House of Commons

Wednesday 14th September 2011 Commons Chamber

Wednesday 14 September 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 14th September 2011 Commons Chamber

[Mr Speaker in the Chair]

Business Before Questions

Transport for London (Supplemental Toll Provisions) Bill [Lords] (By Order)

Second Reading opposed and deferred until Wednesday 12 October (Standing Order No. 20).

Oral Answers to Questions

Wednesday 14th September 2011 Commons Chamber

The Secretary of State was asked—

[Jim McGovern (Dundee West) (Lab)]

1. What recent discussions he has had with the Secretary of State for Work and Pensions on Remploy’s operations in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The Government are totally committed to supporting disabled people into employment, and the amount of money going into that is being protected. A consultation event on the future strategy of Remploy is taking place in Glasgow today, and Remploy staff have been invited to attend.

[Jim McGovern]

As job losses continue to increase in my constituency, can the Minister say whether he intends to engage with the Department for Work and Pensions to ensure that the Remploy jobs in Dundee are protected?

[David Mundell]

I can assure the hon. Gentleman, who is a doughty fighter for Remploy, that no decisions have been made. I understand that he attended a meeting in the Scottish Parliament organised by Helen Eadie MSP that undertook to submit a response to the consultation on Remploy, and that response will be welcome.

[Stewart Hosie (Dundee East) (SNP)]

The Dundee Remploy factory is in the constituency of the hon. Member for Dundee West (Jim McGovern), but many of my constituents work in it. The factory makes first-class chemical and biological suits, which are required by the emergency services and the military. I urge the Minister to speak not just to the Department for Work and Pensions, however important that might be, but to the Ministry of Defence and the Home Secretary to ensure that the emergency services and the military look carefully at what Remploy produces and, in particular, the quality of the suits that the Dundee factory makes.

[David Mundell]

The hon. Gentleman will know that his constituency neighbour has already met the MOD, which has confirmed the high standard and quality of the work Remploy does in its Dundee factory. However, I urge the hon. Gentleman and everyone in Scotland with an interest to take part in the consultation.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I am sure that the Minister is aware that as well as the Dundee factory there are seven other Remploy factories in Scotland. Does he accept that while his colleagues in the Government are talking about the importance of manufacturing it would be crass and foolhardy to embark on the closure of factories that provide goods and jobs, where public sector procurement could make the difference to ensure that they are viable in future? Will he make representations across Government to ensure that the jobs in those eight factories in Scotland are protected?

[David Mundell]

I am sure that the hon. Gentleman agrees that it is not acceptable that around 50% of disabled people are out of work and that those who are in work often do jobs that are far below their potential. Closing the unemployment gap between disabled and non-disabled people could boost the overall economy by £13 billion, and the Government want to achieve that. We are undertaking a consultation; I urge him and everyone with an interest to take part in it.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

2. When he last met representatives of the six largest energy providers in Scotland.

[Anas Sarwar (Glasgow Central) (Lab)]

5. What recent representations he has received on increases in prices for electricity and gas by the main energy suppliers in Scotland; and if he will make a statement.

[The Secretary of State for Scotland (Michael Moore)]

Energy price increases continue to be a matter of concern to the public and the Government. I recently discussed the issue with the six largest energy providers in Scotland as well as with consumer groups.

[Jim Sheridan]

I thank the Secretary of State for that response, but he will no doubt be aware that the energy companies are now just a major cartel. I therefore suggest one of two options for him: either to give Ofgem the power to say no to the energy companies when they come forward with huge increases; or—even better—to return that power to this House.

[Michael Moore]

We share the hon. Gentleman’s desire to be vigilant about everything that we see in the energy market, which is why the work of Ofgem and my colleagues in the Department of Energy and Climate Change is so important. The latest discussions with the energy companies took place in the last couple of weeks, building on those that I had earlier in the year. The energy companies are in no doubt that the Government expect them to look carefully at all their pricing policies, and I assure the hon. Gentleman that we will continue to be vigilant in that respect.

[Anas Sarwar]

One hundred thousand pensioners in Glasgow face cuts totalling £4 million to their winter fuel allowance this year. At the same time, energy companies are putting up their prices by up to 20%. Does the Secretary of State agree that no pensioner in the UK should have to choose between heating their home and putting food on the table? If so, what is he going to do about this?

[Michael Moore]

The hon. Gentleman is right to focus attention on some of the most vulnerable people in society, both in Glasgow and elsewhere in Scotland. I would point out to him that the winter fuel allowance will return to its previous level, as planned by the previous Government, and that the cold weather payments—on which we spent over £50 million last year—will continue at a higher level than before. I know that the hon. Gentleman studies these matters carefully, and he will be aware that, through our Warm Home discount scheme—a statutory scheme that is replacing the previous voluntary scheme run by the energy companies—we will ensure that we get more than double the amount of assistance to vulnerable households this winter and during the winters ahead.

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

I hope that the Secretary of State will take the opportunity to talk to renewable energy providers about the fact that the only way of getting the electricity generated in that way into the grid is via overhead pylons. Given that undergrounding takes place in alpine countries, will he insist that that happens in the highlands and the north of England as well?

[Michael Moore]

I understand the sensitivity of the issue that my hon. Friend raises; indeed, it occurs across the country. This matter must be carefully considered, and the proposals for the transmission network must take full account of environmental and other planning considerations.

[Malcolm Bruce (Gordon) (LD)]

In his discussions with the energy companies, has the Secretary of State discussed the 1 million households that are not on the gas main? What are the energy companies going to do to extend the gas main and give those households the opportunity to use a cheaper fuel than oil?

[Michael Moore]

We are keen to ensure that consumers have as much choice as possible, whether through extending the transmission networks for all different kinds of energy or through looking at ways of enhancing competitiveness in the market by increasing transparency and improving smart meters. All those measures need to be looked at, and I will certainly put the right hon. Gentleman’s point to the energy companies the next time we talk.

[Mr Mike Weir (Angus) (SNP)]

In those discussions about off-grid gas consumers, did the Secretary of State talk about the escalating price and the need to avoid a repeat of the difficulty in ensuring supplies during the severe weather last winter?

[Michael Moore]

People are acutely aware of the problems caused by the weather last winter and the winter before that. That is why the measures to keep resilience in the network are particularly important. Equally, however, we need to recognise that that adds cost to consumers, which is why we are maintaining the cold weather payments. We will also have the winter fuel allowance and, through our new measures, we will enhance the support for vulnerable people across Scotland.

[Jo Swinson (East Dunbartonshire) (LD)]

Many of my constituents, particularly those on low incomes, are struggling with the large increases in their gas and electricity bills. I very much welcome the recent news that Ofgem has brought in a firm of specialist auditors to help its investigation into whether the high energy prices are really justified, and I look forward to seeing its report at the end of the year. Will the Secretary of State and his colleagues ensure that Ofgem has all the necessary support to carry out a thorough investigation, and sufficient powers to sanction the big six, in particular, if, as I expect, it finds that they have been acting unfairly?

[Michael Moore]

Certainly, a feature of the discussions that I have been having recently is that many of the energy companies recognise that they need to regain the trust of the consumer concerning price rises and the reasons that they have come about. In the next few weeks I will be bringing energy companies and consumer groups in Scotland together to look at these issues in detail. I will ensure that the companies focus on the appropriate responses and that we take away whatever work we need to do.

[Ann McKechin (Glasgow North) (Lab)]

Given that surveys conducted by Consumer Focus Scotland show that nine out of 10 people who bought energy products on the doorstep would never do so again, does the Secretary of State agree that it is time for all energy providers in Scotland—not just four—to end the practice of cold calling? If so, when will the Government introduce legislation to ensure that this foul practice ceases?

[Michael Moore]

I join the hon. Lady in condemning the sharp practice that has been on display in many parts of the country, particularly in Scotland. That is one of the issues that we will discuss in the meeting that I mentioned in my answer to my hon. Friend the Member for East Dunbartonshire (Jo Swinson). We are determined to get the companies to recognise that that is an unacceptable practice.

[Ann McKechin]

At a time when Scottish and Southern Energy will be adding an average of £171 a year to each of its customers’ electricity and gas bills, tipping thousands of people in Scotland into fuel poverty, and when other energy providers are following suit, does the Minister agree that it is unfair and morally inappropriate that its chief executive officer received a bonus of £2 million on top of his £840,000 salary when the wholesale prices of energy were actually going down?

[Michael Moore]

Remuneration is a matter for the energy companies themselves, but all of us have to ensure that we are carefully focused on the performance and behaviour of all these companies, which is why I have been ensuring that their focus is on what their consumers, and particularly the most vulnerable, need. The hon. Lady is right to focus on fuel poverty: at the end of 2009, a third of Scottish households were measured to be in it. The measures I have already outlined will go a long way towards helping to tackle it.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

4. What recent assessment he has made of the prospects for the economy of the highlands and islands; and if he will make a statement.

[The Secretary of State for Scotland (Michael Moore)]

Despite challenging international circumstances, the UK and Scottish economies are growing, rebalancing and creating jobs. The Government are creating a new model of economic growth that is more evenly balanced across the UK.

[Mr Kennedy]

I thank the Secretary of State for that reply. He has welcomed, as have we all across Scotland, the formal confirmation of university status for the University of the Highlands and Islands. As he knows, the university has put in an application to the Scottish Government for an additional £3 million in view of the extra demands now being placed upon it. Is that something to which my right hon. Friend can give his discreet support?

[Michael Moore]

I am always happy to look at these cases and provide support as necessary. My right hon. Friend is absolutely right to say that this is an important step forward for the highlands and islands. I hope that the Scottish Government will reflect carefully on what he and others have been saying.

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

Yesterday I had an Adjournment debate in Westminster Hall on fuel duty. Is the Secretary of State aware that the duty is then subject to tax by VAT?

[Michael Moore]

I think that everybody in the House is aware of the realities of fuel taxation. I am therefore sure that the hon. Gentleman was welcoming the fact that in our Budget earlier this year we reduced fuel duty rather than increasing it in the way the previous Government had planned. This question gives me the opportunity to remind the House that we have made further progress in the derogation for highlands and islands fuel prices, which is very welcome news indeed, so that we can get a reduction in fuel duty in the islands.

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

The highlands and islands economy is being held back by the high price of fuel. I warmly welcome the Government’s progress on the island fuel discount and on the cut in fuel duty in this year’s Budget. However, a further increase in fuel duty is planned for January; if the price of fuel remains high, I hope that that will not go ahead. Will the Secretary of State make representations to the Chancellor?

[Michael Moore]

I am very aware from my own travels around Scotland, particularly to my hon. Friend’s constituency, of the extremely challenging circumstances for users of cars and vehicles across rural areas and, indeed, all of Scotland. I therefore particularly welcome, to repeat my earlier point, the Budget reduction and the European Commission's announcement about its support for our derogation. We want to keep all these things in balance. My hon. Friend’s comments will have been heard by the Chancellor, but he alone is responsible for taxation matters.

[Angus Robertson (Moray) (SNP)]

It is to be welcomed that unemployment is down in Scotland and that employment is up, but challenges remain, not least in the north of Scotland where, because of defence cuts, £30 million will be lost every year due to the closure of RAF Kinloss as an airbase. Will the Secretary of State confirm that no specific financial support has been provided by the UK Government to help deal with that economic shock?

[Michael Moore]

I hope that the hon. Gentleman will recognise that, in reaching some difficult and complex decisions over the future not only of RAF basing but of that of the Army and Navy, too, we will see an increased footprint in Scotland as a whole. In the hon. Gentleman’s own area, we will see additional Army resources going into Kinloss in particular. The hon. Gentleman will be aware that discussions on how to support the communities through the next few years are at an early stage, but I am looking forward to them continuing in the constructive manner in which they have started.

[Angus Robertson]

Everyone will have noted that the Secretary of State was not able to confirm that there has been any specific financial support—because there has not been. It has been nearly a year since the announcement of RAF Kinloss’s closure as an airbase and more than two months since confirmation about the Army deployment. Agencies supported by the Scottish Government have been active in support of economic diversification. In contrast, the UK Government have provided little or no details to these local agencies to assist in the transition. Why is that?

[Michael Moore]

I have discussed the matter with the Scottish Finance Secretary on a couple of occasions. The Scotland Office continues to be engaged with the taskforces, both in the hon. Gentleman’s part of the world and in Fife. We are working hard to ensure that the detail and all the other aspects of the plan are in place, and I am sure that the hon. Gentleman will welcome the announcements when they are made.

[Mr Speaker]

Order. Far too many noisy private conversations are taking place in the Chamber. I want to hear Fiona Bruce.

[Fiona Bruce (Congleton) (Con)]

6. What assistance police forces in Scotland provided during the public disorder in England in August 2011; and if he will make a statement.

[Bob Blackman (Harrow East) (Con)]

7. What assistance police forces in Scotland provided during the public disorder in England in August 2011; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

Scottish forces gave assistance to forces in England through the provision of police support units. During the debate in the House on 11 August, my right hon. Friend the Prime Minister said:

“I am aware of the excellent role that Scottish police officers played, particularly helping the West Midlands force. I saw for myself their impact when they arrived in Birmingham, and it is very good that our forces can co-operate in that way.”—[Official Report, 11 August 2011; Vol. 531, c. 1081.]

[Fiona Bruce]

Does the Minister agree that the excellent cross-border support provided by Scottish police has exemplified to everyone in Britain the advantages of a flexible, devolved United Kingdom?

[David Mundell]

I entirely agree. There are many examples of Scottish forces’ playing an important role in incidents elsewhere in the United Kingdom, not least in dealing with the shootings that took place in Cumbria in 2010.

[Bob Blackman]

Londoners welcomed the robust standard of policing brought from Scotland during the recent riots. What plans are there for closer co-operation, joint operations and further training, so that we can learn the lessons of the past?

[David Mundell]

As the Prime Minister made clear on 11 August, Strathclyde police have achieved significant success—particularly in Glasgow—in pursuing gang-related initiatives, including a community initiative to reduce violence. They are committed to working with the Metropolitan police and other forces in England to share best practice in that regard.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

During the recess, I spent six days with Lothian and Borders police as part of the parliamentary police scheme. The people with whom I worked were concerned about the possibility that the call on Scottish forces would deny them, for example, any holidays in August next year during the Olympics, and also about the possible impact on the budget of Scottish forces. Is the Secretary of State lobbying to secure adequate recompense for the Scottish forces for the contribution that they have made, and will make in the future, to English policing?

[David Mundell]

The hon. Gentleman will know that there are arrangements with the Home Office for occasions when police forces are deployed from other parts of the United Kingdom. However, I am sure that the Home Secretary has heard the specific points made by the hon. Gentleman, and I will raise them directly with the Scottish Government.

[Mr David Amess (Southend West) (Con)]

8. What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question.

[Guto Bebb (Aberconwy) (Con)]

9. What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question.

[John Stevenson (Carlisle) (Con)]

10. What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

11. What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question.

[The Secretary of State for Scotland (Michael Moore)]

I have regular discussions with my right hon. Friend the Deputy Prime Minister on a range of issues, and last week the Government announced the steps that we are taking to establish a commission on the West Lothian question.

[Mr Amess]

Will the Secretary of State give the House what is the time scale for the commission, and will he reassure every one of us that the present unfair voting system will be resolved by the end of this Parliament?

[Michael Moore]

The details of the commission’s remit and the time scale will be announced by the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper)—the Minister responsible for constitutional reform—at the appropriate moment, as he indicated last week. As for all the issues to be considered by the commission, I am sure that its members have heard the hon. Gentleman’s opening bid.

[Guto Bebb]

Will the Secretary of State make representations to the Deputy Prime Minister to ensure that the issue of Barnett consequentials is taken into consideration as part of the commission’s terms of reference?

[Michael Moore]

The commission will not give specific consideration to the Barnett formula, or to funding arrangements around the United Kingdom. We have made a separate commitment within the coalition agreement to look at all those matters when we have achieved our primary objective of sorting out the public finances.

[John Stevenson]

Will the Minister confirm that the commission will consider the issue with regard not just to Scotland, but to the other devolved Assemblies in Wales and Northern Ireland? [Interruption.]

[Michael Moore]

May I ask my hon. Friend to repeat the first part of his question?

[Mr Speaker]

That rather reinforces my point that there is far too much noise in the Chamber, which is very discourteous. The hon. Gentleman should repeat his question.

[John Stevenson]

Will the Minister confirm that the commission will consider the issue with regard not just to Scotland, but to the other devolved Assemblies in Wales and Northern Ireland?

[Michael Moore]

I am happy to confirm that although it is called the West Lothian commission, it will look at all the relevant issues regarding all parts of the United Kingdom.

[Simon Hart]

Does the Secretary of State share my view that resolving the West Lothian question would not, in fact, damage the Union?

[Michael Moore]

We now have an opportunity to consider carefully the issues that were first so famously posed back in 1977. As devolution has developed over recent years, the need to address these issues has become more urgent. We are keen for that to be done, which is why we are the first Government to set up a commission to look at the issues, and we look forward to its getting on with its work.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Does the Secretary of State accept that there is an elegant solution to the West Lothian question: Scotland having the normal powers of a normal nation, which is called independence?

[Michael Moore]

Nobody could ever doubt the hon. Gentleman’s confidence in, and commitment to, this issue, but what he says only serves to raise the question of why the Scottish Government are delaying holding the referendum on independence.

[Mr Jim Hood (Lanark and Hamilton East) (Lab)]

May I invite the Secretary of State to ignore the little Englanders behind him and the little Scotlanders behind me, and tell us that we are going to allow Scottish MPs to discuss Scotland in a Scottish Grand Committee? Will he reconvene that Committee as soon as possible?

[Michael Moore]

The hon. Gentleman frequently made that plea to the previous Government. We are, of course, keen to ensure that all Scottish matters continue to be debated in the appropriate way in this House, and we will ensure that.

[John Robertson (Glasgow North West) (Lab)]

I am sure that the right hon. Gentleman is embarrassed by the four grouped questions, which were obviously planted by his Front-Bench colleagues. When he is looking into all the matters under discussion, will he remember London, and perhaps treat Scotland in the same way as London has been treated?

[Michael Moore]

I have no idea what the hon. Gentleman is saying about these questions, but perhaps he would like to look to the way in which the previous Government behaved; indeed, perhaps he is trying to give us an insight into that. All I will say to him is that, unlike the previous Government, we are determined to recognise that there is an issue that needs to be discussed and considered. It is complex, as there are lots of issues that we will have to consider, but then the House can get on with doing all the work it needs to do.

[Graeme Morrice (Livingston) (Lab)]

Does the Minister agree with me as a West Lothian Member of Parliament that it is deeply unsatisfactory that a commission on a constitutional issue affecting Scotland has been set up with no opportunity for any consultation on its terms of reference or any involvement by Parliament until the commission presents its findings?

[Michael Moore]

I am sorry that that is the hon. Gentleman’s attitude. I thought he would welcome the fact that we are setting up the commission. I am sure that when it is set up, he will want to contribute to it. He raised some issues, including on the terms of reference, and my hon. Friend the Parliamentary Secretary in the Cabinet Office has made it absolutely clear that we will listen to all the points that are made to us. [Interruption.]

[Mr Speaker]

Order. The House is in a very excitable state, and it is not even lunchtime yet. Members must calm down and compose themselves.

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

12. What assessment he has made of the effects on job creation in Scotland of the employer’s national insurance holiday scheme.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

As of 7 September 2011, Her Majesty’s Revenue and Customs has received 922 successful applications for the national insurance holiday scheme from new businesses located in Scotland. Of the 396 applications received for the 2010-11 financial year, 386 claimed the national insurance contributions holiday, supporting approximately 1,300 new jobs.

[Mr Bain]

Should not the Minister be lobbying the Chancellor to create a proper strategy for growth for Scottish manufacturing and construction, instead of offering such complacent support for a scheme that has created less than 10% of the jobs that were forecast and that has been described by the Federation of Small Businesses in Scotland as badly designed and failing to deliver at a time when the country needs the creation of new jobs?

[David Mundell]

We will certainly not be taking any lectures on national insurance from Labour, a party that sought to introduce a jobs tax in 2009. [Interruption.] I had the benefit of visiting the hon. Gentleman’s constituency last week, and I would have thought that he welcomed the fact that these jobs that did not exist before and that they have a better chance of becoming permanent with the NIC holiday—[Interruption.]

[Mr Speaker]

Order. I want to hear Mr Angus MacNeil.

[Hon. Members]

Hear, hear.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It seems you are not alone, Mr Speaker.

Job creation is majorly affected by fuel costs. In my constituency in Stornoway fuel is £1.50 a litre and in Uist it is £1.57. A huge component of those prices is the cost of distribution from the refineries. A few months ago, the Secretary of State gave me assurances that he would look into this. Can the Minister update me on any progress that has been made regarding fuel distribution from refineries?

[David Mundell]

I can update the hon. Gentleman on the progress on receiving the derogation from the EU to allow fuel prices in his constituency and other remote parts to be lower than they currently are. I should have thought that he welcomed this coalition Government’s delivering that commitment.

The Prime Minister was asked—

[Alex Cunningham (Stockton North) (Lab)]

Q1. If he will list his official engagements for Wednesday 14 September.

[The Prime Minister (Mr David Cameron)]

This morning I had meetings with ministerial colleagues and others and in addition to my duties in this House I shall have further such meetings later today.

[Alex Cunningham]

Grieving families on Teesside are waiting many months and sometimes many years to have inquests into the deaths of their loved ones concluded. Apparently that is much longer than the wait anywhere else in the country. They have suffered enough. Will the Prime Minister stop the messing about now and instruct the Justice Secretary to sack the incompetent Teesside coroner?

[The Prime Minister]

I will certainly look at the particular case that the hon. Gentleman raises. As he knows, we have been reforming coroner services and putting money and resources into them to try to make them more effective, but I shall certainly take up the individual case that he makes.

[Mary Macleod (Brentford and Isleworth) (Con)]

Will the Prime Minister give us an update on his recent visit to Russia, especially in relation to the tragic murder of Mr Litvinenko, whose widow lives in my constituency? That case also caused a risk to public safety. Will the Prime Minister meet her to give her an update?

[The Prime Minister]

My right hon. Friend the Foreign Secretary spoke to Alexander Litvinenko’s widow before I travelled to Moscow. Let me be absolutely clear that the British Government have not changed their view one jot about how wrong it was for that murder to take place and about how we need a proper explanation about what happened and who was responsible. We want justice for that family. We have not changed our view, but I do think it is right, at the same time, to try to build a better relationship with Russia across a whole range of issues. We have common interests in trying to grow our economies and our trade and we have common interests in working together on issues such as the middle east peace process. I made sure when I went to Russia that I raised not just the Litvinenko case but many other human rights cases, including the Magnitsky case, with the Russian President and others. I think that is the right way to conduct our international relations.

[Edward Miliband (Doncaster North) (Lab)]

Today’s figures show that unemployment is up by 80,000. Does the Prime Minister still think the British economy is out of the danger zone?

[The Prime Minister]

First, let me say that these unemployment figures are disappointing—I do not want to hide from that. Every lost job is a tragedy for that family and I want to do everything I can, and this Government will do everything they can, to help those people back into work. That is why we have 360,000 apprenticeships starting this year, that is why we have 10,000 extra university places, and that is why, in the Work programme, we have the biggest back-to-work, welfare-to-work programme this country has seen since the 1930s. But at the same time, let me say to the right hon. Gentleman that it is right that we get on top of our debts and our deficits, and today of all days shows the danger of getting into the position that other European countries are in where their whole credibility is being questioned.

[Edward Miliband]

People are going to judge the Prime Minister on results. They do not want to hear his spin about the Work programme. Youth unemployment is up by 78,000, on today’s figures, even after his Work programme has started. What young people and their families are asking is, “Where are the jobs?”

[The Prime Minister]

The Work programme is the best way to help young people—indeed, all people—back into work. Of course, as I have said, the figures are disappointing, but we should not ignore the fact that since the election there are 500,000 more jobs in the private sector. There are more people—300,000 more people—in work than there were a year ago. Let me just say to the right hon. Gentleman that there is not one ounce of complacency in this Government about the need to do more to help people back to work. We have a growth plan that includes cuts in corporation tax, freezing the council tax, cuts in petrol duty, introducing the regional growth fund, and making sure we have enterprise zones in every part of our country, but in every week and in every month we will be adding to that growth programme so we help people get back to work.

[Edward Miliband]

The right hon. Gentleman and his Government are the byword for complacency in this country on the issue of unemployment. Youth unemployment was falling at the general election, and it has risen on his watch; it is his responsibility. Women’s unemployment, too, is at its highest level since 1988, and he is making the situation worse by cutting the child care tax credit. How does it make sense, when unemployment is rising for women, to cut the support that helps them back into work?

[The Prime Minister]

Let me just remind the right hon. Gentleman that youth unemployment went up by 40% under the last Government—278,000 more young people were unemployed when he was sitting in the Treasury and breaking our banking system and bankrupting our economy. That is what the people remember.

Now, when it comes to child care, what this Government are doing—we are the first Government to do it—is making sure that there are 15 hours of free child care for every four-year-old and every three-year-old, and we have extended that to every two-year-old. We have focused the tax credit system on the poorest people in our country, so that child tax credits are going up by £290 this year and next for those who need it the most. But let me just say to the right hon. Gentleman that, on a day when France and Germany are meeting to stop Greece going bankrupt, he must be the only person in the world who thinks that you spend more to get out of a debt crisis.

[Edward Miliband]

It is no wonder that the right hon. Gentleman does not want to talk about the British economy and what is happening here, because of what is actually happening. And not for the first time, he is wrong in what he says at the Dispatch Box: youth unemployment was falling at the general election, and now it is rising. Why is it not working? The reason is that his claim and the Chancellor’s central claim that the public sector could be cut and the private sector would make up the difference is not happening. For every two jobs being cut in the public sector, less than one is being created in the private sector. Is that not the clearest sign yet that his policy just is not working?

[The Prime Minister]

So now we have it, Mr Speaker: the right hon. Gentleman wants to tell us about the golden inheritance left by the last Government—the fact that they completely bust our banking system, the fact that they doubled the national debt and the fact that they gave us the biggest budget deficit in Europe that we are still recovering from—and he cannot even be consistent inside one day. This is what he said yesterday to the TUC: “You cannot spend your way to a new economy.” Just 24 hours later, he has changed his tune all over again. No wonder the last Chancellor of the Exchequer said that they have no credibility whatsoever.

[Edward Miliband]

What an insult to the people up and down this country who have lost their jobs! The right hon. Gentleman does not even try to answer the question about his central economic strategy to cut the public sector and make the private sector make up the difference. It is not happening, and the truth is, look at what has happened over the past year: Britain has grown slower than any other EU country, apart from Portugal and Romania. Now can the Prime Minister tell the country and the people who have lost their jobs what he is going to do differently over the next year compared with what he did over the last year?

[The Prime Minister]

First, let me correct the right hon. Gentleman on his facts. The fact is that, this year, Britain is growing faster than America. That is something that he does not choose to tell us. [Interruption.] Let me answer directly—[Interruption.]

[Mr Speaker]

Order. The Prime Minister’s answers must be heard.

[The Prime Minister]

Let me answer directly this point about unemployment in the public sector. All Governments right now are having to take difficult decisions about cutting public spending. Anyone standing here would have to make those decisions. This Government are reducing the welfare bill and reforming public sector pensions. If we were not taking those steps, deeper cuts would have to be made in terms of the rest of the public sector. The right hon. Gentleman would be having even more unemployment in the public sector. That is the truth. When will he learn what I thought he said yesterday, “You cannot spend your way to a new economy”? Is that still his view 24 hours later?

[Edward Miliband]

So the message to all those people who have lost their jobs is that the Prime Minister is not going to change course. The Chancellor of the Exchequer has lashed himself to the mast. [Interruption.] Not for the first time perhaps. Youth unemployment is at its highest level for 19 years and women’s unemployment is at its highest level for 23 years—the highest levels since the last time there was a Tory Government. It turns out that he is just like all the others: for him, unemployment is a price worth paying.

[The Prime Minister]

It is this Government who are cutting corporation tax, who have frozen council tax, who have cut petrol duty, who introduced the regional growth fund, who ended Labour’s jobs tax, who have the biggest apprenticeship programme in decades, and who have increased capital spending compared with what Labour left behind. The truth is that it was the last Government who robbed young people of their future by piling up the debt. It is this Government who will deal with our debts and give them back their future.

[Kris Hopkins (Keighley) (Con)]

Q2. The Prime Minister will be aware that the consultation on the draft national planning policy framework will end next month. Will he confirm that the Government’s proposals will ensure that local residents will be at the forefront of decision making, that important green spaces will retain their existing protection, and that this will not become a developers charter?

[The Prime Minister]

I can certainly give my hon. Friend that assurance. We need reform, as the current system is too slow and bureaucratic, and it does not give local people enough of a say. We are replacing a vast, 1,000-page bureaucratic guide with something that is much shorter. Local development plans will mean that local communities and local people have a far greater say in what is developed and where, and we are not changing the rules on national parks, on the green belt and areas of outstanding natural beauty.

Let me just say this to everyone in the House, because I think there should be cross-party support on this issue. Today, the first-time buyer with no support from their family is aged 37. I think that is wrong. We need to build more houses, to help more young people to get on the housing ladder.

[Robert Flello (Stoke-on-Trent South) (Lab)]

Q3. Last week, the Prime Minister told the House:“There are 25,000 police officers in back-office jobs”.—[Official Report, 7 September 2011; Vol. 532, c. 353.]

Her Majesty’s inspectorate of constabulary says that there are fewer than 8,000 police officers and police community support officers in back-office roles. Week after week, the House hears a litany of evasion, inaccurate answers and arrogant put-downs from the Prime Minister. We want a proper answer. Let us give the Prime Minister a chance today: is it the inspectorate or is it the Prime Minister? We won’t get an answer.

[The Prime Minister]

The hon. Gentleman is confusing two things: the number of police officers who are not on front-line duties, and the number of police officers who are in back-office roles such as IT or HR. Those are the figures that I gave, and those are the figures that are right. What makes the Opposition complacent is that they are not prepared to consider any reforms to try to get more police on to the front line and on to our streets.

[Dr Sarah Wollaston (Totnes) (Con)]

I know that the Prime Minister is serious about tackling violent crime, antisocial behaviour and the fact that there are more than 1 million hospital admissions in England a year for alcohol-related conditions. Will he meet me to discuss the evidence that we need to go further on minimum pricing, availability and particularly the marketing of alcohol to young people?

[The Prime Minister]

I am very happy to meet my hon. Friend, who has made a lot of speeches and written a lot of articles about the issue, about which she feels passionately. She is right in many ways that there is a problem with binge drinking in our country. Much of it is related to very low-cost alcohol, particularly in supermarkets. I want to see an end to that deep discounting, rather than perhaps the way forward that she suggests, but I am happy to meet her and discuss this vital issue.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Q4. A poll last week showed that 68% of Scots want oil revenues devolved to Scotland. Does the Prime Minister agree with 68% of Scots or not?

[The Prime Minister]

If you ask a stupid question, you get a stupid answer. The fact is the whole of the United Kingdom rightly has invested in the North sea, and the whole of the United Kingdom should benefit from the North sea. We should do everything possible to keep the United Kingdom together because we are stronger—England, Scotland, Northern Ireland and Wales—than we ever would be separate.

[Mrs Helen Grant (Maidstone and The Weald) (Con)]

Q5. Does the Prime Minister agree that we need more women on corporate boards?

[The Prime Minister]

I completely agree with my hon. Friend. The current figures are simply not good enough. Only 14% of FTSE 100 company directors are women. We should do far better. We have some experience from the problems that we had in our own party and the need to take much more proactive action to make sure we have a better balance at the top of politics. We need a much better balance at the top of our boardrooms as well.

[Paul Flynn (Newport West) (Lab)]

Q6. Are not the most vulnerable people in the care of the health service those silent voices who live in residential homes? Will the Prime Minister express his regret that under his watch there was, we hear today, a nearly three quarters reduction in the number of inspections—a 70% reduction—because money was moved from inspection to bureaucracy? Does not that again prove that the national health service is not safe in the hands of the nasty party?

[The Prime Minister]

The Health Committee report that is released today makes a very important point about the future and the work of the Care Quality Commission. It is important that it focuses on inspections and making sure that standards are high rather than simply on a process of registration and bureaucracy. I look forward to seeing the Government’s response to a very good report.

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

Was my right hon. Friend taught, at whatever school he happened to attend, that one of the key functions of Parliament over the centuries has been to diminish what the historians have called the overmighty subject. In the 18th century—[Interruption.]

[Mr Speaker]

Order. I want to hear the hon. Gentleman’s views about the 18th century.

[Sir Peter Tapsell]

In the 18th century, it was the Indian nabobs, denounced by Edmund Burke. In the 19th century, it was the ruthless industrialists, humanised by Shaftesbury. In the 20th century, it was the trade union leaders, tamed by Lady Thatcher. Today, the overmighty subject is the bankers. In the United States, the federal authorities are prosecuting a wide swathe of the top banks. When will that happen here?

[The Prime Minister]

My right hon. Friend obviously had a much better education than I did; that is apparent. Also, it was very good to hear him say something very positive about Margaret Thatcher. The serious point that my right hon. Friend makes is right: we do need to see responsibility from our bankers. I support what Vickers has said in terms of the reforms that we need, and to answer my right hon. Friend’s question directly, if people break the law, no matter where they come from or who they are, they should face the consequences and be punished.

[Natascha Engel (North East Derbyshire) (Lab)]

Q7. What does the Prime Minister think of local authorities encouraging developers to put in planning applications not on green belt but on greenfield sites in order to use the new homes bonus to balance their budgets?

[The Prime Minister]

I have the completely original and shocking view that these matters should be for local people and local authorities. In the past, we have had far too much top-down, central direction. People in Derbyshire should make up their own mind, through their local council, about what planning should take place and where. That is the agenda that this Government will follow.

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

I am sure that my right hon. Friend will have noted the recent sound advice that in order for a Government to operate effectively there should be complete unity at the top. With that in mind, will he assure the House and the country that he does not feel the need to re-write a Budget 48 hours before it is due?

[The Prime Minister]

I can confirm that these days those discussions take place in a proper way, between the two partners in the coalition, and that it is not a battle between Nos. 10 and 11. I should also say that when I have a meeting with the Chancellor of the Exchequer it is nothing like going to the dentist and there is no need for an anaesthetic.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Q8. I am sure that all parties in this House have welcomed the news that convicted fraudster and former Lib Dem donor Michael Brown has been found living under an assumed name in the Dominican Republic. Unfortunately, we have no extradition treaty with that country. Will the Prime Minister tell the House what steps the Government are taking to bring Mr Brown back to face justice?

[The Prime Minister]

We would like to extend these treaties to other countries, and I will certainly look into the case of the Dominican Republic and get back to the hon. Gentleman. While we are at it, perhaps we could have a search for the individual donor to the Labour party—I gather that there was only one and that he was called Alastair Campbell.

[Gordon Birtwistle (Burnley) (LD)]

Will the Prime Minister join me in congratulating Burnley football club, which, in partnership with Buckinghamshire New university, has delivered the first university of football business in the UK, which has generated immense interest among young people in the UK and across Europe?

[The Prime Minister]

I happily join my hon. Friend in praising the work of Burnley football club. I have been very struck in this job by the privilege I have of seeing different football clubs working not only on their own football skills, but on inspiring young people, and not only here, but in other countries, as I saw with the work that Spurs football club is doing in South Africa. I think there is a huge role for football in helping to change people’s lives and I fully support what our clubs do.

[Mark Hendrick (Preston) (Lab/Co-op)]

Q9. Contrary to the Prime Minister’s answer at the Dispatch Box last week, will he confirm that the winter fuel allowance this year will be £50 less for the over-60s and £100 less for the over-80s? Age UK has called that a cut. Does he agree?

[The Prime Minister]

What I can confirm is that that payment will be exactly as set out by Labour in their March Budget, a Budget that the hon. Gentleman supported. At the same time, the increase in cold weather payments will actually be maintained throughout this Parliament.

[David Rutley (Macclesfield) (Con)]

Q10. Small and medium-sized enterprises are vital engines of economic growth in Macclesfield and across the country. Sadly, the cost of new regulations put on businesses under the previous Government amounts to a staggering £90 billion a year. Will my right hon. Friend tell the House what this Government are doing to tackle that unacceptable burden on British businesses?

[The Prime Minister]

There is an unacceptable burden in terms of regulation, so the Government, specifically in relation to the retail sector, have already removed 257 regulations. We have the new one-in, one-out rule, so any Minister who comes to me wanting to introduce a regulation has to abolish one first. Also, the red tape challenge means that all regulations are being put up on a website for businesses and individuals to challenge to see what is still necessary and what we can get rid of.

[David Simpson (Upper Bann) (DUP)]

Q11. The Prime Minister will be aware that right across the whole of the United Kingdom we have some excellent industries, businesses and trained staff within those companies, but surely the coalition’s decision to put off banking reform until after the next election will have a detrimental effect on those companies and cause major difficulty.

[The Prime Minister]

The point I would make to the hon. Gentleman is that we asked Professor Vickers to look at this issue, and he recommended legislating in this Parliament but introducing the reforms at the same time as the Basel changes are finalised in 2019, and that is exactly what we will do. At the same time, it seems to me vital that we address the failure of banks to lend enough money, particularly to small businesses. That is why we put the Merlin agreement in place. [Interruption.] Actually, bank lending is not going down, as the shadow Chancellor suggests—he is wrong about everything, even when he is sitting down. Bank lending is actually going up.

[Pauline Latham (Mid Derbyshire) (Con)]

With the closure of the Derbyshire Building Society headquarters in my constituency, which is perfectly situated to take the green investment bank, and with the move from Derby to Nottingham of the Post Office sorting centre and evaluation offices, the closure of Courtaulds, with the loss of all but 70 jobs, and the potential closure of Bombardier, will the Prime Minister encourage his Secretaries of State to look at sending more civil service jobs to Derbyshire so that we can have more employment in the area?

[The Prime Minister]

My hon. Friend makes an important point, and I know that there are real concerns because of what has happened at Bombardier.

On the green investment bank, I know that there are going to be many bids from many parts of the country to house that excellent institution. On Bombardier, it is encouraging to hear that the Department for Transport is looking into the possibility of upgrading an existing fleet of Bombardier-built diesel trains to enable them to run using electric power. That could be a good breakthrough, but, on the previous contract, as we have discussed in the House before, the fact is that it was established by the previous Government and we had to follow those instructions. That is why the contract had to be awarded elsewhere, but we are looking to the future of Bombardier and the future of Derby, and we want to make sure that it is a bright future.

[Chris Williamson (Derby North) (Lab)]

Q12. Last week the Prime Minister told the hon. Member for South Derbyshire (Heather Wheeler) that he would do everything he could to help Bombardier, but the British train building industry is now hanging in the balance as a result of the plan to build trains in Germany rather than in Derby. Will he meet me and a cross-party delegation from Derby to discuss how we can review the contract—and it is possible to review it—in order to secure the future of the British train building industry and keep Bombardier in Great Britain?

[The Prime Minister]

We want to keep Bombardier in Great Britain, and we want to keep Bombardier working, which is why, as I have just said to my hon. Friend the Member for Mid Derbyshire (Pauline Latham), there is that new opportunity, but the issue should be put in the context of the fact that we are putting a lot of investment into our rail industry: £14 billion into a network grant for Network Rail; £3.8 billion for Crossrail; and £750 million for High Speed 2. This is a Government who want to do more for our railway industry, and who want to do more for Bombardier after it was so badly let down by the previous Government.

[Malcolm Bruce (Gordon) (LD)]

Q13. Campaigners on the right want to get rid of the 50p tax rate and those on the left want to juggle with VAT. Does the Prime Minister agree that the most fair and progressive way to maintain confidence in the economy is to stick to the Government’s policies but accelerate the process of raising the tax threshold to £10,000?

[The Prime Minister]

I am grateful to my right hon. Friend for his question, but we have raised the personal allowance significantly in our Budgets and taken more than 1 million people out of tax altogether, and we are committed to going further. On the 50p tax, we should look at the evidence. We are going to find out soon just how much money the tax is raising; let us look to see whether it is a good way of raising money or not.

[Malcolm Wicks (Croydon North) (Lab)]

Q14. When the Croydon riots hit our borough on that terrible Monday night, there were at most 100 police officers on the streets, including some very young community support officers, facing mobs hundreds and hundreds strong, as a result of which my borough was undefended, burnt and looted. May I put it to the Prime Minister, not as a partisan point but as a sensible point, that when the criminal facts change in England, as they did following the riots, a sensible Government would pause for thought and change their mind—and that the last thing they would do is reduce police numbers?

[The Prime Minister]

I went to visit Croydon and met the right hon. Gentleman and a number of people who had seen some shocking things happen in that borough which must not be allowed to happen again, but let me say to him that, even after the changes that we are making in police funding, the police will be able to surge as they did in Croydon, in Tottenham, in Manchester and in Salford. The problem on the night of the riots was that the surge did not take place soon enough, and he confuses the response to the riots in the immediate circumstances with what is happening to police funding. The police have assured me that they will be able to deliver on to the streets of London as many police as they did when they got control of the riots.

[Zac Goldsmith (Richmond Park) (Con)]

Following the question from my hon. Friend the Member for Keighley (Kris Hopkins), will the Prime Minister agree to meet organisations such as the Campaign to Protect Rural England, the National Trust and so on to reassure them and their millions of members that the proposed changes to the planning system do not represent a blank cheque for developers?

[The Prime Minister]

I am very happy to meet anyone to discuss that, and I know that the National Trust has specifically already met the planning Minister, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), and has had many reassurances about what the planning changes mean. Let me just say this again: because we are going to have stronger local plans, that will give local people a greater ability to decide what is in the local plan and what is out of the local plan. At the same time, having a presumption in favour of sustainable development will cut a lot of bureaucracy in our system, but we are not changing the rules for greenbelt, for areas of outstanding natural beauty, for sites of special scientific interest or for all the rest of it. I do think that people need to focus on that, because we need sensible, sustainable development to go ahead without the bureaucracy and the top-down system of today, but with all the reassurances that people need.

[Nic Dakin (Scunthorpe) (Lab)]

Q15. Last week the Prime Minister told the House that the number of young people not in education, employment or training was coming down. In actual fact, the published figures show that over the past three quarters it has risen by 27,000. Will the Prime Minister take this opportunity to correct the record?

[The Prime Minister]

I think the hon. Gentleman will find that what I actually said was that the number of 16 to 18-year-olds who are not in employment, education or training has come down. Indeed, it has come down, and that is a step forward, but the overall number for youth unemployment has gone up, and that is unacceptable. That is why we need the Work programme, more apprenticeships, and more university places—and that is what the Government are putting their money into.

[Simon Kirby (Brighton, Kemptown) (Con)]

Will the Prime Minister join me in congratulating all the winners in last night’s women in public life awards, including the excellent Mary Mears in Brighton and Hove?

[The Prime Minister]

I will certainly join my hon. Friend in congratulating the winners. As I said to my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), we need to do more to promote women in public life, whether in politics or in local government. This party took some steps, but I think, frankly, that we still have more to do, because there are many organisations in our country where we do not have equality of opportunity and where we need to have that equality of opportunity. It is not enough just to open the door and say that it is meritocratic and everyone is able to come in. There are occasions where you need to take positive action in order to get this done.

[Mr Nigel Dodds (Belfast North) (DUP)]

Now that the Prime Minister has committed himself fully to backing the boundary changes will reduce the number of MPs in this House, and to ensure that Prime Minister’s Questions reflects the subject that has been most debated in the corridors of Westminster over the past number of days, will he now also commit to delivering on the other pledge that he and his colleagues made before the election, which was to deal with the scandal of people who are elected to this House, do not take their seats, and yet continue to be paid millions of pounds in allowances, including the equivalent of Short money, which they can use for party political purposes while we have to use it for parliamentary purposes? Please give us a vote to deal with that scandal.

[The Prime Minister]

On the boundary review, we are trying to ensure a basic fairness, which is that every seat in the House of Commons should be the same size. Today, some seats have as many as 90,000 voters and some seats, including some in Wales, have as few as 40,000 voters. How can that possibly be fair? On Northern Ireland and the issue that the right hon. Gentleman raises, I have not changed my view about that one bit, and I do think it is an issue that needs addressing.

[Several hon. Members]

rose—

[Mr Speaker]

Last but not least, I call Mr Richard Harrington.

[Richard Harrington (Watford) (Con)]

In Kenya last week, the father of my constituent Mr Oliver Tebbutt was killed, and his mother was kidnapped and remains missing. What steps are the British Government taking to assist in the return of Mrs Tebbutt and the apprehension of the murderers?

[The Prime Minister]

We are doing everything we possibly can on this desperately tragic case. I chaired a meeting of Cobra about this issue yesterday to make sure we are co-ordinating everything the Government do. My right hon. Friend the Foreign Secretary has met the family today. I think that in some of these cases it is not right to air all the issues in public, but I can reassure my hon. Friend, the family and all who know the Tebbutt family that we will do everything possible to help.

[Mr Speaker]

We come to the 10-minute rule motion. I call Dr Thérèse Coffey. [Interruption.] Order. Perhaps I can make my usual appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and quietly, affording the same courtesy to the hon. Member for Suffolk Coastal (Dr Coffey) that they would wish to be extended to them in comparable circumstances.

Dartford Crossing Tolls

Wednesday 14th September 2011 Commons Chamber

Gareth Johnson (Dartford) (Con)

- Hansard - - Excerpts

With your leave, Mr Deputy Speaker, I should like to present this petition, which is supported by almost 2,000 readers of the Dartford Messenger newspaper and by myself. It states:

The Petition of residents of Dartford and readers of the Dartford Messenger newspaper,

Declares that the Petitioners are opposed to any increase in tolls charged for the Dartford Crossing.

The Petitioners therefore request that the House of Commons urges the Department for Transport not to increase tolls on the Dartford Crossing and to reconsider the emergency measures to lift the barriers during severe congestion and extend the local residents discount scheme.

And the Petitioners remain, etc.

[P000960]

Great Harwood Household Waste Recycling Centre (Lancashire)

Wednesday 14th September 2011 Commons Chamber

Graham Jones (Hyndburn) (Lab)

- Hansard - - Excerpts

I should like to present this petition, on behalf of the residents of Great Harwood in Lancashire and of surrounding areas, to save the recycling centre in said town. A petition in similar terms, asking for the same action, has been signed by a number of my constituents. Great Harwood Community Action Group has gathered a petition of some 1,500 signatures; 3,000 signatures against the closure were gathered at the recycling centre prior to that; about 600 protest letters have been sent to the county council; and I personally received 84 letters of objection to the closure at the beginning of the process.

The petition states:

The Petition of residents of Great Harwood, Lancashire and others,

Declares that following Lancashire County Council's budget review and report into household waste recycling centres, there are now plans to close further recycling centres across the county; that it has been announced that Great Harwood is one of the sites that has been identified to close; and that the Petitioners believe that this will inevitably decrease recycling and increase fly-tipping in Great Harwood and the surrounding areas of Lancashire

The Petitioners therefore request that the House of Commons urges the Government to write to Lancashire County Council to ask them to reconsider the proposal to shut the Great Harwood Household Waste Recycling Centre and to keep it open, as it is a vital service to the town and surrounding areas.

And the Petitioners remain, etc.

[P000962]

Provision of Hydration and Nutrition for the Terminally Ill

Wednesday 14th September 2011 Commons Chamber

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

12:34

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I beg to move,

That leave be given to bring in a Bill to guarantee the right to provision of hydration and nutrition for terminally ill people; and for connected purposes.

Water is the essence of life; we all know that without it we die. That is one reason why I support the charity Water Aid, for which I did a sponsored walk last Saturday.

Another topic that will come up for discussion in Parliament soon is the Hillsborough disaster. One of the tragic cases that arose from that disaster was that of Tony Bland. To remind hon. Members, Tony Bland ended up in a permanent vegetative state and was kept alive for some years. However, Airedale NHS Trust applied, in effect, to end his life by withdrawing ventilation, nutrition and hydration. The Official Solicitor appealed against that application and was concerned that it would amount to effective murder. The case law subsequently established by Sir Stephen Brown in that judgment classified the provision of nutrition and hydration as medical treatment. After nine days without receiving nutrition or hydration, Tony Bland died on 3 March 1993.

Further judgments have been made on those principles and guidance has reinforced them. Concern has been expressed that such decisions could be applied not only to people in a permanent vegetative state, but to those with a declining illness. That has led to many differing views in this House. I do not want to get into the detail of the Liverpool care pathway, and the intention of this Bill is not to prevent or frustrate but to open up the discussion on this matter. It is an important topic that Members should want to discuss.

This is a difficult topic to discuss. I hope that people do not face it in their lives, but when it comes to the death of an elderly parent or relative, we need to face it with a conscious mind. I expect that taking the decision to remove nutrition and hydration is not easy for doctors, and I am not trying to remove any kind of medical judgment. For the avoidance of doubt, the Bill is not a Trojan horse to bring in euthanasia or assisted suicide, or to start force-feeding people. However, we have to recognise that death comes to us all and we have to face the discussion about whether we should prolong therapy or withhold it. There are other discussions to be had about whether therapy is futile. I hope the House will agree that withholding water or food from somebody and, in effect, ending their life in a potentially painful and distressing way, sometimes without relatives even knowing that that decision has been made, is wrong. One aim of palliative care is to help people to die as peacefully and painlessly as possible.

I do not intend to speak for long on this Bill, but I hope that Members will recognise that this is an important discussion to have and that they would not wish any of their relatives or friends to die of starvation or thirst, and so will support the Bill today. I commend the Bill to the House.

12:38

[Andrew George (St Ives) (LD)]

I pay tribute to my hon. Friend the Member for Suffolk Coastal (Dr Coffey) for ensuring that this issue is raised in the House and that the debate on it is advanced. She approached the matter with characteristic thoughtfulness and great articulacy, as she has done on many occasions.

It was clear from the title of the Bill that this issue would bleed into the debate about the appropriate role of the Liverpool care pathway. Just as we debate many other issues, it is appropriate for this House to reflect on and debate the ethical questions that arise from this particular issue. As Benjamin Franklin said:

“In this world nothing can be said to be certain”—

[Mr Speaker]

Order. I apologise for interrupting the hon. Gentleman, but this is not a debate, as such; it is a consideration of a specific and narrowly drafted Bill. What I seek to ascertain at the outset is whether the hon. Gentleman is opposing the Bill.

[Andrew George]

I am grateful to you, Mr Speaker. Having heard what my hon. Friend the Member for Suffolk Coastal said, I have no intention of pressing the motion to a Division. However, the narrow title of the Bill relates to patients’ rights to hydration and nutrition, which raises the question of contradicting the General Medical Council’s advice—that is a medical decision rather than an issue of basic care.

[Mr Speaker]

Order. I am grateful to the hon. Gentleman for his clarification, which for my purposes I will take as a yes.

[Andrew George]

Thank you, Mr Speaker.

As I was saying, Benjamin Franklin said:

“In this world nothing can be said to be certain, except death and taxes.”

As the House debates and comes to conclusions on taxes, it is also appropriate for us to consider—and to consider deeply—ethical questions such as the manner and process of death. We should ensure that end-of-life care and the ethical questions surrounding it are carefully considered.

It is my intention to deal not with the legal case surrounding the death of Tony Bland, but with the implications of the Bill on the GMC and on other guidance on the application of the Liverpool care pathway. Like others, I have been confronted by those issues, with the loss of a very close family member in recent months. Such questions inevitably and sadly confront us all.

Medical treatment of the terminally ill should be in the patient’s best interests. We should recognise that a blanket policy—of always providing, or of always not providing, artificial nutrition and hydration—would be ethically indefensible. Therefore, all decisions on medical interventions, which is what we are debating, should be based on sound, clinical judgment.

I agree with my hon. Friend that these matters should be kept under review. It is absolutely appropriate that the current guidance that applies is kept under review, and that the House of Commons and the House of Lords should be involved in debates on it.

The Liverpool care pathway is used in hospitals as a plan of care for patients in the last days and hours of their life. The pathway is recommended as best practice in the end-of-life care strategy. Patients should be involved in decision making wherever possible, and they have a right to refuse treatment in person, or in advance of a loss of capacity. Health care professionals should seek to provide the highest standards of care possible to dying patients. On occasion, that will involve recognising that a patient who is hours, or at most days, away from death, will be harmed rather than helped by the application of artificial nutrition and hydration.

The GMC guidance to doctors on end-of-life decision making states:

“All patients are entitled to food and drink of adequate quantity and quality and to the help they need to eat and drink…You must keep the nutrition and hydration status of your patients under review. You should be satisfied that nutrition and hydration are being provided in a way that meets your patients’ needs, and that if necessary patients are being given adequate help to enable them to eat and drink”,

hence the application of the artificial intervention to assist them.

The guidance also states:

“If a patient is expected to die within hours or days, and you consider that the burdens…of providing clinically assisted nutrition or hydration outweigh the benefits they are likely to bring, it will not usually be appropriate to start or continue treatment.”

Similar advice is provided by the National Council for Palliative Care.

The benefits of artificially provided nutrition and hydration include the potential to prolong life and improve general well-being. Artificial nutrition could prolong life in patients with obstructing tumours, such as throat cancers, or those with diseases that prevent them from swallowing, such as motor neurone disease. Artificial hydration could in certain circumstances also relieve thirst.

However, there are also risks. In some circumstances, artificial nutrition and hydration will only prolong the period of suffering, and there could be complications associated with having tubes inserted. Fluids given via drip can exacerbate oedema—swelling—and increase leakage into body spaces that can lead to a more distressing death, for example if fluids get into the lungs.

It is important, therefore, that in debating this issue, which I hope the the House will have time to do—because it needs to be kept under review—we will have an opportunity to consider the risks of continuing to apply artificial nutrition and hydration. That issue has been well covered by the General Medical Council and others in the clinical guidance that needs to apply here. The Liverpool care pathway has been accused of encouraging a tick-box culture that does not consider the whole patient and their needs. We have to ensure that the highest-possible clinical standards are applied when the LCP is administered. Equally, as my hon. Friend said, we have to strike a balance between the patient’s best interests and wishes and the wishes of the family close to the terminally ill patient. She emphasises, in the title of the Bill, that this is a matter of the right to treatment, but it is also a matter to be balanced with the right to ensure that medical interventions are in the best interests of patients. On that basis, I wish to ensure that we strike a balance when we debate the Bill.

Question put and agreed to.

Ordered,

That Dr Thérèse Coffey, Andrea Leadsom, Penny Mordaunt, Harriett Baldwin, Jim Dobbin, Thomas Docherty, Mr Andrew Turner and Dr Julian Lewis present the Bill.

Dr Thérèse Coffey accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 25 November, and to be printed (Bill 230).

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

On a point of order, Mr Speaker. This is a genuine question. Will you clarify for Members the rules on speeches during the presentation of a ten-minute rule Bill?

[Mr Speaker]

I am happy to advise the hon. Gentleman and the House. A Member introducing a ten-minute rule Bill has up to 10 minutes in which to do so. A Member who wishes to oppose the Bill similarly has up to 10 minutes in which to do so. Those 10-minute allocations are distinct and separate from each other. It is helpful if a Member who is opposing a ten-minute rule Bill makes it clear that that is what he or she is doing. There is, to be fair, no obligation to test the will of the House by submitting the matter to a vote, but it is important for the orderly and intelligible conduct of business that an opposing speaker makes it clear, preferably at the outset, for the benefit of the House, that the speech is one of opposition. I hope that the hon. Gentleman’s brow is no longer furrowed, that he is duly reassured and that the House as a whole is appropriately enlightened.

Energy Bill [Lords]

Wednesday 14th September 2011 Commons Chamber

Consideration of Bill, as amended in the Public Bill Committee

New Clause 10

Green deal installation apprenticeships

‘(1) Before making the first framework regulations the Secretary of State must lay before Parliament a report on what, if any, steps the Secretary of State has taken to encourage green deal installation apprenticeships.

(2) A “green deal installation apprenticeship” is an apprenticeship which provides training on how to install energy efficiency improvements at properties.’.—(Gregory Barker.)

Brought up, and read the First time.

12:49

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

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

[Mr Speaker]

With this it will be convenient to discuss the following: new clause 8—Support from the Green Investment Bank

‘(1) The Secretary of State must, within six months of this Act receiving Royal Assent, report to Parliament with proposals on the ways in which the Green Investment Bank could maximise the take up of the Green Deal.

(2) The report required by section (1) shall include an examination of the extent to which action taken by the Green Investment Bank could—

(a) reduce interest rates linked to the repayment of Green Deal loans and the impact this may have on consumer demand;

(b) support the research into and development of technologies which could increase household energy efficiency.’.

Government amendment 29.

Amendment 26, in clause 3, page 4, line 29, at end insert—

‘(j) Prohibiting the sale of products and services during Green Deal assessment and installation visits which are not eligible for Green Deal financing unless those products are recognised as being able to reduce household CO2emissions.’.

Government amendment 30.

Amendment 49, page 5, line 2, leave out ‘may’ and insert ‘will’.

Amendment 28, in clause 4, page 6, line 16, at end insert—

‘(9A) The ninth condition is that the green deal provider meets any requirement specified in the framework regulations as to the level of interest charged on the plan’.

Amendment 50, page 6, line 16, at end insert—

‘(9A) The ninth condition is that the green deal provider meets any requirement specified in the framework regulations to enable the consumer to compare recommendations and estimated costs and savings.’.

Amendment 27, in clause 5, page 6, line 34, at end add—

‘(e) a term permitting the improver to specify whether the instalments will be paid via his electricity bill or his gas bill;

(f) a term permitting the improver to change his decision taken pursuant to paragraph (e).’.

Government amendments 31 to 34.

Amendment 45, in clause 18, page 15, line 4, after ‘may’, insert ‘and may not’.

Government amendment 36.

[Gregory Barker]

It is a pleasure to be back in the House to debate this historic Energy Bill one last time before it moves back for the last time to the other place. To better inform the debate on the amendments before us, I shall update the House briefly on the progress made over the summer on a number of issues that were raised in Committee.

We had a lively discussion on measures eligible for green deal finance. That was led by the hon. Member for Ogmore (Huw Irranca-Davies), who championed the power shower. I committed to an early refresh of the Government paper to take into account queries about our position on water efficiency and recommendation of measures outside the green deal. That has been done. After our exploration in Committee of the detail of the energy company obligation—an important part of the Bill—I agreed that my officials would meet the hon. Member for Southampton, Test (Dr Whitehead) to discuss our brokerage proposal. That has been done.

The private rented sector was another important subject of debate—fruitful debate, I hope—with contributions from the hon. Member for Wells (Tessa Munt), among others. I shall say more about that later. My officials are setting up a new workshop to look specifically at how the provisions can best work with older buildings, which present a challenge to the green deal, particularly older historic buildings.

Lastly, I am pleased to report progress on energy efficiency for service family accommodation, following the excellent suggestion of my hon. Friend the Member for Richmond Park (Zac Goldsmith). My officials have had a number of meetings with their counterparts in the Ministry of Defence and, having agreed the shared objective of improving the energy efficiency of accommodation, are investigating the best ways to achieve that. As I mentioned in Committee, it is a complex problem owing to the unique nature of service family accommodation. None the less, I am optimistic that a solution will be found to satisfy the House and, most importantly, service families.

We have a large group of amendments, not all of which were tabled by the Government. I propose to speak to the Government amendments in my opening remarks and address the other amendments in my closing remarks, rather than pre-empt them before the Members who tabled them have spoken. That should make for a more orderly debate. There is nothing more annoying than having one’s arguments addressed before one has even had a chance to make them to the House.

The Government amendments are largely technical. Government amendments 31 to 34 cover disclosure. They enable the Secretary of State, if necessary, to require a green deal provider to produce a further document containing information about the green deal plan as part of the confirmation process. This would be in addition to the energy performance certificate. Both documents would then have to be disclosed to future bill payers. These amendments therefore enable the Secretary of State to require, if necessary, additional information about the green deal plan to be given to future bill payers as part of the disclosure process. This small amendment responds to the concerns of stakeholders and the concerns that were expressed in Committee about consumer protection, particularly in the rented sector. We have moved to tighten that up.

On the transfer of payments, Government amendment 29 is a technical amendment that makes it clear on the face of the Bill that when collecting payments, energy companies are acting in an agent and trustee capacity for the green deal provider, which, in many cases, will not be the energy company itself. This is in line with the policy that I set out in Committee. Liability for green deal payments should sit on the balance sheet not of the energy companies, but of the green deal provider.

Without this clarification, there is a risk that payments received would be the property of the energy company until they were remitted to the green deal provider, which might enable an administrator to claim green deal payments in the event of energy company insolvency. Through the amendment we can minimise this risk and, as with all risk minimisation in this process, help to push down the cost of green deal finance.

On assessment and installation, I shall deal with a number of Government amendments relating to the role of professionals operating under the green deal, and consider them with amendment 26, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas). Amendment 26 and Government amendment 30 relate to the role of professionals and the importance of protecting customers, while allowing the green deal to thrive. I apologise for breaking the rule that I said I would abide by in my opening comments, but this makes more sense, so I hope the hon. Lady will forgive me. I am grateful to her for raising the issue of cross-selling.

It is important to consider how and when green deals are likely to take place. Many will come about as a result of other activities, such as the installation of a new kitchen or boiler in a home. We do not wish to limit these trigger points. They will often be important opportunities to promote the green deal alongside other renovations or improvements that are happening in the home, which the householder may not have considered ahead of planning for a new bathroom, kitchen or other improvement.

Our market research has shown that customers would welcome and are therefore more likely to trust the involvement of local authorities, community groups and third sector organisations when thinking about entering into a green deal. This was a recurring theme in Committee, when we all agreed that the involvement of local authorities and community groups was vital to ensure the successful large-scale roll-out of the green deal. Such organisations may see participation in the green deal as a way of making people aware of other valuable services—for example, loft clearance for the elderly is an essential prerequisite for putting in insulation. Some voluntary or community groups might offer such a service in some areas at no cost or at a reduced cost.

A blanket ban could reduce the willingness of these organisations to play a full and positive role in the green deal. This could be especially detrimental to vulnerable groups such as the elderly, who are most likely to benefit from energy efficiency. It could also affect the ability of enthusiastic volunteers and community groups to encourage their neighbours by knocking on their door, sharing their enthusiasm and urging them to join in community projects. Members of a community or neighbourhood group are more likely to go round and speak to their neighbours individually, rather than e-mailing or writing to them. We are concerned that a blanket ban could be detrimental.

Our approach is therefore to be mindful of the points raised by the hon. Member for Brighton, Pavilion. She is right to identify the need for strong consumer safeguards, but we believe the right way forward is to build on existing regulations that protect customers, and set out a clear enforceable framework within the green deal code of practice for such activities. This will be clearly set out in our consultation and we will seek further views on this important aspect then.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the Minister agree that there is a world of difference between a community group knocking on a door in order to clear a loft so that loft insulation can go ahead, and selling wallpaper, carpets and sofas, which was the example that the Minister gave in Committee? Would he come some way towards supporting my amendment, given that it clearly says that it is permissible to knock on people’s door if the aim is to reduce CO₂, but not if the aim is to sell a sofa?

[Gregory Barker]

I am sympathetic to the thrust of the hon. Lady’s amendment, but it is not illegal to sell things door to door. There is already a code of practice for that, but we do not live in a country where it is illegal for people to sell products door to door. That is already a fact of life and we do not propose to alter it; however, we do think there should be a strong code of practice. However annoying and regressive such practices may be, trying to address them outside a code of practice—that is, through blanket legislation—could affect not just loft clearance services, but the ability to go door to door, just as we as politicians go door to door trying to convince people of our ideas.

13:00

The mobilisation of community groups across a range of issues is important. We are seeing the involvement of a number of new social enterprises and community partnerships, some of which the hon. Lady is encouraging in her constituency. Indeed, one of the most exciting things about the green deal is its potential to give rise to new third sector involvement in delivering energy efficiency services. I appreciate the intention behind her amendment 26, and although I cannot support it I hope she will engage with us on the consultation that we will undertake in the autumn on strengthening the code of practice. Her input will be valuable, as it has been for other elements of the Bill.

We believe that existing legislation and the green deal code of practice will protect consumers while encouraging a healthy promotion of the green deal. However, we are also clear that elements of the green deal process must be impartial if consumers are to trust the information with which they are provided. That is particularly true of the assessment.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

On the code of practice, will the Minister ensure that all lessons are learned from the failure of the energy companies to act properly on the doorstep—a fact that they are beginning to recognise themselves by abandoning doorstep selling—and that none of the bad practices from which constituents have suffered in the doorstep selling of energy are transposed into the green deal?

[Gregory Barker]

Yes. I have a great deal of sympathy with that point. We believe strongly that high-pressure sales tactics, which cold callers sometimes use illegally, should be prevented. When I referred previously to cold calling by assessors, that is the kind of activity to which I was referring and is, I think, what the hon. Member for Brighton, Pavilion was thinking of too.

[Barry Gardiner (Brent North) (Lab)]

Will the Minister also ensure that when the new measures under the green deal are being touted door to door, there will be no opportunity for the simultaneous selling of energy?

[Gregory Barker]

That is a good point. We certainly do not anticipate that assessors would be able to go door to door, give an assessment and then have people sign up there and then. There will be a cooling-off period. We considered in Committee whether an assessor could also be a representative of a commercial organisation or company. We came to the view that that could be possible, but that there would have to be a clear distinction between the roles they performed. An assessor would have to make their assessment on a uniform format and to the same standard right across the industry, so that it could be taken to other providers of green deal services. We would encourage all consumers to get a competitive quote before committing. If consumers wish to go with the first person who knocks on their door or the first person whom they invite in to make an assessment, it is obviously their right to do so. However, we are building in apparatus to ensure that that is not encouraged.

[Barry Gardiner]

I am grateful to the Minister for giving way again; he is being extremely generous. Will he confirm whether he believes it would be possible under the legislation for an assessor, who is there to give impartial and independent advice about one’s energy consumption, also to be a representative of an energy company and to engage in the selling of energy to the consumer? It would be dangerous if the legislation permitted that.

[Gregory Barker]

Is the hon. Gentleman suggesting that an assessor would knock on someone’s door, undertake a green deal assessment and, at the same time, encourage them to switch to another tariff? [Interruption.] He is suggesting that they would switch hats and do that. I do not expect that to happen, not least because the assessment must be independent. However, there can be a degree of cross-selling, provided that the independent assessment is truly independent. However, I shall clarify that when we come to the technical detail of the Bill. I understand that what the hon. Gentleman describes is possible, but energy company practice would be covered by the regulations, such as the code of practice. We shall have an opportunity to look at the detail of what they can offer under the code of practice, but I would expect that type of activity to be strongly regulated.

However, it would not be impossible—indeed, it would not necessarily be a bad thing—for people to be able to switch to a better tariff at the same time as they were considering their energy usage. We are encouraging consumers to switch. Far too many families in this country are on the wrong tariff and do not take advantage of the cheaper tariffs that are available, often from their own supplier, particularly by switching to a direct debit. I would therefore not want to rule out the possibility of a consumer taking a green deal assessment and, at the same time, switching to a cheaper, more appropriate tariff. Indeed, that might seem quite sensible, but it will be covered by the code of best practice.

[Barry Gardiner]

Although I agree that it should always be open to people to switch to a cheaper tariff, I am sure that the Minister would agree that energy advisers operate in an independent capacity and therefore engage with the consumer in a capacity of trust. Will he therefore ensure that if any energy adviser offers advice about switching tariffs, they will have to offer independent advice and will not be able to give it as a tied agent? Otherwise, there will be a perverse incentive for the energy companies to use a new doorstep sales technique, which will involve getting through the door as an independent adviser, switching hats—which will not always be obvious to the consumer—and then selling their own product.

[Gregory Barker]

I will need to consider that more carefully, because we accept that assessors can be part of commercial organisations. It is not a requirement of the green deal legislation—we went through this in detail in Committee—that they have to be totally impartial and that someone else should act as a salesman. For example, gas boilers have to be fitted to the high and rigorous standards set out in CORGI guidelines, and that work must be done independently. When we take our cars for a service and MOT, that must be done impartially and to a certain standard; yet at the same time, those doing that work are selling a service. Indeed, there are several examples of where it is quite possible for professional bodies to undertake professional services independently, transparently and to a uniform format, but where at the same time they have opportunities to sell.

Indeed, that is part of the attraction of the green deal. There is a quid pro quo at work: we are using the power of the market to scale-up the deployment of energy efficiency. Although we hope to go for an ambitious and large-scale eco-subsidy to work with the green deal, ultimately we are talking about a private sector proposition. We are creating a new market, but the investment that will drive take-up will come from the private sector, and obviously those making that investment will be attracted by more than just lagging. That is a good thing, because it will drive innovation and drive prices down as it increases competition, opening up energy services from the big six companies to a new array of retailers and, we hope, small and medium-sized enterprises and local groups. Competition will be good, but for competition there must be something for people to compete for. I hope that that reassures the hon. Member for Brent North (Barry Gardiner), but I will perhaps come back a little later to the point that he has raised.

Government amendment 30, which relates to the impartiality of green deal assessors, is a result of a commitment I made in Committee, given that so many Members were seeking reassurance on this point. It clearly sets out our intention to ensure the impartiality of the assessment process, and I urge the hon. Member for Brent North to look at it closely. We believe that it should be possible for assessors to be employed by a green deal provider, allowing for a more holistic service for consumers, but that should not interfere with the impartiality of the assessment process. The code of practice for assessors will therefore include robust requirements for green deal assessors to act in an impartial manner and declare to consumers any links that they have with green deal providers—or, indeed, energy companies. That is vital in order to retain consumer confidence in the information that they are being provided with.

[Andrea Leadsom (South Northamptonshire) (Con)]

The green deal seems to be a financial services product, and there will be similarities between selling that and, say, selling an ISA, rather than double glazing. This process will certainly involve selling a financial services product. Can my hon. Friend reassure me that, if the proverbial little old lady who lives alone is sold a product with a usurious interest rate, she will have recourse to the financial services ombudsman? Also, is there any intention for the Financial Services Authority to regulate the funding providers?

[Gregory Barker]

As this is defined as consumer finance, it will be the Office of Fair Trading, rather than the FSA, that will regulate this market. My hon. Friend makes a good point, however. It is our intention that there should be robust consumer protection, and we expect that the guidelines will be improved and refreshed to reflect the green deal. We will also expect the Office of Fair Trading to take a robust line from the very start, to ensure the integrity of the selling, and to ensure that any mis-selling is stamped out at the outset and full compensation is paid to any victims.

[Mr Mike Weir (Angus) (SNP)]

One of the problems with energy mis-selling was that it was a long time before many of the cases came to light. Does the Minister have any thoughts on ensuring that the standards that are to be imposed on those selling green energy are regularly inspected to ensure that any problems can be detected at an early stage, rather than finding a huge range of problems several years down the line, which is what happened following the doorstep mis-selling in the past?

[Gregory Barker]

I can assure the hon. Gentleman that we will keep all elements of the green deal under close review. We are embarking on a really new, large-scale proposition; there is nothing quite like it anywhere in the world. We are pioneering a new model for energy saving, at scale, and as a result we will need continually to monitor all aspects of it, especially those relating to selling and mis-selling. We will need to ensure that the legislation that we have put on the statute book, the codes of practice that underpin it and the secondary legislation that we will introduce in due course before the launch of the green deal remain pertinent. If we identify any areas in which we think improvements can be made, we will not hesitate to make them.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Given the Minister’s response to the question from the hon. Member for South Northamptonshire (Andrea Leadsom), it would be useful to know whether there have been any developments over the summer following our discussions on the golden rule. The distinction between the green deal and other financial products is that the cumulative cost of the rate of interest and the cost of the installation should not exceed the amount that people are currently paying on their energy bills. We discussed that in Committee, and it would be useful to know whether there have been any developments on that front.

[Gregory Barker]

There has not been any substantive development on that because we have not yet undertaken the consultation on the secondary legislation that will bring in the regulations. We have begun to hold discussions with stakeholders, and we will consult on the detail of the golden rule because it forms an important part of the measures, but there was no substantive movement over the recess.

13:15

[Barry Gardiner]

The Office of Fair Trading will regulate the contracts. Has the Minister been in contact with his counterpart in the Department for Business, Innovation and Skills to check on the reduction in the number of officers who are able to enforce the measures? The process will put a considerable new responsibility on to the OFT.

[Gregory Barker]

I have not raised the matter in person, but my officials are working closely with a number of Departments—including, importantly, BIS—on that important element of the green deal proposition. We are satisfied that the OFT will have sufficient resource properly to monitor the green deal, and we will keep that under review as the green deal rolls out.

I will deal now with new clause 10 and the consequential amendment 36. The new clause has been tabled to replace the Opposition’s amendment on green deal apprenticeships, which we accepted in Committee—a great personal victory for the hon. Member for Liverpool, Wavertree (Luciana Berger). As I said at the time, it is important that we take expert drafting advice on any amendment to a Bill, however well intentioned it might be. I reiterate that we fully support the creation of apprenticeships in green deal-related trades, and we will be happy to report to Parliament on our progress, as the hon. Lady requested. We believe that the new clause captures the spirit of her amendment; it simply clarifies a couple of technical matters regarding the exact nature of the new obligation. It requires the Secretary of State, before making the first framework regulations, to report to Parliament on the steps that he has taken to encourage green deal installation apprenticeships. I hope that that satisfies the hon. Lady.

Taken together, these are important measures in what will be the most ambitious home improvement programme since the second world war, and I hope that the whole House will support them. There are other amendments in the group that I have yet to address.

[Ian Lavery (Wansbeck) (Lab)]

Getting back to the financing of the green deal, is the Minister aware that 1.9 million people are in arrears with their energy bills, and that that number is increasing by the day because of the increasing price of energy? Is he also aware that 5.5 million people are living in fuel poverty, and that that figure is also rising by the day because of the problems with the energy companies? Will not those people who have been unable to pay their bills have difficulty in gaining access to finance for the green deal?

[Gregory Barker]

Of course they will have access, although it might vary in individual cases—I cannot give a universal commitment. The hon. Gentleman is right to raise fuel poverty, and in the Adjournment debate this evening called by his hon. Friend the Member for Glasgow North West (John Robertson) we will be able to debate the matter more specifically. Importantly, for the most fuel-poor there will be the energy company obligation. We fully recognise that a significant number of families will simply not be able to afford to pay for the green deal interventions through paid-for savings, because if they cannot afford to spend the money on heating in the first place, they will not capture the savings. We will therefore ensure that the very substantial energy company obligation will be directed towards meeting the needs of those vulnerable consumers.

[Ian Lavery]

The energy company obligation does not wholly focus on the people I mentioned, though. My worry is that the 1.9 million people in arrears and the 5.5 million people in fuel poverty—the poorest and most vulnerable, many of whom are elderly—will not be able to get finance under green deal. I am worried that that will create more poverty and do great harm to those who need help the most.

[Gregory Barker]

One or two, or small numbers, may fall through the net, but by and large we have to think about how the green deal will be implemented. Many of the families and individuals the hon. Gentleman is worried about will be captured by community roll-out and street-by-street roll-out of energy efficiency improvement schemes. We have the ECO so that we can offer whole communities the same service on an equal footing, regardless of their ability to pay. We will have to think about how to ensure fairness, because we want to include people living in isolated communities or those living in a relatively prosperous areas in a detached home, perhaps on their own, but I think the vast majority of the types of vulnerable consumer the hon. Gentleman is worried about will be captured by the whole-community approach that we anticipate will be taken up by many local authorities in street-by-street approaches. We need the ECO to be able to offer insulation and home improvements to whole streets, regardless of income, to ensure that we do these things at scale. I do not pretend that we have the perfect solution, but I believe that what we have is by far the best approach in comparison with anything tried before.

With that, I will finish. I will respond to the other amendments raised by hon. Members when I wind up the debate on this group.

[Luciana Berger]

We are delighted that the Government are keeping the amendments proposed in Committee. We accept the proposals to make the provisions more workable, as the Minister set out.

[Andrew Percy (Brigg and Goole) (Con)]

I wish to speak to my amendment 28. I am delighted to hear the Minister say that he will respond to it later, which allows me to make my points before they are addressed.

I say at the outset that I think the green deal is a fantastic idea. As we went into the election campaign, I was very enthusiastic about it and I found a lot of support for the concept on the doorstep. I pay tribute to the ministerial team for bringing it forward so quickly and in such a concise manner. It is especially important because it provides for improved energy efficiency of our housing stock, which is vital to protect not only the environment, but residents. It will also have the benefit of reducing carbon emissions and hopefully, if it works correctly, insulate our residents and consumers against rising energy prices. If the “pay as you save” model works as envisioned, many more homes will be made much more energy efficient than could have been achieved under the previous schemes, whose limitations anyone who has served as an MP or a local councillor will have seen. This model is a great improvement.

Affordability is a massive issue for our constituents, as no doubt all of us have seen over the summer, with a large amount of correspondence in our postbags arising from various energy companies raising their prices. Citizens Advice has informed me and other Members that there has been a 78% increase in hits to its advice websites compared with a year ago. That clearly demonstrates how welcome is any measure that helps to bring down prices and encourage energy efficiency. It is in all our interests that the green deal works properly and effectively and is accessible to as many residents as possible on an equal basis.

There are some concerns—the Minister probably heard them in Committee—about the attractiveness of the green deal to certain sections of our constituents. The Great British Refurb campaign has said that although the green deal is attractive, mass demand will be contingent on a number of factors. I believe it surveyed about 2,000 people across the UK and found that whereas 56% of respondents saw the green deal as attractive, only 7% said that they would be prepared to take it up if a 6% interest rate applied. That is why my amendment focuses on interest rates.

We need to ensure that the interest rates are as low as possible to make the scheme as attractive as possible to as many people as possible. That is what amendment 28 would allow. The advantage of setting a single scheme interest rate is that it will stimulate demand from as many people as possible while forcing green deal providers to compete directly for customers based on the cost and quality of the energy efficiency measures and installation, rather than on the headline interest rate of the finance. I believe that it will also help to increase transparency and empower consumers who would find it much easier to compare different offers and the services provided by different companies.

[Mr John Leech (Manchester, Withington) (LD)]

Does the hon. Gentleman agree that the people most likely to be affected by high interest rates are the poorest, so having a level playing field will ensure that everyone gets the same deal rather than only those who can afford it getting the best deal?

[Andrew Percy]

I thank my hon. Friend. I am aware of his work in this area. He has said exactly what I am going on to say. It is important to ensure that the scheme is as attractive as possible to the poorest households, which, as he knows, are at the greatest risk of fuel poverty.

The alternative to a single scheme interest rate is risk-based pricing. In my view, green deal finance providers must not be able to price green deal finance packages based on the perceived default risk of the original occupier, given that the work done will stay with the property probably long after that household has moved on, sold up or moved to a different private rented property. It would be unfair and illogical to allow that to happen, given that there is no way of predicting the default risk of any future occupants. We cannot price with accuracy on that basis.

[Barry Gardiner]

I perfectly understand the hon. Gentleman’s point that the debt will be tied to the property and that the rate should be based on an average, but does he not accept that there is a very real tension between the need to persuade householders to embark on the green deal in the first place, which will happen only if they can see financial gain for themselves over the period that they propose to occupy the property, and the potential financial gain to the average family in the future? His proposal may create tension between the ability to sell the property and fairness to subsequent occupiers.

[Andrew Percy]

That, of course, is exactly what the golden rule is designed to protect against. My concern is that we offer residents—people living in the properties now—an equal interest rate across the whole area. We need to avoid people in more affluent areas being encouraged to take up the green deal by a lower interest rate than is offered to people in poorer areas or those perceived to be a higher credit risk, particularly tenants. There is a risk that landlords might be put off the green deal if they perceive that the cost is based on the occupancy of a particular tenant.

[Caroline Lucas]

I very much support the tenor of the hon. Gentleman’s remarks and I wonder whether he supports my new clause 8, which would serve to make the green investment bank a vehicle whereby we could ensure that a common and low interest rate—one that is subsidised—is applied?

[Andrew Percy]

I looked at the hon. Lady’s new clause and amendments, which are interesting. I look forward to hearing the debate and listening to the Minister’s response to them. I am sure that he will say something to reassure her.

I am concerned that landlords might be unwilling to take out a finance package if they perceive it as reducing the market value of their property. Under risk-based pricing, those with a poor credit rating—often people on low incomes, who are at the highest risk of being in fuel poverty—might find themselves, by accident rather than design, excluded from accessing a green deal finance package. Tenants in the private rented sector may be at a high risk of exclusion from green deal finance, because the underwriting process for mortgages is such that home owners are likely to have a better credit rating. The Minister rightly said that we should extend as much choice as possible to residents. We need therefore to ensure that as much choice is offered to tenants in the private rented sector as is offered to property owners, and that is, I am sure, what the green deal is intended to do.

13:30

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I am very sympathetic to the hon. Gentleman’s suggestion that there should be a non-discriminatory interest rate across green deal finance, but does he not accept that the golden rule itself is, to an extent, a measure of mitigation of what may well be universal high interest rates, set by green deal providers on the grounds that they are private companies providing finance? Does he accept that ensuring that there is a level playing field for finance in general does not resolve the problem that the golden rule may result in very few changes being made to a property as a result of high interest rates, and that additional measures such as green investment bank intervention may well be needed?

[Andrew Percy]

I take the hon. Gentleman’s point and will be interested to hear Ministers’ response to it. Although we understand how the green deal must operate, we all want to ensure that it is made as attractive as possible and that there is as much choice as possible. What worries me is that if we go down the route proposed, poorer households and, in particular, landlords may be put off.

With risk-based pricing, I fear that people with short tenancies may be charged a higher interest rate than owner-occupiers or tenants who have lived at the same address for a long time. Short-term tenants who default may be difficult to pursue and may already have a chequered credit-rating history. More important, however, is the fact that risk-based pricing is probably unnecessary. As others have pointed out, the golden rule should mean that no one, whatever their credit rating, ends up paying a higher energy bill than they would have without the green deal.

If risk-based pricing is permitted and finance providers try to charge households with poor credit ratings higher interest rates, the total cost of the measures could exceed the golden rule threshold, with the result that such households are likely to be refused green deal finance altogether. I think that that is the point that the hon. Member for Southampton, Test (Dr Whitehead) was making. Although it is possible that the golden rule will hold interest rates at a reasonably low level for most consumers, it will not do that for all of them. As the Minister said, other options are available, but while the energy company obligation may help the very poorest, some consumers could be trapped between the two. I should be interested to hear his response to that as well.

As I said at the beginning of my speech, we must design a system which, as well as being future-proof, can be drawn as widely as possible. I represent a great many people in private rented accommodation, particularly in Goole, and much of it is of poor quality, consisting of single-skinned brick terraced houses to which earlier schemes could not be applied because they had no cavity walls. I do not want private landlords to be deterred from encouraging tenants to take up the green deal because they fear that their properties will be devalued in the future as a result of the higher energy costs.

Many tenants have told me that they have huge problems with damp, meaning that there are rooms that they cannot use. Their houses are crying out for energy efficiency measures. I do not want them to be the ones who do not benefit from the green deal, while constituents living in leafier areas who happen to own their properties do benefit from it, and I know that the Government do not want that either.

[Ian Lavery]

The Minister mentioned the ECO, which focuses in two directions. Does the hon. Gentleman agree that it should focus solely on those who most need energy efficiency measures and who are unable to pay for them?

[Andrew Percy]

That is entirely the right principle. The communities to which I have referred, many of whom I represent, risk fuel poverty because they live in the very worst properties with the very worst energy efficiency ratings.

I will not press my amendment to a vote because I think that the green deal is an exciting proposal, I strongly support it, and constituents to whom I have spoken find it very attractive. However, I shall be interested to hear what assurances Ministers can give me and people outside that the scheme will be designed to be as accessible as possible to as many people as possible, and that it will not exclude anyone. No matter how small their number—it may be just the odd one or two—there are people who are very much at risk, and they must be drawn into the scheme by some means.

[Caroline Lucas]

My name is attached to five of the 15 new clauses and amendments in this group. New clause 8 would require the Secretary of State to report to Parliament within six months of the Bill’s becoming an Act with proposals on how the green investment bank could maximise take-up of the green deal.

Much more needs to be done to make the green deal as attractive and appealing as possible. Given that the energy companies have found it difficult to give away energy efficiency measures in the past, I fear that the “pay as you save” mechanism, as currently designed, will not be enough to drive the level of adoption, or the depth of the improvements that are needed for the delivery of huge emissions savings from our housing stock. In Committee we discussed possible drivers, including council tax or stamp duty rebates linked to the green deal, and reduced VAT rates for products bought under it. I support all those options, but I think that we should chiefly explore the idea of using the green investment bank to subsidise the interest rates, for all the reasons given by the hon. Member for Brigg and Goole (Andrew Percy).

The hon. Gentleman mentioned a survey. I have figures from the same survey. A key statistic that the hon. Gentleman did not mention was that about a third of home owners said that if the interest rate were set at 2% per annum, they would be “very” or “fairly” likely to take up the green deal. As the hon. Gentleman said, the figure fell to just 7% of home owners when an annual interest rate of 6% was suggested. It is clear that if the Government are still considering interest rates above 6%, they will face real challenges in attempting to drive sufficient take-up.

In Germany—which I realise operates a different scheme—an energy efficiency household loan programme offers publicly subsidised interest rates of 2.65%. That programme has achieved 100,000 residential retrofits in a year. The Government must achieve 145,000 every month if they are to fulfil the ambition that they set out at the beginning of the process, and they are intending to do that at market interest rates, which are much higher. I do not see how that will work.

[Gregory Barker]

It is not correct to compare the two schemes. The German scheme consists of a normal personal loan, secured in the normal way. It must be applied for through the banks, and in the case of a successful application the interest rate is subsidised. That is the nub of the programme, which I have discussed in Berlin with the German environment Minister. There is a great deal more to the green deal, which involves substantial subsidy not of the interest rate, but of the interventions themselves. We expect that most solid wall installations will attract a substantial element of subsidy, and that other interventions for fuel-poor households and more vulnerable customers will also be able to attract subsidies. Customers may pay a competitive interest rate, but they will be doing so on a significantly subsidised final bill, and I would have thought that it was much better to pay a competitive interest rate on a smaller bill than a subsidised interest rate on a higher bill.

This is a fundamentally different proposition, therefore. The German scheme simply involves subsidies of existing loans. What makes the green deal unique is that it is not a personal loan in the way the German scheme is. It will be secured against savings on future energy bills. It will not add to the personal debt of the individual who benefits from the installations, and it will remain with the home. There is also the golden rule. I apologise for making such a lengthy intervention, but it was important to put that on the record.

[Caroline Lucas]

We discussed this matter in Committee, so I know that the Minister and I do not agree. I still do not think that the measures under the green deal will be significantly subsidised. I agree that we have the ECO pot of money for the fuel poor and hard-to-treat homes, but the figures that have been discussed in respect of the ECO are about £1 billion to £2 billion, which is a small amount given that we hope there will be mass take-up of the green deal. Most people who take up green deal provisions will therefore not feel that they are being significantly subsidised. I still do not agree with the Minister that this proposal will in its current form be attractive enough.

[Dr Whitehead]

In the light of the Minister’s intervention, the hon. Lady might want to point out to him that the logical consequence of setting a market rate in respect of the green deal and the golden rule is that a significant proportion of those who cannot access the green deal at a market rate will be pushed into the ECO. That underlines the point made earlier about the purpose of the ECO: is it a fuel poverty device, or is it a device to mop up, as it were, those people who cannot afford the green deal at a market rate, which the Minister appears to think is the case? If it is the case, perhaps it ought to be clearly spelled out in our discussion.

[Caroline Lucas]

I am extremely grateful for that helpful intervention. It focuses on some of the contradictions in respect of the purpose of the ECO, and I hope that in this debate we can make clear what exactly the ECO will be for, how big it is going to be, the extent to which it is intended to subsidise those who are in genuine fuel poverty, the extent to which it is intended to subsidise those who cannot afford market interest rates, and the extent to which it is for hard-to-heat homes. There is a lack of clarity, and I worry that ECO is being used as a kind of get-out-of-jail-free card, in that whenever there is a difficult question, the ECO tends to be the answer. There simply is not enough money in the ECO for it to be the answer, however. The financial community has much less appetite than has been suggested for providing affordable green deal finance, which is why the green investment bank must step in.

As Members may remember, on Second Reading the Secretary of State quoted Conor Hennebry, director of global capital markets at Deutsche Bank, as having said that

“‘the City is practically champing at the bit to finance the government’s green deal.’”—[Official Report, 10 May 2011; Vol. 527, c. 1059.]

That sounds very good, but the Secretary of State failed to add that Mr Hennebry went on to say:

“Financing the green deal is absolutely possible for us”—

the City—

“but whether the figures will stack up for you is a different matter.”

That is the crux of the issue: will the figures stack up in respect of rolling out this programme as widely as possible? I do not think they will. It is not at all clear that the figures will stack up for householders, unless there is Government support through either the green investment bank or the ECO. If the ECO is to be used, that is fine, but we must make it an awful lot larger and make its provisions a lot clearer.

No matter what interest rate is applied to the loans, it is vital that consumers have confidence that their rights will be protected if they take up a green deal offer, and I seek to strengthen those protections in amendments 26, 49 and 50. Amendment 26 would ensure that only products and services that reduce household emissions could be sold during green deal assessments and installation visits. Amendment 49 would ensure that consumer protections on the repayment of a green deal loan are extended to energy advice services or energy plans that are not specifically green deal plans. Amendment 50 would ensure that the Secretary of State can make regulations to ensure that quotes provided for green deal goods and services are easily comparable.

13:45

The Minister mentioned amendment 26 on what can and cannot be sold as green deal assessors go house to house. I do not propose a blanket ban. The amendment has changed since Committee. It is perfectly okay for somebody to knock on doors if they are talking about measures to reduce CO₂ emissions, but it is not okay if they want to talk about wallpaper, for instance. I do not mention wallpaper in order to be frivolous. Rather, I wish to remind the Minister of what he said in Committee:

“If Marks and Spencer, or any other retailer, went into someone’s home to offer them a green deal, I am sure that it would also take the opportunity to market wallpaper, carpets and, if the walls are being lined, curtains and perhaps a sofa. This is a huge opportunity for home improvement, which will not be lost on responsible retailers. They will offer not just additional energy measures, but a whole package of other home improvement measures in a commercial atmosphere.”––[Official Report, Energy Public Bill Committee, 9 June 2011; c. 120.]

I am not at all relaxed about that, because I think it will lead to the pressurised mis-selling of products unrelated to energy efficiency, and that could completely undermine the green deal. There have already been similar problems in the small-scale renewables market, and they must be prevented in the context of the green deal. Sales in the home do not happen in a commercial atmosphere. Green deal assessors or providers are invited in because consumers are interested in energy efficiency. It is vital to ensure that commercial enterprises do not abuse the terms of those visits by pushing products that will not improve a home’s energy efficiency. I agree with the hon. Member for Brent North (Barry Gardiner), who pointed to the danger of some enterprises using the opportunity of being in someone’s home to try to persuade them to change to a different tariff as well.

[Barry Gardiner]

The hon. Lady will remember that when the financial services regulations were introduced, banks had to declare up front whether they were providing information and advice to their customers in an independent capacity or as a tied agent for themselves. Does she agree that it is also important in terms of the green deal that people who have gained a householder’s trust and entered their home on the basis that they are providing impartial and independent advice do not, once inside the front door, switch hats and start offering advice as a tied agent of another service provider?

[Caroline Lucas]

I completely agree. Trust is crucial if the green deal is to be successful. We want people to be talking about it, telling their friends and neighbours how great it is; we want there to be a real buzz and momentum behind it. If there are just a couple of cases of such mis-selling, the whole process will be undermined.

I also seek to extend the same consumer protections for the repayment of a green deal loan to energy advice services or energy plans that are not specifically green deal plans. If a householder decides after the initial green deal assessment to pay for the services up front without the need for a green deal loan, they ought to be eligible for the same kinds of protection they would receive if repaying the loan in a different way. If the clause in question is left in its current form, regulations regarding protection and redress will hang not on what a consumer buys, but on how they pay for it. That is perverse. If the consumer pays up front, the protections and regulations will not cover them. Only if they take the green deal loan will they have those protections. If people are not protected until they have signed a contract, how will that help consumers during the advice and contracting stage when they may not have decided to pay for green deal services yet, let alone how to pay for them? Also, who can the consumer complain to about pressurising sales tactics if they walk away before they have signed the contract? Will consumers choose the financial option that is best for them if they have to use green deal finance to get ongoing support from the advice line and redress scheme? I hope the Minister will address those questions in summing up.

My final concern in relation to this group of amendments is about the comparability of green deal quotes. It is vital that consumers are in a position to make an informed choice about which green deal is best for them, and that could be nigh impossible if the different quotes received are hard to compare. I should like the Minister to address this by ensuring that all green deal quotes are provided in a way that makes them very easy to compare with one another, to judge and to assess.

I have detained the House for some time so I shall conclude. My final amendment in this group would give consumers the right to choose which energy bill their green deal loan repayments would be applied to. In 78% of occupied British buildings, heating and hot water are provided by natural gas, so that is the fuel most likely to be reduced after a green deal makeover. It therefore seems logical for customers’ gas bills, where possible, to carry green deal loan repayments because if the golden rule is working, their gas bills will not become more expensive after the green deal repayments have been applied. It is there that the advantage of the green deal will be most apparent to householders.

If the repayments are added to electricity bills, those electricity bills are not likely to fall so much after a green deal makeover unless a home’s space and water are heated by electricity, but far fewer homes are heated by electricity than by gas. That means that in the vast majority of cases, green deal customers will potentially have lower gas bills but higher electricity bills. That makes it harder to see whether the golden rule is working and risks undermining the central pay-as-you-save principle, as well as eroding customers’ confidence in the value of the deal. I hope the Minister will therefore consider allowing consumers to choose which bill they want their green deal payment to be applied to so that their management of the green deal is as straightforward as possible.

[Barry Gardiner]

I am delighted to follow my hon. Friend the Member for Brighton, Pavilion (Caroline Lucas), who has made a very informed speech about exactly the points at the heart of the measures. I, too, want to address the green deal to dig out more about the golden rule and the energy company obligation. We all agree that it is right that energy efficiency improvements should be provided at no up-front cost. That is a good thing that we all support across the House and want to see implemented. As has been pointed out, however, the loans will be provided at commercial rates through the green deal and will attach to the property, not the householder, for up to 25 years.

The golden rule has been introduced to require that all green deal loans are less than the repayment cost resulting from the installation of the measures. The qualifying energy efficiency improvements will be determined through the energy performance certificate. This means that any savings will be estimated and based on standardised use. As a result, there are no guarantees that actual savings will match or better the estimated savings, as I pointed out to the hon. Member for Brigg and Goole (Andrew Percy). The Bill’s central premise is that consumers will save more on their energy bills than they will repay in loan costs and that that will be enough to drive consumer demand. However, the Bill provides little detail about how demand for the green deal will be driven beyond that basic finance mechanism other than through the introduction of the new ECO, which will underpin the deal and subsidise properties that require energy efficiency improvements but for which the golden rule would not be met.

It is estimated that the green deal will reach more than 40 million homes by 2020 and a further 12 million by 2030. That amounts to the retrofitting of 1.7 million homes a year—that is 4,800 a day—between 2012, when the green deal starts, and 2020. The Committee on Climate Change has estimated that, between 2012 and 2022, we would need to insulate 8.3 million lofts, 5.7 million cavity walls and more than 2 million solid walls to meet the UK’s carbon budget. The Government’s expected take-up of those measures, through the green deal and the extension of the carbon emissions reduction target, misses those requirements by 3.8 million lofts and 2.7 million cavity walls.

Although I support the aspiration behind the green deal, it is difficult to see how it can be achieved under the proposals. Indeed, the Committee on Climate Change’s third progress report to Parliament concluded that the Government proposals should help to strengthen incentives for the take-up of energy efficiency measures. However, there is a significant risk that they will not adequately address the range of financial and non-financial barriers. I do not want to talk the measures down because Members on both sides want them to work, but it is important that we are realistic about their likelihood of success.

The economies of energy efficiency retrofits at today’s energy prices simply are not attractive, as my hon. Friend the Member for Brighton, Pavilion has pointed out, because of the gap between projected returns based on current energy prices and the cost of borrowing—a gap that can be met only if substantive subsidies are applied. Recent analysis by E3G has highlighted that at today’s prices and with the commercial interest rates that the Government intend to apply to green deal financing, the golden rule cannot be met on a 25-year loan. The Government have quite rightly identified that the up-front costs of improvement and access to capital are significant barriers to the uptake of energy efficiency, but we should be clear that the green deal alone will not overcome them. Without intervention to limit the cost of borrowing, consumer demand for green deal programmes could be very low indeed.

Furthermore, access to capital is not a universal problem. For those who can afford them, savings, mortgage extensions and personal loans have long been readily available to provide up-front capital for energy efficiency investments, yet they have not been used on any scale, despite the fact that many people are able to procure those borrowings at 5% or 6%, let alone at the 11% that the Government are suggesting. Financing through the green deal simply does not stack up for the rational investor, and particularly for low and middle-income households.

Let me give an example. The annual energy bill for an average household is calculated at £1,029 a year. A good whole-house retrofit would be expected to save approximately 50% on the average energy bill—in this case, just over £500 a year. Solid wall insulation was identified by the Committee on Climate Change as the main energy efficiency measure that could usefully be financed by the green deal, but according to DECC’s own analysis, the capital cost of solid wall insulation ranges between £7,600 and £12,600. Let us take the cost of £12,600 and the maximum saving of £500 a year; in fact, DECC’s analysis estimates that solid wall insulation would save only £400 a year, but I give it the extra £100. Through the green deal, if we pay back £500 a year, through the savings on the energy bill for that average house, against the £12,600 loan over 25 years, we still do not pay back the full amount. That deal fails the golden rule.

An energy company obligation is being introduced to subsidise the difference, reducing up-front costs to the point that they are less than the energy savings. The Committee on Climate Change estimates that up to £17 billion of support will be required through the ECO to insulate 2.3 million solid walls by 2022, but the Government estimate that the total ECO support will be only £1 billion. The fact that the golden rule cannot be met even before the cost of finance is factored in is a matter of huge concern.

The Government have calculated that the green deal’s financial cost will be cheaper than a market personal loan, but they concede that it could mean rates of up to 11%. At today’s energy prices, to drive demand by meeting the green deal’s golden rule, 25-year loans would need to be offered at rates of 2% or less. E3G’s recently published analysis concluded that a £15,000 loan at 0% over 25 years for changes that delivered a 50% energy saving and lifetime savings of £2,461 could meet the golden rule in year 8, but that the same loan offered at just 2% would incur losses of £1,747 over that 25-year period, whereas a similar £15,000 loan for changes that delivered just a 35% energy saving would not break even at all even with interest at 0%.

14:00

At more commercial rates, the economies of the green deal are simply unmanageable. Households with access to capital—those with the option of using savings, mortgage extensions or personal loans—are not using it for this purpose and will not be incentivised to do so under the Bill. Low-income households could require up-front grants of 55% of the overall cost of making energy efficiency improvements, simply to reduce costs to a level where the remainder of the capital could be borrowed at commercial rates over 25 years without any negative impact on annual household outgoings. For many investments to break even over that 25-year period, they would need a significant subsidy via the ECO.

The ECO’s objective is to support low-income and vulnerable households and properties that need energy efficiency measures that do not meet the golden rule. The cost would be recovered from increases in consumer bills. That is a worryingly regressive means of funding energy efficiency measures, particularly given the likely subsidy that will be required to make the green deal viable. In my example, under the ECO, many households that do not benefit from energy efficiency improvements could subsidise those that do.

The ECO will be accompanied by the withdrawal of the Warm Front scheme by 2014. It will be replaced by the affordable warmth element of the ECO, the purpose of which is to provide up-front support to help households heat their homes affordably. In 2009-10, Warm Front delivered more than 21,000 cavity wall and 40,000 loft insulation measures, as well as 80,000 boiler replacements. I should be grateful if the Minister he clarified what proportion of the overall ECO will be targeted at the affordable warmth element and the criteria that he will apply to determine what low-income households will be eligible and how many retrofits the Government estimate will be carried out under the affordable warmth obligation.

[Luciana Berger]

It is helpful at this point to refer to the Treasury levy cap, which has not yet been mentioned. We will not know for some time whether the Office for National Statistics will determine that the ECO should be considered in the same vein as the warm homes discount, the feed-in tariff and the renewable obligation. If it does, the ECO could be even more constricted and less than the figures that my hon. Friend is talking about.

[Barry Gardiner]

The shadow Minister is absolutely right that there has yet to be clarity on the issue, and clarity is vital. If we are to meet the targets that the Committee on Climate Change has set and the budgets, we must know that sufficient funds are available for the ECO to meet those targets. At present, my analysis and other analyses are quite clear that up to £22 billion is required, although an absolute cap of £1 billion might be provided under the ECO. As my hon. Friend suggests, that £1 billion might prove not to be a full £1 billion after all.

On new clause 9, the Secretary of State for Energy and Climate Change has estimated that the green deal will lead to employment in the sector increasing from 27,000 jobs currently to something approaching 250,000 jobs by 2020. That involves the creation of 27,875 jobs every year from the start of the green deal until 2020. Double the number of jobs that currently exist must be created every year. We heard earlier at Prime Minister’s Question Time about the latest unemployment figures and particularly the problems of youth unemployment. Of course, if those jobs were created, we would all welcome them, but there must be a doubt about these provisions.

In opposition, the Prime Minister called for a revolution in skills and training, so that the skills system responds far more effectively to the needs of individuals and businesses in a greener economy, but the recent green economy road map recognises the importance of that and refers to the introduction of new skills for a green economy and the grouping of sector skills councils to help businesses understand the changing skills requirement. It is crucial that that new grouping of sector skills councils supports the development of the additional 27,875 jobs every year between now and 2020. It would be of considerable interest to the House if the Minister explained what financial provision will be made to the sector skills councils to enable that sort of expansion—a tenfold expansion—to take place in the next nine years.

[Gregory Barker]

I should like to start by thanking the hon. Member for Brighton, Pavilion (Caroline Lucas) for tabling amendments 49 and 50 and my hon. Friends the Members for Manchester, Withington (Mr Leech) and for Brigg and Goole (Andrew Percy) for tabling amendment 28.

Amendment 49 would require that any energy efficiency services provided or products sold by green deal participants, in addition to those paid for with green deal finance, should be subject to the green deal regulatory framework. It is important to note that the green deal is an innovative form of finance agreement that is attached to the meter and therefore passes between bill payers. I think that we all understand that. So it needs specific protections, which are not necessarily relevant to those who do not take out the green deal.

I should like to assure hon. Members that we intend to require customers to be made fully aware of the difference between offers that fall under the green deal scheme, with all its specific safeguards, and those that fall outside. However, many of the forms of mis-selling that rightly concern the House can be prosecuted already under existing general consumer protection legislation. We will not accept companies using green deal accreditation as cover for less appropriate goods and services.

Amendment 50 would ensure that recommendations and estimated costs and savings are clearly and transparently communicated to the consumer as part of the green deal plan, thus enabling customers to compare offers. I should like to reassure hon. Members that we intend to require green deal providers to set out clearly how the proposed savings and costs meet the golden rule principle, as enabled by the power in clauses 4 and 5. I urge hon. Members to look specifically at clause 5.

In addition, the Consumer Credit Act 1974 will apply to domestic green deal plans in full, bar a few essential amendments, thus ensuring robust consumer protection, and it already regulates the provision of information to consumers who enter into credit arrangements.

[Caroline Lucas]

I wonder whether the Minister can clarify things a little further. On amendment 50 and comparability, is he saying that there are some guidelines somewhere that will ensure that many different green deal providers will be required to present the savings that are likely to accrue from investing in a green deal package in a similar way, so that they are genuinely comparable? On amendment 49, if a green deal assessor goes in and after a big assessment the householder decides not to take a green deal finance package but to pay up front, will they be unable to access things such as an advice line?

[Gregory Barker]

Such people can certainly access the advice line. If people choose to pay in full and not to take finance agreements, they will not be any less covered by the accreditation of all green deal service providers and the protection and warranties that go with all green deal products. We must not forget that the green deal is not just about financial arrangements where consumer protection kicks in. We will set out in further detail in secondary legislation, which hon. Members will thoroughly scrutinise, and go to great lengths to ensure that there is a rigorous consumer protection element to the accreditation of all services that are green deal applicable. That will apply whether or not they are financed by consumer credit. Obviously, all products must be specified and approved for use under the green deal to ensure that they meet the golden rule.

[Barry Gardiner]

I welcome the fact that the Minister has said that customers and consumers will be protected by consumer credit legislation, and I welcome the fact that robust secondary legislation outlining further protections will be put in place. Will he tell the House at this stage whether he believes that consumers will be protected by the legislation that applies to the financial services industry so that an adviser can act either as a tied agent or as an independent agent, but not mix and match the two roles—at least not in the same consultation? If that protection is not provided by existing legislation, will he ensure that it is introduced in the secondary legislation to which he referred?

[Gregory Barker]

We will have to disagree on this. I understand the protections that the hon. Gentleman is trying to insert into the Bill, but I take a slightly more optimistic view of the potential both for introducing competition in the green deal process and for home improvement.

The biggest driver for take-up—and this is different from the German experience—is not concern about climate change and, surprisingly, it is not even concern about saving money on energy bills. The consumer research that our stakeholder forums have commissioned is revealing, because the majority of consumers said that the biggest factor in their taking up the green deal would be a desire to make their home nicer. That may seem counter-intuitive and surprising, given the high cost of energy, but more than half of respondents indicated that home improvement was the driving force. We need to harness that, and it is little wonder that people failed to respond to energy companies that were not in the home improvement game. They will be responsive, however to new entrants to the market such as B & Q, Marks and Spencer, John Lewis and so on, which excel in offering aspirational consumer propositions. Many people will seek to improve their house, and see no contradiction in making improvements by purchasing new wallpaper and carpets while, at the same time, undertaking energy improvements. I regard this not as an either/or conflict, but as an opportunity to ride on the back of that motivation. Rather than offering a hairshirt proposition, we should harness the inherent instincts of the British public to improve their home, and make it both nicer and warmer.

I welcome the arrival in the market of a host of new players offering additional propositions for home improvement that fall outside strict energy efficiency measures, because that will draw in more people and catch their interest, but—and it is an important but—we must ensure that the integrity of the independent assessment is upheld. We must ensure that there is no inappropriate cold calling or hard selling in the home, which is why we will thoroughly review the measures that are in place. If the evidence shows that they are not sufficient, we will introduce strong codes of practice and ensure that assessments are thoroughly independent. However, I do not share the pessimism of the hon. Member for Brent North (Barry Gardiner), or his reluctance to introduce the two measures alongside each other. As long as that is done in a thoroughly transparent and responsible way, it could be a benefit, rather than a negative.

14:15

[Barry Gardiner]

The Minister has said that in his view the green deal is market driven—that is a fundamental difference from the German scheme—so investment by commercial companies will propel the scheme forward. He is telling the House that, in a sense, it is driven principally by the profits that those companies will make. It is not driven by the imperative of increased energy efficiency, or by the need to meet the carbon budgets set by the Committee on Climate Change, or by the need to address fuel poverty. It is driven by the profit motive. I am willing to capture the drive that the market can bring, but the focus of the scheme, as set out by the Minister, is fundamentally wrong.

[Gregory Barker]

I know that the hon. Gentleman is not quite an unreconstructed, planned-economy socialist, but he is confusing means with ends. The purpose of the green deal—our starting point and our end point—is to meet our carbon budgets and fulfil our legal and statutory obligations under the Climate Change Act 2008, which was introduced with the support of Members in all parts of the House. For decades, we have singularly failed to drive effective home energy efficiency and, come to that, energy efficiency in the business and industrial sectors. Given the size of the deficit and the burden on the public purse, we are living in cloud cuckoo land if we imagine that we would drive down carbon emissions and transform home and business energy efficiency if we left the private sector untapped. We will achieve our objectives only if we harness effectively the power of the private sector. Of course, people will make profits, but provided that that is transparent and fair, I do not have a problem with it. It is called job and wealth creation, and spreading that widely. We do not have enough wealth creation in the UK—we need more—and the green deal will be an incredibly important vehicle in helping us to rebalance our economy and making us more efficient.

We should not ignore that, but it does not detract from the fact that the central aim of the legislation is to allow us to meet our stretching carbon reduction targets. The coalition is absolutely committed to doing so, and the green deal is the means to that end, so we should not confuse the two as the hon. Gentleman did.

Amendment 28, which was tabled by the hon. Member for Manchester, Withington and my hon. Friend the Member for Brigg and Goole, seeks to ensure that we have powers to place restrictions on interest rates that can be offered as part of the green deal plan. I understand the concerns that my hon. Friend the Member for Brigg and Goole articulated in his thoughtful speech, but I can assure him and other hon. Members that clause 5(1)(b) already provides the power—we accept the point that the hon. Gentleman is making—to limit interest rate structures that can be applied to green deal plans. It will not be possible to create a valid green deal plan, unless it specifically complies with the conditions contained in, or made under, clause 5.

The green deal is a market mechanism, and the golden-rule principle will create a natural incentive to drive down costs, so the Government do not intend to place restrictions on the level of interest charged. However, we are considering broader restrictions to ensure that green deal plans are equitable not just for the first but for all subsequent bill payers. This could mean limiting interest rate structures offered to domestic customers to those with the greatest likelihood of the golden rule being met in the first and subsequent years, and we will be consulting on what is quite a complicated area, not just with stakeholders in the financial services sector, but with all concerned stakeholders.

I would certainly welcome the thoughtful input from Members on both sides of the House into this important area of how we ensure we get the most competitive interest rate for the consumer. I invite my hon. Friend the Member for Brigg and Goole, the hon. Member for Manchester, Withington, and other hon. Members who have spoken in the debate and expressed legitimate concerns, to meet my officials so that we can ensure that we take notice of their concerns and take advantage of some of their ideas. I hope that I have been clear throughout proceedings on the Bill that we do not have a monopoly on the best ideas. As we develop the fine detail of the green deal, I am more than happy to work with them.

We recognise that the interest rate is only one of the drivers of affordability. We do not want unnecessarily to focus just on the interest rate. The actual cost of the products, particularly things like solid wall insulation, will be a key driver. Replacement windows are in a very exciting place. For the first time, because of technical innovation and the increased thermal value of new glazing, and because prices are coming down, we can anticipate that we will be able to include glazing in windows. Consumer-facing home improvements will come within the remit of the green deal, and make it much more attractive. The green deal will not just be about out of sight, out of mind, hidden interventions in a household, but about things that people will really value on a day-to-day basis.

[Ian Lavery]

Will the Minister give a categorical guarantee that anyone who cannot pay the green deal part of the bill will not have their supply disconnected?

[Gregory Barker]

The hon. Gentleman’s question is predicated on a misunderstanding. It will simply not be possible for any consumer, poor or rich, to disaggregate their bill payments for the green deal, other charges and the energy consumed. There will not be that opportunity to withhold green deal payments, just as one cannot refuse to pay transmission charges or other levies that are included on the consumer bill. That will not be an option for them.

[Caroline Lucas]

Will the Minister confirm that he is still leaving the door open to using the green investment bank to support and subsidise the interest rates? I am not clear what he is saying specifically about the green investment bank.

[Gregory Barker]

That is a very important point. I do not rule it out completely. It is unnecessary to do so at this stage. But we do not anticipate that it will be necessary, and it is certainly not part of our planning and budgeting. Rather than the green investment bank subsidising interest rates at the consumer end of the journey, it is more likely that it will play a role in helping to pump-prime the liquidity in the bond market when we first see companies taking these aggregated packages of green deal finance and seeking to offer them into the bond market as new securitised products. In the long term, there is an exciting future, and there will be a lot of strong institutional demand for such products.

The conversations that we have had with the largest city institutions and banks have been encouraging and we have set up a working group. Short-term interventions to aid initial liquidity are more likely to be a fruitful use of green investment bank money. Although the coalition Government have promised £3 billion, substantially more than anyone anticipated at the general election, to fund this new important piece of financial architecture in the City of London, which will make a substantial difference to our economy and drive green growth, that money can be spent only once. The key to the green investment bank priorities must be to address market failure. We cannot keep spending that money time after time. There are many demands on the green investment bank funding, and if the market, as we believe, is capable of supplying competitive interest rates in a way that is affordable to most consumers, supported by the ECO subsidy, it would be quite wrong to use green investment bank money when we clearly need to prioritise other areas of the low-carbon economy as well.

Likewise, as the hon. Lady can imagine, DECC is pushing for an ambitious ECO. This is a huge opportunity that is extremely cost-effective, and in terms of the hierarchy of spend on the low-carbon transition, the ECO represents incredibly good value, particularly compared with forms of low-carbon generation; but, again, the ECO comes out of consumers’ bills, and there is a balance to be struck. We cannot keep pushing up the ECO, because ultimately that will start to become regressive. When the coalition came into government, we took steps to reduce consumers’ bills by taking off the cost of funding the CCS programme and taking it into general taxation. We took measures to ensure that the renewable heat programme would be funded not through consumers’ bills but out of general taxation, and that is a progressive measure. We have to ensure that we get the right balance and have an ECO that is good for consumers and does the job. We cannot treat it as a magic pot of money. It is paid by every energy bill payer, and more than ever, as world energy prices go up, they are scrutinising bills to ensure that they are getting good value for money.

[Dr Whitehead]

When the Minister says that he is pushing for a generous ECO, does he mean that he is pushing the Treasury to raise the cap that it has set on levies; that he is trying to ensure that the ECO is as generous as possible within the cap; that the ECO should remain outside the cap and therefore can be as large as he might wish to make it; or that the cap overall ought not to be referred further to the Office for National Statistics for a determination on whether the ECO is inside it at all?

[Gregory Barker]

All those issues are the subject of a constructive and thoughtful conversation between my Department and the Treasury.

[Luciana Berger]

The Minister has said that interest rates are just one element, and we have argued that it is integral and crucial to whether the green deal will deliver, not only because of the affordability of products—if the interest rate is 8% or more, very few products will fall within the golden rule, and if it is 6% or more, a few more will be added but some of the more ambitious measures would not be included—but most importantly because of public uptake. According to the Great British Refurb campaign study and polling of the public, just 7% of the public said that they would take up the green deal if the interest rate was 6% or more. The Government will not meet their ambition of reaching 14 million homes by 2020 if the interest rate is too high.

[Gregory Barker]

There will be a commercial consideration involved, because those matters are not lost on participants who want to carve out a large piece of what will be a substantial market. The interest rate is only one element of the cost. If the product bought is expensive, it does not matter if the interest rate is low. If a product is £1,000 and one is asked to pay an interest rate of 7%, would that be preferable to a product that costs £600 on which one pays 8%? There are many more variables than the absolute interest rate.

Customers will be looking for the absolute savings, taking into account the overall desirability of the package that they are being offered. The industry and new entrants will be looking at which of the levers they are most responsive to. I have no doubt that some companies will offer zero interest rate propositions. It is already possible to grab a sofa in the market and pay nothing until Easter or bank holiday Monday next year, and even then it may be with 0% finance. However, we know, because we are not stupid, that we invariably pay more in such offers than the actual price being offered. A sophisticated blend of different costs will be taken into consideration.

14:30

I understand what the hon. Member for Liverpool, Wavertree says, but ultimately consumers will want to know that the actual savings they make will be substantially greater than the cost of doing the green deal, and then of course they will want to unpick the green deal to ensure that they will get value right the way through the chain. Incidentally, I have here the latest draft of the new energy performance certificate, which I am really pleased with. It is still a work in progress, but I will happily share it offline with hon. Ladies and Gentlemen.

I think that the competitive market will be rather more sophisticated and will be able to fish out where consumers will look. I am not dismissing the hon. Lady’s claims. If borrowing is not available at competitive rates, that will clearly have an impact on the green deal, but our working assumption, which is based not on pie-in-the-sky figures formulated in DECC but on the detailed work done by our stakeholder working groups, with financial sector involvement and with my excellent officials, is that the interest rate, although challenging, will not be a barrier to successful take-up of the green deal.

[Luciana Berger]

We are obviously aware of the stakeholder groups and the consultations going on in DECC, but as far as I am aware only one or two consumer groups are involved, and the majority of organisations taking part in those discussions are businesses. None of the businesses I have spoken with has indicated that it will seek to present a 0% interest rate on its green deal package. Returning to the polling I just asked the Minister about, does he accept the polling from the Great British Refurb campaign, which indicates that only 7% of the British public would take up the green deal if the interest rate was 6% or more? All the organisations we have spoken with have indicated that the interest rate would be at that level or above.

[Gregory Barker]

I am afraid that the hon. Lady is wrong. We have a huge degree of engagement with consumer groups. All the obvious consumer groups have been involved heavily in formulating different parts of the green deal, and that work is ongoing. I have not seen the particular research she mentions, but we have certainly had involvement from Which?, Citizens Advice and Consumer Focus, as well as from sophisticated investors and institutions in the City of London. I do not expect offers to appear until October next year, and it is most unlikely that ambitious new entrants in the market will declare their hand so far in advance: they will wait to see how the market shapes up and look at their competitors before revealing their offers. That is my expectation, which is based on observing what else happens in the market, rather than on what stakeholders have said to me at DECC.

[Barry Gardiner]

The Minister has explained candidly that the ECO is a regressive measure that will be imposed on general utility bill payers and that it will be an additional cost for them. He has also alluded to the fact that the Government removed the cost of carbon capture and storage from those bills on coming into office. Will he give an undertaking that the additional amount he proposes to impose on bill payers through the ECO will not be greater than what he and his Government have already taken off bill payers through their previous measures? He talks of securitisation in the bond markets, but will he explain how a default rate can be estimated, given his assertion that there will be no possibility of defaulting on that part of the bill?

[Gregory Barker]

The default rate will be the same as the standard default rate for electricity bills generally, which is a very low percentage. It is probably higher in the present economic circumstances, but when averaged out over a decade, it is very low compared with other instances, and it will not be extrapolated out of that. On the ECO, the hon. Gentleman seems to be trying to have his cake and eat it. The bottom line is that there is no magic source of money; it all has to come from somewhere and ultimately that is the taxpayer and the consumer, who are basically the same person in this context. We have to be very responsible and we are constantly looking for ways to lighten the load for hard-pressed consumers, who are concerned about rising energy costs.

We will publish in the autumn our expectations of how DECC policies, taken together, will impact on consumers through to 2020. The results of the early work are extremely encouraging. These things must be seen in the round—one strand of policy cannot be taken out as though it was part of a Woolworths pick ’n’ mix. We have to take the energy efficiency measures, the levies and our other measures to encourage greater competition in the energy sector as a whole. We will publish that in the autumn, when I am sure the hon. Gentleman will have an opportunity to quiz the Secretary of State.

[Caroline Lucas]

The Minister rightly says that there is no magic pot of money, but there are certainly progressive and regressive ways of doing this. Does he agree that putting a levy on all consumer bills, irrespective of the financial situation of the householder, is inherently regressive? Indeed, the impact assessment of the 2009 extension of the carbon emissions reduction target showed that using a levy actually pushed more people into poverty than were pulled out as a result of the CERT money.

[Gregory Barker]

The hon. Lady makes an indisputable point. We are mindful of the mistakes made by the previous Labour Government, which resulted in a succession of levies being put on consumer bills without any thought to the long and short-term impact on the vulnerable. That is one reason why we saw such a steep rise in the number of people living in fuel poverty, which increased by millions during the last Parliament alone. It is a difficult balance to strike, and I can understand why Ministers took those decisions, because they had to find the money from somewhere. We are certainly very mindful of the point she raises, which is why, as the hon. Member for Brent North said earlier, we have taken steps to remove the levy for CCS and the renewable heat incentive levy from the bills. The Treasury will insist on clear value for money and due consideration of the impact on those who are least able to pay when we finally settle on the exact figure of the ECO, which will replace the CERT funding.

Amendment 27 tabled by the hon. Member for Brighton, Pavilion, and amendment 45 tabled by the hon. Member for Manchester, Withington, deal with the collection of green deal payments. Allowing either energy bill to be used to collect the green deal charge looks attractive. I asked the very same questions myself and got exactly the same initial response as the hon. Lady, but the devil is in the detail and close analysis reveals significant problems. Requiring gas suppliers as well as electricity suppliers to facilitate the collection of green deal charges, which seems the obvious thing to do, given that heating is the larger element, substantially increases the implementation costs.

I really pushed back on that in the early stages of policy implementation, but our findings indicate that it could increase the implementation costs by up to 50%, which would ultimately be passed on to consumers, mainly because most energy suppliers have separate gas and electricity billing systems. Introducing a choice between collection of the green deal charge via electricity or gas, however desirable—I am all in favour of greater consumer choice—would require regulating two groups of companies rather than one, which would increase the risk of implementation failure and potentially cause a delay to the launch of the green deal in autumn 2012. Auditing payment flows would also be more difficult, because there would then be two possible routes through which the funding might flow.

The idea of allowing the occupier of a property with a green deal plan to switch collection methods at any point also prompted considerable concern in the industry. It would increase the possibility of billing inaccuracies, which in extreme cases could increase disconnections, which I know we all want to avoid, as well as increase the overall risk premium and push up interest rates, which we obviously want to keep as low as possible. I will return in a minute to the issue of disconnection.

That leaves collection only by electricity or by gas; fundamentally, it comes down to an either/or situation. I agree with the hon. Member for Brighton, Pavilion that gas seems the obvious choice, but collection via gas bills would automatically exclude the possibility of billing in that way the 4.3 million households that are off the mains gas grid when they access green deal finance for energy efficiency measures. Many of those properties are in rural communities, and it is important to the coalition that the green deal be available to both rural and urban communities. In contrast, almost all properties in Great Britain are connected to the electricity grid.

The change proposed would also raise the possibility of customers paying summer gas bills that are significantly higher than those before the green deal plan was taken out, which could be very difficult for many low-income families who are prepayment customers and not used to paying large amounts on their gas bill over the summer months. Many breathe a sigh of relief as they reach spring and have that little extra give in the family budget as a result of not having constantly to load their gas prepayment meter. It would be most problematic for prepayment customers on gas, who would then be expected to carry on paying charges equally through the summer, when normally they do not.

We still have a lot more work to do to deal with the iniquity of billing, whereby people on prepayment meters and low incomes often end up paying a higher tariff, so for the foreseeable future it makes sense to ensure that the charge is levelled out across the electricity bill, where we see far fewer lumpy payments, spikes and troughs.

[Barry Gardiner]

Does the Minister accept that, if we are really to reduce fuel poverty, we need to place the first units on the cheapest tariff, so that those who use least energy pay least for it, instead of, as happens now, their paying most for the first bundle and paying less the more they consume? They should pay least for the smallest amount and, as they increase their consumption, pay more per unit.

[Gregory Barker]

I am of course familiar with that argument of rising block tariffs, but that too has unintended consequences, which often hit pensioners in particular. However, I think I would be ruled out of order if I lurched into a discussion of tariffs, which are not necessarily the subject of the amendments before us.

We are left with collection via electricity bills as the only practical solution. The Government accept that that requires measures to strengthen the cognitive link between the green deal charge and energy savings, which in many cases will be realised on the gas bill. That is why the Government plan two requirements to increase the link between the two. First, for the 14.8 million households that receive their gas and electricity from the same supplier, the Government plan to introduce a requirement on energy suppliers to provide a combined energy bill, with the charges for gas and electricity supply and the green deal charge clearly identified on the front page. Secondly, the Government will introduce a requirement for electricity suppliers to reproduce the estimated savings from the green deal assessment on the green deal customer’s annual energy statement.

On the issue of disconnection, it is important that the green deal charge is treated in the same way as normal energy bill payments, so that defaults are kept to an absolute minimum and low-cost finance can be offered. I do not expect the green deal to increase disconnection, given the protection of the golden rule principle.

14:44

[Luciana Berger]

rose—

[Gregory Barker]

I shall give way to the hon. Lady, but then I really do need to make some progress so that we can get on to other parts of the Bill.

[Luciana Berger]

I am grateful to the Minister for stating the developments for those customers who have the same energy provider for their electricity and gas supply. He says there are 14.8 million of them, but my question, which came up in Committee, is about those customers who have different providers for electricity and for gas. What will happen to them? How will they be able to measure the savings across their two bills? My conversations with many energy providers tell me that their systems do not currently speak to each other, and that to make them to do so would cost a great deal.

[Gregory Barker]

There will be access to the energy annual statement, which will make that crystal clear.

Energy suppliers are already prohibited from disconnecting households in the winter months when they know or have reason to believe that the customer is a pensioner or lives with pensioners or with those under 18 years old. We plan to extend those protections to the non-payment of green deal charges.

We have had a very good debate. I have commented on the green investment bank to make clear the Government’s views on what appropriate interventions for the green investment bank would be. Although we understand the intention behind new clause 8, we will not support it. I hope that the hon. Member for Brighton, Pavilion is reassured by my explanation and will not press her amendments 26, 27, 49 and 50 or new clause 8; and that the hon. Member for Manchester, Withington and my hon. Friend the Member for Brigg and Goole are similarly reassured on amendment 28. I hope also that the hon. Member for Manchester, Withington found my explanation regarding amendment 45 equally compelling and will not press that, either. I urge the House to support Government amendments 29 to 34 and 36 and new clause 10.

Question put and agreed to.

New clause 10 accordingly read a Second time, and added to the Bill.

New Clause 11

Agreement about modifying decommissioning programme

‘(1) Section 46 of the Energy Act 2008 (approval of a decommissioning programme) is amended as follows.

(2) After subsection (3) insert—

“(3A) When approving a programme the Secretary of State may agree to exercise, or not to exercise, the section 48 power—

(a) in a particular manner;

(b) within a particular period.

(3B) An agreement under subsection (3A) may subsequently be amended by the Secretary of State and the other party to the agreement.

(3C) The Secretary of State may not make such an agreement or amend such an agreement unless satisfied that the agreement (or the agreement as amended) includes adequate provision for the modification of the programme in the event that the provision made by it for the technical matters (including the financing of the designated technical matters) ceases to be prudent.

(3D) Provision in such an agreement (including the provision mentioned in subsection (3C)) may include provision—

(a) for a determination by a third party in relation to a relevant matter specified in the agreement, and

(b) for the Secretary of State to be bound by such a determination.

(3E) A “relevant matter” is a matter relating to the provision made by the programme for the technical matters.

(3F) Subsections (3A) to (3D) apply notwithstanding that the agreement or amendment fetters the Secretary of State’s discretion.

(3G) In subsection (3A) “section 48 power” means the power of the Secretary of State under section 48 to propose a modification of the programme or a modification of the conditions to which the approval of the programme is subject.”

(3) In subsection (4) for “(3)” substitute “(3B)”.’.—(Charles Hendry.)

Brought up, and read the First time.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

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

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

Amendment (a) to new clause11, line 5 leave out ‘, or not to exercise,’.

Amendment (b) to new clause 11, line 9 leave out

‘and the other party to the agreement’.

Amendment (c) to new clause 11, line 15 leave out ‘prudent.’ and insert

‘adequate to protect the interests of the public and taxpayers.’.

Government new clause 12—Adjustment of electricity transmission charges. Government new clause 13— Consultation.

New clause 17—Proposal for modification of approved programme—

‘(1) Section 48 of the Energy Act 2008 (approval of decommissioning programme) is amended as follows.

(2) In paragraph (2)(c) leave out “(provided that the site operator consents to the proposed modification)”.

(3) In subsection (3) leave out “, in particular,” and insert “only”.

(4) In paragraph (3)(a) leave out second “, or” and insert “.”.

(5) Leave out paragraph (3)(b).’.

Government amendments 35, 37, 38 and 39.

Amendment 51, page 93, line 33, in clause 115, leave out paragraph (a).

Government amendments 40 to 44.

[Charles Hendry]

We now move on to a series of technical and miscellaneous new clauses and amendments, which cover nuclear decommissioning transmission charging, the process of consultation and the Home Energy Conservation Act 1995 and how it applies in Scotland.

I shall first address the issue of the nuclear decommissioning programmes. In Committee, hon. Members raised concerns about how any agreement that sets out the manner in which the Secretary of State will, or will not, exercise his power to propose a modification to an approved programme will deal with “unforeseen circumstances” in the future. I have listened very carefully to hon. Members’ concerns, we have had very useful meetings and I am very grateful for the constructive way in which they have engaged to ensure that we have a new clause that is acceptable to both sides.

I recognise that the funded decommissioning programme and any agreement entered into under the new clause are very long-term arrangements, and that the arrangements will need to take account of “unforeseen circumstances” that may arise in the future.

In the light of the Committee’s concerns, we wish with new clause 11 to amend the relevant measure in order to require that the Secretary of State enter into an agreement only when he is satisfied that it includes adequate provision for the modification of a programme if the programme no longer secures prudent provision for the liabilities.

Let us be clear: we would not impose an additional test to the existing requirement that the Secretary of State must be satisfied that the programme and the agreement as a whole secure prudent provision for the liabilities. The new clause would make it explicit that, as part of ensuring prudent provision, the Secretary of State needed to be satisfied with the arrangements for making modifications to the programme when he entered into the agreement.

[Caroline Lucas]

Will the Minister be a little more precise about the exact definition of the word “prudent” in this context?

[Charles Hendry]

We have chosen to use the word “prudent” not only because it is a concept that is established in law but because it was important to give the Secretary of State the ability to decide, in future, whether something has ceased to be prudent. We looked at some of the wording that had been discussed in Committee relating to unforeseen circumstances and moved away from that because we were concerned that the legal debate would then be about whether something was foreseen or unforeseen. If people could point to one speech by a Minister who had talked about such issues, then nobody could say that they were unforeseen because they had been discussed in this House. I will clarify that further in a few moments.

It is clear that over the years foreseen and, potentially, unforeseen events will occur that may require modification of the arrangements set out in the programme. The new clause is not limited to unforeseen circumstances, but when the Secretary of State enters the agreement he will need to be satisfied with the arrangements for modifying the programme when it is no longer prudent, be that in unforeseen circumstances or those which were foreseen. The new clause also allows the agreement to set out matters that may be determined by a third party, and for the Secretary of State, if he so agrees, to be bound by that determination. This provides reassurance to operators that there can be a mutually agreed and mutually binding process between the Secretary of State and the operator where disputes can be resolved in an impartial manner. Such a third party would need to be impartial and independent of the operator and the Secretary of State. In addition, both parties would need to be satisfied that the third party in question had the expertise to perform the role required of them. The exact terms of the agreement, including any process for third-party determination, and the method for appointing a third party will be decided on a case-by-case basis with the operator and after taking into account the programme submitted by that operator.

I turn now to amendments (a), (b) and (c) to new clause 11, which are in the name of the hon. Member for Brighton, Pavilion (Caroline Lucas). Under amendment (a), the Secretary of State would not be able to set out in the agreement when he would not use his section 48 power. This would leave him with broad scope to use his section 48 powers and so render the agreement ineffective from the perspective of providing investor confidence, which is the whole purpose. Amendment (b) would have the same effect. Amendment (c), which would omit the word “prudent” and insert

“adequate to protect the interests of the public and taxpayers”,

would not provide further protection for the taxpayer. Arguably, it would reduce protection by introducing a looser term that could be subject to conflicting interpretations and be inconsistent with the rest of the Act, for which the test is prudence.

New clause 17 would amend subsection (2)(c) of section 48 of the Energy Act 2008. That would have the effect of allowing others with obligations under the programme to propose modifications to a site operator’s programme without first seeking their consent. It is clearly unreasonable, we believe, to expect an operator to agree to this. In any case, the Secretary of State would need to seek the views of the site operator and take those views on board before deciding whether to approve the modification.

There is also a legal issue involved in the new clause. The effect of modifying subsection (3) of section 48 in this way would probably be exactly the opposite of what the hon. Member for Brighton, Pavilion intends. Under the Act, if it were amended as proposed, the Secretary of State would be able to impose obligations only on an associate of the operator and not the operator itself. Modifying subsection (3)(a) and removing subsection (3)(b) altogether would mean that obligations placed on an associate of the operator could not be removed even if, for example, those obligations were no longer relevant because they had been fulfilled. This is clearly inappropriate and impracticable. On that basis, I hope that the hon. Lady feels sufficiently reassured to withdraw the amendments.

I will now speak to Government new clauses 12, 41 and 44, which relate to transmission of renewable electricity and the role that renewable generators in peripheral parts of Great Britain could play in meeting low carbon energy targets. Section 185 of the Energy Act 2004 allows the Secretary of State to introduce a scheme adjusting transmission charges in a particular area of the country to help to mitigate any material hindrance to renewables development caused by these charges. Section 185 was introduced to address concerns that a GB-wide charging regime for the electricity transmission network might hinder the development of renewable generation in a particular area of the United Kingdom—for example, in the north of Scotland and the Scottish islands. Under the regime, transmission charges are cost-reflective. In effect, the further electricity has to travel, the higher the transmission charges.

Any scheme introduced under section 185 can be applied for up to 10 years—an initial period of no more than five years with renewal for up to five further years. Currently, any scheme must terminate by October 2024. The new clauses merely extend that time limit until 4 October 2034. This power has never been exercised, and it is possible that a review of the transmission charging regime currently being carried out by Ofgem under Project TransmiT will address any perceived problems in other ways. However, it is not certain that Ofgem’s review will address all such perceived problems in every case—for example, renewable generation on the Scottish islands, where forecast transmission charges are significantly higher than elsewhere in Great Britain. The lead times of proposed developments also mean that no renewable generators on the Scottish islands will be connected to the transmission network by October 2014, and so they would not be in a position to benefit from the full possible extent of any section 185 scheme. It therefore makes sense now to extend the sunset clause by 10 years to October 2034. This will allow maximum flexibility to take account of the outcome of Ofgem’s review and give developers time to bring forward renewable generation and associated transmission links without concerns of exceeding the current 2024 deadline.

Government amendments 43 and 51 relate to the Home Energy Conservation Act 1995. As hon. Members know, having listened to concerns raised during the passage of the Bill, the Government were convinced of the desirability of retaining HECA in England, and this was agreed in Committee on 21 June. Schedule 3 makes a number of amendments that were necessary when HECA was being repealed. However, with HECA being retained, the consequential amendments listed in schedule 3 are no longer necessary. Government amendment 43 is therefore a purely technical amendment that I hope raises no issues of concern for hon. Members.

Regarding amendment 51, I would like to reassure the hon. Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Rutherglen and Hamilton West (Tom Greatrex) that we have fully consulted colleagues in the Scottish Government during the development and passage of the Bill. The intention to repeal HECA in Scotland was at the request of Scottish Ministers, who indicated that they believe that the Climate Change (Scotland) Act 2009, together with the local housing strategy guidance, will be sufficient to ensure appropriate promotion of energy efficiency and the opportunities that the green deal will bring to this. On that basis, I hope that the hon. Members can withdraw their amendment.

[Mr Mike Weir (Angus) (SNP)]

Will the Minister confirm that the repeal was part of the legislative competence motion passed by the Scottish Parliament?

[Charles Hendry]

The hon. Gentleman is absolutely right. This is a devolved matter that we have discussed with the Scottish Government. We are implementing this measure as the easiest and quickest way of delivering on that.

Finally, I refer to a small set of Government amendments regarding consultation—Government new clause 13 and consequential Government amendments 35, 37, 38 and 39. The purpose of the new clause is to ensure that consultation with key stakeholders carried out before, as well as after, Royal Assent can contribute towards fulfilling the various statutory consultation duties that arise under, or by virtue of, the Bill. Consulting stakeholders is an important part of developing and implementing any policy. Throughout the Bill, there are several provisions that impose a statutory requirement to consult before exercising powers to make secondary legislation. These include, for example, consultation with devolved Administrations or energy companies. In many cases, the consultation requirement can be satisfied by a consultation that takes place before, as well as after, the passing of the Bill. The new clause seeks to ensure parity of approach throughout the Bill.

I hope that I have assured hon. Members that the Government have listened during the passage of the Bill, and I urge them to support our amendments. Similarly, I hope that I have reassured them sufficiently that they feel able to withdraw their amendments.

[Caroline Lucas]

I am seeking to amend new clause 11, which was based on a clause that was withdrawn by the Government in Committee because of cross-party concerns. I have not been fully reassured by what the Minister has said about the new clause, which has not met all those concerns. My amendments therefore seek to ensure that the Secretary of State cannot decide not to exercise his powers to modify a nuclear decommissioning programme; that a nuclear decommissioning programme can be modified only by the Secretary of State on his own, not working with an operator; and that we clarify what is meant by the word “prudent”. The Minister has helpfully expanded on that term so I feel a little reassured, although I still think that it is a little open.

15:00

In new clause 17, I am seeking to amend section 48 of the Energy Act 2008 to ensure that a third party to a nuclear decommissioning programme can propose a modification of it without the consent of the site operator. I make it very clear that it is still the Secretary of State alone who can modify it. I am not suggesting that the associate to the operator can do so. I suggest that they should be able to propose a modification, but that it remains the responsibility of the Secretary of State to decide whether to go ahead with that. I am also clear that changes should not include a reduction of the requirements.

We are not debating the pros and cons of nuclear power per se. The Minister knows very well that I am not a great fan of nuclear power. The debate is about whether the Government should be subsidising, more or less with a blank cheque, a nuclear renaissance in the UK, either directly or indirectly. Ministers know very well that the UK faces a £4 billion black hole in unavoidable nuclear decommissioning and waste costs, which the Secretary of State revealed soon after coming to office last year. At that time, he said the crisis was such that

“my department is not so much the department of energy and climate change, as the department of nuclear legacy and bits of other things”.

It was well reported at the time that there would be additional costs from rising expenditure on nuclear decommissioning and falling income due to the closure of ageing power plants. The Secretary of State went on to insist:

“I do not think it is possible for anyone responsibly to stand aside and say we are not going to deal with it. We just have to, but what we are effectively paying for here is decades of cheap nuclear electricity for which we have suddenly got a massive postdated bill.”

I could not have put it better myself. What clearer evidence of the long-term subsidy of nuclear power could there be?

It is not clear to me how Government new clause 11 will seriously address this problem. By limiting the Secretary of State’s power to place greater responsibility on a nuclear operator to meet the costs of decommissioning its plants, the new clause could even make the situation worse. It is because of the unpredictable nature of nuclear clean-ups and decommissioning that the Secretary of State must retain the option of adding to the liabilities of companies such as EDF, which boldly lobbied Committee members in support of the original clause 102.

Of course, the cost of an accident could be even higher than the cost of planned decommissioning. The Financial Times reported in April that Toshiba and GE Hitachi have both submitted proposals to clean up and decommission the Fukushima site on the basis that the process is likely to cost billions of dollars. The German Government’s estimate for a severe accident such as the one at Fukushima is €1 trillion. These are unimaginable figures. As a result, there are serious ongoing discussions about the need to raise the EU and UK’s nuclear accident liabilities ceiling from €143 million to €1 billion. As one can see, that still falls well short of the total cost.

I believe that limiting the Government’s power to introduce greater demands on nuclear power companies to cover higher decommissioning requirements could place greater financial burdens on taxpayers and amount to a back-door subsidy for nuclear. The Minister may say that such agreements could still be added under new clause 11. Although that might be technically true, a nuclear operator agreeing to add to its own responsibility for contingency or cost would be a classic case of turkeys voting for Christmas—it would be very unlikely to happen.

I tabled my amendments because I want the Secretary of State to retain the power to modify a decommissioning agreement on his or her own, without requiring the agreement of a plant operator. I also want to ensure that a decommissioning agreement can be modified only to ensure that obligations are added, not removed.

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

I will make a few remarks about amendment 51.

This will perhaps be a rare moment of solidarity with Ministers, as I welcome the position that they have taken on the Home Energy Conservation Act 1995 as it applies to England. The Minister has moved on this issue since the publication of the Bill to retain the statutory provision requiring local authorities to report on their activity with regard to climate change in England. The Minister gave a strong statement on that. I will focus on the importance of the statutory provision.

The situation in Scotland will, of course, be somewhat different if HECA is repealed. I am well aware of the legislative consent motion that was passed in the Scottish Parliament in December 2010. I have no wish to suggest that the Scottish Parliament should not have responsibility for those matters, which are devolved.

In the Public Bill Committee in June 2011, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) made the following statement, which has been reinforced today:

“After we consulted the Scottish and Welsh Administrations, they asked that we continue with the repeal of HECA on their behalf, so it will not apply in Scotland and Wales. The devolved Administrations will, however, continue to work with their local authorities to progress the national energy saving initiatives that they already have in place.”––[Official Report, Energy Public Bill Committee, 21 June 2011; c. 366-367.]

I raise this issue today because some of the energy conservation agencies and environmental lobby groups in Scotland are concerned that what has been put in place in Scotland does not meet the test that statutory guidance would have brought, because the new approach uses voluntary arrangements. While I again put it on the record that the Minister chose to continue the respect agenda for the devolved Administrations, I have some concerns that the Scottish Government and the Scottish Parliament have not fully understood what they need to do to ensure that local authorities continue to act appropriately.

The supplementary guidance on addressing climate change through local housing strategies was last issued by the Scottish Government in March 2011. That guidance accepts that since 1995, the main legislative instrument for addressing energy efficiency has been HECA, which placed a duty on local authorities to set out and report on energy conservation measures in residential accommodation in their areas.

Under HECA, councils have taken a wide range of initiatives to improve the energy efficiency of housing stock in their areas. For example, Glasgow city council developed a comprehensive strategy that included funding programmes, technical assessment tools and staff training programmes. As a result, the council reported that over the 10-year period since HECA was introduced, it achieved reductions of 30.4% in the total energy consumption of housing in its area and a 32% reduction in CO₂ emissions.

The guidance from the Scottish Government states:

“While the progress made by local authorities in reducing emissions under HECA is recognised, in line with a commitment to reduce local authority reporting requirements the Scottish Government and COSLA have agreed that councils should no longer be required to report under the Act, and that instead they will address energy efficiency planning/greenhouse gas emission reduction within their Local Housing Strategies, and where relevant, in Single Outcome Agreements.”

Essentially, what has happened in Scotland is that there has been no statutory provision and that has been replaced by the use of single outcome agreements. For right hon. and hon. Members who are not aware, those are non-binding agreements that the Scottish Government sign up to with each of the 32 local authorities, if indeed one can sign up to a non-binding agreement. Instead of local authorities being required to report, there is now voluntary guidance and a take-it-or-leave-it approach. One can see why some agencies are concerned.

Some of the areas that the Scottish Government, with all due respect to them, thought would be included in the local authorities’ single outcome agreements, perhaps because there was passing mention of them, such as class sizes, teacher numbers and the sale of playing fields, have proved simply to have been warm words, rather than things that were achieved.

Recently, the Scottish Government raised the issue of the future of HECA in their consultation on the energy efficiency action plan. There were a fairly small number of responses—only 28 in total. The majority of those understood that it was time to change HECA and wanted to replace it with a duty on local authorities to report on energy efficiency.

That brings us to amendment 51, which would keep the statutory provision for which HECA provides. I listened carefully to the Minister and I am sure that other Members from Scottish constituencies will have their own views on this. Perhaps it is time to update or replace HECA, as some people argue. I do have concerns about what has happened in Scotland. However, I have no wish to divide the House on this matter as I do not think that that would be helpful at this time. None the less, it is important to put the matter on the record.

Ongoing monitoring of strategies that will improve energy efficiency, reduce emissions and increase resilience to the consequences of climate change in the housing sector should be a priority in Scotland. I therefore hope that my former colleagues in the Scottish Parliament, and indeed the Scottish Government, who I am sure will be avid watchers of this debate, recognise that although they have gone a considerable way in the Climate Change (Scotland) Act 2009 and the voluntary guidance, they should none the less consider the issue again. The Scottish Government should recognise that the UK Government have listened to their request to remove HECA, take their responsibilities seriously, and look at reintroducing statutory provision in Scotland.

[Huw Irranca-Davies (Ogmore) (Lab)]

I love it when we get to technical and miscellaneous amendments. They sound innocuous, but, as the Minister knows, there is a great deal of meat within the details—it is the sort of stuff that we love to agonise over. As we heard from both the hon. Member for Brighton, Pavilion (Caroline Lucas) and my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), there are substantive issues within these proposals.

I shall turn my attention purely to one proposal—we support the Government’s proposals—because I want to pay the Minister and his team some compliments. In respect of Government new clause 11, there was a great deal of debate in Committee on the necessary balance to be struck between certainty for the investor community, and—this is paramount—protection for the taxpayer against the foreseen and unforeseen costs of decommissioning. After a great deal of debate and encouragement from the Committee, the Minister, quite worthily, agreed to remove his measure from the Bill and went away to discuss the options that he could bring back to the House.

I thank the Minister for the way in which he has engaged with Committee members and others, including my hon. Friend the Member for Southampton, Test (Dr Whitehead)—I must single him out. Some of his ideas, including on third-party engagement, have contributed significantly to the ideas behind, if not the drafting of, new clause 11.

The new clause is not perfect, and it never will be, but it makes a very good fist of striking the right balance between looking after the needs of different stakeholders, and—I say this categorically—ensuring that we protect taxpayers. I look forward to the Minister’s response to the remarks of the hon. Member for Brighton, Pavilion, because she made some interesting points. I think the Minister has explained very well the use of the word “prudent”, but I am sure that he will address that and other issues that have been raised.

I thank the Minister, because this is how a Bill should evolve—through constructive engagement. Ministers should take measures away, think about them and listen to all the ideas on the table. He has come back with something that might not be perfect, but it is a massive improvement, on which he and his team are to be congratulated.

[Mr Weir]

I agree with my hon. Friend the Member for Brighton, Pavilion (Caroline Lucas) on nuclear power, which probably does not come as a great surprise to the Minister. I have nothing to add to what she said, because she made her case very well indeed.

I am glad to be able to support Government new clause 12, on transmission charges. It is a very sensible change. I await with interest the outcome of Operation TransmiT. Will Ofgem finally see sense and deal with transmission charges? I am not overburdened with confidence that it will do so, but one lives in hope.

I want to address the points that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) made about the Home Energy Conservation Act 1995. I received a briefing on that from Friends of the Earth, the World Wide Fund for Nature, and the Association for the Conservation of Energy. I would normally be favourable towards those organisations, but I was not impressed by their briefing, which does not give a reason, other than an emotional one, on why HECA should not be repealed.

Very fairly, the hon. Lady said only that some organisations opposed the repeal of HECA, because some do not. Energy Action Scotland, for example, is much less convinced of HECA’s worth. That is the crux of the matter. She and I probably want to get to the same place, and my argument should be seen not as a political one, but one about the methods of getting there.

As I understand it, the Scottish Government want the repeal of HECA simply because they feel that it did not deliver. HECA places a duty on local authorities to set targets, but nothing over and above that. Out of the 32 local authorities in Scotland, only nine have set targets in the 16 years that HECA has been in operation. Despite the fact that the briefing I received describes HECA as the “main driver” for local authority action on energy saving over the past 15 years, the fact that so few local authorities set targets suggests that it was not particularly effective.

15:15

[Cathy Jamieson]

One concern is that even if statutory provision did not act as a driver, a purely voluntary code of guidance would lead to local authorities putting energy saving even further down their list of priorities. Does the hon. Gentleman agree that it is important that the Scottish Government consider how to ensure that targets are set and delivered?

[Mr Weir]

I agree that it is important that targets are set and delivered, but I do not agree that energy saving would necessarily be a lower priority under the guidance system, and I shall explain something about that. As the hon. Lady will know, the Scottish Parliament has often taken a different road from the UK Parliament—the central heating scheme is a classic illustration. Both the previous Administration in Scotland and the current Scottish National party Administration have taken different routes from the UK Government to deal with those matters.

The Scottish Government have decided that they will focus their efforts on each local authority’s housing strategy. As the hon. Lady rightly says, guidance has been issued. They are seeking to make it clear that that strategy and guidance are the driving force behind determining levels of investment in each local authority area—I believe that a significant piece of work was done in the highlands and islands on that basis.

The Scottish Government have also introduced Scottish housing quality standards, which every local authority and housing association must achieve by 2015, and for which an additional £1.5 billion will be spent over the next three years. In a recent case in my constituency, there was a difficulty with lack of insulation, and I took that up with the housing association. It is clear that it is very much aware of the need to react to the 2015 standard. I hope that that problem is resolved before the onset of winter, although time is running out.

The standard has already been achieved in 40% of housing in Scotland. There is still a long way to go, but that is a significant achievement. The standard assessment procedure rating achieved is 7, so clearly the standard is delivering what is necessary in those houses—it is much more effective than HECA in doing so.

In addition, the Scottish Parliament has passed the Climate Change (Scotland) Act 2009, which is acknowledged as world-leading legislation. The Act will drive much of what is done in Scotland. The £33 million energy assistance package has helped 150,000 people on low incomes to reduce their bills since 2009. One in six Scottish homes—a total of 145,000—have been visited for a home energy check, and there have been almost 18,000 installations. The EAP has been extended to help the most vulnerable. In addition to helping pensioners, the scheme has been extended to include disabled families with children under five, disabled children under 16, those with severe disabilities, and those who are terminally ill. The £50 million warm homes fund will also be introduced to help.

In addition to the EAP, the Scottish Government are providing £12.5 million in 2011-12 to support local councils to deliver area-based insulation to save households money, reduce emissions and tackle fuel poverty. It is hoped that councils will target areas across the country that are most in need of free insulation and other energy efficiency measures. The Scottish Government are working with local authorities to help to target the areas that are most in need, which is very much welcomed by Energy Action Scotland.

I am pleased to hear that the hon. Member for Kilmarnock and Loudoun will not press amendment 51 to a Division, but I ask hon. Members to realise that Scotland is doing things differently. In many ways, HECA has been overtaken by events in Scotland, which is why the Scottish Government want it repealed. They want repeal not because of a desire to avoid the implications of HECA, but because they have moved in another direction. Interestingly, the Scottish Government and the Labour Government in Wales have taken a similar view. We might be going in different directions, but I hope that we are all going towards the same goal of making our homes warmer and eradicating fuel poverty among our populations.

[Dr Whitehead]

I want to comment briefly on new clause 11 and, in doing so, echo the remarks of my hon. Friend the Member for Ogmore (Huw Irranca-Davies). With hindsight, it has been recognised that the clause concerned, which was originally pretty flawed, has been substantially strengthened and clarified as a result of its withdrawal, the discussions that followed and its emergence on Report as new clause 11. In Committee, widespread concern was expressed about that flawed clause on the grounds that it sought to replace an arrangement under the Energy Act 2008 that enabled the Secretary of State unilaterally to invoke sections 48 and 49 of the Act for the modification of a decommissioning programme regardless of any agreement made previously.

The original clause would have replaced that provision with an arrangement that appeared to enable the Secretary of State to waive the ability to make programme modifications, if circumstances changed, by making an agreement when the licensing agreement was first adopted binding him or herself in perpetuity regardless of the objective circumstances in place after the original agreement. That was clearly not satisfactory. I accept that, for logical reasons, it is difficult to place the words “unforeseen circumstances” in legislation—clearly we do not know what those would be—but I think that the question of when a programme ceases to become prudent could be better addressed.

I would be grateful if the Minister clarified a couple of issues relating to the wording of the new clause that might be referred to should a modification action be undertaken by people seeking to understand what the clause really means. I appreciate that, as I have mentioned previously, the background to the new clause is similar to the Marx brothers’ form-guide sketch in “A Day at the Races” in which they have to refer to a large number of separate documents to understand where they were in the first place. Nevertheless, I would be grateful if he confirmed that the Secretary of State may act, by him or herself, to point out that a decommissioning programme subject to the new clause had ceased to be prudent and say, “It appears to me that this programme has become imprudent and therefore needs modification.”

What those modifications might consist of would be a matter for negotiation and discussion with the site licensee. If points in the modification programme could not be agreed, a third party could come in, under proposed new subsection (3D), to determine how those points might best be resolved. When the third party—as the Minister emphasised, it would be an independent party—has resolved those previously unresolved issues, the Secretary of State would, under the proposed new subsection, be

“bound by such a determination”.

It is clear, however, that under administrative law the Secretary of State would not be able to undertake an agreement unless he was satisfied that there was adequate provision for the modification of the programme, including the understanding that the site licensee would also be bound by what the third party had determined.

It would not be logical or reasonable for the Secretary of State to undertake a programme that would enable the licensee to escape being bound by the consequences of a determination of modification and therefore simply not undertake any action relating to those modifications, even after they had been agreed. That is my understanding of the new clause. I would be grateful if the Minister confirmed that and placed it on the record that the process would lead to an agreed modification programme that could be instituted by the Secretary of State, but mediated by a third party, after a programme had been judged to be no longer prudent on a different programme of decommissioning.

[Charles Hendry]

I am grateful to hon. Members for participating in the debate. I was surprised by how many of them paid tribute to the Government for listening so hard and making changes—I almost started to wonder whether we had done too much of it. Nevertheless, we remain firmly of the view that the Bill is better as a result of the changes made. I give particular credit to the hon. Member for Southampton, Test (Dr Whitehead) for his work with the hon. Member for Ogmore (Huw Irranca-Davies), and I thank them both for their constructive engagement in getting us to where we are, which, as I said, is better than where we started. It is perhaps an early birthday present for the hon. Member for Southampton, Test—I believe that his birthday is tomorrow—and the House can celebrate by recognising his contribution.

I am grateful to the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) for her comments about the changes that we have made to HECA. Listening to the discussions on the Opposition Benches about how best to address these matters in Scotland, I felt like we were intruding on family grief. However, I have no intention of doing that because they are matters that will properly be resolved by the Scottish Government. Nevertheless, we have to accept that the legislative consent motion is essentially an on/off switch. One either has to have HECA or get rid of it; one cannot have a little bit of HECA or have a different element within it. My understanding from our discussions is that the Scottish Government want to address these issues differently, using different mechanisms. We absolutely respect their right to make those decisions, and the changes in the Bill will simply make that possible.

The bulk of this debate inevitably focused on the nuclear clauses. The hon. Members for Brighton, Pavilion (Caroline Lucas), for Angus (Mr Weir) and I will never agree on the principles of nuclear, but we all want to make sure that if nuclear power stations are built in the United Kingdom, that should be genuinely without subsidy and we should have extremely strict controls on decommissioning, safety and a range of other issues.

15:30

There is also a fundamental disagreement between us. We recognise that if investors are to have confidence in the decommissioning programmes, they must feel certain that those programmes cannot be changed at will or on a whim by the Secretary of State at some subsequent date. That was the flaw in the earlier legislation, which we are trying to address. It gave a power at any time for the then Secretary of State to say, “We’re going to change these rules,” and there would have been no right for a company which thought it had a commitment and an agreed programme to resist that. What we sought to do, and what I hope we have achieved, is to agree the right balance between the powers of the Secretary of State and the guarantees and undertakings necessary for the companies involved.

[Caroline Lucas]

If the liabilities are fixed so that uncertain messages are not being given to the investors, but the costs rise in an unforeseen manner, how is that not a subsidy if the person who is going to meet the difference between the liabilities and the real cost is not the taxpayer?

[Charles Hendry]

The hon. Lady raises an entirely separate issue. A funded decommissioning programme is constantly reviewed. If there is evidence that not enough money has been put aside for decommissioning issues, that money will have to be increased. The operators entirely accept that if the costs rise, they will have to contribute more towards the decommissioning pot. The new clause is about whether the Secretary of State should be able to say, “You know, I’ve decided that rather than you putting that money into a pot over 20 years, I’d like it in 12 months.” That would be a fundamental change which, under the existing legislation, the companies would not have been able to challenge. There will be no change in the measures ensuring that enough money is put into the decommissioning pot. If that goes up or down, the amount put in will have to reflect that. That is not touched in any way by the changes that we are making through the Bill.

On the hon. Lady’s new clause 17, at present anybody can write to me as a Minister and say, “We don’t think this is adequate,” and we will consider that. That, as she says, would not be a legal power, but an advisory power. It would still be for the Secretary of State to decide whether to take it forward. The Secretary of State has a number of choices. He can choose to modify, to modify in part or to take no action, so considerable power rests with him.

That comes to the heart of the questions that we were asked by the hon. Member for Southampton, Test. There is something vaguely Rumsfeldian about the concept of unforeseen. What are foreseen unforeseen circumstances and what are unforeseen unforeseen circumstances? I think we have been wise to move away from that. A prudence test is a better one, which both Government and industry are more comfortable with. The Secretary of State will have the power to make those decisions, but we will also make clear in those programmes the role of the third parties.

We have had a considerable amount of discussion with the hon. Gentleman about the nature of those third parties. It would clearly have to be somebody who was acceptable both to the Government and to the operators and who was not prejudiced towards one side or the other. That is a role that the Government are used to developing. The Secretary of State would have significant powers but there would also be a role for third parties. Critically, the Government and the operator would be bound by the decision of the third party. This gives the extra degree of certainty and comfort that the hon. Gentleman sought. I hope we have been able to reassure him.

We have had a useful exchange. I thank the official Opposition for the constructive way in which they have engaged with the issue, so that the nuclear aspects of the Bill are stronger and more effective than they were before.

Question put and agreed to.

New clause 11 accordingly read a Second time, and added to the Bill.

New Clause 12

Adjustment of electricity transmission charges

‘In section 185(11) of the Energy Act 2004 (areas suitable for renewable electricity generation: end date for schemes adjusting transmission charges) for “2024” substitute “2034”.’.—(Charles Hendry.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 13

Consultation

‘A requirement for the Secretary of State to consult which arises under or by virtue of this Act may be satisfied by consultation before, as well as consultation after, the passing of this Act.’.—(Charles Hendry.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Energy efficiency aim

‘(1) The principal purpose of this Part is to deliver energy savings from the building stock which will make commensurate contributions to—

(a) the fulfilment by the Secretary of State of the duties under section 1(1) (reduction of net UK carbon account by 2050) and section 4(1)(b)(carbon budgets) of the Climate Change Act 2008; and

(b) the elimination of fuel poverty by the target date required by section 2(2)(d) of the Warm Homes and Energy Conservation Act 2000.

(2) In performing functions under this Part the Secretary of State will have regard to—

(a) the principal purpose set out in subsection (1) above, and

(b) the recommendations from time to time of the Committee on Climate Change where these are adopted by the Secretary of State.’.—(Luciana Berger.)

Brought up, and read the First time.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

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

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 2—Duty of the Secretary of State to improve energy efficiency—

‘(1) The Secretary of State must prepare and publish a plan for achieving the principal purpose set out in section [Energy efficiency aim] in England.

(2) The plan must establish specific aims and describe the proposed means of achieving them, together with methods of reporting on progress towards meeting them.

(3) Where an aim is designated under this section, the Secretary of State must take all reasonable steps to achieve the aim.

(4) The plan prepared under subsection (1) must be published no later the 12 months after the day on which this section comes into force.

(5) The Secretary of State must, as soon as reasonably practicable after publishing a plan under this section lay it before Parliament.

(6) The Secretary of State must, within one year of each order setting a carbon budget under section 8(1) of the Climate Change Act 2008, review the plan prepared and published under this section.

(7) Where, following a review under subsection (6), the Secretary of State varies the plan, he must, as soon as reasonably practicable after so doing, publish the plan as so varied.’.

New clause 3—Carbon emissions in local authority areas—

‘(1) Within 12 months of this Bill receiving Royal Assent the Committee on Climate Change shall advise the Secretary of State about—

(a) the scale of action needed in local authority areas to help meet UK Climate Change Act carbon budgets;

(b) climate mitigation and adaptation policies that are effective when locally co-ordinated by councils.

(2) The advice given under subsection (1) should include but not be limited to—

(a) carbon emissions from a local authority’s own buildings and operations;

(b) carbon emissions from the local area;

(c) local renewable energy generation;

(d) national carbon reduction initiatives delivered at the local level

(3) The Committee on Climate Change may advise the Secretary of State on local level adaption to climate change to ensure that individual local carbon budgets are both appropriate for the circumstances of different local areas that the totality of all local carbon budgets is consistent with the requirements of subsection (1)(a).

(4) The Secretary of State must lay before Parliament a response to the advice given by the Committee on Climate Change under subsection (1) or (2), within six months of receiving the advice.

(5) For the purposes of this section—

(a) “budgetary period”, “carbon budget” and “national authorities” have the same meaning as in Part 1 of the Climate Change Act 2008;

(b) “local authority” means a county council or district council in England, or a London borough council, or the Council of Isles of Scilly.’.

New clause 4—Climate change strategy for local authority areas—

‘(1) Local authorities must develop and promote a climate change strategy for their local area.

(2) In preparing the strategy, local authorities must take into account any advice given by the Committee on Climate Change on local action to meet carbon budgets.

(3) In preparing the strategy, local authorities must consult with local residents, businesses, social enterprises and co-operatives and other institutions.

(4) Local authorities must publish and promote their local climate change strategy, publish an annual report on progress towards carrying out the strategy and engage with local citizens and community groups.

(5) The Secretary of State must work with local authorities and the Local Government Association to assist them in producing and implementing their climate change strategies, taking into account any relevant advice from the Committee on Climate Change.’.

New clause 7—Supplementing the Energy Company Obligation—

‘(1) The Secretary of State must, within six months of this Bill receiving Royal Assent, report to Parliament with proposals on the ways in which the Energy Company Obligation could be supplemented by—

(a) revenues from the European Emissions Trading Scheme;

(b) revenues from the Carbon Floor Price;

(c) an additional tax on the profits of gas transporters and suppliers, and electricity generators, distributors and suppliers; and

(d) such other funds as the Secretary of State considers appropriate.

(2) In considering the supplement to the Energy Company Obligation that may be made by the sources of funds listed in section (1) the Secretary of State must include an estimate of—

(a) the extent to which the additional sources of funds listed in subsection (1) could increase the contribution made by a carbon emissions reduction target and a home-heating target to meeting—

(i) the carbon budgets established under the Climate Change Act 2008; and

(ii) the fuel poverty target established under the Warm Homes and Energy Conservation Act 2000.

(b) the extent to which the additional sources of funds listed in subsection (1) could allow the Secretary of State to increase the level of a carbon emissions reduction target and a home-heating cost reduction target without increasing the cost of household gas or electricity bills.

(3) The proposals reported under subsection (1) of this Clause must include an assessment of the extent to which the Energy Company Obligation could make a greater contribution to—

(a) the carbon budgets established under the Climate Change Act 2008, and

(b) the fuel poverty target established under the Warm Homes and Energy Conservation Act 2000

if charges levied on consumers’ bills under this obligation were levied on a per kilowatt hour basis.

(4) The assessment made under subsection (3) must take into account the effect on equity for those living in fuel poverty of levying charges on consumer bills under the Energy Company Obligation on a per kilowatt hour basis.’.

New clause 18—Disclosure of information for the purpose of reducing fuel poverty—

‘(1) The Secretary of State may by regulations make provision authorising the Secretary of State, or a person providing services to the Secretary of State, to supply relevant persons with social security and tax credit information about persons in receipt of welfare benefits.

(2) In this section “relevant person” means—

(a) a person who holds a licence under section 6(1)(d) of the Electricity Act 1989 (c. 29) or section 7A(1) of the Gas Act 1986 (c. 44) (supply of electricity or gas to premises), or

(b) a person providing services to the Secretary of State or to a person within paragraph (a).

(3) Regulations under this section must specify the purposes for which information may be supplied by virtue of subsection (1), which must be purposes in connection with reducing fuel poverty or making homes more energy efficient.

(4) Regulations under this section may authorise the supply of information by a relevant person to the Secretary of State or another relevant person—

(a) for the purpose of determining what information is to be supplied by virtue of subsection (1), or

(b) to enable information supplied to a relevant person by virtue of subsection (1) to be used by that or another relevant person for purposes within subsection (3).

(5) Regulations under this section may—

(a) make provision as to the use or disclosure of information supplied under the regulations (including provision creating criminal offences);

(b) provide for the recovery by the Secretary of State of costs incurred in connection with the supply or use of information under the regulations.

(6) In this section—

(a) “social security information” means information held by or on behalf of the Secretary of State and obtained as a result of, or for the purpose of, the exercise of the Secretary of State’s functions in relation to social security;

(b) “tax credit information” means information held by or on behalf of the Secretary of State and obtained as a result of, or for the purpose of, the exercise of the Secretary of State’s functions in relation to tax credits;

(c) “welfare benefit” means any prescribed benefit, allowance, payment or credit.’.

New clause 19—Additional information provided by energy suppliers—

‘The Secretary of State shall make provision for energy suppliers to—

(a) ensure a generic signpost message is displayed prominently on all customer bills from 1 December 2011, detailing how customers may be able to reduce their energy bills,

(b) ensure a letter reaches all of their customers by 1 December 2011, clearly detailing the extent to which customers overpay or underpay compared to that supplier’s cheapest standard direct debit tariff,

(c) implement, by 1 December 2012, the findings of research undertaken on the efficacy of—

(i) a generic signpost message, to be displayed prominently on customers’ bills;

(ii) a more detailed message, quoting pounds saved depending on payment method and tariff, as influenced by the customer’s actual usage over a 12-month period where appropriate;

in encouraging customers to switch to that supplier’s cheapest standard tariff available.’.

Amendment 2, in clause 42, page 27, line 37, after ‘landlord’, insert ‘, or his appointed agent,’.

Amendment 3, page 28, line 4, after ‘may not let’, insert

‘, let on behalf of the landlord as his appointed agent or market to let’.

Amendment 4, page 28, line 7, at end insert

‘such that the property shall not fall below the level of energy efficiency specified in subsection (1 )(c).’.

Amendment 5, page 28, line 13, after ‘“let the property”’, insert ‘and “market to let”’.

Amendment 19, page 28, line 31, at end insert—

‘(5A) The first domestic energy efficiency regulations shall be made no later than 30 September 2012.’.

Amendment 47, page 28, line 33, leave out ‘April 2018’ and insert ‘January 2016’.

Amendment 6, page 28, line 33, leave out ‘2018’ and insert ‘2016’.

Amendment 48, in clause 45, page 30, line 36, leave out ‘April 2016’ and insert ‘January 2013’.

Amendment 7, page 30, line 36, leave out ‘2016’ and insert ‘2013’.

Amendment 8, in clause 46, page 31, line 4, at end insert—

‘(e) any protections to be afforded to a tenant making a request under the regulations, including, if the Secretary of State considers it appropriate, the circumstances in which no notice under section 21(1)(b) or (4) of the Housing Act 1988 may be given pending the outcome of the request.

‘(1A) In determining whether it is appropriate to make provision under subsection (1)(e), the Secretary of State shall take into account the advice of any relevant body or bodies.’.

Amendment 24, in clause 70, page 52, line 28, at end insert—

‘(ab) to publish a report setting out the intended impact of a carbon emissions reduction order or a home-heating cost reduction order on fuel poverty and on the energy efficiency of domestic properties of different tenures.’.

Amendment 25, in clause 73, page 55, line 11, at end insert—

‘(2A) The Secretary of State may in addition require the register referred to in subsection (1) to record information on—

(a) the tenure of each property; and

(b) in the case of a domestic PR property, the name and address of the landlord.’.

Amendment 23, in clause 74, page 55, line 43, at end insert—

‘(2A) The Secretary of State may in addition require the register referred to in subsection (1) to record information on—

(a) the tenure of each property; and

(b) in the case of a domestic PR property, the name and address of the landlord.’.

Amendment 1, in clause 107, page 88, line 33, after subsection (1) insert—

‘(1A) In setting out the extent to which the green deal plans under Chapter 1 of Part 1 and energy company obligations have contributed to the Secretary of State fulfilling the duty under section 4(1)(b) of the Climate Change Act 2008 (carbon budgeting), the Secretary of State must if necessary explain why the appropriate contribution has not been made and the additional measures he will bring forward.’.

Amendment 9, in clause 108, page 89, line 6, leave out ‘residential accommodation’ and insert ‘buildings’.

Amendment 10, page 89, line 8, at end insert

‘in such a way as to ensure that the energy efficiency of buildings makes its optimal contribution to the delivery of a low carbon energy system at least cost.’.

Amendment 11, page 89, line 9, leave out subsection (2) and insert—

‘( ) In subsection (1) “energy system” means the production, transmission, distribution, storage and consumption of energy.’.

Amendment 12, page 89, line 14, at end insert—

‘(5) The Secretary of State must within 12 months of the passing of this Act publish a report on the steps that he has taken and proposes to take to discharge his duty under subsection (1).’.

Amendment 21, page 89, line 14, at end insert—

‘(5) For the purpose of assisting the Secretary of State to fulfil his duty pursuant to this section, each energy conservation authority must—

(a) take reasonable steps to increase the installation of energy efficiency improvements in residential accommodation in its area;

(b) involve persons and communities in its area in seeking to increase the installation of energy efficiency improvements in its area; and

(c) include a description of the steps it has taken pursuant to this section in its report pursuant to section 2 of the Home Energy Conservation Act 1995.

(6) An energy conservation authority must also consider whether, as a means of assisting the Secretary of State to fulfil his duty pursuant to the Climate Change Act 2008, it would be cost effective to draw up a sustainable energy plan for its area.

(7) In this section—

(a) “energy conservation authority” has the same meaning as in the Home Energy Conservation Act 1995;

(b) “energy efficiency improvements” are such measures as are specified by section 2(4), (5) and (6) of this Act; and

(c) “a sustainable energy plan” is a plan promoting energy from sustainable or renewable sources.’.

[Luciana Berger]

With so many households struggling under the weight of increased energy bills and fuel poverty at record levels, improving the energy efficiency of our nation’s building stock and reducing our energy use has never been more important. A successful green deal scheme would offer protection to worried consumers hit by unfair gas and electricity price rises and reduce our country’s damaging carbon emissions. As they stand, however, the Government’s proposals lack detail, fail to provide clarity to businesses and risk being inadequate. The new clauses and amendments that we have tabled for debate today seek to rectify the Bill’s weaknesses.

Since the Bill was first published last December, we have endeavoured to work constructively with Ministers to improve the proposals, not just because the green deal was born out of pilots begun under Labour in government, but because we recognise the urgent need to improve energy efficiency across our country. We are disappointed that the Bill did not receive Royal Assent before the summer recess, as the Government promised it would. Meeting that deadline was used by Ministers as a justification for expediting debate during the Bill’s previous stages. In addition, the large volume of secondary legislation involved calls into question whether the green deal will be up and running by October next year, which has been set as the Government’s deadline.

We offered a raft of proposals in Committee to increase consumer protection, boost small businesses and provide extra support for those struggling to heat their homes. Our vision of the green deal is one where co-operatives, small businesses, charities and social enterprises can compete equally alongside large companies that want to take part in the scheme. Our vision is of a scheme that supports Britain’s 2 million small businesses, rather than simply leaving them with warm words and empty order books, which is what the Government risk doing. The Government voted against our vision, although I am delighted that Ministers did not oppose our proposal for a green deal apprenticeship scheme. I assure the Minister that all of us on the Labour Benches will be joining him at the next general election to champion the Government’s policy—Labour’s green deal apprenticeship scheme.

Despite that victory, we still have huge concerns that the Bill will not be as effective as it should be. As a result, we have tabled the new clauses and amendments in this group, which, if passed, would define the scale and purpose of the green deal. They would incentivise councils and engage local communities in the fight against climate change, give businesses the confidence to invest by linking the scheme to the UK’s statutory carbon reduction targets, and end the misery for the hundreds of thousands of men, women and children who are left freezing, shivering under their blankets because they live in cold homes that are not fit for the 21st century.

Labour’s new clauses 1 and 2 would address the lack of clarity in the Bill, better define the purpose of the green deal and ensure that businesses have the clarity and confidence they need in the green deal scheme. Together with amendment 1, our new clauses would explicitly link the green deal to meeting the UK’s targets in our carbon budgets and our fuel poverty targets. New clauses 1 and 2 would place a duty on the Secretary of State to produce a plan for improving energy efficiency and a duty on the Government to report to Parliament on the green deal’s progress towards achieving carbon reductions.

We have heard many soundbites from Ministers about the green deal, such as their description of it as “the biggest home improvement programme since the second world war”, but the Bill contains no strategy for delivering it. We have heard today about the 14 million homes to be improved by 2020, yet we have seen no way to measure whether the green deal is delivering the refit of 4,800 properties a day, or 145,000 a month. None of that is in the Bill. As it stands, there is a danger that the green deal will not live up to the hype. I do not relish saying that: the Opposition want the Bill to be better, not worse, and we want the green deal to succeed, not fail. That is why we believe the Government must go further.

We are not the only ones voicing legitimate concern. After Committee, 51 organisations, including the World Wildlife Fund, Asda and the Federation of Small Businesses, sent a letter to the Secretary of State setting out the concerns that they still had about the Bill. They wrote:

“the debate during the Committee Stage of the Energy Bill has left us concerned that the energy saving programme is not yet guaranteed to be a coherent and ambitious programme, and that the Bill requires further significant improvements. We believe there needs to be an over-arching energy saving plan from the Government to ensure clarity of what is needed to be delivered by the market…Business will find it difficult to be in a position to deliver towards the Government’s aspirations on the Green Deal without this further clarity and certainty.”

The letter concluded:

“It is our view that the Government amendments need to go significantly further and currently do not deliver on the principles reflected in the Warm Homes Amendment. They do not deliver a policy ambition equivalent to the Government’s aspirations or ensure the provision of a plan to cut carbon emissions from buildings and contribute to eliminating fuel poverty.”

The letter proposes three ways to improve the Bill. The first is that

“an aim must be clarified in the Energy Bill that is tied to meeting the target set under…the Climate Change Act 2008, and importantly the individual carbon budgets. The aim must also be tied to the elimination of fuel poverty.”

The second is that an

“amendment to prepare and publish a plan to deliver these aims must be included in the Energy Bill.”

The third proposal is that a

“reporting amendment should ensure…the energy saving programme is linked with other…requirements”.

All three improvements could be made today if the Government accepted our new clauses.

The letter is signed by organisations as diverse as B&Q, Marks and Spencer, Friends of the Earth, the Co-operative Group and the National Insulation Association—the very organisations and businesses that the Government hope will deliver the green deal. Environmental groups, businesses and trade associations are all telling the Government the same thing: “You haven’t got this right. You need to go further.” They are asking the Government to do what the Opposition have suggested in this House and in the other place, but we are now running out of opportunities for the Minister to listen and change his mind.

In Committee, the Government added clause 108 to explain their ambitions for the green deal better, but unfortunately it is inadequate. The clause contains no qualified level of ambition and excludes non-residential properties. By repealing section 2 of the Sustainable Energy Act 2003 and introducing clause 108 to the Bill, the Government are in fact diluting existing energy efficiency requirements. That is why we have tabled amendment 1, alongside new clauses 1 and 2, to ensure that the Government’s green deal definitely results in real carbon reductions. We will press new clauses 1 and 2 to a vote if Government support is not forthcoming, because they are crucial to the success of the programme.

New clauses 3 and 4 would ensure that Britain’s transition to a low-carbon economy is fair. They would place power into the hands of councils and give them the freedom and flexibility to engage with local communities in finding innovative solutions to tackling climate change. They would boost the economy and create jobs by encouraging investment in green businesses. In practice, they would establish a three-stage process. The first part would involve the independent Committee on Climate Change examining the carbon output in every locality and assessing what reasonable action could be taken to reduce carbon emissions; those data would then be used by councils and central Government to agree a local carbon strategy, providing a road map for how the area would reduce its emissions. The local authority could use the strategy to engage the local community and voluntary groups in efforts to reduce carbon emissions and improve energy efficiency.

That idea is not new. The previous Labour Government introduced a pilot programme involving nine councils in January 2010. I am pleased that the Minister announced in Committee that further pilots were to follow, but what we are proposing would allow us to take advantage of economic opportunities that we are failing to exploit. The Federation of Small Businesses, speaking in support of local carbon plans, argues:

“Small businesses are keen to go green…but are not getting the help or incentives they need to do so”.

It goes on to say that they need

“a framework that is flexible and supportive to encourage small businesses rather than penalise them.”

Our new clauses would provide such a framework. They would provide certainty about the scale of carbon reductions locally while allowing local authorities to retain flexibility on how they go about achieving the cuts. It is vital that businesses play an integral role in tackling climate change. According to the FSB, at least one third of the UK’s emissions are from businesses, and the Carbon Trust estimates that 20% of the UK’s emissions are from small and medium-sized enterprises. The FSB calculates that if all UK businesses and public sector organisations install energy-efficient measures, at least £3.6 billion could be saved every year, thanks to the reduction in energy consumption. As well as helping businesses to cut energy usage and reduce costs, estimates of the potential for low-carbon job creation are significant.

15:45

Research by Carbon Descent estimates that 70,000 jobs in energy efficiency and renewable energy could be created across the country if all local authorities set about reducing emissions in their areas by at least 40% by 2020. It is easy to see why the proposals have a wide backing both from business and environmental groups, including Friends of the Earth, the Federation of Small Businesses, the TUC, Good Energy, B&Q, the Stop Climate Chaos coalition and, most importantly, local government.

Rather than being seen as a burden by local councils, these proposals have a broad range of backing across local authorities. In March, 40 council leaders from across the political spectrum called for the introduction of local carbon plans. For many councils, the plans build on work they are already doing. By pledging to cut carbon emissions by 40% by 2020 or rolling out grant-funded renewable installation schemes, councils of all political colours—in Liverpool, Manchester, Birmingham, Brighton, Islington, West Sussex and Bristol—are leading the way. Although some councils are making good progress, it is clear that others need to do much more. Any advice to councils from the Committee on Climate Change needs to be meaningful. The level of carbon reductions recommended must be in line with our national carbon budgets and we need to ensure that councils share best practice and policies that successfully deliver local emission reductions, as well as advise each council on the steps that it could take to meet its plan.

The proposals in the new clauses will empower local councils, engage local communities and enhance local economies. They offer a fair way to meet our national climate change targets. We recognise that not every part of our country is the same and that we all need to share the same aim. Ultimately, every one of us needs to do our bit to tackle climate change. We need to go further; we need local carbon plans.

Amendments 47 and 48 would bring forward from 2018 to 2016 the introduction of a minimum standard of energy efficiency in the private rented sector, in line with the UK’s legal target to eliminate fuel poverty. We welcomed the Government’s announcement on Second Reading that they would introduce a minimum standard of energy efficiency for the private rented sector, but we do not believe that a 2018 deadline is adequate; we need to go much faster.

According to the Government, half the properties in the private rented sector are not considered to be of a decent standard. It cannot be right in the 21st century that people are forced to live in unfit homes that they cannot afford to heat. About 1.3 million children live in cold homes. The Marmot review found that this makes them twice as likely to suffer from respiratory problems than children living in warm homes. Anyone who watched the recent BBC documentary, “Poor Kids”, will have seen the haunting footage of Sam who, at the age of 11, said:

“When the gas runs out, the whole house is freezing.”

We must urgently address that problem.

The UK has a legally binding target of eliminating fuel poverty by 2016. How can the Government not introduce the efficiency standard in time to help reach that goal? We know that fuel poverty is at record levels. In July, uSwitch published research showing that a staggering 6.3 million homes across the UK are paying 10% or more of their disposable income towards their energy bills. That means that almost a quarter of all households—24%—find it hard to afford to stay warm. Most worryingly, those figures do not take into account the huge price rises announced over the summer. When those increases hit, the number of people in difficulty will increase dramatically. That should be a wake-up call to the Government. Instead, over the past year, the Government have systematically removed support for fuel-poor households—from scrapping the Warm Front scheme to cutting winter fuel payments by up to £100. They have an opportunity to go some way to rectifying their record by bringing forward the introduction of the minimum efficiency standard.

By ensuring that poor-quality F and G-rated homes are no longer allowed on the rental market, the amendments would improve the living standards of thousands, many of whom are forced to live in the cold simply because their landlords do not know what improvements can be made, or because the owners of properties refuse to improve them. The amendments would end that sooner rather than later, and we sincerely hope that Ministers will support them. The 2016 target still allows adequate time for landlords to be made aware of the changes and to improve their properties.

Amendments 23 and 25 would establish a national landlords register to ensure that the minimum standard is enforceable. A register tightly defined as being for the purpose relevant to the Act would reduce enforcement costs, increase compliance, and help landlords to gain access to appropriate information about the green deal and other schemes such as the landlords energy-saving allowance. It would also leave rogue landlords unable to avoid improving their properties, and with nowhere to hide.

I hope that Ministers will consider carefully the changes that we are proposing, which are intended to improve on what is already in the Bill. I thank the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), for the way in which he has dealt with Opposition Front Benchers during the progress of the Bill. It was necessary for us to meet him on several occasions and although we did not always agree on the best way forward, he was always courteous in his dealings with us, and I thank him for that.

Our new clauses and amendments would substantially strengthen a Bill that lacks clarity and detail. They would make improving the energy efficiency of our building stock a key part of our strategy for meeting the United Kingdom’s carbon budgets. They would put local communities at the heart of tackling climate change, boost small businesses and non-profit-making organisations —particularly co-operatives and charities—and provide extra support for those who struggle to stay warm. I urge the Government to accept them.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I have now to announce the result of a Division deferred from a previous day. On the motion relating to access to a lawyer, the Ayes were 303 and the Noes were 192, so the Question was agreed to.

[The Division list is published at the end of today’s debates.]

[Mr John Baron (Basildon and Billericay) (Con)]

I want to speak to new clause 19, to which my name is attached.

There is much evidence to suggest that too many customers are overpaying for their energy and failing to take advantage of the best offers from energy suppliers. The coalition agreement rightly contains a commitment that energy suppliers will provide information about cheaper tariffs on the bills and statements that they send to their customers, but although energy bills have become longer, evidence suggests that the additional information has had only a limited effect in encouraging customers to switch to cheaper tariffs. What is required is much clearer information on tariffs, tailored to a customer’s actual usage and payment option, to help customers to move to a company’s cheapest tariff. New clause 19 aims to make that a reality.

The case for more clarity on bills is very strong. The average annual energy bill has doubled since 2004; bills have risen significantly this year alone, and may do so yet again before the winter. According to analysis by Which?, the cost of energy is the number one financial concern of nine out of 10 customers. It is of particular concern to the vulnerable in society, especially those who live in fuel poverty. Estimates of their number vary, but I do not think there is any disagreement on the fact that there are between 5 million and 6 million of them.

The problem is that tariff structures are too complex. According to Ofgem’s retail market review, well over 300 tariffs were available to customers at the beginning of 2011. Research by Ofgem and Which? has found that people are baffled by not just the number but the many components of energy tariffs, such as standing charges, tiered rates, discounts and cashback offers. Ofgem calculates that one third of those who switch do not achieve a price reduction, although the vast majority switch in order to save money. That fuels cynicism in the energy market. Only one in three customers trusts the supplier to sell them the best tariff, and Ofgem believes that as many as six in 10 energy customers are inactive, many being completely disengaged from the energy market and potentially paying over the odds.

A further complication is that different payment methods have different outcomes. According to Ofgem, a customer who at the beginning of last year had changed their payment method from standard credit—paying on receipt of a bill—to direct debit could have saved more than £120. Which? estimates that more than 11 million households could benefit from switching to a direct debit payment method. I do not claim that all such households would want to, or that all would be able to, because many do not have a bank account, but that figure is great enough for this issue to warrant closer scrutiny.

[Jim Shannon (Strangford) (DUP)]

Clarification is needed on the green deal and prepayment meters, which are a method that households can use to manage their budget.

[Mr Baron]

The hon. Gentleman makes a decent point. There is a lack of clarity on a range of issues. We want to encourage people to get on to their company’s cheapest standard direct debit tariff. We must try to ensure that bills are clearer, otherwise people will continue to pay too much for their energy.

[Graham Jones (Hyndburn) (Lab)]

I am concerned that some people with prepayment meters will not be able to switch to direct debit. What is the hon. Gentleman’s view on prepayment meters? People will load up and pay heavily on the meter in the winter, but budget and save in the summer. Under the green deal, payment rates will now differ, however. By the end of the summer, people may have a backlog in what is effectively a standing charge on the green deal.

[Mr Baron]

That is a fair point, but I would say in reply that we need greater clarity on bills on the availability of cheaper tariffs depending on payment method, which would include prepayment. We are not getting that at present. At best, we are getting generic messages saying, in effect, “You may be able to save money if you ring this number,” but the evidence suggests that such messages are not sufficiently strong to incentivise people to find the cheapest tariff. New clause 19 addresses that specific point.

In the Retail Market Review, Ofgem stated its disappointment that the energy suppliers have not abided by what it considers to be the spirit of its post-2008 Energy Supply Probe standards of conduct, and that they have not always made details about switching as prominent as they might—although some companies have gone further than others. Ofgem is therefore frustrated about the lack of progress in this area.

Having questioned both the previous and the current Governments about the need to do more in this area, I was pleased to see a coalition commitment that energy suppliers should provide information about cheaper tariffs on the bills and statements they send to their customers. In October last year, I sent a letter to the Secretary of State suggesting a solution to these problems, which involved energy suppliers printing clearly on customers’ bills how much money they would save if they were on their supplier’s cheapest standard tariff, assuming different payment methods. I felt that talking about pounds, shillings and pence—I was brought up in the pre-decimalisation era—sent a much stronger message than giving just general signposting information.

Discussions followed and in June 2011 I was invited by the Minister of State to chair a billing stakeholder group to make recommendations about the implementation of the coalition agreement commitment. The group comprised representatives from the Department, from ERA—the energy retail association, representing the energy suppliers—and from consumer groups such as Which?, Consumer Focus, Citizens Advice and Ofgem. Useful meetings were held over the summer and I thank all the members of the group for their contributions.

16:00

During that process, two proposals emerged. The first, suggested by ERA, was for a generic signpost message, including a telephone number or website that customers could use to find cheaper tariff options, to be displayed prominently on customer bills. The second proposal reflected the view of Which? and my proposal in my letter of 18 October 2010 for a more tailored message on customers’ bills. This message would quote pounds, shillings and pence saved, depending on the payment method and tariff, as determined by the customer’s actual usage over the previous 12-month period, where appropriate.

[Tessa Munt (Wells) (LD)]

I am particularly concerned and exercised about people who never receive a bill, particularly pre-payment meter customers or card meter customers. Of course, there is the opportunity to have a large message printed on the receipt printout that one receives when paying at an outlet, and I hope that that option is included in the proposals. Also, there may be the option of ensuring that people who pay in advance for the sake of convenience or because they have an erratic income might be given a clear definition of what they might save by moving to a standard tariff.

[Mr Baron]

My hon. Friend makes a good point and I shall come to that issue in relation to new clause 19.

Although ERA objected to the second proposal, the general consensus in the group was that the second, more tailored proposal was the way forward, because a message about potential savings in pounds, shillings and pence was thought to be more powerful than a simple signposting message. Ofgem acknowledged that this was in line with its direction of travel and cited research finding that customers are more likely to be interested in information that is personalised to their needs and circumstances. ERA was opposed to the second proposal for a variety of reasons—for example, that suppliers’ billing systems could not handle such a change in time for this winter and that they wished to wait for Ofgem’s retail market review findings.

Let me outline the recommendations from the billing stakeholder group. First, it accepted ERA’s view that the second proposal was not possible this winter. It was therefore agreed that energy suppliers should send out a letter to their customers—not an annual statement, because a lot of people do not get one—in time for this winter, clearly detailing the extent to which customers were overpaying or underpaying compared with that supplier’s cheapest standard direct debit tariff. Ofgem already requires this to be done once every 12 months, but has been disappointed by energy suppliers’ responses to date. We are asking not for anything new, but simply for something that Ofgem already requires energy suppliers to do. The group suggested that suppliers should send a letter rather than a text or e-mail because this is an important communication and such a system would allow consumer groups such as Which? to get behind the letter and mount a co-ordinated campaign to generate interest. Such groups have historically been very good at doing that and many of the stakeholders in the group, including Which?, would be happy to undertake such a campaign. An e-mail would be acceptable only for those already paying by online tariff. We thought the letter should be sent to all customers because even those already paying by direct debit may not be on that supplier’s cheapest standard tariff.

[Tessa Munt]

rose—

[Mr Baron]

If I may finish dealing with the two proposals, I will give my hon. Friend her chance again.

Secondly, it was agreed that the energy suppliers would introduce their idea of a generic signpost message on bills, again in time for this winter. Thirdly, it was agreed that the two proposals outlined—ERA’s generic signpost message and Which? and my more tailored message—would be market-tested to determine which was the more effective and how best to present such information to customers. Energy suppliers would abide by the conclusions, once researched, in time for the implementation by the winter of 2012-13. The amendments and new clause 19 reflect the group’s recommendations.

[Tessa Munt]

I wonder whether my hon. Friend’s proposals and discussions include a number of people who pay by direct debit. It noticeable—is it not?—that people can overpay by direct debit. They might be on the cheapest tariff, but the arrangement in place involves high regular payments. Energy companies never hesitate to contact us to let us know that we should pay more, but I have never been contacted to say that I am paying too much. We need to get a grip on that, because it affects people who do not necessarily understand the fantastically complex information that is sent out on bills, and there is a lack of fairness.

I should like to draw out a point about estimated bills. I met members of various energy companies last week, and they have no idea how many people receive estimated bills. Those who have received estimated bills for a year and are billed now for the outstanding amount will pay the new, inflated prices.

[Mr Baron]

I thank my hon. Friend for those questions. I hope that both of them will be addressed by the research undertaken if the group deemed it necessary.

[Albert Owen (Ynys Môn) (Lab)]

I apologise for coming in and out of the debate because, like many other hon. Members, I have had to deal with other issues. Does the hon. Gentleman envisage his amendment covering people who are off-grid who are not protected by Ofgem and have difficult suppliers? Indeed, their supplies can be cut off at short notice. We are dealing with people who are connected to both gas and electricity mains, but more than 4 million households are not on the grid. Those people can be highly vulnerable and experience the greatest fuel poverty.

[Mr Baron]

I thank the hon. Gentleman for making that point. I hope that there will be no discrimination in how the information is presented. It is as simple as that. Bills go out to everyone in the land, and the information would be pertinent on those bills. Again, the research would ensure that we reached all sectors of our communities.

[Guy Opperman (Hexham) (Con)]

Does my hon. Friend agree that the clarity of bill point that he is making eloquently and well would not necessarily be of use without clarity of ownership? He will be aware that a multitude of companies supply heating oil, which we debated in Westminster Hall in January this year, but the market is dominated by one monopolistic company—DCC Energy—which is being investigated by the Office of Fair Trading. Does he agree that the proposal should include clarity of ownership, so that proper price comparisons can be made?

[Mr Baron]

My hon. Friend makes a fair point. Undertaking market research into the two proposals and getting energy suppliers to abide by the findings of the research in time for next winter would have the advantage of making it much easier for a customer to get a figure from their company, based on their actual usage, because the message would be tailored. That would make comparisons with other companies much easier. At the end of the day, all we can do in the House is legislate to try to help consumers as much as possible to gain the necessary information for them to make informed choices. If they have that information, direct comparisons with other companies could help competition and consumers generally.

[Mr Weir]

To pursue the point made by the hon. Member for Ynys Môn (Albert Owen), does the hon. Gentleman not accept that the real problem with the off-grid market is the fact that there are no differential tariffs, as there is a set price for oil and gas? There are no social tariffs as there are for gas and electricity, so does he agree that that must be tackled before his excellent proposal could take effect in that market?

[Mr Baron]

The hon. Gentleman has a point, but his proposal goes only so far. My problem is that energy bills are far too complex. I want to set hon. Members’ minds at rest: I do not stay up at night studying my energy bills, despite what Ministers think, although I might create the impression that I spend my time doing nothing else. The essential information is often contained on one page, followed by five or six pages of bumpf which compares usage with neighbourhood usage, and even usage overseas and so on. It is a lot of nonsense. What we want is clear information to cut through the 300 existing tariffs, which can be confusing. We need greater clarity, and there is no better way of getting that than making sure that we have information on a bill that says in pounds, shillings and pence how much would be saved if that customer was on the company’s cheapest standard tariff, taking into account actual usage and payment method. If that information was clearly laid out in no more than four or five lines, we could cut to the quick very easily indeed.

Before I accepted a series of interventions—hon. Members were right to make them and I hope that I have answered their questions—I described the three proposals suggested by the billing stakeholder group: two for this winter, the letter and the generic message; and one for next year, which would be an obligation on suppliers, following research on which is the clearest message, to put that in place for winter 2012-13 . Ofgem supports the billing stakeholder group’s general direction of travel, but I am aware that it is about to publish detailed proposals, following consultation, as part of its retail market review. One measure that it is considering is increased prescription on suppliers’ communications with customers in bills and annual statements. Having discussed that with the Minister, I understand that he has asked Ofgem to publish its findings before Christmas. He and I have therefore agreed that we will wait to see what those findings are before the billing stakeholder group and the Minister consult on whether Ofgem’s recommendations go far enough. If not, the third recommendation, in subsection (c) of new clause 19 will be triggered.

I therefore seek assurances from the Minister that the recommendations from the billing stakeholder group, as reflected in the new clause, will be agreed by the Government, with the qualification that we await the findings of Ofgem’s proposals in December this year before deciding whether to trigger subsection (c). The Minister has kindly indicated in previous discussions, following my letter to him of 8 September this year containing the stakeholder group’s recommendations, that he supported the proposals—something that I very much welcome, and for which I thank him. I therefore look forward to his response.

[Graham Jones]

I should like to speak to amendments 24, 23 and 25, which deal with the registration of information with landlords, and amendment 47, which would bring forward the date on which the standard came into force from 2018 to 2016.

I am pleased to make a contribution to this vital debate, and I thank my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) for tabling the amendments on landlord registration, as they are important for constituencies such as Hyndburn. The problems that parts of the country such as mine have in trying to comply with any form of action must be appreciated.

During the summer recess, many hon. Members enjoyed the less than balmy summer statistics released on fuel poverty. They show that far too many of our constituents dread the coming of winter because it will mean living in a home that is cold and damp, and the daily choice between whether to turn on the heating or to go without food or other essentials presents itself. Official statistics show that, in 2009, 5.5 million households in the UK could not afford to heat their home to a reasonable level and lived in fuel poverty. My constituency has a worse than average level of fuel poverty, with 7,352 households—one in every five—living in fuel poverty. This summer also brought the dreadful news that the big energy companies are to push up their prices even further, which will increase those numbers. It will result in more misery for the people in my constituency. Citizens Advice handled 104,000 fuel debt inquiries last year.

The worst conditions are too often found in properties rented by landlords. The most recent English housing survey found that more than 40% of private rented homes were not of a decent standard compared with 27% of local authority housing. Some great work on conditions in the private rented sector is being done by charities such as Shelter and Crisis, but we must do more. Last week, tenants in privately rented homes came together to form the national private tenants organisation, a move that I warmly welcome. It certainly has my support. They deserve the attention of the Minister for Housing and Local Government, who seems unable to hear anything but the voices of the landlord lobby. Almost as soon as he stepped through the door of the Department for Communities and Local Government, he declared:

“With the vast majority of England’s 3 million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.”

[Mark Tami (Alyn and Deeside) (Lab)]

In my area there is a high demand for private rented accommodation, but many tenants who come to see me feel threatened by their landlord if they raise these issues because, regardless of the state of the property, there is always someone else willing to take it on.

16:15

[Graham Jones]

I had intended to raise later the issue of retaliatory eviction and the fact that landlords put pressure on tenants. More specifically, the short answer to my hon. Friend is the Channel 4 programme “Landlords from Hell”, which was broadcast last month. In it a landlord openly boasted that he could act above the law. If tenants did not like what happened, he would take a baseball bat to them. He could manipulate their rents however he wanted, and if they did not like it, violence resulted. The tenants who were interviewed understood this and lived in fear. That is the worst case, but there are many cases where the law on retaliatory eviction is weak, and something needs to be done about that. My hon. Friend raises a good point, which I may return to later.

The Minister seems to be on the landlords’ side, which does not work for a constituency such as mine, and he is being complacent. Rather than landlords’ behaviour improving, it seems to be getting worse as a result of his inaction. In March, Shelter recently reported a 23% increase in the number of people seeking help for problems with private landlords in the past 12 months. Only this week, Shelter found that complaints to local authorities about private landlords have increased by a fifth in two years, with 86,000 made last year.

In Hyndburn, the stark reality is that we have a second-world Britain, with shocking housing conditions that would not have been found in the old East Germany. Private landlords condemn parents and young children to housing misery. As the Housing Alliance reported last week, the UK has some of the worst housing in western Europe, and constituencies such as mine are plagued by this housing crisis. It condemns people to worklessness, as wages cannot keep up with rising costs, and that will impact on the introduction of the Bill.

One measure that would help to tackle the conditions in the private rented sector is a national register of landlords. The Government have seen fit to drop the proposals made by the previous Government for such a register, and that is such a shame. The Bill represented a good opportunity to introduce a register. However, we can still achieve some good by ensuring that the energy performance certificate register records the tenure of the property, where it is rented and the name and address of the landlord. Amendment 23, tabled by my hon. Friend the Member for Liverpool, Wavertree, would achieve that. I cannot see what possible objection there could be to that most minimal of measures. Some might say that it is the thin end of the wedge, or a “landlords register lite”. I wish it were, but it is not, because local authorities would be unable to access the information for other matters they have to deal with. However, it would help them to get accurate information to landlords about the green deal, the landlords’ energy efficiency tax break, their legal duties and other such advice.

Disrepair can take many forms, but in this debate we are obviously concerned with one of the most serious threats to the health of tenants: cold. The increased risk of death for the elderly resulting from cold homes is well established. We have recently seen new evidence in a report by Professor Sir Michael Marmot of University College London about the dreadful damage to the health of children and teenagers that can result from living in a cold home. Children are twice as likely to suffer from respiratory diseases, such as asthma, if they live in a cold home. The very worst insulated properties, those in band G of the energy efficiency rating, are more than four times as common in the private rented sector as they are in the social sector. There are 680,000 private rented properties in England with the worst energy efficiency ratings of F and G. More than 40% of those households live in fuel poverty.

Almost all Members of the House must be aware of, and grateful for, the coalition of 40 organisations that have campaigned during the passage of the Bill to raise our awareness of the problem of cold housing in the private rented sector and that have proposed a solution by championing the idea of a rising minimum standard of energy efficiency for rented homes by 2016, rather than 2018. Without wishing to overlook the contribution of any other organisations, I congratulate Friends of the Earth, Citizens Advice and the Association for the Conservation of Energy on the well-run campaigns that they have pursued.

The Government have responded to this campaign, which is strongly supported by the Opposition, by including legislation that will make it mandatory to improve F and G-rated homes from 2018. This is a step forward, but it is not nearly good enough. Improving F and G-rated homes could have considerable health, climate and consumer benefits, lift 150,000 households out of fuel poverty and save an average of £488 in the annual energy bills of the homes improved. All these benefits will be unacceptably delayed if the introduction of the minimum standards is pushed back to 2018. More than 180 MPs, including many Government Members, have called for the introduction of those standards in 2016. Seven years is an unnecessarily long time to wait, and 2018 is two years after the date by which the Government have a legal obligation to end fuel poverty. In addition, introducing the minimum standard in 2016, rather than 2018, would cost the Treasury nothing.

In Committee, the Minister was unable to give any clear explanation on why 2018 was chosen. He said:

“Ultimately, the date is a matter of judgment and balance. I do not think that we would pretend that there is anything perfect about 2018; there are arguments in favour of setting an earlier date, and I am sure that some would argue for further delay.”

The only reason offered was the proportion of tenancies that would have to be turned over by 2018. The Minister argued:

“Most tenancies, I am told, are 12 to 18 months, so by 2018, we expect that 80% to 90% of tenancies will have changed. .”––[Official Report, Energy Public Bill Committee, 14 June 2011; c. 182-85.]

He was unable to say why 80% or 90% of tenancy turnover was the right proportion, or what the turnover would be by 2016, two years earlier. However, Friends of the Earth calculated that the number of private rented sector tenants who had resided in their current home for five years or less is 80.3% and that the number of people who had resided in their current home for 10 years or less is 89.8%. So when the Minister argues for a delay until 2018 because there is likely to be an 80% to 90% turnover by then, he is wrong; there may in fact be an 80% to 90% turnover earlier than that—it could be expected to occur by 2016.

The independent Committee on Climate Change, in its recent third progress report to Parliament, specifically called for earlier introduction of regulation for the private rented sector, stating that

“there is no reason to delay implementation of this aspect of the proposals.”

It would be a tragedy if the Government’s response to the news that 5.5 million households—many in the private rented sector—are in fuel poverty was to delay a vital measure that would tackle fuel poverty and cut energy bills.

[Mr Leech]

I shall speak to amendments 2 to 6 and 8, in my name and those of right hon. and hon. colleagues on both sides of the House, on energy efficiency in the private rented sector.

I join other Members in congratulating the Department on going a long way to tackle the problem in the private rented sector by agreeing to introduce a minimum efficiency standard and by declaring that it is simply unacceptable to rent out dangerously cold and draughty homes. The Department has gone far further than many expected, and the minimum standard is a major achievement that goes some way to meeting the Government’s pledge to be the greenest Government ever.

I also pay tribute to my hon. Friend the Member for Wells (Tessa Munt) for her work in Committee, to the Minister of State and to my right hon. Friend the Secretary of State for Energy and Climate Change for genuinely engaging with the coalition of organisations that support the introduction of a minimum standard.

My amendments are backed by a coalition of some 40 organisations, and I join the hon. Member for Hyndburn (Graham Jones) in thanking Friends of the Earth, the Association for the Conservation of Energy and Citizens Advice for all their work during the passage of the Bill and for supporting my amendments.

The Government have taken a giant leap forward by agreeing to introduce a minimum standard, and we should not underestimate how far the Department has brought us, but my amendments seek simply to take a further, much smaller step forward.

The most important of my amendments is amendment 6, which would bring forward the date by which landlords have to bring their property up to a minimum standard. So far, 181 MPs from nine different political parties on both sides of the House have signed early-day motion 653, which I tabled in July last year, so there is clearly cross-party support for bringing in the minimum standard by 2016.

The Government have given no good reason why the deadline must be 2018 and not sooner, but there are plenty of good reasons for introducing it sooner. The Warm Homes and Energy Conservation Act 2000 requires the Government to do all that is reasonably practicable to eradicate fuel poverty by 2016, and there must be very compelling reasons not to meet that obligation. According to the most recent figures, 5.5 million households are in fuel poverty, and housing makes up 27% of the UK’s carbon emissions—a strong argument for it playing a central role in the Government’s plan to meet their carbon budgets under the Climate Change Act 2008.

Owing to the lack of available social housing in recent years and the failure of successive Governments to prioritise and tackle the lack of affordable rented property, there has been an increasing reliance on the private rented sector to provide homes. Although there are many good landlords, there are still a number who let substandard properties, and in my constituency some private rented accommodation is among the worst and least energy efficient property available.

The Department’s own impact assessment estimates that 42% of households in F and G-rated properties in the private rented sector are in fuel poverty, and Friends of the Earth-commissioned research by Consumer Focus estimates that 150,000 households would be lifted out of fuel poverty simply by bringing F and G-rated properties up to a minimum E standard, saving an average of £488 on the annual energy bill of the improved homes. It is also estimated that that would save 1.87 million tonnes of CO₂ annually and £145 million currently spent by the NHS on treating illnesses caused by cold rented homes. Those are all good reasons to bring forward the date to 2016.

16:30

Bringing forward the deadline to 2016 would still give landlords nearly four years to comply with the minimum standards. Ministers have argued that waiting until 2018 means that the majority of private tenancies—getting on for 90%—will have changed hands, which will give landlords the chance to upgrade and retrofit the properties before a new tenant moves in. That is a reasonable argument, as it creates the minimum disruption for the minimum number of tenants and will cover the vast majority of tenants in longer-term lets. However, the vast majority of private tenancies—between 80% and 90%—will also have changed hands by 2016, and so bringing forward the deadline would cause very little, if any, additional disruption for tenants.

The Bill should be amended so that we have a 2016 deadline after which all private rented sector homes must, by law, be at least E-rated for energy efficiency. The 2016 date clearly meets the Government’s stated criteria of being

“a date by which properties with long-term tenancies will have gone through a tenancy cycle”.

The 2016 date has been backed by the Committee on Climate Change, which, since the Committee stage of the Bill, has stated:

“There is no reason to delay implementation of the proposals. The regulation would only apply to F and G-rated properties and improvements would be relatively low cost in most cases.”

Research suggests that the vast majority of these properties could be improved to meet the minimum standard for less than £3,500, and that for 37% of them it would cost less than £900 to make the necessary improvements.

Today’s letter from the Minister to Friends of the Earth made it clear that the Government are not going to concede any ground on the date and suggested that it was a matter for Parliament. Well, I am making it a matter for Parliament today. I would have been prepared to withdraw the amendment if I had received a commitment to a public consultation on changing the deadline, but because there has been no such commitment I feel that it is necessary to seek to put it to the vote.

I have tabled amendments 2, 3 and 5 because clause 42 does not mention the role of letting agents and those marketing rented properties. Ministers say that it is “implicit” that the minimum standard will have an impact on not only landlords but anyone acting as their agent, including letting agents and estate agents. The Department has subsequently stated that the Consumer Protection from Unfair Trading Regulations 2008 will prevent landlords and letting agents from marketing F and G-rated properties. I hope that the Minister can give a clear indication of how the regulations will do that, and then I will be happy to withdraw the amendments.

I welcome the provision in clause 45 that means that landlords cannot refuse consent for reasonable requests for energy efficiency measures. Some tenants already worry about asking for reasonable repairs because of the potential threat of retaliatory eviction, so how many will exercise that right if they face a strong chance of being chucked out of their homes? The National Private Tenants Network has clear evidence that retaliatory action is occurring, including landlords seeking possession of a property under the Housing Act 1988. The Housing Minister has said that it is vital that tenants can ask for repairs without fear of eviction, and I welcome that comment. In Committee, Ministers acknowledged those concerns and set up a stakeholder group on retaliatory eviction. That is a step in the right direction because it is vital that tenants have legal protection against such retaliation.

Amendment 8 seeks to give the Secretary of State the power to include in the regulations protection for tenants by limiting the circumstances under which a section 21 notice for eviction of a tenant can be served once a request has been made by the tenant for relevant energy efficiency measures. I would be grateful if the Minister updated the House on what progress has been made by the stakeholder group in ensuring that tenants are protected against eviction.

Finally, amendment 4 seeks to ensure that improvements that are carried out on a property that falls below the E rating make it reach a minimum E rating. It is not clear from clause 42 that it will be mandatory for improvements to bring it up to band E—the minimum standard the Government want to see. Subsections (2) and (3) suggest that landlords will have to make “relevant energy efficiency improvements”. The clause states that those improvements can be financed by the green deal, the energy company obligation or other financial arrangements. Those improvements might bring the property up to band E, but they might not. For some band F and G properties, landlords will rely on using ECO, a fixed pot of money that will not pay for all improvements or other sources of funding. In such cases, landlords will not know what is expected of them. That will not only create the danger that private rented sector tenants might not benefit in full from the improvements the Government want to see; it will also create uncertainty for landlords.

Once the principle of regulation has been accepted—as it has been by introducing a minimum standard—it is in the interests of landlords for that regulation to be clear and straightforward to comply with. The ambiguity will make it more difficult for local authorities to undertake their enforcement role. They will somehow have to distinguish between F and G rated properties that are legal because they have been improved and those that are illegal because there have been no improvements. We need to mend the legislation to make it crystal clear to anybody what the minimum standard is, and amendment 4 seeks to do that.

[Dr Whitehead]

I will address my remarks to amendments 9 to 12, which I tabled. I will also put those amendments in the context of the other amendments in the group headed “Energy efficiency”.

I will question to what extent the Bill is attached to anything by which it can be measured. What might we mean by the success of the green deal, the energy company obligation or the energy efficiency aspirations of the Bill? As things stand, it is difficult to attach the good ideas, aspirations and programmes in the Bill to any sort of measure. Most importantly, it is difficult to attach them to one of the key measures we currently have, which is the progress we are making in reducing our carbon emissions under the Climate Change Act 2008. That Act asked for certain actions to be undertaken by the Committee on Climate Change. In its progress reports and recommendations on meeting our carbon budgets, the Committee has increasingly involved itself in specific measures that, among other things, are the domain of the Bill, such as targets for the removal of problems relating to non-cavity wall homes through external and internal insulation. Such measures contribute to greater energy efficiency and, as a result, to reducing carbon emissions.

My amendments would do something very simple: they would require the Department to assess the cost-benefit relationship between undertaking and investing in energy efficiency measures and undertaking investment in and pursuing energy generation. It will be good for policy direction if we know the costs and benefits before mounting programmes that could have a substantial impact on either. The fact is that we do not know and no one has done that kind of work within or outside the Department, yet a substantial raft of policies have been launched on that non-understanding, including a number of policies in the Bill. Frankly, that is not a rational way to make policy, and the Department’s chief scientist, Dr David MacKay, very much agrees. He said recently:

“I agree that this is a crucial comparison to make, and I would love to see us develop a rational, quantitative approach that incentivises energy saving in the same way that, say, renewables are incentivised.”

Amendments 9, 10, 11 and 12 would require the Minister to assess that and report to the House to inform policy making.

Essentially, my proposals are in the same vein as several that we have debated this afternoon. New clauses 1 and 2 would explicitly link the aims of the Bill to the progress made on reducing carbon emissions and to reports from the Committee on Climate Change. The Department would have to provide a clear strategy in its plan for delivery and ensure that the strategy is based clearly on a link with climate change strategy. Similarly, in respect of putting local authorities at the heart of local carbon reduction, a requirement would be placed on the Committee on Climate Change to advise on local area carbon emissions, so that they too are linked.

We need to be able to relate the ambition—the overwhelming imperative—to reduce energy use in the residential and small business sector to what we need to achieve by certain dates in terms of improving the energy efficiency of property throughout the UK. That is one of the key areas on which the Bill remains silent. After the end of Warm Front, the carbon emissions reduction targets, the community energy savings programme and various other programmes, the green deal and the energy company obligation are the only shows in town as far as making progress on energy efficiency in homes is concerned.

The Bill sets out a number of ways in which the green deal and the ECO can move forward, but it does not set out any means by which to assess their success or appropriateness. That is significant in terms of the proposals in the Bill for the development of the ECO. We are asked to accept that an ECO of perhaps £1 billion a year will get close to achieving the loft insulation, cavity wall insulation, and solid wall insulation tasks that face the country over the next period, which relate to the Committee on Climate Change recommendations. Indeed, my hon. Friend the Member for Brent North (Barry Gardiner) described a number of the scenarios that have been set out and said what we ought to be achieving for the third progress report of the Committee on Climate Change. What is the Government’s ambition within the likely terms of the Bill? Will the finance be available to get us anywhere near that ambition?

The figures suggest that by the early 2020s, using a combination of green deal, CERT extension and the ECO, we are likely to be almost 5 million properties short on loft insulation, 4.5 million short on cavity wall insulation and 200,000 short on solid-wall insulation. Those figures assume the Government’s low-scenario ambition, and although they decrease if we adopt their high-scenario intention, they still fall substantially short not only of the imperative and ambition, but of the likely finance.

16:45

The ambition for the ECO appears to be about £1 billion to £2 billion per year, yet clear figures are available on the cap within which that ECO obligation will fall. The £11.8 billion cap for the current spending period was set by the Treasury at the last Budget and includes the renewables obligation, feed-in tariff and warm homes’ discount. According to the Treasury, the ECO is likely to fall within the cap, which means either removing from the cap some of the areas currently funded up to 2015, or increasing the cap to accommodate the ECO. I believe that the Department thought that it had agreed the latter verbally with the Treasury, but it appears that that hope has been dashed—certainly it seems less certain than the Department thought it was a little while ago.

We do not know how much funding there will be for the ECO over the next period. We do not know whether the Treasury will place it inside or outside the original cap or inside a larger cap. Significantly, some claimed that the Treasury announced the cap following the referral of the measures in it to the Office for National Statistics and that, because those levies and arrangements, which are similar to the ECO, were declared to be imputed tax-and-spend devices, the ONS considered them to be so. That is not so, however. Only one of those three devices went to the ONS. The Treasury effectively declared that the other two were the sorts of things that the ONS could decide were imputed tax-and-spend devices and so put them within the cap.

That does not augur well for the ECO being taken seriously by the Treasury as a necessary and substantial measure for tackling problems with solid-wall insulation and fuel poverty, where people need assistance outside the terms of the green deal owing to their individual circumstances. It is also a bad augury because it appears that the Treasury can declare by fiat what those things should be and, therefore, how they should be limited. The Minister should bite the House’s hand off to incorporate these amendments into the Bill, but I suspect that he will not.

The amendments relate to targets, to the progress that we need to make on climate change, and to the real cost to the country of tackling the problems of solid-wall insulation and helping people in fuel poverty and those otherwise unable to access the green deal. The Minister would then be able to say to the Treasury, “It is not good enough to impose a cap because of the requirements of the Bill. Even if there is a cap on these arrangements, other measures will be needed that may contribute towards the success of such targets in the fight to make energy efficiency a much more central part of our approach to the fabric of our property and its energy efficiency.”

New clause 7, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas) sets out, among other things, a number of areas in which one might look for additional funding to augment the energy company obligation in order to reach those targets. We would be able to argue for that if the new clauses and amendments were accepted, strengthening the approach to the overall energy efficiency target that we all know we have to reach.

It would be a good idea for the Government to move towards ECO-mortgages for homes with solid-wall insulation, with the interest perhaps paid by ECO capital under a new golden rule that the net effect must be less than the payments. That would greatly expand the effect that ECO would have, over and above the level to which it seems to be limited at present.

Unless the Bill contains measures that enable us to see where we are going, what we need to do, and how that relates to the wider issues tackled by, among others, the Committee on Climate Change, I fear that in a few years people will say that the Bill was a good try but it did not get very far, despite the good intentions. Adding backbone to the Bill by making clear what it should achieve and why would make it central to our attempts to tackle climate change, energy efficiency in homes, and our obligation to ensure the best energy efficiency arrangements for the homes of those currently in fuel poverty, to proof them as far as possible against future fuel poverty.

[Caroline Lucas]

I associate myself with the comments made in support of the amendments tabled by the hon. Members for Liverpool, Wavertree (Luciana Berger), for Basildon and Billericay (Mr Baron), Member for Manchester, Withington (Mr Leech) and for Southampton, Test (Dr Whitehead).

I shall say a few words in support of my new clause 7, which I believe would go to the heart of whether the green deal will succeed or not. As the Minister knows, I strongly favour a properly publicly funded, street-by-street, area-based approach to domestic energy efficiency programmes. That would be far more effective than the market-based green deal approach that the Government are pursuing, not least because a market-based approach will not work for those on low incomes living in fuel poverty. I welcome the fact that the Government have acknowledged that the green deal finance mechanism is not appropriate for those groups—essentially low-income and vulnerable households that have under-heated their homes in the past.

It is crucial to recognise that the golden rule is much less likely to work for households, as they are much more likely to use the money notionally saved from their fuel bills to increase their thermal comfort—in other words, to take the benefits of energy efficiency improvements in increased warmth rather than in increased savings. That is why the energy company obligation is so important, yet under the Government’s current proposals, I am concerned that the obligation is being seriously under-resourced.

The purpose of new clause 7 is to try to identify additional support to allow us to create a significantly larger ECO pot of resources and to supplement it with some other sources of revenue. In arguing for more resources, I have tried to be helpful by suggesting possible sources of funding that could come on stream in the years to come—namely, receipts from auctions under the EU emissions trading system, the carbon floor price, a tax on gas and electricity companies, or, if necessary, direct taxation. Let me say a few words about why those resources are so desperately needed.

As other hon. Members have said, the scourge of fuel poverty is getting worse, not better. The latest Government statistics, from 2009-10, show 5.5 million UK households in fuel poverty, or 21% of the total. Retail energy prices have continued to rise since the fuel poverty figures were updated, with five of the six main energy suppliers recently announcing higher charges for gas and electricity, which will inevitably increase the scale of fuel poverty. As a result, National Energy Action estimates that we are currently closer to having 6.5 million households across the UK living in fuel poverty. However, the stark truth is that existing programmes to address fuel poverty through energy efficiency are not equal even to current demand.

If there is to be any prospect of meeting our social and environmental objectives, and if the 2016 target to eradicate fuel poverty in England in particular is to be met, the Government must introduce much more ambitious policies to support and protect low-income and vulnerable groups. That means that the ECO must be much better funded and supplemented with other resources if it is to provide the necessary support for those who are fuel-poor and living in vulnerable households and for the hard-to-treat properties that need it most.

[David Mowat (Warrington South) (Con)]

Would the hon. Lady care to tell the House approximately how much she believes is available or needed for the ECO, and how much of that the sources named in her new clause—in particular, those named in subsections (1)(a), (b) and (c)—would provide?

[Caroline Lucas]

If the hon. Gentleman holds on for just a moment, I will come to those very figures. Indeed, the question that I wanted to ask the Minister was whether he could outline the latest thinking on the level of funding for the ECO pot. The figure of £1 billion has been cited in the past, but a recent all-party report recommended that the annual contribution through the ECO should be no less than £2.5 billion, focused exclusively on low-income and vulnerable households. Other reports have suggested that the contribution should be as much as £4 billion a year.

Let us not forget that the introduction of the ECO will coincide with the end of all Exchequer funding for domestic energy efficiency programmes—the first time in three decades—when Warm Front is phased out. As we have discussed, the ECO will be funded through a levy on all customers’ fuel bills, regardless of households’ financial circumstances. That is inherently regressive and can result in perverse outcomes. I mentioned earlier that if we are not careful, we could push more people into fuel poverty by levying a fee on all bills—rather than by adopting a taxpayer-funded approach—than we take out of fuel poverty. It is simply not acceptable for low-income and vulnerable households effectively to subsidise those who just happen to live in hard-to-treat homes, but who are perfectly able to pay to heat them properly. The dual function of the ECO pot is therefore misguided and risks creating cross-subsidies from the poorest to the better-off.

In their paper “Extra help where it is needed: a new Energy Company Obligation”, published in May, the Government provide further information about the ECO, and in doing so partially recognise the limitations and regressive nature of the policy, as well as acknowledging concerns about targeting and equity. That document says:

“As the delivery costs of ECO are assumed to be recovered by the energy companies through increases in consumer bills and therefore spread across all households, it is important for the credibility of the scheme to ensure that all households have fair access to the benefits, safeguarding distributional equity. In addition to providing for affordable warmth, this includes considering how the benefits of support for solid wall insulation can be delivered equitably. We are looking into learning the lessons from CERT”.

Those are the challenges that need to be overcome. The case that I want to make—the same case as that made by the Committee on Climate Change—is that the funding available from the ECO should be used exclusively for low-income and vulnerable households, including those in hard-to-treat homes. Essentially, what we should not do is use ECO funds for those in hard-to-treat homes who can afford to pay for them.

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

The hon. Lady is making a powerful case, with which I agree, in criticising the market-based approach to the alleviation of fuel poverty. Is she also concerned about the figures that appeared on the front page of The Daily Telegraph last week, which suggested that the cost of the renewables obligation and the feed-in tariff could, depending on the price of carbon-based fuels, be as much as £300 per household? That would negate most of the benefits of the Bill.

[Caroline Lucas]

I did not see that piece in The Daily Telegraph, but I would query some of the assumptions on which such a calculation was based in relation to the levels that fuel bills might reach—because fossil fuels are getting so expensive—without some measure of investment in alternative fuels. I take the hon. Gentleman’s point, however, that it would be better not to put more and more obligations that have to be paid for on to people’s fuel bills. That is a regressive thing to do, and any such measures should be funded either through direct taxation or through mechanisms such as the emissions trading scheme’s revenues.

17:00

The Committee on Climate Change has highlighted its concerns about the dual direction of the ECO funds. It states clearly that they should be used to prioritise solid-wall insulation in the 1.9 million fuel-poor households that live in solid-wall properties. We should combine the two functions of the ECO: yes, it should be used for low-income and vulnerable families, but it should also be used for low-income and vulnerable families in hard-to-heat homes.

[Gregory Barker]

I am listening closely to the hon. Lady, and I admit that the Government have not yet come forward with our proposal on the ECO. She seems quite clear about what it should involve, but I did not pick up the actual figure that she thinks would be right for it. Will she tell us what she thinks that figure should be, so that we can work out whether the sources of revenue would be sufficient to fund it?

[Caroline Lucas]

I thank the Minister for his intervention, and I am pleased to see his impatience for me to get to the crunchy bits involving the figures, which I will now do. The figures that I was quoting were from an all-party group chaired by the hon. Member for Southampton, Test that involved myself and a few others. The group believed that it would be necessary to have a minimum of £2.5 billion in the ECO pot specifically for low-income and vulnerable households involved; some members of the group felt that it should be £4 billion. We were therefore looking at between £2.5 billion and £4 billion, but that was intended not for solid-wall insulation in the able-to-pay sector; it was focused solely on low-income and vulnerable households.

We considered where we might be able to find such sums of money, including down the back of the sofa and so forth. Based on the Treasury’s own budgetary projections, the EU emissions trading scheme and the carbon floor price will bring in a combined revenue of £2.7 billion in the first year of the green deal’s operation, 2013-14, rising to £3.6 billion by 2015-16. If we were to choose to hypothecate those two revenue streams alone, they could be used to supplement the revenues of the ECO. That is exactly what many groups and individuals have recommended. A 2008 European Parliament directive recommended that at least 50% of revenues from EU ETS auctions of allowances should be devoted to environmental protections, including more efficient heating and improved insulation. In contrast to the UK, countries such as Germany, Hungary and Poland are doing exactly that.

Ofgem provided constructive support in its report to the Chancellor of the Exchequer in 2008, stating:

“In view of these pressures on prices the regulator has identified a windfall to the electricity industry arising from the free allocation of tradeable emission permits.”

That windfall still exists. The report continues:

“This could be used to fund aid for fuel-poor households: those who spend more than 10 per cent of their income on energy.”

The European Parliament and Ofgem are thus both in favour of such a move.

[Graham Jones]

The hon. Lady mentioned hard-to-treat homes and solid-wall insulation. Is she saying that those who are able to pay should not benefit from the ECO?

[Caroline Lucas]

If money were no object, I would love to see hard-to-treat homes subsidised through the ECO, even for those who are able to pay. We are living in financially constrained times, however, and I am therefore suggesting that we focus all the money in the ECO, which should be increased, on low-income and vulnerable households, of which a subset would be those low-income and vulnerable households in properties that are hard to heat and therefore need solid-wall insulation.

[Gregory Barker]

If the hon. Lady is not prepared to subsidise solid-wall insulation, does she accept that many able-to-pay customers will baulk at the substantial cost of such insulation, so there is a very real risk—it is almost certain—that we would be unable to hit our CO₂ reduction targets? All the analysis of this problem that has come from a climate change or environmental perspective is absolutely clear that we will need to subsidise these currently expensive measures.

[Caroline Lucas]

I thank the Minister for his intervention. I hope he will allow me to explain my proposal. It would mean that for at least the first three years the ECO would be used for the low-income and vulnerable families that live in hard-to-heat homes. As about 40% of the low-income and vulnerable households do live in such homes, I am confident that if the revenues from the ECO were focused on that group of people, we would have a much greater uptake of solid-wall insulation and the price would come down far more quickly. If we were to use the bulk of the ECO to go house to house or street by street to some of the poorest, most vulnerable people, I believe it would have a far better environmental impact than sitting back and allowing market forces to see who happens to ring up the advice line to say, “By the way, I’m living in poverty in a hard-to-treat home, so could I have some support from the ECO?” What I am suggesting would be better for dealing with fuel poverty and also better for the environment—the figures suggesting that do stack up.

[Simon Wright (Norwich South) (LD)]

Was the three-year time scale you mentioned the period over which you envisage this £2.5 billion to £4 billion ECO operating? If not, what time scale are you looking at for the generation and use of the ECO in this way?

[Caroline Lucas]

I thank the hon. Member for his intervention. I think he is asking me whether, over those three years, I envisage a pot of money of between £2.5 billion and £4 billion, replenished on an annual basis, being used only for these low-income and vulnerable households. If that was the question, the answer is yes.

[Simon Wright]

For how much longer, then, will it go on for the groups that your all-party parliamentary group spoke up for? Is a 10-year programme envisaged for that level of investment? Do you have a longer time scale in mind?

[Caroline Lucas]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Before the hon. Lady answers, let me say that the hon. Gentleman has been here long enough to know that he should address the Chair, that I am “you”, and he should not therefore ask me what my views are. The hon. Lady should be referred to as either his hon. Friend or the hon. Member.

[Caroline Lucas]

Thank you. I commend to the hon. Gentleman the report of the all-party parliamentary group, which was co-chaired by myself and the hon. Member for Southampton, Test, as it contains all the detail in it. Off the top of my head, I cannot remember the overall number of years, but my essential point is that both for attacking fuel poverty and for environmental rigour, it makes more sense to target all the ECO resources for at least the first three years on low-income, vulnerable households, including those living in solid-wall and hard-to-heat properties, rather than trying to separate out the ECO into hard-to-treat homes that might belong to able-to-pay groups. A focus for at least three years solely on low-income and vulnerable households would have stronger fuel poverty and environmental outcomes.

Let us not forget that the Government are still bound by their statutory commitments to the eradication of fuel poverty in England by 2016. If that objective is to be met, we need significant additional resources for programmes that will improve heating and insulation standards in dwellings occupied by those households. An impoverished Exchequer, a coalition Government who are averse to high taxation and a policy of funding a range of programmes through levies on consumer bills can only exacerbate the appalling scale of fuel poverty. I think we need a major investment in a national programme to improve domestic energy efficiency, giving priority, as I say, to those in greatest need.

[Sarah Newton (Truro and Falmouth) (Con)]

Does the hon. Lady accept that the Government are taking other measures? For example, in the recently published public health paper, the eradication of fuel poverty is highlighted as a public health outcome for the very first time. If health and wellbeing boards are established, they will play a critical role, and they will have additional funds to target on this issue. There is already very good partnership working in such counties as Cornwall—between Community Energy Plus and the local authority, for example—and it is targeting precisely the households that the hon. Lady mentions. That is another way of tackling fuel poverty.

[Caroline Lucas]

I thank the hon. Lady for that intervention. I welcome the fact that health and wellbeing boards are now interested in fuel poverty, although whether that will bring significant new resources into play is another question. I hope that the hon. Lady is right, but I am not convinced that she is, or at least that there will be enough resources without hypothecation of some of the revenue sources from emissions trading and so forth.

New clause 18 would allow fuel poverty and energy efficiency programmes to be better targeted at those in greatest need through the sharing of data between the Government and energy companies, with all due consideration for privacy and data protection issues. I believe that such improved targeting would also reduce wasteful administration costs, which have been estimated at about £120 per household. Money spent on trying to identify low-income and vulnerable consumers would be much better spent on helping them out of poverty.

I strongly support amendments 2 to 5, tabled by the hon. Member for Manchester, Withington and signed by me. I had tabled similar amendments to improve clause 42, but withdrew them to support those tabled by the hon. Gentleman.

[Guy Opperman]

It is no exaggeration to say that the citizens of Northumberland are often faced with a straight choice between heating and eating. I am lucky enough to represent 1,150 square miles of south and west Northumberland, and while in the rest of the country 6 million people—one in 10—may suffer from fuel poverty, it is well accepted in my constituency that the position is far worse there. The north-east has the second highest level of fuel poverty in the country, and we take the issue very seriously.

I support what the Government are doing in the Bill and with the green deal. It is a wonderful step forward. Listening to the hon. Member for Liverpool, Wavertree (Luciana Berger), one might have believed that nothing had happened since the present Government came to office, that everything had been rosy in the preceding 13 years, and that fuel poverty magically mushroomed out of nowhere in May 2010.

I want to discuss energy efficiency and fuel poverty in the context of new clause 19, which was presented very impressively by my hon. Friend the Member for Basildon and Billericay (Mr Baron). My constituency is particularly affected in the context of oil and liquefied petroleum gas, although we are obviously affected by other energy issues. I applaud all the efforts to improve the energy efficiency of homes through the green deal, but I am concerned about, in particular, the variances in the price of heating oil and LPG. We discussed the issue during an important debate in Westminster Hall in January to which a number of Members, including the hon. Member for Ynys Môn (Albert Owen), made impressive contributions. I hope that that debate is a source of ongoing development in relation not just to the Bill and the green deal, but to other proposals made by the Government.

Fuel poverty is not an abstract issue. It is talked of as though it affects other people, but account should be taken of the sheer increase in fuel prices. The price of heating oil in Northumberland, for instance, rose from approximately 41p to 71p in the three months between September and December last year. That is a massive price rise. Everyone accepts that prices are affected by consumption and by oil and gas prices generally, but there is undoubtedly an element of profiteering, and naked monopolies and cartels have been created by individual companies. We have campaigned strongly on the issue.

It is well known that I am no fan of the company known as DCC Energy. I am pleased to say that it is being subjected to an investigation by the Office of Fair Trading, which was launched on 14 March this year and will report in October. I hope very much that the OFT will fully address the difficulties that individuals face. I touch upon this matter because it relates to fuel poverty and energy efficiency. We in Northumberland have at least 20 or 21 fuel companies that provide heating oils and other products. If the practice had not been made public by Members and The Sunday Times—whose campaign I applaud and endorse—it would not be known that all but four of those companies are owned by DCC Energy. Long-standing customers of, for instance, a heating oil company that had been bought-out might be told, “We’re the independent and long-established company that you’ve always purchased from,” when that was manifestly not the case. That company is now clearly controlled by a parent company.

17:15

[Mr Weir]

That problem also arises in many other parts of the country, particularly in Scotland. The traditional response of Governments when asked to address the issue of tariffs was that there were too many suppliers, but it is clear that we are now moving towards a situation in which this market is controlled by just a few companies, as in the energy market, which is dominated by the big six. Does the hon. Gentleman agree that it is time that the Government looked at an equivalent to social tariffs in this area?

[Guy Opperman]

I would certainly welcome hearing what the Minister has to say on that. The point, however, is that there is regulation of the big six energy companies, but there is no regulation of the heating oil companies and others. I accept that we must wait until we know the results of the Office of Fair Trading investigation, however. After that, we might want to come back to the House and argue that changes must be made.

[Sarah Newton]

My hon. Friend is giving a comprehensive account of a problem that we in the west country also face, as there are very high levels of fuel poverty, which is related to the fact that so many people are off the gas grid, and they rely on heating oil and LPG, just as people do in my hon. Friend’s Northumberland constituency and in Scotland. As he says, we must wait for the publication of the OFT’s full findings at the end of the month, but does he agree that its initial findings were welcome in that at least there will now be clarity in respect of websites offering people advice on where to purchase their heating oil? Thanks to the intervention of Members—and especially the Minister, who asked the OFT to look into oil supply as part of the off-grid energy review—this winter, when prices are rising and people are increasingly concerned, at least accurate and fair information will be available on where to purchase heating oil.

[Guy Opperman]

I agree with all those points and applaud the efforts of the Government, and especially the Minister, in pursuing the point about websites. One such site, BoilerJuice, is supposedly a price comparison site yet is owned by one company—DCC, unsurprisingly —and it markets only the products it owns. That is manifestly unfair and wrong; it is not good for either the consumer or our constituents in general. I endorse the OFT response, and it is to that company’s great shame that it behaves in that way. I welcome the actions of the Minister, the OFT and especially The Sunday Times, which has done much to help tackle what is, frankly, a scandal.

The message must go out that this issue is about not only what the Government can do through the Bill and the guidance they issue, but about the fact that our constituents must ask questions and shop around as well. They will not be able to do that unless they know who owns the business that is supplying them with fuel or heating oil. If they do not have such information, they will be subject to what amounts to a monopolistic cartel. That is manifestly wrong. We cannot do all the work, however; people must address this issue themselves as well. We have to sell that message to them.

[Sarah Newton]

My hon. Friend is being very generous in giving way. Does he agree that there are some very good initiatives in which communities are gathering together to form co-operatives? In villages, people join together, often enabled by voluntary organisations such as Community Energy Plus in Cornwall, to get a better deal for customers in their villages.

[Guy Opperman]

I totally endorse that. In certain areas in Northumberland, such as in the communities of Tarset and Allendale, similar approaches are being pursued by local communities’ grouping together and purchasing from a local supplier. In my area, we thought we had 21 different companies but in fact we have one company masquerading as 17 providers and four independents. Fortunately, the four independents have been identified and should be supported; indeed, I assure hon. Members that they will be supported because of the way they are trying to do business and support the local economy and are not an Irish-based provider in a cartel.

Following on from the community projects we have been talking about, I endorse the work of organisations that have addressed this issue and worked to improve the position for the individual consumer and constituent. To their great credit, Age UK and the National Farmers Union have done tremendous work to address the matter. It is worth noting that of the 10 things most likely to be stolen in thefts and burglaries of people’s houses, the sixth-highest is fuel—in Northumberland, the figure is probably even higher. The Countryside Alliance should also be complimented because the rural action that it has proposed is massively successful; it is identifying ways in which the community can be assisted, and not just in farming communities and market towns. In my constituency there is no question but that fuel poverty is an issue in residential parts of places such as Prudhoe, Haltwhistle and west Wylam. Those are not areas of farmland and sheep—they are nothing other than normal houses where people are struggling to stay above the fuel poverty line.

Today, I met representatives of the Young Foundation, which supports The U—a citizens’ university-based organisation in Hexham that is working for specific energy efficiency projects. Those projects are just the sort of thing that will benefit from the green deal in future. They, along with the Green Alliance and several Members of Parliament, are working together to try to provide flagship examples and leadership for the type of constituency and community that is putting green policies at the heart of the community. There is great scope for a community-based way forward to try to strengthen our ability to address energy efficiency.

I support the Bill, but I want to touch briefly on new clause 19, which was tabled by my hon. Friend the Member for Basildon and Billericay. It will be no surprise to hon. Members who have listened to my contributions to hear that I should like to see clarity of provider ownership on bills. At the moment, individual consumers are being misled by their failure to understand which parent company owns particular providers. I accept and endorse my hon. Friend’s comments that new clause 19 is a way forward. It addresses the additional information that should be supplied by energy suppliers on bills and I hope that the Government will support it. It is supported by Which?—an organisation that self-evidently works on behalf of individual constituents and consumers—and a number of other organisations that are greatly to be credited. Anything that ensures that a generic signposting message is displayed prominently on all customers’ energy bills, detailing how they might reduce those bills, should go ahead. We should ensure that such messages are on bills. Indeed, I go further in saying that it would be of great benefit if something were supplied on that issue this year, although I accept that it might be difficult to do that by 1 December given the bureaucracy involved.

I should like to have seen a further subsection added to new clause 19—it is to my detriment that I failed to table an amendment to it—that would have touched on clarity of ownership, but perhaps we can return to that after the OFT has produced its report, when we know what it says about the role of DCC Energy.

I support the Bill and the green deal. The constituency that I represent and the whole of Northumberland is well behind the green deal and the objectives that it seeks to achieve.

[Albert Owen]

It is a pleasure to follow the hon. Member for Hexham (Guy Opperman). I welcome him back to the House. He is in good campaigning mode on fuel poverty and off-grid fuels in peripheral areas of the United Kingdom. I support new clause 1 and the other Opposition new clauses and amendments, but I shall limit my remarks to new clause 19, tabled by the hon. Member for Basildon and Billericay (Mr Baron). He highlighted in his opening remarks how important energy issues are to households and how the price hike of recent months and the trend that is forming are hurting every household in the United Kingdom. That is something that we need to address.

Good measures have been taken by previous Governments and, indeed, this Government with social tariffs, but the market simply does not work for many people. The price hikes are unsustainable, hurting and causing fuel poverty across the country. I welcome new clause 19 when it talks about clarity and simplifying bills, so that people have ready information.

I am glad that the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) is still on the Front Bench. He is on record as saying that he was so confused by the information available when he tried to switch supplier that he just gave up. I am in the same league as him. Energy companies deliberately give so much information to their potential consumers and customers that they do not bother.

I am a member of the Select Committee on Energy and Climate Change. We have held a number of inquiries and a mini-inquiry when price rises were announced just before the recess. We took evidence from three of the big six companies. There has been a review and there will be further reviews of energy pricing and tariffs and how the companies present their bills. It was interesting that 40% of those who decide to switch supplier are no better off when they do so, and many of them do so under duress; they switch just to get rid of cold-callers. So it is important that we have such a clause as well as other legislation and regulations that allow individuals to have clear and concise bills, so that they can make clear and concise choices and, we hope, reduce their energy prices, thereby reducing fuel poverty.

We will extend the retail market inquiry being undertaken by the Department of Energy and Climate Change to find out more from experts, including consumer groups, which have been helpful. I join hon. Members in putting on record my appreciation of the work done by consumer groups, such as Which?, Consumer Focus and Citizens Advice, in helping to frame proper protection guidelines for energy consumers.

The confusion needs to be addressed, and new clause 19 would go some way to doing so. When I intervened on the hon. Member for Basildon and Billericay to ask whether he would expect the measure to be extended to people off-grid and not on the mains, he said that he would. Of course, such an extension would be difficult because, as has been said in the previous contribution, the off-grid is not a regulated market. I am not sure—I am willing to take an intervention—how he envisages that independent suppliers would do what would be required of the big six, with dual tariffs and so on. Obviously, people without gas supplies cannot get the dual tariffs or other reductions that many people have.

[Mr Baron]

I think I said that subsection (c) of new clause 19 calls for research to choose the best message and consider how to communicate it. I envisage that we could at the very least consider that issue, without making any promises, when subsection (c) was triggered.

[Albert Owen]

I am grateful to the hon. Gentleman for the spirit in which he made his intervention. However, I think that that would be difficult. For some time, I have suggested—the Bill may not be exactly the right place to deal with this, but the electricity market reform White Paper is looking at it—that the regulator should look after people who are off-grid so that they have the same protection and rights as others. As has been said on numerous occasions, people in hard-to-reach areas on the periphery have the greatest need and are in the greatest fuel poverty. They are often off the mains, so they need equal if not better protection than people with access to mains gas and electricity.

17:30

[Mr Weir]

I very much agree with the hon. Gentleman. I, too, have called for those changes. Earlier, I was trying to make the point that new clause 19 will not help those people at all because there are no tariffs in that market: there is a set price for the oil that they buy. One of my constituents told me that last winter the supplier would not quote them a price. They had to buy the oil, paying the price set on the day of delivery, as prices were volatile. Unlike gas and electricity consumers, they do not receive a bill so that they can look at those things; they are given a price, and so much oil is delivered.

[Albert Owen]

The hon. Gentleman is absolutely right, which is why those people need greater protection. The Office of Fair Trading is undertaking a review, and I hope that, rather than just refer something to the Competition Commission, it will come up with proposals and take action. I hope—and I know that the Minister is listening, because this is a serious issue—that people who are off-grid receive better protection in future. I shall certainly work with the Government—and I know that the Select Committee on Energy and Climate Change will do so, too—and help them to try to reach those people.

The hon. Gentleman made an important point about the contracts and the sums that individuals have to pay. The hon. Member for Hexham touched on that. I have received anecdotal evidence from my constituents that, during the big freeze in December last year, an individual in an isolated hamlet applied to have their tank filled up. They were told that they could have only half the amount that they usually received, and they were charged 50p a litre. Six weeks later, the company came to replenish the tank, and charged them 70p a litre. Members up and down the country will be familiar with such examples. Those people are suffering real hardship and are in fuel poverty, which is why we should all work together to ensure that people who are off-grid receive the proper protection afforded to those on the gas and electricity mains.

The new clause is a good measure, and we are moving towards clearer bills that include such information: informed people can make informed choices, as I have said. We need that information, and the choice of suppliers should extend beyond the big six. That has been mentioned, and the Government and Ofgem are looking at it. The proposal has cross-party support, because the monopoly enjoyed by the six companies that generate 80% of electricity and gas yet supply 99% of consumers does not produce a fair market. That is why we need intervention and tighter regulations, to achieve the outcome that we all want to achieve: price stability and clarity, so that people know from their bills what percentage of what they pay is going to fund energy efficiency measures, and what percentage is used for external measures such as transmission and so on. Transmission has not been discussed at great length, and it is ironic that people who live at the periphery of the United Kingdom, in areas that generate much of the electricity that goes to the grid, pay more for their electricity and gas than people in other areas.

[Tessa Munt]

I cannot resist the opportunity to discuss transmission. Does the hon. Gentleman agree that, in fact, the costs of modernising electricity transmission are minimal compared with the increased prices charged by electricity and gas companies?

[Albert Owen]

Absolutely. To be fair to the national grid, as part of our inquiry into the market, we went to see the National Grid Company which, for the first time, is offering choices and options in transmission, such as underground, overground and subsea. I agree that these hikes are ripping people off. They want choices and if they choose underground and it costs more in certain areas, we might have to consider paying more for it, but at the moment we are getting a poor deal when we have the minimum upgrade to the transmission lines and the infrastructure, and are paying the maximum amount through our bills. That balance needs to be addressed.

I realise that time is of the essence, but in closing I want to highlight the point about off-grid so that all households in the UK are treated equally. We need to ensure that we have a level playing field for people in peripheral areas as well as in large towns and cities when it comes to the green deal and paying for electricity and gas. I am sure that there is consensus on this and we need to move forward.

I congratulate the hon. Member for Basildon and Billericay on raising this important point about simplicity, the changing of the tariffs and how we can get a better deal for all those whom we represent, because at the moment they are being ripped off.

[Gregory Barker]

I shall speak to all the amendments tabled by the Opposition and Back-Bench Members in this group. The first important cluster of amendments covers the green deal. I thank hon. Members for all the amendments and the opportunity, even where we have not agreed, to debate a set of issues that are of particular significance to all our constituents. As we look towards the winter, people will be looking to us for leadership on the important issues of our energy bills and energy efficiency.

I start with amendment 1, tabled by the hon. Members for Ogmore (Huw Irranca-Davies) and for Liverpool, Wavertree (Luciana Berger), and new clauses 1 and 2, also tabled by the hon. Members and by the hon. Member for Rutherglen and Hamilton West (Tom Greatrex). The amendments might appear to duplicate existing legislation, but they raise important issues. On our aims for meeting carbon budgets and tackling fuel poverty, legislation already exists to compel this, as the amendments highlight. There is no doubt about the coalition Government’s commitment to both those issues, and we have already met our first and second carbon budgets and published our strategy for the third. We will be publishing our strategy for meeting the fourth carbon budget in the 2020s this autumn.

As I have said, the green deal and the ECO must be seen in the context of our overarching carbon budgets. The amendments tabled by the hon. Member for Southampton, Test (Dr Whitehead) emphasise the importance of taking a broad view to maximise cost-effectiveness. Our strategy will set out the role played by the green deal and the ECO in support of the green deal. We have already committed to report to Parliament specifically on this.

The Climate Change Act 2008 already obliges us to justify any shortfall and to take action to address it. Likewise, the Act also enables the Committee on Climate Change to provide advice, which I will come to later. This aim commits the Government to ensure household energy efficiency makes a fair and appropriate contribution to delivering our existing legally binding carbon budgets. We will report each year on what our energy efficiency policies are delivering and to what extent they contribute to the carbon budgets. It will be clear to all who wish to challenge us if our policies are underperforming. That is already in the Climate Change Act or in the Bill.

Only English households are covered because energy efficiency is a devolved matter. It is not for the UK Government to dictate the ambitions of the Government of Scotland and the Welsh Assembly, but we are working in tandem with devolved Administrations, and I have been pleased with the way in which, particularly at official level, but also at a political level, there has been real agreement. We are definitely heading together in the right direction.

Amendments 9 to 12, tabled by the hon. Member for Southampton, Test, relate to energy efficiency in a broader sense. I certainly support the principle behind them. He is right to say that successive Governments have ignored at their own expense—or rather, at ours—the compelling argument in favour of energy efficiency improvements before leaping to build new generation capacity, and they have failed to pick up the money available from energy efficiency action on the ground. Energy efficiency within that spectrum of measures must always focus on the most cost-effective savings. Cost-effectiveness is enshrined in policy making within the coalition, and all existing energy efficiency policies come with impact assessments for that purpose. The costs and benefits for UK plc are always in the foreground, not stuffed into the small print. It is for this reason that we propose the green deal as a market mechanism. We will publish an updated impact assessment of the green deal and the ECO, along with a consultation and full details of the secondary regulation, next month.

I assure the hon. Gentleman, who has a substantial record of campaigning and contributing to serious debate on energy efficiency, that it is something my Department now takes far more seriously. We are not just using words to show this, and it goes beyond the green deal. The green deal is clearly a radical, ambitious and key part of our efforts and a flagship policy of which we are extremely proud, but it is certainly not the end of the story. We will establish by the end of the year a new energy efficiency deployment office to deliver energy efficiency; it will sit within the Department alongside the office for renewable energy deployment and the office for nuclear energy deployment, and with equal weight. For too long, and for some extraordinary reason, while successive Governments have exalted the building of new energy generation capacity, energy efficiency, when not ignored altogether, has been dispersed around the Department. It will now have its rightful place in the Department’s hierarchy of actions and priorities.

I am happy to meet hon. Members privately to explain in detail our plans for bringing together the energy efficiency deployment office. It will not only be a first for the UK, but set a precedent around the world. In the international forums I attend, I have found real interest in what we are doing. We are looking at new market models that have not been tried anywhere else. We will certainly look abroad for best practice to build on, but I really think that we will come up with something that has a leading edge.

The energy efficiency deployment office will be tasked with identifying ways of driving further carbon abatement across the economy, which the hon. Gentleman seeks in his amendment, and learning from best practice in other countries. At the heart of its mission, as expressed in the amendment, will be analysing the cost-effectiveness of energy efficiency and energy generation, and it will have the resources to do that. We are recruiting the senior staff with appropriate experience to drive that effort. I hope that that satisfies him and that he is content not to press his amendment to a vote.

The amendments also raise the important matter of the role of non-domestic buildings in the green deal. I assure the House that, as I have said on many occasions, the green deal is an opportunity not only for homes and households, but for businesses and communities. There will be more detail in the consultation document, which we intend to publish next month, about how the green deal will be tailored for non-domestic—invariably business—customers. The UK’s building stock is a key sector of our annual carbon reporting, so the green deal’s contribution to both domestic and non-domestic buildings will be covered. I take the green deal’s contribution to our carbon budgets very seriously, which is why I tabled an amendment in Committee to include in the Bill that reporting commitment, as many stakeholders and other members of the Committee suggested.

17:45

In Committee we discussed at great length local authority carbon emissions and the role that local authorities have to play in producing and taking ownership of plans to reduce carbon emissions in their area. Hon. Members’ proposed changes—new clauses 3 and 4, tabled by the hon. Members for Ogmore, for Liverpool, Wavertree and for Rutherglen and Hamilton West, and amendment 21, tabled by the hon. Member for Gower (Martin Caton)—deal with the role of local authorities in tackling climate change, and I cannot agree more wholeheartedly that they have a key role to play if we are to meet our national carbon reduction targets and to maximise the benefits of, for example, the green deal.

During our debates in Committee I spoke about how we are working with local government, and since then I have had more opportunity to see at first hand the considerable enthusiasm among many local authorities to engage with the climate change agenda, as demonstrated in the memorandum of understanding between my Department and the Local Government Group. I am delighted that under that MOU a new Nottingham declaration on climate change is being consulted on and is planned for publication this autumn. It demonstrates that councils are able to take the lead without central Government diktat.

We have already announced our intention to retain the Home Energy Conservation Act 1995 in England, providing a mechanism already on the statute book to encourage councils to play a key role, to keep track of their progress and to take action when they fail to step up to the mark. Much of the effectiveness of the 1995 Act will lie in the new guidance that we provide. That will give us the opportunity not only to work with the grain of voluntary activity, with the enthusiasm that we see and with the work that is already under way, but, where appropriate, to focus councils on some of the specific—perhaps new—areas that the proposed changes to the Bill cover.

[Lyn Brown (West Ham) (Lab)]

I have been listening very carefully to the Minister, but I do not quite get how we will measure that, in order to ensure that we are successful.

[Gregory Barker]

As the Bill Committee and, in particular, the Chairman of the Environmental Audit Committee suggested I do, I have already met Lord Turner of Ecchinswell and the Committee on Climate Change to discuss how it might inform the guidance that the Government are preparing to help local authorities cut carbon emission in their areas. I expect that the framework and the guidance that the CCC provides will help to answer, at least in part, the hon. Lady’s question. I expect a formal proposal from the CCC shortly; when we met, Lord Turner certainly took on board how crucial it is that the Committee’s advice be completed early next year, so as to feed into the permissive guidance for local authorities being developed by the Department for Communities and Local Government.

[Barry Gardiner]

Will the Minister undertake to make Lord Turner’s advice available to Members who sat on the Bill Committee and, indeed, to my hon. Friend the Member for West Ham (Lyn Brown), so that we might see exactly how it will operate?

[Gregory Barker]

I am very happy to do so. Indeed, I am sure that Members will have further ideas on how to build up the advice that we give local authorities. Given that it will go to councils of every political party, it is important that it is seen to be thoroughly objective, so a sense of co-ownership would indeed be very helpful.

New clauses 7 and 18 and amendment 24 deal with the ECO and fuel poverty. The hon. Member for Brighton, Pavilion (Caroline Lucas), who tabled new clause 7, may recall what I said in Committee in response to a similar amendment: that the Treasury is responsible for the allocation of public funds. Putting a duty on the Secretary of State to report on potential uses of central Government revenues would, I am afraid, conflict with the Treasury’s responsibility. I assure her, however, that the Government are taking great care to ensure that their policies in the round will be up to the task of delivering our climate change and fuel poverty objectives. The ECO is a key part of this, and we will make sure that it has the right level of ambition to achieve our goals without putting an unduly heavy or inequitable burden on energy bills. On that basis, I hope that the hon. Lady will not press the amendment.

Amendment 24, tabled by the hon. Members for Liverpool, Wavertree and for Ogmore, and new clause 18, tabled by the hon. Member for Brighton, Pavilion, focus on data sharing. Although I understand the intent of the proposal, we do not need it now because the existing warm home discount scheme will provide the six major energy suppliers with the details of more than 600,000 older poorer pensioners this winter and information on thousands of further customers over each of the three subsequent years. That information will be used to provide a £120 rebate this winter to those customers, but it can also be used to provide the customers with additional advice, including information about the ECO. Additional powers for further data sharing are therefore not necessary at this time.

The forthcoming ECO consultation will report on the likely impacts of the policy, as will the accompanying impact assessment. The type of statutory duty that amendment 24 would introduce is not necessary for the purpose of showing the intended impact that the ECO will have on fuel poverty and the energy efficiency of properties. I can therefore assure the hon. Members for Liverpool, Wavertree and for Ogmore that the intentions of the amendment are already met in full.

Amendments 2 to 8, 19, 47 and 48 deal with the private rented sector provisions. These were tabled by the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), the hon. Members for Manchester, Withington (Mr Leech), for Brighton, Pavilion, for Leeds North West (Greg Mulholland), for Foyle (Mark Durkan), for Liverpool, Wavertree and for Ogmore, and my hon. Friend the Member for Hove (Mike Weatherley). Amendments 6, 7, 19, 47 and 48 relate to timing issues, and I will consider those first, albeit briefly.

As we debated in Committee, we are providing landlords with a firm legislative position. The tenants’ energy efficiency regulations must come into force no later than 1 April 2016. Under those regulations, tenants will be able to ask for consent from their landlord to make relevant energy efficiency improvements such as those funded under the green deal or ECO, and their requests cannot be unreasonably refused. Amendments 7 and 48 propose that the regulations on tenants’ right to request should be introduced sooner, but as well as regulatory certainty, we need to provide landlords with a reasonable period in which to prepare and get up to speed with the regulations. The dates we have chosen strike a balance between pursuing greater energy efficiency benefits and giving landlords time to prepare.

I draw the House’s attention to the latest survey, published this week, which clearly shows that two thirds of landlords are keen to act and take up the green deal, and that only a relatively small minority—fewer than 20%—are dragging their feet. There are grounds to be optimistic that landlords are not resisting this agenda. We have set the dates of 2016 and, as a backstop, 2018, but I cannot reiterate strongly enough—

[Luciana Berger]

rose—

[Gregory Barker]

I will not give way, because I have to get through these points.

The backstop is 2018—the point at which we must cross the finishing line. Clearly, in the five years to 2018, from the point at which the green deal goes live, it will be up to the Government to monitor progress in the private rented sector. If we see that there is not a significant glide path towards being able to complete by 2018, it remains to us to take further measures and actions, and we will. [Interruption.] If the hon. Member for Brent North (Barry Gardiner) had been in the Committee, he would know that we will have available an improved online register that is much better than the existing data facilities. We will have the information, we will monitor it carefully, and we certainly see the 2018 date as the end line and reserve the right to introduce new powers, measures, regulations and incentives to drive uptake if we do not see it happening.

Amendment 4 considers the implementation of the minimum standard. The principle behind the amendment is that all F and G-rated properties should be brought up to the minimum standard, regardless of how much of the work can be funded through the green deal. However, the regulations come with safeguards. We do not want our regulations to have an adverse impact on the supply of properties in the private rented sector. For that reason, we remain committed to ensuring that there are no up-front costs for landlords. Landlords will either have to reach an E rating or carry out the maximum package of measures funded under the green deal and the ECO, even if that does not take them above an F rating.

My hon. Friend the Member for Hexham (Guy Opperman) raised a very important point. The Government hear and share the concerns that he expressed so eloquently. We were so concerned by the problems in the domestic heating oil sector last winter that the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), asked the Office of Fair Trading to undertake an urgent assessment of the whole off-grid sector. I am pleased to say that it has already taken action to ensure that price comparison websites are genuinely independent. We look forward to its final report next month so that we can see what further steps may be necessary ahead of this winter and ensure that there is proper and effective competition in this important sector, where customers consistently get a very raw deal. The Minister of State is absolutely determined to drive home the agenda that my hon. Friend the Member for Hexham articulated so well.

I turn now to the points raised by my hon. Friend the Member for Basildon and Billericay (Mr Baron) and his new clause 19. This is an area in which he has considerable knowledge and I place on record my thanks to him for taking up the challenge of chairing the consumer billing stakeholder group, which has provided invaluable advice to the Government and has helped to drive forward the aim enshrined in clause 74 of providing consumers with additional information about their suppliers’ cheaper tariffs. My hon. Friend makes the good point that we should seek to provide consumers with helpful, clear information at the earliest opportunity, and that we should build on that through research informed by consumer groups and consumer responses. His new clause would put a set of specific implementation actions in the Bill.

As my hon. Friend is aware, because he has been essential to the steps that the Department is taking, we are on exactly the same page as him on identifying what needs to be done to give the consumer the best possible information. This winter we are doing what can reasonably be achieved, with a clear signpost on bills that will start going out in the next few weeks. There will then be an urgent communication—a letter in most cases—advising consumers of the advantages of switching. I greatly welcome the suggestion that that campaign be backed by consumer groups such as Which? and Consumer Focus to encourage a better take-up than sometimes results from similar mail. We are awaiting the recommendations of the retail market review. If we judge that it does not go far enough, we will look to go further and we have the back-stop of being able to legislate. I have conveyed clearly to the energy companies what we expect and that we will not hesitate to legislate if they do not come to a voluntary agreement.

[Mr Baron]

In short, does the Minister accept the three recommendations of the billing stakeholder group, which are contained in new clause 19? I accept that we do not need to press the matter and put them in the Bill.

[Gregory Barker]

I broadly support those recommendations, although we might have to address some of the detail, such as the nature of the communication. We want to ensure that we have the best possible advice. However, I am happy to confirm that we are on exactly the same page in broadly supporting the three recommendations my hon. Friend has made.

In summary, although I am sympathetic to the well intentioned principles behind many of the amendments, and I apologise if I have been unable to speak in detail to some of them, I hope that the hon. Members for Liverpool, Wavertree, for Ogmore, for Rutherglen and Hamilton West, for Southampton, Test, for Brighton, Pavilion, and for Gower, and my hon. Friend the Member for Basildon and Billericay, have found my reassurances, explanations and commitments satisfactory, and that they consider not pressing their proposals to a Division, given that we have moved a long way since the Bill was first published—

18:00

Debate interrupted (Programme Order, 10 May).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time.

18:00

Division 351

Ayes: 229

---

Labour: 214
Scottish National Party: 6
Plaid Cymru: 3
Democratic Unionist Party: 2
Independent: 2
Green Party: 1
Social Democratic & Labour Party: 1

Noes: 300

---

Conservative: 245
Liberal Democrat: 48
Democratic Unionist Party: 5

Mr Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 1

Green deal plans

Amendment made: 29, page 2, line 29, at end insert—

‘, and

(d) recovered and held by the relevant energy supplier as agent and trustee for the person who made the improvements (unless the relevant energy supplier is also that person).’.—(Chris Huhne.)

Clause 3

Framework regulations

Amendment made: 30, page 4, line 41, at end insert—

‘(ea) requiring green deal assessors to act with impartiality;’.—(Chris Huhne.)

Clause 8

Confirmation of plan

Amendment made: 31, page 8, line 35, leave out from ‘takes’ to ‘in’ in line 36 and insert—

‘one or more of the following actions as required by the framework regulations’.—(Chris Huhne.)

Clause 12

Disclosure of green deal plan etc in connection with sale or letting out

Amendments made: 32, page 10, line 32, after ‘must’ insert—

‘, in relation to the document, or each document, required to be produced or updated as mentioned in section 8(4)’.

Amendment 33, page 10, line 33, leave out from ‘document’ to ‘has’ and insert—

‘or, if the requirement to produce or update the document’.—(Chris Huhne.)

Clause 13

Disclosure of green deal plan in connection with other transactions etc

Amendment made: 34, page 11, line 22, leave out from ‘obtain’ to ‘has’ and insert—

‘a document required to be produced or updated as mentioned in section8(4) or, if the requirement to produce or update such a document’.—(Chris Huhne.)

Clause 21

Powers under sections 17 to 20: consultation

Amendment made: 35, page 17, line 11, leave out subsection (2).—(Chris Huhne.)

Clause 39

Regulations and orders

Amendment made: 36, page 26, line 32, leave out subsection (14).—(Chris Huhne.)

Clause 42

Domestic energy efficient regulations

Amendment proposed: 4, page 28, line 7, at end insert

‘such that the property shall not fall below the level of energy efficiency specified in subsection (1)(c).’.—(Mr Leech.)

Question put, That the amendment be made.

18:18

Division 352

Ayes: 128

---

Labour: 103
Liberal Democrat: 12
Scottish National Party: 6
Plaid Cymru: 3
Democratic Unionist Party: 2
Conservative: 1
Green Party: 1
Social Democratic & Labour Party: 1

Noes: 278

---

Conservative: 244
Liberal Democrat: 32

Amendment proposed: 47, page 28, line 33, leave out ‘April 2018’ and insert ‘January 2016’.—(Luciana Berger.)

Question put, That the amendment be made.

18:31

Division 353

Ayes: 219

---

Labour: 202
Liberal Democrat: 5
Scottish National Party: 5
Plaid Cymru: 3
Green Party: 1
Independent: 1
Social Democratic & Labour Party: 1
Democratic Unionist Party: 1

Noes: 281

---

Conservative: 242
Liberal Democrat: 37

Clause 76

Power to modify energy supply licences: procedure and supplemental

Amendment made: 37, page 57, line 15, leave out subsection (2).—(Chris Huhne.)

Clause 80

Power of the Gas and Electricity Markets Authority to direct a modification of the Uniform Network Code

Amendment made: 38, page 61, line 5, leave out from ‘consultation’ to ‘the’ in line 6 and insert ‘before, as well as consultation after,’.—(Chris Huhne.)

Clause 97

Modification of particular or standard conditions

Amendment made: 39, page 79, line 7, leave out subsection (4).—(Chris Huhne.)

Clause 117

Commencement

Amendments made: 40, page 95, line 32, at end insert—

‘(ia) section [Agreement about modifying decommissioning programme] (agreement about modifying decommissioning programme)’.

Amendment 41, page 95, line 34, at end insert—

‘(ja) section [Adjustment of electricity transmission charges] (adjustment of electricity transmission charges);’.

Amendment 42, page 95, line 44, leave out first ‘section’ and insert ‘sections [Consultation] and’.—(Chris Huhne.)

Schedule 3

Repeals and revocations consequential on section 115

Amendment made: 43, page 101, line 5, leave out Schedule 3.—(Chris Huhne.)

Title

Amendment made: 44, line 12 leave out ‘by a National Park authority or the Broads Authority’.—(Chris Huhne.)

[Barry Gardiner]

On a point of order, Mr Speaker. Have you received a request from a Treasury Minister to make an urgent statement to the House about the news that the Treasury is about to sue the European Central Bank, as that is being reported in the media at the moment?

[Mr Speaker]

No, I have not. The hon. Gentleman is ahead of me. He has heard of information of which I have not heard. I have, however, now heard of it, and I am grateful to him.

Third Reading

Queen’s and Prince of Wales’s consent signified.

18:44

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

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

I begin by thanking the many hon. Members who have contributed so much to the discussions on the Bill. The hon. Members for Hackney South and Shoreditch (Meg Hillier), for Liverpool, Wavertree (Luciana Berger), for Ogmore (Huw Irranca-Davies), for Rutherglen and Hamilton West (Tom Greatrex), for Blaydon (Mr Anderson), for Hyndburn (Graham Jones), for Wansbeck (Ian Lavery) and for Southampton, Test (Dr Whitehead), who is my constituency neighbour, put a lot of work into the Bill during its lengthy consideration in Committee. I extend my thanks to the hon. Member for Bolton North East (Mr Crausby) and my hon. Friend the Member for Gainsborough (Mr Leigh) for chairing the Bill Committee, and to the hon. Member for Brighton, Pavilion (Caroline Lucas), who worked tirelessly and made a substantial contribution to the debate, for which I am extremely grateful.

On the Government Benches, I should like to extend my gratitude to the hon. Members for Richmond Park (Zac Goldsmith), for Mid Norfolk (George Freeman), for Stourbridge (Margot James), for Devizes (Claire Perry), for Winchester (Mr Brine), and for Stratford-on-Avon (Nadhim Zahawi), and to my hon. Friends the Members for Norwich South (Simon Wright) and for Wells (Tessa Munt), for the dedication that they have shown in scrutinising the Bill in its passage through the House. I also thank my officials, who have worked extremely hard to develop the Bill and who helped Members with their inquiries.

The centrepiece of the Bill is the green deal, an innovative finance mechanism to release capital for energy efficiency. The green deal is the first measure of its kind anywhere in the world, and it allows a payback to investors over long periods beyond the normal tenancy or period of owner-occupation, so that householders do not have to pay any of the cost up front, and much more energy saving becomes affordable. It creates a new market in energy saving that will cut energy bills, ensure against future price rises, provide local jobs, boost green businesses and improve our nation’s energy security. We have worked hard to allow hon. Members to scrutinise the provisions in detail, and I believe that the proposal has been strengthened.

[Mr William Cash (Stone) (Con)]

Does the Secretary of State accept that wind farms have generated serious concerns all over the country? Does he accept, too, regarding his proposition on the value of the Bill, that the consumer tariff in fact pays significantly for the destruction of the countryside?

[Chris Huhne]

I am grateful to the hon. Gentleman for his intervention. The bulk of the Bill is about energy efficiency and energy saving, which means that we will need fewer types of electricity generation of all descriptions, including windmills. I disagree with him, as I think that windmills are beautiful and we should have a lot more of them. They provide the most economical form of renewable energy, and I trust that he will come up with ideas for many more windmills in and around his constituency.

There are provisions in the Bill for a new energy company obligation, or ECO, which is critical for delivering carbon savings in homes that are hard to treat. It will protect the most vulnerable groups and those on the lowest incomes, focusing on households that cannot afford to heat their homes adequately. The provisions relating to the private rental sector are a significant step forward. They are designed to increase efficiency to protect tenants in some of the worst housing and to boost overall carbon savings.

The Bill contains a number of provisions relating to energy markets and infrastructure. It ensures that I will have sufficient information to publish an assessment of future electricity capacity requirements, and that I have a duty to do so. That sits alongside the much more significant package of reforms covered in the electricity market reform White Paper. To improve security of supply, the Bill contains powers that, if taken, will give incentives to gas providers to continue to supply their customers, should Britain suffer its first gas supply emergency. Through this Bill, we will be able to de-designate areas of our continental shelf—a small but important amendment to the existing legal situation. Should negotiations between industry players over access to infrastructure in the North sea break down, the Bill gives us the ability to intervene and work to find a resolution, so that our energy security will not suffer.

The Bill contains powers to ensure that the interests of consumers are paramount. For example, we have taken powers to oblige suppliers to specify whether a cheaper tariff is available.

[Mr Baron]

On that issue, may I congratulate the Secretary of State and the Government on accepting the recommendations of the billing stakeholder group and, indeed, the need for a letter, where appropriate, provided that it is supported by a campaign by Which? and others, to make consumers aware of the cheapest tariffs? However, does he share my view, and that of the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), that Ofgem should publish its findings from the consultation on the retail market review before Christmas this year?

[Chris Huhne]

I am grateful to my hon. Friend for his intervention. The ministerial team is pressing Ofgem to move further and faster as quickly as possible on all of this, and I very much hope that it will be able to come forward with conclusions before Christmas. Clearly we are then getting into the period before the highest energy bills, and it is important that consumers should have access to that information and to those potential safeguards. I will certainly be pressing Ofgem to do that.

These measures are accompanied by a number of minor yet vital provisions in the Bill that we need to make to secure our supply of low-carbon energy, and I am grateful to the House and to Members in the other place for taking the time to scrutinise and contribute to the Bill. It has a substantial measure of support across the House, despite the differences that we have had. I certainly pay tribute to Opposition Members. This is one of those cases where success has many parents and, as we all know, failure is an orphan. I hope that bodes well for the success of the Bill when it comes to improving dramatically our energy efficiency.

We have here the keys that will unlock the door that stands in the way of an energy efficient and energy secure Britain, and I commend the Bill to the House.

18:51

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

At last we are here at the Third Reading of a Bill that has dropped off the parliamentary agenda more often than Humpty Dumpty. In Committee, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) clearly set out his ambitions for the Bill. He described the green deal as

“the centrepiece of…the coalition’s ambitious plan for energy efficiency.”

He went on to describe it as

“a new paradigm…the biggest home improvement project since the second world war.”––[Official Report, Energy Public Bill Committee, 7 June 2011; c. 4-5.]

In reality, it is a bit of a disappointment; not as broken as Humpty Dumpty, but in parts as divorced from reality as a nursery rhyme. Much was promised, but little was delivered.

The delays are serious, because they mean that the green deal will fail to be delivered by October next year as planned. But we should not be surprised, because since the Secretary of State was appointed we have seen promises delayed and initiatives re-announced so often that we have lost count. Even after intense parliamentary scrutiny here and in the other place, it is still a weak Bill, which I fear will not deliver what it promises. We want the Bill to achieve its aims, but wanting is not enough. The green deal needs to work, and the Government need to now work very hard on that delivery. But the Government are swamping providers in red tape, customers in confusion and energy companies with responsibilities that many are reluctant to undertake. We should not be surprised because the Government have form on this issue in delay, dither and confusion generally on the green policy agenda.

There was so much promise. The greenest Government ever was the Prime Minister’s pledge. That is the same Prime Minister who has not mentioned green issues at all since the election. In opposition, he criticised energy Bills but now sits on his hands and does nothing. The Secretary of State needs to take responsibility. He has less influence over his Department than the Chancellor of the Exchequer. It is not just the Chancellor who we know has influence. We knew trouble was afoot when the Prime Minister appointed a new energy adviser, and as he arrived at No. 10, dripping with oil, the death knell of the Government’s green credentials were sounded. We know this from a recently leaked memo, originally circulated to a select group of 12 trusted advisers and leaked by one of them to The Daily Telegraph. This shows the unease within the Conservative party ranks about the Secretary of State’s performance. The memorandum from the Prime Minister’s own energy adviser suggested that the Department’s projections were unconvincing, so not exactly a ringing endorsement for the green deal from within the Government.

One of the real scandals of the Government’s approach against a backcloth of rising prices for gas and electricity is how they are turning their back on consumers. As the temperature drops, millions will start to see their energy prices spiral out of their reach, and the green deal will not deliver this winter or even next. Those in private rented housing will have to wait until 2016, or even 2018, to see those improvements. So people will face the terrible choice between staying warm and running up debts, and turning off the heating despite plummeting temperatures. Those on pre-payment schemes will see their money run out sooner and the gas go off. Hundred of thousands will slip into fuel poverty, spending more than 10% of their household income on keeping their home at an adequate temperature. The Secretary of State cannot even persuade members of his own Government. Recent polling shows that energy prices are a top concern for the public. Within months there could be a full-scale crisis.

[Caroline Lucas]

I am no apologist for this Government, but I must observe that in Labour’s 13 years in government CO₂ emissions went up, not down. Does that not look a little hypocritical of the hon. Lady?

[Meg Hillier]

We all share the mission of reducing carbon emissions, and we have all supported the Government in signing up to the fourth carbon budget, but the proof of the pudding will be in whether they can actually deliver. My sad worry is that the Bill will not deliver the home efficiency improvements it sets out. We want it to succeed, but it is a wishy-washy Bill that I fear will not meet the Secretary of State’s aims. It needs further improvement. It has no strategy or plan for delivery, and there are so many unanswered questions about practical delivery, even after being debated in both Houses.

The Secretary of State has staked his reputation on this market-driven home energy efficiency model. His claim that it will transform the energy efficiency of our homes, which represent 27% of emissions nationally, and create green jobs up and down the country is melting away, as publicly and privately the expected players are very critical of it. I re-emphasise that the Opposition strongly support the aim. The original thinking behind it came from my Government when we were in power. The need to tackle domestic emissions is unarguable, and we fully support the direction of travel. It is just a crying shame that the Secretary of State, with all Whitehall’s talent at his disposal, has managed to deliver a wet dishcloth of a Bill.

As five of the big six energy companies hiked their prices over the summer, it was clear that the vast majority of bill payers will face real pressure this winter. The Secretary of State’s proposal was that customers should shop around for the best deal, but with companies’ prices rising in line with one another, that suggestion rings hollow. The Government have abolished Warm Front before any replacement scheme has been introduced, and the new energy company obligation ushered in by the Bill leaves many questions unanswered. We pass the Bill tonight with that detail still to come.

The reality is that the Secretary of State, as a Lib Dem in a Conservative Government, and distracted by other matters, now lacks the focus to get even this flagship Bill delivered in time. We still have more than 50 pieces of secondary legislation to pass, so the timetable is in serious doubt. I do not doubt his commitment to this, but the reality is that the Government as a whole are not serious about their green agenda. With friends like that in No. 10, we can have little hope that the real opportunities for growth and jobs in greening our energy supplies and helping those who are shivering under blankets will be met by the Government.

[Chris Huhne]

May I point out to the hon. Lady that the Government have increased the funding for vulnerable groups in fuel poverty by two thirds, compared with the Government she supported? What is her response to that?

[Meg Hillier]

We will wait to see whether the energy company obligation will truly deliver, because we have real doubts about it. We are yet to see the detail, and the devil will be in that detail. There are 50 pieces of secondary legislation that will flesh out that and other elements of the Bill. We will continue to work on and with the Government, as appropriate and where possible, to put flesh on this skeletal Bill, as well as on fuel poverty and affordability, on climate change and across the board in this area. If the Government fail, they will fail this generation of families this winter and every winter. They will fail future generations who will not forgive them for mistaking rhetoric and ambition for action and outcomes.

18:59

[Graham Jones]

In these final 15 seconds, I should like to say that there are real concerns in the Bill for the poor people of this country. There is the potential for high interest rates on the loans; the pre-payment meters issue has still not been resolved; and the energy company obligation is a regressive tax, because the energy consumption differential between rich and poor will not be that great, and it is going to hit low-wage households.

On the ability to pay, we have the issue of the ECO in hard-to-treat homes, and people who are on low wages but who have the ability to pay may be excluded, so the Government have real issues to sort out there. The Bill is not clear about doorstep mis-selling, whereby vulnerable people could be taken advantage of, so the Government need to tighten up on that, and the whole private landlords issue has just been a sop to the landlords, not to the tenants. That is a real problem, because a child now aged one might be 8 years old before they get the opportunity to benefit from the green deal and from insulation, and that is of great concern. I rest my 15 seconds there.

18:59

[Caroline Lucas]

I support the Government’s intention in this Bill, but—

19:00

Debate interrupted (Programme Order, 10 May)

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read a Third time.

Question agreed to.

Bill accordingly read the Third time and passed, with amendments.

Business without Debate

Wednesday 14th September 2011 Commons Chamber

Delegated legislation

Wednesday 14th September 2011 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Financial Services and Markets

That the draft Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2011, which was laid before this House on 4 July, be approved.—(Mr Francois.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Weights and Measures

That the draft Weights and Measures (Specified Quantities) (Unwrapped Bread and Intoxicating Liquor) Order 2011, which was laid before this House on 5 July, be approved.—(Mr Francois.)

Question agreed to.

draft financial services bill (joint committee)

Wednesday 14th September 2011 Commons Chamber

Resolved,

That this House concurs with the Lords Message of 13 September that, notwithstanding the Resolution of this House of 18 July, it be an instruction to the Joint Committee on the Financial Services Bill that it should report on the draft Bill by 16 December. (Mr Francois.)

delegated legislation

Wednesday 14th September 2011 Commons Chamber

Motion made,

That the motions in the name of Sir George Young relating to the Electoral Commission and the Local Government Boundary Commission for England shall be treated as if they related to instruments subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instruments be approved.—(Mr Francois.)

[Hon. Members]

Object.

Petitions

Wednesday 14th September 2011 Commons Chamber

19:01

[Gareth Johnson (Dartford) (Con)]

With your leave, Mr Deputy Speaker, I should like to present this petition, which is supported by almost 2,000 readers of the Dartford Messenger newspaper and by myself. It states:

The Petition of residents of Dartford and readers of the Dartford Messenger newspaper,

Declares that the Petitioners are opposed to any increase in tolls charged for the Dartford Crossing.

The Petitioners therefore request that the House of Commons urges the Department for Transport not to increase tolls on the Dartford Crossing and to reconsider the emergency measures to lift the barriers during severe congestion and extend the local residents discount scheme.

And the Petitioners remain, etc.

[P000960]

19:02

[Graham Jones (Hyndburn) (Lab)]

I should like to present this petition, on behalf of the residents of Great Harwood in Lancashire and of surrounding areas, to save the recycling centre in said town. A petition in similar terms, asking for the same action, has been signed by a number of my constituents. Great Harwood Community Action Group has gathered a petition of some 1,500 signatures; 3,000 signatures against the closure were gathered at the recycling centre prior to that; about 600 protest letters have been sent to the county council; and I personally received 84 letters of objection to the closure at the beginning of the process.

The petition states:

The Petition of residents of Great Harwood, Lancashire and others,

Declares that following Lancashire County Council's budget review and report into household waste recycling centres, there are now plans to close further recycling centres across the county; that it has been announced that Great Harwood is one of the sites that has been identified to close; and that the Petitioners believe that this will inevitably decrease recycling and increase fly-tipping in Great Harwood and the surrounding areas of Lancashire

The Petitioners therefore request that the House of Commons urges the Government to write to Lancashire County Council to ask them to reconsider the proposal to shut the Great Harwood Household Waste Recycling Centre and to keep it open, as it is a vital service to the town and surrounding areas.

And the Petitioners remain, etc.

[P000962]

Fuel Poverty

Wednesday 14th September 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Syms.)

19:04

[John Robertson (Glasgow North West) (Lab)]

I am delighted to have secured this debate. I look forward to hearing the Minister’s comments on the wider issues that I shall raise.

First, let me set out the current state of fuel poverty in Scotland. Fuel poverty afflicts a cross-section of society. It is determined by the percentage of one’s income that is spent on energy bills: to be exact, when a household spends more than 10% per cent of its income on gas and electricity, it is deemed to be in fuel poverty. One third of Scottish households live in fuel poverty. The Scottish Government believe that, after recent energy price rises more than 900,000 Scottish households will be living in fuel poverty. I fear that we are on the edge of a fuel poverty crisis and that in the coming years that figure will reach the 1 million mark in Scotland alone.

Colder winters in the rest of the UK have not stopped the Scottish National party Administration in Edinburgh cutting the fuel poverty budget by a third, and aided by what the Tory-led Government are doing, the poor and needy are set to suffer even more in the years to come. In constituencies such as mine, as well as others, fuel poverty relates predominantly, although not exclusively, to pensioner poverty; however, many who are not pensioners —people with severe disabilities, single parents and the unemployed, to name but a few—are also in fuel poverty.

My home city of Glasgow is fairly youthful compared with other cities in Scotland, but there is a large elderly population. Among those of pensionable age, there are large pockets of severe pensioner poverty, to which my constituency is sadly not an exception and from which it suffers more than most. When I was elected to Parliament in November 2000, 80% of single pensioner households in Scotland lived on an annual income of £15,000 or less. Today that figure is 60%—admittedly less than in 2000, but still unacceptable. With 13,500 pensioner households in my constituency alone—one of the highest concentrations of pensioners in Europe—hon. Members will understand why this issue is of grave importance to me as a local MP and why I am raising it today. About 6,500 people are claiming pension credit in my constituency, which is consistently ranked 7th out of all Scottish parliamentary constituencies in that respect. My constituency has the highest proportion of single women pensioners in the entire country, and according to official figures their number will continue to rise, with over two thirds of women over 85 in Scotland projected to live alone by 2033. Glasgow North West is fast becoming—sadly for me—like the name of a recent film, “No Country for Old Men”.

Because 65% of single pensioner households and about half of smaller pensioner households in Scotland were classified as fuel poor in 2009, according to official figures, making them more likely than any other type of household to be experiencing fuel poverty, my constituency casework, as hon. Members can imagine, is dominated by the issue—and rightly so. According to Scottish Government figures, almost a quarter of single pensioner households and a fifth of smaller pensioner households in Scotland are deemed to be in extreme fuel poverty, whereby they spend more than 20% of their disposable income on heating their home. In addition, 8% of pensioners in Scotland live in absolute poverty and one in 10 over-65s are classed as “materially deprived”. Although Scotland is one of the worst affected areas in the UK, many inner-city and rural areas elsewhere have the same severe fuel poverty status. Hon. Members will understand why I believe we are on the verge of a fuel poverty crisis.

What causes fuel poverty? To put it simply, it has three root causes: low incomes, poor housing and high energy prices. Eradicating fuel poverty will involve tackling these three problems. Improving the quality of housing stock is of paramount importance. Although big strides were taken under the previous Government through the decent homes standard, the Warm Front programme and the energy efficiency commitment to improve energy efficiency and install cost-effective heating systems in homes, more has to be done. In Scotland between 2008 and 2010, new housing supply decreased by 16%, house building decreased by 17% and public sector housing provision fell by 1%. I would like to blame the current Government for those things, but unfortunately they were not in power. In 2009, according to Scottish Government figures, new-build housing completions were at their lowest level since 1982, meaning that fewer modern, properly insulated homes are being built. In addition, people living in private sector housing in Scotland are twice as likely as those in social housing to experience extreme fuel poverty. More than a third of pensioners live in housing that is poorly insulated or reliant on expensive heating.

Housing is a devolved matter, however. In this speech, I will focus mainly on areas where the Government potentially have a direct influence. Although I will use Scotland and my constituency as examples, colleagues tell me that the situation is just as bad in many other areas of the UK. I have had to apologise to a number of Members who asked to intervene, because I would have needed hours of extra time to have a proper debate and allow them the time that they so richly deserve.

I hope that the Chancellor and the Government will focus more on the vital role of the tax and benefit system in raising the incomes of the needy. I am sure that the Minister knows that benefit entitlement checks can help to ensure that vulnerable customers are getting their fair share of the millions of pounds of unclaimed benefits. Sadly, the many inches of newsprint about the £1.5 billion-worth of benefit fraud outweigh the coverage given to unclaimed benefits. Do not get me wrong, fraud of any kind should be sought out and punished as it is the poorest who always suffer as a result, but little recognition has been given to the fact that up to £5 billion of means-tested benefits that should go to older people in the United Kingdom are unclaimed each year. I wish that the Government would apply the same gusto to chasing up the pensioners who need that money as they give to those who defraud the welfare system.

I could not discuss fuel poverty without mentioning winter fuel payments. I know that the Conservatives were latecomers to supporting winter fuel payments. I remember the Foreign Secretary, when he was leader of his party, saying that such payments were a gimmick, and I am glad that the Conservatives have now publicly declared their support for them. However, the Chancellor’s decision to cut winter fuel payments to the poorest pensioners by £100 seems a cynical and short-sighted decision in the current economic climate, with incomes falling and energy prices rising.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing this important debate. I am sure that he was in the Chamber for Scotland questions earlier today, where the figures for Glasgow were given: 100,000 pensioners face cuts to their winter fuel allowance this year, totalling £4 million, at the same time as their energy bills are rising by up to 20%. Does he share my concern that, sadly, too many pensioners in the UK will have to choose between heating their home and putting food on the table?

[John Robertson]

My hon. Friend and neighbour makes a very good point. I know that the Minister will say that the Government are not cutting winter fuel payments, but maintaining the level that the Labour party set in government. The fact is that each time the Labour party increased the payments because of the weather, it consolidated them the next year. Had Labour won the election, we would have expected the Government to consolidate the money given last time. That is why I feel that this Government should consolidate that money, particularly at a time when energy prices are rising and when poor people—particularly the elderly—who need the money the most will suffer the most. It is a fact that those who receive the winter fuel allowance will receive less this year than last year. The Labour Government did not do that; the Conservative Government did. They had their opportunity to consolidate the payments, but instead used them as another attack on the poor.

Energy is a major cost to everybody, but especially to people who fall into the trap of fuel poverty. Energy companies constantly remind us of increases in the wholesale costs of oil and gas and increased demand, and add that they are required to invest in modernising their industry to keep climate change commitments; they remind us less often of the Government subsidies that they get to invest in renewables, and still less often of the huge profits that they make, and of the huge profits that they made in the days of cheap oil and gas, none of which have ever been repaid to customers. After all, the profits of the big six energy companies have gone up almost a third since 2008, and payouts to shareholders increased across the board, up an incredible sixfold since 1999 in the case of Centrica, which owns British Gas.

I support renewable energy, but the delivery of clean energy has not matched the price paid by the Government. It is time that we saw a return for our taxpayers’ money. The production—or lack of it—of clean energy is being used to rip off the British people, thus adding to the costs of those who can least afford them. I can compare the scale on which private energy companies have managed to privatise profits but nationalise losses only with the recent bank crisis. The energy customer in the UK—if we were totally honest, we could just call them the British taxpayer, because they are one and the same—is picking up the tab for the excesses, irresponsibility, recklessness and lack of long-term vision of the big six energy companies. Those companies—the energy barons—have managed to turn us into their 21st century serfs. The cheek of some of them knows no bounds. As I pointed out in June, ScottishPower is milking the British consumer: having recently increased energy bills in this country to record levels, it lent £800 million to its foreign sister company, which is based in the US, to keep US energy prices down. That money could have been invested in the UK, or it could have helped to keep UK prices down.

That was not even the first time that that happened. Back in 2008, ScottishPower lent £750 million directly to its Spanish parent, Iberdrola. One can assume only that that was to the benefit of Spanish energy customers. That is not the truly sickening aspect of this problem. This is the first year since 1990 when Iberdrola’s US gas and electricity supply companies have raised their customers’ bills. They have seen increases of 2% and 8%, but the British customer is getting hit by near-20% increases this year, and has been hit by 40% increases since 2007. That same supplier is lending money to the American company.

I believe that that is why the energy companies do not want to be fully transparent. Although extra wholesale market costs increase prices, with full transparency we might discover that market costs are not increasing prices to the extent that the price hikes would suggest. According to Bloomberg, the wholesale price for gas in autumn 2008 went above 70p per therm, compared with 59p per therm today. That shows that wholesale gas prices have actually dropped 15%. Similarly, prices in the wholesale electricity market reached £120 per MWh in autumn 2008; today, they are £51.20 per MWh—less than half the price back then.

This is not a case of energy companies being backed into a corner by market forces; it is an act of collective incompetence and ineptitude, leading to a cartel of companies backing consumers into a corner by raising prices in tandem. I therefore suggest that we break up the big six’s monopoly and allow other providers to enter the energy market. I would like to see a major co-operative energy supplier and/or a big supermarket chain, such as Tesco, giving the big six some competition.

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

Does my hon. Friend agree not only that it would be useful if other players entered the market, but that it is important that people can understand the various tariffs? Many people on the lowest incomes find it extremely difficult to work out what is best for them. The energy companies could do more. I hope that new players would operate differently.

[John Robertson]

My hon. Friend makes a good point, and believe me, if I had more time I would go into it. I certainly did so in the Energy and Climate Change Committee, when we talked about tariffs and the fact that there are more than 400 of them. It is a disgrace. How is anyone supposed to understand them all?

It is odd that in 2011, I, a Labour MP, am calling upon a Tory Government to create greater competition in the marketplace, but with more companies and greater competition, I believe that costs would fall, employment would be maintained or increased and the same profits would lead to greater efficiency in the old and new companies. If we do nothing, however, just like the big banks, which were too big to fail, so too, owing to the cartel-like nature of our energy market, will these huge companies feel that there is no sanction for reckless price rises, and only disaster and a big bill will await the taxpayer. I strongly suspect that the true reason for the price rises is the gross failure of the companies to stockpile their energy reserves to hedge adequately against future price rises. Their error is our loss. There might be numerous reasons for the current situation, including ineptitude, but although that is likely, I feel that the answer lies more in the fact that neither the Government nor Ofgem have given them any incentive.

I realise that it is not all the energy companies’ fault. I believe that the regulator, Ofgem, has not helped matters by being idle. I recently publicised the £200,000-a-year salary of Lord Mogg, its chairman. I hope that the Government, who claim to want to crack down on quangos, will have an urgent word with that gentleman, who is paid more than the Prime Minister for a three-day week. He is on footballer-like wages and needs to be reminded to justify his salary. His organisation should be acting to protect hard-pressed British consumers, who on his watch are not getting a fair deal.

I know that I have quoted many facts and figures—I hope that I have not bored too many people, including the Minister—but they are not nameless and faceless to me; they represent individuals whom I have known for many years, not just as their MP, but as their neighbour and friend. That is why I have such passion for this issue. In the nature of cross-party good will, I have a few questions that I would be grateful if the Minister answered.

What does the Minister believe can be done to encourage uptake of means-tested benefits among those in our elderly population who can rightly claim them? Will he consider enforcing transparency upon the big six energy companies or asking the Competition Commission to hold an inquiry into the energy market? What does the Minister think of my suggestion of breaking up the energy companies to stop them acting like a cartel and to allow other providers into the market? What does he believe can be done to tackle fuel poverty, and what measures does he propose to alleviate its harshness this winter? What plans are in place to increase awareness among pensioners and others of the help provided this winter? Would he be interested in a cross-party energy summit, held in Westminster, bringing together energy companies and politicians? Will he ask the Chancellor to revisit the winter fuel allowance and consolidate the £100 reduction?

I thank the many groups, non-governmental organisations and colleagues who have contacted me with help and advice. To mention them all would have taken hours. Let us have the debate we need. I look forward to the Minister’s reply.

19:24

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I congratulate the hon. Member for Glasgow North West (John Robertson) on his success in securing an Adjournment debate, particularly on the important subject of fuel poverty. He spoke at length and with great passion. Unfortunately, he has left me about nine minutes to respond to the many important points that he raised. I shall have to make a slightly shorter speech than I had intended, but if I do not cover all the salient points, I will write to the hon. Gentleman after the debate.

At a time when fuel bills are rising and we are approaching the cold months of the year, it is right to start by reaffirming the coalition’s absolute commitment to helping those households in or at risk of fuel poverty. We recognise the need to help more of the most vulnerable keep their homes warm at an affordable cost. However, the state of fuel poverty in this country, which is totally unacceptable, has not occurred overnight. Fuel poverty has been rising year on year for much of the past decade, during which the hon. Gentleman’s party was in government. Despite legislation designed to reverse the trend, between 2005 and 2009 the number of fuel-poor households across the UK more than doubled from 2.5 million to 5.5 million.

In England, we have seen the number rise from 1.2 million in 2004 to 4 million in 2009 and, of these, 3.2 million were vulnerable, so the elderly, families with young children and the long-term sick and disabled are among those most affected by fuel poverty. Of Scotland’s 2.3 million households, in 2009 there were 770,000 households in fuel poverty, compared to 543,000 in 2005. This means that, as the hon. Gentleman said, a third of households in Scotland were in fuel poverty in 2009. In Glasgow city, which encompasses his constituency, there were 69,000 households in fuel poverty in 2009.

If we are to reverse this trend and the iniquitous and ever-increasing number of those in fuel poverty, it is clear that something big has to change. I do not doubt that the previous Government were well intentioned and had hoped to be more effective than they were, but the numbers speak for themselves. The attempts of the previous Administration were singularly unsuccessful for a number of reasons, some of which were within their control and some not. We need completely to rethink, redesign and re-engineer our policies to meet the challenge of turning around this juggernaut.

Before leaping forward with new answers, we must first make sure that we are asking ourselves the right questions. That is why we invited Professor John Hills to undertake an independent review of the fuel poverty target and definition. He has been asked to look at fuel poverty from first principles—what causes it, its effects and how best to measure it. The review is looking to ensure that in these difficult times available resources are focused where they will be most effective in tackling fuel poverty, targeting support to those who need it the most. As I said, this is an independent review so I cannot predict what will be said, but I am aware that Professor Hills is engaging with a broad range of stakeholders and we look forward to receiving his interim findings this autumn.

In the meantime, the coalition Government need to act. We have introduced the warm home discount, a scheme that spans Great Britain. This is the first year of the scheme and we will assist around 2 million households. The majority of these will be low-income pensioner households in receipt of pension credit guarantee credit only. We expect to find more than 600,000 of them and provide them with a £120 rebate on their bill. Most of these will receive a rebate without having to claim, as a result of the Department for Work and Pensions and the energy suppliers sharing their data to help to find these customers. The rebate will be a major benefit to these vulnerable people who may struggle to claim. This is part of the answer to the hon. Gentleman’s question about how we start identifying such people and encouraging them to take up the benefits to which they are entitled. The discount will increase across the four years of the scheme, rising to £140 by the fourth year. To ensure that those off the gas grid can also benefit from the scheme, the discount will be applied to household electricity bills. Other groups, such as low-income families and those with long-term illnesses or disabilities, may also receive the discount.

Tackling fuel poverty will be a huge challenge. A key part of the solution is undoubtedly to address the thermal efficiency of our housing stock. Britain has some of the oldest building stock in Europe. As consumers, we pay a high price for inefficient, leaky buildings. It is widely known that it costs more on average to heat a home in southern England than it does to heat a home in Norway. That is obviously not because it is colder here, but because our buildings are significantly leakier and draughtier. Both the carbon emissions reduction target and Warm Front continue, installing measures in the homes of some of those most at risk from cold. However, the coalition has extended the CERT programme to 2012, which will bridge the gap before the introduction of the real game changer in autumn 2012, the green deal.

Warm Front has helped more than 2.2 million households in England with a range of heating measures. However, we recognised early on that Warm Front was a totally inadequate response to the scale of fuel poverty. It has helped hundreds of thousands of people when the challenge is to help millions. If we had to rely on Warm Front alone, at the previous high rate of spending under the last Labour Government it would take more than 80 years to get close to achieving our aim. The Government’s green deal, which we debated this afternoon, will be the flagship programme for addressing energy efficiency. We hope that it will be the game changer that finally deploys resources from the private sector to achieve the ambitious scale of change and investment that we need.

The domestic green deal is an opportunity for householders to improve the energy efficiency of their homes and will come at no up-front cost. It will help to protect people against price rises through greater energy efficiency, saving them money now, but also protecting them against future rises. In developing the green deal and the energy company obligation—the subsidy that will target hard-to-heat homes and the fuel-poor—we are removing the barriers to take-up, raising awareness and showcasing the benefits to make energy efficiency a no-brainer. We are also working closely with the devolved Administrations, particularly in Scotland, to ensure that the green deal can be rolled out right across the country.

The hon. Gentleman spoke at length about the big six. Let me remind him that after privatisation in the early 1990s there were dozens of energy companies. I agree with him that the market was surely much healthier then. I have great sympathy for his wish to see far greater competition in the energy sector, although the consolidation of the energy companies into the mighty big six occurred primarily at the end of the ’90s, under the last Labour Government. However, we will not overcome the problem by simply squeezing or over-regulating them evermore. Regulation is important, but we must be careful not to create new barriers to entry. Like him, I want to see new players entering the market and more disruptive technologies. We want to see a more decentralised energy system challenging the monopoly of the old-style, old-fashioned provider. We want to see more energy service companies that make their money not from selling energy, but from helping people to save energy by using less to keep their houses warm.

The Government are taking a range of measures, including our exciting proposals for electricity market reform, to create new incentives to bring new players into the market, because ultimately it is competition—new entrants, new players, new investment—that will create the choice and best value for consumers that the hon. Gentleman and I both want. Indeed, he is absolutely right about that and I am glad that we have found that point of agreement. I am also glad that we have had this opportunity to debate the issue. He is absolutely right—

19:34

House adjourned without Question put (Standing Order No. 9(7)).

Division 350

Ayes: 303

---

Conservative: 244
Liberal Democrat: 46
Democratic Unionist Party: 7
Labour: 3
Independent: 1

Noes: 192

---

Labour: 181
Scottish National Party: 5
Plaid Cymru: 2
Conservative: 1
Green Party: 1
Independent: 1
Social Democratic & Labour Party: 1

Ministerial Correction

Wednesday 14th September 2011 Ministerial Corrections

Wednesday 14 September 2011

Home Department

Wednesday 14th September 2011 Ministerial Corrections

Topical Questions

The following is the answer given by the Secretary of State for the Home Department, the right hon. Member for Maidenhead (Mrs May), to a question from the hon. Member for Peterborough (Mr Jackson) during Home Department Question Time on 12 September 2011.

[Mr Stewart Jackson (Peterborough) (Con)]

T4. The Equality and Human Rights Commission posted qualified accounts in 2009-10 and the auditors found poor financial management, poor record keeping and poor leadership. What specific actions will the Minister take to rectify this problem and to ensure that taxpayers’ money is not wasted by that organisation?

[Mrs May]

I thank my hon. Friend for drawing attention to the issue. The qualifications, of course, represent spend for periods under the previous Government and we have been absolutely clear with the EHRC from the start that any problems with its accounts under this Government are likely to result in financial consequences for it. In March, we set out our plans to change the EHRC. Our consultation closed in June and we will be responding shortly, but we have already announced that we will reduce its budget by more than half from £55 million in 2010-11 to £28.8 million in 2014-15.

[Official Report, 12 September 2011, Vol. 532, c. 751-52.]

Letter of correction from Mrs Theresa May:

An error has been identified in the oral answer given on 12 September 2011. The correct answer should have been:

[Mrs May]

I thank my hon. Friend for drawing attention to the issue. The qualifications, of course, represent spend for periods under the previous Government and we have been absolutely clear with the EHRC from the start that any problems with its accounts under this Government are likely to result in financial consequences for it. In March, we set out our plans to change the EHRC. Our consultation closed in June and we will be responding shortly, but we have already announced that we will reduce its budget by more than half from £55 million in 2010-11 to £26.8 million in 2014-15.

Westminster Hall

Wednesday 14th September 2011 Westminster Hall

Wednesday 14 September 2011

[Mr Jim Hood in the Chair]

Late Payments (SMEs)

Wednesday 14th September 2011 Westminster Hall

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

09:30

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

It is a pleasure to serve under your chairmanship again, Mr Hood. I am grateful to have secured this debate to discuss the effect of late payments on small and medium-sized enterprises.

In the background to how I became involved in the issue and, in particular, launched the “Be Fair, Pay On Time” campaign is a constituent who came to one of my surgeries shortly after I was elected. He was a haulier and had been in business for a number of years. He said that his business was threatened by late payments, in particular from large companies. Although his contractual terms involved payment in 30 days, those companies often took 90 days to pay him.

I decided to see how wide the problem was in my constituency, and I was contacted by a range of SMEs. There was, obviously, an issue, but unfortunately most of them were unprepared to come forward to state their experience, because of fear of reprisals, in particular of being blacklisted for future work. So today it is with mixed feelings that I will discuss my constituents, Ann and Harry Long, and their experience. Ann is in the audience today, with her daughter Janine. They have travelled down from Oldham East and Saddleworth, so I am grateful to them for being present. They are interested to hear about the issue from all MPs and, in particular, about what the Government will do.

In July this year, the plumbing and heating company that Ann and her husband Harry had built up from scratch 35 years ago went bust due to the effect of late payments by larger contractors. Ann told me how larger companies have the buying power to stretch out the time that it takes them to pay their bills to smaller companies such as hers and Harry’s. She said that for most of their 35 years in the business many good local companies such as theirs held strong, honest values about paying suppliers on time. Ann believes that that was because their client base was companies such as theirs—local SMEs who care. When the recession hit, though, the only companies that seemed to have work were the larger ones, so Ann and Harry had to win work with them, even going so far as to compete on eBay for tenders. Last year, however, as a result of bad debts of more than £150,000 from companies not paying promptly or at all—the worst that they had known for 35 years—Harry and Ann’s company went into voluntary administration. With no cash flow, it was impossible for them to continue.

Ann and Harry’s story is not unique. I know about several other businesses which, went into voluntary administration in the summer, primarily as a result of late payments. Nationally, we know from the Bankers Automated Clearing System, which runs electronic processing for financial transactions, that £24 billion is owed to SMEs and that more than a third of SMEs say that large companies are not paying their bills on time. To put that into context, high street banks lend SMEs approximately £47 billion, so the late sum is not insignificant and is affecting the cash flow of those companies.

According to data from a recent survey by the Federation of Small Businesses, over the past 12 months 73% of businesses have been paid late, the average SME being owed £27,000 at any one time, with 56% of FSB members having written off invoices of up to £10,000 because of non-payment and 6% in the construction sector having written off more than £35,000. That position is getting worse. The Economy Watch panel of the Forum of Private Business said last November that late payment had shown a “continued decline”. Small businesses have reported that, typically, payment is now taking 50 to 60 days, not 30, with more than a third of a company’s turnover being tied up in late payment.

The FSB’s survey indicates that manufacturing is the worst industry sector for making late payments, followed by the construction industry. Although the private sector is the worst culprit for late payments, according to 77% of FSB members a significant section of the public sector still fails to pay promptly as well, including local authorities and Departments. New businesses, being particularly fragile as they start up, are also more likely to be affected.

[Mr Philip Hollobone (Kettering) (Con)]

I congratulate the hon. Lady on her excellent speech and on all the energy and industry that she has shown in the House since being returned at the by-election.

A small company in my constituency of Kettering is owed £34,000 by Her Majesty’s Revenue and Customs under the construction industry scheme, and yet at the same time it is being pursued by HMRC for a £10,000 corporation tax bill. May I use the hon. Lady’s debate to pass on a message to the Government that they need to get the Inland Revenue in order, to be on the side of small businesses and not against them?

[Debbie Abrahams]

I agree that the action needs to be comprehensive, and I will mention that at the end of my speech.

The impact of late payment can be disastrous, as we have heard. During the recent recession, an estimated 4,000 businesses failed as a direct result of late payments. Small businesses do not have the cash-flow buffers of larger companies so, in turn, they often pay their suppliers later than they would like, and a downward spiral develops.

The BIS Barometer survey for 2010, from the Department for Business, Innovation and Skills, showed that 60% of businesses have noticeable cash-flow issues and that for 25% of them that is a big problem. The knock-on effects of late payments include the inability of SMEs to access capital from banks and other financial institutions. In the FSB survey, 18% of businesses cited poor cash flow as the reason for a loan application being unsuccessful.

[Gordon Birtwistle (Burnley) (LD)]

I congratulate the hon. Lady on securing the debate. Does she agree that the banks, rather than helping small businesses whose cash flow is suffering from late payment, shove the companies down the invoice-factoring route? Invoice factoring is an extra cost for small companies, so the banks make more money out of them without as much risk, and yet they still fail to collect the old money afterwards.

[Debbie Abrahams]

Yes, a whole range of factors affect small businesses and their viability. No doubt one of those is the transactional costs being passed on to small businesses. SMEs are being affected not only in their cash flow but in their ability to get additional financing from banks.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Lady on obtaining the debate, which all Members surely agree is timely because of the economic difficulties of the country. The hon. Member for Kettering (Mr Hollobone) has mentioned HMRC, and the Northern Ireland Assembly agreed that for any work carried out by companies for the Government, whether it involves schools or whatever, an arrangement would be made for quick payment. Perhaps the Government in this House will look at that idea to help small businesses, because cash flow is their lifeline. It is difficult at the moment for small companies to get credit insurance, so that is an extra cost as well, so some form of quick payment or charging interest if a company defaults on the payment terms might alleviate the problem.

[Debbie Abrahams]

Yes, that is certainly one of the actions that I hope for from the Government.

[Mr Andrew Smith (Oxford East) (Lab)]

I join the congratulations on how my hon. Friend is putting forward this important case. Does she not agree that the previous Labour Government brought in the target of five-day payment, as well as the ability to charge interest, which was mentioned by the hon. Member for Upper Bann (David Simpson) in his intervention? The problem is that in the public sector not enough Departments, agencies and local councils are complying with that target, so stronger measures are needed.

[Debbie Abrahams]

I thank my right hon. Friend for making that vital point. Yes, the previous Labour Government did a lot about that, but monitoring and reporting of the five-day target is needed. That is one of my action requests for the Government.

[Lorely Burt (Solihull) (LD)]

I do not wish to prolong the point, or your patience, Mr Hood, but under the Late Payment of Commercial Debts (Interest) Act 1998, which was introduced by the previous Government, small companies may charge interest if the time for payment of a debt is exceeded. The problem is that as soon as a company rattles the chain of a larger company, it risks losing business. There is always a fine balance between the power of big companies and the lesser power of smaller companies.

[Debbie Abrahams]

I totally agree with the hon. Lady. That is one reason why companies are not prepared to come forward. A concerted effort is needed with a range of interventions to address the power imbalance that she has rightly identified.

On the impact on businesses that were refused additional finance, 13% said that they had had to lay off staff, and a worrying 40% said that they were having ongoing financial difficulties. There is growing evidence that late payments to SMEs are hurting our economic recovery. Data from the Office for National Statistics show that SMEs comprise up to 98% of the total number of organisations in the UK economy, providing 59% of all private sector jobs, 45% of all employment, and generating 46% of the UK’s income from the private sector—a massive £1,558 billion. If their growth and survival is being threatened, it is inconceivable that that is not impacting on the country’s economic performance as a whole.

One of the favourite myths that the Government like to spin is that the recession was made in Britain and that the public sector is somehow to blame for our flatlining economy and should be made to pay with cuts in public spending and vital public services. No one is fooled by that, because everyone knows that the recession started on Wall street, that it was the result of private sector debt, led by the banks, and that it affects every major economy in the world. It belittles my constituents to try to portray it is as anything else.

A little reported fact is that in 2009 City of London debt was 245% of gross domestic product, compared with public sector debt of 60%. It is time that this Government stopped blaming the previous Government and the public sector for the country’s economic woes and targeted action where it is needed on those who abuse their wealth and power. I want the Government to take action on those who flout their contractual responsibilities and fail to pay their bills on time, because those people are not above the law or untouchable. As the Federation of Small Businesses has said, this is not just an economic issue, because it is ethically wrong.

With the shadow Minister, I am calling on the Government to back the following action to address late payments. First, they should bring forward the new EU directive on late payment from March 2013. It introduces a minimum fixed amount of compensation for late payment and tightens the time period for payment. Secondly, the Government must ensure that all Departments are better at meeting the five-day payment target and have effective monitoring and reporting procedures in place. Thirdly, the Government must ensure that prompt payment is enforced all the way down the supply chain and not just between contractor and subcontractor.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I join the congratulations to the hon. Lady on securing this timely debate. Does she agree that in regions of the United Kingdom where there is higher than average dependency on the public sector for economic activity, the issues that she is discussing are even more prevalent, and require even more assistance? In Northern Ireland, for example, almost 60% of economic activity is directly related to the public sector.

[Debbie Abrahams]

I thank the hon. Gentleman for his intervention. I agree that that is an issue in some areas of the economy.

We are calling on large businesses to sign up to the prompt payment code, and I can announce today that Oldham metropolitan borough council, which had not previously signed up, has agreed to do so.

[Mr Jim Hood (in the Chair)]

Order. I have six Back Benchers on my list, in addition to the Front-Bench speakers. I am sure we will find time to fit everyone in, but if we are squeezed for time towards the end of the debate, I intend to call the Front-Bench speakers at 10.40 am.

09:45

[Lorely Burt (Solihull) (LD)]

I congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on securing this important debate. I am sorry that at the end she accused the Government of engaging in public sector bashing. This debate is much more important than scoring political points.

The “squeezed middle” is a phrase that we do not often use in relation to companies, but it is exactly what is happening to small businesses in this country. They are being squeezed on one side by their suppliers, and the late payments that the hon. Lady so eloquently described, and by the banks on the other side. They cannot obtain credit, and their tragic situation is worsening, as the hon. Lady said, and as the constituents who are here today illustrate.

Small businesses are much more fragile than larger ones, so having to endure late payment costs jobs and inhibits growth. Big companies with more than 500 employees pay, on average, 35 days late, but small companies with fewer than 100 employees pay, on average, 19 days late. Big companies have a great deal more relative credit than small companies, and big companies get fatter while small companies struggle and get leaner. However, as I said during my intervention, coming down hard on big businesses may be counter-productive, and may deter them from trading with smaller businesses.

The hon. Lady referred to the prompt payment code, which was launched last year by the Institute of Credit Management on behalf of the Department for Business, Innovation and Skills. Companies promised to keep to payment terms agreed at the outset of a contract. However, I understand that fewer than 1,000 companies have signed up. What can the Government do to encourage many more companies to sign up to the prompt payment code?

[Jim Shannon (Strangford) (DUP)]

A system that might benefit both suppliers and receivers is the BACS system—bankers’ automated clearing services. It ensures that money goes from A to B quickly and painlessly. Does the hon. Lady believe that there might be some way of incentivising that scheme so that everyone benefits?

[Lorely Burt]

I am grateful for that intervention. It is an excellent idea, and perhaps the Minister will address it when he responds.

The Companies Act 1985 requires public companies to submit their payment terms, but that has not been properly enforced. The Federation of Small Businesses has suggested that more resources be put into the policing of that requirement. Many companies write warm and woolly words about how socially responsible they are, but if that is not backed up with action and a declaration of their terms so that they can be measured against those terms, their warm words about how corporately responsible they are cannot be measured.

The House is scrutinising the late payment directive. The Government are challenging the EU to reduce the threshold at which payment is made from 30 days to 10 days, and, if that can be achieved, it will be admirable. It is, however, something that we can impose on ourselves in this country today.

The FSB suggests that we should introduce a social clause for sub-contractors. First-tier suppliers are often paid promptly but keep the little guys further down the supply chain waiting. If first-tier suppliers are being paid quickly it should be extended to everyone down the supply chain, and the further down the supply chain a business is the more important prompt payment is to it. I should be interested to hear the Minister’s views on that.

On public sector procurement, there is an aspiration to simplify applications for approved supplier status and make them manageable for small businesses. What progress have the Government made with that? If small businesses can contract directly with Government bodies, their cash flows will be much improved.

I should like to ask about the enterprise finance guarantee, the aim of which is to make £2 billion available to viable small businesses without credit history or collateral. The Minister might not have the figures to hand, but I should be interested to hear how that is going.

The Government have an aspiration to award 25% of their procurement to small businesses. We are making great progress towards achieving that self-imposed target, but will the Minister update Members on it, either this morning or later?

09:52

[Fiona O'Donnell (East Lothian) (Lab)]

It is a pleasure to serve once again under your chairmanship, Mr Hood, our having served on the Health and Social Care (Re-Committed) Bill. I know that we can look forward to a firm but fair hand in proceedings today.

I join Members in congratulating my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) on securing this debate. The issue is of concern not only for my constituents but for us all, so I am pleased to see Members from all nations of the United Kingdom present to participate in this discussion.

I thank the shadow Minister, my hon. Friend the Member for Streatham (Mr Umunna), for the work he has already undertaken in his new post in reaching out to businesses across the UK. I apologise for the fact that so far I have not provided him with information from my constituency, but work is ongoing. I am working with my political partner, the MSP, Iain Gray, to assess the challenges facing businesses in East Lothian. Although that is good for joint working, it is not so good for meeting deadlines.

This issue is vital, especially in my constituency, because the hope for economic recovery, for growth, for more money to go into the economy and, importantly, for more jobs lies with the public sector and SMEs. The issue is relevant to my local employers when they are considering taking on new staff.

The one bill that employers must meet every week or every month is that for wages. We have seen evidence of slippage in Whitehall Departments achieving the five-day target. The impact of a Department being a couple of days shy in meeting the target might be viewed as small, but, bearing in mind the fact that private companies may not have signed up to the target, many companies were assured by the good practice set under the previous Labour Government because they knew that money would be in their accounts. That security meant that they could meet their wages bill.

Labour’s opponents criticised its manifesto and plans to increase national insurance tax, saying that it would inhibit growth in jobs, but confidence in the economy and in their cash flow is far more important for SMEs considering taking on new staff. If youth unemployment in my constituency is to be targeted, with an increase in the number of apprenticeships for young people and those retraining and reskilling, it is vital that the Government support the health and stability of SMEs.

My hon. Friend the Member for Oldham East and Saddleworth spoke of the danger of a contagion, and in this respect I can draw on my experience of working in the private sector. As a company’s cash flow starts to become restricted, it must start to decide which bills to pay, and when. The health of the small business sector is under threat because many companies are now having to make such decisions.

SMEs face a resource issue. We did not have the capacity vigorously to chase late payments or to send threatening legal letters, which meant that larger companies and the public sector, aware of our dependence on them, could feel secure in not making payments on time.

[David Simpson]

Although not all the public sector signed up to the five-day target, I acknowledge that it is a good thing, but does the hon. Lady agree that the problem is that if a private sector company is not being paid it will go to the man behind and say, “I’m not being paid quickly enough to pay you”—a chain reaction? How do we ensure that the chain works as we would want?

[Fiona O'Donnell]

I thank the hon. Gentleman for his intervention. It is the job of the Government to set the tone and encourage businesses to change that culture by making it clear that late payment is not acceptable.

The issue must be set in the context of the many challenges facing SMEs in my constituency, across Scotland and across the UK, such as rising energy and fuel costs—having to fill vehicles at the pumps, which particularly affects large rural areas—VAT increases and a shrinking public sector. I appeal to the Minister to recognise that, yes, we need to rebalance the economy—especially in Scotland, where we are far too dependent on the public sector—but also that many small businesses are dependent on the public sector for their health and economic activity and if we shrink the public sector too quickly they will not have a chance to adapt to the challenges the Government are setting them.

We welcome the Vickers report and the prospect of more effective bank regulation, but I appeal to the Minister to ensure that it is not SMEs that pay the cost of that regulation in increased credit charges and more restrictive access to credit.

The Government can act on this issue and make a real difference. Labour started that work in government, but the danger is that we are slipping into reverse. I therefore hope that the Minister gives a positive response to the proposals set out by my hon. Friend the Member for Oldham East and Saddleworth. There is an opportunity for Government to change the culture and to give a lead. I look forward to the Minister’s response.

09:59

[Anne Marie Morris (Newton Abbot) (Con)]

This is an excellent debate and very timely. The focus to date has been on the challenge in the public sector, but as the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) explained at the outset, the biggest offenders are in the private sector. They are the large British corporates. My comments will therefore focus on what we might be able to do there.

RSM Tenon examined the figures and found that in the first quarter of 2011, 80% of SMEs were paid late. A lot of evidence has been given about the length of those periods. The points made have referred to 30 days, 60 days and 90 days. What we have not put on the table and should is that some SMEs are waiting six months. That is not in any way acceptable.

To deal with the problem, we need to understand why it exists. This has already been implied, but I think that it is worth putting on the table the fact that one of the main problems is the imbalance of power. The large companies have significant trading power over the smallest, and as the recession has bitten, so all the very small companies are fighting for every contract that comes through the door and do not necessarily think as strategically as they might about whether a contract is a good one or a bad one.

Small businesses could do a couple of things to help themselves. I was interested to learn that a large number of small businesses enter into no form of written contract. The consequence is that they are then dependent on the Late Payment of Commercial Debts (Interest) Act 1998. That is excellent legislation, but as has already been expressed, it depends on the willingness to enforce it, because clearly there is a cost to litigation.

I was also surprised by how few small businesses do any form of credit check. According to the Institute of Credit Management, 25% of businesses make no checks at all. If people make those checks, they can be a little more streetwise in terms of how they negotiate the contract and they might think about some form of part-payment in advance.

[Mr Andrew Smith]

On contracts, does the hon. Lady think that there would be merit in exploring the idea of a default contract that automatically applied if one had not explicitly been negotiated and in legislating to that effect?

[Anne Marie Morris]

I think that it is very difficult to imply a contract, because contracts are inevitably quite complex and varied and depend very much on the nature of the business. However, the 1998 Act gives protection. I suspect that in terms of legislative moves, that is probably as far as it is sensible to go.

May I now consider the current solutions? Credit insurance was mentioned. Clearly, that is expensive for the smallest businesses. I spoke yesterday to one of the agencies, which told me that the average cost is 45p for each £100 of turnover. That makes it almost a luxury for the smallest businesses. The other challenge is that those schemes have to some extent been discredited, as they have been withdrawn, sometimes in a rather prompt manner, leaving some of the smallest businesses with particular problems.

However, the schemes do have a place. I am pleased to say that in my own constituency, Westaway Sausages has taken out credit insurance, which has made a huge difference to that business. It suffered a bad debt of £22,000 and now annually pays £10,000 to ensure that the business is protected. It has also considered the trade terms that it enters into and is very diligent in what it does.

With regard to current solutions, we have talked briefly about the prompt payment code. I certainly agree with the comments that we need more corporates to sign up to that. The challenge, of course, is whether they comply when they sign up and, if they do not comply, whether the small businesses that suffer act as whistleblowers. As has been well evidenced in the Chamber, the challenge, given the imbalance of power, is the extent to which those small businesses are willing to do that. Therefore, I am not sure that the answer is necessarily a greater number of people signing up to the code, although I would like that to be encouraged, because I think that it is morally the right thing to do.

The Companies Act 1985, which has been referred to, requires public companies at least to submit payment term details to Companies House and to list on the register their average payback time to SMEs. The problem is that getting all that information into Companies House is a mammoth task, requiring substantially more resource than is currently available. It might be desirable, but I have a suspicion that it might be unaffordable. In a minute, I will make a suggestion that might be equally effective but not as expensive.

Questions have been asked about whether the best way forward is through compulsion or through an additional voluntary code of practice or steps to impress on companies the fact that there is a better way to behave. Compulsion has been tried in California with the public sector, but the experience in Australia and the European Union is that it has not really worked. I suspect that that is partly because of the cost of litigation.

So what about voluntary solutions? What could we do in that respect? Clearly, we could consider a league of shame, which I think was one of the things suggested by the FSB, but at the end of the day, we have to come up with something that will put pressure on and change the attitude of the customers of the offending companies, rather than the suppliers. That is really the challenge.

I have three suggestions. First, I think that local enterprise partnerships have a role. We have asked them, on a region-by-region basis, to consider how they can support private sector growth. I believe that they have a role in providing advice and training for SMEs and that they could well collect information about bad payers. That information could then be shared among SMEs.

[Mr Chuka Umunna (Streatham) (Lab)]

I am grateful to the hon. Lady for giving way during a very useful contribution. How does she envisage LEPs doing what she has described, given the sheer lack of resource that they have to fulfil all the other responsibilities with which they have been charged?

[Anne Marie Morris]

I am delighted to report that I have found LEPs to be excellent at doing an awful lot with very little. Let me give an example. In my own constituency, we have a mentoring system, Teignbridge business buddies, which is supported and endorsed by the LEP. No one is paid anything, but we support new businesses, including people who were formerly unemployed, and it is a very good system. A lot can always be done if the will is there.

[David Simpson]

I am not being critical when I say this, but does the hon. Lady really believe that a voluntary system will work? We are talking about money, about people and about the natural instinct of companies to hold on to their money for as long as they possibly can. In addition, does she agree that among the biggest offenders in creating cash-flow problems are the major supermarket chains in the United Kingdom? All hon. Members help to get planning approval for them, but it is between four and six months before they make their payments.

[Anne Marie Morris]

To an extent the hon. Gentleman has anticipated my further comments.

[David Simpson]

Great minds think alike.

[Anne Marie Morris]

Indeed. Things can be done that are not simply voluntary, and I will expand on those. As for the supermarkets, I think that the plan is to have a supermarket ombudsman at some point to consider just this issue.

I hope that my second suggestion will give the hon. Gentleman some comfort. The Government could consider introducing Government-backed credit insurance for micro-businesses. Clearly, that would be unaffordable for the whole of the sector, but it could be done for the smallest businesses—those with fewer than five employees and a turnover of less than £250,000. That could be edged up to just under 10 employees and turnover of £500,000, but either way we are talking about a relatively small part of the economy. I am pleased that the Government have already introduced export credit insurance for the first time in 20 years. I say “Well done” to them for that, but we could do more.

I come now to my third suggestion. There is something that we could do to make large companies change their behaviour—change the accounting standards. I believe that in the annual report and accounts, there should be a report on the debtor days with regard to SMEs that are suppliers to a company. Clearly, it would be inappropriate for a report of debtor days to be too extensive, although any good company will keep such records. However, it would be helpful if it applied to any supplier providing more than, say, £100,000 of goods and if the number of debtor days was limited to 30, because that would ensure that it was included in the auditor’s report.

In the 1997 debates on this issue, it was suggested that the policy adopted by companies should go into the director’s report, and the proposal was subsequently implemented. However, it was decided not to include any information about debtor days in the auditor’s report. If such information were included, it would be in the accounts filed at Companies House, and the Federation of Small Businesses, the Forum of Private Business and other groups could easily look through the reports and accounts for the top 250 companies. They could then begin looking at how to campaign and raise the issue of the bad boys in the press. That might be a cheaper and more viable approach than simply dealing with Companies House filing requirements, laudable though that is.

Finally, small trade groups must begin to take ownership of, and responsibility for, the problem. We can sit here and say there is too much of a power imbalance, and it is easy for a small SME to say, “We can’t rock the boat, because X, Y and Z Ltd down the road will simply get the contract instead,” but power comes from acting together. Clearly, companies will not do that in every case, but it will be worth standing up together against some individuals and large corporates.

10:11

[Owen Smith (Pontypridd) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hood. I congratulate my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) on securing the debate, which has been extremely interesting so far. We have heard a huge number of positive and constructive ideas from both sides of the Chamber, which is a measure of the interest in SMEs and the recognition that they are, as we heard in the statistics which my hon. Friend has mentioned—I will not repeat them—the backbone of our economy.

I have experience of running an SME. I worked in a television production company, although not for a huge amount of time. I have also worked in quite a few large companies, so I have seen the interaction from both sides of the fence. The obvious lesson that came from that experience was, first, that turnover and cash flow are critical for small companies, especially in the early days. Late payment is therefore central to their viability in not only the long term, but the short term, especially in the early days. Secondly, as several hon. Members have said, large companies have enormous power to make or break small companies through the contracts that they dictate and put in place and through the payment structure that they observe.

In a recession and a downturn in the economy, all those problems are compounded. Small companies’ cash-flow problems become exponentially greater. Larger companies—here we come to where the late-payment culture intersects with a wider culture of irresponsibility in our corporate sector—are instantly tempted to renegotiate contracts, and they are often encouraged to do so by their procurement, supply and legal teams. They are tempted to pass on their problems to the supply chain and to screw down on smaller suppliers by squeezing the maximum amount out of them to insulate themselves. I have seen that; it is a common occurrence, and late payments are part of it. It is no surprise, therefore, that late payments have increased in the recession; indeed, that is inevitable because they are standard practice among large firms. Although they do not happen only in this country, they are a particular problem and cultural issue here.

One interesting aspect of the debate is the number of hon. Members from different parties who have said that the Government have a large role to play, rather than that the best thing for our economy would be for the Government to get out of the way. In this instance, there is clearly a real interest in the Government intervening and playing a leading role.

[Fiona O'Donnell]

May I say that television production’s loss is our gain? There was a large gathering of Eurosceptics last night—[Interruption.] I am disappointed. However, does my hon. Friend agree that introducing the EU directive on late payments would be one way for the Government to ease this problem?

[Owen Smith]

Yes. Indeed, they should think of introducing it earlier than anticipated. Europe clearly recognises that late payment is an issue. The Government should recognise that it is an issue, as the Opposition do, and they should introduce the directive. I hope the Minister will tell us he is interested in doing that.

The Opposition have long recognised that late payment is an issue. As we have heard, several pieces of legislation were introduced in the late 1990s. Initially, there was legislation allowing small companies to charge interest and seek compensation. Subsequently, the Labour Government sought to set an example by setting targets. They also talked about the need for a greater culture of responsibility on the part of all businesses. They set an example through the targets that they set Departments, although they should have gone further and pushed that right out across the public sector. The current Government would do well to look to that example. They believe in a big society, and they could use a bigger society to bring about that public good.

Late payments also relate to a wider issue: the culture of dog-eat-dog, devil-take -the-hindmost, beggar-thy-neighbour irresponsibility—call it what you want—that is an absolutely common feature of corporate life in this country. Suppliers are vital for all large firms, but they are inevitably and invariably low on the list of priorities for large firms. Some people, including Government Members, might say that that is inevitable in a system predicated on the primacy of shareholder value, but that system should not preclude other objectives, such as social responsibility. The most immediate form of social responsibility that larger firms can show is responsibility towards the welfare and viability of smaller firms. That is a matter not only of late payments, but of the way in which larger firms move their investments.

In my constituency, there is a filters factory called Sogefi. It is now Italian-owned, having been purchased from a British company a number of years ago. It is downscaling because its order book is declining. Two hundred jobs will probably be lost at that firm, which is in the Rhondda—a part of the country where there are all too few well paid and secure jobs. The knock-on effect of that company cutting jobs and potentially eventually moving on is enormous, because 12 or 13 suppliers throughout the area rely on it. One thing that we have failed to impress on the company is that it has a responsibility to those suppliers, because it clearly does not feel that it has. The culture of feeling that a company’s primary job is to look after its own shareholders and that it is for other companies to worry about themselves is precisely what motivates and underpins the culture of late payment in our country.

What do we need to do? Clearly, the Government need to set a better example. The hon. Member for Kettering (Mr Hollobone) has mentioned HMRC, and other hon. Members will have had builders in their area tell them that the chaos at HMRC—especially over the construction industry scheme—has resulted in enormous backlogs in the reimbursement of taxes already paid by small construction firms. That is but one example where the Government need to intervene to provide the resources to ensure that small firms—in this case, construction firms—do not go under.

This is also a question of the Government pulling their socks up when it comes to hitting the five-day payment target, because they are falling back right now. My understanding is that in the last quarter of the Labour Government we were hitting about 90% of the target figure for five and 10-day payment, but we are now somewhere south of 80%. That looks like falling back to me, but if my statistics are wrong the Minister can correct me—I would be delighted to learn that the figures are better than I thought.

We should be looking at introducing the European directive early and expanding that payment culture to the whole public sector. However, other aspects of intervention and legislation should not be off the table. It is not fashionable to talk about regulation, but clearly regulation is required in the present context; there seems to be a huge amount of consensus about that. I thought that the idea that we heard a moment ago about changes to accounting standards, and naming and shaming, was excellent. It would not necessarily require changes to legislation. Filing requirements at Companies House should also be looked at. Although the hon. Member for Newton Abbot (Anne Marie Morris) has rejected the notion of standard default contracts, the Government should look at the idea of minimum standards in contracts to try to marshal larger firms’ behaviour, so that they do not instantly fall back on screwing people lower down the food chain, which inevitably happens.

The Government have an enormous role to play. It is a myth, as the debate has shown, that the most effective way to get growth and efficiency in the economy is for Government to get out of the way. That myth has been wholly exposed by the recent crisis in capitalism. Late payments are a small but telling example of how the Government have a vital role to play. I hope that the Minister and his party recognise that.

10:21

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I shall be brief, given the time.

I want to deal with the so far unexplored issue of late payments due to legal disputes and to touch on one example from west Wales, which highlights that point. RWE npower is constructing a £1.6 billion power station, using Alstom as its main contractor, which in turn is using SOMi Impiante, a company based in Italy. That company is using a range of local subcontractors. Because of a legal dispute—I will not go into the rights and wrongs of it; the legal process will unfold—a wide range of subcontractors to SOMi Impiante, which has now gone back to Italy, have found that the money due to them for work done in good faith in accordance with their contract has not been paid. It is uncertain when it will be paid. They face the prospect of a considerable wait for the legal process to unfold.

Those companies are important to our local economy. They tendered competitively for the work, and their margins are extremely tight at the best of times. They have a sensitive and vulnerable cash flow, and their local reputation is important to them. Yet they are the victims of delays that are way outside their control and beyond the terms of the contracts that they signed. The delays are also outside the terms of the prompt payment code, but those companies do not have the money to engage in expensive and long-running legal battles against major companies based in foreign countries. Even if they had a reasonable chance of success, the sensitive cash flow that I have mentioned is hardly on their side. Of course, typically at such moments, the banks are facing in the opposite direction just when they are needed.

If the Minister were in my shoes, advising companies in my area that are victims of late payment as a result of others’ legal disputes, what advice would he give me?

10:24

[Andrew Griffiths (Burton) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hood. I congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on securing this important debate. I have tried unsuccessfully on several occasions to secure a similar debate, so I must talk to you afterwards to find out how you were so successful, while I failed miserably.

[Mr Jim Hood (in the Chair)]

Order. The hon. Lady may have applied for such a debate, but I did not.

[Andrew Griffiths]

Thank you, Mr Hood.

The hon. Lady had all of us in the Chamber nodding in agreement and support. We all—from all the parties, and all the nations represented here—want to do more to support small and medium-sized businesses, but such businesses in my constituency, and, I am sure, in the hon. Lady’s, do not want us to engage in party politics. They want us to work together and not to make party points.

I know that time is short and others want to speak, but I want to focus on an issue that has been raised with me in my constituency several times. We all go and talk to people who run small businesses, who tell us that things are tough, but that they are surviving. They tell us about difficulties with finance and the banks, and they have faced difficulties with late payments for many years. My family had a small engineering business and had to endure the “cheque in the post” argument when we chased payment of invoices after waiting a long time. However, a new phenomenon has begun to hit businesses in my constituency, and elsewhere. Large companies are arbitrarily extending their supplier payment terms. In recent months some larger businesses have decided to extend their normal payment terms of 30 days to 60, 90 or, in some cases, 120 days. Small businesses, which are desperate for the contract and do not want to lose the potential for future business, must live with having to finance an extra two or three months while they wait for payment.

I pay tribute to the Federation of Small Businesses, which has done a great deal of work on the issue.

[Fiona O'Donnell]

Does the hon. Gentleman agree that in that competitive and hungry market many SMEs take the risk of doing business with companies that they know may not have the best record of invoice payment, because that is the reality in these tough economic times?

[Andrew Griffiths]

The hon. Lady makes a good point. It is a case of better jam tomorrow than no jam at all. Many businesses must make difficult decisions, and take risks to keep their work force ticking over and to sweat their assets.

I want to draw the Minister’s attention to a survey by Touch Financial. It surveyed 200 businesses and found that in the past year half of those had had their credit terms extended. The Forum of Private Businesses has a hall of shame of companies that have extended credit terms in that way. It includes well known businesses such as Dell, Argos, the Co-op and United Biscuits. Molson Coors in my constituency recently extended payment terms to suppliers there. That has a devastating effect, particularly when many of the businesses affected are being rung up by their banks, and told that their credit facility is being reduced—sometimes by up to half. It has a massive impact on cash flow, which as we know is the life blood of any small business. If we cut off that cash flow, those businesses will bleed to death.

10:28

[Justin Tomlinson (North Swindon) (Con)]

I realised that there might be a bit of a gap, Mr Hood, so I thought I would try to build on some of the excellent speeches that have been made. My remarks will be brief. Before I became a Member of Parliament, I ran, for 11 years, a small business that would have fitted excellently within the category that my hon. Friend the Member for Newton Abbot (Anne Marie Morris) has championed through her work on micro-businesses.

In the spirit of praising the public sector, we should recognise that if a small business can secure a contract with the public sector it has a far better chance of being paid quickly. As several hon. Members have said, cash flow is king, and that makes a difference. However, it is extremely difficult for a small business to secure those public sector contracts, which are nearly always snapped up by the big boys who then subcontract the work on to small businesses. I welcome moves from the Government towards opening up the books and the contracts to smaller businesses, but I should be interested to hear more about how that will work in the real world.

Many businesses that struggle are either start-up businesses or are simply caught unawares. Those who start up businesses believe that, with a bit of hard work and some graft and enthusiasm, things will be great. They do not anticipate other businesses paying late or choosing deliberately not to pay. I therefore have a couple of requests. I understand that the Government want to create 40,000 business mentors for start-up businesses. I urge that the No. 1 priority for those mentors should be to teach start-up businesses about the necessity of invoicing quickly and using contracts and other available methods, because all too often new businesses are caught unawares.

Banks, too, have a role to play when start-up businesses ask for a new business bank account. The banks could provide training—or at least information on how to invoice and chase up late payments. I have often championed financial education in Parliament. I predominantly want to equip the next generation of consumers, but I also want to encourage entrepreneurial skills, and part of that is about basic accounting and ensuring that businesses understand how to invoice.

A tip from my own experience is that one should talk regularly to customers and suppliers, because there are times when even good businesses will struggle because of the knock-on effect of some of their customers not paying. If others are aware that there are likely to be problems, everyone can plan accordingly. There is nothing worse than waiting on a cheque from a supplier or customer when you have to pay the wage bill, but one can at least talk to the bank about it.

The majority of suppliers that I knew which had folded, folded because their customers continued to spend money even though they knew that they were highly unlikely to be able to pay, and in the end it dragged them down. I would be interested to know the Government’s thoughts on that.

[Fiona O'Donnell]

I thank the hon. Gentleman for giving way. Will he indulge me by going back to what he said about the pay roll? The Government say that their Work programme is about not only creating jobs, but making those jobs sustainable. Does he agree that those SMEs that we hope will create jobs for the unemployed in our constituencies are far less likely to create sustainable employment if they have cash-flow problems?

[Justin Tomlinson]

Absolutely. Cash flow is the most crucial element for small businesses. In my case, I did not even have an overdraft. There were times when things were comfortable and times when we were anxiously waiting on customers to pay us. If they did not pay, that had a knock-on effect for suppliers. Access to cash is crucial, and banks need to be sympathetic and not simply say that the computer says no. The banks should take account of the fact that a business with a successful track record has a couple of customers who are taking longer than normal to pay.

There are some customers who continue to spend money that they do not have. If I go into a high-street shop as a customer, put things in my bag and walk out without paying because I cannot afford to do so, I will be done for stealing. All too often, however, I see good businesses that have traded for many generations being brought to an end because some of their customers have taken advantage of their credit terms, knowing that they could not pay. The consequence is that many jobs are being lost, and things need to be tightened. I would welcome the Minister’s comments on that.

10:33

[Mr Chuka Umunna (Streatham) (Lab)]

I congratulate my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) on securing this debate. Frankly, the subject has not received the attention that it deserves, given the adverse impact of the fact that the economy has flatlined over the past nine months.

Everybody knows that there are disagreements about the Government’s economic strategy, but the Opposition agree that growth, which we all hope will return, will ultimately be driven by the private sector. If Britain’s 4.47 million small and medium-sized businesses do not thrive and prosper, our economy will not thrive and prosper. The simple reason is that they are the bedrock of our economy. Many of the owners and entrepreneurs running these businesses have identified a gap in the market, left their jobs and risked all to set up shop. They have had to cope with a difficult economic climate and have had many struggles.

My hon. Friend the Member for East Lothian (Fiona O'Donnell) spoke of the problems of SMEs in accessing finance. At the end of the day, they work hard and employ local people. They treasure every customer. It is not only about making money and a decent living; many of them have a huge passion for their businesses and many of their customers are the large companies about which we heard so much during this excellent debate.

The eight speeches that we have heard so far amply demonstrated the trials and tribulations of businesses in this country, but many of those businesses are going under not for want of sales, but because they have been let down by their customers. The culture in this country is that customers and those who receive supplies seem to think that it is okay not to pay for goods and services on time. I shall give an example of that attitude.

About 20 years ago, a well known businessman famously said how skilful he had been in stringing along his company’s creditors. That businessman was Lord Heseltine, currently the chair of the independent advisory panel for the regional growth fund. When challenged about that statement, he did not withdraw it but said:

“Anyone who has started a small business knows they are likely to need tolerance. Small business people know it, creditors know it, bankers know it”.

The problem is that such unacceptable attitudes still continue today. It is not surprising that 73% of members of the Federation of Small Businesses, responding to a survey in May, reported that they experienced late payments.

The Opposition carried out a survey in July and August of more than 150 businesses, and 83% of them said that the problem had become worse over the past year. My hon. Friend the Member for Oldham East and Saddleworth cited the situation of Ann and Harry Long, whose business was forced under by late payments. The hon. Member for Burton (Andrew Griffiths) spoke of his family’s engineering business’s struggles in dealing with late payments.

The consequence of all this, as my hon. Friend said, is that SMEs are owed a staggering £24 billion—more than the entire budget of the Department for Transport. It is not only a question of lost cash. There is also a huge loss of productivity; 158 million man hours are wasted every year in chasing bills. The latest figures from the Department for Business, Innovation and Skills show that 18% of business failures are a direct result of late payment.

I turn to where the problem resides. We know that it is primarily a business-to-business problem, although we heard today from many Members that it is a problem also for the public sector. Indeed, the hon. Member for Kettering (Mr Hollobone), who is no longer in his place, referred to the irony of HMRC owing moneys and paying late, yet demanding the payment of taxes. My hon. Friend the Member for Pontypridd (Owen Smith) also referred to HMRC.

Shortly after Lord Heseltine made his famous comment, the Labour Government responded to the growing problem with the Late Payment of Commercial Debts (Interest) Act 1998. That Act enables firms to charge interest and obtain compensation on overdue payments. If a firm has agreed a credit period with the purchaser of its goods, interest applies from the expiry of the credit period until the invoice is paid; if no credit period is agreed, a default credit period of 30 days applies instead. I appreciate what has been said, but although that Act serves as a deterrent it requires a certain amount of courage for businesses to litigate in such circumstances.

Following the 2008 crash, the Government worked with others to set up the prompt payment code. In the March 2010 Budget, shortly before the election and leaving Government, we tightened the existing rules governing payments by the public sector, setting Departments the goal of paying 80% of undisputed invoices within five days, and requiring them to do so within 10 days. Departments were also compelled to include clauses in contracts with suppliers, to ensure that contractors paid any subcontractors within 30 days.

Clearly, more needs to be done. In her excellent speech, the hon. Member for Newton Abbot (Anne Marie Morris) talked about some of the things that SMEs can do themselves, including ensuring that they have a written contract. When I worked as a solicitor, I always encouraged my business clients to have a written contract. She also talked about the need for SMEs to carry out credit checks.

The hon. Member for North Swindon (Justin Tomlinson) also talked about the need to ensure that invoices are chased in a timely fashion. A number of suggestions have been made about what more we need to do. I have publicly said that I welcome the Government’s decision to carry on with our prompt-payment code. I should like to work with the Minister and his colleagues on a cross-party basis to get more companies, particularly large ones, signed up to that code.

We need to ensure that not only Whitehall Departments but all public sector organisations meet the 10-day and five-day targets. It is interesting to note that in the Federation of Small Businesses survey, those who reported problems with late payments from local government exceeded those who reported problems with late payments from central Government Departments and agencies.

[Fiona O'Donnell]

Given that the health and strength of the economies of the devolved nations of this country benefit from being part of the United Kingdom, is it not important that the Minister should also work with them to ensure that the practice is spread across the UK?

[Mr Umunna]

How could I possibly disagree with such a fantastic suggestion?

The Government need to be ever vigilant in enforcing the public sector targets because the figures obtained by the Opposition in July showed that seven Departments had not paid around £3.5 billion worth of invoices within the five-day prompt payment target. The Government must improve their monitoring of Departments to see whether they are meeting the target. At the moment, monitoring is quite patchy.

The hon. Member for Solihull (Lorely Burt) said that the prompt-payment target should be enforced all the way down the supply chain, and I could not agree more. The EU directive has also been mentioned. Although some Conservative Members are not famed for their love of Brussels, the Minister himself is. Perhaps he will ensure that the EU late-payment directive is transposed some time before the March 2013 deadline.

In conclusion, successful firms with sound business models are going under because customers abuse their position of power and disregard their contractual obligations to pay on time. Given that we all agree that SMEs have a key role to play in contributing to the future prosperity of the country—I should be careful to say here that I know that the micro, the small and the medium-sized business are all very different—we must do all we can to ensure that they are paid in a timely manner.

10:43

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

This has been a fantastic debate, Mr Hood, and we all owe a debt of gratitude to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) for introducing it. In pursuing this issue, she has shown both her knowledge and her determination. I am sure that she will agree with me that all Members here have not only shown knowledge of what is going on in their own constituencies and in the sector but contributed some interesting ideas and a number of questions. I will try to do justice to this debate by explaining what the Government want to do.

I was economic researcher for the Liberal Democrat party during the recession between 1989 and 1992, and late payment was one of the biggest issues on which we pressed the then Conservative Government. It is depressing that this issue has not gone away. In 1998, Labour passed legislation allowing compensation to be paid in cases of late payment. I never thought that measures such as that would be a silver bullet, but I hoped that they would begin to change the culture. I therefore welcomed that legislation and felt that it was the right approach. None the less, legislation can never sort out a problem. It can begin to change attitudes, particularly in an area in which millions of contracts are made between many different companies of all shapes and sizes.

Things are slightly better than they were in the early 1990s. Nevertheless, we have heard from some eloquent speakers that there is still a problem here, so we need to tackle it. Sometimes, however, the debate on late payment becomes a little simplistic and lacks real evidence. That is not to decry today’s contributions, but we must look at the evidence to ensure that we get to the real causes of late payment so that we can identify the best means of tackling it. We need to diagnose the problem properly.

Late payment is not exclusive to any sector or to any style of business. Although I sympathise with those who say that this is big business abusing its power, an awful lot of payment is between small businesses. The majority of contracts that any small business has are with other small businesses. We should not say that it is just a big business problem against small businesses, because the issue is about more than bully-boy tactics. Research shows that of the moneys owed by large businesses, around 40% is overdue compared with 30% for small businesses. The problem therefore affects businesses of all sizes.

I acknowledge that it is important for large businesses to give a lead here, to step up to the plate and set a good example. There is support across the Chamber for the Institute of Credit Management’s prompt-payment code, which is backed by the UK’s leading businesses and finance bodies. The code requires signatories to pay according to agreed terms, and there are now more than 1,000 signatories. People may say that that is not many, but they represent more than 60% of the total UK supply chain.

The Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), who normally speaks on such matters, launched the new “Be Fair, Pay On Time” campaign in June, which backs up the prompt payment code. I agree with the hon. Member for Streatham (Mr Umunna) that we should work on a cross-party basis to encourage even more signatories to this code. Certainly, that is the Government’s aim. We very much want actively to encourage new signatories to this important code.

I agree with those Members who argue that the public sector should be an exemplar. Indeed the previous Government played a role in developing that policy. At the time, the Opposition parties argued that they should develop that policy, too.

There is some confusion over how the Government are performing, which is mainly due to the confusion over the pre and post-election targets. The pre-election target from the previous Government was 90% in 10 days. The target that we have been operating is 80% in five days. We felt that a quicker period was important. My own Department is paying 93.6% of our bills within five days, which is significantly faster than the target. Our evidence shows that the performance in this area across Whitehall has been continuously improving. Private business is also saying that local authorities are improving and paying faster than ever. On average, they pay in 18 days.

[Mr Umunna]

rose—

[Mr Davey]

I am happy to allow hon. Members to speak, but I must say that our record is rather better than it was portrayed.

[Mr Umunna]

One of the other areas of confusion is that the five-day target is an aspiration; the 10-day target is a requirement.

[Mr Davey]

I believe that that is correct, but we are beating our aspirations.

[Fiona O'Donnell]

Some of the most vital SMEs in all our constituencies are local post offices—I have debated this issue with the Minister before—and they depend on the Government for their health. Has the Minister carried out any assessment of the weakening of the requirements on Government Departments on local post offices?

[Mr Davey]

I must confess to the hon. Lady that I myself have not made any assessment of Government Departments in relation to local post offices. I will see whether my Department or Post Office Ltd have made that assessment. If Post Office Ltd has made that assessment, I am sure that it will want to share the information with her.

The hon. Lady said earlier that the Government should work with the devolved Administrations on this issue. The whole of government—whether it is the devolved Administrations, local authorities or even parties working on a cross-party basis—needs to send out a clear signal that we want companies to pay their bills on time. That would make an important contribution towards ensuring that this economic recovery is as strong as possible.

There is an important point that was not made as often as other points during the debate, but it is none the less important to stress, which is the need to improve the way that companies manage their invoices. Obviously, many companies manage their invoices well, but some companies create the problem of late payment for themselves. Better management of invoices is something that we should emphasise. We believe that more than half of all UK business transactions take place with no pre-agreed payment terms, which is astonishing. Barclays has done some analysis in this area and its data suggest that only one in 10 suppliers regularly credit-checks their customers. Clearly, companies themselves need to do some work.

Under the previous Government, my Department undertook some research with Experian to look at payment of invoices to suppliers by four large FTSE 100 businesses. The total value of the sample invoices was more than £1 billion. There was no evidence at all of systemic late payment by those four companies. Typically larger companies in the UK have moved to electronic purchasing and invoicing, which means that late payment is no longer an option for them. I am not saying that there is not a problem with smaller companies; clearly there is, and we have heard contributions to the debate that show there is. However, it is worth putting on record that electronic payment systems in some of the largest companies are beginning to change things.

That research, which was carried out under the previous Government, identified clear evidence of poor invoicing by some suppliers. By that, I mean that invoices were completed incorrectly or submitted late. Consequently, data on payment across the UK economy are generally flawed, because of a single factor—due dates for payment are collected using the date provided on supplier invoices and more often than not those invoices reflect the terms assumed by the suppliers rather than the terms assumed by or contractually defined by the customer. So, there can be confusion about how that type of payment operates in practice.

That is why we see the average time for payment in the UK economy coming out at around 16 days beyond agreed terms. What typically happens is that suppliers assume a 30-day payment period, while the period adopted by the majority of larger businesses is 30 days net monthly; that is, 30 days from the end of the month in which the invoice is received. So we need to work really hard to ensure that suppliers have the information support that they need to manage their customer relationships and cash flow. Work is being done to try to help suppliers not only by the Department but by outside organisations. For example, since 2010 there have been more than 250,000 downloads of the simple checklists developed by the Institute of Credit Management to help suppliers manage customer relationships.

Inevitably, legislation was discussed during the debate. As I mentioned earlier, the UK was one of the first countries to introduce legislation setting out the rights of a supplier to agree payment terms and to secure payment. When we consider what other legislation might be introduced, I must point out that the majority of business bodies oppose any strengthening of the current legislation. Partly that is because many suppliers have long-standing relationships with their customers and—as has been mentioned—they are unlikely ever to resort to legal action to chase up payment from those customers. Where suppliers seek to use legislation to secure payment, weak invoicing means that all too often the courts are unable to intervene meaningfully. It is not that the courts are unwilling to intervene to enforce the law. Instead, when these matters have been examined, it has emerged that sometimes it was the supplier that failed to invoice the customer properly.

That is not to say that I do not see legislation as being entirely unimportant for setting the environment in this area. I encourage suppliers to set out their invoices with the agreed payment terms, stating very clearly the fee that will accrue if payment is not made by the due date. That is what the hon. Member for Streatham (Mr Umunna) was advising his clients to do when he was in the legal profession. It is very important that these contracts are set out clearly. If they are not set out clearly, suppliers have no chance of using the legislation, whatever it might be.

There was a question about the European legislation on late payments. Actually, UK legislation on late payments has played a really important part in shaping the EU legislation, and the recently revised EU directive on late payment very much mirrors UK practice. Because the revised EU legislation follows UK practice so closely, we are seeking advice on whether it will entail any changes whatsoever to existing UK legislation.

[Mr Umunna]

I agree with the Minister that the EU regime is essentially very similar to our existing domestic regime. However, the EU regime introduces minimum fixed amounts of compensation for late payment, and I think that it also slightly tightens the time periods for payment.

In the five minutes that the Minister has left to respond to the debate, can he say what more can be done about expanding the compliance with targets of the public sector organisations beyond Whitehall? In Whitehall, the worst offender on late payment is the Department for Communities and Local Government and surely that Department has a role to play in getting local authorities to pay suppliers promptly and on time. As I said in my speech, in some senses local authorities are a bigger problem than central Government in terms of public sector bodies failing to pay on time.

[Mr Davey]

The Secretary of State for Communities and Local Government is keen to ensure that all Government Departments are doing their best, and I am sure that when he reads this debate he will note the hon. Gentleman’s comments.

Regarding the hon. Gentleman’s comments on the EU directive, we will undertake a second consultation in the winter of 2011-12 and will then transpose the legislation into UK law in the first half of 2012, which is earlier than we are required to do. I hope that that addresses some of the concerns that colleagues have expressed during the debate.

In the final minutes that I have left, I want to try to address some of the points that I have not yet dealt with. For example, my hon. Friend the Member for Solihull (Lorely Burt) asked how we are progressing with the approved supplier status, having committed ourselves to trying to simplify the application forms. I recommend that she reads the Cabinet Office report published in July that shows that 14 out of 17 Government Departments have removed the requirement for pre-qualification questionnaires for contracts for less than £100,000. As she is aware, those questionnaires were the really big bugbear that many companies complained to us about. The remaining three Departments are piloting an open group process. So there has been some real progress. Clearly there is more to do, but we are going in the right direction.

There were a number of excellent contributions to the debate. I particularly liked the contribution of my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who showed a lot of knowledge of this issue. She made the point that late payment is, in many ways, a private sector issue, because both this Government and its predecessor have made some headway on late payment within the public sector. She also referred, quite rightly, to the issue of trade credit insurance. That is one of the issues that I asked about in preparing for this debate. In many ways, trade credit insurance is a private sector solution. The market for trade credit insurance is relatively small and—almost by definition—those people who use it tend to be more educated and better trained in managing their cash flow and invoicing. She referred to the sausage firm in her constituency, which is obviously now growing with a bang, and she was quite right to say that trade credit insurance is not the answer for everything.

My hon. Friend was right to say that we should be very careful before we go down the compulsion route. That has always been my view too and the examples that she referred to from Australia and other EU countries that have gone down that route showed that in the end compulsion is not helpful to businesses on either side of the late payment issue.

My hon. Friend also talked about accounting standards. She will be aware that the Government do not want to tie up business in red tape, but as I am the Minister with responsibility for corporate governance and as I am looking at narrative reporting, I will certainly take on board her points and consider them very carefully.

The Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford, who is the Minister with responsibility for small businesses, will read this debate with relish, because of the quality of the contributions to it. I thank hon. Members for their contributions, and I particularly thank the hon. Member for Oldham East and Saddleworth for ensuring that we had the opportunity to debate this issue.

Media Ownership (Regulation)

Wednesday 14th September 2011 Westminster Hall

10:59

[Mr Graham Allen (Nottingham North) (Lab)]

As always, it is a pleasure to serve under your chairmanship, Mr Hood.

Media ownership in this country is massively over-concentrated, and that has resulted in a number of problems, some of them profoundly unhealthy for our democracy. The media are so over-powerful that they have frightened and corrupted Governments of all political colours, and have chilled and intimidated Parliament and Members of this House in the performance of their duties. Vibrant British politics has shrunken into a grotesque tango between the press and No. 10 Downing street, who are unwilling but inseparably locked partners in a duopoly that diminishes all others, including Parliament, local government and civil society. For me, the ownership problem is not about the corruption techniques that have recently been exposed; it is part of the broader question of the settlement of our democracy: a democratic agenda, and a Britain in which people know their rights, own their politics, aspire to better for themselves and their families as citizens, and are less subjects and placid consumers of low-grade trivia.

The problems of the press pre-date hacking. There are a number of problems with the role of the press, including the constant denigration of individuals, the culture of cynicism, the trashing of whole classes of people—Members of Parliament know a little about that—the demise of the inspiring and investigative journalism that I was used to in my youth, the dumbing down of once-great newspapers, and the international reputation of our press. Those problems deserve a hearing, but I will not go into them in any detail here. All too often, the press will lead and the rest of the media pack—TV and internet—will fall behind the very low standards that are set. We deserve better from our media.

Today I want to focus on the greatest threat to a free and independent media: the over-concentration of ownership. When one person or organisation can become so insulated by its own power from scrutiny of its behaviour, and so important that Prime Ministers of all colours go cap in hand hoping for its approval, our already feeble and unwritten system of checks and balances becomes more obviously ineffective, and we should fear for our democracy and take action to protect it.

Much of the recent debate has been about symptoms not causes, about the things that the press themselves are interested in, including hacking and intrusion, and unhealthy links and relationships, rather than about what we as politicians should focus on: the power that distorts markets and politics alike. It is that distortion that drives the practices that we have recently seen, such as hacking and a tendency to be loose with the truth and protected from the consequences. The answer is to create a broader diversity of ownership of media outlets and let good, professional, effective journalists blossom and get on with their job of standing up for ordinary people and getting the truth our there for us all to consider and reflect upon.

Now is a good time to make progress. I congratulate the Prime Minister and the Secretary of State for Culture, Olympics, Media and Sport for picking up on this problem, along with the Minister present today—the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey). In the middle of the hacking scandal, the Opposition day motion on Mr Rupert Murdoch and News Corporation’s bid for BSkyB contained no reference to ownership. I amended it by adding that the Prime Minister

“should consider a statutory settlement for the press based upon the principles of diversity of ownership, fairness and honesty”.

That was happily superseded by the Prime Minister’s amendment to the motion, which set up the review of media ethics and regulation that we now know as the Leveson inquiry, and included

“the issue of cross-media ownership…more effective way of regulating the press—one that supports its freedom, plurality and independence from Government”.—[Official Report, 13 July 2011; Vol. 531, c. 312.]

I am pleased that the Government have developed a position that includes those matters.

We all await the results of the Leveson inquiry, and I very much hope that it will balance its examination of the symptoms—some of the sexier press behaviour—with that of the causes, such as the lack of plurality of the media, and media and cross-media ownership. It should not be an incestuous inquiry, giving the media prurient stories about the media and thus feeding the cycle. It should look outwards at the media’s involvement in and relationship to our constitution and our politics. It should seek to lay the ground rules of a strong, independent media, with the possibility of opening up a new chapter and restoring the media’s reputation as a key contributor to the plurality of institutions in our democracy. That is what the media need to be, and Justice Leveson might help to nudge us all towards that better position.

[Susan Elan Jones (Clwyd South) (Lab)]

Does my hon. Friend agree that a plurality issue in Wales concerns the fourth channel, S4C, which is Britain’s only Welsh-language television channel? Many people fear that the proposed Government changes to the channel will jeopardise its independence. That is important, not just because of Welsh-language broadcasting but because of the plurality of media ownership. Many of us fear that the channel will be subsumed into the BBC, and that monolithic way of broadcasting cannot be good for any of us.

[Mr Allen]

My hon. Friend makes her point very eloquently, and the Minister will no doubt wish to refer to it in his concluding remarks.

Those of us who support effective regulation are the friends of an evolving, developing, vibrant and refreshed media and will not be painted as people who do not want diversity. On the contrary, the people who object to diversity and plurality are the very people who have a monopolistic settlement that they wish to preserve. It is very important to consider this matter, and that Lord Leveson, with the Minister’s encouragement, looks at proper regulation, not by the Government but by a strong, independent regulator that is respected by all parties. That should not be feared. We can consider the ethical codes that apply to the BBC and to independent television. Those codes are fair, uncontroversial and totally accepted, and there is absolutely no reason why we should not aspire to the same sets of ethics for the press.

Tougher media ownership laws are required in this country; the ownership of the press needs to be at the forefront of the debate. I hope that Lord Leveson does not decide that there has to be a totally comprehensive and coherent cross-media ownership set of rules, or that he is paralysed by dealing with sectoral ownership in the press, television or other media outlets. There should never again be the concentration of unaccountable power in this country that we have seen in the media in recent years.

While there is a well-documented history of the rich and powerful abusing media ownership and resisting regulation, there is also a history, from this place, of efforts to attempt to tackle the abuses. I would like to pay tribute to a former colleague, Clive Soley, who in 1992, when he was the MP for Hammersmith, called for a new independent press authority to investigate and monitor ethical standards of the press, distribution of newspapers, ownership and control of media, access to information, restrictions on reporting and any related matter that that authority might consider. He could have been speaking at the end of the recent hacking scandal, and I hope that Mr Soley feels that his day may soon dawn.

Certainly, the long-running weaknesses of the Press Complaints Commission have recently been starkly exposed, and it is here that self-regulation most clearly fails. Many of us may have suffered from being traduced in the media. We complain, and then the complaint disappears into the bowels of the PCC. Many months later, if we are lucky, we may get a microscopic apology on an obscure website. That is frankly no longer acceptable in a modern democracy and needs to be examined. Lord Leveson also needs to look at a right of reply that can be fairly and practically implemented, so that people feel that they have redress if they are wronged or feel wronged by the press.

I was pleased that the Secretary of State for Culture, Olympics, Media and Sport stated that we need to look carefully at cross-media ownership laws and whether the merger rules for media takeovers work as effectively as they could. Consideration must also be given to the suitability of those who push for greater slices of the media pie for themselves. Does the Minister support my call for a negative resolution of this House that would explicitly enable his boss, the Culture Secretary, to take the public interest into account, and which would give him the ability to order a fit and proper person test to be carried out in any future media acquisition? It would be a simple and modest safeguard to look after the interests of the broader media family. Also, does the Minister agree that an immediate amendment to the Enterprise Act 2002 to allow the public interest and a fit and proper person test to be taken into account in media takeovers would be a positive step that should secure all-party support? In doing that, along with introducing tougher cross-media ownership laws and ensuring the plurality of the media, we will finally be able to begin to develop a plural and diverse media in the UK and to tackle the causes of some of the gross abuses of power that we have seen from the rich and the powerful who own those organisations.

The key question is whether there is the will to do it. I hope that given the recent scandals, the Government can take courage from the public reaction to take the necessary steps. There is a moment here. Many of us have waited many years for it, and if it is not seized, we could wait many more years to give the press and the media the boost, encouragement and boldness to start to be a new part of a wider, broader and democratised constitution. Can the House of Commons, enfeebled by years of subservience to the Government and the media, also help to seize the opportunity? The jury must be out on that particular question.

If we get those two big institutions—the Government and Parliament—to work as effective partners with the media, instead of sour cynicism, denigration and mutual recrimination, we could enter a new partnership between those three institutions, with all of them playing an enhanced role. I hope that that will happen. If we do that, Parliament can be less inhibited in holding the Government to account and, above all, it will increase the potential for the Government to work for the future rather than for the next day’s headlines.

11:14

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

It is a pleasure to serve under your chairmanship, Mr Hood. I thank the hon. Member for Nottingham North (Mr Allen) for securing this important debate. I hope that he will not mind or become cynical, thinking that I am trying to neuter his remarks, if I use this opportunity to say how much I admire him from afar for not only his sterling work in the House to protect the interests of Parliament, with which I wholeheartedly agree—we need a stronger Parliament to hold the Executive to account—but his valuable work on early-years education and, perhaps most importantly, his support for the great sport of cricket.

The debate raises a number of important issues, and I welcome the opportunity to have a constructive discussion about some of them. Media ownership is a high-profile issue at the moment; questions about the plurality of the media and its implications are live. It is interesting that the issues regarding News Corp’s takeover of Sky and the furore that that created are combined with the rapid changes to the press that new technology is bringing. It is only right and proper for us to discuss such issues and rehearse how the Government intend to address them. We want to look at media ownership constructively, as we do not want to set ownership limits that would have a disproportionate effect on growth.

Before I come to the main points in response to the hon. Gentleman’s debate, let me briefly address the points raised by the hon. Member for Clwyd South (Susan Elan Jones) in her intervention. I understand why she wanted to raise the issue of S4C. She is a champion of that important channel, which was set up in 1982 to promote Welsh language broadcasting and which has many glories to its name. I assure her that the Government intend to ensure that S4C remains a strong and independent force in broadcasting.

Our intention is that S4C should be funded via the BBC, and therefore the BBC should have some space on its board. There is already close collaboration between the BBC and S4C on the provision of news, for example. Nevertheless, there are important safeguards for independent content control for S4C. Discussions are currently ongoing between the BBC and S4C, which I understand are fruitful and productive.

On the debate secured by the hon. Member for Nottingham North, there are three areas that we need to look at: plurality, the Leveson inquiry to which the hon. Gentleman referred, and media ownership in general. As I said, the proposed takeover of Sky has brought the question of media plurality to the forefront. The News Corp bid highlighted problems with existing media ownership regulations that need to be discussed and debated.

When Ofcom produced its initial report on the proposed News Corp takeover of BSkyB, it identified a potential gap in the media ownership regime, which has been well aired. There is a potential weakness, in that the public interest test that accompanies questions about media plurality can be triggered only when a merger takes place. At present, the system cannot address concerns that arise from the organic growth of one particular media organisation.

We understand the need to look at the current system, but we do not want to rush into a change in media ownership regulations simply as a reaction to one controversial takeover bid. We do not want to make changes that could have knock-on effects further down the line, which we are not able to foresee. However, that does not take away from the fact that we want to investigate the issue thoroughly, rehearse and debate it in public and come to a conclusion as we approach the publication of a communications Bill and the parliamentary discussion of that Bill.

In the context of the Leveson inquiry, the hon. Gentleman also discussed the importance of regulation of the press, referring to the calls that have been going on for 20 years or more for proper independent regulation of the press. I note what he said about the Press Complaints Commission. The PCC has many critics, but it would say in its own defence that it works closely with people who have concerns about the press and often prevents the press from publishing damaging stories when agreement can be reached that a story is unfair. The good work of the Press Complaints Commission does not necessarily get the prominence that it deserves. However, the right of reply and the prominence of apologies are live issues that have been debated recently in the House.

Lord Justice Leveson is now conducting an inquiry focusing on the regulation of the press, the relationship between the police and the press and media ownership and plurality rules. Lord Justice Leveson held his first preliminary hearing last week; his work has only just started, and he has many issues to consider. The inquiry will concentrate initially on the behaviour and practices of the press, but he also intends to consider media plurality, as I said. I assure the hon. Gentleman that my Department will co-operate fully with the Leveson inquiry.

It is important to emphasise that the inquiry is completely independent. It is up to the inquiry to ask my Department for assistance rather than for us to be seen to influence the inquiry in any way. We are responding to information requests from the Leveson inquiry. When the report concludes, the Government will of course listen carefully to its recommendations and incorporate them, where appropriate, in final decisions about the Bill on media ownership and the future regulation of the press. We must be mindful of the time scale for the Leveson inquiry, which aims to examine the issues of press regulation and media ownership within a year. We want to hear what the inquiry says, as it will be a significant piece of work on media regulation.

In general, we believe that it is important for the media to reflect different viewpoints at national level and to safeguard democratic debate. Media ownership rules are important to prevent any one UK media company from obtaining too great a concentration of media power. Competition rules will usually ensure an outcome that promotes plurality, but not always, because they are designed to prevent abuses of market power. It is possible for someone to be dominant from a plurality point of view without acting in an anti-competitive fashion. Without additional plurality rules, we will be unable to prevent a concentration of media power.

As I said in my opening remarks, we are acutely aware of how changes to technology make media ownership and plurality complicated issues. The media landscape is changing rapidly, as is the way in which it influences debate and informs citizens. It is therefore even more important that the rules do not allow one person or organisation control over the entire media landscape. At the same time, it is also important that the rules do not unreasonably constrain the working of the market. We want a vibrant media sector capable of innovating and of attracting investment, ideas and skills. The challenge is to strike the right balance.

My right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport will make a speech this evening at the Royal Television Society conference. He will outline his early thinking on numerous issues across the media sector, and will address in particular media ownership, plurality and press regulation. As was reported earlier this week and as he will say this evening, the Secretary of State has asked Ofcom to prepare a report on the options for measuring media plurality given the new online world in which we exist, to recommend the best approach and to supply a copy of the report to the Leveson inquiry. That work will form part of our communications review, but I hope that it will also assist the Leveson inquiry.

The hon. Gentleman called on me and the Government to support a change now to media ownership regulations. Specifically, he asked us to support the proposals of the shadow Culture Secretary, the hon. Member for Bury South (Mr Lewis). With the greatest respect, I am not sure that those changes have been entirely thought through. I am not sure whether the shadow Secretary of State has the power to introduce such a change; my understanding is that the Enterprise Act 2002 allows only the Secretary of State to do so.

More importantly, to discuss the substance of the proposal rather than any technical hurdles to its adoption, Ofcom is already required to ensure that any person holding a broadcasting licence is and remains a fit and proper person to hold it. That requirement is ongoing, not a one-off requirement limited to mergers. I am not sure that the amendment is necessary, and it could narrow the scope of the current duty on Ofcom.

My further concern with the proposals of the hon. Member for Bury South, bearing in mind that he is not here to defend them, is that they could add to the politics of the situation rather than detract from them. The Secretary of State conducted himself impeccably throughout the News Corp takeover process. He sought legal advice at every stage, he was transparent and he published that legal advice when appropriate. Nevertheless, the fact that a politician had the final say in the takeover proposal allowed people to speculate that undue influence was being exercised. It therefore seems likely that the direction of travel in such contentious takeover proposals is to try as far as possible to remove politicians from the process.

What concerns me about the proposals of the hon. Member for Bury South, well meaning though they are, is that they would effectively allow a Secretary of State to take into account new factors, which seems wide open. Almost any factor could be taken into account and inserted into the current process, which would create enormous uncertainty for every media company in the country—and perhaps inadvertently increase, rather than reduce, political interference in such processes. For that reason, we do not support the proposals. The Secretary of State has written or will write a response to the letter sent to him by the hon. Member for Bury South calling for his support for the proposals.

[Mr Allen]

Before the Minister concludes, I should say that he is making a sensible and rational contribution to an extremely important debate. Will he say something ridiculous and outrageous so that his comments will be reported fully in the press tomorrow, rather than ignored?

[Mr Vaizey]

The hon. Gentleman makes a fair point. It is a matter of regret. As he well knows, there is an adage: “If you want to tell a secret, the best place to do it is probably in the Chamber of the House of Commons,” because it is rarely reported. Those of us who love the House of Commons and politics would love for the media to return to devoting a page in the newspaper to reporting parliamentary proceedings. We have to listen to Radio 4’s “Today in Parliament”, or there is, of course, the BBC Parliament channel, which we can watch all day if we want. Many of us—I am sure that you are the same, Mr Hood—prefer nothing to watching the Parliament channel whenever we get a spare moment, catching up on the odd Select Committee appearance by our colleagues and so on. I find it riveting viewing.

I thank the hon. Gentleman for securing this important debate. As I said, a huge number of issues are involved, including media plurality, media ownership and regulation of the press. Our approach is twin-track. We are moving towards an important communications Bill in a changing area of technology, alongside the important and independent Leveson inquiry into the press.

11:30

Sitting suspended.

European Union Fiscal Union

Wednesday 14th September 2011 Westminster Hall

[Annette Brooke in the Chair]

14:30

[Mr William Cash (Stone) (Con)]

In the light of developments not only today but over the past several decades, not to mention more immediate events since the Lisbon treaty and the general election, I am glad to have the opportunity to deal with the question that has been embedded in the history of the European Community and the European Union over a long period. It relates to the creation of a two-tier Europe, which the fiscal union appears to represent. I cross-examined the Prime Minister on the issue in the Liaison Committee about a week ago, and I cannot say that his answers were satisfactory. I therefore take this opportunity to reply, vicariously through the Minister, to the Prime Minister on a number of the matters that remain outstanding.

Mr Barroso, the unelected President of the European Commission, gave a speech this morning, lecturing the whole European Union, and the world for that matter—not to mention the United Kingdom—on what is to be done about the mess that has been created over the past 20-odd years. In fact, it is much more than that, but I shall draw a line at the Maastricht treaty for present purposes; otherwise, we will be here all night.

Curiously, Mr Barroso takes the view that, in the short term, there has to be—surprise, surprise—reinforced economic governance. He also argues that all this can be done only by way of the Community method; in other words, nothing changes. In his speech, he had the temerity, despite the failure of the Lisbon agenda and the 2020 agenda, to say:

“Growth is key and we must use all instruments available to promote growth”.

He went on to talk about using the Single Market Act to promote sustainable growth. Then, somewhat ominously, he referred to his promise—this is not just a floated idea—that

“the European Commission will very soon propose a Financial Transaction Tax.”

The clear implication is that that will apply to the European Union as a whole. It would be interesting to hear what the Minister has to say about that.

Mr Barroso went on to talk about the governance of the euro area, saying:

“A system based purely on intergovernmental cooperation has not worked in the past and will not work in the future. After all, this is why the Community method and the European Union institutions were created by the member states in the first place.”

He continued:

“The Economic and Monetary Union cannot function properly only on the basis of decisions taken by unanimity,”

So there goes that veto. He went on:

“Because if a eurosceptic fringe”—

I suspect that that refers to the likes of me and, I hope, other Members of the Government, and certainly to the majority of hon. Members who have turned up to this debate—

“can determine the position of one Member State and one Member State can block decisions, the result is that we are not credible.”

That raises the question, of course, of whether the policies are credible in the first place.

[Kelvin Hopkins (Luton North) (Lab)]

On the Eurosceptic fringe, the fact is that, on many occasions when referendums have been held, the majority have voted in a Eurosceptic way, so it is possible that there is a Eurosceptic majority in the European Union.

[Mr Cash]

Opinion polls in this country have regularly indicated that 70% want a referendum and, moreover, would vote yes against the idea of the continuation of our present relationship with the European Union. People want renegotiation and if they do not get it, they want to leave. That is the position.

We are confronted with an incredibly serious situation that is getting worse. There will be a telephone conference this afternoon—it might already be in progress, at the very moment when we are debating this question—between Monsieur Sarkozy, Angela Merkel and Papandreou, because the system has failed. If, however, we raise the question of its failure, the response is, “We don’t want less Europe; we want more,” so they want more integration, not less.

[Jake Berry (Rossendale and Darwen) (Con)]

Will my hon. Friend concede that the system was set up to fail by the fiddling of figures when it was established?

[Mr Cash]

Yes, I certainly will. In the case of Greece, it is perfectly clear that, to put it bluntly, misrepresentations —and even lies—were contained in the statistical base on which it was brought in. Indeed, even the present German Chancellor has criticised the way in which it was allowed to come in when it did.

In his speech, Mr Barroso said:

“The conclusion I draw is crystal clear—The only right way to stop the negative cycle and to strengthen the euro is to deepen integration, namely within the Euro area, based on the Community method.”

He went on to say:

“What we need now is a new, unifying impulse—‘un nouveau moment fédérateur’”.

Let us get this clear—he means a new moment of federal fervour, although that is my translation. He continued by saying,

“let’s not be afraid of the word, moment fédérateur is indispensable.”

He went on:

“It has become clear that we need an even greater integration of our economic and budgetary policies.”

Do not get the impression that he is referring exclusively to the proposed fiscal union. His ambitions extend to the whole European Union. This is a call to arms by the Eurofanatics—let us be in no doubt about that.

On eurobonds, Mr Barroso, having said that we need even greater integration of our economic and budgetary policies, confirms that the Commission, again, on behalf of the European Union,

“will soon present options for the introduction of Eurobonds”,

on which, as it happens, the German constitutional court has cast grave aspersions. Indeed, I understand that the President of the German Republic has also said that he regards them as illegal. I could spend a lot of time going into that, but I do not need to for the moment. Mr Barroso said:

“Some of these options could be implemented within the terms of the current Treaty”—

that is the abominable Lisbon treaty, which we accepted after we had opposed it as a party, united together, and called for a referendum that we never got—

“and others would require Treaty change.”

I wanted to draw all those matters to the attention of my colleagues, because they are the latest emanations from the European Commission. This is what it is about and, as we speak, none of it is being reported.

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

The hon. Gentleman is describing something that is not surprising; we are getting milk from the milkman in terms of the statements that he has read. Does he, like me, find it depressing that the Front-Bench representatives of both main parties argue for less democracy, rather than more, in the eurozone?

[Mr Cash]

That is absolutely the case, and it is very depressing. The whole objective of the treaty arrangement, from its inception and the days of Jean Monnet onwards—and as evidenced by recent treaties, including the Lisbon treaty—is essentially undemocratic.

Implementing the measure would create a situation in which people in this country, who in general elections have voted through their own free choice at the ballot box for policies, were denied those policies because the proposals brought forward by majority voting in the European Union are inimical to growth and deficit reduction.

I shall explain why it is so fundamentally wrong for the Prime Minister, the Chancellor of the Exchequer and the coalition Government as a whole—under the baleful influence of the Liberal Democrats—to advocate the idea of a fiscal union. For reasons that I will explain, fiscal union is immensely damaging to the national interest and our economy.

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

Does my hon. Friend share my concern that it is the language surrounding these new moves that is deeply worrying? I believe that those people who had a chance to vote on whether they wanted to join what they thought was the common market would never have done so at any time if the rhetoric that we are now hearing had been used then. The language being used relates to deeper fiscal integration, eurobonds and basically subsuming what the British people want. That is why we need to ask the people again whether they wish to embark on this experimental project.

[Mr Cash]

I am grateful for that intervention. Indeed, when the Chancellor of the Exchequer made his statement—which he slipped in, as it were, in the middle of the emergency debate on the riots—he said that he was going to promote the idea, and that the Prime Minister had already spoken to Mrs Angela Merkel and Mr Sarkozy and had encouraged them to go ahead with fiscal union.

In addition, he said that he, as Chancellor, had already made overtures to other Chancellors in other member states advocating the idea of fiscal union. When he said that, he was ignoring the fact that the consequences of going down that route would, as I said at the time, have been such that even Edward Heath would not have proposed it back in 1971-2. Indeed, if hon. Members look at the White Paper produced at that time, they will see that it says that we would retain the veto in our national interest and that to fail to do so would not only be immensely damaging to the United Kingdom, but would even endanger

“the fabric of the European community itself.”

Since then, we have had an accumulation and aggregation of policies in defiance of the democratic issues and principles to which the hon. Member for Blackley and Broughton (Graham Stringer) referred—and, indeed, in defiance of the wishes of the people of this country and, as the hon. Member for Luton North (Kelvin Hopkins) said, of other member states such as Ireland, Denmark, Holland and France. Every single time a referendum, which shows the democratic wishes of the people in question, has been overriden, we are being taken down a route that, above all else, does not work. That is the problem.

Apart from the matters of principle, the real problem is that such an approach does not work and is now causing immense damage. For example, there are incredibly high levels of youth unemployment in places such as Spain, where 47% of young people are unemployed. There are similar levels of unemployment in Greece and Italy, although the figures are not quite as high as 47%.

I do not need to read all the figures out, but the official statistics for unemployment among youths under 25 are 46.2% for Spain, over 23% for eight countries and 32% for one country. This is not a working system; this is a system that is destroying people’s aspirations and prosperity.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I commend the hon. Gentleman for securing the debate. I agree with what he is saying, particularly his comments about the system simply not working. However, does he agree that part of the problem that the United Kingdom is faced with is that we need to have a cohesive alternative to the total integration policy that he is outlining, which I am sure is completely different from the approach that he will discuss shortly? A practical coherent alternative needs to be laid out by our Government to try to lead ourselves out of the mess into which we have got over the past 20 years.

[Mr Cash]

I am extremely grateful to the hon. Gentleman. He may recall that I raised the matter in Prime Minister’s questions, when I asked when the Prime Minister would lead us out of the mess that had been created by the existing treaties. This morning on the “Today” programme, we heard Lord Lawson of Blaby echoing that call and saying that he had always had grave reservations about the political union. I can only say that when the Maastricht treaty came and went, a lot of those arguments developed at the same time. The hon. Gentleman is completely right in saying that we must have a constructive alternative.

I have always advocated the idea of our working effectively with a European system capable of producing the right results. In fact, I hope that no one will mind my holding up a copy of a book that I wrote in 1990 called “Against a Federal Europe: the Battle for Britain.” I think I can confidently say that there is not very much in there that I would change and that most of it appears to have come true. To answer the question asked by the hon. Member for East Londonderry (Mr Campbell), I should say that it is very alarming to note that the first chapter is entitled “Britain for Europe”; it is not only a case of “Britain for Britain” but of “Britain for Europe,” because it is certainly true that we are affected by what goes on in the other member states.

As I have said many times before, the answer to the question is to go down the route of having an association of nation states, whereby we would return the right and proper power to this Parliament to make judgments on behalf of the people who have chosen us in a ballot box, to follow through policies, and to try to work in a form of understanding made on the basis of trade and political co-operation.

That was the situation anticipated by the 1975 debate when we had the referendum, which people understood. However since then, there has been onward and continuous progress towards ever further integration in an ever more undemocratic and ever more dictatorial manner. The time has come when we have to draw a line. It should have been drawn a long time ago. We drew it as a party over Lisbon. We said that we would not accept that treaty, but now here we are implementing it like there was no tomorrow.

A rather intriguing article by Camilla Cavendish was published on 8 September—only a few days ago—in The Times, which also had rather a good leader, either on the same day or the day before. It is rather amusing that she says:

“It’s no longer cuckoo to take the Swiss road; Britain and the EU are no longer going in the same direction. We should grab the chance for an amicable divorce”.

She then explains how that would be done. Essentially, she is arguing for an association of nation states, as many of us have. We are at a dangerous crossroads. A particular reason for this debate is the fact that the idea of fiscal union is being promoted. In our opinion—or in my opinion, anyway—that is entirely the wrong direction to take in the context of the broad landscape that I have been seeking to identify.

[Henry Smith (Crawley) (Con)]

My hon. Friend is making a persuasive argument. On the point of European nations not being members of the EU but being very successful, the article that he mentions refers to Switzerland, but there have recently also been articles about how the Norwegian krone is attracting a lot of investment. That is another example of a successful European nation outside the EU, which reinforces the point that an association of nation states rather than a political union is the best way forward.

[Mr Cash]

I endorse entirely what my hon. Friend has said. We are at a crossroads and it is a very dangerous crossroads. We have to get it right. It simply is not good enough to appease the European institutions by going along with their ideas when we have our own national interest to stand by, support and protect. We are not just talking about institutional arguments; we are talking about real people, their real daily lives, the unemployed and the people who cannot increase the enterprise of their businesses.

I was deeply concerned in my exchanges with the Prime Minister. I put a question to him on the question of the single market. In reply, he made it clear that he was conscious of a fact, which I had put in a pamphlet that I had published the day before. The pamphlet, by the way, is called “It’s the EU stupid”, because we have got to a stage where it is obvious that the EU is at the root of so many of these problems.

On the question of the single market, I pointed out to the Prime Minister that if there is a fiscal union of certain member states it is inevitable, as a matter of solidarity, that they will use the treaties to transfer their own wishes, through majority voting and a block vote, in a way that will be contrary to our own domestic economic interests. What would be the point of a fiscal union if, when it came to questions of legislation relating to the economy, the member states were not prepared to vote together? They will. When they do, and they outvote us, that will gravely undermine our competitiveness and our ability to grow small and medium-sized businesses. It will affect our growth. It will damage and destroy our prospects of reducing the deficit, because it will lead to a reduction in growth, which is already stagnant.

[Mr John Redwood (Wokingham) (Con)]

Does my hon. Friend think that we should allow the fiscal union to go ahead, for those who wish to join it, if our Government negotiated for us independent democratic control over everything here that mattered to us as the price for making that sacrifice?

[Mr Cash]

The short answer is that it would depend on how the renegotiation went. If the renegotiation was entirely in line with protecting fully our own interests, if it were guaranteed that we were not tied to the existing arrangements by a treaty that drew us in to all the adverse consequences of being part of this overall European Union in the shape and form that it has at the moment and if we could manage to achieve the perfect answer, then that would be a good idea. However, I do not think that that is the way it is going to go. I think that we will put forward positions, if we ever get to the point of renegotiating the treaties. A meeting took place a couple of days ago in which it was clear that a very large number of MPs in the Conservative party want renegotiation. Some of us have been arguing for that for 20 years. However, the fact is that that is the position in the party as a whole. The question is not only whether we want to renegotiate, but how that would be done.

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

My hon. Friend makes an important distinction. The Chancellor of the Exchequer seems to be suggesting that we would consent to a fiscal union provided that we were insulated in some way from the direct effects of that fiscal union. My right hon. Friend the Member for Wokingham (Mr Redwood) is saying something much more profound, which is that we should use this opportunity to recover control over a whole lot of policies that are already damaging the British economy, and continue to damage the British economy, whether there is a fiscal union or not. It is that latter position that has to be, ultimately, subject to a referendum, or the danger is that we will sell the pass on fiscal union and we will not recover very much.

[Mr Cash]

I agree with that entirely. My hon. Friend is very much in line with the views of many us on this side of the Chamber, which is that if this is going to be done, let it be done properly. Let us not nibble away at some of the minor matters. Let us get down to the real nub of the issue and say that this kind of Europe is not a Europe with which we are prepared to continue. The status quo is completely untenable, and so a referendum question that dealt with those matters—including the question of fiscal union, because it will be so damaging, and I will give further examples of where I think it would be damaging in a moment—should be: do we want to leave the European Union all together; or, given that the status quo is untenable, do we want to renegotiate the treaties?

We now know that the bulk of the Conservative party, which, after all, is the bulk of the Government, wants renegotiation. The next question is, are we just going to nibble away and pretend that it is renegotiation, or are we going to get down to the structural questions and really do it? I believe very strongly that the Prime Minister has an obligation to go the next summit and to put forward proposals for renegotiating those treaties in a way that would actually change the entire system. If the other member states say, “No, we are not prepared to put up with that,” then we will deal with that situation at that point in time. The case for a referendum in either event, to my mind, is completely unanswerable.

On the question of fiscal union itself and damage to the United Kingdom, I have already mentioned the problems that will arise in relation to the single market bloc voting arrangements. We are always being told that our trading relationship with the EU is vital to us, and that it represents approximately 50% of our trade. Some dispute that, but the reality is that it is a substantial proportion of our trade. However, if one actually looks at the net results of the so-called benefits of that trading relationship, I am bound to say that in the past year alone, between 2009 and 2010, our trade deficit with the European Union, the other 26 member states, has gone from minus £14 billion to minus £53 billion. The deficit has leapt up by £40 billion in one year.

Those figures are taken from the House of Commons Library and the Office for National Statistics, so I am not going to dispute them—others may wish to do so, but they are official figures. I have repeated them several times and no one has challenged me on them. That demonstrates that our trade with the rest of the European Union is not working. The reasons for that are over-regulation and a system of economic constraints that prevent us from allowing our small businesses to grow. After all, small businesses make up the greatest percentage, by a massive amount, of the prosperity of this country. The downside of our failure to grow is increasing unemployment. We heard the figures today. The truth is that we are not growing because we are trading with a Europe that is bankrupt, except for Germany.

There is also the question of the position vis-à-vis the City of London. The Minister and I have crossed swords on this from the very outset. When the de Larosière report came out—it was about four years ago, I think—I wrote letters to the Financial Times, several of which it published. I argued that we had to keep the City of London within the framework of our own legislation and not appease those in the European Union, such as those in France and elsewhere, who would like to take control over our City of London. The Government caved in, and now the whole City of London is within the jurisdiction of the European institutions and the rules and regulations that will be made there. Every single time there is a new problem in the City of London, we will have to ask ourselves to what extent it is the consequence of that fatal mistake.

[Mr Redwood]

Does my hon. Friend agree that the situation causes the electorate to believe that we have a dishonest political debate in this country? We are having a big argument over the Vickers report and how and when it should be implemented, whereas it will all be settled under the capital requirements directive, CRD IV. I do not see the point of the Vickers report.

[Mr Cash]

That is all part of the problem. I have been on the European Scrutiny Committee for 26 years now, and over and over again I have found that legislation brought to this House is based on European legislation, but that is never disclosed. People do not say, “Oh, by the way, we have got to do this, therefore we are going to,” so we go through a charade of passing legislation as if we have control over it. The Whips move in like the clappers, saying, “You can’t possibly vote against this, because it’s all based on European legislation that we have already agreed to under the European Communities Act.” In reality, we are being governed by Europe, and that is my greatest objection—plus the democratic question, which the hon. Member for Blackley and Broughton has mentioned—and why I got so exercised about the Maastricht treaty. We have gone beyond that now, and what we are faced with is much more critical, but we can remedy it if we renegotiate the treaties.

[Mr Jenkin]

Before my hon. Friend leaves those shocking trade figures too far behind him, do they not demonstrate another factor? Our European partners, notably Germany, have far more to lose by disrupting the trading relationships between us and the rest of the EU than us. I do not diminish the point that we want to maintain the free movement of goods within a customs union, if we can, but the idea that they simply will not talk to us or chuck us out is absolutely ludicrous.

[Mr Cash]

Given the growth the rates elsewhere in Europe and the complete mess that the eurocrats and other Governments—including our own—have created, allowing us to get into this parlous state, it is inconceivable that they would dare to argue that somehow or other they could operate without us. That suggestion is simply child’s play and a joke, although it has got beyond a joke because it is so serious. That seriousness might come out this afternoon, but it will certainly come out—as night follows day—over the next few months.

I have been looking into the £53 billion trade deficit. I made some further inquiries, because I wanted a breakdown, and I was given the figures yesterday. In the trade balance of £53 billion against us, £17 billion is in vehicles—cars and lorries. In other words, we have destroyed or have had destroyed our manufacturing base in car making—my hon. Friend the Member for Luton North knows that better than me—and yet our trade in commercial and other vehicles is now on a monumentally adverse basis.

Another point that I am bound to make, which is deeply concerning, concerns the consequences of the departure of one or more states from the European Union, which some advocate. Some will have read Hans-Olaf Henkel in the Financial Times the other day. He is the former head of German industry, the equivalent of the director-general of the CBI, and he said that the “biggest professional mistake” of his life was to have supported the euro process, which is an important statement from someone of his standing. He is completely against the idea of the European Union as it now is. Germany has some very important voices, because it is effectively the paymaster for the rest of Europe.

Our negative trade balance with Germany is devastating. I was in Poland the other day, and I looked at its trade figures. I suspect that a lot of people in Poland desperately want to remain within the framework of some protective system but are deeply worried about the imbalance between Germany and Poland. And so it goes on—if we look at the Greek or Spanish situations and at the bottom line, what is happening with fiscal union is also, to use an expression, the creation of a greater Germany. For practical purposes, if we examine what is said at the various meetings, no one can be in any doubt that the Germans call the shots. The Germans are benefiting enormously from the European Union for one reason, which is that they are benefiting from their investment in other countries.

In that context, I have the figures for unit labour costs, if anyone is interested. In the past 10 years, German unit labour costs have gone up by only 2%. The average of all the other member states put together has unit labour costs increasing by no less than 25%. That is worth thinking about. Not only do we have the most monumental trade balance against us with Germany, but its trade balance with the rest of Europe is monumentally in its favour, and the Germans have done that largely through what we might call their skill or commercial nous. None the less, they have managed to do it and so they make huge profits from other parts of the European Union. Let us not be taken in by the argument that, somehow or other, Germany will suddenly go walkabout. The Germans get so much out of the European Union, and Angela Merkel is making it clear that they will continue to do so, and that is one of the reasons why Germany is so committed to political union. That does not mean, however, that it is in our interest.

[George Eustice (Camborne and Redruth) (Con)]

My hon. Friend gets to the nub of the issue—whether it is realistic to expect the Germans to accept mutual liability with countries such as Greece, Spain and Portugal. It was different when they wanted to reunite Germany, and when West Germany was prepared to accept some of the liabilities of East Germany. Does he accept the difference, and that that is why going to full fiscal integration to prop up the euro is a very big decision for the Germans?

[Mr Cash]

I very much agree with that. I put that same point to the Prime Minister in the Liaison Committee last week. I asked him whether he seriously believed that Germany was going to be able to bail out the other member states. The money is simply not there. To imagine that Germany could carry the weight of the Spanish debt is, as Camilla Cavendish has said, complete cloud cuckoo land. We can see the Italian position getting increasingly out of control, while the Greek situation is beyond critical. Greece should exit the euro—that is perfectly clear—but there are desperate attempts to prevent it happening, although that is literally trying to do something impossible. One might as well believe, as Alice said in Wonderland,

“six impossible things before breakfast”,

and the truth is that one of them is the idea that Germany will be able to sustain the whole of the European Union or, indeed, that its own people will allow that. All the evidence is that there is a very serious concern that they simply cannot afford to do it and that they do not want to do it. I will not give all the instances, because they are so well reported in the newspapers and other media.

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

One of the reasons that things have worked quite well for Germany is that, without the southern countries, the exchange rate of the euro would have been even higher. They therefore helped suppress the exchange rate in the free markets, to some extent, which has been of benefit to Germany.

[Mr Cash]

Absolutely right. Germany has gained much, but now the chickens are coming home to roost. The system is not working because the Germans have made investments in other countries. If we look at the Greek sovereign debt situation, an enormous amount of investment—by far the greatest amount—is from Germany, followed by France. So the sovereign debt question is now part of the overall problem of Europe as a whole, and the mess created, which many of us predicted, is now with us. Any sovereign debt default will become all the more serious the longer that the European Union attempts to sustain the euro. Economists such as Tim Congdon and others have made that case, but it is absolutely clear that the situation will get worse the longer that the European Union tries to put sticking plaster over what is a clear case for complete renegotiation of the treaties to get some sanity back into the situation.

The idea that those of us who are eurorealists and who have argued this case for so long would take any satisfaction from the fact that the situation might implode is complete rubbish. Of course we do not want it to implode; we want to get stability back, to reduce our deficit and to increase growth, but none of those things can happen if we have over-regulation, too much integration and too much governance from European institutions, which prevent oxygen reaching our small and medium-sized businesses. That is an issue not only for this country, but for other countries, which all face greater and greater unemployment. I therefore strongly urge the Prime Minister to sort this out at the next summit.

We cannot create growth unless the money to pay for the public sector comes from reasonable taxation on private enterprise. It must be reasonable taxation, because growth must come from the development of small and medium-sized businesses. There is no way we will reduce the deficit if we continue trading as we are with a Europe that is bankrupt, with the exception of Germany. Incidentally, while we had a £53 billion trade deficit with the EU in 2010—that went up by £40 billion in one year—we had a trade surplus with the rest of the world of £7 billion, and it could be much more if we made the big strategic change that I am proposing. That, too, underpins my resistance to the idea of fiscal union.

Fiscal union will lead to greater implosion, greater sovereign debt, more defaults and more trouble. It might also—I say this cautiously—lead to the rise of the far right, because that is the consequence of implosion in democracies and of their being forced into situations where their people start saying, “We’re not going to put up with this any more.” One has to be careful about what is done. That is the dangerous crossroads we are at, and the Prime Minister must make the right call.

[Mr Denis MacShane (Rotherham) (Lab)]

As I understand it, the Chancellor is rather keen on fiscal union. Does that mean that the hon. Gentleman opposes the Chancellor’s point of view?

[Mr Cash]

The answer is yes. I did not say it so emphatically, but I said so when the Chancellor made his announcement in the House. I said that even Edward Heath would not have done what we were seeing now, so that probably sums the situation up quite well.

In my exchanges with the Prime Minister about fiscal union—I understand that these things can come out of the blue, but I wonder about the extent to which that was the case—he said:

“Of course, it will have an effect on us, but the clear rule for a referendum…is whether we are transferring power from Britain to Brussels.”

I do not agree that that is the basis for a referendum. It would be under the European Union Act 2011, but where a European decision, treaty or other legal instrument —in this case, there will be a mixture of those—applied on the face of it only to the eurozone, there would, under section 4, be no referendum.

That is why I have introduced a Bill saying we should have a referendum, and that Bill is supported by no less than six Select Committee Chairs, plus some distinguished Members, such as my right hon. Friend the Member for Wokingham (Mr Redwood), and members of the new intake who have taken a great interest in these matters. As I have said, the Bill has been presented, and the good news is that there will be a ten-minute rule Bill debate in October—the Leader of the House is here, and he knows that already. The Bill is intended to advance the case for a referendum on fiscal union.

In the Liaison Committee, the Prime Minister seemed pretty confident that there would not be a treaty. When I said that

“you are implying that there might not be a treaty” ,

he said—this was on 6 September—

“There is an important point on the issue of the treaty…Let us be clear: no one in Europe at the moment is currently talking about a new major treaty to put in place deeper fiscal union or changes in the eurozone. That may well happen in future…and if it were to happen, there would be consequences for Britain. Britain should think carefully about how to maximise our national interest”.

My answer to that is, first, that we now know that there will be a treaty, because the Chancellor of the Exchequer announced it from Marseilles. Secondly, I do not see how Britain can maximise its national interests when the new treaty, by its very nature, will erode the heart of those vital national interests.

There will be consequences for Britain, which raises another issue. We know there will be a treaty. As Mr Barroso said this morning—the Prime Minister has said this, too—it will be dealt with through a mixed bag of measures. Part of the process will no doubt be dealt with through enhanced co-operation, although the legality of that is very questionable indeed, and the European Scrutiny Committee will certainly look at that. Part of the process may also be dealt with through European Council decisions and intergovernmentalism, if those involved can get away with it. However, the bottom line is that the policy and the judgment are wrong, and we should not promote them. The best thing that I can suggest, therefore, is that we go to the next summit, put down a clear marker and insist that we will refuse to accept the treaty for fiscal union.

[Henry Smith]

Would our position as a country not be further strengthened in the negotiations if other EU members knew that any decision would be subject to a referendum in this country? The worst time to make irreversible treaty changes is during a crisis.

[Mr Cash]

I could not agree more. That is why I am making the plea that we get ahead of the curve now, although it is almost too late. We should get ahead of the curve now, get things right now and make sure that the crisis that we are in is remedied in good time. We will then be able to make sure that we get things right. However, that will involve turning the current treaty arrangements into an association of nation states. It will mean abandoning the current concept of the institutions, directly in opposition to Mr Barroso’s proposals today. The crisis is very great, but our ability to grow our economy and reduce the deficit—the very raison d’être of the coalition agreement, which said that that was the way to proceed—will be totally undermined unless the proposals that I have set out are pursued with vigour now.

Mrs Brooke, I am glad to have been able to make some of the arguments, and I hope that you will listen to the rest of the debate with pleasure.

[Several hon. Members]

rose—

[Annette Brooke (in the Chair)]

Order. Before we proceed, I should point out that I will call the Front-Bench spokesmen to begin the winding-up speeches at 3.40 pm. Quite a few Members are standing, so whether everyone gets in is in your hands, gentlemen.

15:18

[Kelvin Hopkins (Luton North) (Lab)]

I am grateful to have an opportunity to speak in the debate and to support the hon. Member for Stone (Mr Cash) in his concerns about fiscal union.

The issue has been raised because the eurozone is in deep trouble and is starting seriously to fall apart. A fiscal union would mean that one had substantial redistribution between the wealthy parts and the poor parts of an area. That would be acceptable in a democratic member state with a meaningful polity, but the European Union is not one. I suspect the German people would have something to say about such a proposal, if it ever went ahead. As we have seen, the German representative on the European Central Bank has already resigned because he knows that such a proposal will cause serious problems for Germany and is completely unacceptable.

I have something of track record on this issue. Thirty-two years ago, I did not think I would be speaking in such a debate. At that time, I wrote a brief for the general secretary of the union I worked for—the National and Local Government Officers Association. Economic policy was one of my areas, and I wrote a brief urging him to suggest to the TUC that we should not join the European monetary system, or the snake, which was a forerunner of the exchange rate mechanism and the single currency. He took my brief to the TUC, banged the table and demanded that the TUC take that line, which it did. The TUC then went along to see Denis Healey and banged the table, and he did not join the snake. I do not say it was all down to my brief, but at least I was on the same side, and we got the right answer. Unfortunately we joined the exchange rate mechanism a little later, and that was a mistake, but I could see the direction of travel then, and that it would be a disaster for both democracy and economics.

My hon. Friend the Member for Blackley and Broughton (Graham Stringer), who is no longer in his place, raised the question of democracy. It must have certain features: not just votes, but votes for people who will have power—Governments and representatives who can make decisions on voters’ behalf, and make the votes meaningful. If the vote has no meaning at all—if it is just a declaration and power is held by other people—that is not a true democracy.

Another feature of democracy is the ability to change Governments, as we have just done. The change we made was not to my taste, but nevertheless that is democracy. The way to keep the far right, and extremists of all kinds, away is to have a meaningful democracy, in which Governments can be changed, and where they have power over the lives of the people they represent. If they have no power there is no point, which is when street politics takes over. We do not want street politics. The things that happened on the extreme right and left before the second world war made for a very unpleasant time, which led to the war. We do not want that to happen again.

[Mr MacShane]

Does my hon. Friend take comfort from the fact that the most dramatic rise of the far right has been in Sweden, while the most dramatic and horrible single incident associated with it was the terrible slaughter in Norway? There was also the anti-Muslim referendum in Switzerland on places of worship, sponsored by the hard-right nationalist SVP. Does my hon. Friend take comfort from all those countries either being outside the European Union or not using the euro?

[Kelvin Hopkins]

With the far right we need to look at each individual case; I think that in Norway it was just one lunatic—an obsessive. Of course the far right attracts people who I would suggest are not entirely sane. Nevertheless, the far right in general has not taken hold in post-war Europe because we have had meaningful democracies; but I think those meaningful democracies are starting to fade. Fiscal union would, again, mean democracy taking more of a back seat.

It is clear that the founding fathers and mothers of the European Union in the 1950s wanted a world in which electors did not have the power to change Governments; they wanted power safely in the hands of a stable body. That is why the Commission was set up—to make sure that we do not have distasteful changes of politics and Government. However, changes of Government mean that people believe in democracy and work for it. They know that they will have a chance of getting their party into power next time. I shall certainly work hard next time to make sure that our party comes back into power; and no doubt our Conservative and Liberal Democrat colleagues will do the same. That is why democracy means something: we know it matters because those elected have power, and because it is possible to change the Government. That cannot be done with the European Union.

We are in a European crisis. The hon. Member for Stone constantly refers to Europe, but I refer to the European Union. The European Union is not Europe: they are two concepts. Europe is a wonderful continent full of fabulous people and great culture, history, music, art, languages, and literature; but the European Union is a political construct imposed on some of the countries of Europe. I fully support the idea of a different kind of European Union—a loose association of democratic member states co-operating for mutual benefit. I do not support a bureaucratic and anti-democratic machine that controls our lives and makes our votes decreasingly meaningful at national level.

The polity over which a Government govern must also be meaningful. If national boundaries are dissolved, and other structures are imposed—especially if those are not democratically controlled—that is not democracy. The great thing about democracy is that it is accepted these days that it will govern a national state. I am an internationalist, but I think that internationalism is about good relations between states, not the abolition of states, national boundaries or national entities. We get on extremely well with other states around the world because we co-operate across national boundaries, but we do not want them to disappear completely. We have culture, language and history that unite us in particular polities. That is why Germany, for example, could unite its east and west and spend a vast amount of money rebuilding East Germany. It was accepted that it was part of Germany. I doubt whether it would have spent so much money rebuilding, say, Greece—because Greece is not part of Germany but a separate country.

I think that many people would be upset if the same kind of money that went into rebuilding East Germany went into helping Greece. Greece now has the opportunity to get out of the euro, recreate the drachma and devalue. Suddenly, Greece would become the cheapest place in Europe for people to holiday, and the tourist industry would take off like nobody’s business. Greece would recover, because that is what it will be good at. It is a beautiful place, where people go on holiday. That is the logic for Greece.

The problem, of course, is that banks—and particularly French banks—have lent vast sums of money to Greece, and will be in trouble if that happens. However, as was said in a good discussion on “Newsnight” last night, either the euro will collapse and there will be a crisis with many people losing their money, or we will deconstruct the euro in a progressive and managed way, and some banks will have problems. Then Governments will have to step in and no doubt recapitalise those banks, if they choose to keep them alive. That is a difficult choice, but the logic is for countries that cannot sustain membership of the eurozone to get out, recreate their own currencies and devalue.

Ireland’s major economic partner is Britain. The British isles is not a single economy, but we are close. The fact that we are not in the euro and have depreciated our currency substantially means that the poor Irish, who are stuck in the euro, are massively over-valued relative to Britain, and so have a trading problem with Britain. I have suggested to Irish friends that they should recreate the punt, depreciate and rejoin the sterling zone, which is where they belong, instead of remaining in the eurozone, where they do not. I have not had any positive answer to that suggestion, but that is the logic of where we should be going.

I could speak for much longer, but others want to speak and I have probably said enough for the time being. I support the hon. Member for Stone in arguing the strong case against fiscal union.

[Annette Brooke (in the Chair)]

After the next speech, by the hon. Member for Northampton South (Mr Binley), I would like to call the hon. Member for Witham (Priti Patel), and I know that there are others who want to speak. The winding-up speeches will begin at 3.40pm.

15:27

[Mr Brian Binley (Northampton South) (Con)]

I shall try to be brief and will therefore quickly congratulate my hon. Friend the Member for Stone (Mr Cash) on securing a debate of such importance. There is no doubt that the eurozone is contemplating its very existence, so the debate is not only timely but vital. The whole thing could blow up in our faces in the next four or five weeks, and I want to be assured by the Minister that contingency plans for that possibility are well established. I hope that he is not over-affected by what appears from the outside to be the culture of Treasury officials, who have not been over-helpful on this issue for a long time.

It is a truism that what has happened in the European Union in recent months will have profound consequences for the eurozone and a wider region, including Great Britain. It is unlikely that future efforts to provide protection for the failing currency will have any more success than those undertaken to date. The truth of the matter is that the euro is a failed currency and had within its creation the very traits for its destruction. Those are coming into view at a time when pressure is being applied.

The euro is in trouble not only for that reason, but because its membership does not understand what a properly conducted fiscal society means. I visited Greece three months ago and went to the Greek Parliament. I had to be smuggled in. I talked to a Greek politician and said, “Is tax evasion really widespread?” He said, “Of course.” I said, “Who are the people who do it?” He said, “Everybody.” I said, “Are you?” He said, “Yes.” I said, “What are you doing?” He said, “I’m buying gold.” What a story! Greek politicians are begging us to prop up their currency, yet they are getting out of it and buying gold. I hope that the Minister will take serious account of that.

We all know that Italy has deliberately—I shall use a kind word—misled people ever since the creation of the eurozone. Many would say that it lied—I would not say that in this place—about its situation. Many would say that other nations accepted Italy’s deceit, and therein lies another problem. There is no proper monitoring or policing of any fiscal measures in any eurozone country. How can we expect those nations suddenly to become as white as white on the application of a united fiscal unit? Of course it will not work, and we know it.

We face two possible measures. The eurozone could shed nations—those to the south, mainly—that cannot compete with the price of the euro, and never could, or the eurozone could dissolve completely, which would be very expensive for this nation. What might the Minister do to protect business if that happens?

I accept the figures given by my hon. Friend the Member for Stone, but business is worried about the impact of the eurozone dissolving. It has had a tough time for three years, and has not been overly helped by Governments of either party in this country, and it certainly does not want another great deluge of problems. Will the Minister refer to business when he responds? This country must make a decision, and it might need to do so quickly.

[Mr Andrew Smith (Oxford East) (Lab)]

I am following the debate carefully. The hon. Gentleman refers to the possibly cataclysmic effect on this country of dismemberment of the eurozone, or of some states leaving and contingency measures being required. Might that be precisely why the Prime Minister and the Chancellor have been arguing the case for fiscal union within the eurozone, and what does he think about that?

[Mr Binley]

That might be. I did not say “cataclysmic”; I said there would be problems for British business. I would be grateful if, when the right hon. Gentleman puts words into my mouth, he used the words I used.

[Mr Smith]

It is a serious problem.

[Mr Binley]

The problem is serious, and I simply want to hear what the Minister has to say about it, because we expect our Government to recognise the impact on business and to do something about it. But that does not mean being involved with or part of the creation of a fiscal Europe in the eurozone. That is not the way to go, and I would rather go the other way: free up British business and restore some of the ancient and traditional markets that we have neglected for some time.

[Mr Nigel Dodds (Belfast North) (DUP)]

I have listened to the debate from the outset. The truth of the matter is that there is no pain-free option, and that whatever happens there will be difficulties, but to continue with the old, failed approach and carry it forward to fiscal unity would be an even greater disaster than the alternative. We must inject some common sense and democracy into the argument. That is the alternative that faces the British people.

[Mr Binley]

I am grateful to my right hon. Friend, and that leads me to my final words.

British business is important. We must help the eurozone to come to a sensible conclusion, but that does not include our being part of a fiscal union. We must help to ensure that we renegotiate a relationship with Europe that is much more sensible than we have had for a very long time. If necessary, we must come out. We face a tough time, whatever occurs, and we must use that time in the interests of Britain, not of the eurozone, which is the creator of its own downfall.

15:34

[Priti Patel (Witham) (Con)]

I shall be brief.

I congratulate my hon. Friend the Member for Stone (Mr Cash) on securing this debate and on all that he does on all matters European and their scrutiny in the House. This is a timely debate, and it is essential that all necessary steps are taken to protect hard-pressed British taxpayers from paying the costs of eurozone bail-outs, full stop, and to defend Britain from efforts to enforce closer fiscal integration in the wider EU.

Having campaigned for several years against Britain’s entry into the euro, I strongly recall the arguments that monetary union in Europe would inevitably lead to fiscal union. We heard many of the arguments today. We now see Europe heading in that direction, and it is a road down which we should never be drawn. As we heard over the summer, the desire in Europe to move towards fiscal union has accelerated, and the eurozone crisis is being used to support ever-closer union and to further federalist ambitions.

The EU’s Competition Commissioner said:

“This is one moment where we need greater integration…We need fiscal union”.

As we have heard this afternoon, that is not the right way forward, and I support all the views I have heard. I appreciate that much of the talk about a fiscal union is concerned primarily with the 17 eurozone countries, but there would be dire consequences for Britain, and we have a role in the wider discussions of the implications, particularly with those countries that are trying to take the whole EU with them. We must stop that.

The Europe 2020 strategy, which my hon. Friend the Member for Stone touched on, has implications for our fiscal and economic policies, including scrutiny of national reform programmes, and for plans to increase the size of the EU budget. The European semester, for example, includes proposals for greater monitoring and peer review of our domestic budgets. Our pre-Budget report is being looked into, but it is only a matter of time before Europe tries to grasp more control of such matters, because it believes that interdependence within the EU requires tighter economic governance to apply to all member states, and not just to those in the eurozone.

I urge the Minister, politely but forcefully, to notify our European partners that any interference in our fiscal policy is unwelcome. We should not encourage that. I and many others have argued that Britain should not surrender any of its fiscal powers, but should instead use this and all opportunities presented by the prospect of any new treaty to repatriate powers to this country. That is the right way forward.

Finally, I reiterate the importance of cutting all costs relating to Europe. Over the lifetime of this Parliament, our contributions to Europe will increase by between £8 billion and £9 billion, which is unsustainable. Businesses and consumers in this country keep facing additional costs. We know the direction of travel for all matters financial in the EU. It is preventing the creation of jobs here, and action must be taken.

Hard-pressed taxpayers in my constituency and throughout Britain want cuts in the EU budget—and no more increases, not even the proposed 2% increase. We must just say no. We must defend the rebate, and if we tighten our belts at home Europe must get the message and tighten its belt. Such matters should be a priority for the Government in the months ahead and, importantly, now, while there is a eurozone crisis, but they are also an opportunity.

15:38

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

I invite the Minister to explain why the Government are now advocating fiscal union. We opposed the euro because we did not believe that fiscal union was viable. Lord Lawson graphically explained on BBC Radio 4 this morning that fiscal union will not work because it needs budgetary union and a European Treasury, which needs a European Government and a federal Europe. There is no popular support in any European state for a federal united states of Europe, so fiscal union is unsustainable.

This is no time for positioning or appeasing; it is a time for blunt truths, and I thoroughly endorse the comments of my hon. Friend the Member for Stone (Mr Cash) that it is time for us to go to Europe and to tell our European partners positively that we have an alternative plan for Europe, which is about the orderly break-up of the euro to limit liability. The longer the issue continues, the greater the liability will be.

It is like the ERM; the officials who are today advising the Minister to support fiscal union are the same officials who advised the Conservative Government to stay in the ERM. The longer we stayed in the ERM, the more damaging it was. Why are the Government on the wrong side of history?

15:40

[Mr David Hanson (Delyn) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Brooke.

I pay tribute to the hon. Member for Stone (Mr Cash), who is nothing if not consistent in his arguments. The holding of today’s debate reminds me of the fact that I have been in the House for 19 and a half years and that the bags under my eyes started to appear when I was up all night listening to the hon. Gentleman in the debates on the Maastricht treaty in 1992 and 1993.

[Mr Jenkin]

Which way did you vote?

[Mr Hanson]

On many occasions I voted differently, because the purpose of the Opposition was to keep the Government on their toes and divided—as, indeed, we see today in the interactions between Back Benchers and the Minister.

I pay tribute to other Members who have spoken. The consistency of my hon. Friend the Member for Luton North (Kelvin Hopkins) is unparalleled, although his approach has differed from that of Labour Front Benchers. The hon. Members for Northampton South (Mr Binley) and for Witham (Priti Patel) hold strong convictions on this subject, which does not come as a surprise to hon. Members or to their constituents.

I confess that I feel like an onion in a strawberry patch, as I take a different view of the benefits of our relationship with Europe and with the European Community. I want the Government to engage positively, not within the potential framework of withdrawal—the tone that percolates through the comments of the hon. Member for Stone and his colleagues and of my hon. Friend the Member for Luton North—but in tackling deep and serious issues of economic policy, and ensuring growth, stability and fairness across the European Community.

As I said, I feel like an onion in a strawberry patch because I hold positive views about Europe and the European Community. Our EU membership gives British companies full and direct access to 500 million consumers —the single market that Governments of all parties have supported. The 3 million jobs in the United Kingdom—10% of the work force—linked directly to the export of goods and services to the EU exist partly because of the structures of the European Community.

Our EU membership makes the UK an attractive place for investment from Europe and creates stability for the emerging countries in the east, the growing markets. Furthermore, the EU brings democracy to countries that when I was first elected were still under dictatorships and were not the positive members of Europe that they are becoming today.

[Dr Julian Lewis (New Forest East) (Con)]

I thank the right hon. Gentleman for giving way, but this really will not do. He is making a general defence of the European Union in a debate on fiscal union, and the fact remains, as many of us have argued for many years, that there cannot be a single currency without a single economy, there cannot be a single economy without a single Government and there cannot be a single Government without a single state. That is why the Eurofederalists want fiscal union, and regardless of whether it works or fails they say we should have more union. The reality is that it is failing and we must disentangle ourselves from this mess, not have a general debate on trade in the European Union.

[Mr Hanson]

If the hon. Gentleman allows me, I shall cover some of those points in a moment. It is important to record the fact that we have economic growth partly because of co-operation, because of the single market, because of the widening of the European Community to the east and because of EU investment in this country.

[Mr Shepherd]

I am sorry that the right hon. Gentleman has repeated the old canard about 3 million jobs, but perhaps he will comment on the other side of the equation. How many jobs on the European continent depend on trade with Britain?

[Mr Hanson]

I believe that the single market and the European Community have contributed to growth and jobs in this country and throughout mainland Europe. The hon. Member for Stone touched on the potential difficulties with the euro and Greece, Portugal, Spain and Italy, but the argument that he advanced about renegotiation does not fly and would not be a starter in relation to the positive policies that I hope I share with the Minister on engagement and the future of Europe.

We need to look at three issues. The economic growth strategy for Europe is key to economic growth as a whole. When we look at what we are doing in reducing public spending—in achieving a balance between public spending and private expenditure—we see that the growth strategy is missing in Europe and that the collective strategy of reducing public spending will not lead to economic growth.

Given the potential collapse of the euro, it is important that we look at the current stability mechanism, and I am sure that the Minister will speak about the future stability mechanism for 2015. We must consider negotiating an earlier end to the temporary European financial stability facility, of which the UK is a member. The UK’s exposure is too high and is a risk, and if the euro collapsed now we would face severe difficulties with the funding mechanism.

My right hon. Friend the Member for Edinburgh South West (Mr Darling) negotiated the facility—with, I believe, all-party agreement, although there is dispute about that—before the general election, and it is key to stability with the euro. It is not in this country’s interest for Greece to fail, for the euro to break up or for other countries to default. As my right hon. Friend the Member for Oxford East (Mr Smith) said in an intervention on the hon. Member for Northampton South, one of the reasons why the Prime Minister and the Chancellor are looking to develop an EU fiscal policy to follow the current agreement is to ensure that a collapse is avoided, that the currency is strengthened and that a positive Europe, geared to growth in the future, is maintained.

[Mr Binley]

Will the right hon. Gentleman explain how that policy might be policed to ensure that nations properly abide by its dictates and do not act as they do in many other instances with the other regulations imposed on them?

[Mr Hanson]

One of the hon. Gentleman’s points that struck me most forcefully is that some countries do not play by the same rules as this country on tax evasion, tax avoidance and other issues, but that is not a reason to say that we should leave the pitch. It is our job to work responsibly within the structures of the European Community—with our Members of the European Parliament, with the European Commission and with national Parliaments—and to make the case for a single market, properly regulated, in which tax evasion and other issues are dealt with firmly.

We cannot walk off the pitch and withdraw from the European Community, although that is the ultimate aim of Members who have supported the hon. Member for Stone today. We must ensure that the replacement mechanism in 2015 is strong and stable but oriented solely on the eurozone, where the UK Government’s liabilities are limited.

Honourable, determined and consistent though the hon. Member for Stone is, and difficult though the challenges are in relation to countries, such as Greece, that should not have joined the euro in the first place, the failure of the currency and our failure to act to help to maintain stability in Europe would ultimately lead to lower growth, further unemployment and the UK being distanced from potentially successful markets.

There are many issues ahead of us about which there is clear disagreement between Labour Front Benchers and Members who have supported the hon. Member for Stone today, but I look forward to hearing the Minister’s response.

15:49

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

First, I congratulate my hon. Friend the Member for Stone (Mr Cash) on securing the debate. I do not think that anything he said came as a surprise to any of us who have taken part in discussions on this issue in this Chamber, in the main Chamber or in European Standing Committees—he has the merit of consistency.

There were helpful contributions from the hon. Member for Luton North (Kelvin Hopkins), from my hon. Friends the Members for Northampton South (Mr Binley), for Witham (Priti Patel) and for Harwich and North Essex (Mr Jenkin) and from the right hon. Member for Delyn (Mr Hanson). Let me deal with a couple of specific points that were raised. My hon. Friend the Member for Stone raised the question of a financial transactions tax. He is aware that President Sarkozy and Chancellor Merkel discussed that at their summit in August. Let me be clear about the UK Government’s view on a transactions tax. It would work only if applied globally. If it were applied any less completely than that, the transactions would simply move away. Business that was previously booked in, say, France would move to the UK, Singapore or New York.

[Mr Cash]

Will the Minister give way?

[Mr Hoban]

No. My hon. Friend—[Interruption.] May I continue? My hon. Friend spoke for nearly an hour; I have 10 minutes and want to cover a wide range of topics.

The UK would not agree to the introduction of any financial transaction tax that damaged competitiveness and growth and, in the absence of a global agreement, the UK sees no evidence that a transaction tax would maintain EU competitiveness. Of course, that does not prevent other countries from introducing a transaction tax if they wish to do so.

My hon. Friend is quite keen to ensure, given his legal background, that words are used carefully. I think that he said that my right hon. Friend the Chancellor of the Exchequer had said that there would be a new treaty. Let me give the quote, so that we do not set any hares running. The Chancellor said in Marseilles this weekend:

“I think it is on the cards that a treaty change may be proposed.”

That is a very conditional statement. It is not saying that there will be a treaty. Before we let the argument run away with itself, I point out that there is no proposal at the moment for a treaty.

My hon. Friend the Member for Northampton South asked whether the Treasury was monitoring the situation in the eurozone. Yes, it is. We are working closely with the Financial Services Authority and the Bank of England to monitor what is happening in the eurozone and to understand its potential impact on the UK economy and banking system. We take that particularly seriously because of the interconnection between financial markets and our economy.

Let me be clear: the responsibility for sorting out the problems of the euro area ultimately rests with the euro area Governments. We are not members of the euro and will not join it in the lifetime of this Parliament. Being outside the euro area has clearly given us the flexibility to adapt our fiscal and economic policy to manage the crisis. It is not our responsibility to deal with their problems.

However, no one should be under any misapprehension about the importance of the euro area to the UK economy—a point that my hon. Friend the Member for Northampton South made very powerfully. A strong euro area means a growing market for our goods and services; a weak euro area puts at risk jobs and businesses in our constituencies. We should not lose sight of that. A weak euro area is not in our interest: it puts jobs and businesses at risk. More than 40% of our exports go to the euro area. Hon. Members will know that we export more goods and services to Ireland than we do to Brazil, Russia, India and China combined. No one should be under any illusions about the importance of the euro area to our continued success. Britain wants a successful euro area that can deliver growth and stability, so we want the euro area to have the rules that it needs to prevent future crises.

[Mr Jenkin]

Will my hon. Friend give way?

[Mr Hoban]

No. I am sorry, but I am going to continue. As the Chancellor has said, the eurozone must accept the remorseless logic that leads from monetary union to fiscal union. That is why Conservative Members have consistently opposed joining the euro—we recognise that fundamental link. There can be a successful single currency only if there is a fiscal policy to back it up. We are seeing in the current crisis the consequences of not having that link between monetary policy and fiscal policy in the eurozone. Recognising that remorseless logic, we cannot stand in the way of closer fiscal integration in the eurozone. Clearly, our status—

[Mr Jenkin]

Will my hon. Friend give way?

[Mr Hoban]

Let me just finish the point. Clearly, our status as a euro “out” has implications for our influence over the outcome of the discussions. None the less, we should be engaged in the debate on closer fiscal integration. It is very much in our interest to have a say in the design of any new structures or processes that may be required.

[Mr Jenkin]

Precisely because our economic interests are so intertwined with our European partners, my hon. Friend is making the case for our having a clear position to ameliorate the crisis that is developing in relation to the euro. To light on one little piece of remorseless logic, which is that there cannot be a currency union without a fiscal union, but then abandon logic on every other part of his argument is not remorseless logic; it is putting his head in the sand. Does he actually think that a fiscal union can work?

[Mr Hoban]

I think that there is a great deal of work to be done on this and that it is my hon. Friend who is putting his head in the sand. We need a successful euro area if we are to protect jobs and businesses in this country. We can see some of the impact on the economy today as a consequence of the uncertainty in the eurozone. We have seen the impact in the form of growth in France and Germany being below the rate of growth in the UK in the second quarter. These issues have an immediate impact on what happens in our constituencies and businesses. We need to ensure that the eurozone is successful if we are to continue to have a successful economy.

[Dr Julian Lewis]

Will the Minister give way?

[Mr Hoban]

No, I am going to continue. [Interruption.] No, I have four minutes left and there are more things that I need to say. My hon. Friend would have had a chance to speak earlier if there had been a more even division of time.

The situation in the euro area remains one of great concern. Market tensions have persisted since the euro area summit of 21 July. The European Central Bank’s purchase of an additional €70 billion of euro area bonds since early August has been accompanied by an alleviation of some of those tensions, but Greek 10-year bond yields are at a new high of about 20% and Italian and Spanish 10-year bond yields remain high. Commitments were made at the summit of 21 July to enhance the scope and flexibility of the European financial stability facility, to lengthen the maturity of euro area loans and to lower interest rates. Those commitments must be implemented in full. Euro area countries need to get ahead of the curve and move towards a more permanent, comprehensive solution to the ongoing crisis.

Several further proposals for greater fiscal integration in the eurozone have been put forward, most notably by President Sarkozy and Chancellor Merkel following their summit of 16 August. There will be further debate about that, but let me be clear: nothing in the agreement of 21 July or in the current proposals put forward by Chancellor Merkel and President Sarkozy requires a treaty change or a transfer of powers from the UK to the EU. That is the state of play at the moment, but it is clearly not possible to say where the debate on fiscal integration may end up.

As the Chancellor has already told the House, more radical proposals should be considered as part of a permanent solution for the euro area, including measures such as euro bonds or other forms of guarantee. However—this goes back to the point made by my hon. Friend the Member for Northampton South—any move in that direction needs to be matched by more effective economic governance in the euro area to ensure that fiscal responsibility is hard-wired into the system. I am pleased that he recognised the need for those monitoring controls to be in place.

Although euro bonds or other guarantees could be designed in a number of ways, it is possible that such a proposal would require a treaty change. If that were to happen, the Government would act to protect the UK’s national interest, as we did last December when leaders agreed to amend the treaty to allow the creation of the new, permanent crisis resolution mechanism. As my right hon. Friend the Prime Minister said when he appeared before the Liaison Committee last week, we will take that opportunity seriously. He said that

“when there is a treaty change, you have an opportunity to put forward what you want in your country’s national interest. I have done that once already, and I would do it again in the future.”

He also said:

“Britain should think carefully about how to maximise our national interest if that”—

treaty change—

“were to come about, but I think that it is some way down the road.”

We need to ensure that there is a strong eurozone and, as hon. Members said, a clear growth agenda in the EU. The current position is one of the barriers to those countries digging themselves out of the recession. However, we should not underestimate the value of the European Union to this country. It adds £600 billion a year to the economy. Further liberalisation could add a further £800 billion to the value of the economy. We need to ensure that we get this right. It is in our national interest to get it right, and we will work to ensure that we do so.

Waste Water (Thames and Greater London)

Wednesday 14th September 2011 Westminster Hall

15:59

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

We are moving to slightly calmer waters as we change from a debate on European Union fiscal union to one on waste water in the Thames and Greater London. I am grateful to the Minister for his and his Department’s regular interest in these matters.

On Monday this week, David Walliams—he is probably more famous than many of those elected to Parliament—ended his swim from Gloucestershire to Westminster bridge. On the same day, Boris Johnson, the Mayor of London, wrote an article in The Daily Telegraph entitled “David Walliams’s Thames swim: it will take a super-sewer to get London out of this mess”. He was referring to the fact that London has a looming waste water crisis.

We have a fantastic piece of engineering in this great city of ours. Our sewer system was designed by Sir Joseph Bazalgette in the wake of what was known as the great stink of 1858. The purpose was to stop the sewage backing up into homes and streets whenever the system overflowed. It was connected to the Thames, so that excesses of waste water and sewage emptied into the river. That system was designed for a city of 4 million people. The city’s population is now approaching 8 million, and before too long it will be a conglomeration of nearer 9 million people. It is obvious to everyone that, with the best will in the world, the present system will not be sustainable. Thames Water is responsible for the system, the company is overseen by Ofwat, and the regulator is accountable to the Department for Environment, Food and Rural Affairs.

For some years a proposal has been on the table to build a Thames tunnel. It was the subject of consideration by the previous Government, and the scheme has been handed on to the present Government. In principle, Labour Ministers gave their blessing to a tunnel scheme; the alternative was a softer environmental mix of things, including a hope that rain water could be collected, and that there would be a more personalised collection with less sewage and so on.

The amount of sewage currently discharged into the Thames is one of many dramatic figures. That is not sewage taken to the waste disposal plants but the excess of sewage that ends up in the river. It is 39 million cubic metres a year. That may not mean much to most people, engineers apart, but it is equivalent to filling the Royal Albert hall 450 times. That is a lot of sewage. It is clearly something that nobody would wish to be in our capital city’s river.

Last weekend, I had the privilege of chairing the hugely successful Thames festival for the 10th time. The Mayor of London’s Thames festival is a reincarnation of the GLC festival, which started 15 years ago. It is held to celebrate the river, and getting on for 1 million people were there this weekend. We want the river to continue to be celebrated. We want it to be clean. We want it to be accessible, and we want people to be able to use its beaches. We want it to be used for commerce and tourism and related activities. We want to see more natural life in the river, including fish such as porpoises and dolphins. We also want to see David Walliams or the Mayor of London swimming in it—or even the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), whose constituency is opposite mine on the north bank of the river, and me. I was once thrown in; it was not a pleasant experience, but that was soon after I was first elected 28 years ago.

I bring the matter to the House today because, in part, it is already on the Minister’s desk. Indeed, the Minister will be aware that in November last year, perfectly properly, the Government published the national policy statement for waste water. On 30 March 2011, the Select Committee on Environment, Food and Rural Affairs published its report. It makes 19 recommendations. In essence, the Committee would like to see the draft national policy statement amended. As the Minister knows, some of the Committee’s recommendations relate specifically to Thames matters. I shall put recommendations 9 and 14 on the record, but I shall leave colleagues and others to read the other conclusions later.

Recommendation 9 states:

“Approval of the costs which can be passed on to water and sewerage company customers is rightfully a core Ofwat function under its current regulatory remit and it is hard to see the benefits to be gained from duplicating this activity within the spatial planning process. In view of the alarming increases in estimated costs, Ofwat must fully utilise its regulatory powers to scrutinise the economic case for the Thames Tunnel project and be rigorous in determining which costs should be passed on to Thames Water’s customers.”

Amen to that. Water bills are high enough and the project will not be cheap, so people will want to ensure the best cost benefit.

Recommendation 14 states:

“We recommend that the draft NPS be revised to produce a purely generic document by removing Chapters 3 and 4 on the replacement of the Deephams Sewage Treatment Works and the Thames Tunnel. Defra may wish to provide material in an annex exemplifying points made in the NPS by reference to specific schemes, but it should be made clear that it does not constitute information to which decision makers must have regard when considering project applications.”

Those are the only two Thames-specific recommendations. The others are about the process.

I shall briefly put things into context and then pose my questions. I apologise that I gave the Minister notice of my questions only recently, but they are all matters for his Department. However, I shall understand if he needs to come back on some matters. The European Union agreed in 1991 that there should be one system across Europe. Again, following the previous debate, one of the good things that has come out of the EU is that it is setting standards on such things as air and water quality. Bluntly, London has failed on both water and air. On water, the UK is on the way to being taken to court by the Commission. We are also at risk of being liable for poor air quality in London. The EU is the right place to chase such things and to ensure better quality. The Thames tunnel project was intended to ensure that we comply with statutory EU requirements. However, we have been held to be in breach of the directive, which is why the matter is going to the European Court of Justice. Judgment is expected next year.

Secondly, the Government have been consulting on secondary legislation to be made under the Planning Act 2008 that would classify proposed major sewer projects such as the Thames tunnel as nationally significant infrastructure projects. The consultation closes on 5 October. The project would go to the independent Infrastructure Planning Commission. My colleagues and I and Conservative Members did not want that body to be independent, but when the Localism Bill becomes law it will become accountable to the Government, and the Secretary of State will be accountable to Parliament, which I welcome.

The last bit of the jigsaw is that Ministers are considering the draft national policy statement in light of the consultation responses generally, and the Select Committee’s responses in particular. We will have a final statement before too long. A waste water policy statement is coming down the track, and there will be changes to the planning law. There is also Thames Water’s plan; the company has received responses to its consultation and it will almost certainly published a revised plan in November.

Like every riverside MP, but more than most, my constituency is very much on Thames Water’s map. When the company announced its plans at the turn of the year, it featured two sites in Bermondsey. It considered Druid street, which would connect the local combined sewer overflow, known as Shad Thames pumping station, to the main tunnel. It also considered the foreshore near Butler’s wharf and the car park at the flats in Tower Bridge road. It decided that Druid street was the preferred site. However, there was concern about that as it was the site of a children’s playground on a council estate and not the greatest of sites. I hope that Thames Water will respond positively to those views and go ahead using the Shad Thames pumping station and not the Druid street site.

By far the most controversial plan is to use the King’s Stairs gardens as the main drilling site for south London. Some 5,274 people have signed a petition against it, and a considerable number of other people, including me, have said that it is not a good plan because it is a greenfield site and on the Thames Path.

Thames Water has responded positively to such views. It has always engaged well with the community. I pay tribute to the Save the King’s Stairs Gardens action group and to its chair Donna Spedding. The group made a substantive case about the use of greenfield sites as opposed to brownfield sites and put forward good technical arguments.

As a result, Thames Water has now co-purchased Chambers wharf, a brownfield site slightly further upstream. As of this moment, there are two sites in the frame. Obviously, the Rotherhithe community hopes that the King’s Stairs gardens site will come off the list as it is inappropriate. We do not know where the other sites will now be—whether it is in Southwark, Deptford or further downstream.

[Mr Andy Slaughter (Hammersmith) (Lab)]

The hon. Gentleman correctly identified two problems with the scheme. One is the choice of site and the other, as with all infrastructure projects, is the cost. As constituency Members, we will all have issues and will have to negotiate with Thames Water. Like the hon. Gentleman, I have found Thames Water to be a reasonable organisation with which to negotiate. Can we try to disaggregate this matter from the project as a whole? My local authority, which is implacably opposed to the scheme, is using those legitimate objections to object to the whole scheme. I hope that we can have a three-party endorsement today of the fact that we have to clear up the Thames. David Walliams has focused our attention on that. Every single week, my constituents see huge amounts of raw sewage going into the Thames, near to where they live. Let us try to identify and solve the problems so that we can support a scheme that really has to be carried through.

[Simon Hughes]

The current estimate for the Thames tunnel scheme is pretty enormous. It is £3.6 billion and is likely to go up rather than down. Thames Water says that the alternative would cost £13 billion and take 30 years. When I responded to the consultation, I said that the evidence seemed to be in favour of the Thames Water plan, subject to getting the sites right, but I wanted final reassurance. I made my response formally at the turn of the year.

I also put in a short response to the private commission that was set up by some interested local authorities and chaired by Lord Selborne. The commission has argued that we must have a totally different direction. I am not persuaded by that. The Thames tunnel is the best direction. The previous Government came to that view and the present Government have held to it. Unless something comes up in the latest process, we need to go ahead with the Thames tunnel scheme, but the site must be right. My experience is that engineers are reasonable people who will look at a better option if it is put to them. They are also quite flexible. The private commission is having its hearings and it is about to produce its report. I hope, therefore, that we can arrive at a common position.

My questions to the Minister are partly procedural as well as substantive. Will the Government respond specifically to all the recommendations in the Select Committee report? If they cannot do it now, when will they do it? If the concerns that have been expressed by colleagues across the House and in the Select Committee are taken into account, will the Minister accept that that will lead to a change in the draft policy statement?

Will the Department delay bringing the debate on the policy to the House until the Localism Bill has been enacted and implemented and the Infrastructure Planning Commission has been set up? I want to ensure that if the Thames tunnel is subject to an overarching planning approval, the decision is a democratically accountable one. Will the Minister give us the earliest date when Parliament might be able to have the national policy statement back? When the policy comes back, can he assure us that there will be a debate on the Floor of each House so that colleagues in London and the whole of the Thames estuary can make a contribution to the debate? This is a big debate and we want to ensure that it is given adequate time and that it is not something that is pushed through on the nod or in half an hour.

It is clearly logical to have one overarching planning approval for the scheme, but if there are any sites on which there is a significant building there should be extra planning processes to ensure that everything is done in the right way. For example, if the King’s Stairs gardens site or the wharf site in Bermondsey are chosen, people will want to know that the new building will not be too tall, too big, too wide or too ugly and they will also want to have their say. The subsidiary buildings should not be rubber-stamped through either. Will the Minister pass on that concern to his colleagues in the Department for Communities and Local Government? We want an extra consultation process about the detail or extra planning requirement.

Whatever our views about the Selborne commission, will the Minister tell us that the Department will consider the report and respond to it before the final draft of the national policy statement is published? Will he give us the Government’s final assessment of the cost of the project and will he give us an assurance that council tax payers, local councils and the Government will not have to pick up the tab? Obviously, people understand that this is a Thames Water project and that it will not be cheap. People will want to know not just what the cost is overall but that their bills will not go up in other places as well. It would be helpful if the Minister could show us the departmental cost-benefit analysis.

Will the Minister tell us whether there is any compensation available to people whose land, properties or amenities are affected? If they suddenly have a great treatment works or a shaft put in front of their window for seven years, what compensation will they receive? If Thames Water identifies new sites, people in my constituency and elsewhere would be grateful if the sites that are no longer in the firing line or are no longer being considered are dropped off the list so that they know they are no longer under threat.

I end by paying tribute not just to the Save the King’s Stairs Gardens group but the Save Your Riverside group. All these people are highly intelligent and reasonable in what they are asking for and I hope that I have reflected that here. This is a huge issue for many of our constituencies in London and we would be grateful for as much information about the scheme as the Minister can share with us.

16:19

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

Thank you, Mrs Brooke, for calling me to speak. I am very grateful to you for your chairmanship of our proceedings this afternoon. I congratulate my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) on raising this important issue at a crucial time for this project.

I do not know any elected person from any political party who could possibly approach this project in any way that was not sceptical. We are talking about a huge sum of money, but we are also talking about a huge problem. Consequently, it is right that we rigorously check, first, that undertaking this project is the right thing to do and, secondly, that the alternatives are simply not good enough to deal with what we know is a very serious problem.

I approach this project from that perspective, and I also approach it as a constituency MP, whose constituents are paying Thames Water’s bills in the most westerly point of the Thames Water area. As is the case with many MPs in the Thames Water area, my constituents will ask me whether this project is good value for money and what it aims to achieve. I understand the concerns that have been expressed, and I respect the debate and the spirit in which the right hon. Gentleman introduced it.

We know that we face a very serious problem. It is not only a legal problem, although it is important that we respond to the European Commission’s concerns and its belief that we are not complying with the urban waste water treatment directive—we will vigorously defend ourselves against that claim. Nobody who has anything to do with the River Thames can deny that we face a problem now and that if our generation of politicians does not take action, we will leave the next generation with a possibly devastating impact on an iconic—that is a rather overused word, but it is appropriate here—river that runs through one of the most important capital cities in the world.

Therefore, the Government are taking a similar view to that of the previous Government, in that we believe that it is important that this project goes ahead and that the tunnel option is the right one. We are open about our reasons for that. I have the highest respect for Lord Selborne. He is an extraordinarily able parliamentarian and he has experience of a wide range of scientific and environmental issues. My Department is taking his commission and its inquiry seriously. We have contributed to that process, and we will certainly look at what his commission says. We want to be as open as possible, and we also want to try to make people who are sceptical about our proposal understand how we have arrived at this point, sharing with them as much information as we can.

It takes as little as 2 mm of sudden rainfall to trigger an overflow into the Thames of untreated waste water from a combined sewer. Currently, around 39 million cubic metres of waste water enter the Thames every year from London’s combined sewer overflows when storm water capacity is exceeded. That is enough to fill the Royal Albert hall 450 times. I have tried to get that image out of my head, but failed.

Those discharges occur around 50 to 60 times a year, and they have a significant environmental impact on the Thames. The drought ended in June. That was just after the Department for Environment, Food and Rural called the drought summit—the two events may have been linked—and at that time there was a combined sewage overflow spill that resulted in an appallingly large number of fish being killed. It is the habitat and environment of the river that we are concerned about. I am sure that hon. Members from all parties know that those discharges increase the likelihood of aquatic wildlife being killed and create a higher health hazard than we can imagine for people using, enjoying or living near the river. Therefore we must take action. Nobody has more respect than me for David Walliams for his extraordinary achievement, but it brought to our attention the fact that he had to take antibiotics to protect himself in case he fell ill because of the condition of the Thames, as so many other people already have.

In the few minutes that I have left, I will try to respond as quickly as I can to the specific points that my right hon. Friend made. I received a copy of them as I walked into Westminster Hall this afternoon, because I came straight from another event.

My right hon. Friend asked what the Government’s response is to the recommendations of the Environment, Food and Rural Affairs Committee report of 30 March. I can assure him that we will respond to that report in full in a few weeks’ time, and I will ensure that he is apprised of that response.

My right hon. Friend also asked whether my Department will hold off on the publication of the revised national policy statement until the relevant part of the Localism Bill has been implemented. We are going through this process without prejudging what Parliament will do, on the basis that the Localism Bill as it currently stands will receive Royal Assent. It is really important that we understand that the Localism Bill will bring that crucial element of democratic accountability, and I am grateful to him for raising that point.

Parliament will consider the NPS by the end of this year. My right hon. Friend asked me whether I can confirm that there will be a debate about the NPS on the Floor of the House and, if so, whether the motion will be amendable. The NPS will be laid before Parliament for 21 days, and it is in his gift and that of any other right hon. or hon. Member to request a debate on it. I would welcome such a debate, which would be an opportunity to set out our reasons for supporting this project.

My right hon. Friend asked whether significant consequential buildings will be the subject of local planning processes. I think that he is concerned about the NPS and the planning processes being dealt with all in one when there might be specific issues in right hon. and hon. Members’ constituencies about legitimate local planning concerns. My understanding is that those cases would undergo application for development consent. I will write to him and make it absolutely clear what we are saying here, because I know that this is a matter of particular importance to right hon. and hon. Members.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Will the Minister be so kind as to include in that correspondence the other hon. Members who are here in Westminster Hall for this debate and who are interested in that particular issue?

[Richard Benyon]

I put it on the record that I will copy that correspondence to the hon. Members for Poplar and Limehouse (Jim Fitzpatrick) and for Hammersmith (Mr Slaughter), who are present in Westminster Hall for this debate.

The Thames tunnel commission has been established. As I have already said, we are providing evidence to it and we will look at what it produces. My right hon. Friend the Member for Bermondsey and Old Southwark asked about the cost of the Thames tunnel project. Obviously, that is of huge concern to everybody who pays water bills in the Thames Water area. The current estimates for the costs are being reviewed on a regular basis, as he would expect them to be. As is the case with any cost assessment, there are assumptions in those assessments, including assumptions about construction costs and the financing of the operation. I assure him that Thames Water is building a very large contingency element into its costs analysis. Along with Thames Water, we are being extremely rigorous in ensuring that all risks are being considered and that—without being Rumsfeldian—all the unknowns that we know about are assessed, to see whether we can know more than we currently do.

The most important point, however, is that there must be a credible package to put, first, to water-charge payers and, secondly, to put to investors. Without that credible package and without Government support for the project, I do not believe that we can go ahead with the scheme. As I have said, it is extremely important that there is a credible package. An impact assessment from 2007 of cost-benefit analysis is being updated, and we will make the updated version public.

My right hon. Friend asked what the rules are regarding compensation when people’s land and amenities are affected by this scheme. If he will allow me, I will include a fuller answer to that in my letter to him.

My right hon. Friend’s last question related to issues about the sites at King’s Stairs gardens and Chamber’s wharf. That is a very important question and there are other sites that other hon. Members have already raised with me and will continue to do so. I confirm to my right hon. Friend that those issues are planning issues and therefore that it is for Thames Water to take them forward. However, we are looking very closely at them and we will liaise with him and others if we feel that there is a role for Government to influence the process. We want to ensure that this enormous scheme—both its construction and its eventual operation—has as little impact as possible on his constituents and others in the Thames area.

I cannot give a fuller reply than that, but I assure my right hon. Friend that I will continue to liaise with him and other London Members, particularly riverside Members, as well as with any other hon. Members who represent constituencies in the Thames Water area, to ensure that we are working together, first, to make the value of this project understood and, secondly, to make it a success for future generations.

Consumer Focus Wales

Wednesday 14th September 2011 Westminster Hall

16:30

[Mr Mark Williams (Ceredigion) (LD)]

It is a particular pleasure to serve under your chairmanship this afternoon, Mrs Brooke. I am grateful for the opportunity to once again put forward the concerns of the Welsh consumer sector to the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey). He was good enough to meet representatives from Consumer Focus Wales and my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) a few weeks ago. I was grateful for that meeting, and I am grateful to have the opportunity to present to him what are perhaps some familiar arguments.

Consumer Focus was set up by the Consumers, Estate Agents and Redress Act 2007 and it has a federal structure, with autonomous bodies in each of the devolved nations. The bodies collaborate, but each leads on projects of its own, particularly where there are differences due to devolution. Consumer Focus Wales has done some outstanding work on a number of issues of concern to my constituents. It has worked very closely with trading standards departments on the major concern of private car parking, including with Lawrence Martin from Ceredigion trading standards, to try to eradicate the shady practices that sadly have gone on in the pursuit of private parking offences. I understand that one private operator in Ceredigion has been the cause of the most trade complaints in the area for many years. A year ago, Consumer Focus Wales put out a call for evidence to consumers and received numerous complaints about private car park operators. The complaints included instances of operators misleading consumers about the nature of charges, operators and debt recovery agents using threats to secure payment, charges that bear no relation to the loss sustained by the operator or landowner, ease of access to keeper details registered with the Driver and Vehicle Licensing Agency, errors in charging and the lack of an independent appeals process. I also, as a constituency MP, have received a number of complaints, and there has been interest in the local press. I cite that as just one pertinent example in my constituency.

Consumer Focus Wales has carried out crucial research as part of its work, thanks to which we know that 200,000 people in Wales do not have access to a bank account, 206,000 homes in Wales are off the mains gas network and half of prepayment meter households self-ration their energy. That research has given us additional insight into the problems faced in Welsh communities, particularly rural ones. I am very glad that my hon. Friend the Member for Cardiff North (Jonathan Evans) is here this afternoon. We do not know whether the new model will allow for such unique Welsh research to be carried out to the same extent, advancing Welsh issues in a Welsh context.

The work that Consumer Focus has done on post offices, digital inclusion, fuel poverty and financial services has been very important in raising the issues and in proposing practical solutions to some of the concerns. A major piece of work for Consumer Focus Wales this year has been an investigation into park homes, which is an issue close to many of my constituents’ hearts. Many of the issues involved, particularly licensing by local authorities and planning, are devolved, so that is an excellent demonstration of why we need a Welsh perspective.

Perhaps the most important work that the organisation has done—literally a matter of life and death—has been its investigation into E. coli and food safety. All members of the Public Bodies Bill Committee have received as written evidence a letter from Sharon Mills, who tragically lost her son as a result of the 2005 E. coli outbreak. Consumer Focus Wales has taken up the matter, raising some serious concerns about food safety, and changes have been implemented as a result, such as the Welsh Government agreeing to introduce the mandatory display of food hygiene ratings by all food businesses, and encouraging the Food Standards Agency to clarify the law on the separation of raw and cooked food. Just this month a food safety map of Welsh schools was released, which highlighted the ones that had failed to make the grade. For the record, it is worth quoting a paragraph from Mrs Mills’s letter:

“If it wasn’t for Consumer Focus Wales the profile of food safety would not have been raised over the past two years, significant advancements in implementing these recommendations wouldn’t have been made or reported and most importantly myself and other families would continue to be in the dark about what action was being taken to ensure no other family has to go through what we have been through.”

[Jonathan Evans (Cardiff North) (Con)]

As a former consumer affairs Minister, I acknowledge the difficulty that there was during my time in office in getting a coherent and relevant representation of consumer viewpoints, which was a key Government objective. It is universally recognised that Consumer Focus Wales has managed to achieve that objective and, therefore, within the context of the reforms that are being considered, I wonder if my hon. Friend would not think it appropriate for the responsibility for Consumer Focus Wales to be devolved to the National Assembly for Wales, so that we can at least retain within our area an organisation that is universally admired across the political spectrum.

[Mr Williams]

I am very grateful to my hon. Friend for making that point; he pre-empts the second half of my speech. The central message on which I agree with him is the need to secure a holistic body of information, with those isolated cases with which we as constituency MPs often deal put into the much broader context. That has been the great strength of Consumer Focus, and Consumer Focus Wales.

I wanted to set out the work that Consumer Focus Wales has done, because I do not want anyone to be under the illusion that it is not a relevant or useful body. I certainly do not believe that the Government take the view that the work done by Consumer Focus is not valuable; the Minister has said that that is not the case in our discussions. The organisation’s work is recognised, because the Government propose to transfer its functions into another, albeit in my view inadequate, model. The Government’s intention to reduce the cost is understandable, and I sincerely hope that they are able to deliver a service for consumers at a lower cost, but these functions are vital—they make a real difference to people’s lives.

The Government are now consulting on their approach to consumers, while the legislation that will allow them to abolish Consumer Focus makes its way through the Commons—the hon. Member for Clwyd South (Susan Elan Jones), who is here, will recollect yesterday’s brief discussion in the Public Bodies Bill Committee on the role of Consumer Focus. The consultation had not, however, even been launched when the Bill was heard in the House of Lords some months ago. That certainly is not the ideal approach, though it is arguably necessitated by the difficult timetable and the need to make savings. Nevertheless, it inevitably has created a sense of uncertainty.

The real concern that Consumer Focus Wales has is about the model proposed by the Government. There are few organisations that I have praised more often in this House than Citizens Advice. It performs excellent advocacy right across Wales and the United Kingdom, but it does not have—currently, at least—a great deal of expertise in detailed policy research, certainly outside of benefits, personal finance and housing. It has done some admirable work, and as a constituency MP I have referred cases to it on such matters, and it has referred cases back to me. What were formerly my two bureaux in Aberystwyth and Cardigan, now merged into one Ceredigion bureau, have done some excellent work.

[Roger Williams (Brecon and Radnorshire) (LD)]

I support my hon. Friend in his views on Consumer Focus Wales, but I do not think that the alternative model would work to represent my constituents. Citizens Advice does not have that reach into the rural areas or that way of tapping into the problems. For instance, in Brecon an alternative organisation called the Brecon Advice Centre has set itself up to replace the citizens advice bureau.

[Mr Williams]

I agree with the thrust of my hon. Friend’s remarks. Like me, he represents a vast rural area. Brecon, Radnorshire and Ceredigion are huge tracts of rural Wales. With the capacity of small organisations, inevitably facing financial constraints at the moment and curtailed by costs, I question their ability to reach out into those communities, despite the best of intentions. We will have to look closely at the resource transfer implications, if resources are going to Citizens Advice, to ensure that it has adequate resources to deliver what is expected of them.

I welcome the Government’s intention to expand Citizens Advice’s policy research team, but there is no certainty about retaining existing expertise to transfer it to that team. We need to differentiate between the advocacy role of the individual bureaux in our constituencies and the central role of collating information, to which my hon. Friend the Member for Cardiff North alluded, providing Members of Parliament, other interested parties and the Government with holistic information that advances public policy.

Some excellent people work in Consumer Focus Wales, and they have developed a high level of expertise over the past years. There is no guarantee that those excellent people will be retained by a new model. I hope that I am wrong on that, if we move in a certain direction, but I fear the worst.

[Susan Elan Jones (Clwyd South) (Lab)]

Does the hon. Gentleman agree that Consumer Focus Wales offers a unique service? It is not there as a special interest group, but there to protect the citizen as a consumer. That is where its research comes from, and that is its focus. It is able to support consumers right across Wales with its specialist knowledge because of that.

[Mr Williams]

I concur with the hon. Lady’s comments. Consumer Focus Wales has the unique ability to look at an individual case or an individual citizen coming forward with a concern, call for further information, as I said when I mentioned car park issues in my constituency, explore the depth of the problems, which are often brought to its attention by an individual citizen, and present them positively to policy makers. That approach is to be commended. The matter is not just about advocacy, but about the link between an individual citizen’s problems and advancing changes in public policy.

Returning to the body of expertise, I would be interested if the Minister could update us on the latest status of discussions with Citizens Advice about the proposed model.

The definition of “consumer” set out in part 1 of the Consumer, Estate Agents and Redress Act 2007 includes the words,

“the activities of any government department, local or public authority or other public body.”

As such, Consumer Focus Wales regularly undertakes work to look at the services that consumers receive from all levels of Government. It does not just have an advocacy role—critical though that is for individual citizens—but looks at the workings of Government agencies. There is no certainty that that important and independent focus on Welsh public services will continue.

[Nia Griffith (Llanelli) (Lab)]

Is the hon. Gentleman aware that Consumer Focus has also identified the need to help shape the functions of the new Welsh language commissioner? That is yet another area in which its expertise could be used.

[Mr Williams]

I was not aware of that, and I am grateful for that intervention. I will come on to issues about the Welsh language in a moment, because they are, as the hon. Lady knows, critical to our constituents.

The failure to recognise the gap between what the consultation describes as consumer policy and all the areas that Consumer Focus Wales works in creates a worry that future arrangements may leave out altogether significant areas of work currently undertaken by Consumer Focus Wales. There is also concern about the arrangements for the extra help unit, which protects some of the most vulnerable consumers in society and is part of the Consumer Direct service via a referral protocol. The proposal is for that service to be transferred to Citizens Advice and Citizens Advice Scotland by March 2012. Therefore, that needs to be integrated into the plans for Citizens Advice to take over the Consumer Direct service, with absolutely no break in the service provided.

Significantly, the extra help unit is a completely bilingual service. That has to continue. I am not clear from what has been proposed how Citizens Advice plans to supply a fully bilingual service. Not only does that have to be provided, it must enable Welsh speakers to have direct access to a phone line staffed by trained Welsh language operators. Many of us, including myself, have great concerns about the function of public bodies and their capacity to respond to people who speak in Welsh. Providing a service via an intermediary translation service such as Language Line is not an acceptable alternative, a principle supported by the Welsh Language Board. The Office of Fair Trading once tried to provide a Welsh language Consumer Direct service via an intermediary, but changed that policy following complaints from users and advice from the Welsh Language Board. Any clarification on that matter would be extremely helpful.

Crucially, while the new model in Scotland will be led from Scotland, and the model in Northern Ireland is led from Northern Ireland, in Wales we will be led from London. That would present concern in many areas. Given that the Welsh Government have competence for a number of the issues raised by Consumer Focus, and that there are many significant policy divergences between London and Cardiff, many of which I welcome, it is crucial for there to be Welsh input, which was the point made by my hon. Friend the Member for Cardiff North in his intervention. I know that we have a much better model for Wales than when proposals were first raised, but it still falls short of the Consumer Focus Wales model. I doubt whether it is practically achievable within the current model of Citizens Advice in England and Wales.

I understand that the Welsh Government are seeking the power to set up their own consumer body, in the same way that the Public Bodies Bill will give them the power to set up their own environmental body to take on the functions of the Countryside Council for Wales, Environment Agency Wales and Forestry Commission Wales. That would not involve the transfer of new powers, other than the ability to set up their own body to deal with advocacy. It would require no additional funding—in the current climate I respect that—as Wales would simply get the Barnett consequential that would arise from the new model in England, with much of the funding coming from levies rather than the public purse. The Minister may well urge me to respond to the consultation, but the difficulty that we face is that the Bill is going through Parliament now, and if we are going to give the power to the Welsh Government, as I believe we should, we have to act now.

Finally, we should go back to the original purpose of the decisions over quangos and consumer bodies. Do they streamline the process? That is questionable, given the new responsibilities expected of Citizens Advice and the significant work that will be required to get it to do the equivalent work of Consumer Focus Wales. Will it save money? Again, that is debatable, given the costs of transferring functions and the expansion of Citizens Advice that is required. I am sure that the Minister can help us on that matter.

Ultimately, there is a need for a body that can look specifically at all consumer issues from a Welsh angle. If that can be achieved through what the Government are outlining, then I am happy to listen to what they propose, but I am not sure that it can. In that case, I hope that the Minister will listen to the calls of many, including his counterparts in the Welsh Assembly Government, and give them the opportunity to go their own way and have the power to set up a Welsh consumer body—

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Will the hon. Gentleman give way?

[Mr Williams]

Before the last four words of my speech, I will give way.

[Jonathan Edwards]

I apologise for being late; I was giving evidence to the Select Committee on Procedure. There is unanimity of support in the National Assembly for Wales for the transfer of such powers. That is a key point to be made to the Government in London.

[Mr Williams]

I am grateful to the hon. Gentleman for making that intervention before my last four words. That is a key point. On the basis of what the hon. Gentleman and I have said, I hope that the Minister will look favourably at what some of us are suggesting.

16:39

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

May I start by thanking my hon. Friend the Member for Ceredigion (Mr Williams) for securing the debate? As he said, he and my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) came to see me in June, just after the consultation had begun, to press their case. My hon. Friend the Member for Ceredigion has pressed his case again today with his usual energy and enthusiasm. He was right to discuss in his initial remarks the excellent work done by Consumer Focus Wales. Any changes made will not reflect on that work; in many ways, we want to build on it and its excellence in representing consumers in Wales.

My hon. Friend mentioned Sharon Mills, whose son Mason tragically died during an E. coli outbreak in Wales. Ms Mills showed through her excellent work on food safety with Consumer Focus Wales that citizens can play a role. It also shows that Consumer Focus Wales has done an excellent job.

My hon. Friend is right that we are still consulting, and the consultation will not close until the 27th of this month. To reassure him and other Members, particularly Members from Wales, that we are listening, I can tell him that officials from my Department will be in Cardiff next week talking to officials in the Welsh Government about what they want. We have a genuine desire to reach out, listen, consult and find a way forward, and to ensure that all the great things that Consumer Focus Wales has done are maintained and that the Welsh voice is heard in whatever we end up with as a result of the consultation.

We must await the end of the consultation process. We will consider all responses carefully, but we believe that our proposals to rationalise further the functions of consumer protection bodies, strengthening the front line of consumer protection while reducing the complexity, confusion and waste of the current wide variety of bodies, are a positive step forward for consumer advocacy in Wales and across the UK.

We have absolutely no intention of reducing the level of support afforded to consumers across Wales; in fact, the whole purpose of the exercise is to see how we can improve it. I agree with the assertions made by the Welsh Government and Consumer Focus Wales that Consumer Focus Wales’s functions in representing Welsh consumers should be retained in Wales. The organisation’s important role in providing support for particularly vulnerable consumers, for example, which my hon. Friend asked about, will remain under the new regime.

Exactly how that role will be delivered is obviously still under consideration and will need to include comments from the ongoing consultation, but as I said, we are talking with interested parties, including the Welsh Government and Citizens Advice, to design a model of consumer representation in Wales that meets our objective. We believe that the concerns expressed by my hon. Friend and Consumer Focus Wales are not insurmountable, and I hope that we can cover them all in our considerations.

[Jonathan Edwards]

Consumer Focus Wales has an agreed funding formula with Consumer Focus. Will the Minister ensure that any successor body has funding comparable to that currently enjoyed by Consumer Focus Wales?

[Mr Davey]

The hon. Gentleman will understand that that is part of the deliberations and consultation. I cannot pre-judge the findings of the consultation, but funding is clearly key among our decisions.

One big issue raised is governance in Wales. We see no reason why the new model cannot replicate the current one. We understand how important it is that decisions affecting Welsh consumers should be made in Wales. I hope that that reassures hon. Members.

We do not want to add layers of bureaucracy. In these difficult times, that would be wrong, as my hon. Friend said. Although it is important that each country should have national representation on issues of specific interest to it, universal industries should also continue to have a single national voice and should not have to negotiate three or four times whenever they wish to do something.

For example, if Royal Mail wished to make even a minor change to their service, devolvement of consumer advocacy, which some have proposed, would require them to have detailed conversations three or four times over, which could lead to differing levels of service. I hope that hon. Members can understand that some industries covering the whole United Kingdom are not devolved, and that we do not want to add unnecessary costs that will not serve the consumer.

[Mr Mark Williams]

I am pleased to hear that the discussions are being held between the Minister’s Department and our colleagues in the National Assembly Government. That is important, and I wish those discussions well. Can my hon. Friend understand the frustration of some of us who are committed devolutionists and who look forward to the time when power can be transferred and Ministers in Cardiff, rather than here, will decide the appropriate future structure? That is my fundamental point, coupled equally with the need to provide a good service.

[Mr Davey]

I understand how my hon. Friend feels about that point. I hope that we can come to some agreement, not just in this debate but in due course. We want to give consumers and others greater clarity about who is championing their rights. Consumers need to know who their advocate is. We want to increase the impact of publicly funded consumer advocacy domestically and internationally and to reduce overlap. We want all that to be delivered by a known and trusted organisation with high visibility and outreach. I will talk tomorrow to the Welsh Minister, Carl Sargent, about the issue. I hope that that indicates to colleagues that we are taking Welsh concerns seriously.

Citizens Advice in England, Wales, Scotland and Northern Ireland is widely recognised and trusted by the public. In the surveys, its brand recognition is extremely strong and it is extremely well trusted. That is one reason why we have shaped the consultation as we have. It is a distinct advantage for an organisation with such strong recognition and trust to be up front, championing the consumer.

[Jonathan Evans]

I will be brief, as I am looking at the time. As the Minister is praising Citizens Advice, in which we all join him, I will share with him the observation that Citizens Advice is under great pressure. Other Members of Parliament and I are now seeing people who cannot get into Citizens Advice surgeries. Is he taking account of Citizens Advice’s capacity to take on the responsibility?

[Mr Davey]

I am glad that the hon. Gentleman made that point, as it enables me to clarify something that has been slightly confused in this debate. One must remember that at the moment, Citizens Advice has a national organisation, which undertakes much of its research for consumers, and local bureaux. We are talking about the national organisation, Citizens Advice, taking forward the work of Consumer Focus and other organisations to ensure a powerful research and expertise base for advocacy, education and information at the national level.

[Jonathan Edwards]

Will the Minister give way?

[Mr Davey]

I must end my remarks, I am afraid.

That will be in no way affected by local pressures. Most funding for the national work comes either from levies or from the taxpayer; a lot of the local funding comes from local government. They are two connected organisations, and the strength is in their connection.

Citizens Advice, the national organisation, gets information fed up from the grassroots all the time. That is one reason why the brand is so trusted and why the organisation has a special, and perhaps unique, role to play in our country. Citizens Advice has local representation through its bureaux in communities. Although those bureaux will not be conducting research, they will be able to feed into the analysis. That is particularly important for the most vulnerable in our society. It is another reason why I think that our model has a lot of strengths.

I emphasise that Citizens Advice has an excellent track record of advocacy on behalf of consumers at a national and local level. We want to build on that track record and the brand awareness that it enjoys and direct resources for consumer education, information, policy and advice to Citizens Advice. We also want to bring together local, bottom-up information with the national research and expertise currently carried out by Consumer Focus, which is, as we have heard, of extremely high quality. That will create a powerful consumer body to which businesses will have to listen.

We do not intend to lose the experience and expertise held at Consumer Focus. Instead, we want to bring together its policy and research expertise, especially in the energy and postal services sectors, with the long-standing success of Citizens Advice and its bureaux in helping consumers. By operating in that way, we can connect consumer policy and research functions with the concerns and problems of citizens in their communities. There are benefits to be realised by making that connection. We remain committed to working with all, including those across Wales, to make it a reality.

Question put and agreed to.

16:59

Sitting adjourned.

Written Ministerial Statements

Wednesday 14th September 2011 Written Statements

Wednesday 14 September 2011

Regional Development Agencies (Transfer of Property Assets)

Wednesday 14th September 2011 Written Statements

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

I announced on 6 July that land and property assets acquired by regional development agencies (RDAs) and in need of further development would be transferring to the Homes and Communities Agency (HCA) under a stewardship arrangement. I can now confirm that the transfer order has been signed and that the transfer will take place on 19 September 2011.

The HCA will use its expertise in land and property management to ensure that the assets are fully developed in a way that will help deliver economic growth and regeneration to local areas. Under the stewardship arrangement the HCA will establish local committees to allow local partners such as local authorities, businesses, LEPs and others to influence development of the portfolio. National policy interests will be managed through BIS and DCLG representation on a newly constituted Land and Property Board, and with BIS local membership of the local stewardship committees.

Over the summer recess, we completed detailed work on the transfer with DCLG, HCA and the RDAs and we published the list of land and property assets to be transferred on 26 August at www.bis.gov.uk/rda-assets.

The portfolio includes income-generating assets which will provide investment funds for those assets which need further development. This recycling of receipts should enable the arrangement to be largely self-financing.

Under a similar but separate stewardship arrangement, BIS will contract with HCA to manage its interests in three nationally important technology parks: Ansty Park, Coventry; the Advanced Manufacturing Park, Rotherham; and SPark, Bristol. HCA will manage these in order to continue the development of these land assets which will maximise their impact on economic growth. These sites have been identified as assets of national importance to be retained under the ownership of central Government in order to be developed further to support investments in innovation and technology. Four facilities based on these sites form part of the recently established High Value Manufacturing Technology and Innovation Centre funded by the Technology Strategy Board.

This transfer is in line with the principles for disposal of assets published on 10 February 2011, which can be viewed at www.bis.gov.uk/rda-assets. I will arrange a further briefing meeting to provide an opportunity for Members of the House to discuss these transfers.

Naming Astute Boat 5

Wednesday 14th September 2011 Written Statements

[The Secretary of State for Defence (Dr Liam Fox)]

I am pleased to announce that the Astute class submarine hull 5 is to be named HMS Anson. The boat is expected to join HMS Astute, HMS Ambush, HMS Artful and HMS Audacious at the end of 2020.

The seven Astute class boats planned for the Royal Navy are the most advanced attack submarines ordered by the Ministry of Defence, with improved firepower and communications, and the ability to operate stealthily for extended periods. The crew also benefit from greatly improved accommodation and facilities.

The boats will undertake a wide range of tasks in support of military operations worldwide.

Electoral Administration Provisions

Wednesday 14th September 2011 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)]

I am announcing today the publication of draft legislation on an electoral administration provision for pre-legislative scrutiny, and also that the Government will be introducing two electoral administration measures that can be achieved through secondary legislation.

These provisions are intended to form part of a larger package of measures which will also include draft legislation on individual electoral registration, and the electoral administration provisions on: extending the electoral timetable for UK parliamentary elections from 17 to 25 days, the use of emblems by jointly nominated candidates, and the timing of polling places reviews, which have been published separately for pre-legislative scrutiny.

The further proposals address particular issues that have been raised by MPs and peers, and by electoral stakeholders, and will help to deliver more effective electoral administration, and to increase participation and trust in the electoral process.

The draft legislation removes the automatic postponement of parish and community council elections in England and Wales that currently occurs when they fall on the same day as ordinary local government elections and either a parliamentary or European parliamentary general election. This will allow more polls to be combined and facilitate participation in parish and community council elections.

I am also announcing proposals that can be achieved through secondary legislation under existing powers that will:

mandate 100% checking of the identifiers for postal votes at elections. While current legislation requires a minimum of 20% of postal vote identifiers (signatures and date of birth on the statement returned with each postal vote) to be checked, over recent years there has been a general commitment shown at both local and national polls to check 100% and, with safeguards for instances where there is a good reason that this cannot be done, I consider it is now appropriate to formalise this position;

extend the “emergency” proxy voting facility to enable those called away on business or military service unexpectedly, and at short notice, before an election, to appoint a proxy to vote on their behalf. At present, only those who fall ill once the routine deadline for proxy applications has passed are able to appoint an “emergency” proxy up to 5 pm on polling day.

I am today sending the draft legislation to the Political and Constitutional Reform Committee for pre-legislative scrutiny.

A Command Paper (Cm 8177) setting out the draft legislation and associated explanatory notes has been laid before the House.

General Election 2010 (Government Response)

Wednesday 14th September 2011 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)]

The Government are today publishing their responses to a set of reports published on the administration of the 2010 UK parliamentary general election. The response to the Electoral Commission’s statutory reports on the election incorporates recommendations from other stakeholders where appropriate, including the Association of Electoral Administrators, SCOPE and the Greater London Assembly’s elections review working group. Recommendations made by the Organisation for Security and Co-operation in Europe’s Office for Democratic Institutions and Human Rights (OSCE/ODIHR) have been addressed in a separate document.

The Government have already brought forward legislation and draft legislation as part of their programme of constitutional reform which should assist the effective administration of future elections and make parliamentary elections more transparent and fair in their operation. We were grateful for the analysis and recommendations within the reports and the responses show the progress made so far against many of the issues raised.

Copies of the Government responses will be placed in the Libraries of both Houses.

Court of Justice of the European Union (Appointments)

Wednesday 14th September 2011 Written Statements

[The Minister for Europe (Mr David Lidington)]

At a conference of representatives of Governments of member states on 8 September 2011 the appointments of a Swedish judge to the Court of Justice and a Bulgarian judge to the General Court were considered.

The nominations were in respect of: Mr Carl Gustav Fernlund of Sweden and Ms Mariyana Kancheva of Bulgaria.

Having consulted with the Lord Chancellor and Secretary of State for Justice and the Attorney-General, the Foreign Secretary agreed to the appointments.

Foreign and Commonwealth Office (Human Rights Work)

Wednesday 14th September 2011 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

I have today laid the Foreign and Commonwealth Office’s response to the Eighth Report from the Foreign Affairs Committee of session 2010-12; “The FCO’s Human Rights Work 2010-11” (Cm. 8169).

Overseas Territories Strategy

Wednesday 14th September 2011 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

In my statement to the House of 10 March I set out this Government’s overall vision for our overseas territories and explained that we were working with Departments across Government on a new strategy to deliver this. The National Security Council (NSC) agreed the main principles of a new strategy in July.

The UK Government’s fundamental responsibility and objective are to ensure the security and good governance of the territories and their peoples. The strategy recognises that our 14 overseas territories are remarkably diverse. Policies to meet these objectives need to be tailored to the specific circumstances of each territory. The strategy is designed to provide a framework in which these policies can be developed and implemented consistently and effectively.

Much of the Government’s work on the territories is rightly concerned with meeting our responsibilities to the territories with settled populations. Our new strategy aims to ensure that proper attention is also given to the UK’s extensive sovereign territory where there is no settled population. We want to ensure that the significance and value of this territory is better understood.

We have reviewed the constitutional status of our overseas territories. Each territory has its own unique constitution. The previous Government launched in 1999 a process of modernising the constitutions of the inhabited territories. We are continuing this work with a view to equipping each territory with a modem constitution. We expect these constitutions to continue to evolve and to require adjustment in the light of circumstances. But we believe that the fundamental structure of our constitutional relationships is the right one: powers are devolved to the elected Governments of the settled territories to the maximum extent possible consistent with the UK retaining powers necessary to discharge our sovereign responsibilities.

We believe that at this point in the history of our relationships with the territories, when a decade of constitutional revision is coming to a close, the time is not right to embark on further constitutional change. Rather our strategy is to ensure the constitutional arrangements work effectively to promote the best interests of the territories and of the UK. We are therefore focusing on three practical policy goals:

(i) to strengthen the engagement and interaction between the UK and the territories.

(ii) to work with territories to strengthen good governance arrangements, public financial management and economic planning where this is necessary; and

(iii) to improve the quality and range of support available to the territories.

The implementation of these policies will take different forms in each territory. We are now engaging in discussion with the territories and our many stakeholders to identify the priorities for action in each relationship.

To support this process the NSC also agreed that each UK Government Department should recognise its responsibility to engage with the territories in its area of competence and expertise. Departments will set out in papers by the end of January 2012 how they can support the territories. The FCO will retain leadership and oversight of the Government’s policies towards and relationships with the territories and continue to provide advice, where needed, to other Government Departments on engagement with the territories. If ministerial co-ordination is required we will chair a ministerial committee to resolve any issues. This is a clear demonstration that the Government as a whole are committed to the territories.

The Government will publish a White Paper on the overseas territories next year, Her Majesty’s diamond jubilee year. The White Paper will set out in detail this Government’s approach to the overseas territories. We will continue to report progress regularly to Parliament.

Voluntary Gender Equality Reporting

Wednesday 14th September 2011 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

“Building a Fairer Britain” (December 2010) announced the Government’s intention to work with business and others to develop a voluntary approach to greater transparency on gender equality in the private and voluntary sectors.

The “Think, Act, Report” initiative being launched with business leaders today sets out a step-by-step approach to improving transparency. It encourages employers to undertake their own analysis of gender equality in their organisation, take action where appropriate to address issues identified, and in time report publicly. To support participating employers, the Government have produced a framework containing the measures which would be most useful for employers to monitor and report on, and ACAS is publishing new guidance.

The Government will review annually the number of companies releasing information, and its quality, to assess whether this approach is successful. A copy of the baseline report on voluntary gender equality reporting will be placed in the Library of the House. This sets out the aims of the “Think, Act, Report” initiative, looks at the existing evidence on how many employers currently engage in monitoring and reporting on gender equality, and explains how we will measure progress.