from God; Camden Council almost unbelievably saying that a Roman Catholic group had no right to advertise a meeting with the slogan, “Climate change is a Christian issue”. I am thinking of religious charities which have been finding it harder and harder to get local authority funding, with Brighton and Hove Council withdrawing funding from a residential care home because those running it refused to ask the elderly residents every three months about their sexual orientation. I am thinking of the five Catholic adoption agencies forced to close because of their unwillingness to place children with same-sex couples, although there are very many adoption agencies specifically catering for gay couples and the society’s objections could have been accommodated with no harm to anybody at all.
It is not just people like myself who are outraged by this determination to treat unfairly people who wish to do no more than observe a moral code that, only a few years ago, was accepted as a valid guide to behaviour by the vast majority of people. Even the Equality and Human Rights Commission has complained that the courts and public bodies have failed to recognise that people prevented from expressing their beliefs have suffered discrimination and has said that something ought to be done about it.
Now let us get back to the particulars of the regulations. Noble Lords will be aware that plenty of local authorities already enjoy collecting useless statistics. On 27 August, the papers reported that when people want to borrow a book in Islington, they are asked if they are transgender; in Brent, they are asked whether they are schizophrenic; and in Leicestershire, they are asked whether they are HIV. Is it not strange that while Eric Pickles says that this nonsense has to stop, the Home Secretary is insisting that all local authorities should behave exactly like Islington—because that is exactly what she is doing through the regulations? Is the world going completely mad?
Look at what public authorities will have to do under the regulations. They will have to collect information about people in the community and in their workforce who are disabled, gay, about to change their sex, et cetera, and then demonstrate to the world how they intend to eliminate discrimination against such people. It is hard to see how they can do that except by counting the number of their clients and the number of their employees sharing each of the relevant protected characteristics and, when they find that they do not have enough clients or employees sharing each relevant protected characteristic, setting out to recruit a few more clients or employees to fit into one of the protected groups. How else could they demonstrate, as the regulations require, that they are indeed eliminating discrimination?
The Government say that compliance with the regulations will not cost much—certainly not as much as complying with the current three separate duties with regard to disability, race and sex. Of course, that is complete nonsense because Section 149 extends the coverage of the duty massively to age, sexual orientation, religion or belief, pregnancy, maternity and gender reassignment. More importantly, the Government are careful not to say what will be the total cost of the regulations for more than 27,000 public bodies. It will be enormous. How on earth do the Government reconcile that with their declared intention to cut back on bureaucracy—a point made by my noble friend? How does it fit in with the Prime Minister's red tape challenge, and how can it be squared with his bold declaration that it is about time that we encouraged greater responsibility in society and that that means that we have to trust people and give them the freedom to do the right thing rather than to regulate them? Almost every utterance of the Minister and almost every word of the regulations contradict what I was told after the election was one of the principal aims of this Government.
The regulations will do nothing to ensure that people who do not fit into the neat categories prescribed in equality law have their rights protected. There is nothing to ensure, for instance, that people with religious convictions are allowed to live by them without harassment or worse. Why should it be so difficult to protect such people? If in the darkest days of the war we could allow people the right to conscientious objection, why is it thought necessary to compel those who have deeply held convictions against gay adoption, for instance, to conform or else?
I have great admiration for the Minister. The Government are privileged to have her in their ranks.
Lord Renton of Mount Harry
I thank my noble friend for allowing me to say a few words. I very much follow what he is saying and I know that we will vote on the issue. Where I am a bit lost is that I do not know how any of us could change the equality law so that it takes proper account of freedom of religion and conscience. His idea is very good, but how would he do it if he was in charge?
Lord Waddington
I was making the very point that my noble friend touched upon. If at a time of war you can make exceptions for people who have deeply felt religious convictions, why the Dickens can you not do it in peacetime? It is absolutely absurd to say that because you have equality law there must be no exceptions in any case whatever, although by granting such exceptions you will cause no hardship to anyone. That is the whole point about the Catholic adoption societies. How completely cruel it was to say that those societies could not continue in existence when everyone knows perfectly well that if gay couples want to adopt there are 101 other places to which they can go. That is the answer to my noble friend.
I must conclude. I can give my noble friend no comfort. The relevant sections of the Equality Act permit the making of regulations. I must remind noble friends that they do not require regulations to be made telling local authorities how to observe the law. These particular regulations are fit for the dustbin. It would be beneficial for the House today to make the Government sit up and think and to expresses its view with the simple message along the lines that I have suggested; the dustbin is the place for these particular regulations. I beg to move.
Lord Low of Dalston
My Lords, I, too, ask the Government to undertake a rethink but from a slightly different perspective from the one that has just been laid out by the noble Lord, Lord Waddington. The notion of equality duties goes back to the Race Relations Act, the Sex Discrimination Act and the Disability Discrimination Acts, all of which have been widely recognised in your Lordships’ House to have conferred real benefits on the groups with whom they deal and on the community in general. They were supported by specific equality duties that required the production and implementation of equality schemes, including the publication of equality information and plans to improve performance in relation to equality. They also contained requirements concerning equality impact assessments and, depending on the Act, to set equality objectives and involve or consult affected groups in the development of schemes or in relation to impact assessments.
The Equality Act 2010 introduced a single public sector equality duty whereby public bodies are under a general duty to have due regard to—to paraphrase—the need to eliminate discrimination, advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. In January, after much consultation, draft regulations were published that rationalised the system of specific duties. It was proposed that public bodies should be under a duty to publish details of engagement undertaken with affected groups when determining policies and equality objectives, equality analyses undertaken in reaching policy decisions and information considered when undertaking such analysis. While there was some disappointment at the disappearance of the requirement to produce equality schemes, these proposals addressed concerns identified by both groups working to further equality and public authorities, and were generally welcomed as representing a reasonable balance between regulating to reinforce the general equality duty and placing undue burdens on public authorities.
Now, however, in the regulations we have before us today, all but two of these requirements have gone. It is proposed only that the general duty is supported by specific duties to publish at least one specific and measurable equality objective every four years, and publish information annually to demonstrate compliance with the general equality duty. In other words, the duties to publish details of engagement undertaken when determining policies, engagement undertaken when determining equality objectives, equality analyses undertaken in reaching policy decisions, and information considered when undertaking such analyses, are removed completely. It is hard to understand the reason for the Government’s change of heart, unless it is deregulation for deregulation’s sake regardless of the merits of the regulations in question, for not only the advocates of equality legislation but a significant number of public authorities have expressed their support for strong specific duties as providing a useful framework for helping public authorities comply with their duties under the Equality Act.
This change of direction also comes at a very late stage, after guidance has already been issued by the Equality and Human Rights Commission, reflecting what were assumed to be the Government’s final thoughts on the specific duties regulations. There is now an inevitable gap between the coming into force of the general duty on 5 April and the implementation of the specific duties after an extended period of consultation on them. Public bodies will still be subject to the general duty, and the absence of the specific duties can only create uncertainty as to how they should go about meeting their obligations. According to these regulations, the great majority of public bodies must publish information to demonstrate their compliance with their general duty by 31 January next. That does not give a lot of time. Will the Minister tell us how the Government propose to get over that difficulty? “Make the best of a bad job” is what I suspect she will say. “Admit it’s a shambles” if she is honest. What sort of Government is this? No better than the last lot, if you ask me.
I have a lot of sympathy with what the noble Lord, Lord Waddington, has had to say. I am no more in favour than anyone else of making public authorities jump through the hoops of political correctness that he has excoriated so comprehensively, but these regulations are really not fit for purpose—indeed, for the Government’s own purpose. The specific duties spell out the implications of the general duty and help authorities to understand what is required of them. This helps to protect them against legal challenge. As these regulations stand, the specific duties do not reflect the extent of the obligations imposed by the general duty, and will therefore fail in their main purpose of achieving better performance of the general duty. The Government’s principal motivation seems to be the minimising of duties, and not the maximising of benefits—of improved equality of opportunity. This is a vital prerequisite for realising, for instance, the Government’s ambition to get more disabled people into work, and is surely not something to be reining back on at a time when a sense of alienation and social exclusion are disfiguring our society and erupting in social unrest.
This is not just special pleading. There is a wealth of research to show that the specific duties as traditionally conceived have been widely welcomed as having a beneficial impact. There is too much to summarise adequately here, but to give a flavour: in some Disability Rights Commission research, interviewees indicated that disability equality had assumed greater priority in their departments, and reported improvements in the involvement of disabled people, evidence of disability equality, and of meeting wider organisational objectives. Some research in 2007 found that equality issues were accorded higher priority and were increasingly mainstreamed. Practitioners were said to be particularly enthusiastic about the impact of the public sector duty in encouraging consultation and the ongoing involvement of disabled people.
The Government’s own Equalities Office commissioned research to identify which aspects of the specific duties were believed to be effective. It concluded that the specific equality duties were widely accepted, with the majority of authorities across all sectors viewing the requirements of data collection, planning, involvement and impact assessment as effective. Of 174 respondents, more than half rated the specific duties very effective or effective, leading to positive outcomes.
The Equality and Human Rights Commission has also commissioned research to identify the elements of the specific duties that were most effective in achieving change. Equality schemes and equality impact assessments were said to provide a framework and focus for action. While some participants felt that in some cases implementing the specific duties might be perceived as overly bureaucratic, nevertheless the research states that the vast majority were clear that implementing the specific duties has been fundamental in improving services.
In some other research commissioned by the EHRC, 77 per cent of schools said that their work to meet the disability equality duty had a positive, measurable impact on disabled pupils. This is the only research to have investigated the impact of the Secretary of State’s specific duty to report on disability across each sector. It was found to have created a significant shift in central government’s understanding of and response to disability equality.
“Not only has it raised the awareness of key issues across departments”,
the report says,
“but it has also helped to clarify the importance of integrating and mainstreaming the agenda in all central government activities”.
Perhaps I may say a word about what is still in and what is left out. The policy review leading up to these regulations suggests that all but two requirements—to publish information and to set equality objectives—can be eliminated on the ground that compliance with the general duty presumes the other requirements. It is clear that the general duty cannot be met without assessing the impact of policies on equality or involving those affected at an early stage in policy-making, and this is certainly the way in which the courts have interpreted it. However, this overlooks the role that the specific duties play in providing public bodies with a framework which, if they work within it, provides vital guidance on how to comply with the general duty.
That is particularly true of the requirement to involve or engage with those affected by action on equality. In the case of disability, public bodies have benefited greatly from such involvement, which has helped them to ensure that the policies they put in place and the services they provide reflect the real needs and experiences of disabled people. In their analysis of responses to the consultation—more than 60 per cent of them from public authorities—the Government acknowledge that, despite the fact that no questions on engagement were raised in the consultation, around a third of respondents raised a concern about the lack of any requirement for public authorities to engage with or involve relevant groups. Nor is it possible to rely on guidance within the codes of practice. As the EHRC has said:
“Where the regulations fail to impose specific obligations, the Codes of Practice cannot do so. The Codes must elaborate on the requirements of the legislation, not add to those requirements”.
The requirement to publish at least one equality objective every four years is particularly risible. This runs the risk that authorities will think that setting just one equality objective every four years discharges their duty with regard to equality. It is extremely unlikely that a public body could satisfy all the three elements of the general duty while taking such a minimalist approach. The regulations should make it clear that the objectives that a public body selects must be across the full scope of the duty. Stripped-down regulations will encourage only minimum compliance, not best practice, especially at a time of economic stringency.
There is some consolation in the fact that the Government have undertaken to carry out a review of these regulations after two years. However, I would welcome the Minister’s assurance that the review will be broad in scope, assessing the extent to which the specific duties have supported better performance of the equality duty in general and not just those aspects covered by the narrow specific duties that we have in these regulations. Will the Government use the review to assess whether there has been progress from the situation that obtained under the old regime of specific duties or whether things have slipped back, and whether they will strengthen the regulations if it is found that things have slipped back? Also, will the review assess how far public bodies have been engaging with those affected by their decisions in the absence of a specific requirement to do so?
Finally, I would welcome a clarification from the Minister of the process that will be adopted for the conduct of the review. Will it be informed by the experience of those most affected as to how effective the duties have proved to be as a means of holding public bodies to account? This would seem to be essential, given that the Government’s stated intention in designing the regulations in the way that they have is to achieve greater accountability on the part of public authorities.
Baroness Oppenheim-Barnes
My Lords, I congratulate my noble friend Lord Waddington on moving this amendment and on the moderate and thoughtful manner in which he moved it, giving examples of situations widely ridiculed at the time. It is not a fatal amendment. I wish that it was. I would like to get rid of the regulations.
I am going to clarify my position on the issue in the form of a confession. Some 40 years ago in the other place I was the sponsor of two separate pieces of anti-discrimination legislation. However, it was made clear at the time that these were not in favour of positive discrimination, which is a very different matter. I therefore oppose the regulations on a number of specific grounds. The objective of the regulations is absolutely right if the intention is to prevent victimisation, but it is not right because it is not about equality. It is about inequality of opportunity because it requires a protective element for some but not for others who may in fact be best suited for the job. They are not to be considered equally. They are to be considered after the protected characteristic groups. These groups are very wide and very varied, giving special protection to a wide and varied group. That is positive discrimination, which is neither fair nor equal in regulations stemming from what is the so-called Equality Act.
I emphasise my support for the stated object, that anybody should be given a chance, whatever protected characteristic they may have, as long as they can do the job better than or at least as well as other applicants who do not comply with these characteristics. There is always a chance that some bright young body might claim to have one of these characteristics in order to be considered for the job more favourably. This would only enhance the unfairness. We can only imagine how much these requirements are going to cost local authorities and their ratepayers to enact. How much additional staff will be needed? What burdens will be placed on staff who are already there? How are they to represent their reasons for not employing an able applicant who does not meet the requirements in the regulations but is after all the best person for the job?
The regulations under the Equality Act’s Explanatory Memorandum 10/4 states that this new version, presented to your Lordships’ House today, initiates various savings compared with the previous regulations of up to £205 million over 10 years. That would probably be the cost over the same period of the adoption of the amendment of the noble Lord, Lord Low, if it was accepted. All of us care about the fairness with which people are treated and given jobs and about human rights, but then we look at the Equality and Human Rights Commission, which cost £70 million to set up, was recently condemned by the National Audit Office for not presenting its accounts in an acceptable manner and recently squandered more than £800,000 on a website that did not work. Is this the sort of pattern we wish to impose on local authorities? Again, I emphasise that no one wants to condone unfair discrimination in any walk of life. However, I am not at all sure that these regulations will not lead to discrimination that is more unfair than the very discrimination they seek to prevent.
The Earl of Listowel
I am grateful to the noble Lord, Lord Waddington, for tabling this amendment and for the work he has done in this area for many years now. I join him in expressing deep concern about what has happened to those five Catholic adoption agencies. The previous Government and this Government are well aware that voluntary adoption agencies have the best outcomes for children. They provide the best stability and the longer term support for those children and their families to see that those children do well. It is a matter of very great regret that those five agencies have closed. Will the Minister assure me that the guidance makes clear that the principles in the Children Act 1989 and the Children Act 2004 are paramount, that the interests of the child are paramount and that where it is considered that it is in the best interests of children not to be placed with same-sex couples, agencies can do so? I believe it is a perfectly tenable position. I have worked in this House on child welfare for 12 years now and, in my view, it is not generally in the child’s best interests to be placed in that situation. I may be wrong in that view, but there are many professionals who share it. It is not proven that it is safe or in the best interests of children to place them in such settings. I think Professor Golombok—I hope I have her name correctly—has done the most work in this area, but she looks only to the age of 18 and the sample of families examined is quite small. I should be most grateful to the Minister if she could assure me that the guidance will be clear about the paramountcy of the welfare of children, about agencies’ ability to decide where that interest lies and that we will not be seeing a repeat of what happened with those five Catholic adoption agencies.
Lord Lester of Herne Hill
My Lords, I should declare a couple of interests before I say anything. First, I was the architect of a Private Member's Bill on equality that went through this House and became a kind of model for what came later. Secondly, I am counsel to the National Secular Society in the intervention in the pending Strasbourg proceedings and, therefore, will not say anything about the cases that have been placed before the European Court of Human Rights. Thirdly, I am so old that I can remember listening for the past 40 years to the arguments I heard just now basically attacking equality legislation root and branch and suggesting it should be consigned to the dustbin.
The most useful way in which I can assist the House is to begin by explaining a bit more about the framework within which this debate takes place as that might throw some light on what we are talking about. The previous Government, with all-party support—I commend the noble Baroness, Lady Royall, in particular for having led the Government at the time on this issue in this House—were responsible for introducing Section 149 of the Equality Act, which is the public sector equality duty. That duty was already in our law in relation to gender, ethnicity and disability, but it was strengthened in important respects by the previous Government with support from all three main parties right across the House. The duty requires every public authority in the exercise of its functions to have due regard to three things: first, to eliminate discrimination, harassment, victimisation and other conduct which is prohibited; secondly, to advance equality of opportunity between people who share a relevant protected characteristic and those who do not; and, thirdly, to foster good relations between people who share a relevant protected characteristic and others.
The duty covers various grounds, including religion or belief. I assume that even the staunchest opponents of the legislation are pleased that discrimination on grounds of religion and belief is covered. I say with all respect that it has nothing to do with positive discrimination, which is dealt with in a limited form by a completely different provision. It imposes a general public sector duty. There are particular problems about the way in which the duty treats religion and belief in the same way as the other protected characteristics. Some would argue, and I would be one of them, that religion is too strongly protected in the legislation, but we really need not go into that today.
The Explanatory Notes on the Equality Act make it clear that a whole range of religions, including Catholicism, Protestantism, Liberal Judaism, Orthodox Judaism and various forms of Islam, are to be looked at individually and separately if there is an allegation of discrimination. That is the framework. The power being exercised under the regulations is to give better governance in complying with that general duty. Complaints about the Act itself were settled by the previous Parliament when it enacted the legislation.
Where I part company with the noble Lord, Lord Low, with whom I hate ever to disagree, is in believing that his amendment—I have already had the advantage of speaking to him about it—is a real example of overregulation of the worst kind. The best way in which I can illustrate that is by giving just one example, that of religion. Under the general duty, every public authority has to have due regard to the three things that I mentioned. The first thing that an authority has to do under the law is to identify within its area various religious, irreligious, non-religious and atheistic groups. Then it has to decide whether something needs to be done in order to tackle inequality, discrimination and so on with regard to those groups. The regulations strip down the core needs to ensure compliance with the general duty in a well targeted and sensible way. They state that each public authority must publish information to demonstrate its compliance with the Section 149 duty, which is quite right and entirely sensible. They further state that the information has to include information relating to persons who share a relevant protected characteristic, which they define—perfectly sensible. The third thing that the authority must do is prepare and publish one or more objectives that it thinks will achieve the things that I have already mentioned. Again, that is perfectly sensible. Then they say that the objective must be “specific and measurable” —again entirely sensible.
The amendment of the noble Lord, Lord Low, would add that each public authority in the country must,
“publish information on equality analyses they have undertaken … set objectives designed to facilitate compliance with the General Equality Duty … publish information about the engagement they have had with affected groups when developing these objectives and … report annually on progress towards meeting these objectives”.
I do not wish to be unmannerly in saying that it reads a bit Soviet—
Viscount Eccles
I should be most grateful if my noble friend would tell the House exactly what the general duty is and how it differs from the duty in Section 149.
Lord Lester of Herne Hill
The general duty is in Section 149 and I have already said what it covers. I obviously did not do it very well, but that is where the general duty is. I was trying to explain that these extra obligations, on every public authority, really are an example, in my view, of overregulation. The noble Lord, Lord Waddington—who does not like the legislation, and has always made that absolutely clear, with the reasons given again and again in previous debates—rightly says that he is against overregulation. He referred to the Red Tape Challenge. The Minister will correct me if I am wrong but my understanding is that the Red Tape Challenge, which asked the public what they thought about the regulation under the Equality Act, disclosed that about 95 per cent of respondents expressed overwhelming support for the scheme that he dislikes so much, and the remaining 5 per cent included some who wanted it to go further. If one takes any regard of public consultation, that is a vote of confidence in the scheme, however much the noble Lord, Lord Waddington, and those around him may dislike it. One is entitled to take account of that since the Government did so. I am totally opposed to overregulation, and I want just to give one example of what worries me when a body such as the Equality and Human Rights Commission has responsibility for monitoring.
In my professional capacity I was consulted by the Commission for Racial Equality about a scheme involving Crossrail. The question was whether digging a large hole in the ground in a particular part of London would be directly or indirectly racially discriminatory against people of Bangladeshi origin, and therefore whether the whole scheme might have to be stopped as a result. It seemed to me, if I may say so, a strange thing to ask me to advise on, but that is what happens in life. I then called for the race equality impact assessments that would have been made and were relevant to this under the previous legislation. I discovered that there were 100 pages from the Department of Transport, separate submissions by each of the three London boroughs affected, a separate submission by the Mayor of London and a separate one from Transport for London. One had this bulky mountain of paper, none of which had ever been read by the monitoring agency, in a cupboard that no one had ever opened. That seemed to me to be an example of creating paper mountains through overregulation of a completely pointless kind.
When I was constructing my own Private Member’s Bill it was impressed on me by people from Northern Ireland who had great experience in monitoring that one must go for targeted monitoring by a body that is capable of doing the job. I do not think that the Equality and Human Rights Commission at the moment is capable of doing the job. It requires a great deal of professional expertise which is lacking and is very difficult to do. I therefore welcome the fact that the Government have sensibly produced specific duties that are capable of being carried out and have said that we will treat it as an experiment for two years, at the end of which we will suck it and see whether we need more or less regulation. That seems entirely desirable. Therefore, I could not possibly support the noble Lord, Lord Low, if he were to divide the House, which I hope he will not.
As for the amendment proposed by the noble Lord, Lord Waddington, when the Equality Bill was going through Parliament, as the Explanatory Notes make clear, the right to freedom of religion was specifically taken into account, as was freedom of conscience. My view is that there is nothing whatever in that Act, or in the way it has been interpreted by the courts or, in my judgment, in Strasbourg, that infringes on freedom of religion or freedom of conscience. I do not refer to the way in which it has been interpreted by the Daily Mail or in stupid reactions by ignorant people, or others. There are cases pending in Strasbourg.
Lord Waddington
Is the noble Lord concerned for one moment with the way in which it has been interpreted by public authorities? That is the point.
Lord Lester of Herne Hill
I am deeply concerned about that. As the noble Lord, Lord Low, said, I am deeply concerned about ridiculous political correctness, with the rubbish about how you must not mention Christmas or Christmas lights, and so on. The same is true of the Human Rights Act; day after day, you read ridiculous examples that do not represent the law of the land. All that I am talking about is the law of the land, not misinterpretations of the law of the land; there is nothing wrong with the law of the land as it stands, but there is everything wrong with mischievous misinterpretations outside or sheer ignorance. But we are not here to pass judgment on the basis of ignorance or anything of that kind; we are here to approve some sensible regulations, narrowly and clearly targeted to carry out the general duty, which was passed by the previous Government with the support of all parties. Therefore, I hope that we can do so soon.
Lord Tebbit
My Lords, I apologise to my noble friend the Minister for not asking her this question before she sat down in order that her officials would have time to prepare the answer. What is the cost of all this, not just in some gross sum of money but in terms of how many care assistants employed by local authorities will have to be made redundant to finance it? I have a feeling that there would be a greater contribution to human happiness and to the benefit of disabled and elderly people, who are protected categories, were the care assistants to be kept in work and these regulations to be junked. No doubt the figures will be provided before the end of this debate, with the customary efficiency of our Civil Service.
I remember when the Equality Bill was brought before this House at Second Reading and the spokesman for my party—we were then in opposition—started her speech with the words, “We on these Benches support this Bill”, and was greeted with something of a pantomime chorus behind her, crying, “Oh no we don’t!”.
Let me make it very clear that I do not like this Act. Of course, there are elements of it that are very helpful, not least the consolidation of much of the previous legislation concerning disability. It brings it all together, and that is very helpful. So I would not just repeal it like that—I would want to keep some parts of it. Unfortunately, primary legislation that is itself misconceived spawns very bad and misconceived secondary legislation. That is what we are now facing.
The whole of this is misconceived, in my opinion, because of its confusion of equality and sameness, and its frequent confusion between rights and entitlements—one day, I hope we might have a debate in this House entirely on the matter of the distinction which should be drawn between rights and entitlements—and that of course is leaving out its failure to understand that on many occasions, and in many ways, effective and efficient administration, which is in the interest of all of us, even the protected categories in this Act, should have priority over the duties set out in Section 149(1) of the Act.
However, we look at the Act now as it is. My noble friend Lord Waddington gave some of the examples of the way in which the Act has spawned action by Government and local government which is profoundly harmful, not least, as has been referred to, in the matter of adoption societies, and the discrimination against some religions. Not all religions, of course: it would be a bold local authority that would discriminate against, let us say, the Islamic religion. That would be a step too far; but of course Christians are easy meat, as we see day by day.
Lord Lester of Herne Hill
Is the noble Lord, Lord Tebbit, aware that it would be unlawful to discriminate against any particular religion under the Act that he slights?
Lord Tebbit
Yes indeed, but I hope that the noble Lord, Lord Lester, does not deny the truth of what my noble friend Lord Waddington said, and the way in which he described the discrimination which is brought against people who believe in a particular religion, that is, the Christian religion. No doubt the noble Lord, Lord Lester, would probably want to have a group of original Mormons on a committee in a local authority which was considering matters of divorce, or marriage, or something of that sort. The point is that once we start trying to get down into these details, instead of relying upon the decent conduct of decent people, elected to office democratically in local authorities and responsible to their electorates, we find ourselves in a morass; indeed, not merely a morass, but an expensive and a contradictory morass. I think that we need to look at all this again, preferably with a basic reform of the Act. I know that that is not on offer right now. However, as my noble friend Lord Waddington was saying, the Act does not require that these regulations be placed before us, and it does not require that they should be passed. I think that it would be a very great benefit to mankind in general if they were not and, in particular, I think it would be of a very great benefit if the amendment of my noble friend Lord Waddington were to be accepted this evening as a warning shot across the bows of this Government. In the words of the noble Lord, Lord Lester, it does not seem that this Government are much better than their predecessor.
Lord Clarke of Hampstead
My Lords, this debate has reached the point where the comments I wanted to make would be repetitious, so I shall be very brief in supporting the Motion of the noble Lord, Lord Waddington. The noble Lord has given this House the opportunity today to make its views known on a number of issues which have been highlighted and which have been mentioned again. I am not concerned with the legal interpretations of things, because that is not what the people outside this House are on about: they are concerned about the drift in our society that seems to favour one group against another. As I say, there have been long explanations by the movers of the two Motions. However, I compliment the noble Lord, Lord Waddington, on the comprehensive way in which he put the view not just of Members of this House but of countless thousands—probably millions—of ordinary folk in this country who think some things are wrong. He has illustrated some of them today and many other Members can find examples of such things leading us into difficulties.
We have this one world. We have a freedom of expression. I know that the noble Lord, Lord Waddington, is just as keen on freedom of religion and conscience in other parts of the world, as I have had the privilege of working with him on a number of occasions. All I can say today is that we have the opportunity, thanks to his Motion, to say, “We have gone far enough; let the Government understand that we are not prepared, as a nation, to let this thing drift on and on”. I hope that if the noble Lord, Lord Waddington, divides this House, he will appreciate my support in following him through the Lobbies.
Lord Campbell of Alloway
My Lords, the purpose today is to consider some reasoned opinions as to what should be done in a highly distraught situation. It has not been substantially debated as yet but it is time that we gave it time. I hope today not to divide but to consider what has been said. I am grateful to my noble friend, with whom I do not totally agree, and to the noble Lord, Lord Lester—with whom I seldom agree, but we disagree in amity—for what he has said, with which I do not agree at all for two reasons.
First, this is a question of religious freedom, putting it simply—the concept of it and the implementation of it. There are, inevitably, such matters as adoption agencies but it is wider than that and it applies to all religions. We are still a member of the EU, and those member states with written constitutions defend in them exactly the type of religious freedoms which we are discussing. Because they are defended in that way in those constitutions, they are not within the remit of any of the EU courts. We do not have a constitution and if we want to get out of the trap there is actually only one way, which has not yet been considered. That is why I am so grateful to my noble friend.
If we have a constitution Bill which makes the appropriate provision akin to those of others in the Union and it is approved by our Supreme Court—which now is, in effect, a constitutional court—we are home. Nobody has considered that but if you do not do it that way, you cannot do it at all. It is no use saying, “Oh, we will make statutes. We will do this, we will do that”. This was explained perfectly clearly. I took up the point with my noble friend Lord Pilkington after the debate, in our usual conversations which we had in a little room not far from here. He said, “Well, I had better find out a bit about this. I had a brilliant pupil who is now at the Bar—somebody called Armitage. I am going to ask him to send me an opinion”. I had never met Armitage. In fact he is a brilliant man, a first rate-lawyer, totally objective, and not in any way involved in politics. He wrote an opinion and I am talking to the effect of his opinion, which was my opinion too. My noble friend gave me a copy of the opinion and I am afraid I have lost it, but it is very important that it should be found, and perhaps Armitage could provide a copy.
This one short point has never been taken and never been understood. Unless you get a constitutional position, our courts will have to accept that they cannot be excluded from the European laws—putting it broadly—with which we are bound at the moment.
That was also in a sense explained by the noble Lord, Lord Sacks, in his article in the Times after the debate, in which the right reverend Prelate the Bishop of Winchester took one view, and the right reverend Prelate the Bishop of Oxford took the other view, and my noble friend Lord Waddington was concerned.
Lord Taylor of Holbeach
My Lords, I do hesitate to interrupt the noble Lord, but there are a number of people I know want to speak, and if he could wind up it would help the House in its deliberations. I do apologise to the noble Lord for raising it in this way.
Lord Campbell of Alloway
I have to say I could not quite hear what my noble friend was saying. If I have done anything wrong, I apologise. Should I shut up?
Lord Shutt of Greetland
My noble friend was suggesting that the noble Lord may well have concluded.
Lord Campbell of Alloway
I have, save for one point. This question of freedom of religion was raised as an amendment to the Human Rights Act, and it was supported by the right reverend Prelate the Bishop of London, another noble Lord and Lord Jakobovits. Within a very short time it was opposed by the noble Lord, Lord Lester, and the noble and learned Lord the Lord Chancellor, and withdrawn because of a message from Lambeth House indicating that it thought it could make some appropriate arrangement. Well, it was never done, and that remains at the base of this problem. Of course, if the amendment had been accepted, we would not be in this position and could have taken steps then.
Lord Davies of Coity
My Lords, it was not my intention to participate in this debate. However, as a result of listening to the comments of many noble Lords, I am driven to say a few things. Recently we had riots on the streets of Britain, and as a result there has been a lot of heart-searching about why people participate in this exercise—some for criminal reasons, some for other reasons. No one really knows why, and there will be some investigation into that. However, it strikes me that the pendulum of secularism and political correctness has swung too far. Consequently, we need to bring it back a bit. The way in which that can be done is by instilling more Christian standards and morality in our society.
These regulations discriminate against religious bodies, as has been said by the noble Lord, Lord Waddington. People who wear necklaces with a cross on, as I do, will be discriminated against, and that is wrong; people are entitled to have religious freedom and should not be discriminated against for that. I shall support the amendment of the noble Lord, Lord Waddington, today if he puts it to a vote.
Lord Mackay of Clashfern
My Lords, my noble friend Lord Waddington’s amendment would not prevent the passing of these regulations. It is an amendment that regrets a certain result from the present situation; that is all. That is well expressed in a press release that the Equalities and Human Rights Commission issued on 11 August. It applied for leave to intervene in the cases to which the noble Lord, Lord Lester, referred. It said then:
“If given leave to intervene, the Commission will argue that the way existing human rights and equality law has been interpreted by judges is insufficient to protect freedom of religion or belief”.
The commission has withdrawn that as a result of representations made to it, which does not entirely increase my confidence in its independence, but that is what it said originally. That is really what my noble friend’s amendment expresses; it seeks not to change what the regulations are proposing but simply to express a concern that may be taken into account in whatever emerges in future.
Baroness Royall of Blaisdon
My Lords, I rise to express concern about the draft regulations being moved by the Minister, to speak against the amendment moved by the noble Lord, Lord Waddington, and to support the amendment tabled by the noble Lord, Lord Low of Dalston.
I say to the noble Lord, Lord Waddington, that I speak as someone who is proudly married—for 31 years today—but who strongly supports the Equality Act and the regulations that flow from it. I am proud of the Act and of the fact that those on all Benches in this House supported it when it was a Bill in this House.
The duties that we are discussing today are critical in delivering the public sector equality duty that is enshrined in the Equality Act 2010 to provide better all-round services to the community and all its diverse members. The purpose of the duties was explained carefully by the noble Lord, Lord Lester. Contrary to the views expressed by the noble Lord, Lord Waddington, and others, I believe that as a result of three rounds of consultation the duties appear to have been watered down and therefore fail to deliver the main objective to ensure the better performance of the general duty by public bodies. It is difficult to understand how a single objective can enable a public authority to meet the range of its equality duties, and I would be grateful if the Minister could explain this point more fully.
As noble Lords will recall, the Equality Act 2010 brought together existing equalities legislation, with its specific equality duties, and added additional equalities-specific protected characteristics, as the Minister explained. Concern was expressed at the time that the new duties would be less robust, and I think this is precisely what has happened. The regulations before us are a step back from the level of specific equality duties that public authorities are currently used to under provisions on race, gender and disabilities. Yet there is evidence that the existing specific duties, which are more specific than those that we are being asked to approve today, have been useful in assisting public bodies to make progress with equality. The noble Lord, Lord Low, has given tangible examples of the ways in which specific equality duties are being used to improve outcomes, both for disabled people and school pupils, and as we have heard, positive outcomes for pupils include better access to facilities, feeling valued, developing higher aspirations, and narrowing gaps in performance and participation in sport.
In the wake of the disturbances this August, I suggest that these outcomes have become more, rather than less, important. The purpose of specific duties is to give proper guidance to public bodies whose main job is often not about equality but rather about healthcare, education, recreation, et cetera, but all these bodies want to improve the delivery of their services in a way that has equal outcomes for all. I must say to the noble Lord that I am not saying sameness for all, but equal outcomes, which is a very different thing. Despite the Minister’s assurances—
Lord Tebbit
My Lords, it was the noble Baroness’s Government who decreed that the upper ranks of the Civil Service should be representative of the community that it serves. I take it from the way she nods that that is her view. Surely we do not want 15 per cent of near illiterates and 10 per cent of near innumerates in the higher ranks of the Civil Service? Should we not have a more subtle way of deciding these things than passing over able candidates in favour of less able ones, for the first time since the 19th century?
Baroness Royall of Blaisdon
My Lords, I do not think that the Act suggested that people should be appointed if they are not properly qualified, or that the best person for the job should not have it. The Act said that there should be equal opportunities, so that whether you are black, white, disabled, yellow, orange, gay, lesbian, or heterosexual, you should have equality of opportunity, and the best—
Baroness Oppenheim-Barnes
My Lords, the Act refers specifically to protected definitions of people. The very word “protected” means that they are going to be treated more equally than others.
Baroness Royall of Blaisdon
No, my Lords. It defines certain disadvantages, but it does not mean to say that some people are more equal than others. We are not in an Animal Farm situation. We are saying that every individual has their intrinsic worth as a human being, and that they should be treated in an equal manner and given equality of opportunity. That is what I believe we are all—or most of us—agreed upon in this Chamber.
Lord Lester of Herne Hill
My Lords, the word “protected” simply means those protected against discrimination in those categories. However, it seems to me that the noble Baroness was giving a very narrow interpretation, which may be why she agrees with the noble Lord, Lord Low. May I try to say what I think the regulations mean? Regulation 3 says that each public authority,
“must prepare and publish one or more objectives it thinks it should achieve to do any of the things mentioned in paragraphs (a) to (c)”,
but that does not mean, in my judgment—no doubt the Minister will want to respond to this—that if they publish only one objective, that is sufficient.
Earl Ferrers
With the greatest respect, the noble Lord is doing more than making an intervention; he is making another speech.
Lord Lester of Herne Hill
I do not think I know the difference, since I am asking a question. The question that I am asking, if I may be permitted to do so, is whether the Minister—
Lord Lester of Herne Hill
I am so sorry. I meant to ask whether the noble Baroness, looking at the wording, accepts that there would be a judicial review, or something worse, if one were simply to do what she suggests.
Baroness Royall of Blaisdon
My Lords, these are questions for the Minister. I am just putting my views as the spokesperson for the Opposition. I go back to what I was going to say, about transparency. The Government rightly stress the need for transparency and accountability. However, it is difficult to understand how these can be enhanced when the public and public sector employees will not be able to compare the equality performance of similar bodies because the information will not always relate to the same issues or be measured in a standard way. Access to data is crucial, but it is difficult to interpret those data if they are not given in a standard way. Therefore, it will be more difficult for public authorities and those they serve to discover and understand what good practice is. There is a possibility that there will be a new postcode lottery. The Government have failed to provide clarity with these regulations. It could well be that the burden on public bodies will increase in some way. As the Council for Disabled Children says in its excellent briefing,
“the requirements should be clear to all public bodies who are required to comply with the specific duties. This purpose is better served by making these requirements explicit in the Regulations rather than leaving public bodies open to challenge because ‘implicit’ requirements have not been made clear to them”.
I have to say that I fundamentally disagree with the amendment tabled by the noble Lord, Lord Waddington, in relation both to freedom of religion and conscience and to burdens and bureaucracy. I must also disagree with the noble Lord, Lord Campbell of Alloway, who is in many ways my noble friend. During the passage of the Equality Bill we debated these issues long and hard and they were subject, as he rightly said, to amendments. The noble Lord, Lord Waddington, was wrong when he made the arguments at that time and he is wrong now. I am grateful to the noble Lord, Lord Lester, for pointing out the difference between the law of the land, which I believe is correct, and mischievous misinterpretations of that law, of which there are undoubtedly many. While I respect that around this Chamber we have different views, I am concerned that perhaps some of the voices opposite are those of the modern Conservative Party. I know that some on my Benches will disagree with me on that.
When we debated the Equality Bill, there was wide agreement on all Benches that the Bill—now the Act—was the right way to address discrimination and advance equality of opportunity in our tolerant British society. I believe that that is still the case. The noble Lord, Lord Waddington, says that specific regulations would be a burden on the public sector. However, I remind him that good regulations serve an important purpose. In this case it is to ensure that systematic inequalities can be challenged so that all members of our society can live and flourish without discrimination. The noble Lord dismisses the importance of equality of outcomes, whereas I suggest that outcomes and opportunity are equally important.
The noble Lord, Lord Low, is right to stress the need for the general equality duty to produce tangible and positive outcomes. I fear that the regulations have been weakened to such an extent that the outcomes will be neither tangible nor positive. In the other place, the Minister made a commitment to review the duties in two years’ time. That is very welcome, but I ask the Minister to confirm that such a review will take place and to provide further information about a timetable for it. How will the evidence be gathered? Will the review be based on progress towards the aims set out in the general duty, rather than simply on the aspects covered by the specific duties, and will it be public? I also ask the noble Baroness for a clear commitment that the specific duties will be amended if the review reveals that public bodies have not made sufficient progress in eliminating discrimination and advancing equality of opportunity.
The equality duty should be one of the most effective ways of combating institutional discrimination and putting the public sector at the forefront of efforts to secure equality. Contrary to what the noble Lord, Lord Waddington, said, in this seemingly fractured society I believe that issues relating to equality and discrimination have assumed greater importance and that regulations to define the specific duties are vital to delivering the general equality duty. As I said earlier, I would be very happy to support the noble Lord, Lord Low, should he wish to vote on his amendment.
Baroness Verma
My Lords, I will deal with the points raised by my noble friend Lord Waddington and the noble Lord, Lord Low, separately, but I will begin by dealing with my noble friend’s amendment. I recognise that he speaks with passion and that he has been consistent in his arguments. I stand here as somebody who may not be absolutely in tune with everything on the subject of equality, but I do know the outcomes of discrimination and inequality. I think, therefore, that what we are doing here today is helping to address those issues. While there may be Members among my noble friends behind me who think that we have gone too far, I say to them: ask the people who do not have access to those opportunities and you may get responses that are difficult to take if you have never had to undergo such discrimination yourselves.
My noble friend has made clear his concerns about the issue of religious freedom.
Baroness Deech
In her description of access, has the Minister taken into account the fact that the Government’s own cuts in legal aid will prevent people with those protected characteristics from enforcing their rights? They represent a savage onslaught on protected characteristics and access to justice.
Baroness Verma
My Lords, I will continue with my notes. My noble friend has made clear his concerns about the issue of religious freedom and its relationship with equality law. The Government are committed to striking a fair balance between religious freedom of expression and the rights of people not to be discriminated against whether at work or at school and when buying goods or using services. A fair balance is what the Equality Act 2010, and the legislation it replaced, achieves. I know that my noble friends and others would agree with that. The Act provides protection from discrimination because of religion or belief. It is drafted carefully to ensure that people are protected from being discriminated against but different treatment is permitted where this is justified—for example, because it is necessary to protect religious freedom of expression.
In addition, in service delivery, non-commercial religious organisations are permitted to restrict the provision of services because of religion or belief, or because of sexual orientation in some circumstances, but discrimination because of sexual orientation is not permitted when a religious organisation is providing services on behalf of a public authority. Where a policy or practice has an adverse effect on people of a particular religion, it is permitted only where it can be objectively justified. As you can see, the legislation has been framed carefully to ensure that religious organisations can act in line with their doctrine while ensuring that people are protected from being subjected to discrimination and harassment because of their sex or sexual orientation, for example. However, for commercial businesses the position is different. In practice, this means that someone who runs a business or provides a service to the public can of course hold and express their religious beliefs, whatever those may be. However, the right to manifest religion or belief may properly be limited in certain circumstances, including where it interferes with the rights of others. The Government are clear that these measures strike a fair balance between religious freedom of expression and the rights of people not to be discriminated against. Thus the Equality Act 2010 delivers a level playing field rather than a hierarchy of rights.
The equality duty covers the protected characteristic of religion or belief. This is only right. Had it not been included, there would have been a hierarchy of discrimination whereby discrimination and disadvantage suffered because of religious beliefs would effectively have been deemed less important than discrimination and disadvantage because of gender or race, for example. Indeed, it would have been more complex than that, as Jews and Sikhs would have been covered—as they are covered by the race aspect of the duty—but Christians, Muslims and Humanists would not.
Indeed, the equality duty now covers all the protected characteristics and provides the legal framework for considering how decisions affect all groups and, where necessary, how different needs can be balanced. The specific duties which we are discussing today will help to ensure that public bodies do that balancing correctly.
Lord Campbell-Savours
It is the custom in parliamentary debates for Ministers to respond to debates. Does the noble Baroness intend to reply to the debate and individual points made by Members?
Baroness Verma
If the noble Lord were patient he would know that the points I am making relate to the points raised, and I will also directly reply to points raised by noble Lords.
The specific duties we are discussing today will ensure that public duties do that balancing correctly. They will open up the decision-making and performance of public bodies to scrutiny. If people think that their religious freedoms and beliefs are being overlooked by public bodies, or that people of their religion are being treated unfairly, they will be able to look at the equality information that public bodies will be required to publish and to hold them to account. They will also be able to question a public body if they feel that the organisation is inappropriately advancing the interest of one religious group over another. Relevant data will be in the public domain for them to check.
On the issue of costs, it is simply not the case that the regulations will unnecessarily burden the public sector. On the contrary, they are designed to help public bodies comply with the equality duty and, by harmonising the three previous equality duties on race, gender and disability into a single duty and making the new single equality duty less bureaucratic and more straightforward to comply with, we are delivering long-term savings for the public sector. We estimate that the compared costs of complying with the previous duties and with the new single equality duty and the new specific duties will result in a net benefit to the public sector of £11 million in year one and about £19 million a year from year two onwards. That will deliver public services which are better tailored to the different needs of service users, which is what the equality duty is designed to do. We will also save public bodies money in the long run.
Earl Ferrers
Perhaps I may interrupt my noble friend for a moment as one who intended to make a speech but was unable to do so because the noble Baroness got up too quickly. Does my noble friend agree that it is in fact impossible to have equality between people? You can have equalities of opportunity for people to use, but you cannot possibly say that two people are equal.
Baroness Verma
My noble friend is right, but it is about ensuring that there are those equalities of opportunity. That is what the regulations lay out.
My noble friend Lord Waddington asked about adoption agencies and the fact that some have had to close. I think the noble Earl, Lord Listowel, also mentioned that. Let me be clear that the Equality Act (Sexual Orientation) Regulations 2007 and the Equality Act which replaces them did not and do not mean that faith-based adoption agencies must close. Nor do they mean that those agencies cannot restrict their services of recruiting and assessing prospective adopters to people who are Catholic. They just mean that those agencies must not refuse their services to prospective adopters just because they are lesbian, gay or bisexual. It is an important principle that publicly funded services should be provided to people irrespective of their sexual orientation.
The Earl of Listowel
I could not quite understand what the Minister just said. Could she rephrase it, because it was not clear to me?
Baroness Verma
The noble Earl may read Hansard tomorrow.
In response to my noble friend Lord Tebbit, I declare an interest as a person who has a business in the care sector. The specific duties will ensure that those receiving publicly funded services are responded to through those services more appropriately to their requirements. The duties do not create discrimination; they will enhance the services that people receive.
Lord Tebbit
My noble friend waxed almost lyrical on the even-handedness of the regulations in relation to religious discrimination. Will local authorities be required to report on whether schools serving meals to Christian children can serve halal meat covertly without the parents of those children being told?
Baroness Verma
My Lords, my noble friend asks a question that I may not be able to respond to straight away. I assume that it would be up to the school and the school’s policy to inform parents of what they are doing in activities including school meals.
The noble Lord, Lord Low, has pressed the Government to replace these regulations with the draft published in January. I must stress from the outset that I wholly share the noble Lord’s wish that the equality duty should produce tangible, positive equality improvements for people who experience discrimination and disadvantage. His record on pressing for such improvements for disabled people is to be respected and admired, and I can assure him that we seek to achieve the same ends. We differ only on the best means of achieving them.
As I explained at the beginning of this debate, the equality duty set out in the Equality Act 2010 is a stronger and broader duty than the previous equality duties on race, disability and gender. By providing a clear explanation of what it means to have due regard to the need to advance equality of opportunity and foster good relations, the new equality duty is designed to focus the attention of public bodies on the aims they need to consider when carrying out all their functions.
In addition, in respect of disability, the equality duty also makes clear that consideration of the need to advance equality of opportunity for disabled people includes considering the need to take steps to account for their disabilities. This important and helpful clarification was the result of an amendment put forward by the noble Baroness, Lady Campbell. Noble Lords should be assured that the equality duty will be an effective lever for delivering equality improvements for those who still regrettably experience discrimination and disadvantage.
On the detail of the concerns that the noble Lord expressed, the January draft regulations were not implemented so we cannot know exactly what effect they would have had. The regulations that the Government now propose are the right approach and will help public bodies perform the equality duty better. There was a full public consultation on an earlier draft of the specific duties last year and a further public engagement exercise on them earlier this year. The Government are grateful for the many responses they received and have carefully considered them. Plainly the regulations—
Lord Lloyd of Berwick
I am very grateful to the noble Baroness. Was not the simple point made by my noble friend Lord Low that, in relation to disability—which he took simply as an example—the regulations that are now proposed go less far than the existing specific duties which, he says, are working well? He says that is the evidence. Is that not a good reason to vote for his motion?
Baroness Verma
No, my Lords. In continuing with this, the noble and learned Lord will see that we are trying to lay out a better informed basis for the duty, for public authorities to respond to their own local needs. It is not about central diktats that impose duties that have to be responded to regardless, but about being able to take into account what is needed by those public bodies in their particular areas. Once the noble Lord, Lord Low, has heard what I have to say, he will probably feel satisfied that we have addressed his concerns in what we are proposing.
Some equality groups would have liked us to have set very prescriptive specific duties, particularly regarding what needs to be published.
Lord Campbell of Alloway
I apologise. My noble friend assumes that our courts will not exclude matters of religious freedom but accept and adjudicate on them. I presume she accepts that, contrary to what I suggested.
Baroness Verma
If my noble friend allows me to continue he will be satisfied with what I am proposing.
The regulations before noble Lords now require public bodies to publish information to demonstrate that they are complying with the duty but give them freedom and flexibility to do that in the way that makes sense for their particular circumstances. That is the best possible outcome. The key to our approach is to move to democratic accountability through transparency. If service users and local groups do not see the information they need in order to see how their public bodies are performing on equality, they will rightly press for information to be published. And if the information shows insufficient progress, they will press public bodies to do better.
As I have said, we are commissioning the production of a toolkit which will help voluntary and community organisations to use the equality duty to hold public bodies to account for their performance on equality. In contrast, the January draft regulations were too prescriptive. Every meeting a public body had would have had to be logged and the minutes published, and public bodies would have had to publish information which was not helpful to the public in holding them to account, simply because they had looked at it. Smaller local authorities, in particular, were concerned that complying with those earlier proposals would have been too onerous. The Government have listened to those views, and share their concerns. The guidance will make clear what information public bodies should consider publishing. Crucially, the regulations provide flexibility, so that public bodies can develop approaches which fit with their particular circumstances. What is right for a small school will not be the same as what is right for a large Department of State, and this balance is right.
Before I conclude, I will respond to one or two points raised by noble Lords. The noble Lord, Lord Low, and others, have asked about the reviewing of the regulations. We will take note of the review of the regulations and consider how they have impacted and whether the public bodies have posed challenging objectives themselves—if not, we will have to address those as they come along. The review will include a major survey of public bodies and representatives of the different types of organisations, it will speak to the voluntary sector and the community sectors and it will also work from information from the Equality and Human Rights Commission.
The noble Lord, Lord Lester, comprehensively outlined what this Government are trying to do. I think that across the three major parties there is general agreement that we need to go forward by ensuring that public bodies are accountable, that they are able to show that they are taking due regard of the processes of ensuring that all protected characteristics are included in the forward planning of public bodies and the services they offer. In conclusion, I feel confident that the draft regulations will enable the public to hold public bodies to account for their performance on equality. This will be the real driver for delivering equality improvements and helping us achieve a society which is fairer and provides equal chances for everyone. I hope that the noble Lord, Lord Low, feels assured by my remarks.
Lord Waddington
My Lords, we have had a very good debate, and I would like to thank all those who have taken part. I will not detain the House for long. I am sorry to pick on the noble Lord, Lord Lester, but in his contribution, he very neatly illustrated all that is wrong with the present situation. His line was perfectly simple: “There is nothing wrong with the law, so there is no need for us to register our concern about abuses, as the noble Lord, Lord Waddington, wants to do in his amendment, and there is absolutely no need to register our concern, let alone do anything about the abuses”. The noble Lord, Lord Lester, can live quite comfortably with the injustices, but I have to tell your Lordships that I cannot. When the adoption societies were forced to close, that was in accordance with the law. It was a gross injustice. The noble Lord, Lord Lester, can live with it; I cannot. When Brighton and Hove City Council withdrew funding for a care home because it did not like the owners of the home refusing to ask people about their sexual preferences, that was a gross abuse of power. The noble Lord, Lord Lester, can live with that sort of abuse of power; I cannot. When people are sent home from work because they want to wear a cross to signify their religion, I think that that is a gross abuse of power. The noble Lord, Lord Lester, can live with it; I cannot. We have an opportunity this afternoon to show that we have not taken leave of our senses. We are concerned about these abuses. We want to make it plain to people—
Lord Waddington
I am going to finish now. We want to make it plain to people that there is real concern throughout the whole country. We stand for fair, not unfair, behaviour. Let us make that plain this afternoon by voting for my amendment. I am happy to press it now and I ask noble Lords throughout the Chamber to join me in the Division Lobby.
Lord Low of Dalston
As an amendment to the Motion in the name of the noble Baroness, Lady Verma, to insert at the end “but that this House regrets that the Government have seriously weakened the Regulations, making it more difficult to hold public bodies to account; and calls on the Government to withdraw the Regulations and re-lay the earlier version published in January which required public bodies to publish information on equality analyses they have undertaken, to set objectives designed to facilitate compliance with the General Equality Duty and publish information about the engagement they have had with affected groups when developing these objectives, and to report annually on progress towards meeting these objectives, all of which is critical to ensuring that the General Equality Duty produces tangible and positive outcomes.”
Lord Low of Dalston
My Lords, what we have witnessed this afternoon is nothing more nor less than a backlash against equality legislation—certainly in the debate if not in the vote. It was a slightly hysterical, indeed apocalyptic, backlash from people who, as the noble Lord, Lord Lester, said, are basically against equality legislation. As I made clear when moving my Motion, I hold no brief for the excesses of zealots or the ignorant; my Motion seeks merely to underline those elements of equality legislation which have been found to have value in helping public authorities better to understand the needs of historically disenfranchised sections of the community and which the Government embraced scarcely more than six months ago.
The noble Lord, Lord Lester, has dubbed my Motion as leading to overregulation, although I hope that he might on reflection withdraw the charge of it being the “worst kind” of overregulation. We must all have the greatest possible respect for the noble Lord, Lord Lester, who basically invented equality legislation—so it is all his fault, really. We can debate the detail of regulation, and I say with respect that it may be more appropriate to some strands of equality legislation than others. I drew attention to the value of equality analysis and engagement with affected groups—the noble Lord, Lord Lester, might disagree about that; there is room to differ over those—but surely no one could suppose that a duty which is capable of being interpreted as a requirement to set only one equality objective every four years is appropriate guidance to give on how to go about implementing the general equality duty across the piece. I do not see how anybody could suppose that that was unduly burdensome regulation.
Although it has at times been a slightly ill-tempered debate and precious few noble Lords have spoken on my side of the argument, I am grateful to all those who have contributed. However, I persist in believing that my Motion gives expression to the point of view of those who espouse a more moderate and practical approach to advancing equality. I propose to test the opinion of the House in the confident expectation of discovering that the strength of liberal opinion in it remains greater than has appeared in the debate.
Scotland Bill
(13 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, as your Lordships’ House’s Constitution Committee said,
“The Scotland Bill is a measure of clear constitutional significance”.
Indeed, this Bill will strengthen Scotland’s position within the United Kingdom by further empowering the Scottish Parliament and making it more accountable to the Scottish people. I do not think that I have said anything controversial.
Lord Foulkes of Cumnock
The Minister had said something very important: this Bill is a matter of clear constitutional significance, not just to Scotland but to the whole of the United Kingdom. Does he not think that it is a disgrace that we are starting to discuss the Bill at 5.35 pm, and that we are only going to have half a day for the Bill, when in 1998 the Scotland Bill had two days at Second Reading? Is that not outrageous, and are the Government Whips not culpable in relation to that?
Lord Shutt of Greetland
My Lords, when the business was laid and agreed by the usual channels—I am delighted that the noble Lord, Lord Bassam, is here, and will be able to confirm that it was—it was not of course known how many speakers there would be. There are, I think, three dozen speakers on the Scotland Bill today. We did not know that when the business was agreed, but it was agreed. It is the normal way of things that when there is divisible business, that business comes first. Again, that was agreed by the usual channels for the convenience of the House. We have just seen this afternoon how convenient it is for the House, because in the two earlier Divisions just short of 400 Members went through the Lobbies. Clearly, it would not have been convenient for those Members to stay here until late this evening.
Three dozen people have put their names down to speak. It is not unusual for a Second Reading to go beyond the normal 10 pm deadline, and, as I say, it has been agreed by the usual channels. I think we would be better to get on with it, as otherwise it will get later still.
Lord Forsyth of Drumlean
I support what the noble Lord, Lord Foulkes, has said. By the way, Second Readings are divisible, but the tradition is that we do not divide the House on Second Readings. This is an important piece of legislation, and I am afraid that this situation is not really for the convenience of those of us who care deeply about the legislation. If everyone took the 15 minutes which the Companion allows, I would have to wait until 2.30 am to hear the views of the only woman Secretary of State for Scotland, who is number 33 on the list. This is a scandalous way in which to treat Members of this House, and important constitutional business.
Lord Soley
My Lords, I, too, support what has been said. I have a strong view about this, because I regard it as an important issue for the United Kingdom. It is very important that we do all that we can to preserve the union. I think that, if we deal with Bills like this in this way—at this moment as far as I can see we are likely to go on beyond midnight—it cannot be desirable for the House. I have to say to the government business managers that it is not good business management to end up in this situation. They have brought people back for two extra weeks as well as bringing the House back a week early, and yet we will still be dealing with this probably after midnight.
Lord Shutt of Greetland
I hear what the noble Lord says, but there are a lot of people here anxious to speak. There are in fact three dozen such people. Some have come from Scotland—perhaps on the train or the aeroplane—specifically to speak. Therefore, it would be inconvenient if we did not continue. Everything we do in this place is important. I do not think that we should be looking at this in pecking-order terms. We do know that it is convention—just as the noble Lord, Lord Forsyth, said about voting convention—that we first have what is perceived as divisible business. The usual channels agreed this; it may have been some time ago, but it was agreed, and so I think we should proceed.
The Earl of Shrewsbury
My Lords, forgive me for intervening, but would it not be much more sensible, for a Bill of this constitutional importance, to deal with half of it today, and half on Friday? Then we can all do it properly.
Lord Bassam of Brighton
My Lords, I only venture into this to say that I think that the Government are wise at all times to be flexible in their approach. Although I am part of the usual channels, I must say I did predict at the time that this would not be an easy passage for the Bill. I go no further than that, because I do not want to undermine the effectiveness of the workings of the usual channels. However, I think that noble Lords agree that these are points that are very well made to the House, and they have validity.
Lord Wallace of Tankerness
My Lords, both sides of the usual channels have no doubt heard the points that have been made. I reiterate the point that this is a Bill of constitutional importance, and I think that it is important that we now make progress to debate it. Given the quality of the speakers—as is the case in of all your Lordships’ House’s debates—I think that, looking down the list of former Secretaries of State, former law officers, former Members of the Scottish Parliament, former junior Ministers in the Scottish and Scotland Offices, we are clearly going to have a well-informed debate, and one that is worthy of the importance of this Bill. I believe that the Bill will strengthen Scotland’s position in the United Kingdom, it will empower the Scottish Parliament, and it will make that Parliament more accountable to the Scottish people. It delivers on our coalition agreement to implement the recommendations of the Calman commission. It is in fact the biggest transfer of fiscal responsibility within the United Kingdom since the Act of Union in 1707, and delivers the first major change to the workings of the Scottish Parliament and Scottish Ministers since that Parliament was established in 1999.
For its first decade and more, the Scottish Parliament has been accountable to the Scottish people for the money it spends. We believe the time is now right to make it accountable for the money it raises—one of the fundamental changes that this Bill will bring about. Many noble Lords present will remember, and indeed took part in, the debates on the Scotland Bill in 1998 in one House or the other. They will recall, however, as any look at the record shows, the significant scrutiny that this House afforded to the Scotland Bill at that time. I notice the noble Lord, Lord Sewel, allowing himself a small chuckle. With all due respect to all the others who took part, he did much of the heavy lifting on that Bill and deserves credit for that. I have no doubt that those who served in scrutinising the 1998 Bill, and indeed many other noble Lords, will afford the current Bill the same level of examination to ensure that it too delivers the new powers that will benefit Scotland.
I believe that the Scottish Parliament has been a success and is here to stay. Indeed, that was the first conclusion of the Calman commission. The Scottish Constitutional Convention, of which I and other noble Lords were members, built up the case for the 1998 Act and set the country on the path towards creating a Scottish Parliament, which is now an important part of Scottish life. Decisions are now taken closer to the people they affect. Decisions on housing, education and hospitals are made in Scotland, for the good of the Scottish people by a Parliament that they have elected to serve them. Devolution in Scotland has delivered notable policy initiatives: free personal care; a Scottish Drug Enforcement Agency; long-overdue land reform; proportional representation for local government elections; a smoking ban in public places, which paved the way for a similar measure in other parts of the United Kingdom. In what seems a relatively short period, devolution has become central to the way in which we work. Many of us in this Chamber have worked either for or with devolution and the Parliament in Scotland.
The Calman commission was established to review the settlement in light of experience and to recommend changes to enable the Scottish Parliament to serve the people of Scotland better. Improving the financial accountability of the Scottish Parliament was an important part of the commission’s remit, which was agreed by the Scottish Parliament and endorsed by the then United Kingdom Government. Membership of the commission included representatives from the three main United Kingdom political parties and from local government, experts in Scots law, business, education, community organisations and the trade unions. I must tell noble Lords that when, in 2008, I agreed to sit on the commission for the Liberal Democrats I was not anticipating that, three years later, I would be the Minister charged with taking the recommendations through the House—not that it would have had any influence on recommendations that I agreed to.
We wish to thank the chair of the commission, Professor Sir Kenneth Calman, the other commissioners and Professor Anton Muscatelli and the independent expert group on finance, which supported the commission in the work that it did. It was work invaluable to the future of devolution and I particularly look forward to the contributions of my fellow commissioners today, the noble and learned Lord, Lord Boyd, the noble Lords, Lord Elder and Lord Selkirk, and the noble Earl, Lord Lindsay, who brought their wealth of experience and understanding to the commission. The Scotland Bill has enjoyed widespread support across the political spectrum. Consensus on its purpose and direction has been the order of the day. This Government are delivering the next chapter in Scottish devolution and remain committed to doing so, with the support of the three main United Kingdom-wide parties. It is on the basis of cross-party consensus that the Bill has been taken forward, alongside a commitment to consider suggestions from others, including the Scottish Government, as we proceed.
Those of us who campaigned for devolution wanted more decisions taken in Scotland by a Scottish Parliament but we also wanted to retain many of the benefits, to both Scotland and the United Kingdom, which come from remaining part of our United Kingdom. The devolution settlement was about getting that balance right. Of course, there will always be those who think that the Scottish Parliament should be responsible for everything and there are those who think that devolution has already gone too far. However, by and large, we have managed to maintain consensus while bringing forward a strong set of improvements to the original settlement. The fact that the Calman commission was not inundated with representations to make fundamental changes to the division between devolved and reserved matters is, I believe, testimony to the judgment of the architects of the 1998 Act.
We will strengthen devolution by providing new powers to the Holyrood Parliament. In 1997, the Scottish public voted for a Parliament that could change the rate of tax within a limited margin. That power has never been used. In fact, the current Scottish Government who, as we know, are forever calling for new powers actually allowed this tax power to lapse last year. The United Kingdom Government do not want to see Holyrood lose its fiscal powers, rather the opposite. The financial powers contained in the Bill are, as I have indicated, the largest transfer of financial powers out of London since the United Kingdom was created. The Parliament will become accountable for raising more than a third of the money it spends.
The Bill will create a Scottish rate of income tax by cutting 10p from every income tax rate, reducing the Scottish block grant in proportion and obliging the Scottish Parliament to set a new rate to meet its spending plans. It will allow Scottish Ministers to borrow up to £500 million for current spending and up to £2.2 billion in capital spending. In the light of a request from the Scottish Parliament, we will make part of that capital investment available in pre-payments for approved projects by 2012.
Lord Forsyth of Drumlean
The Bill abolishes the variable rate of income tax—the 3p rate, which was approved by a referendum of the Scottish people—so it is taking away a specific power approved by referendum. Why do the Government not think it necessary to have a referendum, given that they are going to introduce a further power that goes beyond the 3p they are abolishing and which was approved by the people in a referendum?
Lord Wallace of Tankerness
The answer to that is that we have absolutely moved forward; the Scottish Parliament has been established and it is very clear that what we are proposing has commanded widespread consensus within Scotland. It was not only the product of a commission that took extensive evidence. It has been supported by the three UK-wide political parties and by the representatives of the Scottish people in the Scottish Parliament, as I will indicate later, by 121 votes to three. There is a broad consensus for that in Scotland and, with the honourable exception of my noble friend, I have not really heard any clamour for a referendum on the specific tax powers involved in this Bill.
As I indicated, it will also devolve landfill tax, stamp duty and the power to create new taxes. The Bill will phase in these powers up to 2016. It will provide a whole new set of policy levers that will be at the disposal of the Scottish Government elected in that year. In his David Hume Institute address last week, my colleague the Secretary of State set out some possibilities that would be open to future Scottish Ministers. With their new tax powers, the Scottish Government could stimulate the construction sector and boost the housing market by cutting stamp duty by, for example, 5 per cent at a cost of £25 million to the Scottish budget, or ensure that Scotland competes to be the greenest country in Europe by proposing innovative new green taxes, offset by other tax cuts, to ensure that Scotland moves the tax burden from people to pollution. They could use the new Scottish income tax to raise investment in public services higher than is the case in other parts of the United Kingdom, or do just the opposite—cutting the rate to attract bright and ambitious people to Scotland and reduce the brain drain from within.
Those are all options. We are providing the power; it will be up to the Scottish Parliament, elected by the people of Scotland, as to how those options are exercised. However, the Command Paper published in November alongside the Bill stated that for every penny by which one increases income tax, the yield will be around £450 million—or 1.7 per cent of the present Scottish budget. That gives a flavour of the considerable powers that this Bill provides to Scottish Ministers. This is a big shift to the financing of public services in Scotland. It will deliver real financial accountability, as more than a third of current spending will be funded by taxes determined and raised in Scotland. It will give the Scottish Parliament a real stake in Scottish economic performance, as a significant proportion of the budget for public services in Scotland will come directly from taxes set and raised in Scotland. Stability to the Scottish budget will continue to be provided by continuing block grant from the United Kingdom Government.
Delivering the Donald Dewar lecture in 2003, my noble friend Lord Steel of Aikwood said:
“No self respecting Parliament should expect to exist permanently on 100% handouts determined by another Parliament, nor should it be responsible for massive public expenditure without any responsibility for raising revenue in a manner accountable to the electorate”.
I believe that this Bill addresses that critique. The Calman commission also concluded that the original divide, as I have indicated, between devolved and reserved policy powers was broadly right. The Bill therefore does not seek radically to alter the boundary but instead updates the balance between reserved and devolved powers in specific areas, as recommended by the commission. We are devolving the power to set the national speed limit and the drink drive limit, to regulate air weapons. Recognising that this is a two-way street, where a consistent approach across the United Kingdom is required, we will legislate at a United Kingdom level, specifically over the winding up of companies and the regulation of healthcare professionals, as provided for by the Bill.
The functioning of the Scottish Parliament itself will be improved by measures in this Bill. The Parliament will be able to elect additional deputy presiding officers, it will have greater discretion to set its own Members’ interests regime, and there will be greater flexibility about the makeup of the Scottish Parliamentary Corporate Body. Closer working relationships between UK and Scottish Ministers will be required. Scottish Ministers have a role in the appointment of a Scottish member of the BBC Trust, and a Scottish Crown Estate commissioner.
The Bill also provides for some largely technical and relatively uncontroversial updates to improve the Scotland Act and help devolution to operate more effectively. Improving devolution for Scotland is an ongoing process, and while constitutional legislation is rare, the Scotland Bill provides an opportunity to make some amendments. In my role as Advocate-General, I am responsible for providing advice on Scots legal issues to the United Kingdom Government, and I therefore thought it right to take the opportunity to review the existing Scotland Act. There are a number of technical measures in the Bill.
I also took the opportunity to revisit an area of the Scotland Act which was raised with the Calman commission by the judiciary, but on which the commission made no recommendation. I established an expert group under Sir David Edward to consider the way in which acts or failures to act of the Lord Advocate that are incompatible with Community law and convention rights are dealt with. Clause 17 of the Bill implements the findings of that expert group and simplifies process, with human rights and European Union law issues being referred to the Supreme Court.
The Bill represents a large and historic change for Scotland, and therefore deserves proper scrutiny, which I am sure this House will give it. Alongside the scrutiny it received in the other place, the Scottish Parliament has examined and debated the Bill, and the Scottish Affairs Committee at Westminster provided a rigorous analysis of the Bill’s provisions.
Your Lordships’ House’s Constitution Committee has noted that the Bill is of clear constitutional significance, but also said that there were no issues of constitutional concern in the Bill. I noted that the Committee welcomed the extensive deliberation which preceded introduction of the Bill. Those of us who are veterans of the PVSC Bill and the Fixed-term Parliaments Bill will be very pleased with that particular commendation from the Constitution Committee. The Delegated Powers and Regulatory Reform Committee also noted no issues in the Bill.
The Government welcome all these reports, and thank those who have worked to consider this Bill. While the Calman commission’s balance and evidence process is the basis for the Bill, the Government have made it clear that we have never ruled out sensible and similarly evidenced suggestions for change. We have listened to recommendations made by the Scottish Parliament and the House of Commons Scottish Affairs Committee, and to advice from other stakeholders, and while we believe that the Scotland Bill package provides the right balance of powers for tomorrow’s Scottish Parliament, we nevertheless have made some amendments to the Bill, and the supporting non-legislative package.
These will give Scottish Ministers greater flexibility to exercise their new powers effectively; for example, by bringing forward to 2011 pre-payments—a form of cash advance to allow work on the Forth replacement crossing to begin. The Government have listened to other recommendations and tweaked the finance and non-finance aspects of the Bill and its accompanying package.
We continue to believe that the package set out in this Bill and the associated Command Paper will strengthen Scottish Devolution and Scotland’s place within the United Kingdom. It provides strong financial accountability to the Scottish Parliament, and the right balance of additional powers. It provides the Scottish Government and Scottish Parliament with new tools to deliver policies in Scotland to respond to new challenges.
The other place debated the Bill over three days in Committee on the Floor of the House. Committee days in this House subject to the Motion later, will take place as a Committee of the Whole House. It is right that legislation of such constitutional significance gains the level of scrutiny it deserves, and that no one is excluded from the process. The whole essence of the Bill has been about inclusion. All parties were invited to be involved in the Calman process, just as they were in the Constitutional Convention. Those parties and those people who accepted the offer have therefore had the biggest hand in shaping these, and therefore the future of devolution.
There is, of course, a relationship with another place, a place much affected by the provisions of this Bill, and that is the Scottish Parliament. As I have indicated, the previous Scottish Parliament overwhelmingly approved the Bill, with 121 MSPs voting for the legislative consent measure in support, three voting against, and one abstaining. The three main UK-wide parties, together with the party which currently forms the Scottish Government, voted in support of the Bill. I think we can say that the Scottish Parliament believes in the Scotland Bill.
A new Parliament with a new focus was elected on 5 May, and as we are all well aware, it represented a landmark change in Scottish politics. This new Scottish Parliament will consider the Bill again, and we will consider sensible recommendations for the Bill made in time for this House’s final amending stage. We will get the chance to consider any recommendations which come from the Scottish Parliament, and the Government will continue to work with the Scottish Parliament’s Scotland Bill Committee, which is considering amendments to the Bill. My right honourable friends the Secretary of State and the Parliamentary Under-Secretary of State will give evidence to the Committee on Thursday of this week.
The noble Lord, Lord Sewel, who is with us today, has given his name to a convention that Westminster would not normally legislate with regard to devolved matters on Scotland without the consent of the Scottish Parliament. This convention has been developed and embodies the respect that this Parliament has for the Scottish Parliament. In keeping with the spirit of the convention, the Government will continue to work closely with the Scottish Parliament Committee reviewing the Bill, and we will look to maintain the support of the Scottish Parliament for the Bill.
As is well known, the Scottish Government have expressed their desire to see additions made. We will look at these further proposals and set them against three tests: that the Scottish Government provides detailed proposals to strengthen the Bill; that the proposals maintain the cross-party consensus that has been worked up and developed; and that any such proposals are beneficial to Scotland, without being prejudicial to the rest of the United Kingdom as a whole. I will of course keep the House appropriately informed of any developments in discussions with the Scottish Government, which will operate under a banner of mutual respect.
I have no doubt that in the course of the next few hours, many noble Lords will wish to debate not only the detailed provisions of the Bill, but also wider constitutional issues of importance to which this Bill is related. Of course, as I have indicated, the political landscape has changed since the Bill was introduced into the other place. Most obviously, the Scottish Government have claimed their election success as a mandate for a referendum on independence.
The Scottish Government have still got a lot of explaining to do when it comes to their main objective of separating Scotland from the rest of the United Kingdom. They do not want to provide any detail on how or when they will conduct a referendum. Nor do they want to explain in any greater detail, to date, what they mean by independence. The people of Scotland deserve to be told, and we will keep pressure on them to provide the facts to the people of Scotland. The Government, along with other noble Lords, believe that Scotland’s future is a future within the United Kingdom.
The Scotland Bill is a vehicle for upgrading Scotland’s devolution settlement. It is a Bill founded on evidence. It is a Bill with a clear purpose and clear principles: to strengthen devolution within the United Kingdom and to make the Scottish Parliament financially accountable. It fixes some things that have not quite worked; it makes the Parliament and the Government of Scotland more responsible for money they raise; and it allows the Scottish Parliament itself to run more effectively. Crucially, it will leave the Scottish Parliament with more powers than it had before; mature powers for a maturing Parliament.
The package strengthens the United Kingdom, by providing a settlement with financial responsibility, but it maintains the key elements of risk and benefit sharing that help the United Kingdom as a whole to perform effectively on the world stage and deliver fairly for all people. Stronger devolution which works for Scotland works for the United Kingdom, and I believe strengthens the United Kingdom for years to come. I commend this Bill to the House. I beg to move.
Lord Davidson of Glen Clova
My Lords, we welcome this Bill in principle. Of course, it has been Labour, both in government and in opposition, which has been consistently in favour of devolution. It was the Labour Government who took the initiative in setting up the cross-party Calman commission, on whose work the Bill draws.
We must, however, recognise that the Calman commission produced its report in 2009. Many matters of significance for Scotland have occurred since the report. I will seek to look at a number of issues which have arisen in debate in Scotland that are not as yet found in the Bill. I accept immediately that not every new issue should be reflected in the Bill, but where an issue has emerged of constitutional importance, it should not be lost sight of. One does not anticipate that Scotland Bills will be a frequent occurrence, nor will opportunities arise often to correct constitutional difficulties.
First, perhaps I should say that at a time when economic growth in Scotland is hardly vibrant and unemployment threatens many in Scotland as well as in the rest of the United Kingdom, a focus on purely constitutional issues may seem to many to be at best a skewed priority. True, the Bill contains borrowing powers that could be useful if properly applied at this point in the economic cycle, but the welcome that such powers might receive will be muted if they are not put in place quickly.
I think that I understood the Minister to say that the borrowing powers may come into place in 2012. We certainly have called for them to be advanced to that year, and the Scotland Bill Committee and Scottish Affairs Committee reports both recommend that those powers be brought forward. We would welcome the Government bringing them forward to 2012. It would be useful for people in Scotland to know exactly when in 2012 the Government accept that capital borrowing powers will become available.
One should also observe the attention given to demands for new expanded powers, all claimed to be essential to the regeneration of the Scottish economy. This has led to scant scrutiny of the use of existing powers. The Scottish Government already have a wide portfolio of powers to contribute to economic growth. Their use, their non-use and the ostensible priorities might perhaps be subject to greater assessment and accountability.
I turn to the issue that the noble Lord, Lord Forsyth, has already referred to: a referendum on the question of the separation of Scotland from the United Kingdom, a subject that has engaged substantial debate in Scotland over a number of years. Since this year’s Scottish Parliament election, the issue of a referendum has come very much to the fore. Although there is scant evidence of public demand for such a referendum, the SNP Administration have committed themselves to this at some unspecified point before 2015. While we see no public demand for such a referendum, the issue will not simply vanish, given the SNP’s apparent commitment to it.
The prior constitutional question of law regarding any referendum is by what legal process such a referendum can be held lawful. To put it more acutely, can the Scottish Parliament lawfully put in place its own referendum on separation, set its own timing and questions and possibly ignore the obligations of Scotland to the rest of the United Kingdom? The question of lawfulness is inevitable, as in the Scotland Act 1998 the intention of Parliament was, unsurprisingly, not to put in place a mechanism for decisions on separation but solely to establish devolution in Scotland within the United Kingdom. It would have been remarkable if such a dramatic power to break the union by way of referendum had been included in the 1998 Act. After all, Section 29 of the Act provides that any reserved matter is outside the competence of the Scottish Parliament. Schedule 5(1) states:
“The following aspects of the constitution are reserved matters, that is … the Union of the Kingdoms of Scotland and England”.
Various ingenious attempts thus far to imagine some kind of power to hold a referendum—for example, “It’s just an opinion poll, not a referendum; it’s only advisory”—may at least be unlikely to survive a challenge in court. And no doubt they would be challenged, either by the law officers, the Presiding Officer of the Scottish Parliament or indeed by any concerned citizens or group of citizens. The question for the Government may become whether they should create a proper statutory power in the Bill for, say, a one-off referendum or whether they would countenance a unilateral, potentially unlawful declaration by the Scottish Parliament of its own power to run its own referendum, whenever. That would hardly be the chosen route of any Government committed to the rule of law. It would set a precedent with the most remarkable consequences for the UK. In any event, it would remain vulnerable to third-party challenge with potentially hugely embarrassing results. I encourage the noble and learned Lord the Advocate-General to pursue this issue with his ministerial colleagues, perhaps before he is obliged to consider it as one of his statutory duties in his separate role as law officer. To waver accelerates tension on this issue. I accept that there are many political arguments for the Scottish Parliament to run its own referendum, but the rule of law does not yield to political convenience.
I move on to another constitutional issue: the Supreme Court. This has come to prominence recently because of certain criminal cases in which the role of the Supreme Court has been challenged. Contention has arisen regarding cases involving criminal matters due to some recent cases where an appeal has been made to the Supreme Court on human rights points from the Criminal Court of Appeal in Scotland. In those high-profile cases, the Supreme Court has overturned the Court of Appeal decisions. This has precipitated much debate, not least because of wholly inappropriate criticism of the Supreme Court by the First Minister and the Justice Minister in Scotland.
This Opposition agree that the UK Supreme Court should retain its sole role in determining human rights and European treaty issues. Section 17 of the Bill, however, seems to create a number of obstacles to the speedy testing of compatibility issues. We will want to scrutinise these closely in Committee. One concern is that where Scottish procedures contain an incompatibility, some such obstacle may simply defer and hence magnify the difficult consequences of any finding of incompatibility. The Minister will of course be acquainted with the problems that arose over the slopping-out cases in Scotland and the way in which delay can magnify problems. The Scotland Act 1998 permits a challenge to be made at any stage, thereby potentially avoiding the entire criminal process being run through, where there is an incompatibility discoverable by early challenge.
Another concern is that, in respect of the certification of leave to appeal, Scottish devolution issues will be subject to an obstacle that does not apply to either Welsh or Northern Irish appeals on devolution issues. This seems to be creating an anomaly, and I look forward to hearing the explanation for it.
The apparent fortifying of the position of the Lord Advocate in that regard will also require scrutiny. It is presumably not the intention of the Government to erode the access to justice by persons prosecuted in Scotland. As a member of the legal profession, the Minister will be aware of the considerable disquiet that the Bill has caused in the profession in this area.
The Minister is also one of the many law officers required to look at Scottish arrangements. I move on now to look at the question of Scottish law officers. One of the notable constitutional features of the Scotland Act 1998 was the substantial role given to law officers in Scotland—namely, the Lord Advocate and the Solicitor-General. As part of the Government in Scotland, they are Ministers and bound by collective responsibility. The Lord Advocate—this is the unusual feature—is also the head of the system of criminal prosecution and may in fact lead any prosecution in court, make decisions directly on any part of any prosecution and make the decision on what plea in any prosecution may be accepted. These are wide-ranging responsibilities for a Minister, as I think this Minister would accept, and are increasingly seen as powers that do not belong as part of the responsibility of Ministers.
Having been appointed myself in the past to the position of Solicitor-General in Scotland, I was immediately struck by the tension between the roles of politically appointed Minister and prosecutor. It appeared that there had been no assessment of why Scotland did not have the equivalent of a Director of Public Prosecutions appointed by an open and objective process. When the Minister was Justice Minister in Scotland, he described the role of the Lord Advocate as both prosecutor and Minister as anomalous, and he was right. He would remain right if he were still of that view today.
Over the past decade, law officers have increasingly eschewed involvement in political issues. First the Solicitor-General, then the Lord Advocate, and now both law officers, have been drawn from the Civil Service staff of the prosecution service, a de facto if not de jure Director of Public Prosecutions. Given the awareness of the anomaly in having prosecuting Ministers and the desire on their part to avoid political association and political responsibility, this Scotland Bill is surely an opportunity to remove the anomaly.
The issue also contains within it the risk of yet further human rights challenges to the conduct of prosecution in Scotland, which has been somewhat embattled of late. The Government might consider modernisation of the position. This is not merely a desirable adjustment. It raises profound issues as to the constitutional position of the Scottish prosecution system.
Another feature of the constitutional arrangements under the Scotland Act I wish to look at is the position of the Auditor-General, who examines the economy, efficiency and effectiveness of Scottish Ministers discharging their functions. In the light of the trend to give greater financial powers and responsibilities to Scottish Ministers, the Auditor-General is likely to have, and certainly should have, a role of greater importance in scrutinising ministerial expenditures. A clearer, more transparent view of the Auditor-General’s responsibilities might be helpful. It is hardly good government where the auditor is powerless to act when he is aware of proposed unlawful or wasteful actions, involving expenditure of public money. We suggest that this is an area which calls for clarification of powers and we may look at this more closely in Committee.
I move on to taxation. Part of the statutory purpose of the Bill is to create greater financial responsibility and accountability in Scottish Governments. The Bill sets out a Scottish rate of income tax. One understands and welcomes the purpose, but we will wish to examine in Committee the scheme of taxation proposed. One notes, for example, the provision that envisages the Scottish rate of income tax being set each year by resolution of the Scottish Parliament. In a sense one is familiar with such a process in annual UK Finance Bills. But one is also familiar with the potential for disruption to business and to the economy more generally where substantial shifts in taxation occur.
Some questions arise. What consequences do the Government foresee from this transfer of fiscal power to the Scottish Parliament? What costs to business will result? What greater administrative burden will the transfer impose on business in Scotland? Is the tax base in Scotland sufficiently resilient to absorb the use of income tax for the budgetary purpose envisaged? What problems do the Government foresee in respect of the residence definitions, and the checking of days spent in Scotland by those who may work or reside in more than one part of the United Kingdom? We consider scrutiny of these issues in Committee to be necessary.
In conclusion, I repeat the welcome that we gave to the principles guiding the Bill. However, it should be clear that we consider that this Bill should not miss out the areas where the experience of more than 10 years of devolution shows a need for constitutional clarification, at least. We look forward to examining the Bill and its various amendments in Committee.
Lord McCluskey
My Lords, I declare an interest, and not a patrimonial one. The First Minister of Scotland asked me and three distinguished lawyers to look into the relationship between the Supreme Court and the Scottish criminal courts. That of course followed the somewhat acrimonious debate which the noble and learned Lord, Lord Davidson, has just mentioned. The review group’s report will be published in a few weeks, perhaps less, and I hope that the Government will take notice of what we recommend.
However, when addressing your Lordships, I speak entirely for myself and not on behalf of my review group. I had intended to speak for between 20 and 25 minutes with plenty of forensic flourishes, as your Lordships would expect from an aged lawyer, but over coffee the noble Lord, Lord Hughes of Woodside, persuaded me that four or five would go down very well. Despite being a lawyer—bearing in mind that I am an unpaid lawyer of course—I shall try to be as brief as I can, and I shall concentrate on the one issue on which I can claim a degree of expertise. However, Clause 17 is a matter that will need to be looked at very carefully when we come to Committee, as both previous speakers have intimated.
Judicial decisions on human rights issues that have aroused public debate over the years have included the right to slop out, mentioned by the noble and learned Lord; the right of prisoners to vote; and, going back some years, the duty of the British Government to pay compensation to IRA hooligans, and their relatives, who had sought to murder a large number of people in Gibraltar. These decisions follow a kind of pattern from the court in Strasbourg, but ever since the Human Rights Act came into force in 1999, these decisions have been taken in this country. It is our own domestic courts that apply the human rights law in our domestic circumstances and in particular in Scottish criminal trials. Some of the decisions in those cases mentioned have caused enormous problems for the Scottish prosecution system.
The jurisdiction of the Judicial Committee of the Privy Council, created in 1998, has now been passed to the Supreme Court, which has taken some of the more recent decisions. As has been said, the debate about the Supreme Court was couched in offensive and unparliamentary language, and I totally and utterly deplore that. However, I shall confine myself to the merits of this particular clause, Clause 17. As has also been said, we are not just legislating about a case or two, an insult or two, or a judge or two. We are legislating about a system that will probably endure for decades, so let us please concentrate on the principles and let us try to get it right this time.
The decision to create a right of appeal from the High Court in criminal cases, for the first time since 1701, was enacted in the Scotland Act 1998. The system that was set up was inserted into that Act as if it were a necessary by-product of devolution. In my view, that was clearly a mistake. The creation of a non-Scottish court with final say on the interpretation of the European Convention on Human Rights listed in the Human Rights Act 1998 for the Scottish criminal courts was necessary, but had nothing to do with devolution. I accept that there was a need, flowing from the new devolution system, to have a United Kingdom supreme court with a jurisdiction relating to the vires question: that is, the possibility that the Scottish legislature and Executive might exceed the limited and well-defined powers that were conferred and devolved to them under the Scotland Act.
We talked about this question of vires in 1978, when I had the privilege of helping to conduct the 1978 Bill through this House, and we reached certain views then about the need for the Judicial Committee of the Privy Council to look into these matters, which have nothing to do with human rights. As a consequence of devolution—I emphasise these words—there was no need to give the Supreme Court or its predecessor any right whatever to be involved in criminal cases except in relation to vires, and possibly in relation to defining the law.
Therefore, while I accept fully that legal disputes regarding vires must go to the Supreme Court and must be appealable to the Supreme Court—I have no quarrel with that because these are truly devolution issues—the decision to make the European Convention on Human Rights part of our domestic law was entirely separate from the matter of devolution and should not have been dealt with in the Scotland Act at all. It was an accident that it was, and probably came about because during the passage of the Bill it became plain that it was not going to come into force the same day as the Human Rights Act. A temporary expedient was invented and it went into the Bill without proper scrutiny of any kind.
The Human Rights Act 1998 imposed duties on all public authorities to act in accordance with the human rights in the convention. However, the public authorities included such people as the Attorney-General, the Director of Public Prosecutions, the police and the Lord Advocate, whether or not they were devolved persons. The Attorney-General was plainly not devolved, and nor was the DPP, but the duty was imposed on them, too. The acts of the Lord Advocate, in exercising what are properly called his retained functions—the functions, mentioned by the noble and learned Lord, of being in charge of prosecution and investigating deaths in Scotland—are, as they have always been, functions of a very special character. The Lord Advocate shares no responsibility with his fellow Ministers for his or her decisions in relation to these matters. There is no collective responsibility either way.
Therefore, it was constitutionally inept to do what was done by the Scotland Act 1998—to ask the courts to treat the acts of the Lord Advocate in exercising his retained functions as though they raised devolution issues. That was precisely what the Act did. I borrow from the expert report of Sir David Edward, which was mentioned by the noble and learned Lord the Advocate-General. I think the noble and learned Lord, Lord Boyd of Duncansby, was a member of that group. It got it absolutely right; it was constitutionally inept to do what was done. Sadly, however, I fear that what is now contained in Clause 17 is also constitutionally inept and seriously flawed. That is a matter on which I shall not detain your Lordships in any detail this evening. We can look at it in detail in Committee.
Let me just hit the main points. First, the new section still focuses on the acts of the Lord Advocate. There can be happenings, events and circumstances in the course of a typical trial that cause a breach of someone’s human rights. However, they can be nothing to do with the acts of the Lord Advocate. They may be in spite of the acts of the Lord Advocate. The committee that I sit on could offer some examples of that. Not every incompatible act that happens in a criminal trial is an act of the Lord Advocate. It might be an act of the police, the Prison Service or the court itself. As far as I know, the Bill provides no route whereby breaches of human rights in criminal proceedings by persons other than the Lord Advocate can be brought to the attention of the criminal courts. That is a serious lapse.
I must also ask why it was necessary to give the Supreme Court extremely wide powers, as the proposed new section does in Clause 17. They are listed in new Section 98A(9). All that is necessary is for that court to define the convention law applicable, define the right, say whether there has been a violation and send the case back to the High Court of Justiciary to allow it to do what it has been doing since 1701 and apply the law to the facts and circumstances of the case in hand. In other words, that method of proceeding would enable the historical independence of the Scottish criminal justice system to be preserved.
There is also a question, which I shall not go into in any detail, about the procedure that is to follow this change. At the moment it is a rather complicated procedure. It is very messy, with lots of paper. It looks as though the new section will result in just a change of paper; otherwise it will be equally messy and equally likely to cause the delay that the noble and learned Lord mentioned.
I also touch on certification. No criminal case can go to the Supreme Court on a human rights issue in England, Wales and Northern Ireland unless the “local” apex court grants a certificate to say that a point of law of general public importance has been raised. Curiously enough, although the High Court of Justiciary has been the apex court for Scotland for centuries, the Scotland Act, in seeking to devolve power to Scotland, not only created a right of appeal for the first time in nearly 300 years but did not give the High Court of Justiciary the same right as is enjoyed in England, Wales and Northern Ireland. Why the court in Scotland should not be trusted to rule on this matter, I do not profess to understand.
In conclusion, the correct approach to this whole matter is to identify the true role of the Supreme Court in light of the Human Rights Act. The expert group, with whose conclusions—but not the consequences in the Bill—I agree, recommended that the legislation should,
“make explicit, and put beyond doubt, the nature and limits of the jurisdiction of the Supreme Court in relation to criminal proceedings … in Scotland”.
It goes on to say that the new,
“statutory formulation should be such as to concentrate attention on the compatibility with Convention rights of the criminal proceedings as a whole”.
Therefore, my final point is that I agree with this approach, which Clause 17 fails to adopt. The words “as a whole” are key to the matter. Respect for the historical role of the high court in Scotland is an abiding principle that should be observed unless there is some powerful reason to depart from it. I hope that in the course of these debates we can persuade the noble and learned Lord the Advocate-General to persuade his colleagues that this approach should be adopted. I certainly hope to return to this matter in Committee.
Lord Forsyth of Drumlean
My Lords, it is a pleasure to follow the noble and learned Lord. I very much agree with what he said about the intemperate nature of the attacks that were made on the judges by the First Minister of Scotland. All I can say is that when I was Secretary of State, I made the odd intemperate attack—on the noble and learned Lord, actually—but had I done what the First Minister did, I am sure I would have been sacked the next day. I hope that lessons have been learnt from that.
I hope I shall not damage the position of the noble and learned Lord, Lord Davidson, by saying that his speech was absolutely excellent and that I agreed with many of his points. I shall come to that. However, because of the ridiculous position in which we find ourselves, I shall concentrate, for reasons of time, on Part 3 of the Bill, which is concerned with taxation. My noble and learned friend has said that this will bring accountability to the Scottish Parliament.
I am sorry that the noble Lord, Lord Robertson of Port Ellen, is not here. I have great affection for the debates that we had about devolution. I was opposed to it; he was in favour. He told me that devolution would kill nationalism stone dead. I have to say that the Bill looks curiously out of time. The world has moved on. We all know what the genesis of the Calman commission was. Wendy Alexander quite sensibly suggested that we should cut the Gordian knot and have a referendum on independence once and for all—that we should take the nationalists at their word. Unfortunately, she was not supported by the Prime Minister, so the three unionist parties got together and set up Calman in the hope that it would halt the nationalist bandwagon. That has not quite worked out. We now have a nationalist Administration without, it seems, any check or balance on it. The architecture of the electoral system under the Scotland Act, which was to prevent any party gaining dominance, has failed. We now have a nationalist Administration determined to use all the resources of the Scottish Office to break up the United Kingdom and pretending that it is in favour of an immediate referendum.
When my noble and learned friend says that the income tax powers will bring accountability, I very much doubt it. I give noble Lords a tale of woe as an example: the poll tax. We introduced the poll tax; it did not work out terribly well for us. The argument was that it would bring accountability to local government. The problem was that the proportion of the revenue that was raised, as with the rating system, was small. Therefore, to get a relatively small increase in resources there had to be a huge increase in the level of poll tax. That was the fundamental flaw. The idea of accountability is the same as the case that the Minister makes for income tax. I noticed that in his speech he said that a penny on income tax would raise £450 million.
Let us be clear about this: we are not talking here about the 3p variable rate on the basic rate of income tax. The Bill abolishes that, even though it was agreed by the Scottish people in a referendum, as I indicated earlier. We are talking about introducing, for the first time, a Scottish income tax that will apply at the basic, intermediate and top levels. The Minister said that £450 million was 1.7 per cent of the Scottish Budget. On my calculations, if we take £450 million as the product of that, a 5p increase in the Scottish income tax rate would give you an 8.5 per cent increase in the Budget, so to get 8.5 per cent more money you would have to increase the basic rate of income tax by a quarter.
The stoppages in most people’s pay packets would go up by a quarter in order to increase the Budget by less than 10 per cent. That is disastrous in an environment that has changed, where there is a huge deficit and where the Scottish Parliament was given a year off by the Chancellor and it did not make the necessary deficit reductions. To bring this measure in now seems extraordinary because the income tax proposals suffer from the same gearing problems that applied to the poll tax, the rating system and now to the council tax.
Here, the Government and those who support these proposals have a problem. On the council tax, I think our policy is to freeze it. On the one hand we argue that the Scottish Parliament must have the right to put up taxes in order to have accountability, but in local government this does not apply. We have a new policy that where the council tax is to be increased by more than the rate of inflation, there has to be a referendum of the local people to approve it. I ask my noble and learned friend why that does not apply to the local income tax. Why is there not going to be a referendum first of all on the principle of having this? My noble and learned friend says that there is a consensus in Scotland and that everyone agrees with this. I wager that if you stop three people in the streets of Edinburgh and tell them that a Bill is going through Parliament that could put their income tax up by a quarter in order to increase expenditure by less than 10 per cent—or, in this case, maintain expenditure—
Lord Wallace of Tankerness
First, I point out to my noble friend that it was in the manifestos of three parties at the last UK general election and endorsed. It is not intended that these powers will be made available next year in the midst of a recession. My noble friend must remember that the power to put tax up is also the power to bring tax down. Therefore, the question he is putting to the three people in Edinburgh is wrong on so many points.
Lord Forsyth of Drumlean
My noble and learned friend has been here too long if he thinks that the electorate reads the manifestos of the political parties and bases its votes on that. As for the point that the power could be used to bring tax down, the Government are asking the Scottish Parliament to find deficit reduction expenditure of about £3 billion. On my calculations based on his figures, that would amount to a 7p increase in the rate of tax just on deficit reduction. While we are on the subject of Calman, my noble and learned friend says that it is not being implemented now, so that is all right because it will be not in his term of office but in 2016; someone else will have to explain the consequences of this policy.
My noble and learned friend says that the deficit will have been dealt with by then. He cannot have it both ways. He has told us that there is a great consensus for Calman. Calman says that we should move to a needs-based system of funding for the Scottish Budget. Furthermore, from the work of Professor Bell and others we know that that would result now in a reduction of £4.5 billion in the Scottish Budget, which is a lot to find in income tax. That is the Government’s policy for the longer term, so we are going to have to have a higher rate of income tax in order to stay exactly where we are. I do not think that this has been thought through.
There are very few things that I agree on with the First Minister, Alex Salmond, but when he says that you cannot run an economy on a narrow tax base like income tax and that you need to have wider tax powers, he is correct. I am against having wider tax powers for the reasons that I will give shortly. I say to my noble and learned friend—and I will table some amendments in Committee—that he should consider whether it might not be right to have a referendum before these proposals on income tax can be implemented and, certainly in line with our policy on local government, to have a referendum if the Scottish Parliament chooses to set a rate of income tax that is higher than it is for the rest of the United Kingdom.
There is another aspect of taxation in this Bill that absolutely terrifies me; it gives the Scottish Parliament the power to invent new taxes altogether with no reference to anyone—not to the voters or to anything else. My noble and learned friend is shaking his head. Am I wrong about that? If they decide to introduce a local income tax, which is their declared policy, as I thought on these Benches—I am not sure what the coalition Government’s position is on local income tax, but the Conservative Party has always been opposed to local income tax because we would have all the problems that we have just been hearing—we could be faced not only with having the highest rate of income tax in the United Kingdom but with having a local income tax on top of that. I see that my noble and learned friend is reading the Bill. I hope he realises that the Bill actually provides for the creation of new taxes. It specifies particular taxes in respect of land and landfill.
On top of all that, we have powers of borrowing, which are described as positive—and here I did disagree with the noble and learned Lord, Lord Davidson. I think that the Scottish Government must be the only Government legislating on the planet that thinks that now, with a huge financial crisis and huge economic problems, is the moment to have higher taxes and higher borrowing. That is what this Bill provides for. When my noble and learned friend says that the powers might be used to cut taxes and cut borrowing, what planet is he living on? I do not know a single serious politician looking at the Scottish Budget, at the problems and at all these goodies that the nationalists have provided—such as free prescriptions, free healthcare and free transport, all of which are desirable but none of which are affordable—who could believe that the result of these powers would not be that Scotland would become the most highly taxed part of the United Kingdom. As the noble and learned Lord said, at the moment Scotland is suffering the worst rate of growth and the biggest threat to employment in the public sector because of the size of the public sector. It just seems plain daft to do this.
Having dealt with taxation, I turn to the issue of referenda. I see that the Bill has sections on elections, on presiding officers, on deputies, on the Supreme Court, on Members’ interests and even on Antarctica. I am delighted to see that Antarctica is not going to be in the province of the Scottish Parliament, having spent my Christmas there. Every corner of the world is covered except vires on referenda, which is the central issue in politics today in Scotland.
Why have the Government not taken the opportunity to clarify the point made by the noble and learned Lord, Lord Davidson? It is perfectly clear to me, from reading the previous Scotland Bill, and as the noble and learned Lord pointed out, that the Scottish Parliament does not have the power to run a binding referendum on the issue of independence for Scotland. The Scottish Parliament now has a majority of Members who are committed to doing so. We know that there is going to be a referendum. How can it be in anyone’s interests not to ensure that that referendum is held on a proper basis with a proper campaign and with proper notice? Why on earth are the Government dealing with every other issue, including the name of the Government, but not dealing with the central issue, in my view, and providing the machinery for a referendum on independence? Of course, I am a bit of an extremist on some of these subjects, so I would prefer the Bill to say that the referendum is to be in October next year, because I think that it is deeply damaging to have this uncertainty.
Lord Forsyth of Drumlean
A fixed-term referendum, as my noble friend says. Of course, I have always been a person who has sought out consensus, and I see no objection to putting the machinery in place. Then the First Minister can decide whether or not to use it. In my opinion, he will be absolutely terrified to use that machinery because he knows that he will lose. Then we can get on to discussing the real business in Scotland, which is how we are going to deal with the reduction in the public sector, the creation of jobs and the protection of services. To be fair to my noble and learned friend, the May election was a surprise, so the Government may not have thought of this and there is still time for him to come forward with amendments that reflect the new political reality.
I have one other point about my reading of the Bill that may interest your Lordships. The Bill is ludicrous because of its income tax powers. It creates non-doms within the United Kingdom. I thought, “Am I a Scottish taxpayer or not?”. There are conditions A, B and C, which are a hugely complicated set of proposals. The Bill states that if you have a property in Scotland and a property in London, which I have, you have to count up the number of days for which you stay in each property to decide whether you are a Scottish taxpayer. Then I read another bit that states that if you are a Member of the House of Commons, a Member of the Scottish Parliament or an MEP, whatever the number of days you are automatically up for the Scottish income tax. There is no mention of the House of Lords, so the good news is that Members of the House of Lords will be able to become non-doms if they spend more time in London than in Scotland. Who writes this stuff? Are we all to be counting our days? Wait for it. The Bill also states that the Scottish rate of income tax will not apply to you in respect of dividend or savings income, so the good news is that Scotland will be a great place to retire, because if you have only dividend and savings income you will not pay the tax. If you want to set up, grow or expand a business, go to England. What sort of message is that to send to people who are concerned about our economy in Scotland?
I understand the politics of the Bill, but why are we giving the Scottish Parliament the power to have a different speed limit from that in England, or a different level for drink-driving? What is life going to be like in the Borders? You cross a bridge and suddenly you are illegal. Are you allowed two drinks or one drink? I am no great Euro fanatic, but if anything, I would say that we should have a common European view on speed limits and drink-drive limits if for no other reason than that everyone would know what they are. The idea that we should change it in Scotland and have something different in England only adds to bureaucracy and confusion and is being done for political reasons. I do not know anyone in Scotland who says, “We really ought to be able to decide our own speed limits, and it is an absolute scandal that we have to be stuck with what is being decided by Westminster as to the number of drinks that we can have in the pub before we go off in a car”.
In conclusion, I am not really very happy with the legislation. I am not happy that we have had no time to discuss it. I look forward to an extended and interesting Committee.
Lord McConnell of Glenscorrodale
My Lords, I suppose that the starting phrase should be, “Follow that!”. In any debate on the constitutional position of Scotland, my starting point is what is best for the people of Scotland and what is best for Scotland—not what is best for the coalition Government, the Labour Party or even the union, but what is best for Scotland and the people of Scotland—whether it is best to be inside or outside the United Kingdom or, indeed, the European Union.
For me, devolution for Scotland, and for Wales and Northern Ireland within the modern partnership of nations that is the United Kingdom, is indeed the best arrangement for Scotland and for the people of Scotland. That is why in my very first vote I cast a yes vote in the 1979 referendum that the noble and learned Lord, Lord McCluskey, mentioned earlier. That is why I campaigned through the 1980s and 1990s and was involved in the convention that the Minister mentioned in his introductory remarks, and why I stood for the Parliament and had the pleasure of serving with my noble and learned friend—I call him my friend even though he sits on that side of the House—as First Minister and Deputy First Minister in that Parliament.
Do I believe that the Scottish Parliament has done everything right in the 12 years since 1999? No, of course not; no Parliament does everything right. Do I believe that the Scottish Government or all First Ministers have done everything right? No, of course not. All Governments and First and Deputy First Ministers will make mistakes from time to time. But is Scotland a stronger and a better place? I would argue that, yes, it is. Did we survive and indeed build on the electronics manufacturing meltdown in the late 1990s to ensure that our economy's growth rate matched that of the UK by 2007? Yes we did. Did we reverse the brain drain that the Minister mentioned in his introductory remarks and increase Scotland's population after years of decline? Yes we did, through policies pursued in the Scottish Government and the Scottish Parliament. Did we lead the rest of the UK in the smoking ban? Yes we did. Did we reform Scotland's land laws and criminal justice service? Yes we did.
Devolution has made Scotland a stronger and better place, but after 12 years it is right to review the settlement agreed by referendum and by this Parliament back in the late 1990s. Was Calman the right way to do that? I think, on balance, yes. I am not a great fan of committees of the great and the good or of trying to seek consensus for the sake of consensus, but on the issue of the constitutional position of Scotland within the United Kingdom I think that the attempt to find consensus and the way in which that was done was broadly the right approach. Do I believe that the proposals have merit? Yes. Initially, I was not convinced by the report of the Calman commission, but over time I have become persuaded that most of the proposals have merit. Are they perfect? Of course not, but I do not believe that perfection should ever be the enemy of progress, as has been said by others more eminent than me.
Do I believe that the Bill deserves scrutiny? Yes, I do, but I also believe that it will ultimately deserve support. It contains proposals that are both radical and reasonable. I will come to the radical ones in a second. Although some of the initial proposals may irk the noble Lord, Lord Forsyth, I believe that, subject to the scrutiny that we need to give them, they will ultimately be supported by this House and Parliament. I am sure that they will lead to sensible decision-making in Scotland and therefore deserve a fair wind.
On finance and taxation powers, the original tax power was conceived at a different time and in a different economic climate. Like the electoral system, it was part of a settlement designed to secure the progress of devolution. The power to increase income tax by plus or minus 3p in the pound has never been used. That is partly because the parties who would have used it lacked the courage to do so. The nationalists lost an election in 1999 because they proposed to use it by increasing income tax and never made that proposal again. I would argue that one reason why the Scottish Conservatives have been in the doldrums since then has been that they have never been brave enough to propose to reduce income tax in the Scottish Parliament. That power has now become redundant because the political parties in Scotland have never felt that it was an appropriate use of the powers of the Parliament.
Lord Forsyth of Drumlean
One of the reasons it has not been used is because, when I was Secretary of State, the budget was about £14 billion. It is now about £30 billion. That was a period when there were vast amounts of money coming in. We are now in a period when the opposite is happening.
Lord McConnell of Glenscorrodale
I was just coming to the issue of the increase in the budget. In the mean time, the budget has increased from about £10 billion when I was the first Finance Minister to about £30 billion. A broad consensus has developed in Scotland over that time that there is not enough responsibility for spending in the Scottish Parliament and the Scottish Government and that there is a need to change taxation powers—the way that the Scottish Parliament receives finance and that the Scottish Government raises finance—to ensure greater accountability of decision-making.
I was not initially convinced by the proposal in the Calman commission but I have become convinced that it could indeed be workable and improve the governance of Scotland. As the noble Lord, Lord Forsyth, has just said, it is wrong to argue that the Scottish Parliament, perhaps alone among legislative parliaments in the world, is not fit to set taxes. As long as a parliament is held accountable for its decisions, it should be free to set some taxes. That opportunity in the Scottish Parliament would lead to more responsible decision-making than has perhaps been exhibited at some times over the last 12 years.
This power is also fundamentally different from the imposition of the poll tax back in the late 1980s. The difference is that income tax is income related whereas the biggest problem with the poll tax was not its gearing—although that was an issue—but the fact that it was correctly perceived to be unrelated to income and provoked a reaction and civil unrest across the country.
We should test the proposal here. The noble Lord, Lord Forsyth, made some important points about the need to test the detail. In my view, the principle is right. The Scottish Finance Minister having to set a budget every year and make a decision to raise taxes would enhance accountability and responsibility in the devolved settlement. However, since the Calman proposals have come forward—
Lord Reid of Cardowan
I agree with almost everything that the noble Lord, Lord Forsyth, said—which must be a first. On this point, I am inclined to agree with my noble friend the former First Minister. The reason that the 3p was originally introduced, in about 1980, into our plans for devolution was precisely in order to meet the requirement that a parliament—or an assembly, as it was then called—should not be able to spend endlessly without any obligation to raise its own tax, in answer to the electorate. The reality is that in all of the prior period since the formation of the Scottish Parliament, and precisely because there has been an increasing budget, there was no obligation in practice for it to do that. We may be in a different position now and the question is simply whether we should have a parliament that is allowed to spend tens of billions of pounds but has no obligation whatever to raise any of it or to answer to the electorate for raising that tax.
Lord McConnell of Glenscorrodale
I thank the noble Lord, Lord Reid, for that point. It reinforces the argument I am making.
The context in which the Bill is now in front of Parliament has changed since the Scottish election result in May. I would argue that a referendum on Scottish independence is now almost certainly going to happen—I suspect in around late 2014. The next three or four years will be very uncertain for those who want to invest in Scotland as well as for the people of Scotland more generally. At the moment, one side has the absolute power to shape the terms on which that referendum will take place. Unfortunately, it is also true that only one side is even in the park playing in this match.
The Scottish football team had another disaster at the weekend. We have learned in Scotland regularly to take an approach after these games of, “We were robbed”. We are in grave danger here of having a referendum campaign in which, afterwards, potentially a majority of the Scottish population suddenly realise that something has happened and feel, “We were robbed”. It will not be good enough for the mainstream political parties in the UK and other organisations to adopt that “We were robbed” approach afterwards. To use a wider analogy than Scottish football, we cannot give the pacemaker so much of a lead that we end up having too much to do on the last lap in the referendum campaign that will take place between now and, I suspect, 2014.
I believe absolutely that the best future for Scotland is as part of a partnership of nations that is the United Kingdom—not some 1950s Britishness that is part of our honourable and respected past but a modern, 21st century arrangement that is modern, multicultural, multinational and has a different vision for the United Kingdom and for Scotland itself. Some decisions are right to be made at the United Kingdom level and some are right to be made in Scotland. There is a fundamental choice between that vision and that of independence for Scotland. That is a once-in-a-lifetime choice and, perhaps even at this stage in the century, a once-in-a-century choice. It should not be taken lightly.
Scots deserve a full debate on this, in which both cases are positively put and clearly explained and the result is a clear resolution of the debate once and for all in our lifetimes. Those who support the alternative vision to that of the nationalists are in grave danger of sleep-walking into an irreversible decision. It is incumbent on political leaders, the business community and the civic Scotland that supported devolution 15 years ago to rise to this challenge by coming together to put forward a positive vision—not a fear of the alternative—of where Scotland can be in the 21st century. If we do that, we can make a decisive decision about that future that leads to a more prosperous and successful Scotland with devolution inside the United Kingdom and not the dramatic implication that would come from a decision to go independent.
Lord Maclennan of Rogart
My Lords, as the first Member of your Lordships’ House contributing to this debate who has not held a ministerial office peculiar to Scotland, perhaps I may be forgiven for beginning by raising a question on the impact of the Bill in the wider constitutional context of the United Kingdom. If the Bill is to be a success it has to face up to the needs of balancing equitable distribution of our resources with devolved autonomy. The Calman commission did not attempt to do that. I defer to the five members of the commission present in the House today but it dealt with Scotland. In the very changed political circumstances that we face today, we cannot simply confine our discussions to those issues.
The financial austerity that we currently face in this country puts pressures on our constitutional arrangements which could lead to a fissiparous consequence—one certainly never considered likely when Calman sat and even less likely when the Scotland Act 1998 was considered. It follows that we must consider not only whether Scotland is being fairly treated with respect to other constituent parts of the United Kingdom such as Wales or Northern Ireland but also focus on what the consequence of the specific measures in the Bill—I do not intend to go into them in detail today because we shall have a plenitude of opportunities in Committee and on Report—will be upon the sense of well-being of our citizens. That is something rather different from the sense that they are masters of their own destiny. Both are requirements.
The consideration of the matters in the Bill is also enlightened by reference to another commission which has not so far been referred to in the debate. I refer to the Holtham commission on Wales. There are differences of approach in the report of that commission which should be considered in the context of what we are doing for Scotland. One of the reports from the House of Lords Select Committee on the Barnett formula stated:
“On every funding decision the Treasury is judge in its own cause”.
I have to ask whether anything in the Bill really alters that. We need to recognise that in this carving up of the resources of the country the Treasury voice is strong. In the intergovernmental arrangements I hope that the Scottish voice will be strengthened and also that the voices of other parts of the country will be heard in these deliberations as well as the voices of other devolved governments.
There are some matters to which the Bill, as I have read it, does not refer although I am not yet a master of it. For example, the Treasury controls the year-end flexibility of expenditure. Is that a satisfactory arrangement? The limitations of revenue-raising which will flow from the Bill will be substantially reduced upon the present situation. That is welcome. However, I am bound to say that in the current circumstances I have a strong inclination to agree with my noble friend Lord Forsyth about the likely way that this power will have to be used. It is hard to believe that in the austere circumstances in which we live—it is optimistic to believe that in five years’ time we will have completely resolved our current economic problems and that circumstances will have changed—we can foresee cuts in public spending.
It is somewhat surprising that the opportunity has not been seized to go for a system which distributes the central government grants more fairly. The Holtham committee in Wales and our own House of Lords Select Committee on the Barnett formula both indicated that that could be done without enormous difficulty. Without addressing that—and of course it has been deliberately excluded from the discussions—we are not looking at the economic situation of our United Kingdom in the round and we will create growing discontent with which I think it will be hard to battle. I am not suggesting that the Bill should have in it a formula in place of the Barnett formula, but I am suggesting that serious consideration should be given to the many views that have been expressed in academic circles, such as those of Iain McLean and a number of other very careful voices, as to how this should be tackled. Postponement will not cure the growing sense of injustice.
The extension of fiscal autonomy, which the Calman report recommends, does not go even half as far as we see in a number of other federal countries. Australia, which is one of the more centralised federal systems, has up to 55 per cent of its spending raised by devolved governments, so we are not actually doing something which is profoundly revolutionary when viewed in a global context. Other federal countries have even higher proportions of locally raised expenditure. But if we are going to do that we have to accept the consequences of the lower tax base of certain parts of our country and we must come up with equitable solutions to these problems if we are not going to a see a deepening of disquiet and discontent in the poorer parts of our United Kingdom.
There are many other matters that are worthy of deep consideration, but I will confine myself to what I think is intended to be the central issue of the Bill. I refer to the economic balance and the change in the direction of responsibility. My noble friend Lord Forsyth had a number of very good points to make about the sense of responsibility and the limits that the Bill has imposed on the process. I hope that in the time which will now elapse before we get down to considering these things in detail we will look at these measures in the context of the circumstances in which we are considering them, which are very different from those circumstances on which the Calman commission reported.
Lord Lang of Monkton
My Lords, I should perhaps begin by declaring an interest, or rather a lack of interest, in that I was invited, and declined, to serve as a member of the Calman commission. I have no regrets about that.
The first thing to be said about this Bill is that it is an admission of failure. It will solve nothing and it will endanger everything. Its arrival underlines vividly the shortcomings and the dangers that were always intrinsic in the other Scotland Bill of over a dozen years ago. Then we were presented with what the late Donald Dewar claimed to represent “the settled will” of the Scottish people. It was to herald a new age for Scotland. And now we have before us another Scotland Bill. Another Secretary of State hails it as the settled will of the Scottish people, and another new dawn beckons.
My Lords, I was present when we debated that Bill in this House, and my heart bled for Scotland, as I warned then that it was a Bill that I believed would break the back of Britain. I derive no satisfaction from seeing that prediction heading towards fruition. It is sometimes more painful to be proved right than to be proved wrong, but I believe that the new Bill represents one more fracture in that inexorable process. The “settled will” is looking distinctly unsettled.
Now, of course, the settled will has become an ongoing process, and an accelerating one. Does the Labour Party still believe that devolution will “kill separatism stone dead”? Surely not. Has it brought Scotland peace, plenty and contentment, even from the cornucopia of Mr Brown’s borrowings and Lord Barnett’s formula? Before the Act the Scottish National Party had almost no Westminster MPs and only a sprinkling of Scottish local councillors. Now, through the Scottish Parliament, it has overall control in Scotland.
One looks in vain for provisions in the Bill that might actually improve Scottish government, popguns and penguins notwithstanding. But the Bill will not work, firstly, because its powers will fall into the hands of the Scottish National Party, whose core objective is the opposite of this Government’s. To pander to the nationalists has the same effect as paying Danegeld. Even as we debate this Bill, they seek to double their demands. The Bill offers them the chance to raise income tax, but they now want corporation tax as well, and capital gains tax, and excise duties, and fuel duty, and quarrying, and mining, and air travel, and, for good measure, the Crown Estate’s Scottish revenues. We can be sure of one thing: they do not want to control all of these taxes in order to reduce them. My noble friend Lord Forsyth made that point in his very telling speech on the tax issues.
But yet another burden looms. Over the past decade, United Kingdom public spending, which determines the level of the Scottish block grant, has grown faster than Scottish income, which of course determines the revenue from income tax. UK public spending, of which Scotland has received its share and more, has grown by 94 per cent in 10 years, but Scottish income by only 48 per cent. Therefore, when the new Scottish income tax replaces part of the block grant, it seems that it will have to be raised above the United Kingdom rate for Scottish public spending just to stand still.
I accept, of course, that the Bill attempts to address the accountability issue—the worst shortcoming of the 1998 Act. Just as in the eurozone monetary union cannot work without fiscal union, so with devolution responsibility for spending is untenable without responsibility for taxation. However, here, too, the Bill will not work because, although it proposes to increase to 35 per cent the proportion of expenditure raised by the Scottish Parliament, the remaining 65 per cent will still come from the Treasury’s block grant, so the Scottish Parliament will still be able to blame Westminster for starving it of funds and freedom. It raises another problem, touched on by my noble friend, which is that of gearing. Anyone familiar with local government knows that, where the bulk of its budget comes from central government and that amount does not increase, the whole burden of any spending increase must fall on the local tax base—so with Scottish income tax. With the 35:65 split between Scottish tax and block grant, if the Parliament wanted to increase spending by, say, 5 per cent, Scottish income tax would need to increase for that reason alone by 15 per cent.
The Bill will not work above all because Scotland’s weakened economic base cannot support the spendthrift policies of its Government. When the Barnett bonus of some £4.5 billion starts to disappear in the shake-out of the new tax arrangements, the burden will get heavier and it will fall on a small tax base. We have fewer than 2.4 million individual taxpayers in Scotland—less than half the population. A large proportion of them are either employed by or dependent upon the public sector, where substantial cut-backs are inevitable in response to the deficit and debt crisis. Therefore, an even bigger burden will fall on the beleaguered private sector, yet that is where the only hope for future economic growth is to be found; that is where the spirit of enterprise lies. Enterprise is not a gift of government; it resides in people, not parliaments, and the more Parliament taxes it, the less it can succeed. That spirit has had little chance to prosper over the past 12 years while Scotland has languished under the cloud of what one might now call “Saltire socialism”. In 2009, Scotland, with 170,000 more public sector jobs in just 10 years, was deemed in one survey to be the most state-dependent country in the world after Cuba and Iraq. Presumably they could not get hold of the figures for North Korea.
If income tax is levied in Scotland at a higher rate than in the rest of the UK, as it would have to be, targeting our brightest and most successful entrepreneurs, I foresee, as surely everybody can, a flight of capital, a flight of jobs and a flight of people, and it would be the brightest and the best who would go first. Already the uncertainty alone about Scotland’s future is a major cause of concern to the business community.
So I say again: this Bill will solve nothing and endanger everything. It builds on failure. It offers help and encouragement to those who would destroy the United Kingdom. It will create fiscal confusion and grievance. In seeking to rectify the worst shortcoming of the Scotland Act—its lack of accountability—it will go far enough to alienate Scottish taxpayers but not far enough to enforce accountability, and it will bring with it an accumulation of painful and unforeseen financial consequences. The Germans have a word for it: Schlimmbesserung—an improvement that makes things worse.
I sympathise with my right honourable and noble friends in their dilemma. They inherited an Act that set Scotland on an ineluctable downward path towards separation. They cannot reverse it, but how can they try to slow it down and hope that it may come to rest short of complete break-up? If they do too little, the lack of accountability continues; too much, and the downward slide continues.
To conclude, I suggest that what is urgently needed is an injection of realism into this debate. What Scotland needs now is a dose of “tough love”. The Government —by which I mean the UK Government—should withdraw this Bill and place it on hold in the light of the change of government in Scotland and the determination of the governing party there to use it to advance its separatist ends. They—the UK Government —should hold the independence referendum with which the First Minister of Scotland is toying, and they should hold it soon to remove uncertainty. Before that, they should spell out in complete and unqualified detail precisely what independence would really mean for the people of Scotland.
I do not believe that deep down most of my fellow Scots want to break away, but they quite enjoy having a nationalist Government to fight their corner within the United Kingdom. However, the danger is that step by step we pass the tipping point and, before we realise it, the union is lost. So let us have it all out now: no more pandering, no more fudging. I say to my noble and learned friend: lay it on the line now and let us clear the air.
Lord Sewel
My Lords, here we are again. It seems like only yesterday that we were discussing the Scotland Bill. Over the intervening years, the cast of characters has changed in this Chamber, and I think we can say that it has been enriched, particularly by the noble and learned Lord the Minister, the noble Lord, Lord Forsyth, and my noble friend Lord McConnell. The one sad bit is that I think we all miss the contributions, which we learnt to love and appreciate, made by the late Lord Mackay of Ardbrecknish. His is a voice that will not be heard this time around, unfortunately.
I wish the Minister the best of good fortune in guiding the Bill through your Lordships’ House. I make it clear that I broadly support the Bill, although I hope that we do not spend quite as much time in Committee this time as we did in 1998. I thought that I understood the 1999 Act pretty well inside out but it had passed me by that we had devolved Antarctica. Whether it meant that we could send the noble Lord, Lord Forsyth, on internal exile to Antarctica, I do not know, but at least it is some relief that we have re-reserved it.
There is one thing that I do not understand in the Government’s approach to this legislation. This is undoubtedly a constitutional Bill, as the Minister made clear from the very beginning, so the question arises as to why the Government have sought legislative consent Motions from the Scottish Parliament. The position does not seem to be totally clear because the Secretary of State for Scotland was quoted the other week as saying that the Government would push on with these proposals, even if the Scottish Parliament came out against them. Why have a legislative consent Motion if you are going to do that? Are the Government going to use the “not normally” qualification in the Sewel convention? It would have been a lot better if the Government had said that this is a constitutional Bill and, because of that, it is a reserved matter, although of course the opportunity is there for the Scottish Parliament to express its views and to be involved in the consultation. However, I think that the approach taken by the Government so far is a bit messy.
As many noble Lords have discussed, the Bill has to be set in the wider political context of the debate about the relationship between Scotland and the rest of the United Kingdom, and indeed about the future of the union itself. I do not take the somewhat depressing view put forward by the noble Lord, Lord Lang. There is almost an element of political unreality in discussing this matter in your Lordships’ House, where all the parties represented support the union—with one personal exception. The party that presently forms the Government of Scotland is committed, hook, line and sinker to the destruction of the union and we have to recognise that in the way that we approach and understand the terms in this Bill.
In 1998—I am sorry to keep on harping on about this—I said on one occasion that I was a devolutionist because I was a unionist. That is still my position. I think that the union is of fundamental importance to us all. The union celebrates diversity rather than imposing a stifling uniformity. Having lived in England, Scotland and Wales, I find that it is that sort of union and diversity, that mixture, that creates something rather special about the United Kingdom. It ought to be nurtured, celebrated and preserved.
Why are we dealing with a Scotland Bill a dozen years or so after the original one? Clearly it is sensible to take stock, to see how things have worked out, and to make some common-sense adjustments. I think that that is absolutely right now that the settlement has had time to work and some shortcomings—the very few shortcomings in the original Act—have been identified. Part of the pressure for additional powers has come from those who have argued that devolution is a process rather than an event. Within the United Kingdom as a whole, I hope that it is a process, but whether they want real regional government in England is up to the English to take forward at some stage. In Scotland those who have argued for the process rather than event case have done a disservice to devolution. Where is the process likely to lead? Is it not almost perverse to set in train a line of thinking that makes a major concession to your principal opponents, who want to destroy the union in the first place?
A major disappointment about political debate in Scotland since devolution has been that very few voices have argued the alternative case, that devolution gives Scotland the best of both worlds: the ability to devise Scottish solutions to Scottish problems set against Scottish priorities, while at the same time ensuring that Scotland enjoys the social and economic security of being part of a larger state, together with the greater political influence that that brings. Nowhere is that more the case than in Scotland’s relationship with the European Union, where, because qualified majority voting is the normal system of EU decision-making, it is infinitely preferable to be part of a large member state with a lot of votes than of a small member state with few votes.
There are a couple of areas in the Bill where the Government ought to have seized the opportunity to clarify things. This is particularly the case with vires, which has been mentioned already. In Schedule 5, nuclear energy, for example, is reserved, apart from two exceptions.
Lord Garel-Jones
The noble Lord mentioned qualified majority voting as being the norm, but I am sure that he would agree that an application by an independent Scotland for membership of the European Union, which it would have to make, would need unanimity.
Lord Sewel
Treaties do—a treaty change would require unanimity. In terms of the normal day-to-day policy-making of the EU, it is now virtually all qualified majority voting.
Can I get back to nuclear energy? Nuclear energy is essentially reserved, but the Scottish Parliament—the Scottish Government—is opposed to it, wanting to use, I suspect, their planning powers to prevent it. The issue is whether the use of the planning powers would pass the purpose test on vires which is in the Act. If there is doubt about that, surely this is the opportunity to make it absolutely clear where responsibility for nuclear energy lies. That is a big issue that we are going to have face up to in this country in the very near future.
The second area—the obvious one—is to do with the calling of a referendum on independence. As the Minister knows, that specific issue was a matter for debate both in the other place and here during the passage of the 1998 Bill. Perhaps I may read two quotations. One follows a question that was asked by the then Mr Michael Ancram of Donald Dewar particularly on this point. The Secretary of State replied:
“It is clear that constitutional change—the political bones of the parliamentary system and any alteration to that system—is a reserved matter. That would obviously include any change or any preparations for change. … If one assumes that that is a way of changing the constitution, no, it is not in the power of the Scottish Parliament to change the constitutional arrangements ... A referendum that purported to pave the way for something that was ultra vires is itself ultra vires”.—[Official Report, Commons, 12/05/98; col. 257.]
Those were the words of Donald Dewar. In this House, the Minister in charge of the Bill was also questioned on this issue. There was a specific amendment put down. In arguing that any act about the continuation of the union would be beyond the competence of the Scottish Parliament and therefore not lawful, the Minister said:
“Perhaps I may go through the three steps that lead to that conclusion. First, the parliament cannot legislate if the provision relates to a reserved matter. That is Clause 28(2)(c). Secondly, the Union of the Kingdoms of Scotland and England is a reserved matter by virtue of paragraph 1(b) of Part I of Schedule 5. Finally, legislation for a referendum on independence would be legislation about whether the Union should be maintained and would therefore relate to the reserved matter of the Union, and so be beyond the competence of the parliament. That is brought in by the purpose test [on vires]”.—[Official Report, 21/07/98; col. 854-55.]
Do the Government still hold to that position or not? If they do not, they must in all fairness, honesty and transparency amend the Bill so that it deals with and faces up to the issue.
On the increase of non-financial powers, which are of mind-blowing importance, I welcome them. There is no fundamental change in them, which is perhaps because the original Act was quite good. The noble Lord, Lord Forsyth, has previously spotted the question of the poor guy who lives in England, drinks in England, but drives through Scotland to get there. At the beginning and the end of the journey, he is perfectly lawful, but for the five miles or so that he drives through Scotland, he is committing a crime. I am sure that this is not beyond the powers of the Government to sort out.
The real substance of this Bill is the financial powers. That is the real guts of the whole thing. I welcome the intent of those clauses. I believe that the one major mistake we made in 1998 was failing to ensure that the Parliament was financially accountable to the people of Scotland. That omission has meant that the crucial political decision of striking a balance between expenditure and taxation has been missing, and that has led to at least a rhetoric of irresponsibility. By giving this power, that is closed off, and I thoroughly support it.
However, I do not believe in fiscal autonomy, not least because devolution provides a structure through which the resources of the whole of the United Kingdom can be redistributed so that more wealthy and prosperous nations and regions of the UK can assist the less wealthy. That, at heart, is the social democratic argument for devolution.
As for the powers of the Scottish Parliament to create new taxes but only with the approval of the Parliament of the United Kingdom—a point which the noble Lord, Lord Forsyth, may have skipped over when reading the Bill—the issue is how that is going to be done. Will it be done by primary legislation? Will that approval be given by primary legislation, by resolution or by order? That has to be specified in the legislation.
Lord Forsyth of Drumlean
I hesitate to interrupt—I have said too much already tonight—but, just on that point, if we cannot bring ourselves to deal with the vires, does the noble Lord seriously think that we are going to bring ourselves to contradict them if they introduce a new tax?
Lord Sewel
I think that it would depend on what the tax was. If it was a tax on left-handed people, I would happily vote against it. When it comes to taxation, nothing is ever simple—as the noble Lord, Lord Forsyth, knows. It is important to catch the right people and avoid creating the potential for someone finishing up being a territorial taxpayer in two jurisdictions. I am not quite sure that the Bill has that bit right. I remember long and interesting discussions on lorry drivers sleeping in their cabs at night north or south of Gretna and the great importance that that would have on whether they were a taxpayer. How anybody knew whether they were going to sleep north or south of Gretna, I never dared try to find out.
Lord Lyell
I have all that debate—it is in vol. 593 —here with me. After I have been able to speak in this debate—perhaps in the morning—the noble Lord might be able to read that in Hansard. However, he is absolutely right. I shall never forget all the efforts that he made—it is all here. Alas, I was before him getting vol. 593.
Lord Sewel
I thank the noble Lord very much for that intervention.
Perhaps I may focus on one last thing. The really big difference is now that Scottish public expenditure will be financed by a combination of tax raised in Scotland and grant given to Scotland by the United Kingdom Parliament. Everything about Scottish income tax is defined and specified in the Bill, but the Bill is silent on grant, and that is still going to be the largest source of income for the Scottish Parliament. I think that that is a lopsided arrangement that really is unsustainable. We have got to the stage now where the grant element ought to be defined in legislation as well as the tax element.
I have spoken much too long. I think that this is a good Bill. It builds on the original Bill without fundamentally disturbing it, and I welcome it wholeheartedly. However, I think that we are going to spend quite a bit of time in Committee.
Lord Steel of Aikwood
My Lords, the late Donald Dewar once observed that devolution is not an event but a process. I very much agree with that, and I believe that we should look at this Bill as the second.
Lord Sewel
This phrase that it is a process rather than an event is attributed to Donald Dewar. I spent some time trying to trace the source of that comment, but I could not find any occasion when Donald Dewar said it. It was said ad nauseam by the then Secretary of State for Wales, for very good reasons, if you looked at what Welsh devolution was.
Lord Steel of Aikwood
That has lengthened my speech already, before I finished my first half-sentence. Anyway, it was attributed to him, but the point is that it is true, and I regard this Bill as the second stage of the process of devolution, the 1998 Act being the first stage. It may not be the last stage; there may be a third or even, possibly, a fourth stage to come. I do not think we should be frightened of that. The truth is that we are wrestling all the time with the basic problem that we cannot have a proper federal constitution in this country because one component part is larger than the other three put together. That has been the difficulty with which Governments have had to wrestle, so we end up with what I have always called lopsided federalism.
When he opened, the Minister used a quotation from my Donald Dewar lecture in 2003 when I said that no self-respecting Parliament could exist permanently on the basis of a grant from another Parliament. I believe that is true, and although the speech of the noble Lord, Lord Forsyth, was very entertaining, he did not address that problem. This Bill at least attempts to do so. After I said that, people in my own party came to me and said, “You’ve made this pronouncement. We agree with it. Will you now chair a commission to work out what we do about it?”. I was very reluctant to do that because I tried to follow the precedent of Speakers of the House of the Commons and not engage in party-political activity. However, I regarded it as a constitutional issue, and so I said I would chair the commission, provided that there were people other than the usual party enthusiasts appointed to it. I was greatly assisted by my noble friend Lord Vallance, who had then just retired as chairman of British Telecom and is a former director of the Royal Bank of Scotland, and my right honourable friend Chris Huhne, with all his economic expertise.
We came up with what became known as the Steel commission report, which was subsequently the substance of our evidence to the Calman commission. The one difference between the two—this has been commented on by many in the Liberal Democrat ranks—is that our commission recommended a far wider sweep of tax-raising powers than is in this Bill or was recommended by the Calman commission. The noble Lord, Lord Forsyth, put his finger on it when he talked about the possibility of having a wider net of tax-raising powers rather than focusing simply on income tax. The fact is that the Calman commission was the product of a consensus agreement between the three parties taking part in it, and the Bill is the result of a consensus agreement. I have always believed that when it comes to constitutional reform, you cannot expect any one party to dictate how exactly it should proceed. If constitutional reform is going to succeed properly, it has to be on the basis of a broad range of consensus. I therefore find myself in support of the principles of the Bill in its tax-raising powers, although clearly in Committee we can have much more discussion along the lines that we have heard already.
I was very interested in the speech by the noble and learned Lord, Lord Davidson, and the noble and learned Lord, Lord McCluskey, about the fallout from the remarks by not just the First Minister but also by the Minister of Justice in Scotland about the Supreme Court decision on a human rights case. It seemed to me that they were quite paranoid about the court being in London and would be quite happy for cases to go to Strasbourg, which is a most bizarre position for them to adopt. I was incensed by the language used and the insult to prominent members of the Scottish judiciary who serve on the Supreme Court. I thought it was quite intolerable, and that is why I resigned as an adviser to the First Minister on the ministerial code of conduct. As I said to him in a letter at the time, I did so because if now that they had a majority that was how they were going to behave, there would be more and more complaints against Ministers, and I did not want to spend my time refereeing them. I do not regret that decision. However, the issue that they raised in the debate today was echoed by another Donald Dewar lecturer—namely, Elish Angiolini, the immediate past Lord Advocate—whose lecture I went and listened to. She devoted the latter part of her speech to this issue and clearly was not satisfied that we have yet solved the question of how we treat our engagement with the Humans Rights Act with the new Supreme Court. We should return in Committee to the points made by the noble and learned Lord, Lord Davidson, and the noble Lord, Lord McCluskey, and treat them very seriously. I welcome what they said.
One minor point which I am pleased to see in the Bill, in Clause 4, is about the Presiding Officers in the Scottish Parliament. It is a direct result of the evidence which I gave to the Calman commission. We had the embarrassing situation in 2002 where, despite juggling hospital appointments with the Easter Recess, I had to take two weeks off from the Scottish Parliament for treatment for prostate cancer. My two deputies had a simply terrible time trying to cope with not just chairing the Parliament, because that is only part of the function, but chairing the committees, the Parliamentary Bureau and the corporate body. They had also to entertain the legions of visitors that we had, because the Foreign Office took it into its head to tell every visiting dignitary coming to this country, “You must go to Scotland and see this thing which has come to pass”. We had constantly to give lunches and dinners to visiting people. My two colleagues told me that they were run absolutely ragged during that fortnight. It was intolerable that the Parliament had no power to appoint a third deputy even for a temporary period. I am delighted that that minor flaw has been put right in the Bill before us.
I share the surprise of others who have spoken that the Bill is silent on the question of holding a referendum. Again to be fair to the Government, I point out that the election of the SNP Government in May came subsequently to the Calman commission’s deliberations and the drafting of the Bill. We should be quite open about that. The Bill has come to us; we shall have to deal with it in Committee; and we should look at that question. There is a real danger that Scotland will find itself sleepwalking into independence unless we tackle the matter. As others have said—the noble Lord, Lord Sewel, was right—this is quite plainly and clearly a reserved matter for the Westminster Government. It is not a question of the SNP Government saying, “Well, we’re elected, therefore we can have a non-binding referendum which we devise—and we organise, by the way, not the Electoral Commission”. That would be intolerable. We should make it quite clear in this Bill that, granted that the SNP has its majority and a mandate to hold a referendum, ensuring that it is done in a proper way is a matter for this Parliament. The Bill has to come to us late, but we have the responsibility to send it back to the Commons for further deliberation.
My right honourable friend the Secretary of State has asked some very pertinent questions of the SNP about what it means by independence, and I hope that we will in due course get answers to them. My heart sinks at the thought that we will have three years of debate and uncertainty about independence or not, with a permanent collective whinge from the Scottish Government that everything that goes well in Scotland is due to their magnificent government and everything that goes wrong is due entirely to Westminster. It is not a situation that we should allow to fester for three years.
The basic question which the SNP has to address is whether people in this country really want a situation where Scots people living and working in London are living and working in a foreign country, and English people living and working in Scotland are living and working in a foreign country. That is what independence means and we should not hesitate to say so.
I also believe that there is a common misunderstanding about the history of how the union came about. It is frequently said, “Oh, well, it was all bribery and corruption that the Scottish Parliament was abolished and people were against the union”. They were not against the union. In 1704, three years before the treaty was signed, Fletcher of Saltoun said that he was in favour of the union,
“to do away with bloody and destructive wars”.
The fact was that there was a perfectly good defence and foreign policy case for the union, just as there was an economic case following the collapse of the Darien scheme and the ridiculous notion that we in Scotland should compete with England in colonial adventures following that disaster.
When there were discussions between the two Parliaments in 1706, although the word “federal” may not have been used—it perhaps did not exist in those days—the discussion was of federal type constitution. When it became clear that the English representatives would not accept that, and that it had to be an incorporating union or nothing, that was the point at which there were riots in the streets of Glasgow and Edinburgh. The truth is that the abolition of the Scottish Parliament was never accepted by the Scottish people. We saw that—although there were other factors as well—in 1715, 1745, through the 19th century, through the early part of the 20th century, the campaigns in the Labour Party, the Liberal Home Rule Bills and the covenant campaign of 1950 which attracted millions of signatures. The abolition of the Scottish Parliament was never accepted. The 1998 Act put right something that was done wrong in 1707. But that is a quite different argument from talking about going back to pre-1707 years and having a completely independent state north of the border.
This Bill is simply a fine-tuning of the 1998 provisions. So long as we treat it like that, it should deserve our support and go through to success.
Lord Morgan
My Lords, I rise with a good deal of apprehension as the first non-Scot to speak and one of three non-Scots altogether on the speakers list, but, as several noble Lords have said, the Bill raises some very important general issues. I also venture to take comfort from the fact that I once wrote a book on Keir Hardie, who I am absolutely certain would have been in favour of this Bill—so, I may say, would Ramsay MacDonald, but he is perhaps not so cherished a figure on these Benches.
We have had many constitutional Bills from the Government that have been piecemeal, open to objection and coloured in many cases by partisanship. This Bill is different and much better for it. It is better for two reasons: first, it seems organically connected with previous constitutional legislation, particularly the fact of Scottish devolution; and, secondly, unlike the previous measures, it follows careful, evidence-based examination resulting from the Labour Government’s setting-up of the Calman commission and the consensual atmosphere in which its report was considered. The Bill, as we know, was carried unopposed through the House of Commons.
The Calman commission established an unanswerable and Unquestionable case for accountability: that an elected assembly should have not only political accountability but fiscal accountability. Many centuries ago, not quite as far back as the Act of Union, the American revolutionaries called for no taxation without representation. The corollary—it applies to Scotland as well as to Wales, which I shall mention later—is that there should be no representation without taxation. The reverse is also true: a proper democratic assembly should have its own resources and be accountable for them, not just for the money that it spends but for the money it raises. It should not be dependent, as the Minister said quite rightly, on handouts from others in the form of the block grant. Without that, the Scottish Government, or any government, are lacking in legitimacy and credibility.
I welcome the main thrust of the Bill—the Scottish Parliament will have the power to generate about a third of its revenues and the block grant will be adjusted accordingly. As noble Lords have pointed out, this will be done almost entirely through a Scottish income tax, within limits. The other taxes mentioned are really minor ones; income tax is the nub of the case. It will of course produce problems. Some have been mentioned—I think excessively so—about the yield that income tax would produce and the calculations. Cannot a democratic government be allowed to form their own judgment on these matters rather than people sitting in Westminster telling them how they are bound to get things wrong? As a Welsh-speaking Welshman I find that attitude really deplorable.
However, there is another point: income tax will be defined here in Westminster—the same tax rates and tax bands will apply. The Scottish Parliament will therefore have to accept the definitions and concept of income tax as sent down by a controlling Westminster Parliament, which leaves the possibility of conflict. This contrasts very much with the Holtham commission for Wales which, as the noble Lord, Lord Maclennan, rightly mentioned, went further and suggested that the Welsh Assembly should be empowered not just in having a Welsh income tax but in setting its own rates and deciding its own idea of progressivity. This is something that perhaps might be considered a shortcoming here. The Holtham commission also suggested other taxes, including corporation tax, but Calman decided, probably correctly, that that was too complicated.
In general, I support the principle of the Bill. It is a good, democratic principle. It enhances the practice and the spirit of devolution and gives the Scottish Government powers and tools to do the job. It has greater borrowing powers than previously proposed. I also support the greater legislative powers being given to the Scottish Parliament but I notice on the question of air guns that it is little guns that it will have power on and not big guns. The big guns perhaps symbolically will remain in the control of Westminster. It makes devolution more credible and more coherent and does so by also ensuring that the union will be preserved. I was very glad that the Labour Party supported the Bill in the Commons and, subject to serious amendment, I understand from my Front Bench that we are going to support it here. It is a good thing. Among other things it takes the Labour Party back to its early democratic principles—the principles of Keir Hardie and George Lansbury and the ILP and the founding fathers of the party. In my opinion that is where the Labour Party, as a socialist party, ought to be.
There are two other questions—one about Wales and one about England. What indeed about Wales? I am aware that my noble friend Lord Wigley is going to speak later so he will perhaps or perhaps not echo what I say. The lesser treatment consistently handed out to Wales stands out very vividly from the devolution process. It was highlighted by the referendum only a few months ago when only then did Wales get an approximation of full legislation authority. There should certainly be a Calman commission for Wales and, if I understood the Minister correctly in his announcement last July, I gather that is broadly what we are going to have. I was very pleased to hear the Government announce that they would produce an inquiry. This inquiry will find that much of the work has been done for it by the Holtham commission. It was an excellent commission. It shredded the Barnett formula as unfit for purpose. It spelt out a clear way in which Welsh funding could be indentified in the overall funding process. It spelt out a way in which Welsh needs could be defined. It asked, as I mentioned, for Wales to have control of its own tax bands, rates and exemptions and to determine its own policy in taxation. All these might or might not be accepted, but as they say, a lot of the heavy lifting has been done by Holtham and should ease the commission the Government have in mind. Otherwise, Welsh devolution has always been a hesitant process. Wales has lagged behind. It lagged behind Scotland 80 years in getting a Secretary of State. It lagged behind in devolution. It is now advancing. The Welsh Government can do their work only with proper fiscal tools including the power to introduce new taxation and the borrowing power to finance capital expenditure. I hope we are going to have a Holtham-style agenda for Wales. I would be grateful if the Minister could tell us what progress is being made in setting up the inquiry he announced.
Finally, what about England? England, as the noble Lord, Lord Steel, said, is the largest partner. Calman sought a solution within the United Kingdom. It wanted to preserve our increasingly confederal union state and very much so do I. Problems are likely to arise between Scotland and England—about tax rates, about the extent to which the Scottish Assembly can borrow as it wishes and, perhaps, about something which was alluded to earlier: the definition of Scotland’s share of the block grant and how that will be arrived at. All these are presently determined by decision-making in London. Whether one likes it or not there is a Government of a very different stripe in Edinburgh that may well take a different view. England will be even more displeased by the Barnett formula. It is manifestly unfair to Wales. It gives the English regions too little, particularly at a time of extreme economic difficulty, and it gives Scotland too much. Whenever the issue of the Barnett formula is raised by anyone in Edinburgh, to quote the title of a famous song, there is “The Sound of Silence” and the sound of silence echoes through the realm. Holtham has dismantled the ideas behind the Barnett formula and it seems to me wrong—I hope that we can look at this in terms of an amendment—that the finances of a self-governing Scotland should be examined while the really inequitable Barnett formula is left undisturbed.
As we have heard from other noble Lords, the authorship of this cryptic phrase has been disputed—devolution is indeed a process. It is an ongoing process; it does not obviously have an end any more than any other political process has one. There is no period when, like Fukuyama, you say that history has stopped. It has not stopped over devolution. There are many sources of possible conflict that will arise as the process of Scottish devolution unfolds. Some have already emerged; for example, over university fees and the very wrong attitude taken in Scotland there. I hope we will help along the process of devolution by allowing a clear analysis and definition of what tax powers are to be devolved and what are not. There should be a much clearer division of resources than perhaps this Bill presently allows for. Otherwise, while the Bill is full of admirable intentions, it may lead, I fear, to perhaps a more disunited kingdom.
Lord Selkirk of Douglas
My Lords, it gives me great pleasure to follow the noble Lord, Lord Morgan, who is a very distinguished historian. He is right to remind us of the powerful call, “No representation without taxation”, and as a historian he will remember that the American colonists particularly had the request of “no taxation without representation”. Both requests are very powerful.
It is customary for Peers to mention past interests before speaking, and in my case I have two. While several of us have served in three parliamentary Chambers, only four members of the coalition in this Chamber have been elected to the Scottish Parliament. Three of them, including the Minister taking this Bill, the noble and learned Lord, Lord Wallace of Tankerness, are Liberal Democrats, but for some reason, which I am sure must have involved a great deal of good fortune, I happen to be the only Conservative in this Chamber to have served for eight years in the Scottish Parliament. The other past interest is that I served on the Calman commission, with other members of this House, including the Minister and the noble Earl, Lord Lindsay, from the Conservative Benches. Along with Labour Members and many others, after more than a year of hard work, we produced a report which was unanimous, and the legislation we are considering is based on those conclusions.
In the 1998 devolution referendum, some 74 per cent of voters in Scotland were in favour of establishing a Scottish Parliament, and the Conservative Party, rightly in my view, decided that it would be wrong to act as disgruntled bystanders on the sidelines and instead that it should participate fully in the democratic process, with a view to making the new institution work successfully in the best interests of Scotland and the union. The noble Lord, Lord Sewel, rightly in my view, said that it was right after a number of years to review the devolution Act and to suggest adjustments. The noble Lord, Lord Steel, said that he regarded this as a second stage. If I may say so, in 10 years’ time there may well be another review and another stage, and that would not be unnatural, given the fact that we are discussing the terms of a voluntary partnership.
When the Calman commission reviewed the devolution legislation and received evidence, the responses were overwhelmingly to the effect that the Scottish Parliament had been a success and indeed a majority of those giving evidence believed that it should have more powers. This brings me to the principles that underlie this entire subject, these being accountability and equity. The Secretary of State for Scotland said:
“The Bill is not about transferring power for power’s sake; it is about creating accountability”.—[Official Report, Commons, 21/6/11; col. 282.]
I have to make my own position very clear on this principle of accountability. I am strongly in favour of it. If the Scottish Parliament is given additional tax-raising and borrowing powers, it is a fallacy to believe that these would necessarily be used irresponsibly, for a very simple reason. All Governments wish to be re-elected, and no Scottish Administration will be returned to power if they force up taxation to an intolerable extent or cut essential services far more than is acceptable to the electorate. Finding the most appropriate level between levying taxation and funding public services will always be a matter of balance and judgment. The devolved Parliament should be allowed to reach such conclusions and put them before the electorate.
The Scotland Bill does not make any specific changes to the method by which grant is allocated by Westminster to the devolved Governments, but I would like to refer to the calls by the noble Lord, Lord Barnett, for his long-standing population-based formula to be replaced by one based on need. The noble Lord, Lord Morgan, referred to the importance of this subject. The position of the coalition Government, as I understand it, is that the top priority is to tackle the deficit and to stabilise the public finances. There is of course no consensus on the needs indicators that would have to be chosen if the formula was ever to be replaced. My own position is that until the legislation we are considering is enacted and is operational, the Government should stay their hand over changing the formula. The Bill we are debating will give the Scottish Parliament the new powers and flexibility it would need if Barnett was to be changed with far-reaching subsequent effects on the block grant.
The executive summary of the Calman commission report made this statement:
“Until such time as a proper assessment of relative spending need across the UK is carried out, the Barnett formula should continue to be used as the basis for calculating the proportionately reduced block grant”.
I mentioned that a needs assessment would be contentious. I can only say that if the results of that assessment reduced the Scottish block grant significantly this would give rise to a third principle. There should be the possibility of substitution if there is to be reduction. In other words, if several billions of pounds were to be chopped off the block grant overnight, the Scottish Parliament would need to have the necessary flexibility to be able to find the most appropriate balance between funding services and levying taxation. This Bill will help to meet that point and makes the Parliament more accountable for the level of a substantial portion of its tax and spending. Indeed, I would contend that if there were to be a reduction in the Scottish block grant without the possibility of substitution, which this Bill will allow, there would be an adverse reaction and friction in Scotland, which could inflict lasting damage on the union.
The question that those who oppose a measure of financial autonomy for the Scottish Parliament have to answer is, “Why are the Scottish people unfit to be allowed a measure of financial responsibility?” I believe that their duly elected representatives should be allowed more discretion to frame their own fiscal policy. They should be allowed to raise more of their own funding as well as to engage in expenditure. While the centuries-old ties that bind the Scots to their more numerous southern neighbours may have been loosened somewhat in recent years, it must be emphasised that the Scots people have shown no appetite for breaking them completely, but they have consistently expressed a desire for their Parliament to have more power.
One of the great benefits of the union is that it replaced centuries of warfare across the border with a sustained era of peaceful development, notwithstanding the odd Jacobite rebellion. In the case of my own family, I am descended from both the Douglases and the Percys, who used to kill each other in very considerable numbers. It always struck me that this was not the best way to settle disputes and, fortunately, the Act of Union 1707 consigned such hostilities to the dim and distant past. In fact, with my father being a Douglas and my mother a Percy, it could be argued that I am a product of the union.
I intend when the time comes to commend to Scottish voters the case for the continuity of the United Kingdom. I take absolutely the point of the noble Lord, Lord Steel, that there must be a straight question on whether or not the people of Scotland want independence, and not a slanted question. I would wish to campaign in the strongest and most positive terms when the planned referendum is held. I do not believe that passionate support for the union is in any way incompatible with backing for giving the Scottish Parliament increased powers, especially over financial matters.
In conclusion, I would like to commend to the House the splendid words of Scotland’s national poet, Robert Burns, when he wrote his famous poem, The Dumfries Volunteers. His words were as follows:
“Be Britain still to Britain true,
Amang ourselves united;
For never but by British hands
Maun British wrangs be righted”.
Just to reassure the House, Robert Burns was by no means a dangerous revolutionary but was indeed one who understood the importance of fiscal responsibility. Just in case anyone may wonder, he was in fact by profession a tax collector and exciseman, who believed in the rule of law.
This legislation delivers an important coalition commitment. It will increase the responsibility and accountability of Scottish legislators and allow the devolved Parliament to come of age.
Baroness Ramsay of Cartvale
My Lords, this Bill is the second major constitutional change for Scottish devolution that this House has considered. It is natural that those of us who were closely involved with the first Scotland Bill, the Scotland Act 1998, have many memories of that Bill revived by this one, as the noble Lord, Lord Sewel, indicated. It is perhaps difficult for those who were in neither House of the UK Parliament at that time to appreciate the enormous sense of excitement, and of making history, which so many of us felt. Having heard the noble Lord, Lord Lang, I do not say that all of us felt it, but certainly the vast majority of us felt it.
As one of the three government Front-Benchers who took that Bill through this House, along with the noble Lord, Lord Sewel, and the noble and learned Lord, Lord Hardie, then Lord Advocate, I remember what a marathon that Bill was: 10 days of Committee, and many sessions late into the night, and two days for Second Reading. I have vivid memories of how nervous I was as a comparative newcomer to have to open the second day of a major Second Reading debate. Those of us involved all felt it was a great privilege because, for most Scots of my student generation, a Scottish Parliament was something we had wanted all our adult lives, and although we all believed the words of the late John Smith—I think they were the words of the late John Smith—that it was,
“the settled will of the Scottish people”,
we had had to fight hard to win the national referendum held immediately after the 1997 general election.
None of us has witnessed, either before or since, the joyful scenes when the Bill finally passed in this House, and Scottish Labour MPs flooded into this end of the building in a wave of euphoria. We were aware of course even then, in the midst of the euphoria, that this was no permanent or perfect template and that it would require revisiting once the Parliament was up and running. So it was absolutely right for the Scottish Labour group in Holyrood, with the agreement of the Scottish Liberal Democrats and the Scottish Conservatives —but not, of course, the SNP—to set up the Calman commission in 2008 to review the provisions of the Scotland Act 1998 in the light of experience, and, as was said,
“to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, that would improve the financial accountability of the Scottish Parliament and that would continue to secure the position of Scotland within the United Kingdom”.
It is natural that, after some 10 years, experience would reveal the requirement for some such change, even though the contents of the White Paper preceding the 1998 Bill had been prepared from unprecedented wide consultations and debate throughout Scottish civic society, over some eight years, by the Scottish Constitutional Convention. I should declare an interest here as one of the final two co-chairs of that body, along with the noble Lord, Lord Steel of Aikwood.
Although there might not be the same degree of excitement and sense of history about this Bill, I have to say that, in so far as it contains much of what the Calman commission recommended, it is to be welcomed. The Calman commission acted in the best Scottish traditions of wide consultation throughout civic society as practised by the Scottish Constitutional Convention.
Specific points in the Bill can be considered at the appropriate later stages of the Bill. I want—very briefly in view of the long list of speakers and the time—to lay down a marker about two subjects that are not included in this Bill, although much discussed in connection with it; indeed, both were the subjects of amendments and debate in the other place.
The first point is corporation tax. In considering a different rate of corporation tax for Scotland, one cannot but be worried about the consequences for the UK as a whole. I agree entirely with the views summed up succinctly by the Chair of the Scottish Affairs Select Committee in another place, when he said that,
“beggar-my-neighbour politics on corporation tax is not helpful. The risk of driving that divide between England and Scotland by achieving a marginal gain in corporation tax revenue in the short term is not worth the candle”.—[Official Report, Commons, 21/6/11; col. 269.]
The Calman commission did consider and reject a different rate of corporation tax for Scotland, and in my opinion was completely correct in doing so.
The second point is the Barnett formula. I have heard many times in this House the views of my noble friend Lord Barnett, for whom I have the greatest affection and respect but with whom on this particular topic I do not entirely agree. In any case, whatever one thinks about the future of the Barnett formula, I think it correct that it should not be considered in this Bill. As the Minister in another place said:
“The current formula is an administrative procedure and does not appear in legislation”.—[Official Report, Commons, 21/6/11; col. 229.]
He then pointed out very clearly that it was a mechanism for allocating funding across all four countries of the UK, which would make it quite inappropriate to legislate in this Bill for Scotland in isolation.
Finally, we should be careful about this Bill. We should not of course do too little in it, but I think we should be very wary of trying to do too much. It should not, as they say, be used as a Christmas tree. In so far as this Bill satisfies the recommendations of the Calman commission, I welcome it and wish it well. I look forward to more detailed discussion on some particular aspects in the future stages of the Bill.
Lord Wigley
My Lords, I hope it will not be considered impertinent of me to contribute briefly to this debate. I do not come from Scotland, and I do not speak on behalf of the SNP, although my party, Plaid Cymru, and the SNP are Celtic cousins, and both aspire to the maximum level of self-government for their two countries and a new relationship between the nations of these islands. What happens in Scotland, however, does matter to Wales. It has a direct bearing on other parts of these islands, but particularly on Wales, because our constitutional aspirations have developed side by side with Scotland over the past 50 years. There is some irony in the fact that the debate to empower the Scottish Parliament further is taking place now, just as we in Wales thought we were catching up, after the referendum in March that gave us primary law-making powers.
While Wales and Scotland are two different countries with their own different needs and aspirations, there is undoubtedly a mindset in Wales that says, “If it is good enough in Scotland, it is good enough for Wales too”. I think that the Government appreciate that dynamic to some extent. Large parts of this Bill have grown from the Calman commission and the Government announced in July the intention to have a Calman-type committee in Wales. However, I suggest very strongly that the work of the Holtham committee, which several speakers have mentioned tonight, should be the basis of the report and that Gerry Holtham himself should be involved in the work to save duplicating what has already been done.
My point is that issues arising in this Bill, such as the borrowing and tax-varying powers of the Scottish Parliament, will inevitably also arise in a Welsh context. There are other matters which MPs sought to add to the Bill in the debates in another place earlier this year, such as the need to review the Barnett formula and the pressure for Scotland's Parliament to have the right to vary corporation tax, which mirror similar arguments now being heard in Wales and, I believe, in Northern Ireland. I believe there is a feeling today that the Treasury is prevaricating on the question of corporation tax. The issue of year-end flexibility has also been mentioned, which again has a bearing in Wales and, I believe, in Northern Ireland and needs to be resolved.
What this Bill reflects, to my mind, is an adhoc piecemeal approach that has been taken by successive Governments at Westminster to the issue of devolving power to Scotland, Wales and Northern Ireland and, indeed, the failure to address the consequences here in England—either in terms of greater regional government or where devolution has left England's legislative capacity in matters such as health, education or housing, which are devolved to Scotland, Wales and Northern Ireland. In the 19th century, there was much talk in this Chamber of the Irish question. Dare I suggest that there is now a need to address the English question? I noted that the noble Lord, Lord Sewel, touched on this earlier.
Because of the lack of any overall vision, what we are seeing in this measure and in others is a salami-type concession that this power or that function may be devolved but with no framework to ensure balanced devolution or any idea of what is the ultimate destination. Indeed, many of my friends in Scotland, while accepting the provisions of the Bill as far as they go, feel that it has already largely been superseded by events—a number of noble Lords have touched on that this evening.
The May elections in Scotland represented a political earthquake and a wake-up call which Westminster will ignore at its peril. It also sent a message that this Bill goes nowhere near addressing the political agenda as it is rapidly developing in Scotland. I see that an opinion poll in Scotland reported yesterday that if a referendum were held now, 39 per cent of respondents would vote for independence and 38 per cent against it. Whether that is a stable ongoing position only time can tell, but this week we have also heard a call for a new, centre-right political party in Scotland because the London-centric Conservative Party is widely seen as not serving Scotland's needs. Might I suggest that against the background of May's election, Alex Salmond's triumphs and the recent opinion polls, some are seeing the UK in its present form as not serving Scotland's needs? Before the Bill even reached this Chamber it has largely been overtaken by events, as the noble and learned Lord, Lord Wallace, recognised in opening the debate.
On 25 June, the First Minister of Scotland, Alex Salmond, called for a more ambitious borrowing framework, fit for the long-term needs of Scotland and particularly for the Scottish Government’s borrowing capability of up to 2 per cent of their annual resources, with capital borrowing being capped at 20 per cent of annual government resources. Furthermore, this demand has the unanimous backing of Scotland's Parliament, as shown in the Committee that reported on the Bill in March. There are further calls for strengthening Scotland's voice in Europe, with statutory rights for Scottish Ministers to be part of the UK delegations attending European Union meetings such as the Fisheries Council. There are feelings in Wales, and, I suspect, in Northern Ireland, particularly on matters that are unique to those two countries.
There has also been a call by the Scottish Government for this Bill to be enhanced to include the transfer of broadcasting to Scotland, including public service broadcasting institutions and future licence fee arrangements. These are all demands that could be widely echoed in Wales, particularly against the background of the disgraceful way in which DCMS treated the Welsh fourth channel, S4C, earlier this year. My point is that the time will come—perhaps it has already come —when sticking Elastoplast over the growing divergence of aspirations in these islands will just not work.
In an address to the Ditchley Foundation on 9 July, the former Prime Minister, Sir John Major, made a radical proposal which I believe the Government would do well to study. He called for the devolution of almost everything to Scotland except defence, foreign affairs, broad economic policy and the monarchy. That approach is surely more commendable than a piecemeal, grudging, reluctant approach.
Lord Maxton
That, of course, is not what the Scottish National Party wants. It wants an independent, separate state established as Scotland. It is not really interested, although it may demand it, in more powers for a Scottish Parliament.
Lord Wigley
I appreciate that that is the position of the SNP. I do not think it has been in any way coy about it. I do not believe it has ever shied away from making it quite clear that independence is its objective. One may or may not agree with that, but that is its position.
Lord Maxton
The fact is, however, that it never tells us exactly what it means by the term “independence”.
Lord Wigley
Let me make it clear that if I used the term “independence”, I would not use it in the way that UKIP uses it—wanting to pull out of Europe and believing that you cannot be independent without being a state with a wall around it. I believe there has to be co-operation between independent countries and within frameworks such as the European Union. Indeed, there has to be co-operation within these islands, but that relationship may be a new relationship.
The reason I was pointing out the speech made by Sir John Major was that it should be relevant to the parties opposite. It should be relevant that their former Prime Minister made a far-reaching proposal that may well be relevant in the context of what the noble Lord, Lord Lang, spoke about earlier in this debate, and this should be considered.
Lord Forsyth of Drumlean
The noble Lord has put a lot of emphasis on the membership of the European Union, but does he recognise that an independent Scotland would have to apply for membership in the European Union? It would have to take its place in the queue, it would require unanimity, and it would almost certainly be blocked by countries such as Spain and others. What he is proposing is not attainable in a realistic timetable.
Lord Wigley
I am very familiar with the arguments about Spain fearing what will happen in Catalonia and the Basque country. If those two national groups within Spain do move towards independence, Spain itself will face that question, but that is a matter for Spain. It is a matter for the European Union whether it would prefer to see a Scotland outside the European Union in those terms.
I certainly would not want to see Wales outside the European Union, but I believe that there has to be a change in the relationships within these islands that respects our ambitions to take every decision that we can for ourselves, whether in Scotland or in Wales, while working together and having an effective voice at other levels where decisions are taken that cannot be taken within our two countries.
This approach is surely a force that the Government need to address, and the consequent agenda is currently being neglected. First, there is a need to ensure balanced, symmetric devolution throughout these islands, especially to Wales and Northern Ireland. Secondly, and crucially, there is a need to address the unspoken cry of, “What happens to England?” and indeed, how Westminster institutions—including this Chamber—can be re-engineered to help address an agenda whose force is not yet being heard but whose consequences cannot be avoided.
Lord Foulkes of Cumnock
My Lords, given the plethora of criticisms of this Bill, and of suggested amendments—I have one or two more to suggest—I must say it is very fortuitous, and the Minister must be very glad, that it is going to be at least three months before we get to the Committee stage. May I make a helpful suggestion to the coalition Government, which is not something I often do? They might consider some government amendments to take account of some of the very good suggestions—some of them detailed, some not controversial, and not necessarily political—that have been made during the course of this Second Reading. They should look at Hansard very carefully and consider that, as it would help our debate and discussions at Committee stage.
Last Saturday, I was with about 50,000 other Scots at Hampden, and about 1,000 Czechs, and I cheered with them when Kenny Miller and Darren Fletcher scored. I even joined in the singing of “Flower of Scotland”—fortunately, not many people heard me—with all its words about sending proud Edward’s army home to think again, but that did not mean that all of us there wanted to see Scottish secession. Patriotism, or pride in one’s own country, does not mean that you want to see the break-up of the United Kingdom. When we come to consider these decisions, all of us in Scotland will be using our heads, not our hearts, to make that decision.
I see colleagues here—I was going to say from all parties, but there are not many Tories although there are Liberal Democrats and Labour Members—who campaigned for devolution again and again. We have got the campaign medals from 1979 and 1997. In the battle for devolution, it was not just the Tories who were posted missing. The SNP was missing also—not missing in action, just plain missing. At the time, fundamentalism ruled within the SNP. Rightly, in my view, it saw independence and devolution as two totally different concepts. I say that to the noble Lord, Lord Lang, because I do not accept his pessimism; we have to look at this carefully, turn things round and fight for the cause that we believe in.
Now, though, that fundamentalism has been put to one side and we have Salmond’s opportunism taking over, trying to get independence by stealth and taking advantage of step-by-step devolution. That is why I hope that the noble Lords, Lord Steel and Lord Selkirk, who say that there are to be third and fourth stages, are wrong. They are playing into Salmond’s hands. He wants, having had three or four steps, to think that there will then be just one more little step to independence, and that is where the danger lies. This is a nonsense; that would be the biggest step of all, crossing the Rubicon once and for all. It would be a major step that could not be gone back on. As others have said, it would mean the splitting up of the United Kingdom.
The UK has been the most successful economic union over a long period anywhere in the world. Our flexible constitution means that what we now have with this variable geometry, this quasi-federalism, this phased federalism, has been possible. I say to my friend, the noble Lord, Lord Steel, that it is a nonsense to say that federalism, which I support—unfortunately, the Liberal Democrats seem to have abandoned it—is impossible because of the size of England. They just assert that without any argument or justification. There would be nothing wrong with having an English Parliament dealing with devolved affairs, as Scotland, Wales and Northern Ireland do, and having this federal Parliament dealing with the reserved areas. That would not impinge on Scotland, Wales or Northern Ireland. It would be perfectly logical and it is the one stable solution that we should be moving towards in the longer term; otherwise, the only two stable solutions are centralised government, which we have left behind, or independence for each of the units.
Secession would be a disaster, as I say, but we should avoid saying that Scots could not govern an independent Scotland. Of course they could; it is entirely possible. Many Scots have governed the United Kingdom one way or another as well as other parts of the world in colonial days—it was not the English but the Scots who did most of the colonisation—so we should not argue that. Scots could govern a separate Scotland effectively; that is not the question. The question is whether we are better off in or out of the United Kingdom.
As others have said, and this bears constant repetition, the uncertainty that is being perpetrated by the Scottish Government is harming Scotland. Linda Urquhart, the chairman of CBI Scotland, spelt it out the other day. Others have said to me that people do not want to invest in Scotland. The UK Government will think twice about putting, let us say, the green bank or some other development in Scotland because of the uncertainty regarding the future of Scotland within the United Kingdom.
As my noble and learned friend Lord Davidson of Glen Cova said, in what I thought was a brilliantly constructed speech full of crucially important points, and as others have confirmed, constitutional issues are a UK Parliament competence. It is our responsibility, and it is about time that we took that responsibility. This is why I am proposing to table an amendment for consideration in Committee—I know others have thought about this and perhaps we should discuss it—that the UK Government organise a referendum as quickly as possible to end the uncertainty. We should also choose the wording of the question, which is very important; look at the wording in the Herald opinion poll to find out why that had the result it did. The wording should be: “Do you want Scotland to remain part of the United Kingdom—yes or no?” We would campaign for the yes side.
The timing of the election should also be our decision. We should not concede that the Scottish Government should run the referendum; we should not leave it to Salmond’s trickery. It would be a loaded question, and the timing would be his timing to make sure he got the best possible result. If a referendum is inevitable, as people seem to assume, it is for us here in the United Kingdom Parliament to take responsibility for it.
I have a few additional points to make. Notwithstanding my noble friend Lady Ramsay’s plea that we do not use this Bill as a Christmas tree, I want to suggest that there are one or two things that we should consider adding to it. For example—I have started to consider an amendment for this as well—both the Scottish Constitutional Convention and the Arbuthnott report suggested that we should review the electoral system for the Scottish Parliament. It is crazy. I got elected to the Scottish Parliament without any campaigning at all. I campaigned not to get elected: I campaigned for constituency members to be elected. I did not spend a penny on the campaign, and I got elected. It is a crazy, crazy system. Regional list MSPs and constituency MSPs just do not go together.
As someone said earlier on, the electoral system was supposed to prevent any party getting an overall majority. Well, it clearly does not do that. It is weighted against Glasgow, Edinburgh and the central belt in favour of the rural areas where the SNP has its stronghold, and that is why the party has done so well. It is a distorted system and it needs to be reviewed. Now, of course, we will be accused of calling to review it because of the outcome of the last election. We should have done it before—I accept that—but why bother about what we are going to be accused of when we will be accused of these sorts of things anyway? We should take up this recommendation and review it.
I have also started drafting an amendment to prohibit the Scottish Government from charging huge fees for students coming to Scotland from England, Wales and Northern Ireland. It is a disgrace, an absolute disgrace, that Edinburgh University is to charge these students £9,000—that is £36,000 in fees for a four-year course—whereas students from Poland, Lithuania and other parts of the European Union will get in for nothing. Which students will be able to afford to come to Scottish universities from England? Maybe the old Etonians and old Harrovians will get in, but ordinary students will not be able to do so. That is not that only reason for an amendment. The current arrangement is discriminatory and unfair and, with no disrespect to Christmas trees, we should take the opportunity to legislate on this.
In conclusion, we federalists, devolutionists and unionists—but not separatists—should take the initiative once more, as many of us did when we set up the Scottish Parliament. Like the noble Lord, Lord Forsyth, I have a few more amendments up my sleeve. I am looking forward with great relish to the Committee stage of this Bill.
Lord Sanderson of Bowden
My Lords, I never thought that in this House I should have to agree with almost every word that the noble Lord, Lord Foulkes, said. However, that was one of the most interesting speeches that I have ever heard him make; I agree with just about every word.
I understand why we are being asked to pass this Bill into law as a result of the unionist party’s Calman commission. It is a good idea that we should do it. We should, wherever possible, have taxation with representation. Accountability matters in these affairs. However, like my noble friend Lord Forsyth, I am worried about tax rates. Everyone who pays income tax in Scotland must be worried when we know that only 2.3 million people in Scotland pay income tax. However, I agree with the Secretary of State for Scotland, who says about this Bill: this far and no further. The reason for that is that there are many things that should be in place before going any further. Can the law be implemented fairly? Do we know for certain that HMRC can cope with the implementation? Most important of all, what is to be the future position of Scotland as a nation?
As someone who has been involved in business in Scotland all my life, I believe that we must have confidence in the future of Scotland, particularly if we are to invest. To have a possible independence referendum hanging over us for any length of time is very damaging to business. I am not at all surprised to see it resulting in decisions in Scotland being delayed. I see from official figures published in July that Scottish GDP increased by only 0.1 per cent in the first three months of this year, compared to 0.5 per cent across the UK in the same period. Scotland avoided another recession, defined as two successive quarters of falling GDP, only narrowly after the economy contracted by 0.5 per cent at the end of 2010. Over the past year, Britain’s economy has grown by 2 per cent, compared to 1.3 per cent in Scotland. Surely these comparisons do nothing to give confidence to those of us in the business community in Scotland.
This Parliament has the ultimate responsibility for the well-being of the whole United Kingdom, as has been so well put by the noble and learned Lord, Lord Davidson. The parties represented in this Chamber all believe in the future of the United Kingdom, yet the SNP Government have said that they will hold a referendum at the time of their choosing—no doubt with their own question or questions on the ballot paper. I ask my noble friends on the Front Bench whether we, as the sovereign body, should not be taking a more proactive role in this whole business before we go further down this devolution path. In other words, the test of this legislation for unionists such as me is whether the passing of the Bill helps or hinders the unionist cause.
The problems confronting the union are now huge and must be put right if it is to survive. What is to be done about the Barnett formula and the clear need for change? What is to be done about Scottish MPs voting in the other place on matters in which they have no say in their own constituencies? If any noble Lord wants to read an interesting book, they might like Off Message by Bob Marshall-Andrews. On page 167 he makes his views about that very clear. I am sure many of his colleagues feel the same when things that are debated in the other place—matters that are of no concern to Scotland—get pushed through by the votes of Scottish Members of Parliament.
Then there is the recent example—here I come to what the noble Lord, Lord Foulkes, said—which, as a Scot and a unionist, I find hard to bear. Why must we have students from England, Wales and Northern Ireland paying student fees at Scottish universities, and—pardon the pun—European students and locals getting off scot free? This can only divide rather than unite, and I believe that this sovereign Parliament should ensure, by altering the devolution legislation, that matters such as these are put right. After all, this Parliament has given power to the regions, and it is in Parliament’s hands to alter those powers if we think that they are being flouted. Indeed, the chairman of the Scottish CBI said,
“constitution is a reserved matter”.
It must always remain so.
I believe that we are nearing the crossroads for the United Kingdom remaining united, and I hope and trust that the Benches opposite, with such high representation in the other place from Scotland, realise that the ice is getting very thin as a result of a lopsided arrangement, which is indeed the Scotland Act. Other countries have proper devolution on a federal model, but this is not the case at the moment in the United Kingdom. I say in the strongest terms possible that our Government must look urgently at this matter of the Scottish referendum. There is no doubt that Scottish business will suffer as long as that uncertainty remains.
As far as the Bill is concerned, can we have an assurance that no further powers in relation to corporation tax—here I agree with the noble Baroness, Lady Ramsay—will be taken until a referendum in Scotland has been held? The Northern Ireland situation is totally different. I know what they are thinking about there. There is no chance that the people of Northern Ireland seek to separate from the United Kingdom, unlike what the Scottish National Party intends to try to do in Scotland.
In preparation for this debate, I came across an article in the Times of 15 October 2008 with the heading:
“Scottish Dependence—The case for independence was never strong”.
It was written at the time of the spectacular collapse of the two big Scottish banks. Some of it bears repeating now as this House considers the wider implications of this Bill. It says:
“The credit crunch has already claimed some significant victims. The credibility of Scottish independence is next”.
It goes on to explain the case for independence based on North Sea oil reserves, saying that the case now for the small nations, such as Ireland, Norway and Iceland, looks very flimsy. It goes on to say that, given the Scottish banks’ situation, an independent Scotland would now be,
“negotiating a rescue package with a foreign central bank”.
The article continues:
“It is difficult to argue that the Union is a shackle when, in a strange echo of the generous Barnett formula, a great deal of taxpayers' money is heading from South to North”.
That was written in 2008.
I finish with what is said at the end of this article, because it is very relevant:
“The First Minister”—
that is, Mr Salmond—
“is, of course, playing a very long game indeed. He has a strategy of inevitable gradualness in which independence is secured in 2017 after a spell of sound SNP government and a Scotland-denying period of Unionist Conservative rule from London”.
The article concludes with the sentence:
“The Union that has served them for three centuries may be the only asset in Scotland that has not depreciated sharply”,
over the last two weeks of the banking crisis. Those were very difficult days in 2008, but it is interesting that the leading article in the Times should make such comments about 2017—a date that is now much closer.
I hope all sides of the House will appreciate that we cannot allow the First Minister of Scotland to make all the running when the future of the union is at stake. We should use the opportunity of this Bill to start flexing our muscles and fighting back.
Lord Boyd of Duncansby
My Lords, it was a privilege to serve along with other Members of this House as a member of the Calman commission, and it is pleasing to see its recommendations in legislation before this House, so it will come as no surprise to learn that I support the Bill. In fact, there were two reports from the Calman commission. The first, in December 2008, looked at the broad principles and, as no one else has referred to it, if noble Lords will bear with me I shall consider some of the issues from that report. We attempted to put together principles that would guide the work of the commission and to set out the issues and context for the final conclusions. We asked: what do we understand the union to be? First and foremost it is a political union, a constitutional monarchy that has over 300 years evolved, as the commission stated,
“common political and constitutional values and institutions, which form the bedrock of our liberties”.
We share on these islands a profound commitment to democracy and the rule of law. We have a common citizenship that includes a commitment to human rights and their safeguarding for all our citizens. An integral part of the Scotland Act is the embedding of the European Convention on Human Rights within it.
I am genuinely pleased to see the noble and learned Lord, Lord McCluskey, in his place. He and I have had our differences of opinion, but I recognise his commitment and the contribution he has made not only to Scots law but to this House. I read the debates on the 1978 Bill, which formed a substantial contribution to the 1998 Act. No doubt we will debate the Supreme Court, but I recognise a degree of common approach from the group of the noble and learned Lord, Lord McCluskey, and that of Sir David Edward. I served as a member of the Advocate-General’s expert group. For my part, I think that Clause 17 is about right, but we will no doubt debate that in Committee. I will certainly approach it with an open mind.
Scotland benefits from being part of a state whose overall influence may have waned as the Empire has diminished and is now challenged by new emerging states, but we remain a part of a United Kingdom with a permanent seat on the UN Security Council, a permanent seat on the G8/G20 and a commitment to membership of the European Union. Scotland's influence would be substantially diminished if that union were to go.
We also recognise that the union is an economic one. Sometimes we forget that there were substantial economic reasons for Scotland to join the union in the first place: the establishment of a common currency and a customs union. As the commission stated, we have,
“a deeply integrated economic Union”,
with a,
“well-integrated single market in goods, services, labour, capital and knowledge”,
with common institutions that support the structure within which the market operates: the Bank of England, the FSA, HMRC, the Treasury, and so on. Although the commission did not highlight this, there are other parts of the regulatory framework, for example Ofgem in the electricity market.
The commission was united in stating that that single market and the framework and institutions necessary to sustain it should remain. The irony is that we now have a Scottish Government who wish to secede from the union, with all the advantages that it brings, only to embed Scotland even more deeply in another Union—one that would, over time, require Scotland to adopt a different currency from the rest of the UK and in which it would have less influence.
The United Kingdom is also a cultural union. We speak with substantially the same language. There are substantial ties of family and kinship. We belong to cultural, social, professional, scientific and business institutions that operate across the United Kingdom, albeit ones that often appear to have a Scottish face within Scotland. We share a common history. Together we forged an industrial revolution, built an empire and struggled to provide a better future, securing rights for workers and providing a free health service, education and social welfare. We fought two world wars together and have taken part in many more—some ill-advised and wrong, some heroic and right. In all of that, Scotland has made a contribution to the common history well in excess of its size relative to the rest of the United Kingdom.
In recent decades, we have seen new immigrants to Britain. These have contributed substantially to the cultural diversity of these islands and the multiple identities which Britain holds within it. For all the tensions that that sometimes brings, Britain remains a fundamentally tolerant society. The commission recognised that, as it did the cultural institutions, for example the place of the BBC as a public broadcaster—much criticised at times, sometimes flawed. While some change was necessary to ensure a distinct Scottish influence, fundamentally we did not wish to see the break-up of that institution.
There is also a social union. We share assumptions about the provision of social benefits. We sometimes disagree about how these should be delivered. Despite growing diversity in education and health, we remain across these islands committed to free education—at least up until secondary level—and free healthcare at the point of delivery.
I am sorry that these parts of the first report did not perhaps get the attention that they deserve. Together, these factors are substantial arguments in favour of a United Kingdom. The debate thus far has become somewhat sterile. On the one side, we now have the SNP talking of a mixture of independence-lite or devolution-max without any great attempt to define what it means by that and promises to lull us into a sense of false security that not much would happen were a divorce to take place. On the other side, the language has not always been wholly helpful. We have talked incessantly about separation or secession. It is right to warn people of the dangers of secession but we cannot frighten people into supporting a United Kingdom. Until we start talking the language of inspiration and aspiration, we will continue to lose the argument. I hope that, whatever else we do, we start to talk that kind of language and give people a sense of purpose as to why Scotland should remain part of the United Kingdom.
On the issues of financial accountability, I do not intend to dwell long on the details but certain principles were fundamental to our approach. We were given the remit of addressing the issue of improving financial accountability of the Scottish Parliament. We were greatly helped by the independent expert group led by Professor Anton Muscatelli, which began by setting out a series of principles that would guide its work. The commission itself then refined six of those principles into three broad areas.
First, on equity, does a funding system allow levels of funding and hence a distribution of public services generally accepted as fair? Secondly, on efficiency, in both economic and administrative senses, does it impede the efficiency of the system? Thirdly, on accountability, does the devolved body have the autonomy to make spending and taxation decisions for which the electorate can hold it accountable? All of these in my submission are important principles. But there is a balancing act. No solution is ideal, and they will always be traded off, one for the other. We will no doubt debate whether the commission in its recommendation came up with the right mix. I believe it is broadly right because it produces an element of accountability that is not now present, but we will no doubt debate that.
My noble and learned friend Lord Davidson raised the issue of the position of the Lord Advocate, and the suggestion that we should be looking at separating out the role of the Lord Advocate as head of the system of prosecutions from the other functions that he has, perhaps with the appointment of a Director of Public Prosecutions. This of course is not a new idea; it has been around for some time. The role of the Lord Advocate has evolved greatly over the centuries; it is an office that goes back at least until the 15th century. At one time the Lord Advocate effectively ruled Scotland; in the days of Dundas his powers were immense. Sadly, by the time I came into office they had somewhat diminished. But the role of the Lord Advocate did change with devolution, because the spotlight was very much more on the law officers.
I remember when my noble and learned friend Lord Hardie was Lord Advocate—he sat in this House—and I recall in particular a question on search warrants. There had been a number of instances in Scotland where search warrants had been granted by justices of the peace with important pieces missing, and the result was that they were ineffective, and questions were asked about that. The only place where he could be asked questions about them was in this House. That was a pretty ineffective way of holding the Lord Advocate to account, because he was removed from Scotland, and of course this is a House in which only a small minority of Members would have a particular interest in such matters. Suddenly, when we became law officers in the Scottish Parliament, there were 129 MSPs, all of whom had large mailbags full of substantial complaints about the prosecution system. It was, at times, pretty uncomfortable. The noble and learned Lord, Lord McCluskey, helped that process at times, if I may say so, with quite proper concern about, for example, the death of Surjit Singh Chhokar, which he will no doubt recollect. There were other instances, too, where it became extremely uncomfortable to have to answer questions about the prosecution system. When the noble Lord, Lord Steel, who is not in his place, was Presiding Officer, I remember being called to the Scottish Parliament to answer an emergency question on a prosecution matter.
Whatever happens in the future, I believe that that accountability is actually good, although it is uncomfortable. The fact is that I was able, as Lord Advocate, to take through the most far-reaching and profound changes in the prosecution system in Scotland, I have to say with the great help and assistance of the noble and learned Lord the Advocate-General, and more particularly perhaps with the First Minister of the time, my noble friend Lord McConnell. I would not have been able to do that were it not for the accountability that was brought by the Scottish Parliament to those proceedings.
I do not shy away from looking at these issues, but I have to say to my noble and learned friend that my own view is that this is more properly a matter for the Scottish Parliament initially to debate, and for us, the United Kingdom Parliament, to engage with it. That is where the impetus should come from for such a debate, not from the Chamber of this House.
The Scotland Act 1998 was a substantial achievement. The Scottish Parliament got extensive powers. The Canadian provinces have substantially less power in relation to criminal justice than the Scottish Parliament, and that is just one area where the Scottish Parliament has competence. It was, I believe, a considerable achievement but, as the noble and learned Lord said, one of the commission’s conclusions was that devolution had been a success. It had worked for the people of Scotland, it gave people greater access to those who made the decisions and it increased accountability. I believe that the changes in this Bill will strengthen the devolution settlement, make Parliament more accountable for its decisions and strengthen the union.
The Earl of Mar and Kellie
My Lords, I have no difficulty in welcoming this mild and tame devolution Bill. It is worth recognising its introduction at this time as a Liberal Democrat achievement in government. The Bill makes some progress towards greater self-government but is unlikely to be the last word on the subject. I expect that it will be amended by addition, rather than by deletion.
I am interested in what this Parliament recognises as the desirable endgame. The strength of desire in Scotland for self-government is considerable—maybe up to 75 per cent. Many of that 75 per cent are still cool to the traditional 19th century nation state concept but they definitely want greater political autonomy—just within a British state, and why should they not do so?
This United Kingdom, from 1603, could be restructured to suit the democratic will. After all, it was in 1707 and 1999. That further restructuring can be done by legislation alone and without the endless international legal agreement processes which formal separation leads to and requires. What I am referring to may be called home rule and it includes a Scottish Treasury. This is probably what the Scottish negotiators wanted in 1706, although they certainly did not get it.
It is probably instructive to look at Denmark’s Home Rule Act 1948, and I thank those in the Library for their help. This granted sufficient autonomy to Greenland and the Faroe Islands to make their own decisions, even about foreign policy. Greater Denmark is therefore primarily a defence union. Greenland, after all, decided to leave the European Union with compensation for damage done to its fishery, and the Faroe Islands decided not to join the European Union. I know that this Parliament does not like examples of good practice from abroad but I believe that this example of home rule is relevant and, what is more, it has been happening for the past 60 years quite near by. Conversely, it has to be said that this Parliament has recently acted in favour of promoting democracy in Iraq, Afghanistan and, one hopes, Libya. Full democracy is desired in Scotland. Could it be that this Parliament is resisting such a development?
It is quite helpful to have a constitutional referendum in 2015 in the background to the Bill. I believe that it would clearly be sensible to legislate for this by amending the Bill, rather than just relying on the electoral mandate won in the summer. The outcome of such a referendum will be determined, in part, by the response of this Parliament to the request for additional powers. A favourable response is likely to lead to something akin to home rule—that is, a British solution. A negative response will enhance the vote for formal separation. Jealousies and personal insecurities among parliamentarians need to be suppressed during the passage of the Bill.
In conclusion, the Bill is a mild response to the growing need for self-government in Scotland. It is too mild and further legislation will be required quite soon. Noble Lords should be quite relaxed about this. Robert Burns derided the Scottish negotiators of 1706, but the Parcel of Rogues did quite a good job. While the parliament was lost, the Scottish state was not smashed. I can understand how Queen Anne and the Earl of Godolphin wanted control of just one parliament. This was a problem of regal personal rule. Now of course Governments are derived from democratic election. The process of re-establishing the Scottish state has been running for the last 150 years. It should be met by accommodation rather than intransigence.
Lord McAvoy
My Lords, I will be particularly brief. I am not as erudite as many of those who have spoken so far, but I have some knowledge of and involvement in the historical and political events that have been outlined. I find it irresistible to take part not to settle a few scores but perhaps remember a few things.
There has been a lot of mention, particularly by the noble Earl, Lord Mar and Kellie, of the 1706 negotiators and of the reasons for the negotiations for the Act of Union. The one that he has not mentioned is that many people feel—though not all historians agree, and here we start to wander down highways and byways—that the real reason was the existence of someone called James Francis Edward Stuart, the Jacobite King James VIII and III. That was why the English Parliament wanted control of Scotland— the Scottish Parliament had the right to pick a separate monarch. The fear among the English and a lot of the Scots was that the Jacobite King James would be brought back from St-Germain-en-Laye. So there is a wee bit of history there as well that I do not agree with.
Going on to more serious matters, I want to comment briefly on why we are here at this time of night, on the stage that we are at and on the speakers list. I would like to echo what the noble Lord, Lord Forsyth of Drumleen, said about the positioning of the noble Baroness, Lady Liddell of Coatdyke, in the batting order—an absolute disgrace upon the former Secretary of State for Scotland to be put in that position. I do not know who makes up that list, but that was a bad, bad, bad mistake and I hope that there is some acknowledgement of that. I really think that it was pretty poor. Naturally, as a Labour and Co-op Peer and a member of the Front Bench I support the Bill.
Listening to a lot of the comments about the make-up of the Bill, it is coming across to me that yet again it is a rushed one. We have a rushed process. We started this Second Reading debate at 5.45 pm and are going to finish around 1 am. I do not think that is right. I also think it is bad politics for the Government because in Scotland it will, wrongly, be seen as Scotland being shoved to the back and put into the early hours of the morning because who cares about Scotland? It was not because of this side of the usual channels. It was the Government. Let us be clear: it is the Government who put business on, not us. It is typical of the situation we are in at the moment where they are mishandling every Bill. What is coming across quite clearly to me is a level of incompetence. I do not know whether they are getting tired, whether they have been around too long or whether they are just trying to do too much, but the Government’s timetable is in a mess, and they are trying to compensate for that by rushing things through here, and it is showing up. I think this Bill will be scrutinised very thoroughly now that we have seen what I think is a level of incompetence in bringing the Bill forward. I think that is pretty poor.
The noble and learned Lord, Lord Wallace of Tankerness, mentioned the Scottish convention that started the process of getting a united front for a Scottish Assembly and a Scottish Parliament. I am not point-scoring or settling any scores or anything like that but, once again, it brings to mind how when the Liberals get to the top table, they always seem to look after themselves very well. Out of those arrangements the Liberals got two seats for Orkney and Shetland, for instance, and, quite frankly, the Labour Administration at the time could not wait to get into bed with them, metaphorically, and form a coalition, so they always do well. Conservative colleagues in this House would do well to observe the Liberals very carefully and make sure that their back pockets are not picked before they go.
What we are getting is something rushed and incompetent. At the risk of ruining his reputation, the contribution by the noble Lord, Lord Forsyth of Drumlean, was a tour de force by exposing and putting to question the tax issues and all the other matters. They might not be right, but they certainly sounded very credible to me. They are going to be meaty issues for the Committee process. I promise not to call him Comrade Forsyth—that might perhaps be going too far—but he was certainly the best speaker tonight as far as I am concerned.
It is about time somebody paid tribute to the nation of England. It is a bigger nation by far and financially supports Scotland, Northern Ireland and Wales. It is about time there was more recognition of that. I do not recognise this mass force in Scotland that wants separation. I just do not see it, but real separation will come if this Government allow the SNP to foster division, resentment and bitterness against England, English people will get fed up with it and will say, “If you want to go, off you go then”. That is a bigger danger than perhaps folk think. We have this infamous phrase that devolution is the settled will of the Scottish people. As soon as we got devolution, the people who wanted to go further kept coming back looking for more. They describe it as a process. With due respect to them, I do not think that they are being dishonest, but it is dishonest to say that it is an ongoing process because what they are really saying is, “We are going somewhere, we don’t know where it is, we can’t tell you anything about it, but we are going on anyway”. That is wrong. There should be clear statements about where we are in Scotland and in any devolved area, and it should be done by consensus.
I hesitate to have a go—to cross swords rather, as I had better use the proper language—at the noble Lord, Lord Steel of Aikwood, especially when he is not in his place, but he made a very profound statement that I 100 per cent agree with, which is that no constitutional change should take place unless there is consensus. That was not the case with the Parliamentary Voting System and Constituencies Bill which went through this place and altered the constitution. Lasting damage will be done by that. The referendum must obviously be discussed very thoroughly in Committee. We cannot have Scotland and Scottish business subjected to years of uncertainty. Whatever the ultimate decision, I look forward to the Committee stage where we can try harder to get some answers out of the Government.
The Duke of Montrose
My Lords, I pick up the danger referred to by the noble Lord, Lord McAvoy, of the way that the pushing back of our debate to so late in the day will play out outside this building. It has been very interesting to see how each noble Lord has given his perspective on the history of the devolution Act and on the relationship between Scotland and England. Short of the struggles that have occurred over Ireland, the relationship between Scotland and England has been one of the most well known and contentious areas of our national life. Throughout our history, each side has won some and lost some. Certainly, in the first 500 years before the Act of Union, my family was quite heavily involved in every scrap that came up and at least six members died either in battle or by execution at the hands of rival factions—and that is without going into family squabbles, mentioned by the noble Lord, Lord Selkirk. To be a leader in Scotland was not always found to be a very cushy ride.
It is a well recognised fact that there can be nothing bloodier than a civil war. We do not need to look beyond the current situation in Libya to see this being fulfilled as we speak. As with Fletcher of Saltoun, mentioned by the noble Lord, Lord Steel of Aikwood, this might have weighed on the mind of my ancestor, the 4th Marquis of Montrose, when, as President of the Council in the Scottish Parliament, he sent the commissioners to negotiate the Act of Union. As the noble Lord, Lord McAvoy, said, the Scots at that point were regarded in England as potential troublemakers. However, considering the state of the Scottish economy at that time, it has always seemed to me remarkable what sort of a settlement they were able to achieve. The Scottish historian Tom Devine points out in his recent book:
“Far from being a junior partner of England, Scotland played its distinct and … often larger part in building British influence and prosperity. In finance, engineering, commerce, medicine, education, the military, etc, it was at the heart of British global expansion, in good causes of human development, and in bad ones like the West Indies slave plantations”.
Even today, the areas of co-operation and distinctness that the Scots laid down have proved a useful foundation for the modern approach to devolution.
This issue of devolution, and even home rule, has been raised in the forum of politics periodically during the past 100 years. On occasions in years following the Irish Home Rule Act when the topic came up in relation to Scotland, my grandfather's name was frequently associated with it. In 1932, a letter which he had sent to the Times, in which he expressed the view that nobody denied the great benefits which Scotland had obtained from the Act of Union, was quoted in the other place in the debate on the Address at col. 243 on 24 November. As far back as 1926, slightly presupposing the line taken by the noble Lord, Lord Steel of Aikwood, he wrote in the Glasgow Herald:
“I cannot believe that for all time coming Scottish affairs will continue to be settled by Englishmen sitting in London”.
His campaign was for devolution to a Scottish Parliament, but not for separation or independence. I am sure that he would have regarded it as a great step forward that we are now marking the first 10 years of the Scottish Parliament.
Major issues in the Bill have been dealt with by many other noble Lords. Perhaps I may raise a small but fundamental one: we are now the third legislative Chamber to have been given the opportunity to scrutinise it. It was obviously a major task of the Calman commission to look at mechanisms for strengthening relations between the Parliaments, and it is interesting to see the Government’s response as contained in their Command Paper. However, there is one question about its progress which I should like to put to the Minister—it was raised also by the noble Lord, Lord Sewel. What is the place of the Sewel convention in all this? How are these conventions established and who gets to interpret what they contain?
During the past 10 years, I have been a keen watcher of the use of this convention and the very essential channel that it has provided between the two legislatures. There are proposals in the Command Paper to have it strengthened. My question is quite well illustrated by the Explanatory Notes. Line 6 of paragraph 8 states:
“The Sewel Convention provides that Westminster will not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament”.
I have always taken it to refer to matters that are devolved. However, the paragraph begins with the words:
“At introduction, this Bill contains provisions that trigger the Sewel Convention”.
Maybe some of it does, but by way of illustrating its argument, it advances Clauses 11 and 24, which relate respectively to the Firearms Act 1968 and the Road Traffic Act 1988. In the Scotland Act 1998 and up until now both of these were reserved matters under Schedule 5.
In my recollection, the use of the Sewel convention was to obtain the consent of the Scottish Parliament when modifications were needed to devolved legislation. A recent exercise which comes to mind was the Marine and Coastal Access Act 2009 where Scottish inshore waters were already devolved and the application of the Food and Environment Protection Act 1985 under Scottish jurisdiction was already devolved but the Bill had to encompass all these and therefore the Sewel convention was very appropriate.
This Bill has been subject to consideration by the Scottish Parliament and in its final form it appears it will be subject to its consideration again. It is not my purpose to question whether it was a good idea to see what the Scottish Parliament thought of it. However, to consider the holding of that consultation to be part of the Sewel convention seems to me to constitute rather a new precedent that should not be entered into just by default. If what we are considering is a necessary political adjustment and perhaps the handing over of entirely new powers, perhaps it should be subject to a rather different form of negotiation. Perhaps it is something new that we require, even a Wallace convention. The handing over of entirely new matters that were not previously devolved is a more serious matter than simply making adjustments.
I see that the establishment, and we touched on this earlier, of who will be regarded as a Scottish taxpayer is now said to be already laid down in relation to the previous tax-raising powers of the Scottish Parliament. At least it is reassuring to know that HMRC are looking at it again in the light of the situation in which we find ourselves. Will the Minister bring these findings to the House before we complete Committee stage? They will be very relevant to how we regard the approach on this matter.
The question of how the Treasury will be able to tell the actual size of what is termed “the equivalent sum”—to be removed from the block grant to match the removal of 10p off all levels of income tax from individuals designated as Scots—throws up an enormous list of allowance and adjustments. My noble friend Lord Selkirk of Douglas in a debate on the Barnett formula used the comparison of Lord Palmerston’s explanation of Europe’s understanding of the Schleswig-Holstein issue. We are now winding the whole financial settlement up several more levels and I can only wish the Minister well in his attempts.
Lord Elder
My Lords, I start by declaring a minor interest as a member of the Calman commission which led to this Bill. It will come as no surprise when I say that, as a result of that, I enthusiastically support this Bill. That does not mean to say I will not participate in Committee, nor that I shall not seek amendments, but it does mean that I fundamentally and enthusiastically support what this Bill is trying to do. A huge number of points have already been made and, judging from the length of the speakers list, a huge number of points are going to be made this evening so I will limit myself to three brief points: about the economic commission; about the financial recommendations in which I was heavily involved; and, finally, about a referendum.
The Calman commission made a very comprehensive study of the legislative powers which had been devolved in the 1998 Act and it reviewed very carefully whether there should be further changes. Further changes have been proposed but it is a measure of the strength of the original legislation that very few were suggested. The settlement, in most important matters, has stood the test of time.
The Calman commission was a good process and I regret that the SNP chose to stand aloof from it and to make passing remarks from the sidelines. The SNP should have made the effort to participate. We wanted the parties who were involved in it to look after the best interests of the good governance of Scotland for the people of Scotland. The SNP, I fear, wanted to reserve its position for independence irrespective of the consequences of that for the people of Scotland. I regret that.
The point about the financial settlement proposal is that the Scottish Government will have to set a rate for tax and will then either benefit from the additional taxes if the economy prospers or face a reduced income if the economy does less well. The budget will, to an extent, be tied into the success of the economy, and that is an important change. Some of the ease with which London is blamed when things go wrong will be passed back to Scotland properly. Had we known back in 1997, 1998 or 1999, when devising the original scheme, that the tax-varying power was not going to be used, then we would either not have put it in or, I believe, sought just the kind of arrangement that the Bill proposes. But it was intended to be used, and that is why it was a separate question in the referendum.
Some of the additional taxes proposed to be devolved on the financial side in Calman were, to be honest, put in at the last minute to get the total tax take up to a higher percentage. They were never central to the scheme. I hope that the Minister will not mind me pointing out that, as he was responsible for putting them in at the last minute by and large to get the total tax take up to a certain percentage, it is not without irony that the Government have taken some of them out since. They were never central to the scheme, because the central part of the financial settlement was always what was happening on income tax. That is a very important step, which is still absolutely at the heart of the Bill.
I would like to say a few words about a referendum. For whatever reason, back in the 1970s and in 1997, we held a referendum on the main question of setting up the Parliament, and in 1997 on a separate question on giving it financial powers. Had we known that those powers would never be used, I am not sure that we would have felt the need to have a referendum. However, having created that precedent, I think it is impossible not to have a referendum on proposals which contain new powers on tax which will have to be used in setting a tax rate. Therefore, there should be a referendum, and the only question to be resolved is whether it should a question on the SNP proposals as well. I think that it should be. I note that the noble and learned Lord the Advocate-General referred to Pujol a few days ago. I would not like Scotland to get caught in the trap of a supposedly nationalist Government always asking for more from the centre but never being prepared to ask the fundamental question themselves. I regret that, for whatever reason, the other place did not seek to introduce such a question. It might, however, be appropriate for this House, at least in the first instance, to give it the chance to reconsider the matter in due course.
Too often these days, discussion about devolution as against independence is caught in the past. No one is suggesting a return to the pre-Scottish Parliament days. One of the changes of the last five years, which I at least am grateful for, is that we have heard precious little of late from the First Minister about the arc of prosperity that he was so keen to join—Iceland and Ireland being his role models only five years ago. In a referendum, what the present Scottish Government want would have to be defined. To take just one matter of some importance, in the current financial climate, the central banking function would not surely be taken on by a new independent Scottish central bank, so it would have to be decided whether it was going to be the Bank of England or the European Central Bank in Frankfurt. I have to say that, if nothing else, that would smoke out what I fear many nationalists actually are, which is not so much pro-Scottish as anti-English—and that I deplore.
There are many things still to discuss in the Bill, although as I say I fundamentally support it, and I look forward to the further stages.
Baroness Linklater of Butterstone
My Lords, there are so many infinitely abler, wiser and more experienced speakers in this important debate. As I am 21st on this list and we are just about halfway there, noble Lords will be pleased to hear that I have considerably filleted my speech.
There is no doubt that, as devolution has developed in Scotland, the appetite for more powers for the Scottish Parliament has grown rather than declined. Every poll suggests that and every survey of public opinion confirms it. What the Scots seek is not so much more power for its own sake as better, more effective government that addresses and tackles the serious problems confronting the nation, including the need to turn around its economy, improve its schools and do something to improve its appalling health record, to mention just three. When Sir Kenneth Calman’s commission examined what steps should be taken to enhance the role of the Parliament, it bore this issue very much in mind.
There has been a huge debate in Scotland over whether Calman goes far enough, and whether this new Scotland Bill properly reflects that appetite for change. There was, however, general agreement that giving Scotland greater tax-raising powers was an essential next step. A devolution settlement which simply continued the reliance on a block grant from Westminster was ultimately no settlement at all. It not only embedded a dependency culture, it offered no stimulation to the spirit of enterprise which is the vital spark of a vibrant economy, and for which Scots have been so famous in the past.
Unless Scotland is allowed greater opportunities to stand on its own feet, and to take responsibilities for raising, as well as spending, its own taxes, it will never truly rediscover its innate potential. This Bill, unlike its groundbreaking predecessor—in which I was proud to be involved—is work in progress to that end. That it is cautious seems good to me, and a good thing particularly in the midst of a global crisis, when it would surely have been foolhardy to attempt any major leap into the unknown. There has been much talk in the north of fiscal autonomy, but far too little real work on what that actually means, what its implications would be, or, above all, on whether Scotland is actually ready for it. There are far too many questions still to be addressed to be able confidently to say that we are ready for wholesale fiscal reform.
This Bill will give the Scottish Parliament responsibility for raising and spending about a third of its taxes. This will undoubtedly increase over time; but it will increase only if the measures contained in the Bill are seen to work. Scots, I believe, are essentially pragmatic and canny, and want sensible, workable progress, not leaps into the unknown. There is no mandate for independence, but there is a mandate for moves towards greater fiscal responsibility, which this Bill represents. It gives the Scottish Government the potential to benefit from its own economic achievements, to expand the tax base, and potentially to increase the revenue base—despite the problems and pitfalls that have already been so graphically and thoroughly described this evening.
I have one, overarching, concern, to which Calman also alludes: the nature of a practical, working relationship between England and Scotland in the new, devolved world. It is not a specific issue for this Bill, but it concerns the way we work together. I have watched with concern a sort of disengagement, which I think reflects a lack of active, practical connection between our two Governments. People in Westminster and beyond have almost no idea what is going on in Holyrood, what the big issues are or how things are tackled—and vice versa. It is not antipathy, but I think it is apathy. I declare an interest as my husband is deeply involved in press matters in Scotland as the editor of the Scottish edition of the Times, and issues which may be the stuff of headlines in the Scottish press simply do not get a mention in England. It is as though for those down here the Scots and their issues have floated off their mental maps, leaving those in the north to get on with our separate business. It may be not entirely irrelevant that there are very few English men or women participating in this very important debate. Indeed Calman recommends,
“a greater degree of engagement between the two Parliaments”,
and he is right. It is not an active problem yet, but it is a matter of regret and should be kept under review.
As was mentioned earlier, it was the Welsh politician, Ron Davies, who first said that devolution was,
“a process, not an event”,
and “process’ is the right word, because the scope to explore the opportunities as well as the pitfalls of devolution is still relatively new and still being developed. It was Scotland's first First Minister, Donald Dewar, who personified that sensible, pragmatic approach. His early death was a tragedy for Scotland but his legacy is the successful process of devolution that has taken Scotland forward over the past decade to where we are now. It will and must maintain its active participation in a United Kingdom while developing its own distinctive policies. That approach is reflected in the Bill. Donald Dewar would, I am sure, have approved of it—and so do I.
Lord Hughes of Woodside
My Lords, I wonder if I might as a brief introduction point out that, as some Members of your Lordships’ House may recall, in the 1970s when we were debating the setting up of a Scottish Assembly, and indeed later, I was not exactly an enthusiast for devolution. In fact, I still have the scars on my back to prove it—I think they have mostly healed by now.
Having said that, I commend what the Calman commission has done. After more than a decade of the Scottish Parliament, it was right and proper that there should be an assessment made. Where there is a genuine need for a change or for a transfer of power in the interest of good government, we should of course go ahead. However, I should point out that some still argue that it is necessary and desirable to increase the powers of the Scottish Parliament in order to stem the demands of the nationalists. Sir John Major said that in the speech to which the noble Lord, Lord Wigley, referred. I profoundly disagree with that. If you believe that ceding more powers will stem that side of nationalism, you must believe that if you feed a carnivore more and more meat it will one day turn vegetarian. The truth is that the nationalists cannot be bought off in any way.
I wish that we had time to debate fully the merits of, and differences between, fiscal responsibility and fiscal autonomy. I was always in favour of fiscal responsibility and I recall that some of my colleagues in the other place were in some great odium for suggesting that there should be what is now received wisdom—tax-raising powers for the Scottish Parliament. In those days I kept good company: the late Robin Cook, the late Norman Buchan, Tam Dalyell and even George Cunningham, then the Labour MP for Islington. The battle was generally won, if not by us, and it became the perceived wisdom for what became the Scottish variable rate. It is not only a scandal that the power was never used but an even greater scandal that I do not think any single party in the Scottish Parliament ever said in an election manifesto that it would use the powers.
Now we are told that there will be a different system and that there has to be direct responsibility. I am somewhat confused as to what the process is in this. I know that, under the Bill, the Scottish Parliament has the power to raise taxation—it does not say that it must raise it but that it has the power to do so—and, as I understand it, there is to be a deduction of the direct grant. How does one fit the other and which comes first? Is it the reduction in the government grant, so that the Government in Scotland will have to raise an equivalent amount of money? Or, if there is a reduction, can they raise less money? Do they have to raise the full amount? How will the reduction in the government grant be arrived at? Will it be by negotiation or discussion with the Scottish Parliament, or will it be mandatory and decided by the UK Government?
I may be overly pessimistic but I fear that the tax-raising powers proposed in the Bill will never be used by an SNP Government, because the SNP thrives on conflict and grievance, real or imaginary. I can see the possibility of the grant being cut and the Scottish National Party in government saying, “Well we can't provide this service because we just had a grant cut. If we are going to increase taxes, it is because the central Government in Westminster have cut the money that we are getting”. The possibilities of the ways in which Salmond can exploit the differences are legion.
What of the future? Are we simply to pass this Bill and allow events to unfold north of the border? Even if we give this Bill every fair wind and turn it into an Act, notwithstanding the rather vague dates on commencement in the Bill, we are a long way from seeing these provisions in action.
The SNP has a manifesto commitment to having a referendum on separation. If my memory serves me right, SNP policy at one stage was that, if the nationalists gained an overall majority in the Scottish Parliament, that would give them a mandate to negotiate secession. Of course, they have changed their minds. Now they believe in a referendum. One would have expected that, flush with the results of the latest Scottish Parliament elections, the nationalists would have considered this a propitious time to call a referendum. So why have they not done so? Of course, they know, and I know—we all know—that the majority of voters who voted SNP at the last Scottish parliamentary election were not in favour of separation.
Nevertheless, we would have expected a positive response from the Scottish Government as to when and how the referendum might take place. Alex Salmond is no shrinking violet, so why is he so coy in pressing home his advantage? As I said earlier, the SNP thrives on grievance and conflict, and he will wish to engineer a whole lot of dissatisfaction, grievance and perceived slights to maximise his chances. This is why I do not believe that in any circumstances he should be allowed to pick a date of his choosing. There has to be, and must be, widespread debate, discussion, and consultation on this matter, so that the true voice of the people of Scotland can be heard, and after mature consideration we could have a referendum. One would hope that the result could be accepted, whatever the outcome, but I am afraid that past results of referendums prove that the losers never give up.
Lord Watson of Invergowrie
My Lords, I welcome the Bill but I fear that in many ways it is too timid. The coalition Government had a commitment in its agreement to,
“implement the proposals of the Calman Commission”,
but they have fallen some way short of that. We have heard about the aggregates tax, which has been left on the shelf and, pending developments, may yet be brought forward. There seems to be no such proposal on air passenger duty. Half of the yield from tax and savings and investments was recommended by Calman—we have heard nothing of that—and there is to be a restriction on the borrowing powers to £500 million with £200 million in any one year. That is still an increase in one sense, but both the legislative consent committee of the Scottish Parliament and the Scottish Affairs Committee advocated going farther. The Scottish Affairs Committee suggested a figure of £1 billion, with £500 million in a year. I hope that the coalition will be amenable to amendments to that effect at the Committee stage. The powers on borrowing should be brought forward. They are scheduled to come into effect in 2015 and I hope that that can be brought forward to at least 2013.
The additional tax raising powers mean that the Parliament will become more dependent on the tax revenue it raises itself. That is surely a positive move, both for the standing of the Scottish Parliament and in terms of its legislative programme and the work that it carries out. I do not share the fears of the noble Lords, Lord Forsyth and Lord Lang, as to the effects of the Bill’s proposals. The noble Lord, Lord Lang, questioned the settled will of the Scottish people both in terms of the original Scotland Bill and indeed of this one. It is quite clear that the 1977 referendum bore out the assertion that John Smith had made some three years earlier. I would accept that there is no settled will as such among the people of Scotland on this issue largely because it has not had anything like the publicity or coverage, discussion or debate that the original Bill had. However, I believe that there is an expectation that the much quoted “process, not an event” should be borne out.
Around 170 orders under the Sewel convention have been passed through the Parliament over the 11 years of its existence. That is one of the signs of development. There has been a constant change and improvement in the way that the Parliament operates and indeed in its relationship with the UK Parliament. Evolution or devolution is a natural process, though, and should be expected by Scots. The Bill meets their expectations to some extent. I disagree with my good and noble friend Lord Foulkes of Cumnock on one of the points that he made. He fears a process whereby step by step we get closer to what I think he described as the edge of independence. I have more faith in the Scottish people’s understanding of the issues involved in such a major change and what it would mean for their lives.
I also believe that up to now the people of Scotland, when asked to vote on the issue, have shown a clear differentiation regarding what it means to vote for the SNP. The reason for voting for it in Scottish Parliament elections and in UK elections—they voted for it in droves in May this year—was not that the main goal was independence; it was about the perceived competence of the SNP Government over the previous four years. People are capable of making those distinctions. If and when the referendum campaign comes—I support my noble friend Lord Foulkes in saying that it should come sooner rather than later, and I will back him when he comes forward with his amendment in that regard—and the debates and discussions are held, the Scottish media will be well able to air the issues.
If I am confident of anything, it is that the political parties that want to maintain the union will be able to make their case convincingly, although they need to make it more convincingly than they have been doing up to now. If there is no movement with regard to devolution 12 years down the road, while I do not believe that we will have a revolution if there is no evolution—there will not be an insurrection—there could be a revolution in constitutional terms if for some reason it is seen that only the SNP is interested in trying to advance the interests of the people of Scotland, develop its democracy and to some extent meet their needs in terms of greater accountability over the people elected to legislate.
People have mentioned UK-wide parties, but that is probably not quite correct; it is GB-wide parties that we are members of. Those of us in those parties have to accept that political opposition to the SNP’s bid for independence is often based on scaremongering. We seem to be very much on the defensive; we are on the back foot, and generally that is not a position from which anyone has achieved a victory. I have to say on behalf of the Labour Party that we found that out to our cost just four months ago. We largely fought the Scottish election campaign on the back foot, and we are now paying a high price for what I would say was our inability to articulate in advance a positive rather than a negative case for winning support.
To some extent, that is the elephant in the Chamber this evening. Since the Bill was introduced some months ago, not only the goalposts have shifted; we have moved on to a different pitch with a completely different surface. Let us not make any bones about it: the SNP recorded a stunning success in May, one that was supposedly impossible under the electoral system that obtained for the Scottish Parliament. It is wrong to blame the electoral system for what happened. I was personally in favour of that system at the time and remain in favour of a more proportional system. I shudder to think how much more decisive the SNP victory could have been if it had been under first past the post; there would have been no representation by other parties. It is interesting to see the Advocate-General nodding his head there; I think that he would support that point. For all its faults—it is not a perfect system; there is no such thing—by and large the Scottish Parliament’s electoral system has served the Parliament well because it has drawn a line between what happens at Westminster and what happens in the devolved Administrations, and the same is true of Wales and Northern Ireland.
The SNP presented a positive programme for Scotland and was rewarded for that; this is how we in the three GB-wide parties should react. We have not reacted in Scotland since the election in May. There has been a pretty mute response to be honest, partly because the parties are still shell shocked. The Lib Dems have chosen a new leader—I am not sure whether there was an election—the Tories are in the rather entertaining process of doing so, but the Labour Party has so far left the SNP facing an open goal because we have not even been able to put forward a candidate. I hope that will be put to rights soon. All the while, the SNP is getting on with business and is presenting a face to the people of Scotland which no other political party in the country is able to do.
I was interested to see the TNS-BRNB poll on independence published this week. A chart was drawn going back to August 2007, which I believe was when the SNP first published its White Paper on Scotland’s future and mentioned eventually holding a referendum. The question asked—I agree with my noble friend Lord Foulkes that in any poll the questions are fundamental—was: do you agree that the Scottish Government should now negotiate with the UK Government on independence? In August 2007, 35 per cent agreed, while 50 per cent did not. At the time of the May 2011 elections, these figures were 37 and 45 respectively. Now, 39 per cent believe negotiations should be undertaken and 38 per cent do not.
I do not think anyone should be in any way surprised at these figures, given that since the May election virtually nothing has happened in Scotland in political terms that has not been driven by the SNP. This is the wider context of the Bill that we are discussing today and that we will be discussing in the early part of next year. The political landscape and the political context of Scotland have changed dramatically since this Bill first appeared. The Bill is more important than ever because it is a tool which demonstrates to the Scottish people that there are progressive moves—I understand that the noble Lord, Lord Forsyth, will not see it in these terms—within the UK Government on behalf of Scotland, and that the SNP are not making all the running. That is a very important message to get across.
The Bill’s proposals will make a difference to the way the Parliament is perceived because of the accountability that it will bring in terms of tax-raising powers. However, as I said earlier, I agree with my noble friend Lord Foulkes that we need to get moving on the referendum. I urge the Advocate-General to think very strongly about including this in the Bill when it goes to Committee. The delay can serve only the nationalists. If they felt strongly enough about their position, they would have called the referendum more or less immediately after the election in Scotland. Clearly, they do not feel that strongly, so why should we wait and allow them to call it at a time that is most beneficial to them, as they would do naturally as a party? Let us get this debate up front and let us give the Scottish people the chance to make their decision on a straightforward and unambivalent question.
It is quite clear from the debate that took place in another place on this Bill that the SNP is still more concerned with arguing about the inclusion of corporation tax and what it calls full financial responsibility, neither of which, I am sure, would do anything other than reduce the block grant for Scotland. On that point, I would urge some caution with regard to tampering with the means by which the block grant is calculated. My noble friend Lord Morgan urged ending the Barnett formula for reasons that he outlined very clearly—it does benefit Scotland—and your Lordships decided in Committee two years ago that it should be replaced. I understand that, but one has to be careful what one wishes for if one values the union, because ending Barnett, or even changing it dramatically, would be an absolute gift to the SNP.
Finally, I will say a word about the concerns of the noble Lord, Lord Forsyth, regarding the definition of a Scottish taxpayer. I share those concerns. The Law Society of Scotland stated in evidence to the legislative consent committee of the Scottish Parliament that,
“it would be much better if there was a simpler definition that anybody could pick up and read”.
Clause 32 of the Bill was inserted after Report stage in another place, but it has not provided a simple definition. Indeed, proposed new Section 80F, which remains, talks of spending,
“more days of a year in Scotland than in any other part of the UK”.
As the noble Lord, Lord Forsyth, says, your Lordships are not excluded from the elected parliamentarians in respect of that. Just think for a second: it is not at all unusual for your Lordships’ House to sit for 150 days a year. If some of your Lordships were to travel from Scotland on a Sunday—remember, it is where you end the day that counts—that could add to that figure. There are also weekends, the time you may spend out of Scotland during recesses and so on. It would not be difficult to get from 150 days into a position where you were spending more than half of that year in London or another part of the UK rather than Scotland. That needs to be clarified and, I hope, laid out clearly in the Bill.
In closing, I believe that the Bill contains many positive proposals. It enables us to advance to the people of Scotland the case that we can have the best of both worlds—being part of the United Kingdom, while having a devolved Parliament that is responsive to the needs of the people of Scotland and will now have substantial tax-raising powers. I look forward to discussing these and other issues in Committee.
The Earl of Shrewsbury
My Lords, in welcoming this important Bill, I must declare my interests. I am the honorary president of the Gun Trade Association and of the British Shooting Sports Council. I am a member of both the British Association for Shooting and Conservation and the Countryside Alliance. On my past record in defending and promoting the shooting sports over the past 20-odd years, it will come as no surprise to your Lordships that I wish to address several issues raised by Clause 11, in which it is proposed to devolve the power to regulate air guns to the Scottish Parliament.
Since 1920, legislative control of all firearms, including low-powered air guns, has rested with the Westminster Parliament and legislation has been applied to England, Wales and Scotland. A different regime of controls applies in Northern Ireland. Low-powered air guns are those that generate not more than 12 foot-pounds of energy at the muzzle in the case of air rifles, or six foot-pounds in the case of air pistols. While such air weapons are subject to an extensive system of controls, they are not subject to licensing. It is now proposed in Clause 11 to devolve controls of low-powered air weapons to the Scottish Parliament. Controls of other classes of firearm, including high-powered air guns, will remain with the Westminster Parliament. There is little intimation of what controls are planned by the Scottish Government but it seems likely that additional restrictions will be imposed in Scotland, creating a different regime in one part of Great Britain.
The Gun Trade Association has estimated that around 4 million people in Great Britain own and use some 7 million air guns. In Scotland, around 700,000 people own approximately 1 million air guns. Between 150 million and 200 million air gun pellets are fired in Scotland each year. Air gun owners invest heavily in their guns and in accessories such as telescopic sights. The air gun industry has a turnover of around £750,000 per year in Scotland. There is, in addition, a considerable trade in both air guns and accessories with other parts of Great Britain.
Air guns are extensively used by responsible owners for legitimate reasons. Ten-metre air rifle and air pistol events for men and women will feature in the forthcoming Olympic Games, as they do in the Commonwealth Games, European games and other major international and national competitions. The starting point for all competitors in these events is the local shooting club, and the well-being of those clubs is the key to success at national and international level. Competitive air weapon shooting demands very high levels of fitness and, perhaps most of all, discipline. Air gun shooting is seen as very much a character-building sport by organisations such as the Scout movement.
Air weapons are extensively used to control pests such as rats, rabbits and some birds. In many rural communities those linked to agriculture see air weapons as essential tools in their work. Among the wider shooting community, air weapons are seen as a vital training tool, allowing mentors to instil high levels of skill, discipline and safety into newcomers to shooting sports, particularly youngsters. Most of today’s sporting shooters made their start with an air weapon of some description.
Perhaps the most extensive use of air guns lies in informal shooting, with parents or elders teaching their youngsters to shoot in the privacy of their own garden. Shooting sports are a major source of income in Scotland. In 2006, a report to be found on the VisitScotland website shows that direct income from providing shooting for visitors is estimated at £80 million per annum, with two-thirds of that coming from outside the country. Many of those visiting Scotland to shoot will take along an air weapon so that they may supplement their sport on the deer by indulging in pest control and informal target shooting.
Like almost every instrument known to man, air weapons are misused. However, the evidence is that the misuse of air guns is very low and is susceptible to control by vigorous policing. At the most serious end of the spectrum, air weapons are very rarely involved in homicide. In England and Wales during the period 1983 to 2002, there was an average of 0.6 homicides per year in which an air gun was involved. In Scotland, from 1998 to 2005-06, the comparable number was 0.2 cases per annum. Comparative statistics work better with larger numbers. The number of offences for all classes in England and Wales in which air guns were involved during 2000-01 was 10,227 cases. The figure peaked at 13,822 in 2001-02. There was a slight and insignificant reduction in the following year, but a dramatic fall from 2004-05, which has been sustained to date.
In seeking an explanation for a halving of the number of offences in England and Wales, researchers have pointed to the Anti-social Behaviour Act 2003, which took effect in January 2004 and which created a simple and easily enforced provision in the case of someone having an air weapon in a public place, whether loaded or not, without a reasonable excuse. Other new controls included restricting selling by way of trade to registered firearms dealers and new age limits for acquisition and use. Linked with an extensive programme of education by shooting organisations, these have provided the police with the tools they need to control the problem without imposing major restrictions on legitimate users.
In Scotland the picture is a little different. In the 1990s, the number of air gun offence cases per year was around the 1,000 mark, but from 2000-01 to 2009-10 that number has been driven down to an average of about 500 cases per annum. Comparison with the figures for England and Wales shows that police in England and Wales have driven that number of cases down to a level comparable with that in Scotland. The indications are that continued police efforts in this field are capable of driving down this problem of air weapon abuse much further without the need for a new or different regime of control in one part of Great Britain.
All the evidence shows that the police have an ample range of powers to deal with the misuse of air guns and that the UK Government have been ready to consider the evidence and implement additional controls where appropriate. The result over the past two decades has been a halving of the number of reported offences, first in Scotland and then in England and Wales. Misuse of air guns has been consistently lower in Scotland than it has been in England and Wales, and no evidence is available to show that further restrictions would be beneficial to Scotland.
The absence of any detail about what the Scottish Parliament proposes in respect of air guns makes it impossible to understand what consequences will flow from this clause. There has been an indication, via press releases in 2008, that a proposal to license air guns in the same manner as rifles has been under consideration. It is understood that officials have liaised with the Irish Government about the licensing system there. The intention is to license only those people who use air guns for occupational and sporting uses. That implies a system akin to that for the current firearm certificate, which involves a great deal of police time and effort in inquiring about the nature of the use of the gun, the background of the individual, storage arrangements et cetera. Police in England and Wales have estimated the cost at £102 per certificate. The cost of the certificate may therefore exceed the value of the air gun in some cases. Less well disposed owners may simply decline to submit to this bureaucracy and there will be no mechanism for tracing them. No one in Scotland knows precisely how many air guns are currently in circulation and, more importantly, who has them.
The administrative burden of introducing an air gun licence will be enormous. There will be potential demand for 700,000 certificates, although the history of the gun control regime suggests that actual take-up will be far less—perhaps half a million, almost certainly decreasing with the passage of time. If the “good reason” requirement is imposed, many certificates will be refused, and the administrative burden of a refusal is much greater than that of a straightforward grant. There will be appeals to the courts with high costs involved.
There are currently about 50,000 shot gun certificates and 26,000 firearms certificates in Scotland. The overlap—those who hold both certificates—is not officially published but has been estimated at 17 per cent of shot gun certificates, being 8,500, making a total of 67,000 certificate holders. The added burden of air gun licensing on the police might initially increase the current burden on firearms licensing departments. With government cuts, they are losing staff right, left and centre, seven or eightfold.
Many Scots will be able to cross the border into England to purchase air guns and their accessories, and the nature of the border is such that no one will be any the wiser. Visitors from England may in ignorance continue to bring their guns with them, or they will require a visitor permit. Visitors involved in sporting shooting are most likely to leave their air guns at home, with loss of revenue to providers of the sport. Those competing in major national shooting events, such as the annual Scottish shooting meeting, will be seriously inconvenienced and will incur additional costs. Many are likely to restrict their efforts to events in England and opt out of the Scottish events. The problem will extend to events such as the Commonwealth Games, in which air gun events are mandatory. There will be considerable difficulties continuing with the major role of the air gun, which is training young shots in informal target shooting. The trade in air guns would be very hard hit by any such change and it seems highly likely that many suppliers, especially specialist suppliers, will simply go out of business.
Trade sources have calculated that, of the 5.1 million Scots, 700,000 own air guns, which is 137,000 air gun owners per million population. In Northern Ireland, 1.5 million people own 20,000 air guns, which is 13,000 air gun owners per million population. Thus, over a period of years, the imposition of an Irish system would eliminate 90 per cent of the law-abiding air gun users who apply for a licence, leaving about 70,000 as a long-term burden on the police—still a greater burden than that of administering the current firearm and shot gun certificate system, but a shadow of the present legitimate air gun owning population.
In conclusion, I look forward to tabling amendments in Committee.
Baroness Kennedy of The Shaws
My Lords, it will surprise none of your Lordships to hear that I am not going to speak about air guns.
I was very proud to be among those who championed devolution for many years as chair of Charter 88, and I was in this House to see the passage of the first Scotland Bill, which fundamentally altered the constitutional architecture of the United Kingdom. I endorse what was said by the noble Baroness, Lady Ramsay; it was a time of excitement and exhilaration for so many of us who had wanted it for so long. It was not about holding the Scottish nationalists at bay. For us, it was about strengthening democracy and letting people make decisions closer to home on matters that affect them directly. I think that the reforms have been a success and that the new Parliament has made a real difference to the lives of everyone in Scotland.
There has been a bit of an argument about who said that devolution was a process, not an event. Donald Dewar recognised that we would continue to see a transfer of power from the House of Commons to the Scottish Parliament as the new Parliament bedded down and gained the confidence of the people. I know that because he told me so. Like Donald Dewar, I am a strong believer in genuine devolution. I do not support independence, because I think that the unity of our island gives us greater sway in the world. I think that huge benefits come from our union, from our partnership of nations but, as in the best of contemporary marriages, I think that strength comes from recognition of the distinct identities of the partners—that they are complementary yet separate entities within a conjoined state.
Few modern women would want to go back to the marriage of old, where their status was second-class and survival depended on the good will of their man, without recognition of their huge contribution to the family and where their autonomy and ability to make choices on matters directly affecting them were profoundly constrained by their spouse. A modern marriage involves constant evolution. Donald Dewar always recognised that Scotland would have to have its own fiscal powers, and the first drafts of the devolved powers included fiscal powers. It is claimed that it was our then Chancellor who quashed those plans.
As my noble and learned friend Lord Davidson and the noble and learned Lord, Lord McCluskey, said, there are matters to resolve around the Supreme Court. I hope at some point in Committee to add my voice to those concerns and my belief that the Supreme Court plays an important role for our whole United Kingdom.
There is much that I support in the Bill. It accepts that greater financial powers should be devolved to the Scottish Parliament. I welcome that shift—in principle. I am rather tired of the talk of whinging Scotland. As has my noble friend Lady Ramsay, I have listened over the years to speakers in this House complain about the Barnett formula and the way in which Scotland has apparently benefited disproportionately from the Westminster grant. Nothing is ever said in those debates about the reciprocity involved: the benefits to the United Kingdom as a whole of the North Sea oil revenues over many years or the intellectual property brought to the United Kingdom by Scottish inventions from Watt to Macadam. We can name those great inventors, and they still exist in Scotland. We even gave you capitalism, for which you should still be paying us commission.
The Barnett formula has not been mentioned in the Bill. That causes me concern, too. It does not have to be mentioned because it is an administrative arrangement, but I suspect that it will be altered once the Bill is passed. It seems clear to me that it is an intention of Government to have a staged withdrawal of that grant. We should be clear, and there should be discussion in Committee, on what the implications of that are and whether increases in taxation are actually going to meet the default.
The people of Scotland want to see the functions of their Parliament strengthened. They want their Parliament to have greater fiscal responsibility so that it can be held accountable. They would accept the Calman proposition that the Scottish Parliament should not be there simply to divide up the block grant but that it should have fiscal accountability. Currently, the budget bears no relation to economic performance in Scotland. The Bill replaces the Scottish variable rate of income tax with a new Scottish rate that will be decided by the Scottish Parliament annually and applied consistently to the basic, higher and additional rates of tax.
Although there are other areas where the Scottish Parliament can make changes, the noble Lord, Lord Forsyth, told the House that Alex Salmond said that you cannot make an economy run on a narrow tax base. On other occasions, the noble Lord described it as,
“You can’t play golf with just one club”.
You cannot limit financial responsibility to income tax and stamp duty if you want to manage the economy. If the Scottish Parliament is to have responsibility, it must be responsible not just for varying tax but for its own economy. The noble Lord, Lord Forsyth, said that and I agree with him. Scotland has to be given the levers to grow its own economy, then it really can be self-reliant on taxation, otherwise Scots are going to suffer. That means that there have to be increased borrowing powers. We have already seen those in the Bill, but they are not adequate to the task. Nor, as my noble and learned friend Lord Davidson said, are they coming into force soon enough. The limited £500 million borrowing powers are allowed only if tax receipts fall short of those anticipated. That puts Scotland under pressure to make significant cuts should a shortfall arise.
What are the implications of that? Scotland should be allowed to say that it might choose a different route out of recession than the one selected by the current Westminster Administration. Many in the House are against the idea of Scotland being able to set its own corporation tax. That corporation tax and other fiscal matters have to be thrown into the mix if Scotland is to be able to choose a different set of priorities. I say this as someone who would like to see the harmonisation of taxation across Europe, but we are certainly not going to see that delivered by this Government. How can Westminster think of allowing Northern Ireland to set its own corporation tax but withhold such powers from the Scots? You cannot do that. Think of the feelings of inequity that that is going to create in Scotland. Think what that is going to mean in terms of adding to the numbers of those who will vote for the Scottish nationalist party.
The problem with this Bill is that it might create unintended consequences. It gives just enough tax powers to make the Scots parliamentarians more accountable, but not enough to enable a truly different set of economic choices.
Unlike the Scottish nationalist party, I do not believe that the people of Scotland as a whole want independence. What they want is a different visioning of their destiny from the one that is being offered by the coalition Government. They do not want the slash-and-burn approach to public services and the introduction of extortionate fees for a university education. They do not want sado-monetarism. They are revolted by the triumphalist language surrounding the cuts, where toughness is good and compassion is deemed pathetic. They find the current economic policies of Westminster morally repellent. They are revolted by the characterisation of the public sector as some kind of parasite, draining the wealth of the nation.
Scotland is a nation that has been built on respect for learning and public service. There is still huge admiration in Scotland for teachers, doctors and nurses, for academics and ministers of the churches. The Scots do not want the brand of global turbo-capitalism to which Westminster is so wedded, which sets itself up in hostile opposition to professional public service. They want something different. They want a modern mixed economy of private enterprise, creativity and public service, a mix of commercial success, social responsibility and civic engagement. They have turned to the Scottish nationalist party out of disdain for the three main political parties, disdain for the modern Conservative Party, disdain for the changes and shifts that the Liberal party has made, and disappointment that Labour failed to create a distinct social democratic model. They have watched the honourable, law abiding Adam Smith tradition of wealth generation being trashed, and have seen it give way to a system in which the big corporations and the bankers and the Murdochs of this world can suborn any elected Government with threats of taking their ball elsewhere; where the masters of the universe can get laws changed that in any way interfere with their super-profitability, and blackmail Governments into doing it all their way.
Well, it is not the Scottish way. This is not the model of capitalism that the Scottish people want. The deficit-cutting strategy of the coalition Government is not going to create growth in Scotland, and the Scots know it. It is going to bring higher unemployment and misery.
Around me on my own Benches—they are all absent because they are all down in the bar, I am sure—are the many who fear that giving greater powers to the Scottish Parliament will provide a gift to Alex Salmond, who will use increased borrowing powers to protect Scots public sector workers, maintain things such as free prescriptions, and increase his chances of winning a referendum on independence. Well, I think you are all underestimating the canniness of the Scottish electorate.
The Scottish nationalist party is not in government in Scotland because of the folly of devolution. It is not in government in Scotland because of some kind of peculiar election system. It is there because of the failure of the main political parties. And I am afraid it is there because of the folly of new Labour in failing to have a sufficiently social democratic agenda. If Labour wants to recover in Scotland—and I say this to my own party—it has to stop defending its romance with neoliberal economics. It has to stop canoodling with Thatcherism and revive its belief in equity and social justice. It has to embrace new models of enterprise fit for the 21st century, and provide Scotland’s Parliament and people with the powers that they really need.
One day, I hope, we—Labour—will want to exercise those powers. The noble Lord, Lord Wigley, got it right when he said that the United Kingdom in its present form is not serving Scotland’s needs, and we should take lessons from that. There is plenty of evidence that the people of Scotland want a stronger form of devolution. We now have a unique opportunity to reshape how that devolution works. Therefore, I welcome the Bill. I welcome the opportunity that it provides to us to strengthen and change it, and I hope that in its passage through this House it will become more empowering and more reflective of the concerns of the Scottish people.
The Earl of Lindsay
My Lords, I thank my noble and learned friend the Minister for introducing the Bill to the House. I declare an interest as a member of the Calman commission and, in doing so, I express my broad support for what the Bill intends to achieve and the opportunity that it provides for implementing the recommendations put forward by the Calman commission.
I have listened with care to the concerns and fears that a number of noble Lords have expressed about the fact that the landscape and circumstances have moved on since the Calman commission reported in 2009, as well as concerns that there may be unintended consequences from some of the Bill’s provisions. The value of the process that the Bill will be subject to in this House is that we can both test those fears and test the robustness of the provisions that were rooted in the Calman recommendations in the light of modern circumstances.
Equally, I should like to caution noble Lords against seeing the proposals in the Bill purely from the political end of the telescope. Those of us who served on the Calman commission were struck by the extent to which there is a real appetite within civic Scotland for an increase in choice and responsibility and the extent to which there is a desire within the Scottish Parliament to serve the people of Scotland better. There is a real appetite for a Scottish Parliament that is more financially and fiscally accountable to the people of Scotland. Therefore, there is not just a political manifesto lying at the root of the provisions of the Bill; there is a real strength of view in non-political Scotland that these provisions will be good for Scotland, and the quality, quantity and diversity of the evidence that we took from civic Scotland underpinned that assertion.
The noble Lord, Lord Elder, made a brief reference to the process of the Calman commission, which helps to underline the point that I have just made. We sat for well over a year. We met almost weekly at times. We received a substantial amount of evidence in a variety of formats designed to engage with the widest possible range of views across Scotland. We sought views on everything that was raised with us and we also sought counterviews. We did that not once but twice in that the commission had a two-part process. We also sought independent expert advice as necessary, and we spent some considerable time understanding the experience of other countries with devolved Governments.
The sum of those efforts was that our report was shaped not by our own preconceived views or by the political mafia but by the sheer weight of evidence, submissions and advice that we received across the length and breadth of Scotland, and largely from civic Scotland. To further put the Calman commission report into a proper context, the report and recommendations were unanimously endorsed by all its members. The commission had a majority of non-political members from different parts of Scotland, as described by the Minister in his opening speech, and we shared a wide range of backgrounds. However, the endorsement of our recommendations was unanimous, and I take this opportunity to pay tribute to the deft and wise chairmanship of Sir Ken Calman.
Since the Calman commission formulated those recommendations, the proposals in this Bill have been further subject to scrutiny, amendment and improvement within the Scottish Parliament and in the other place, as well as by committees, as described by my noble friend, in your Lordships’ House. I hope and believe that the proposals that we are looking at are going to deliver the benefits that we were tasked with securing when we set forth on the Calman commission remit. Ten years after the Scotland Act 1998, a review of how it worked and a revision of certain boundaries has been a sensible exercise. Queries raised by various Members about specific proposals in this Bill with respect to some of the changes in devolved or reserved matters can be studied in greater detail in Committee. It illustrates that there are boundaries between devolved and reserved powers which require continuing surveillance and discussion.
The improvement in the financial accountability of the Scottish Parliament is also going to be a beneficial step. The extent to which beyond the Scottish income tax it is able to raise new taxes, which my noble friend Lord Forsyth mentioned, is, I understand, subject to the approval of the United Kingdom Parliament, but perhaps my noble and learned friend might confirm that. The commission recognised the complexity of the recommendations for a Scottish income tax. We recognised the need to understand and anticipate the logistics, administration and operation of such a proposal before it came into effect. We recognised the need to avoid unintended consequences from the proposed Scottish income tax. We were categorical in our view that no such proposal should take effect until considerable time had been spent preparing and understanding the ground, and that that prior work should be followed by transitional arrangements when the Scottish income tax was introduced so that further teething problems could be properly dealt with.
The Scotland Bill takes forward the commission’s recommendations that require primary legislation. These are set out in parts 3, 5 and 6 of the commission’s report. I would like to draw the House’s attention to part 4, entitled “Strengthening cooperation”, as the commission saw the recommendations set out there as being of special relevance to the recommendations requiring primary legislation. Tonight’s debate on the various proposals for legislative change, and some of the comments and concerns that noble Lords have expressed, further emphasise the importance of this part of the report in dealing with the relationships between Governments and Parliaments.
In paragraph 4.2, at the start of part 4 of the report, we state:
“Between the UK and Scottish Parliaments and Governments, issues regularly emerge that require discussion, co-ordination or joint action. On some occasions this may involve disagreements about policies or priorities. On others there may be broad political consensus but a need to ensure that joint interests are co-ordinated, information is properly shared, the impact of the choices at one level on the responsibilities of the other are recognised, or that different circumstances or institutional background are taken into account.”
In paragraph 4.6 we make the point, and I paraphrase, that wherever there is a boundary between reserved and devolved powers and responsibilities, there is going to be a need for mechanisms to manage the issues that will arise around that boundary. Some of the topics of concern cited tonight range from speed limits to air rifles and energy policy. Wherever there is a division in responsibilities, powers and interests, there is a need for mechanisms that can ensure and manage discussion around that division.
We were firmly of the view that a vital element of the success of any devolutionary settlement is the strength of those relations, both formal and informal, between Governments, Parliaments, other democratic representatives and institutions of the state. This prompted us to look closely at how the arrangements for dialogue, collaboration and dispute resolution worked in practice and had worked since 1998 and whether they could be improved. In doing so, we also received extensive evidence on the widely seen need for Governments, officials and Parliaments to work together and, indeed, on the widely held expectation that, on behalf of the wider public good, such joint working and collaboration would be the norm, not the exception.
In respect of Government Ministers and officials, we considered and took evidence on a number of the mechanisms, such as the Sewel convention, the memorandum of understanding, the various departmental concordats and the joint ministerial committees. We also looked at inter-parliamentary relations. There, we found relatively few mechanisms to promote communication, dialogue, information exchange and even access between Members of the Westminster and Holyrood Parliaments. The evidence that we heard suggested that there is significant room for improvement and a need for more structured relations between parliamentarians and parliamentary committees in London and Scotland.
The general picture on cross-border co-operation was not without one or two brighter spots. We acknowledged that the two Governments can and have worked well together on some issues—for instance, on civil contingencies and in response to bio-security scares. We also recognised that there is a good example of the two Governments and two Parliaments working together regularly and effectively with what is known as the Sewel convention, which, as has been explained by various noble Lords, enables the UK Parliament to legislate for Scotland on devolved matters with the agreement of the Scottish Parliament. I regret that, overall, these examples were relatively few in number, and we were struck by how underdeveloped inter-governmental and inter-parliamentary arrangements are.
This was especially striking when looking at other countries where there are not dissimilar arrangements between sovereign and devolved levels of government. In other countries, these relationships tend to be much better organised, and they are seen as being a key ingredient of a resilient, flexible and successfully functioning devolved constitution.
We therefore came forward in part 4 with a series of recommendations to strengthen the degree, effectiveness and transparency of co-operation at all levels. In fact, of the 63 recommendations made in total by the Calman commission, over one-third of them—23 to be exact—dealt with strengthening co-operation, dialogue and collaboration. Noble Lords will be glad to hear that I shall not go through all 23 recommendations, but I shall give a flavour of one or two of them because they are relevant to the proposals in the Bill and to some of the fears and concerns expressed by noble Lords in relation to it.
In regard to collaboration between Governments, Ministers and officials, our recommendations included reinvigorating and further developing the joint ministerial committee structure and network, making it subject to greater parliamentary scrutiny and transparency. Importantly, we want to see its remit developed so that its primary purpose is to champion and ensure close working and co-operation on joint interests, rather than merely being a dispute resolution of the last resort.
In regard to Parliaments, we made a number of recommendations. These included strengthening the Sewel convention and ending the United Kingdom Parliament's self-denying ordinance of not debating devolved matters as they affect Scotland. If we ended that self-denying ordinance, we would achieve some symmetry with the Holyrood Parliament, where there is no self-denying ordinance to prevent it discussing reserved matters. We recommended introducing a regular “state of Scotland” debate in another place, an initiative that we may want to consider in this House as well. We also recommended strengthening the existing mechanisms of both Parliaments for working together and communicating with each other, either in respect of the Sewel convention or on other matters.
We proposed that a standing joint liaison committee of the UK Parliament and Scottish Parliament be established to oversee the strengthening of inter-parliamentary relations and consider the establishment of subject-specific and ad hoc joint committees of the two Parliaments. Likewise, we proposed that committees of the United Kingdom and Scottish Parliaments should be able to choose to work together when appropriate and that any barriers should be removed in terms of reciprocal access, sharing information and evidence and holding joint evidence sessions. In recognition of the importance of the joint interaction between both Parliaments and Governments, we felt that both United Kingdom and Scottish Government Ministers should commit to respond positively to requests to appear before committees of the other’s Parliament.
We brought forward a large number of considered recommendations in this section, covering other matters such as the conduct of inter-governmental ministerial meetings and Europe. Importantly, we felt that there should be ongoing UK parliamentary oversight and stewardship of the constitution by way of regular scrutiny of the shape and operation of the devolution settlement.
I raise this part of the Calman commission’s report and its 23 recommendations in this evening’s debate for good reason. The ability of different Governments and Parliaments to work together in a constructive and structured manner is a fundamental dynamic in the management of a series of divided and overlapping responsibilities and powers. The ability to manage and collaborate around the boundaries between reserved, devolved and overlapping interests has a bearing on all the proposals in the Bill.
I welcome the Bill. We need to test in Committee and on Report both its proposals and the concerns that have been expressed today. I would welcome an update from my noble and learned friend the Minister on the progress that is being made with the recommendations in part 4 of the commission’s report, because it has underlying relevance to the Bill and to the whole constitutional relationship between Holyrood and London Governments and Parliaments. I would welcome information also on any other relevant plans or initiatives.
Lord Soley
I strongly believe in the United Kingdom as an entity. It is one of the most effective political and economic unions that the world has ever seen. It virtually put an end over a relatively short period to the internecine warfare around the area. Importantly, it also launched Britain as the world’s first industrialised, unified economic and political system, which produced great freedom under the rule of law. We should be proud of that and stand up and fight for it.
One of my regrets about today’s debate is that the Government have chosen to put it all into one day. My noble friend Lord McAvoy pointed out that it would make people in Scotland feel that they have been pushed to the end of the day. Although they would be right to feel that, it is also the United Kingdom which has been pushed to the end of the day, because there would be many more speakers here from elsewhere in the United Kingdom—from England, Wales and Northern Ireland—if this had been a two-day, rather than a one-day, debate. That is a serious failing on the part of the Government.
I am also a strong believer in devolution. I think we got it broadly right and that the broad thrust of this Bill is right but I am worried about the development of the nationalistic agenda in Scotland. I have never really liked the push towards nationalism. One of the things that perhaps Alex Salmond needs to recognise is that if you wrap yourself in the flag of one part of the United Kingdom and suddenly start arguing that you can separate in some clean break into just two separate systems, you are forgetting that there are other parts of the system—Wales, Northern Ireland and England. I might add that the people of Shetland do not talk about Scottish oil. They talk about Shetland oil. I have just come back from a delightful holiday in Orkney. I counted in the first four days there no fewer than 14 Norwegian flags. If I was somebody representing Orkney or Shetland I would be insisting on a referendum in Scotland including a referendum on the future of Orkney and Shetland in Scotland. It is one of the reasons I make this point. The Minister will know the importance of the Orkney one.
One of the important points that has been made—I hope the Government will accept it—is that the referendum needs to be held, as I think the noble Lord, Lord Steel, said, under the Electoral Commission for the United Kingdom. It is completely wrong to leave it to the existing government of Scotland to develop the rules and regulations for an election that affects not just Scotland but the whole of the United Kingdom. We should also remind ourselves that in the settlement on Northern Ireland any referendum in Northern Ireland on its future also requires a referendum in the island of Ireland. There is a very strong case for saying that any referendum on any part of the United Kingdom breaking away ought also to be a referendum within the United Kingdom in much the same way we have agreed for Ireland. That has all sorts of dangers. I am not necessarily recommending it, but follow the logic. If you say one part can just break away the changes will be very significant and very dramatic and we should not go down that road. I actually think the Scottish people will be far too sensible to do that. At the end of the day there is not the will for that degree of independence.
I want to make another point about which I also feel very strongly. It is the idea that somehow or other on this island of just 60 million people, where for 1,000 years we have been mixing and interbreeding, you can suddenly come out and say that this person is English, that person is Scottish and that person is Welsh. I often get people saying to me, “You’re English”. I speak with an English accent. I was born in East London so you could say that makes me English. However, if you look at my background it is actually Welsh, Scottish and Northern Irish. What suddenly gives Alex Salmond or anyone else the right to tell me that I am English? If you ask me what I am I do not say English. I have never identified with England as an entity. I identify myself as British and for me that is important. It seems to me that I have a right to vote in a Scottish referendum if I regard myself as Scottish. I am in the process of looking for a house in Scotland. If I get one in time suddenly I will be Scottish and will be able to vote.
This sort of nonsense makes sense in a larger continental entity. If you are in a continent the size of Europe with 400 or 500 million people you can do this but in an island the size of Britain with four nations it does not make sense. I have strong objections to people telling me what my national identity ought to be. Much of my life has been spent in close connection with Scotland. In many ways, as my noble friends will know, the Scottish education system saved me. I left what by any definition was a failing school in East London aged 15 in the early 1950s. I was turned down even by Ruskin College, believe it or not, but I was accepted by Newbattle Abbey College near Edinburgh. I was accepted by Strathclyde University as an adult student even though I did not have the proper qualifications. I was even, I might add, accepted as a bus conductor on what used to be known as Alexander’s Buses in Scotland where doing the Ruchazie, Castlemilk and Easterhouse runs on a Friday or a Saturday night required a great deal of nerve and the recognition that paying your fare on those nights was a voluntary activity, particularly when someone turned round to you and said, “What is a Sassenach doing taking my money off me?”. This nationalism that has suddenly convinced Alex Salmond that he has some great national identity that he can give to the rest of us is profoundly wrong and profoundly dangerous. When national identities break up, they do not always break up neatly; they often splinter, and splintering is dangerous, which is why I mention this issue of where the referendum is really held—not because I recommend it but because I know that that can be the end of the road if you go down that line.
I would like to talk a bit about the tax issue that the noble Lord, Lord Forsyth, mentioned, but at this late hour it would be better if I did not. He is hitting on a very important point about the impact on the union at the end of the day and the similarities between the various parts of the union. One issue that we have yet to face up to—the noble Lord, Lord Sewel, touched on it—is that in a way the United Kingdom was the first invention of a type of federal system, but it was not and could not be a full federal system because, as he said, England is too big compared to the other parts. But we should consider the relationship between the Parliaments and institutions of the various parts of the United Kingdom. That touches on what the noble Earl, Lord Lindsay, said about the report, which again I would have liked to talk about more. We need to do much more work on that. It has often occurred to me that although I would not recommend that this second Chamber became simply a chamber for the regions of Britain, there is a way that we could use it on occasion for debates about the regions. That is particularly true if you develop devolution within England. The problem is that very often it is said that the Scots feel that they are governed by London and that everything is decided down here. You can have a similar conversation in Cornwall and in parts of the north of England. They feel that London dominates. If you look at the population of the United Kingdom, 25 million people are in that south-east corner bordered by Cambridge, Milton Keynes, Oxford and Southampton. Of course that area is going to dominate the rest—but that makes other people in further-out regions, not only Scotland, Wales and Northern Ireland but other parts of England, feel marginalised. I do not think that the answer to that is to have an English Parliament, but the devolution option is a real and sensible one. Then you would need to find ways in which to discuss the matters that affect all of us, which could be one of the roles—perhaps a limited role—of a second Chamber. It is something that we have never really looked at or thought about in any depth.
I want to end on this point. The United Kingdom is immensely important. If we risk breaking it up, it does not follow, as the SNP needs to understand, that it is going to be a nice, neat, clean split. It could be much more splintered and unpleasant than that, and it would certainly lead in my view to many problems that none of us need have. But to win that argument we need to think about the structures again. The noble Earl, Lord Lindsay, is right to spend some time on that. We need to think about the tax issue, because of the differences that that can create. Other noble Lords have mentioned things such as the educational grants and so on; all these things accentuate difference and play into divisions.
The United Kingdom is a very impressive asset for us. It is particularly suitable to an island of this size; we are not a continent but an island, and it is important to remember that. It is those structures that we ought to look at. I do say to the Government, “For heaven’s sake, in future if you do constitutional Bills like this, don’t think that it just relates to that part of the United Kingdom that we are talking about—it relates to all of us, and we all need to have a say on it”.
Lord Stephen
My Lords, I begin by agreeing with my noble friend Lord Soley that the timing of this debate, given its self-evident importance, is less than ideal. However, there have been many very valuable contributions. It is perhaps worth starting with the summary given by my noble and learned friend Lord Wallace about the history of all this. This particular Bill and review all began back in 2007, immediately after the Scottish election that took place in that year. There was a sense that, after 10 years or so of its operation, we needed a full and serious review of the working of the Scottish Parliament and its effectiveness and the possibility of more powers for the Parliament. We needed to put in place what became the Calman review to achieve that.
It is important to underscore that the scale of this review has been extremely serious, significant and substantial. In my view, great credit should go to the noble Lord, Lord McConnell of Glenscorrodale, for helping to trigger the review. He had just fought a very close election campaign, essentially on a manifesto of no change to the powers of the Scottish Parliament, yet he took on the proposal to trigger this review. So too did the leader of the Scottish Conservatives—now their outgoing, and perhaps final, leader—Annabel Goldie. Not everyone in her party agrees with this review, as we have seen in the Chamber this evening, but she was prepared to put her reputation at stake and work with the Labour Party and the Liberal Democrats to trigger the review.
My position at that time, as leader of the Liberal Democrats in Scotland, was a far easier one, because, as noble Lords will be aware, the Liberal Democrats support home rule, a federal structure for the United Kingdom, greater powers for the Scottish Parliament and more decentralisation. My concern was that the whole thing would not go far enough and that it would not be substantial. To give one simple point of clarification, I should point out to the noble Lord, Lord Forsyth, that in establishing this review, we had to wait for the election of Wendy Alexander as the new Scottish Labour leader before finalising the commission, its membership and so on. The plans were already in place when she became party leader, and therefore her plans to support the referendum—to “bring it on”, as noble Lords may recall, and as he referred to earlier—did not actually come until later in her leadership.
I would like to pay tribute particularly to Professor Sir Kenneth Calman, but also to the lay people—businesspeople and young people from across Scotland—as well as the senior party political figures who participated in the Calman review. I would also like to pay tribute to the noble and learned Lord, Lord Boyd, the noble Lords, Lord Elder and Lord Selkirk, and the noble Earl, Lord Lindsay, and particularly to the noble and learned Lord, Lord Wallace of Tankerness. I am delighted that he is now in charge of the Bill in this House. I think it should also be mentioned that there was one other political activist involved in all of this, Audrey Findlay. She deserves considerable credit, not least for her work alongside the noble and learned Lord, Lord Boyd, the noble Lords, Lord Elder and Lord Selkirk, the noble and learned Lord, Lord Wallace of Tankerness, and the noble Earl, Lord Lindsay. It was quite a task for her to be part of that heavyweight team.
It was hard and serious work, but we achieved unity. That involved compromise. It could have been simply tinkering at the edges—a polishing of what was achieved in 1998—and, at one point, I feared that it might be. Yet, in my view, the commission came up with a radical set of measures particularly in relation to taxation that went far beyond what we were told that the Treasury would live with when the review was first established. That is another point to emphasise: getting the UK Government to support the Calman commission, and getting the Treasury directly involved in the review, was difficult to achieve, but we got there in the end and they played a very important role in shaping the proposals that are now part of this Bill.
It is simply not tenable for any Parliament to receive a £30 billion cheque each year but have responsibility only for spending that money without having any role in raising a single penny. I tried to explain the system once to the Chinese Finance Minister during a visit to St Andrew’s House in Edinburgh, probably just after a lunch with my noble friend Lord Steel as Presiding Officer down at the Parliament. After I had given the best explanation I could, he responded by saying “Ah, I understand now. It’s very similar to the way we fund Tibet”. At that point, I wondered whether the problem was my explanation or whether we perhaps had a fundamental problem with the system in Scotland. The Scottish Parliament was, and today still is, 100 per cent dependent on another Parliament for its funding. In my view, that is not sustainable and more powers to create a more buoyant tax base are required. Perhaps more powers than are in this Bill are required in time, but this remains a strong start.
For the Liberal Democrats all of this was, as I have mentioned, a natural progression building on our original commitment to home rule, our commitment to the Scottish Constitutional Convention, the progress through Parliament of the Bill which became the Scotland Act and then the excellent work of the Steel commission, chaired by my noble friend Lord Steel, in looking at how to create a stronger, more effective Scottish Parliament. This Bill is not only of great significance but has been progressed far more quickly than we might have imagined when the Calman commission was established. Having been thought of in the summer of 2007, the commission was established by the Scottish Parliament in December that year, with an interim report in 2008 and a huge volume of work done by the commission and its members in the period up to the final report in 2009, which was at the 10-year mark. It was then endorsed at a UK general election in 2010 and is moving forward into legislation in 2011. It has moved speedily—far more so than I originally anticipated—and has had a far greater impact on Scotland than the Scottish Government's “national conversation”, which took place over the same period.
In my view, the UK remains too centralised. We have heard discussion tonight of some other nations. My noble friend Lord Maclennan mentioned Australia, in some parts of which 55 per cent of the tax base is raised at the state level. In some regions of Spain, 100 per cent of taxation is raised at the regional level. The USA, Canada and Germany—the list goes on—all raise substantial taxes at a federal or regional level and all have substantial devolved powers. Democracy can still work—indeed, can flourish—with systems of devolved administration and federal taxation. Wide, broadly-based tax-raising powers at local or regional level, in my view, give strength to democracy rather than undermine it. We need to see more of this in the United Kingdom. Some would argue that 33 per cent is not enough; my noble friend Lord Forsyth mentioned that. I have some sympathy with that view but this Bill is, I repeat, a substantial start and should be strongly supported.
Finally, at one point we thought the Calman proposals might settle things, perhaps for the following decade. However, in May this year that all changed so this Bill is neither the end nor the beginning of the end. A very big constitutional debate lies ahead. We are at an early stage in all of that but it is a profoundly important, historic stage in Scotland's future. There is a great responsibility on all of us who share the view that we should work powerfully together to prevent Scotland's separation and block independence. I believe it is impossible to overstate the importance of this. If we pull together as Liberal Democrat, Labour and Conservative representatives to activate everyone in Scotland who opposes independence—and there are many, I believe—the campaign can and should be won. These are defining times for our nation’s future, and this Bill must act not just as a foundation but as a launch pad for a strong and effective cross-party campaign to keep Scotland as part of the United Kingdom.
Lord O'Neill of Clackmannan
My Lords, the case for devolution has been quite adequately presented by the last speaker, in so far as the case for devolution is twofold: first, to stop separatism; and, secondly, to try to bring to the United Kingdom a degree of decentralisation, which our metro-centric country requires. The first attempt that we made at devolution was accepted by the Scottish people and by the Welsh people—by a smaller majority but now, I think, embraced by them—and was subsequently embraced by the people of Northern Ireland as well, but after a time we have to pause and reflect. It is fair to say that, after the 2007 election, not only did we pause and reflect in Scotland but we tried to find a means of stopping the progress of the SNP. The Calman report, and indeed this Bill in its embryonic form as it was in the Commons, has singularly failed to do that. It has failed because, frankly, to use an old Scots expression, it is “cauld kale het up”. There are bits of this and that, but at the end of the day the whole is probably less than the sum of its parts. Probably our task here will be to try and bring some degree of importance and significance to it.
One of the problems that decentralisation in the United Kingdom has had is that we failed to decentralise anything in England. It has been fashionable this evening to agree now and again with the noble Lord, Lord Forsyth, about his remarks on taxation, but I would like to pay tribute to the noble Lord because nobody did more to pave the way for devolution in Scotland than he did by reforming Scottish local government into single-tier—and, I think, daft—authorities. Between the two of them—I know it would be wrong to deny his colleague a little praise as well—by creating single-tier local government in Scotland, they removed the biggest obstacle that many of us confronted when we were supporting devolution in 1978 and 1979. That is that, having had what we considered to be a most rational form of local government reform just introduced, we were then confronted by these councillors being extremely reluctant to give up what they considered to be quite important powers at that time. Given the manner in which the over-centralised Forsyth regime and the Lang administration—he also must claim some credit and blame for this—sought to reform Scottish local government, between the two of them these arch-unionists paved the way for Scottish devolution. I only wish that we had had, in the shape of my noble friend Lord Prescott, the then Labour Minister, someone with a wee bit more savvy about what local government involves and the—in many respects understandable—reluctance of local authorities to give up power, or as someone said, for turkeys to vote for Christmas. We are talking about decentralisation of Scottish powers but in a UK context, in which there is still a very overcentralised system of government within England. That makes a difficulty for us.
In a Second Reading debate like this, one only picks out bits and pieces of the process, but it is clear that if we are going to have some form of plebiscite on Scottish separatism it has to have a legal basis that will give it some form of legitimacy. It is therefore important that at some stage in our consideration of the Bill we look at amendments that state clearly that it is a reserved power of this place and that you do not break up the United Kingdom with some ragbag referendum organised by the SNP in Scotland. I put the matter in these rather dismissive terms because I do not trust that party to get the wording right, I do not think it will conduct a referendum in such a way that it will meet all the requirements of decent electoral law and I am not convinced that it will not try to hold it on an unsuitable date—although it certainly will not coincide with any Scottish sporting triumph.
It is unfortunate that many of us today were denied the opportunity to see Scotland win 1-0 in a historic victory over Lithuania. If the managers of this place had any sense of what we were doing, they would not have had this debate on a major sporting occasion of this character. I phoned up last week and was told that I was the 30th person to make an application to speak. If that fact was known to the Whips Office on Thursday and Friday, even the Nobel laureates who normally people whips offices might have been able to understand that this might be a rather long debate. At 11.10 at night, this is stretching the good will of a lot of people—not that I am worried about being late in the debate, but debates in this place should finish at 10 pm and we should come back the next day or we should start earlier and have the debates at appropriate times. That is as may be, though—we can return to that at our leisure in Committee and look at these matters in greater detail.
The Calman commission was very good about the powers and, after a fashion, about the tax-raising powers, but it did not look at the composition of the Scottish Parliament and it was indifferent to the constitutional changes that have quite correctly followed as a consequence of devolution. Scotland was overrepresented in the Westminster Parliament post 1707 because we gave up a Parliament to join the United Kingdom. The fact is that we have not seen any change in the number of Members of the Scottish Parliament—129 of them—regardless of the fact that there are now probably going to be only around 50 Scottish seats in the other place as a result of the dreadful piece of legislation that has been imposed on us in the form of the AV and constituency reorganisation Bill. There is no reason why we should not have coterminous seats for both Parliaments, with an appropriate reduction in the list system to accommodate the consequences of that. That is something that we could look at.
I had disagreements on this with my dear friend who is sitting next to me when she was Secretary of State. I have to say to my noble friend Lady Liddell that she was wrong then and now we have an opportunity to correct it. Frankly, the Scottish Parliament does not meet many days a week nor as often as we do. As far as I understand what the Members of that Parliament actually have to do, they do not deal with social security, taxation or the anxieties of people who have kids abroad in the Army. There are so many things that the Scottish Parliament is not responsible for that you wonder how its Members can fill in the days in the week that they are there—with some considerable difficulty, it would appear at times, because they do not do the job. Having been a longstanding chair of a committee in this place, which was served remarkably well by incredibly competent staff and produced extremely effective reports, I have looked at some of the reports coming out of the Scottish Parliament and they are akin to an elephant giving birth to a mouse; they seem to have the same gestation period and much the same output.
This Scottish Parliament that people say has been a great success has not increased the efficiency of the health service to any great extent, nor are we convinced that the quality of Scottish education is what we like to think it once was and what it should be in the future. There has been no Parliament that has had the resources of the Scottish Parliament, because of the Barnett formula, without any of the pain of raising taxes. Even with the powers of tax raising envisaged by the Calman report, it is frankly not very impressive. As a democratic socialist, I believe that the purpose of the tax system is not only to raise money to facilitate expenditure but also to improve social justice. Perhaps when we get to that point in Committee, we will see whether or not it is possible to vary the level of taxation within each band. We could, for example, have 50p plus 3p on the top grade, 2p on the second and perhaps leave the standard rate as it is so as to have a little bit of redistribution through the tax system. That is one of the purposes that some of us regard the tax system to have. I think that Calman was grossly deficient here. I realise, however, that when trying to get a committee to produce a consensual report, this is a consequence.
The noble Lord, Lord Forsyth, and I were never political friends but we were neighbours of a polite kind—we never looked into each other’s gardens, but he had the constituency next to mine. However, the people who drive through Clackmannan and the bits of Stirlingshire that he did not represent certainly seem to have much the same attitude towards the taxation of motorists that I have encountered. Frankly, I do not think anybody is going to get greatly excited about speed limits and fining people. People are very irritated by these things: if it is more complicated when you go south of Berwick or north of Carlisle, then life becomes more complicated. I do not think that will give us any greater sense of national feeling or diminish our resentment or support for Westminster. When they were casting around for other bits and pieces to throw into the pot, they thought of this. That is one of the criticisms I have of Calman. I understand the task that he and the members had: they had to produce something but, ironically, it was too late and at the end of the day I do not think it is going to make a great deal of difference.
If we want to make a difference and if we want to do things better, we have to address the challenge of decentralisation. We have to look at the issue of social injustice, which, in view of all the resources that the Scottish Parliament has had, it has done precious little about, either under Labour or under alleged social democratic nationalist parties. There are things that we could still try to do in this respect, but I do not think they will necessarily come from an all-party consensual group such as Calman. I realise that there are advantages in having such a group every so often. This, however, is not a major constitutional change but a tinkering at the edges—a tweaking here and there. We will probably spend a disproportionate amount of time looking at it. I know the lawyers have already made a bid for the Supreme Court, which will take up a couple of days and one or two important votes. There will be all the other bits—the guns mob will be in, and Charlton Heston mark 2 will come across to tell us what to do.
At the end of the day, we have to take on the challenge of nationalism and separatism with a far more clear and consistent programme, whether it is one of right-wing conservatism or what I regard as the kind of sensible social democratic views to which many of us on these Benches subscribe. There are choices available to the Scottish people, but one thing that is quite clear is that changing the boundaries of our country will not solve any economic or social problems. The record of nationalism and separatism is very patchy when it comes to smooth transitions. We have seen what happened in the Czech Republic and Slovakia but, sadly, that is one of the rare exceptions.
In the present economic climate, with the difficulties that we have, I am not sure that we could necessarily achieve a major constitutional transition of the character that is envisaged by the separatists in the United Kingdom, particularly the Scottish separatists. Therefore, we have to find more effective ways of taking them on than this Bill. The Bill will, perhaps, make the Scottish Parliament a little more efficient, but it will not address the other challenge that devolution has to face—the challenge of separatism. We need far more good government, effective policy-making and proper advocacy of social and economic objectives. Those may well be different across this House but they would provide the Scottish people with choices, which, at the moment, the nationalists do not offer. The incompetence, in large measure, of the other parties has allowed the nationalists to have free run in these past months and has given them a majority that many of us resent bitterly, while recognising that it seems to be the will of an awful lot of Scottish people and that we must persuade them to the contrary.
The Earl of Caithness
My Lords, this Bill was introduced in the other place on 30 November last year, St Andrew’s Day; 21 June is not quite such an auspicious day in Scotland but I guess that until today my noble and learned friend Lord Wallace will have remembered 21 June as the anniversary of the scuttling of the German fleet in Scapa Flow in 1919. From now on, I guess he will remember 21 June for the Scotland Bill.
Ironically, we might all be wasting our time in this debate if there is a referendum. Most of the provisions will not come into force until after the referendum might take place. Therefore, I support the cause that we ought to assert the constitutional duty of this Parliament to determine the timing and composition of the referendum.
This is a groundbreaking Bill, particularly on finance matters. As such, I welcome it. In the early and mid-18th century, the well used phrase in Ireland and the future USA was, “No taxation without representation”. Three hundred years later, the call is for no representation without taxation. The UK has the most centralised tax system of any major economy, with just over 4 per cent of tax revenues being set and collected locally. That is basically council tax. Despite this, the current law gives the Scottish Executive and Parliament decision-making powers on 60 per cent of the spending that is identifiably Scottish. That is unjust and bad for democracy. The Scottish Executive has always been able to spend and ask for more money, without having to justify that to its electorate. That is an incentive to spend more, rather than spend effectively. The Scottish Executive has been rather good at that.
Things will be different for the future Scottish Government. Rather than the paltry 4 per cent of local revenue, they will be responsible for raising approximately 35 per cent of their revenue, with the remaining 65 per cent still coming from the UK block grant. That takes the ability to raise local taxes to a percentage level comparable to that of the USA, but still less than that of Canada. I should like to see that expected 35 per cent be even higher but I appreciate that there are many difficulties. Any transfer of taxation powers must not increase costs of administration to the point where the transfer is uneconomic and detrimental to business. I therefore ask my noble and learned friend Lord Wallace whether he can tell the House what further taxes are now being considered for transfer. What is the justification for the deduction of 10 percentage points of income tax? Why should it not be 15 per cent, which would give more accountability to the electorate in Scotland? Can there be a different basket of taxes that the Government can transfer to Scotland to give the accountability, but without causing some of the concerns that I will come to later?
Moreover, does my noble and learned friend agree that there is still a fundamental flaw to this Bill? The flaw is that it is based on the outdated existing financial settlement. Through the block grant, over the past 24 years Scotland has received approximately its share of North Sea oil revenues. Thus it has been financed as if it was independent but—this is the crucial point—it has not had to cope with the huge fluctuations in the price of oil. The Executive’s spending programme has been cushioned from the marketplace and in times of low oil prices has been subsidised by the rest of the United Kingdom. Is it not time for the whole basis of the block grant to be changed to one of need and linked to the price of oil? That would encourage a future Scottish Government to be much more prudent than the ones that we have had to date and to spend more effectively. It would expose the country and the electorate to the realities of the real world and to the benefits that the union has brought to Scotland.
I listened carefully to the concerns raised by my noble friends Lord Forsyth, Lord Lang and Lord Sanderson. One of the concerns was population. How can one say that Scotland cannot raise 35 per cent of its revenue from its population? If one talked about that to people in Denmark, Finland or even outside the EU in New Zealand, they would be amazed, and the response would be a surprise to my noble friends.
The Earl of Caithness
No. I did not interrupt my noble friend. The time is late and I want to get on. I have almost come to an end.
The present system of funding Scotland is broken. It is doing Scotland no good. The principle that a Government who spend money must be accountable for raising some or all of it is right. We must not flinch from that, but this Bill is surely one that should make it work.
Lord Maxton
My Lords, when I saw what my position was on the list of speakers, and recognising the lateness of the hour, I was tempted to start by saying that everything I want to say has already been said and that I will therefore not make a speech at all. However, I decided against it.
I have been a supporter of devolution for a long time. Throughout the whole of my parliamentary career I have campaigned for it. In fact, if noble Lords look back through history, they will find that my uncle, Jimmy Maxton, was one of the signatories to the 1924 Private Member’s Home Rule Bill for Scotland, introduced by one Geordie Buchanan; so even the family history, let alone my own, is good on it. I have always supported devolution because it is part of the process of moving to a more democratic state, where decisions are taken by people at the appropriate level for them to be taken. Therefore devolution for Scotland was right. When my noble friend Lord O’Neill started attacking the noble Lords, Lord Forsyth and Lord Lang, I thought he was going to attack them because they did push the whole question of devolution forward.
During the 1980s, there was an increasing democratic deficit in Scotland whereby legislation could be introduced down here without having a majority of Members in Scotland. In fact, over the years, there was a decreasing number of Members in Scotland. Of course, the introduction of the poll tax, for which both noble Lords can take some responsibility, was probably the thing above all that pushed people in Scotland to accept that there had to be a better way of running their affairs in Scotland. Devolution did not start in the 1970s. Arguably, it was started in 1885 with the introduction of the office of Secretary of State. Bit by bit, over the years, there has been a gradual increase in the number of things that Scotland has been allowed to do—separate Scottish legislation, the Grand Committee, and the Grand Committee meeting throughout Scotland, which the noble Lord, Lord Forsyth, introduced. All that has been part and parcel of the process of increasing democracy.
When my late good friend Donald Dewar said that it was a process, not the end, I am sure he meant that it was part of a democratic process that had to go on. In Scotland, we have not shifted democracy further down to the levels where people ought to be taking more decisions—in their own societies and communities. Nationalism has stopped that. Nationalism has been the enemy of the democratic process, not its friend. That is not because the SNP is an undemocratic party—I believe that it believes in democracy. The problem has been that every time anyone suggests that there should be some form of change to the democratic process—more devolution, more powers to Scotland—the SNP says that this is yet one more step towards independence. That is wrong; we must not allow that. That is why, in my view, the SNP and nationalism have been the enemy of democracy. That has also stopped us saying that some things might be better done taken away from the Scottish Parliament and given back to the British Parliament or to the European Parliament. There is a whole broad band of things that we might look at, but we do not look at them properly or logically in a democratic way; we look at them in terms of how they relate to nationalism and the SNP's agenda. That is wrong.
Therefore, we ought to be doing three things. First, we ought to be arguing the case for the union as strongly as we can. My noble friend Lord McConnell of Glenscorrodale—I am the only person who knows where Glenscorrodale is and has been there—who is not in his place at present, was quite right when he listed the organisations that had to make the case. He missed one out, which is the most obvious. We must persuade the Scottish media to be prepared to listen to our arguments and not just those of the Scottish National Party. I wrote at least three letters to the Herald during the election campaign; the Herald refused to take them because it said that they were too political.
Lord Maxton
Yes, quite. We have to get that case across. My first point is that we must make the case for the union, because there is a very good case to be made. Secondly, we must ask the SNP why it wants us to separate. What is the case for independence? If we look at history we see that various things divide people from people and make them say, “That is why we want to be separate”. Language is one. We have the same language. Religion is another. Scotland may be divided by religion, but Scotland and England are not divided by religion. Another is difference over boundaries. There is no natural boundary between Scotland and England. I remember that when I used to go north as a child with my father and we crossed the Solway he used to say, “We are now in Scotland”. If you drive that road now, you will see that the sign that says, “You are now in Scotland”, is at least a mile and a half further up the road from the Solway, so even that is a movable feast. You could not set up a frontier or boundary between the two countries. There is no natural divide.
What divides us? History, which the SNP distorts the whole time. The SNP refers to Bannockburn as if somehow it was a great victory for the Scottish people and somehow makes Bonnie Prince Charlie into a great nationalist hero. If Bonnie Prince Charlie wanted to be the King of Scotland or to put his father on the throne in Scotland, he could have done it. Why did he march south into England and get defeated? He did not want the throne of Scotland but that of the United Kingdom. History is the one thing that possibly divides us—but only just. The other is sport.
My noble friend mentioned that he was at Hampden singing “Flower of Scotland”. I have to beat him at that. I was at Murrayfield in 1990 when David Sole marched out and Scotland won the Grand Slam. We all sang “Flower of Scotland” and I was among them singing heartily. I accept that I was singing the words printed in the programme and did not know them off by heart, but I was singing them heartily. I support Scotland when it plays. I will also support the British team when it takes part in the Olympics next year. I even support Europe in the Ryder Cup. It depends on what the sporting occasion is as to where my support will lie.
There is no divide, so the SNP has to tell us why it wants us to split away from the rest of the United Kingdom. I am in some ways typical in this.
Lord Wigley
The one area that the noble Lord has not touched on is the possible difference in social aspiration. England and London are overwhelmingly Conservative and Scotland is not. Is he happy that Scotland should be governed perennially by right-of-centre parties when his own country does not espouse those values?
Lord Maxton
Those may be the social aspirations in London but I am not at all convinced. Certainly in several elections recently, the Labour Party has had a clear majority of Members of Parliament from London. Equally, the social aspirations of the people of Manchester are very similar to those of the people of Glasgow, as are those of the people of Newcastle to those of the people of Edinburgh, Glasgow and elsewhere. Those are the aspirations of the urban working class as opposed to the rural working class. The aspirations of people from the highlands are different from those elsewhere.
The third thing that the SNP has to do is say what it means by “independence”. If you look at its own Scottish National Party website, it still does not tell you what it means. I have always assumed that it wanted to establish—I will not use the word “separate” because I gather it objects to that—an independent nation state on its own, with its own social security system, army, ambassadorial services around the world, a taxation system that is totally separate from ours and a currency, unless it wishes to be in Europe when Europe will tell it that it has to adopt the euro. I always thought that that was what it meant. It now seems to want to fudge that. It is constantly fudging what independence means. To me, it is clear cut; that is what it means.
I do not know whether I, as someone who comes here and has a flat in London, will have an English passport or a Scottish one. Presumably, when you come from Scotland to England and it is a separate state, you will have to carry a passport. Some people say that that is how it is in Europe. I have to carry a passport if I go to France, Germany, Spain or Portugal—all parts of Europe. What is so different in that? Does it want that or does it just want devolution-max? No, it does not want that. Its own supporters hate the English so much that they want an independent, separate state. It is time that we demanded that the SNP tells us exactly what it wants an independent Scotland to be and what it means by that term. That is why, although I give the Bill a cautious welcome, I will consider some details at considerable length in Committee in the coming weeks.
Lord Lyell
My Lords, I start by thanking my noble and learned friend for his very clear exposition of this Bill at the outset. He and I, and maybe one or two others, are the only two who have attended virtually every second of this debate. Perhaps there is something in it, that the first Lord Lyell, my great-grandfather, was in fact the Member of Parliament for Orkney and Shetland for 15 years. So there is doubtless something in the breeding that makes hard men, and indeed my noble and learned friend might perhaps be one of those. I think he has done a super job, but he has not started yet: he has to wait until Committee stage comes, and then we shall have enormous fun.
I had a look at this Bill, and the first clause that crossed my mind, a clause which has been beautifully and eruditely covered in great detail by my noble friend Lord Shrewsbury, deals with airguns. I consulted the Tayside constabulary in Kirriemuir, and was told that in broad terms it was very pleased and quite happy with what was set out in the Bill. It seems that many of the airguns used in our neck of the woods are used legitimately in a very rural area. If indeed airguns are spreading and multiplying in urban areas in Scotland, no doubt my noble and learned friend will be able to take care of that, and we shall be able to make some arrangement.
I would turn fairly quickly towards the financial aspects of the Bill. I think that is is Clause 28 and further on. At the outset there have been notable contributions from the Liberal Democrat Benches. My noble friend Lord Forsyth was a marvellous opening bat, and we will come to him later. The Liberal Democrat Benches dealt very well and very effectively with a federal system. I think the noble Lord, Lord Steel, referred to what might be a federal tax system in the United Kingdom. I certainly call it a lopsided federal system. There might be a very good reason for this. It seems to me that what is set out in the tax-raising powers in the Bill, and indeed has been set out from the outset in all the aspects of devolution, in giving more powers to the Scottish Parliament. It is lopsided devolution, in that the tax measures that might be proposed for the Scottish Parliament will be in the nature of—if I take the Federal Republic of Germany—a state tax, whereas every other citizen of the United Kingdom, be they English, Welsh or from Northern Ireland, will be paying tax under a unitary system. Marvellous figures have been quoted: my noble friend Lord Caithness—was he Chancellor of the Duchy of Lancaster?—was a great financial expert in his previous expert incarnation, and he mentioned some percentages. The noble Baroness, Lady Liddell, will be able to explain the Australian system.
About 25 years ago I took a German course. It was very carefully explained to me that in Germany you pay tax to your Gemeinde, your local district. For every 100 euros of tax you pay, you know that 15 per cent—15 euros—are going to your Gemeinde. The 85 per cent is—or used to be—split, fifty-fifty, so that 42.5 per cent went to the federal government, 42.5 per cent went to your Land, your land government. That would be an exact replica of what we are discussing tonight, and what might come about in a federal system. It was another notable Member of your Lordships’ House from the Liberal Benches, a former member of the Institute of Chartered Accountants in England and Wales, the noble Lord, Lord Sharman, who said to me, “If you want to look at systems of federal taxation that might be relevant to the Scotland Bill and what we are discussing now, first of all look at Germany, then look at Switzerland”. I have been visiting Switzerland for 35 or 40 years, perhaps not entirely for purposes of tax, mainly for skiing. Indeed the noble Lord, Lord Forsyth, is a noted denizen of Lenzeheide, and he represented your Lordships at skiing, so he will have some idea of the breakdown of how you pay your federal tax, your local tax, and the other taxes. The main crux of the discussions we have had is on tax—we have looked at landfill tax and all the other taxes—but mainly it is income tax.
I am so pleased that the noble Lord, Lord Forsyth, is here. I am sorry that the noble and learned Lord, Lord Fraser, is not with us because the noble Lord, Lord Forsyth, and I are both Angus lads. I think that in the words of the Bill the closest connection he might have is with the lovely town of Arbroath. There is another Scot—also an Angus lad, from Arbroath—who 50 years ago put together a melody that is to be found in Rossini’s opera “William Tell”. It was originally called “William Wallace” but it was translated. The melody went via the Crimea to a pipe major in the Gordon Highlanders who prepared the wonderful melody that we marched to called “The Green Hills of Tyrol”. About 50 years ago, this marvellous denizen of Arbroath and Angus put the melody on a disc. It went platinum and trillions of copies were sold. He was called the “Scottish Soldier” and I look at many of his words as a Scottish taxpayer. In the words of Mr Andy Stewart, he wandered far away. Indeed, he did, and we have heard a great deal about that tonight from the noble Lord, Lord Watson of Invergowrie.
However, there is something that worries me very much, as it does several of the expert groups. I declare a tiny and humble interest as a member of the Institute of Chartered Accountants of Scotland. The institute briefed me in 1998 on aspects of who would pay the Scottish tax and who would be classified as a Scottish taxpayer. It seems that not much has changed since then. I purloined volume 593 of your Lordships’ Hansard report, which covers 6 October 1998. I made pretty well the same speech as I may be making in Committee about who would be a Scottish taxpayer. I received a wonderful, courteous briefing from the government spokesperson—the wonderful and very courteous noble Baroness, Lady Ramsay, who explained the matter quite vividly. If your Lordships glance at paragraph (4) at the top of page 24 of the Bill, they will find an exact description of what was in Section 75 of the 1998 Act concerning one’s residence in Scotland as being on a boat or vessel. Earlier, we heard a dissertation about houseboats, rafts and other things, but what the noble Baroness was pointing out then—I think that it is a major flaw in the Bill—was a ferry. I recall the late Lord Dunleath asking what would be the tax status of people from Northern Ireland arriving on a ferry at Stranraer or Cairnryan. Certainly I was given to understand that even if a UK taxpayer from Northern Ireland never set foot on Scottish soil, because that ferry was tied up on Scottish land he would be deemed to be, and would be classified as, a Scottish taxpayer. That was set out by the noble Baroness in a very erudite fashion at col. 296 of volume 593, but even with her great humility and wonderful courtesy I do not think that she was entirely convinced. Indeed, the late Lord Mackay of Ardbrecknish was in no way convinced. However, I hope that we can move on from that and that my noble and learned friend will be able to take care of it.
I think that it was the noble Lord, Lord Sewel, who during that debate referred to lorry drivers. He had been the Minister taking care of it. In 1998, I referred to a firm in my own neck of the woods in Kirriemuir which employed 360 lorry drivers, 27 of whom had residences in Scotland, Therefore, straight off they were Scottish taxpayers. When you start looking at midnight at where you are with new Sections 80D, 80E and 80F under Clause 30 relating to Scottish taxpayers, you become just as confused as you were in 1998. You have to start totting up how many days you spend in Scotland or elsewhere. We have not moved on from there. Could my noble and learned friend take this on board, so that we can come back to it at greater length in Committee? I worry about how many other non-Scots are going to be classified as Scottish taxpayers. I am delighted to hear—I think that I heard that it has been confirmed—that the decision as to who will be a Scottish taxpayer, let alone a rate payer, will be taken not by the Scottish Parliament, though that may cause consternation and anger, but by Parliament here.
The transport firm found that up to 70 out of their 360 employees would easily be deemed Scottish taxpayers. They have homes in England and all other aspects of their lives, including paying tax, are in England too. But if they are to be classified as Scottish taxpayers, the din down in the other place will be something like the zoo at feeding time. I do not think that even with a three-line Whip these tax measures will be pushed on to so-called Scottish taxpayers who do not live in and have nothing to do with Scotland, apart from the fact that for a certain hour at a certain time of the year they will be north of the border. I am grateful to my noble and learned friend for the details that he has provided, and I look forward with great relish to Committee, whenever it may come. I hope that it may be this year, not in 2012.
Baroness Liddell of Coatdyke
Your Lordships can be reassured that I am not going to give a lengthy seminar on the Australian taxation system. At this late hour, I would not wish your Lordships to become overly excited. I thank the noble Lord, Lord Forsyth, and my noble friend Lord McAvoy for taking into account my plight. Scotland had to wait 115 years to have a woman Secretary of State, so having to wait seven hours to speak is not all that challenging.
As the only woman who has ever been Secretary of State for Scotland, perhaps I may give this House one piece of advice that previous male Secretaries of State could not give. You cannot be a little bit pregnant, just as you cannot be a little bit independent. Some of the recent debate that we have heard in Scotland, from the First Minister in particular, leads us to believe that he thinks that you can be a little bit independent, with the same monarchy, the same embassies, the same army, the same regiments. No. One of the valid points made by the noble Lord, Lord Steel, was that the Bill was intended as a fine-tuning of the devolution settlement.
There is a certain symmetry in our sitting here late at night. Prior to devolution a lot of Scottish legislation was done very late at night in the other place. Devolution is a modern word for what happened at the Act of Union and was re-emphasised with modern legislation and the establishment of the office of the Secretary of State. The noble Lords, Lord Forsyth and Lord Lang, presided over a department that covered the equivalent of 13 different UK government departments. That was the argument for devolution. The aim of this Bill is to fine-tune that. But as the noble Lord, Lord Forsyth, said, this Bill has missed its time. It was introduced when it was legitimate to look at ways by which we could improve devolution, make it more effective, and in particular deal with this issue of fiscal and financial accountability. Last May’s election changed that. I was active in that election. I am sure that many Members of this House were very attentive in watching the Scottish media. All of us in this House have things to have answer for in not winning that election. But there is one thing of which I am certain. Separation was not part of the debate. I agree with the noble and learned Lord, Lord Boyd, who says that it is not enough to portray the negatives of separation. You must portray the positives of the United Kingdom.
I am a Scot who is proud to be British, and I am a Brit who is proud to be European. I am quite comfortable with having multiple identities. I believe that one of the key issues that we have to address in a mature manner is that the debate in Scotland is not about soft and cuddly words like independence but about secession. As we look to the future and to the ramifications of what is in this Bill, we should look in detail at the elements of this Bill in relation to secession. There are certain things, particularly in relation to tax, on which we need some adequate costings. If we were to find ourselves negotiating a secession treaty—I do not believe that we will find ourselves in that situation, but it is a foolish person who does not plan ahead—would we want to have conceded so much in advance? Frankly, I want answers on some elements of this Bill.
In general, I support the Bill. In principle, I support the Bill. I had nothing to do with the Calman commission—I was in the colonies at that time, fortunately as a free person, not as a prisoner—but I can see the reasoning behind what Calman has come up with and is embodied in this Bill. However, there are many aspects of this Bill that require further thought, I have issues that I want to raise in Committee, and I have questions that I do not expect the Minister to reply to tonight. He is always most gracious in trying to answer people’s questions. I want to flag up these questions because I want to refer to them in some detail in Committee.
The points on taxation made by the noble Lord, Lord Forsyth, are extremely valid. One of the key arguments around the 3 per cent variation on taxation in the second question in the first referendum was around how much would be raised. There are three elements in the development of any tax. The first is the amount of money that it will raise, the second is the cost of collecting it, and the third is the ability to avoid it. I am sorry that the noble Lord, Lord Sassoon, is not in his place, although I saw him in the Chamber earlier, as some of these issues are for the Treasury. I would like to know how HMRC proposes to manage the introduction of a separate variable rate of income tax in Scotland, the cost of transferring that, how the burden of collection will be shared and the level of avoidance anticipated. Many of us in this House are forced into having two dwellings—the point that the noble Lord, Lord Forsyth, made—so where are we liable to be taxed?
The other area I would like to cover is borrowing. Anyone who has been watching the bond markets in recent weeks knows that the issue of government borrowing is extremely fraught at the moment. We have seen the debate about the US AAA rating, and we have had huge debates about Greece and Italy and their credit ratings, and France and its credit ratings. What would Scotland’s credit rating be, particularly when we take into account that RBS is headquartered in Scotland? What element of that comes into the computation of the interest rate in relation to Scottish bonds floated in the open market? These questions may seem esoteric, but they are not esoteric if we are considering a secession treaty. I ask the Minister to ask the Treasury to look at some of these issues.
The mechanics of bond issuing also have to be looked at. Are we going to have to replicate the Debt Management Office in Scotland? You get the impression that Scotland would just suddenly come along and say, “Oops, we want to have another hospital. Let’s go and raise some money. Let’s get it on hire purchase”. It does not work like that. Government debt has to be managed, and we also have to know what would be the impact of putting the Scottish borrowing requirement alongside the United Kingdom borrowing requirement and what would be the projected or extrapolated rate of interest on UK bonds as a consequence of Scottish borrowing. I ask the Minister to give us some answers in due course.
The debate around the future of the Crown Estate is extremely complex, not least because there is a pressing need for considerable investment in wind and tidal energy. The Crown Estate will end up having to shoulder a fair amount of that. Where will it come from? Who is liable for it? The growth of wind and tidal energy requires the upgrading of the national grid, which is creaking at the moment, particularly in remote parts of Scotland. Where will the money come from to allow the national grid to be upgraded? To pay for that, is it likely that Scottish-generated electricity will have to be sold to England to raise revenues and that the Scottish consumer will therefore face a higher cost for electricity? I do not know the answer to that, but I would like somebody who is clever to go away and work out what it is.
We have had a fairly vituperative debate about the Supreme Court. Many of us in this Chamber have been around the houses a few times in Scotland. The level of debate there has always been quite robust, but we have seen it in recent months become increasingly personalised. I think that the appalling attacks on the noble and learned Lord, Lord Hope, in particular cause many of us distress and do Scotland’s reputation no good. I dread the detail that we will have to go into because we will hear that kind of vilification again, but we must not desist from asking the questions. We have to ask the questions, and get the answers, as to what this model of secession will look like. This Bill is an opportunity to do that. I know that it will be some time before it comes back to the House in Committee. That is a positive thing, because it will give time for the work that needs to be done. No one dreamt at the beginning of this process that the Bill would be so pivotal to Scotland’s constitutional future. It is understandable that some of the work has not been done but we cannot delay any longer. It is vital that we get a move-on in looking at some of these issues, particularly in relation to costing, accountability and who carries the burden.
My noble and learned friend Lord Boyd talked about the benefits of being part of the United Kingdom. I believe that the people of Scotland, whenever they confront the realities of being part of the United Kingdom, will recognise the strength that we get from it. We are told that the Scottish Government would seek to become a member of the European Union. One has to comply with certain rules before one can do that, and new accession countries have to become members of the eurozone. I wonder how many people in Scotland right now would like to have euros in their pockets rather than pounds sterling. These are issues that people are going to have to address.
My father was in the RAF. Most people in this House will have fathers, uncles or brothers who served in the forces. They did so because of the concept of a country that brought us all together. I entered politics not because I was concerned about the vulnerable in Scotland; I was concerned about the vulnerable throughout the United Kingdom. I see the challenges that we face in building a better Britain as a route to building a better Scotland. We should be self-confident enough now to know that we play a dominant role in the United Kingdom and long may that continue. The Minister always seems to get the thin end of the wedge and these long, rather complicated Bills. I think that the Bill will be a long time in Committee, but it will be one of the most vital things that we do in this term of this House.
Viscount Younger of Leckie
My Lords, my lowly position in the batting order is mitigated by the pleasure I have in following the first lady Secretary of State for Scotland and indeed the questions she has raised.
I give my broad support to this Bill, with some key reservations, as I believe it presents a firm platform from which devolution for the Scottish people can be extended and enhanced but with some practical limitations. Its strength derives from two main sources. First, the detailed and well researched Calman report, with recommendations that underpin this Bill, has been approved and broadly acknowledged across the professional and academic diaspora in Scotland, in addition to the three main UK political parties. Secondly, the report and the Bill are clear cut as much for their recommendations for exclusion and for further devolution as for inclusion, following the debate in another place.
Further devolvement is both an expression of faith in, and hope for, the Scottish people in extending self-determination. However it remains an experiment because, as my noble and learned friend has said, the new powers represent the largest transfer of financial responsibility to Scotland since the union, but as yet there is no clear financial plan. With a reduction of part of the block grant as a quid pro quo for increased tax-raising powers to cover 35 per cent of the spending budget, there will have to be either a reduction in public services in Scotland, the major sector, or increased taxes, bearing in mind there are already free prescriptions, free elderly care and no tuition fees north of the border. However the experiment has some monitoring in place. The introduction of regular OBR forecasting for the first time in Scotland means there will be some transparency in observing progress on how receipts from revenues from all taxes match expenditure, or indeed not, and the reasons for this.
Transitional arrangements have considerable merit. The new borrowing powers proposed from 2015 for the Scottish Government at £2.7 billion are in excess of Calman’s recommendations of £400 million more than the Scottish Government’s total capital budget for the current spending review period. The decision to delay until 2015 the point at which the new tax powers can be exercised is pragmatic as the UK continues to tackle its enormous deficit—a protection required to manage tax volatility, but a hedge against a potential Scottish reduction in income tax, without the credible quid pro quo of corresponding public spending cuts or other tax rises. Other measures of interim support are welcomed and exceed the Calman proposals, such as the provision for payments into the Scottish cash reserve, the offer of cash pre-payments from this year to progress work on the new Forth crossing and the facility to borrow money by issuing bonds without the need for primary legislation.
The items that were included in the Calman report but rejected as unworkable have caused considerable debate in the other place. As the noble Baroness, Lady Ramsay of Cartvale, has mentioned, it has to be recognised that the devolvement of corporation tax-raising powers would likely create instability for Scotland. Assuming the Scottish Government lowered taxes, there is no convincing evidence to support the case that there would be a corresponding financial growth in businesses, particularly as those benefiting would be the banks and other major corporations and not the myriad small businesses, many of which pay no corporation tax. A reduction would cause a draw of businesses to north of the border, but over time this would likely be counteracted by market forces and a reduction of the English rate with a spiral downwards of the UK corporation tax rate as a whole. Sharp practices, including arbitrage and tax avoidance, would be encouraged to the detriment of the Exchequer. A further knock-on effect could be a rise in income tax in Scotland to counteract a decrease in corporation tax to balance the books, which would harm small businesses—surely from where one might expect economic growth to emerge.
On the question of excise duty, which has hardly been covered this evening, I agree with those who state that the issues surrounding the purchase and consumption of alcohol are complex and cannot be simplified to the basic principle whereby a rise in duty leads to reduced consumption.
On the assumption that a Scottish Government, given powers, would raise excise duty post-2015, as has proved the case with the land border between the Irish Republic and Northern Ireland, Scottish citizens would surely flock south of their border to purchase alcohol and other goods at the same time for convenience, thereby hurting Scottish outlets. It is widely recognised that complex social problems lie at the core of excessive drinking, not the unit price.
The Calman commission and the Bill have excluded from their deliberations the matter of the UK block grant, not revisited since the Callaghan years. However, we are at risk of creating in England a sourness—a word coined by the honourable Member for Birkenhead in the other place in relation to the Barnett formula—if we do not tackle now the unfairness of the Scots receiving 19 per cent more public money per head than the English. First, the block grant is inextricably linked to the Scottish fiscal and financial budget in aggregate and by department, and therefore a plan for reform should be included in this Bill. We should commence the lengthy process of analysis, research and renegotiation now and not delay to 2015 simply because of deficit distractions. I am convinced that Barnett 2 must be needs-based and take account of complex regional differences in addition to national variations. Although a costly process, the benefits will be seen in the longer term, not least to restore fairness and trust in the grant allocation process.
The Calman commission report was balanced, professional and non-political. However, there are important underlying political ramifications resulting from the contents of this Bill. This Bill is not a step towards full independence. The Scottish nationalists are unwise to push for further demands as reflected in their six main amendments moved in another place, not least because these demonstrate a degree of financial recklessness over prudence.
The Bill is a giant leap of faith, but the experiment does, crucially, still preserve the union. It is now critical that we advance and consolidate the arguments in favour of a continued union and, as my noble friend Lord Forsyth and the noble Lord, Lord McConnell, have highlighted this evening, be fully prepared legally and logistically should a referendum be called.
Those who through blind emotion seek full independence for Scotland should not forget the experience of Czechoslovakia, which has been raised this evening, which fought long and hard to gain independence from its Austrian rulers in 1918, only to find that there were too many differing nationalistic and ethnic factions, post-independence, for it to have a chance of working. It was rapidly an abject failure.
As the noble Lord, Lord Maxton, has pointed out already this evening, ultimately perhaps James VI of Scotland, later James I of England, a well-educated king, is to blame for raising Scottish hopes so high for self-determination and then abruptly abandoning the Scottish cause, with his court, when he succeeded to the English throne in 1603. This enduring Scottish national insecurity remains potentially financially dangerous for a country whose sum populace totals barely 8 per cent of the UK total, and indeed for Great Britain.
Lord Gordon of Strathblane
My Lords, I thank the noble and learned Lord, Lord Wallace, for introducing the Bill and sitting so patiently through a very long debate. I am happy to report, as you will all notice, that we are in fact into the second day of the debate—it is just that we have not had a night’s sleep in between.
Administrative devolution in Scotland is over 125 years old. The Scottish Office was set up in 1885. The change that we had in 1999 was to give democratic control over the administrative devolution, and this measure does very little in the way of increased powers, because so much was already devolved. It simply tries to ensure that the elected representatives of the Scottish people in the Scottish Parliament are more responsible for raising some of the money. All my instincts tell me that you will get better government if you make the politician who makes the promises also raise the money for it, be responsible for it and get the opprobrium from the electorate. My instincts would be to let them raise 100 per cent of the money and see whether they want to promise so much. We do not quite go that far—we have the figure of 35 per cent. In fact, I would be happy to go further.
I make one general observation about the Bill as it stands at the moment. If it is only going to be 35 per cent, I would much rather that it was 35 per cent that covered 100 per cent of expenditure in certain clear areas, so that there was clear responsibility and we knew who was responsible, rather than 35 per cent of all areas. Any decent politician, even if he has totally mismanaged his expenditure of his 35 per cent, will blame whatever has gone wrong on the lack of the 65 per cent, or its not being 70 per cent, and so the blaming of Westminster will still continue. It is an end to this blame culture that we have to try to get through in Scotland. As I said in a previous debate, the Scots enjoy blaming other people for their problems: if you can blame the English, you score double; if you can blame English Conservatives, you hit the jackpot.
I take the view that Scotland is already independent. It is entitled to be, and already is, in the sense that nobody is stopping us doing exactly what we want. We are a totally free country. If we decided next year to be a full, autonomous, independent country, the tanks would not roll up from Carlisle to stop us. We are an independent country; we simply chose to live in an economic union with our neighbour to the south. That union has endured, as has already been mentioned, for several hundred years and has been hugely beneficial to both parties. There would not have been such industrial growth in 19th century Scotland had it not been part of the British Empire. As has already been alluded to, the Scots did rather well out of the British Empire, sometimes in a rather unsavoury way. When we are talking about increased tax-raising powers for the Scottish Parliament, any objection to that is based not on issues of entitlement, but rather, I think, on whether it is imprudent, impracticable or would have unfortunate side effects.
Perhaps we should look at practicability first of all. It is very important to recognise that we have a land border with England. I would refer the noble Baroness, Lady Kennedy of the Shaws, to the experience of Northern Ireland and the Republic of Ireland: there was constant smuggling going one way or the other, depending on which economy was doing better at that moment. In my view, if there is a land border, there are three alternatives: either we leave the rate of excise duty, or whatever it might be, to be fixed at Westminster; or we devolve it, with the clear understanding that all the Scottish Parliament will do is mimic what Westminster does, but at least it is apparently deciding this for itself; or we create the possibility that the Scottish Parliament will choose a different route, in which case we have to be quite clear about how we are going to police that. Are we actually going to have a customs post at the border?
For example, the noble Viscount, Lord Younger, mentioned the possibility that Scotland might raise excise duty. That would be very acceptable to the medical profession, but the licensed trade would go out of business in Dumfries, as it has done in ferry ports on the south coast of England, and the M74 would have to be widened still further to cope with the traffic going down to pick up cheap booze south of the border. This is a very small island. People will vote with their feet and buy things where they are cheapest. You can impose whatever taxes you want; I will go elsewhere and buy those goods cheaper unless you physically stop me. A lot of taxation proposals will founder on this test, as it is simply not practicable to enforce them without a customs post at the border.
We must also consider the fact that, if we are not going to have a separate currency, passport controls or customs, there are severe limitations on what we can do differently from our near neighbour. That has led most people so far to think that we are much better off being part of that larger neighbour as a unit, so that we can at least influence the rates of taxation and the policies reached, rather than being outside it, and so simply having to copy our neighbour and imitate what it is doing.
There is another consideration which I think on grounds of prudence would give us pause before we introduced a different form, which is the question of Scotland’s size and relatively sparse population. We are, after all, about 30 per cent of the UK land mass but only 10 per cent of the population or slightly less. That would make me, frankly, very worried about going it alone on anything involving transport, broadcasting, rolling out broadband or anything else. It stands to reason with those costs—the cost of broadband rollout, for example, would be a lot higher proportionately in Scotland than in London, which has two and a half times the population but could do it at a fraction of the cost.
There are other issues of unintended consequences. Reading the Scottish media during recent months, you get the impression that we are looking for a variation in the rates of corporation tax and income tax so that we can be lower than the rest of the UK and attract all the high-flyers. Who are we kidding? Scotland has a higher dependency on public services than any other part of the UK. If you raise less in taxation, you have less to spend on public services so that is another area where we have to be cautious.
All I really look for from this Bill is that, while nobody can say that anything is a final settlement, let us at least hope that it can be a stable one, because uncertainty is bad. My noble friend Lord Foulkes has already referred to things such as the green bank. Would any UK Government prudently site any UK activity in Scotland over the next few years? You might as well site it in Dublin. If it is going to be an independent country, you cannot take the chance and we are in danger of losing out on some things unless we get some certainty.
The final point I would make is that in many ways this debate is a bit unreal—and not just because it is well past my bedtime. The fact is that the real action is taking place offstage. This Bill is out of date; the sea change took place last May. I am well aware that, in the past, support for the SNP has fluctuated quite wildly and it may well do so again. I do not think that it is downhill all the way or anything like that, but it is a pity that there is no representation of the SNP in the House of Lords. I think that is the fault of the SNP and I would genuinely like to have heard its voice answering in the debate and explaining why some things that some of us have been saying are, in its view, wrong. I would be genuinely interested in that debate.
Lord McConnell of Glenscorrodale
Would the noble Lord want to comment on the fact that this whole debate, which has taken some several hours this evening, has been filled with speeches from Members on all sides who are here at the nomination of, or at least have a connection with, the political parties in the Chamber? In fact there was only one Cross-Bench speech, right at the beginning, from the noble and learned Lord, Lord McCluskey. Perhaps there is an issue being highlighted here about the geographical spread represented in the House by the Cross-Bench Peers—an issue that might be for the commission to look at in terms of future debates about Scotland in this House.
Lord Gordon of Strathblane
I genuinely disagree with that observation. It is not a question of the overall representation of Scotland but the nature of the political representation. The SNP has chosen to set its face against the idea of anyone taking a seat in the House of Lords. That has disadvantages for the nationalists, because the honest truth is that they would get a fairer hearing in this Chamber than in any other because we are not up for re-election and running the risk of losing seats to them. That is a mistake.
My final plea would perhaps come from recognising that I know some quite sensible people in the SNP. I disagree with them but they are not madmen; they are people who immediately realised, with the huge majority that they got last May, “Hold on—this independence thing—what are we going to do?”, so they have now dreamt up independence-lite. I fully accept the strictures that have been made already. They have not spelt out what it is, because the honest truth is I do not think that they know but they perhaps recognise that what might be traditionally thought to be independence is neither possible not desirable. We have to help them reach a conclusion which the rest of us would find acceptable. Independence-lite and devo-max, to use chattering-class lingo, are probably not all that far apart. I am quite happy to have a sensible dialogue with the SNP and listen to a reasoned case for further devolution of tax-raising powers. I do not think it possible but I am very happy to listen.
Lord Browne of Ladyton
My Lords, I am delighted to stand at this Dispatch Box for the first time, with the sound of the words of my noble friend Lord Gordon ringing in my head. He has treated us to 10 minutes of quite profound common sense.
I think I can reassure my noble friend—I am sure that the noble and learned Lord the Advocate-General will support me in this—and, indeed, the noble Viscount, Lord Younger, that there is no possibility of the Bill leaving this House with excise duty powers transferred to the Scottish Parliament or indeed any taxation powers that would contravene or raise the sorts of problems and concerns that have been identified. We can, at least at the beginning of this summing up, reassure Members of the House that that is not a possibility, though it may be part of the debate that we have.
When I agreed to do this, I had not imagined that I would make my maiden speech at the Dispatch Box at this time in the morning. However, it has been a privilege to be here. It is traditional to say that we have had a varied and informed debate when one is in this position, but it has genuinely been a privilege to listen to this debate. I regret that we were denied the forensic flourishes of the noble and learned Lord, Lord McCluskey, which I was looking forward to hearing, and I regret that my noble friend Lady Liddell could not be tempted to give us a deep and serious explanation of the Australian tax system. Despite that, there have been a number of very valuable contributions from all sides of the House. The depth and range of experience contained within this place in relation to Scotland is impressive and it has been reflected in the quality of this debate. Indeed, we heard from voices beyond Scotland. The noble Lord, Lord Wigley, and my noble friends Lord Morgan and Lord Soley contributed to the debate. I share the regrets expressed by the noble Baroness, Lady Linklater of Butterstone, that there was a lack of English voices here. I hope that the absence of those English voices was to leave room for the Scots, because there were so many that wished to contribute and we were restricted in the time that we had. However, I suspect that that is not the whole of the explanation. The issues we have been debating affect not just Scotland but the United Kingdom quite profoundly and they will not be resolved with the certainty and stability that many noble Lords crave unless there is a significant and informed contribution from the rest of the United Kingdom to try to settle them. I will come back to that in a moment.
Before moving on, I would like personally to express my gratitude to the noble Baroness, Lady Linklater of Butterstone, for her words of approval and support, giving credit to Donald Dewar, whom I had the privilege to serve as Parliamentary Private Secretary at just about—though not all of—the time that the Scotland Bill was passing through the other place. His name has been mentioned occasionally in this debate, but I know that there is a sense and knowledge around this House of the contribution that he made to the modern Scotland. It is a matter of great regret that he died prematurely and was not able to make the contribution that we all know he would have continued to make for many years, in Scotland and beyond.
I thank the noble and learned Lord the Advocate-General for his introductory remarks. This is not an easy Bill to make a Second Reading speech about, in a way that captures and retains the audience, but he introduced the comprehensive nature and complexity of the Bill well, and set the scene for the debate. I want to take this opportunity to thank him personally for the gracious and helpful way in which he and his fellow Ministers in the Scotland Office have extended the help of their Bill team to me, and to other members of our Front Bench, in order that we can be assisted in understanding some of the complexity of this legislation. We have had but a small reflection of that complexity in the debate that we have had tonight and it will unfold over the days of the Committee stage. That sense of continuing co-operation is characteristic of the whole process that started, as we have heard from noble Lords, in 2007. The process has been co-operative and transparent, with the discussion and testing of these issues through the Calman process and thereafter through the White Paper and the other documents, discussions and consultations. I am grateful to the noble and learned Lord.
Today he has heard speeches of support from all sides of the House, with one or two minor exceptions. In a sense, the tone of the debate has been summed up by the contribution of the noble Viscount, Lord Younger of Leckie, in which he gave qualified support to this legislation. I sense that there is quite a lot of qualified support around the House. That is a perfectly healthy position for a piece of legislation of this nature; it requires to be tested, teased out, explained and understood, but I am certain that the House will be persuaded to support it and send it back to the other place in substantially the same form as we received it. There are reasons why it might be important to do that, although we can have other debates.
The Opposition’s intention is to support the Bill, but we will of course scrutinise and review its contents in as much detail as necessary and, when appropriate, table amendments that we believe will enhance the Bill for the benefit of the people of Scotland. I gently chide the noble Earl, Lord Mar and Kellie. I understand his desperation to find something that he can claim as a Lib Dem contribution to the success of the Government, but he cannot have this Bill. As noble Lords have made clear from all sides of the House, this process, which started as an initiative of the Scottish Parliament on 6 December 2007, is owned by all of the devolution parties of this House—although not all the members of those parties. I see the noble Lord, Lord Forsyth of Drumlean, moving his head in a particular direction; it is not supportive of the remarks that I am making, and I understand that. The initiative was born in another time and we are now having to deal with it in changed circumstances, but that does not mean we should not make the best of this process to make a contribution to the ends that we see for the Scottish people.
With regard to the way in which Scotland is governed, it is important that we see this as a progressive step, or a series of progressive steps, to the opportunities that the Scottish Parliament has to govern for the benefit of the Scottish people. I hope that we will approach our debates in Committee by testing the legislation and asking all the difficult questions that we have heard rehearsed today and more, but always with a view to trying to make our contributions pass the test that my noble friend Lord McConnell posed for us—that is, “Is this for the benefit for the people of Scotland and, more broadly, will it be for the benefit of the United Kingdom?”.
There was support for the Calman process. Indeed, there was support for an independent review of the powers of the Scottish Parliament from all but one of the parties in the Scottish Parliament. I was Secretary of State for Scotland at the time when the Calman commission was set up and this report was commissioned. The commission’s terms of reference, to which a number of noble Lords referred, were the responsibility of the UK Government, particularly in consultation with the other devolution parties. It is no criticism of the Calman commission that it may or may not have done certain things. It did the job that it was asked to do and it did it in an exhaustive, painstaking, positive and engaging way. We have heard from the noble and learned Lord the Advocate-General, the noble Lords, Lord Selkirk, Lord Elder and Lord Stephen, my noble and learned friend Lord Boyd of Duncansby and the noble Earl, Lord Lindsay, about the care and detail that have gone into the process. I commend the Calman commission report to all Members of the House. Indeed, I also commend the report of the expert group which informed the decisions relating to financial provisions. Many of the questions asked about why decisions were made, why certain percentages are favoured rather than others, or where the evidence was to support certain conclusions, are contained in a very accessible form, both in the report of the Calman commission and in the evidence of the expert group. There are additional documents that have been published in the processes that had led to this Bill, and they also inform the debate, but I commend those two reports. I recognise that the commission was instructed in a different set of circumstances and it would be unrealistic not to admit that the decision of the Scottish Parliament and the election of May last year have changed those circumstances significantly. However, it does not follow from that that these recommendations or this legislation are irrelevant to the future of the Scottish people.
As regards scrutiny of these provisions, I share the concerns expressed by my noble friends Lord McAvoy, Lord Foulkes and Lord Soley, and by the noble Lord, Lord Forsyth of Drumlean, that this debate appears to have been pushed to the end of the day. It will be presented and perceived by some as having pushed Scotland to the end of the day and to the back of the minds of the Members of this House and this Parliament. Of course, those people will not have taken the trouble to consider the terms of the debate, the knowledge that has been revealed, or the level of scrutiny that is being applied to this legislation even at this early stage. It is a pity that this was done, and as my noble friend Lord O’Neill points out, on a day that Scotland’s football team played and won; this is perhaps the ultimate offence to the Scottish people. I trust that for a Bill of this importance we will not see a repeat of what happened in the other place when insufficient notice was given of quite significant changes to the Bill before Third Reading to allow them to be properly debated. I am sure I will be reassured by the noble and learned Lord, Lord Wallace, when he concludes the debate this evening, that this will not be the case.
I am pleased the Committee stage will take place when the maximum amount of information is available on how these provisions will be implemented, in particular the taxation provisions. I understand that at least two bodies in government are looking in more detail at the implementation and are resolving some of the issues that have been raised, such as the definition of a Scottish taxpayer. I think there is a joint Treasury or Exchequer group of some description and there is a high-level group of some description. I hope that in winding up the Minister will indicate exactly what stage these groups are so that we can judge whether there will be sufficient time to absorb their conclusions and to incorporate them into a debate. For a start, I would like to know if these two committees that have been set up have actually met, and if they have met, what their role is.
We devoted some time, though not an inordinate amount, to the issue of referendums. We have heard calls, variously, for a referendum on the implementation of these tax powers and for a debate on the provisions that are necessary for a referendum on the separation of Scotland from the United Kingdom. Indeed, at one stage we heard a contribution about the possible combination of these two referendums.
I look forward to the promised amendments from my noble friend Lord Foulkes of Cumnock and, perhaps, the noble Lord, Lord Forsyth of Drumlean, and others in relation to these issues so that we can tease out the necessary matters. When my noble and learned friend Lord Davidson of Glen Clova introduced the Opposition’s position on the Bill at the beginning of this debate, he indicated an interest in the legal issues associated with such a challenge. There is an important debate to be had. It will be a debate worth having, provided it is focused on the arguments for a 21st century Scotland within the United Kingdom.
I am conscious of the time but I want to make this point: it is very important that Members of this House pay significant attention to the speech that was made at Second Reading by my noble friend Lord McConnell of Glenscorrodale. There are Members of this House who have held office in both the Government here and the Government of Scotland, as we shall come to call it properly and legally when the Bill is enacted. However, my noble friend Lord McConnell is the longest serving Scottish First Minister. He has served in government with Members of this House and has significant experience and knowledge of Scotland. He exhorted us to approach this from the point of view of what is best for the people of Scotland. He exhorted us, in the context of the challenges that we face and the ambitions that we have, to retain the union; to provide the best for the people of Scotland in that diverse union; and to do so in the context of an argument that shows Scotland’s position in a diverse, modern United Kingdom, and that it is best for Scotland and the United Kingdom if it stays there.
I as much as anybody enjoy the cut and thrust of politics—taking on one’s opponents directly and attacking them—both in Scotland and in the United Kingdom. However, the message of the Scottish Parliament election in 2007 was that the Scottish people are no longer responding as they once did to that type of politics in Scotland. There are those of us who believe in the union and devolution, in the social and economic union that is the United Kingdom, and in all the positive things that were described in a generic sense in contributions from across the House. Those of us who believe in all those things need to develop a narrative that sets them in a modern 21st century Scotland so that we engage with the Scottish people in a way that says, “We have a message for your future”. It should not just be a message that stops with, “Certain people are doing something with the constitution of your country that we do not think is in its best interests”.
We have the beginnings of such an argument. We have heard it set out in parts of this debate in contributions from all sides of the House. It is as incumbent on those of us who believe in devolution and that Scotland’s future lies within the United Kingdom to spend time developing those arguments in the context of the Bill and its powers, no matter how challenging that might be, as it is incumbent on us to point out the errors and flaws in the approach of the party that wants to separate Scotland from the United Kingdom. It is only if we get that combination right that we will succeed in what we seek to do for the future of Scotland.
I intend now to wind up, and I apologise to all who have contributed to this debate in such an informed, witty, entertaining and engaging way. There has been insufficient time today, but we will have plenty of time in Committee to go back and pick up on some of these issues, and to attribute to those who have made a contribution to the debate the rightful acknowledgement that they deserve. Whatever one’s view of devolution, the Scottish Parliament has become a permanent fixture in Scottish political and civic life. It is here to stay. Secondly, Calman has done us a great favour in spelling out why this is the case. Devolution has been good for Scotland and is settled with the Scottish people. The cross-party consensus in Scotland, with the depressing and repeated exception of the SNP for some alleged reason of principle that it abandons when it suits it and picks up again when it does not, has been sustained over last year’s election and will continue throughout the passage of this Bill.
We on this side of the House will of course carefully scrutinise this Bill as the tenor of today’s debate reveals that there are a number of very difficult questions that need to be asked and, more importantly, need to be answered. Your Lordships’ House is rightly respected for its approach to the scrutiny and review of legislation, and that approach will continue for this legislation. In Committee we will look closely at the individual clauses. We will pick them apart and put them back together again, and we will explore what further measures can be added to this Bill for the benefit of the people of Scotland. On this side of the House, the test that we will apply to each and every clause, as set out by the Scottish Parliament when it initiated this process in 2007, is: does it enable the Scottish Parliament to serve the people of Scotland better, to improve the financial accountability of the Scottish Parliament, and to continue to secure the position of Scotland within the United Kingdom? It is on this basis that we support the Scotland Bill and we look forward to debating it further in the coming months
Lord Wallace of Tankerness
My Lords, first I welcome and congratulate the noble Lord, Lord Browne of Ladyton, on his maiden speech from the Dispatch Box. He has had a very distinguished ministerial career in the other place and I am sure that the House looks forward to hearing him further from the Dispatch Box, not least in the many hours in Committee that have been clearly flagged up during our deliberations—and quite properly. As I indicated in my opening remarks, a number of contributors to this debate have said that this Bill should be properly scrutinised, as was the original Scotland Bill back in 1998.
I believe that we have had a very well informed, worthwhile debate. Noble Lords have contributed with great passion but with great knowledge, bringing to bear expertise in many different ways, having been informed by their experience of civic life in Scotland and, in the case of the noble Lords, Lord Wigley, Lord Morgan and Lord Soley, in Wales and England. They have all made a contribution as part of the United Kingdom and Members of this Parliament in the United Kingdom and have brought their experience to bear.
The general tenor has been one of welcome for the Bill, albeit with varying degrees of enthusiasm. My noble friend Lord Mar and Kellie described it as a mild measure. The noble Lord, Lord Elder, said that he fundamentally and enthusiastically embraced it. In between those views there has been qualified welcome, and, I think quite properly, people have put down markers as to where they wish to examine these provisions further. Like the noble Lord, Lord Browne, I find it impossible to pick up all the points that have been made. I think there will be time in Committee to develop some of them if I do not get the opportunity this evening.
However, I disagree with my noble friend Lord Lang, who saw this Bill as an admission of failure, following on from the failure of the 1998 Act, as he alleged. The findings of the Calman commission, as I think my noble friend Lord Selkirk of Douglas indicated, was that the Scottish Parliament was overwhelmingly judged a success. Clearly some people would not have wished us to go down that road. We do not have a parallel universe so we cannot work out what would have happened if the Labour Government, having come to power in 1997, had said, “We are not actually going to do any of the things that we have done, and we are not going to have a Scottish Parliament”. For my view, I suspect that it would have hastened the day when we would have had an even greater upsurge of the SNP if the promises made prior to 1997 had been broken. We do not know; we have a Parliament in Scotland. As has been said, it is part of the scene. It has been generally supported by the people of Scotland. In the Bill, we have set out to build on the foundations laid and improve our Parliament.
I turn to some of the specific points raised. The noble Lord, Lord Sewel, and my noble friend the Duke of Montrose raised the question of the Sewel convention. The passage of the Bill through your Lordships' House may be interesting if we have the noble Lord, Lord Sewel, talking about whether the Sewel convention should apply and in Committee the noble Lord, Lord Barnett, discussing whether the Barnett formula should apply. That would be novel.
The devolution guidance note established by the previous Government and adhered to since 1999 has been supported and endorsed by the present Government. It states that legislative consent Motions apply in three cases: where we are legislating on devolved matters; to amend powers of the Scottish Parliament; or to amend the powers of Scottish Ministers. I would be more than happy to make available devolution guidance note 10, which sets all that out. No doubt the noble Lord, Lord Sewel, will be more than familiar with the various provisions in the Scotland Act that allow powers to be transferred. In a number of those circumstances, that would have to be approved by the Scottish Parliament as well as by both Houses of this Parliament. Where that is done by other primary legislation, it seems right, and it was thought right in 1999, in the spirit of the convention, that if there is no order—if it is being done by primary legislation—there should be a legislative consent Motion.
Lord Sewel
Do I take it from that that if, ultimately, the Scottish Parliament decides that it does not accept the proposals, the Government would not proceed with them?
Lord Wallace of Tankerness
That is a highly hypothetical question. The Scottish Parliament has already approved the proposals by 121 votes to three. It remains to be seen what the committee of the new Parliament will do with any amendments, but the Scottish Parliament has already approved the proposals.
With regard to the specific powers on the boundary between devolved and reserved matters, I know that there has been comment that the Bill does not contain a substantial number of powers. As I said earlier, that is probably a reflection of the fact that the balance struck and judgments made in the initial Scotland Act were basically right, but we should not belittle or minimise the changes being made. They have been well thought through. In the case of Antarctica, there was clearly an oversight, but that is not an academic argument—well, in some respects it is an academic argument because if anyone wishes to undertake research in Antarctica, they require a permit or licence, and I am sure that Scottish academic institutions will wish to do so. It is only right that we ensure that the proper regime is in place for them to do so with certainty.
My noble friend Lord Shrewsbury asked about air weapons. The question here is not so much about the devolution of the power; some of his points reflected the fact that the Calman commission did not go beyond air weapons because the advantage of having a common system for other firearms throughout Great Britain was well understood. Many of the issues he raised are not so much about the devolution of the power but how the power might be used by the Scottish Parliament. Clearly, we will come back to that in Committee, and I look forward to looking at that in greater detail.
My noble friend Lord Forsyth suggested that we should not get too excited about a change to drink-driving. He might want to note the evidence provided by the Association of Chief Police Officers in Scotland to the Scotland Bill Committee of the Scottish Parliament. It stated that ACPOS welcomes the proposals contained in the Bill relating to drink-drive limits, which it would consider a step towards helping save lives and preventing serious injury on Scotland's roads. That is not a trivial matter at all. It is an important point. If, by exercising the power, the Scottish Parliament is able to pass legislation that would have that positive effect, then we welcome it.
Lord Forsyth of Drumlean
Is that not rather anticipating that the Scottish Parliament would choose to reduce the level rather than to increase it? Is that not a gross assumption?
Lord Wallace of Tankerness
The indications that have been given to us by those pressing the case for the change are that, to address the serious problems of alcohol misuse in Scotland, it was more likely that the level would be reduced rather than increased. I take the point that that could be a presumption but it is one that is fairly well based.
The noble and learned Lords, Lord McCluskey and Lord Boyd of Duncansby, and the noble Baroness, Lady Kennedy, all mentioned Clause 17 and the role of the Lord Advocate. Whatever differences there might be in terms of the detail of that particular clause, there was a general agreement that issues relating to convention rights and European Union law should ultimately be litigated in the Supreme Court. That is certainly the conclusion of the expert group, which was set up under Sir David Edward’s chairmanship. Clearly, there will be an opportunity to go into the detail of how that will work in Committee.
The noble and learned Lord, Lord Davidson of Glen Clova, also raised the important point about whether the roles of the Lord Advocate should be split. As was said, this issue has been around for some time. I was rather surprised for it to be raised from the Front Bench at this stage of the proceedings. No doubt, we will again have an opportunity to debate that. As I indicated, the position of the Secretary of State—and the Government—is that, if novel proposals are to come forward at this stage, the tests are that they should be very detailed in their presentation, command a consensus and not only be for the benefit of Scotland but not prejudice other parts of the United Kingdom.
My noble friend Lord Caithness asked what other powers there might be. The noble Lord, Lord Wigley, raised the issues that the Scottish Government have raised. Again, those tests will apply. We hear a lot of rhetoric from the Scottish Government but we await with some interest more detailed proposals. We are still awaiting any submission from them on excise duty. I certainly found the points made by the noble Lord, Lord Gordon of Strathblane, and my noble friend Lord Younger of Leckie very persuasive in the context of the Calman commission, which did not recommend any devolution of excise duties. The tests that I have already outlined will apply to any of these proposals coming forward from the Scottish Parliament, including for example on corporation tax.
In the Government’s mind, the only other taxes which could be devolved are the two which were recommended by Calman but are not in the Bill: aggregates tax, which we did not proceed with because of litigation that is currently in place, and air passenger duty—on the basis that the whole question of aviation taxation was being looked at. Did it make sense to devolve something which was under a much wider consideration?
The noble Lords, Lord Morgan and Lord Wigley, asked about the position in Wales. It was announced back in July that an independent commission will be established in the autumn to look at the financial accountability of the Welsh Government and the National Assembly for Wales. It will examine the issues of fiscal devolution and accountability, and take into consideration the work of the Holtham commission, mentioned by a number of contributors including my noble friend Lord Maclennan of Rogart. The Government are currently discussing the terms of reference and the commission members with the Welsh Government.
Important points were made by my noble friends Lady Linklater of Butterstone and Lord Lindsay about the recommendations within the Calman commission relating to non-legislative but important matters regarding links between parliaments and governments in Scotland and at Westminster. I can assure your Lordships that we take this matter seriously. Since the Government came to office in May 2010, we have committed ourselves to upholding an agenda of mutual respect and engagement with all the devolved Administrations.
We have successfully resolved some disputes under the new dispute resolution procedure that had been put in place by the previous Government: there have been two joint ministerial committees in plenary session since May 2010; the joint ministerial committee on Europe continues to meet regularly; the joint ministerial committee (domestic) has met twice; and, consistent with the Calman commission recommendations, we have issued communiqués after plenary meetings and made an annual report on the work of the JMC. I will be happy to give further information to my noble friends, but one other thing which I remember the Calman commission was keen on was attendance of Ministers at respective parliaments. We support the attendance of Ministers before committees of the Scottish Parliament. I think I am right in saying that the Chief Secretary to the Treasury has given evidence; I certainly gave evidence, along with the Secretary of State and Parliamentary Under-Secretary of State, to the previous Scotland Bill Committee in the Scottish Parliament, and I intend to do so again with regard to the new committee.
The electoral system was mentioned by the noble Lord, Lord Foulkes. When the Calman commission looked at this, it noted that the Arbuthnott committee said it should be looked at again after the 2011 elections. Therefore, we did not think it appropriate as Calman commissioners to make a recommendation on that. There is an acceptance, following the Arbuthnott committee report and the Calman commission report, that some form of review of the electoral system for the Scottish Parliament is required. The matter is under consideration, and the Government will confirm our intentions at a later stage.
It is clear that the key provisions in this Bill relate to finance. I rather thought when I heard my noble friend Lord Forsyth mounting his arguments against the tax-varying powers, as usual with great gusto, that they were very similar to the arguments we had in 1997 against tax-varying powers, so I will not rehearse all of these now. What the commission was faced with was trying to get a proper balance between the efficiency of the tax system and proper accountability. At the core, a number of noble Lords who have contributed to this debate have pointed out the importance of trying to ensure that there is a link between spending money and raising money. I think it was the noble Lord, Lord Morgan, who talked not only about “no taxation without representation” but also about “no representation without taxation”. That link is very important.
What we did within the Calman commission, and which the Government accept, was to look at different international systems. I do not agree with my noble friend Lord Forsyth, who compared income tax to the poll tax. As the noble Lord, Lord McConnell, pointed out, the thing about the poll tax was that it had no link to income at all, which was one of its problems and its criticisms. Income tax, however, we were advised, was one of the taxes, perhaps more than any other, which actually impacted not only in reality but in perception upon individuals. We thought that in terms of identifying a tax which was most likely to accentuate accountability, income tax was the appropriate tax.
My noble friend Lord Caithness asked, “Why the 10p?”. Clearly we are trying to achieve a balance between the Scottish Parliament having responsibility, while recognising that Scottish taxpayers contribute to the United Kingdom as well to a whole range of services which are provided at a United Kingdom level.
The question of the Scottish taxpayer was put very graphically by my noble friend Lord Lyell, with tributes to Andy Stewart. There is a different test from that which applied to the Scottish variable rate, and indeed Clause 32 of this Bill, for such time as the Scottish variable rate will continue, is brought into line with what is proposed in future.
For most people, determining whether or not they are a Scottish taxpayer will be a straightforward matter: it will be whether their sole or main place of residence is in Scotland. If it is in Scotland, they will be Scottish taxpayers. It is not an unusual thing to use a sole or main place of residence for capital gains tax purposes. I think it is also used for when we have to register as Members of this House as to where our transport links will be. So it is not a novel concept. One of those individuals who are UK resident but do not have a close connection with any part of the United Kingdom will need to establish the number of days they have spent in Scotland. Again, I suspect that this is a matter that we will look at in great detail in Committee.
Lord Forsyth of Drumlean
I know that the hour is late but that is not what the Bill says, unless I have misread it. It says that if you have more than one residence you count the number of days that you have spent in those residences.
Lord Wallace of Tankerness
I do not think that my noble friend has that right. The principal point will be whether it is your sole or main residence. As I have just indicated, it is only if you are an individual who does not have a close connection with any part of the United Kingdom that the number of days spent in Scotland will be relevant. We can clearly debate that, as we no doubt will, in greater detail when we come to Committee, but I seek to reassure my noble friend on that. He also said that the SNP would take the power to have new taxes and would implement them willy-nilly. However, the provisions in the Bill make it very clear that the power to have any new taxes will have to be passed not only by the Scottish Government but by both Houses of this Parliament. An order would not be brought forward to this Parliament unless it had the agreement of the UK Government. Therefore, there would have to be negotiation between the UK Government and the Scottish Government before such an order could be brought forward, and it would be subject to an affirmative resolution of both Houses of Parliament.
The noble and learned Lord, Lord Davidson, wished the borrowing powers to be accelerated. My noble friend Lord Younger put his finger on the matter: there is a pragmatic reason for delaying such powers in the context of the current spending review period. The borrowing of the Scottish Parliament would be aggregated with UK borrowing and, given that the borrowing limits have been clearly identified in the current spending review period, we do not think it right to move at this stage to extend the borrowing powers to the Scottish Parliament before 2015. The exception to that—it is perhaps not a proper exception although it is an important point—is that, in response to representations from the Scottish Parliament and the Scottish Government, we have made prepayments, or a sort of cash advance, in terms of the money required to do the preliminary work for the building of the new Forth road crossing. That has been widely welcomed and it is a pragmatic response to the situation.
The noble and learned Lord, Lord Davidson, asked about the administrative burden and cost of income tax powers. Employers and software providers have already made changes to payroll software so that they can operate the existing Scottish variable rate of income tax. Therefore, the existing payroll software provides for a different rate to operate. Additional compliance costs and burdens may arise if the Scottish Government seek to adapt the existing process—for example, to introduce a greater degree of transparency—by requiring the Scottish rate to be separately identified on payslips and P60s. Further costs and burdens could also arise in relation to the treatment of certain tax reliefs.
The noble Lord, Lord Browne, asked about the working group. There is a high-level implementation group, which involves a number of bodies and organisations with an interest in the detailed implementation of the tax reliefs. It has already met three times and is due to meet again in the autumn. There is also a joint Exchequer group involving Ministers in the Scottish Government, the Secretary of State and the Parliamentary Under-Secretary of State. The group will look at the negotiation of the detailed implementation of these plans. I think that it is due to meet again shortly in the autumn. In addition, separate groups have been looking at issues such as tax on charitable giving and other such detailed issues. These groups have already met, and I assure the House and the noble Lord, Lord Browne, that those meetings will continue.
Finally on finance, the noble Lord, Lord Hughes, asked about the workings of the Scottish rate. He asked, as with chicken or egg, which would come first—the reduction or the block grant. Unlike the Scottish variable rate, the Scottish rate of income tax will require an annual decision from the Scottish Parliament. The proportionate amount will be deducted from the block grant and, if the Scottish Parliament does not set a rate, it will not get the money. It will be obliged to set the rate and to do so in good time before the start of the tax year—again, giving proper notice in terms of collection and to businesses which will have to administer the system.
Related to that, the question of bond issuing was raised by the noble Baroness, Lady Liddell. Although the Bill makes provision for that to be implemented—not by having further recourse to primary legislation but by secondary legislation—it will be dependent on the outcome of a consultation, which is either under way or is about to get under way, regarding the merits of going down that road, taking into account some of the points which the noble Baroness raised.
Linked to this is the question of the Barnett formula, raised by a number of noble Lords, including my noble friends Lord Maclennan, Lord Forsyth, Lord Caithness and Lord Younger, and the noble Baroness, Lady Ramsay. Under the proposals in the Bill, as I have indicated, the Scottish rate of income tax will be reduced by 10p. It will then be for the Scottish Government to decide to levy in Scotland. I am sure a number of noble Lords will wish to debate this further. The Government have made clear in the coalition agreement that we recognise the concerns about devolution funding, but the priority has to be to reduce the deficit and to stabilise the public finances.
The noble Lord, Lord Sewel, said that something should be in the Bill about the formula. The position is that the Scotland Act contains nothing about it and that the Bill, if implemented, is neutral about its future. There will be a block grant but the formula to determine it can be done externally to the provisions in the Bill. We have been duly warned by at least one if not two noble Lords that we will have amendments on this. I note that the noble Lord, Lord Foulkes, and others are liable to bring forward amendments on the question of a referendum. A number of noble Lords have pressed a case for the United Kingdom Government holding a referendum on independence. Their argument is that it is in Scotland’s interests to end the constant constitutional uncertainty and that a clear-cut question will produce a clear-cut endorsement of Scotland’s place in the United Kingdom.
I understand the motivation of those who have argued that case. Many, including the Government, would like nothing more than to see an end to the manoeuvring of separation, which for so long has distracted Scotland from the many other opportunities and challenges on which we might more fruitfully and productively focus. As this debate broadens out beyond this Chamber to the political classes, more questions will be put to the SNP Government, as we saw last week, with important speeches by representatives of the CBI. The dangers of continued uncertainty will become more obvious to people across Scotland if the SNP—“rather coy”, was how the noble Lord, Lord Hughes, described it— carries on ducking questions. It will need to be clear about its plans and its timings.
Perhaps it is too ambitious to hope that tomorrow, when he announces his programme for government, the First Minister will start to say something about that. As noble Lords have indicated, there are crucial questions about the euro or the pound, and about whether it would be the European Central Bank or the Bank of England that would have responsibility. My right honourable friends the Secretary of State and the Chief Secretary to the Treasury raised these questions last week. We will continue to press the Scottish Government on these issues. I take the point made by the noble Lord, Lord McConnell of Glenscorrodale, about the importance of all us waking up to the challenges and positively making the case for the United Kingdom, and for Scotland being part of that.
Lord Soley
Will the Minister say what his thinking is about the Electoral Commission’s involvement in any referendum?
Lord Wallace of Tankerness
That is an important issue. Under present legislation, the Electoral Commission could be involved in a limited way only if the Scottish Government wished to proceed on their own. The commission is building up an expertise in referendums and has much to contribute, not least in helping to frame questions. In making the case for the union, as the noble Baroness, Lady Liddell of Coatdyke, said, we must challenge the independence case, because you cannot be a little bit pregnant and cannot be a little independent—the independence-lite or devo-max, which seems to be somewhat undefined. The noble Lord, Lord Soley, made an important point, saying that in the United Kingdom we have the most effective political and economic union that the world has ever seen. If we had not had it, today’s debate would be about creating it. When you have peoples bound by a common language in one island or closely proximate islands, why would you not want to come together and be a union, certainly when you look around the world and see other islands or peninsulas that are divided? The thoughtful speech by the noble and learned Lord, Lord Boyd of Duncansby, set out the economic, social and cultural cases for union, which are, indeed, set out in the first volume of the first report by the Calman commission. It was a very good exposition of the positive reasons why Scotland should remain part of the United Kingdom, and I entirely endorse what he said: that we cannot frighten people into supporting the United Kingdom and have to give people an aspirational and inspirational reason for why we believe that this valuable union has served Scotland well over the past 300 years and will serve us well into the future.
I conclude by saying that the genesis of this was in co-operation among parties. I believe and hope that that will continue. I have every confidence that it can continue into the future. My noble friend Lord Sanderson said that the test of this Bill would be whether its passing would help or hinder the cause of the United Kingdom. He is absolutely right. That reflects the terms of reference of the Calman commission. They were referred to by the noble Lord, Lord Browne, and were:
“To review the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, improve the financial accountability of the Scottish Parliament, and continue to secure the position of Scotland within the United Kingdom”.
Those were not only the guiding lights of the Calman commission but are the guiding lights of this Government and, I believe, of this House as we approach this Bill. I believe the Bill delivers on that and that in our deliberations in Committee, we can ensure that it does. I commend the Bill to the House.